Connect America Fund: A National Broadband Plan for Our Future High-Cost Universal Service Support; ETC Annual Reports and Certifications; Telecommunications Carriers Eligible To Receive Universal Service Support; Connect America Fund-Alaska Plan; Expanding Broadband Service Through the ACAM Program, 55918-55937 [2023-16674]

Agencies

• FEDERAL COMMUNICATIONS COMMISSION

[Federal Register Volume 88, Number 158 (Thursday, August 17, 2023)]
[Rules and Regulations]
[Pages 55918-55937]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-16674]



[[Page 55918]]

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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 54

[WC Docket Nos. 10-90, 14-58, 09-197, 16-271; RM 11868; FCC 23-60; FR 
ID 160132]


Connect America Fund: A National Broadband Plan for Our Future 
High-Cost Universal Service Support; ETC Annual Reports and 
Certifications; Telecommunications Carriers Eligible To Receive 
Universal Service Support; Connect America Fund--Alaska Plan; Expanding 
Broadband Service Through the ACAM Program

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: In this document, the Federal Communications Commission (FCC 
or Commission) adopts the Enhanced Alternative Connect America Cost 
Model (A-CAM) program as a voluntary path for supporting the widespread 
deployment of 100/20 Mbps broadband service throughout the rural areas 
served by carriers currently receiving A-CAM support and in areas 
served by legacy rate-of-return support recipients. In adopting this 
program, the Commission furthers its long-standing goals by promoting 
the universal availability of voice and broadband networks, while also 
taking measures to minimize the burden on the nation's ratepayers.

DATES: Effective August 17, 2023, except for Sec. Sec.  54.308(e)(2), 
54.308(e)(6), 54.313(f)(1)(i), 54.313(f)(6)(i), 54.313(f)(6)(ii), 
54.313(f)(6)(iii), 54.316(a)(9), 54.316(b)(8). The Commission will 
publish a document in the Federal Register announcing the effective 
date.

FOR FURTHER INFORMATION CONTACT: For further information, please 
contact, Theodore Burmeister, Special Counsel, Telecommunications 
Access Policy Division, Wireline Competition Bureau, at 
[email protected] or Jesse Jachman, Deputy Division Chief, 
Telecommunications Access Policy Division, Wireline Competition Bureau, 
at [email protected] or 202-418-7400.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Report 
and Order (Order) in WC Docket Nos. 10-90, 14-58, 09-197, 16-271; RM 
11868; FCC 23-60, adopted on July 23, 2023 and released on July 24, 
2023. The full text of this document is available at the following 
internet address: https://docs.fcc.gov/public/attachments/FCC-23-60A1.pdf.

I. Introduction

    1. With this final rule, the Commission takes significant next 
steps in achieving its goal of ensuring all consumers, even those 
living in the costliest areas in the nation, have access to affordable 
and reliable broadband service so that they can work, learn, engage, 
and obtain essential services no matter where they live. The Commission 
also focuses on the future and seek comment on how to reform its high-
cost programs so that it can continue to efficiently promote broadband 
deployment and meaningfully support networks long term in the face of a 
significantly changing broadband landscape.
    2. In this final rule, the Commission adopts the Enhanced A-CAM 
program as a voluntary path for supporting the widespread deployment of 
100/20 Mbps broadband service throughout the rural areas served by 
carriers currently receiving A-CAM support and in areas served by 
legacy rate-of-return support recipients. In adopting this program, the 
Commission furthers its long-standing goals by promoting the universal 
availability of voice and broadband networks, while also taking 
measures to minimize the burden on the nation's ratepayers. The 
Commission also adopts requirements for the Enhanced A-CAM program to 
complement existing Federal, state, and local funding programs, so that 
broadband funding can be used efficiently to maximize the deployment of 
high-quality broadband service across the United States.

