Frozen High Cost Support
With the advent of the Connect American Fund, existing High Cost Program support was frozen at December 2011 levels and additional changes were made to existing programs to transition universal service from focusing on voice networks to supporting and expanding broadband availability.
Price Cap Carriers
For price cap carriers and their rate-of-return (ROR) affiliates the FCC froze support for High Cost Loop (HCL), Safety Net Additive (SNA), Safety Valve, High Cost Model (HCM) support, Local Switching Support, Interstate Access Support (IAS), and Interstate Common Line Support (ICLS). Additionally, frozen support will be reduced to the extent the carrier’s flat rate for residential local service falls below the local urban rate floor.
The USF/ICC Transformation Order transitioned existing CETC support to the Connect America Fund over a five-year period beginning January 1, 2012. For the transition, the FCC set each CETC’s baseline support at its total 2011 support in a given study area, or an amount equal to $3,000 times the number of reported lines as of year-end 2011, whichever is lower. Beginning July 1, 2012, each CETC’s support is reduced by 20 percent for five years for every July to June time period. Additionally, certain CETCs serving remote areas in Alaska will be subject to a delayed support phase down on a later schedule than that required of all other CETCs.
What else do I need to know?
Price cap carriers and their rate-of-return affiliates, CETCs, and rate-of-return carriers are eligible for frozen support if they were receiving High Cost Program support as of December 2011. For those carriers, review the High Cost Program deadlines schedule for information about certification letter, FCC Form 525, and FCC Form 481 deadlines.
For more information on Frozen Support, visit the FCC Connect America Fund information page, the USF/ICC Transformation Order, and the FCC Executive Summary.