II. Report and Order Adopting Enhanced Alternative Connect America Cost 
Model

    3. In this final rule, the Commission adopts the Enhanced A-CAM 
program to promote the widespread deployment of 100/20 Mbps broadband 
across areas served by A-CAM recipients and rate-of-return carriers 
eligible to receive legacy support. The Commission adopts deployment 
and service obligations to align deployment with the requirements of 
the Infrastructure Investment and Jobs Act (Infrastructure Act), 
encourages the deployment of affordable broadband service, and allows 
the Commission to monitor compliance with the program rules. Next, the 
Commission extends by 10 years beyond the remaining five years, for a 
total of 15 years, the term of support for electing carriers, and sets 
a methodology for determining support amounts for locations without 
100/20 Mbps broadband service within a potential budget of no more than 
$1.27 billion annually, or no more than $1.33 billion annually if 
certain conditions are met, using an updated version of the A-CAM. 
Finally, the Commission makes eligible for Enhanced A-CAM all current 
A-CAM recipients as well as rate-of-return carriers eligible to receive 
legacy support, and adopt a voluntary election process for eligible 
carriers.
    4. The Commission concludes that it is in the public interest to 
adopt Enhanced A-CAM before Broadband, Equity, Access, and Deployment 
Program (BEAD Program) grants are made, and thus the Commission 
requires in the following that carriers make their elections by no 
later than October 1, 2023 to ensure alignment with the expected BEAD 
Program timeline as required by the Infrastructure Act. By proceeding 
now with Enhanced A-CAM, the Commission is able to complement and 
bolster congressionally appropriated programs, like the BEAD Program. 
Importantly, the Commission obligates carriers electing Enhanced A-CAM 
to serve 100% of unserved locations with service levels consistent with 
the standard established in the Infrastructure Act. This requirement 
helps establish a Federal enforceable commitment and alleviates the 
need for BEAD and other broadband funding for these areas, allowing 
those funds to be used for other means like extending networks further 
or funding other broadband initiatives. The Commission also establishes 
a framework to avoid duplicating existing efforts from other government 
programs funding broadband deployment. The Commission acknowledges that 
some commenters urge them to wait until the BEAD Program and other 
Federal funding programs have allocated their funding, or at least have 
determined how to allocate funding, before deciding how to proceed with 
supporting the remaining areas without 100/20 Mbps or faster service 
with universal service support. However, the Commission disagrees that 
standing by would serve the public interest.
    5. Instead, the Commission finds that proceeding now to fund these 
areas with universal service support is an efficient use of Federal 
funds. Enhanced A-CAM builds upon years and billions of dollars of 
universal service support by leveraging rate-of-return carriers' 
existing networks to incrementally increase broadband speeds across 
eligible areas and supporting the ongoing operations of those networks. 
The Commission is not convinced that it would be more efficient for 
another program to overbuild these areas by funding competitive 
carriers to deploy new networks, particularly when it has already 
committed years of long-term

[[Page 55919]]

universal service support to these areas. Although it is possible that 
a rate-of-return carrier will successfully compete for support through 
an alternative funding program, it is also possible that other 
providers may cherry pick and receive funding for certain portions of a 
rate-of-return carrier's study area, leading to multiple funding 
programs supporting different locations within the service area and 
delays in deployment to the remaining locations while the Commission 
determines how to fill in any gaps with universal service support. 
Instead, the Commission concludes that obligating one service provider 
with an existing supported network to serve 100% of unserved locations 
across its study area now will provide more certainty that the unserved 
locations in rate-of-return carriers' study areas will be served with 
broadband at speeds of 100/20 Mbps in a timely manner.
    6. As explained in more detail in the following, the Commission 
requires carriers authorized for Enhanced A-CAM to serve all Enhanced 
A-CAM required locations in their study areas. The Commission delegates 
to the Wireline Competition Bureau (the Bureau) to determine the exact 
set of locations that must be served based on the Fabric, the Broadband 
Data Collection (BDC), and further deduplication of enforceable 
commitments. Although Enhanced A-CAM required locations in each study 
area will be identified at the time Enhanced A-CAM offers are made, the 
Bureau may make adjustments, by no later than the end of 2025, to 
identify: (1) locations in the Fabric when the Bureau sets final 
obligations; (2) locations that were already served by an unsubsidized 
competitor at the time the offer was made but this competitive service 
was not reflected in the BDC; and (3) locations that were subject to an 
enforceable commitment for the deployment of broadband of 100/20 Mbps 
or greater at the time the offer was made. In making adjustments to the 
Enhanced A-CAM required locations, the Bureau will determine which 
vintage of National Broadband Map data best reflects serviceable 
locations and broadband coverage at the time of the offer. If there is 
a substantial decrease in the number of locations, Enhanced A-CAM 
support will be decreased according to the procedures adopted herein. 
However, if the number of locations that must be served increases, the 
Enhanced A-CAM carrier may receive additional support if consistent 
with the available budget, but such increases are not guaranteed. 
Because Enhanced A-CAM carriers are the incumbent provider in their 
service areas, the Commission expects that they are in the best 
position to know the number of locations in their study areas and the 
availability of competitive broadband alternatives. Therefore, the 
Commission finds that Enhanced A-CAM carriers are well positioned to 
know the maximum number of locations they may have to serve and based 
on their knowledge of their study areas determine whether they should 
accept Enhanced A-CAM funding.
    7. While the Commission recognizes that funding these areas through 
the universal service program will increase the contribution factor, as 
it explains in the following, the Commission has adopted a budget that 
balances its goals of supporting universal access to voice and 
broadband service, and minimizing the burden on contributors. The 
Commission is also not persuaded by commenters' speculation that it 
should not act now because congressionally mandated funding programs 
could ``obviate the need'' for any additional funding in these areas. 
Because the Commission has the ability now to efficiently support 
deployment across these areas in a manner that is complementary to 
other funding programs, it does not believe it would serve the public 
interest to further delay deployment so that the Commission can wait 
and see if certain locations remain stranded with no or inferior 
service after funding programs have finished allocating their funds.
    8. Finally, the Commission adopts requirements and safeguards for 
Enhanced A-CAM that address other concerns expressed by commenters 
requesting that it waits before implementing Enhanced A-CAM. In 
response to concerns that areas will not be served as quickly as they 
might be if they were funded by the BEAD Program, the Commission, in 
the following, aligns the deployment timeline for Enhanced A-CAM 
recipients with the timeline required by the Infrastructure Act. And 
while it is not possible to know whether a service provider that 
received BEAD Program funding or funding from another program may have 
provided ``comparable (or better) service at a lower price,'' the 
Commission also adopts performance requirements that align with the 
Infrastructure Act, and subject Enhanced A-CAM recipients to 
performance testing to ensure those performance requirements will be 
met. Additionally, the Commission subjects Enhanced A-CAM recipients to 
the reporting requirements and non-compliance measures that it applies 
to all high-cost support recipients so that it can monitor and 
incentivize deployment.
    9. Final Deployment Obligations. The Commission adopts deployment 
obligations requiring every Enhanced A-CAM recipient to deploy, by the 
end of 2028, 100/20 Mbps or faster broadband service, with latency of 
100 milliseconds or less, to all Enhanced A-CAM required locations in 
their service areas. In the context of this Enhanced A-CAM program, 
Enhanced A-CAM carriers are required to deploy to those locations for 
which voice and terrestrial broadband services of speeds 100/20 Mbps or 
faster are not yet available or lack an enforceable commitment for 
deployment (``Enhanced A-CAM required locations''). These deployment 
obligations are designed to maximize the Enhanced A-CAM program's 
compatibility with the Infrastructure Act and BEAD Program, which also 
require deployment of 100/20 Mbps or faster broadband to all locations 
within a funded ``project'' and will exclude areas covered 100% by 
existing Federal, state, or local commitments to deploy broadband at 
such speeds. By committing support through Enhanced A-CAM to deploy 
broadband at these speeds to electing carriers' required locations, the 
Commission will avoid overlap with the BEAD Program and help more 
Americans become connected at modern broadband speeds.
    10. Moreover, since the Commission adopted the original A-CAM 
program, the nature and use of broadband internet access services have 
continued to change. The Infrastructure Act defines an ``underserved 
location'' as a location that lacks reliable service with latency 
characteristics sufficient to support real-time, interactive 
applications at speeds below 100/20 Mbps. The Commission believes the 
same deployment goal would be appropriate to future-proof the next 
iteration of A-CAM to the maximum extent possible. The Commission thus 
rejects the ACAM Broadband Coalition's (Coalition) earlier proposal to 
deploy 100/20 Mbps or faster service to only 90% of eligible locations 
and 25/3 Mbps or faster service to the remaining 10% of eligible 
locations. The Commission also rejects suggestions that Enhanced A-CAM 
recipients be required to deploy broadband with symmetrical download 
and upload speeds. Requiring 100 Mbps upload speed is at odds with the 
congressional determination in the Infrastructure Act.
    11. Consistent with past A-CAM offers, the Commission will 
determine compliance with deployment obligations based on meeting the 
minimum service levels regardless of

[[Page 55920]]

technology. The Commission does, however, require Enhanced A-CAM 
recipients to provide voice service to their required locations. The 
Commission's high-cost program historically supported traditional voice 
services until 2011, when the Commission reformed the program to 
support networks capable of providing both voice and broadband 
services. Consistent with the Commission's universal service goals of 
connecting Americans to both kinds of services, A-CAM carriers, like 
other high-cost support recipients, must already provide voice service 
along with broadband service to their required locations.
    12. More specifically, the Commission requires a carrier electing 
Enhanced A-CAM to provide 100/20 Mbps or faster broadband and voice 
service to all Enhanced A-CAM required locations within its study area, 
as determined by the National Broadband Map as of the date of the 
Enhanced A-CAM offer with adjustments adopted by the Bureau no later 
than the end of 2025, including extremely high-cost locations and 
locations that currently receive no support because their estimated 
cost to serve is below the support threshold. A carrier electing 
Enhanced A-CAM must also continue serving locations where it already 
provides 100/20 Mbps or faster broadband service. Conversely, Enhanced 
A-CAM recipients are not required to provide broadband to locations 
where, in addition to voice service, there is existing 100/20 Mbps or 
faster broadband service using wireline or terrestrial fixed wireless 
technology, offered by an unsubsidized competitor, or where any carrier 
has an enforceable Federal or state commitment to deploy 100/20 Mbps or 
faster broadband service.
    13. In doing so, the Commission declines to adopt the Coalition's 
proposed ``two-pronged analysis'' for identifying areas to be excluded 
due to competitive overlap. Under the Coalition's proposed analysis, 
the Commission would first make a determination for each Enhanced A-CAM 
provider and unsubsidized competitor at the state level before making a 
separate determination at the census block level. The Coalition's 
proposal would, in the Commission's judgment, likely result in funding 
for many locations that are already served with 100/20 Mbps by an 
unsubsidized competitor. The Commission excludes such locations to 
ensure that its limited universal service funds may help bring 
broadband at today's standards to as many areas as possible, while 
avoiding spending in areas where there either is existing broadband 
service of the same quality or for which carriers are already committed 
to deploy such service in exchange for other Federal or state support.
    14. Consistent with the Broadband DATA Act and the Broadband 
Interagency Coordination Act, Enhanced A-CAM offers will be made using 
location data from Fabric v.2, broadband coverage data from the 
National Broadband Map, and Federal broadband funding data from the 
National Broadband Funding Map. The Commission recognizes that there 
are ongoing efforts to improve the accuracy of each data set, and those 
maps will continue to be refined over the coming months. To avoid 
unnecessarily duplicating Federal broadband funding, the Commission 
directs the Bureau to coordinate the areas under consideration for 
Enhanced A-CAM offers with other Federal agencies, e.g., the Rural 
Utilities Service, the National Telecommunications and Information 
Administration (NTIA), and the Department of Treasury, and to remove 
from eligibility locations already subject to enforceable commitments 
to deploy 100/20 or faster broadband service.
    15. Complete information on Federal commitments will likely not be 
available in the National Broadband Funding Map at the time Enhanced A-
CAM offers are made or elected, and the Map is not expected to include 
information regarding commitments made using state funds. Accordingly, 
the Commission directs the Bureau and Office of Economics and Analytics 
to adjust carriers' lists of required deployment locations as more 
complete data become available. These adjustments specifically shall 
reflect locations and broadband deployment that existed at the time 
Enhanced A-CAM offers were made, but were not reflected in the Fabric 
or the National Broadband Map, and locations for which an enforceable 
commitment to deploy had been made prior to Enhanced A-CAM offers but 
were not included in the National Broadband Funding Map. The Commission 
directs the Bureau to conduct a process, as necessary, to identify 
enforceable commitments not reflected in the National Broadband Funding 
Map. Because these adjustments are consistent with the BEAD Program's 
requirements, the Commission expects that they will not result in de-
confliction issues that may cause unnecessary duplication between 
Enhanced A-CAM and BEAD. Further, as discussed in the following, the 
Bureau should adjust deployment obligations where BEAD awards are made 
for Tribal locations and the Enhanced A-CAM carrier and the Tribal 
government mutually agree to forego Enhanced A-CAM deployment 
obligations. The Commission anticipates that the Bureau will make all 
adjustments to the required deployment locations no later than December 
31, 2025.
    16. The Commission directs the Bureau to treat as served and 
therefore exclude in the Enhanced A-CAM offers any locations for which 
100/20 Mbps or faster service is provided only by an unsubsidized 
competitor via terrestrial fixed wireless technology utilizing entirely 
unlicensed spectrum. Although the Commission acknowledges that this 
approach is not consistent with NTIA's BEAD Program, it declines to 
depart from the Commission's long-standing policy of technological 
neutrality at this time. The Commission recognizes that there are 
concerns regarding the accuracy of claimed deployment by fixed wireless 
providers utilizing entirely unlicensed spectrum. In particular, some 
parties assert that, although such providers may be able to serve many 
locations with fixed wireless technology utilizing entirely unlicensed 
spectrum, they may not be able to simultaneously serve all locations 
within their coverage footprint. However, to the extent that any such 
coverage claims may be deficient, there have been and will continue to 
be opportunities for carriers electing Enhanced A-CAM to challenge such 
claims through the BDC processes. In fact, Enhanced A-CAM carriers will 
have ample time to challenge any deficient claims made with respect to 
the National Broadband Map associated with Fabric v.3, after the 
release of this final rule and to be incorporated in the Bureau's 
adjustment Enhanced A-CAM carriers' obligations and support.
    17. The Commission adopts a deployment timeline that aligns with 
the Infrastructure Act's requirements. The Infrastructure Act requires 
that carriers in the BEAD Program complete deployment of 100/20 Mbps or 
faster broadband to all locations within four years, and, as NTIA 
notes, aligning the Enhanced A-CAM and BEAD Program deployment 
timelines will ``help[ ] eliminate gaming by providers seeking to delay 
deployments.'' The Commission expects that BEAD Program deployment will 
not begin until after completion of the processes laid out by NTIA. If 
the Commission were to adopt deployment milestones that provided 
significantly more time for Enhanced A-CAM carriers to deploy broadband 
than for carriers under the BEAD Program, its adoption of Enhanced A-
CAM could

[[Page 55921]]

actually prevent rural consumers in high-cost areas from being served 
with broadband as quickly as the BEAD Program requires. The Commission 
reiterates that, in adopting this program, it intends to maximize the 
effect of Federal dollars to bring broadband to high-cost areas, 
consistent with its universal service goals. The Commission thus 
rejects the Coalition's proposal to require complete deployment within 
eight years and adopt a deployment timeline for Enhanced A-CAM ending 
in 2028.
    18. Still, the Commission recognizes that there may be unforeseen 
delays causing BEAD Program broadband deployment to not be entirely 
complete until 2030 in certain states and that these delays may affect 
Enhanced A-CAM carriers as well. Although the Commission declines at 
this time to adopt a final deployment milestone permitting Enhanced A-
CAM carriers to complete deployment by 2030, to ensure that the 
Enhanced A-CAM and BEAD Program deployment timelines remain aligned and 
to account for possible unforeseen circumstances, the Commission 
directs the Bureau to consider, in 2027, whether a one-year extension 
for Enhanced A-CAM carriers' final deployment milestones would be 
appropriate in light of any such BEAD Program deployment delays.
    19. Interim Deployment Milestones. The Commission adopts interim 
deployment milestones requiring Enhanced A-CAM recipients to make 
continuous progress with deployment until their final milestones at the 
end of the fourth year of Enhanced A-CAM support. At the end of a 
carrier's second year of Enhanced A-CAM support, the carrier must 
deploy 100/20 Mbps or faster broadband service to at least 50% of 
required new locations, and the carrier must deploy such service to an 
additional 25% of required new locations at the end of each subsequent 
year, until the carrier deploys to 100% of required new locations at 
the end of the fourth year of Enhanced A-CAM support.
    20. The following table summarizes Enhanced A-CAM carriers' 
deployment milestones:

         Enhanced A-CAM Interim and Final Deployment Milestones
------------------------------------------------------------------------
                                                Deployment milestone
              Milestone date                         requirement
------------------------------------------------------------------------
December 31, 2025.........................  N/A.
December 31, 2026.........................  50% of required locations.
December 31, 2027.........................  75% of required locations.
December 31, 2028.........................  100% of required locations.
------------------------------------------------------------------------

NTIA has not established specific interim deployment milestones for the 
BEAD Program--instead, allowing states and territories to establish 
such milestones; the interim deployment milestones the Commission 
adopts allows it to monitor progress with the goal of achieving 
buildout to all required locations by 2028, consistent with the 
Infrastructure Act's four-year, final deployment milestone. As noted in 
this document, if there are any changes to the BEAD Program's four-year 
timeline at a later date, the Bureau will consider whether such common 
circumstances require modifying the interim and final deployment 
milestones for Enhanced A-CAM as well.
    21. Finally, as the Commission tentatively concluded in the 
Enhanced A-CAM NPRM, 87 FR 36283, June 16, 2022, Enhanced A-CAM 
carriers' interim and final deployment milestones will supersede the 
existing deployment milestones required by the A-CAM I and A-CAM II 
programs. Subjecting Enhanced A-CAM carriers to a single set of 
deployment milestones will reduce administrative complexity for both 
the Commission and for carriers, while holding Enhanced A-CAM carriers 
to a new, higher standard for broadband deployment. However, to ensure 
that A-CAM I and A-CAM II carriers have continued in good faith to 
deploy broadband pursuant to the terms of their existing A-CAM 
commitments, carriers electing Enhanced A-CAM must still report in the 
Universal Service Administrative Company's (USAC) High Cost Universal 
Broadband (HUBB) portal any progress made this year (2023) towards 
their existing A-CAM I and A-CAM II deployment milestones. Carriers 
that elect Enhanced A-CAM, whether currently receiving A-CAM I, A-CAM 
II, or legacy support, that do not meet their existing deployment 
milestone due by December 31, 2023, will be subject to the compliance 
regime set forth in Sec.  54.320(d)(1) of the Commission's rules. As 
discussed below, any support withholding or recovery will be based on 
support at the time the carrier is notified of non-compliance.
    22. Deployment Compliance Gaps. Enhanced A-CAM recipients will also 
be subject to the same support withholding and recovery provisions 
currently applicable to A-CAM carriers and other high-cost support 
recipients. Pursuant to the Commission's rules, if a high-cost support 
recipient does not satisfy its final deployment obligation within 
twelve months of the final milestone deadline, USAC will recover ``the 
percentage of support that is equal to 1.89 times the average amount of 
support per location received in the state for that carrier over the 
term of support for the relevant number of locations plus 10 percent of 
the eligible telecommunications carrier's (ETC) total relevant high-
cost support over the support term for that state.'' For high-cost 
support recipients that fail to meet their interim deployment 
milestones, carriers with a compliance gap of five percent or more are 
subject to quarterly reporting and potentially support withholding/
recovery based on the level of non-compliance. The non-compliance 
procedures apply until the carrier failing to meet its interim 
deployment milestone reports a compliance gap of less than five 
percent. These generally applicable provisions will likewise apply to 
Enhanced A-CAM recipients.
    23. Performance Measures Requirements. Similarly, Enhanced A-CAM 
recipients will be subject to the same performance testing requirements 
as other high-cost support recipients. It is a priority of the 
Commission to ensure that high-cost support recipients deploy to 
required locations on time and at the level of service required. 
Accordingly, the Commission requires that high-cost support recipients 
annually test and report the speed and latency of a random sample of 
locations. Carriers that fail to meet the required performance 
standards are subject to additional reporting and may have a percentage 
of universal service support withheld based on the level of non-
compliance, but those carriers that later come into compliance may have 
their support restored. Enhanced A-CAM recipients will therefore be 
subject to performance testing. The Commission delegates to the Bureau 
the authority to implement and clarify further details, including the 
specific schedule, regarding the performance measures testing regime 
for Enhanced A-CAM.
    24. Federal Funding Coordination Requirements. As a condition of 
receiving Enhanced A-CAM support, the Commission requires carriers to 
make efforts to avoid duplicative Federal broadband funding. First, the 
Commission requires Enhanced A-CAM recipients to participate, in good 
faith, in any relevant BEAD Program challenge processes or other 
processes conducted by states or other BEAD Program eligible entities 
to determine eligibility of locations for the BEAD Program, to 
otherwise coordinate with states, Tribes, and other eligible entities 
to help avoid duplicative Federal broadband funding, and to certify 
their compliance with this obligation annually. This requirement will 
also extend to any other Federal broadband

[[Page 55922]]

funding program and related processes. By engaging in these processes, 
carriers will help ensure that more Americans in high-cost areas will 
have access to broadband, consistent with the Infrastructure Act's 
goals, as well as the Commission's goals for Enhanced A-CAM.
    25. Second, the Commission requires, as a condition of receiving 
Enhanced A-CAM support, that carriers not receive or use BEAD Program 
funding or other future Federal grant funding, unless otherwise 
specified herein, that supports broadband deployment to those locations 
for which they are receiving Enhanced A-CAM support, and the Commission 
requires Enhanced A-CAM recipients to certify their compliance with 
this obligation annually. The Commission imposes this requirement as an 
additional measure to ensure that Enhanced A-CAM recipients use support 
as intended, consistent with the Commission's goals for the program. 
Under this requirement, Enhanced A-CAM recipients may seek BEAD funding 
for locations that are not eligible for Enhanced A-CAM because they are 
served with at least 100/20 Mbps by an unsubsidized competitor (and not 
also served by the Enhanced A-CAM carrier), but which are eligible for 
BEAD because service is not considered ``reliable broadband'' pursuant 
to BEAD. Similarly, Enhanced A-CAM recipients may seek other Federal 
funding for locations that are not eligible for Enhanced A-CAM.
    26. Third, as the Commission further discusses later in this final 
rule, it requires carriers to identify, when electing Enhanced A-CAM, 
the broadband technologies (e.g., fiber to the premises) with which 
they intend to fulfill their Enhanced A-CAM deployment obligations. 
This information may assist states and other BEAD Program eligible 
entities in identifying which areas remain eligible for BEAD Program 
funding. This information may also be relevant to other Federal 
broadband funding programs.
    27. Affordability Requirement. The Commission requires Enhanced A-
CAM recipients to participate in the Affordable Connectivity Program 
(ACP) as a condition of receiving Enhanced A-CAM support. The 
Commission continues to emphasize that ``[p]romoting access to 
affordable, high-speed broadband is a priority for the Commission,'' 
and the ACP plays an important role in helping low-income consumers 
obtain affordable internet services. Beyond the Commission, the 
Infrastructure Act requires subgrantees of NTIA's BEAD Program to offer 
at least one ``low-cost broadband service option.''
    28. Commenters broadly supported requiring Enhanced A-CAM carriers 
to address affordability. The Coalition, for example, advocated for 
``making enrollment in ACP a condition of participation'' while asking 
that the Commission ``refrain . . . from adopting specific product 
characteristics for the affordable option under ACP,'' consistent with 
NTIA's decision to ``grant[ ] states the flexibility to set the 
parameters that best serve the needs of residents within their 
jurisdictions'' as part of the BEAD Program. Similarly, the California 
Public Utilities Commission (California PUC) argued that the Commission 
should ``require all carriers participating in Enhanced A-CAM to offer 
broadband plans that are affordable to low-income households either by 
participating in the ACP or by creating their own low-cost plans.'' The 
California PUC explained that programs supporting broadband 
infrastructure in unserved areas improve broadband availability but do 
not necessarily ensure that broadband is affordable for consumers in 
those areas, even though affordability may be a greater concern in 
rural and high-cost areas.
    29. The Commission agrees that it is appropriate to require 
Enhanced A-CAM carriers to participate in the ACP, and further 
encourages participating carriers to offer an affordable broadband 
option. Accordingly, as part of the Enhanced A-CAM offer and as a 
condition for receiving Enhanced A-CAM support, carriers must certify 
annually their participation in ACP or a substantially similar 
successor program. If a carrier accepts the Enhanced A-CAM offer and 
subsequently elects not to participate or ceases to participate in ACP 
or a substantially similar successor program, the carrier will be 
considered in default of its obligations. The Commission also requires 
that the carrier annually describe and certify its compliance with this 
affordability requirement in the FCC Form 481. The Commission further 
directs the Bureau to take further action to implement this 
requirement, as necessary.
    30. The Commission declines, however, to make any changes to the 
ACP itself, including by adopting an ``enhanced'' ACP benefit of up-to-
$75 per month for households served by high-cost support recipients, as 
suggested by the NTCA--The Rural Broadband Association (NTCA). The 
Infrastructure Act's direction to the Commission to create an enhanced 
ACP benefit for service provided in certain high-cost areas by 
providers experiencing particularized economic hardship is under 
consideration by the Commission, and it believes that proceeding is the 
more appropriate vehicle to resolve those issues in accordance with the 
statute's directive. The Commission also finds that the record 
regarding whether it should provide an increased ACP benefit for 
households served by support from the high-cost program remains 
undeveloped in this proceeding and is best addressed in a proceeding 
focused on that issue in the ACP.
    31. Additional Obligations. Finally, the Commission notes that 
Enhanced A-CAM recipients will be subject to other obligations 
generally required of high-cost support recipients. Under the USF/ICC 
Transformation Order, 76 FR 73830, November 29, 2011, and subsequent 
orders, ETCs subject to broadband public interest obligations must 
provide broadband at rates that are reasonably comparable to offerings 
of comparable broadband services in urban areas, with usage allowances 
reasonably comparable to those available through comparable offerings 
in urban areas. Likewise, Enhanced A-CAM recipients will be required to 
file annual reports pursuant to Sec.  54.313, will be subject to the 
existing audit and record retention requirements applicable to all ETCs 
pursuant to Sec.  54.320, and will be required to make available 
Lifeline service to qualifying low-income consumers.
    32. The Commission adopts a budget for the Enhanced A-CAM offers 
totaling no more than $1.27 billion annually, or no more than $1.33 
billion annually if certain conditions are met, over a 15-year term 
beginning January 1, 2024. This figure includes the existing A-CAM 
budget, ($1.1 billion per year over five years, 2024-2028), plus an 
additional 10-year extension, for a total 15-year support term (2024-
2038). The total budget amount will be distributed at a constant annual 
support amount of up to $1.27 billion per year. The Commission also 
delegates to the Bureau the authority to increase the overall budget by 
$1 billion, up to no more than $1.33 billion annually, if it determines 
that this additional support will allow substantial increases in 
deployment or if such support is needed to increase support to Enhanced 
A-CAM carriers because of updates to the National Broadband Map.
    33. In setting the budget for Enhanced A-CAM, the Commission is 
mindful of its longstanding goals adopted in the USF/ICC Transformation 
Order to ``ensure universal availability of modern networks capable of 
providing voice and broadband,'' and to ``minimize the

[[Page 55923]]

universal service burden on consumers and businesses.'' The 
Commission's goal is to provide support that is sufficient but not 
excessive so as not to impose an unnecessary burden on consumers and 
businesses who ultimately pay to support the Universal Service Fund 
(USF). The Commission wants to provide enough support to substantially 
increase the deployment of high-speed broadband to currently unserved 
locations in rural areas, and to maintain the provision of such service 
where it is already deployed. At the same time, as stewards of the USF, 
the Commission is mindful of the effect increases in overall support 
have on the contribution factor. The Commission believes the budget it 
has adopted appropriately balances these objectives.
    34. The deployment obligations set above are ambitious and will 
require additional support to achieve. The requirement to provide 100/
20 Mbps to 100% of required locations is a substantial increase to both 
the level of service and the scope of coverage. Further, the number of 
unserved locations has increased because of the evolving standard for 
unsubsidized competitors to 100/20 Mbps or faster, from 10/1 Mbps for 
A-CAM I and 25/3 Mbps for A-CAM II. In addition, locations that might 
previously have been identified as served by the Commission's Form 477 
data are now recognized as unserved by the more granular information in 
the Commission's National Broadband Map. Finally, where carriers have 
deployed 100/20 Mbps locations in reliance on the A-CAM I and A-CAM II 
support commitments through the end of the current terms, the 
Commission assumes some level of continuing support will be required.
    35. The Commission finds that the Enhanced A-CAM budget 
appropriately balances these concerns. The Commission estimates that 
Enhanced A-CAM offers may support deployment to approximately 1 million 
Enhanced A-CAM required locations, as well as continuing support for 
locations to which A-CAM carriers have already deployed 100/20 Mbps 
service, while the effect on the contribution factor will be relatively 
small. If every A-CAM recipient elects the Enhanced A-CAM offer, the 
revised budget would add $166 million per year, or $41.5 million per 
quarter, to the current quarterly universal service demand of $1,947.08 
million, an increase of approximately 2%. Based on the current 
contribution base, this would increase the contribution factor by .7 
percentage point. The Commission believes the benefits of supporting 
this standard of deployment to millions of locations outweighs this 
limited increase to the contribution factor.
    36. Finally, the Commission delegates to the Bureau the ability to 
increase the budget up to an additional $1 billion over the term of 
support, if it finds that doing so will improve significantly the 
amount of deployment that would be expected to occur through Enhanced 
A-CAM. For example, the Bureau may increase the funding cap set forth 
below to permit an extra $1 billion in the offer amounts, if it 
estimates that doing so would result in more acceptances of Enhanced A-
CAM offers and, accordingly, more commitments to deploy 100/20 Mbps or 
faster service to locations currently without that level of service. 
Changes within the funding parameters discussed below, including those 
for currently served locations, may also be considered, if they would 
result in higher acceptance rates and more commitments to deploy to 
unserved locations. Alternatively, the $1 billion or a portion thereof 
may be reserved to provide additional support if warranted if updates 
to the National Broadband Map result in increased deployment 
obligations. An increase of $1 billion to the total 15-year budget 
would increase the annual demand for universal service by approximately 
$66.7 million, which would result in an additional .3 percentage point 
increase to the contribution factor, using the third quarter 2023 
forecasted contribution base and funding requirements.
    37. The Commission declines to adopt an annual inflation adjustment 
to the Enhanced A-CAM support amounts, as proposed by the Coalition. 
Adjusting support annually to account for inflation would require the 
Commission to reduce the initial annual Enhanced A-CAM support amounts 
to accommodate future inflation-driven increases or such adjustments 
could result in support in excess of the budget adopted here. Even 
small inflation adjustments would, over the term of support, cause 
Enhanced A-CAM to exceed the budget significantly. Inflation 
adjustments would undermine the benefits of budgetary certainty 
provided by fixed, model-based support, including the ability to 
control the future impact of the mechanism on the contribution factor.
    38. The Commission recognizes that maintaining this budget will 
require parameters and funding limitations to calculate the offers, 
including funding caps as past A-CAM offers have used. It is possible 
that some current A-CAM I and A-CAM II carriers will not elect the 
Enhanced A-CAM offers as a result, finding the support amounts to be 
insufficient in comparison to the obligations. If a current A-CAM I or 
A-CAM II carrier declines the offer of Enhanced A-CAM support, the 
carrier will continue to receive A-CAM support until 2026 or 2028, 
consistent with its current authorizations. The Commission will 
consider what support, if any, is required in a future proceeding, 
consistent with the concurrently adopted Notice of Inquiry (NOI).
    39. In the following, the Commission sets forth the process for 
calculating Enhanced A-CAM offers. First, the Commission uses an 
updated version of A-CAM to estimate the cost for each location served 
by eligible A-CAM and legacy rate-of-return carriers. Second, the 
Commission sets the parameters for calculating support for currently 
unserved locations.
    40. Model Cost Estimates. For the Enhanced A-CAM offers, the 
Commission will use cost estimates from an updated version of A-CAM 
that incorporates the location data from the Fabric v.2 to calculate 
the average cost per location in each census block served by an A-CAM 
or CAF BLS recipient. The Broadband DATA Act requires that, after the 
creation of the Broadband Serviceable Location Fabric and associated 
maps, the Commission use those maps ``when making any new award of 
funding with respect to the deployment of broadband internet access.'' 
While the Commission does not believe that the Broadband DATA Act 
prescribes any particular method for estimating the cost of serving 
locations, cost estimates from the current version of A-CAM would be 
nearly impossible to reconcile with location and broadband coverage 
data from the Fabric and the National Broadband Map. Because prior 
versions of A-CAM used 2010 census block boundaries, while the Fabric 
uses 2020 census block boundaries, there are significant differences in 
census block location counts, including many census blocks that do not 
have model-estimated costs but have Fabric locations. Rerunning the 
model with Fabric locations will provide more accurate estimates of the 
cost of serving unserved and underserved locations in a census block 
and minimize the amount of reconciliation that will be required in the 
calculation of offers.
    41. Support for Required Locations. In calculating support for 
Enhanced A-CAM required locations, the Commission retains the basic 
principles of, but make critical changes to, the methodology it used to 
calculate support amounts in prior A-CAM offers.

[[Page 55924]]

Generally, A-CAM I and A-CAM II carriers receive support based on the 
model-estimated monthly cost of serving locations in eligible census 
blocks above a funding threshold of $52.50 per month, subject to a per-
location cap on support of $200 per month for most locations. As 
described in the following, the Enhanced A-CAM offers will use the 
National Broadband Map to determine eligible locations, rather than 
census block eligibility, use a revised funding threshold of $63.69 for 
non-Tribal locations, and utilize a combination of per-location caps 
and percentages of uncapped support to limit funding above the 
threshold.
    42. For purposes of determining Enhanced A-CAM offers, the 
Commission updates the funding threshold for non-Tribal locations to 
$63.69. The funding threshold is the Commission's estimate of the 
amount of revenue per location, per month, that a carrier can 
reasonably obtain from end-users. The current funding threshold of 
$52.50 was established in 2014, as the Commission was developing the 
original Connect America Cost Model, and was determined by multiplying 
an estimated Average Revenue Per User (ARPU) of $75 by an estimated 
take rate of 70%. With nine years having passed, the Commission 
believes the estimated ARPU used there is stale, and should be updated 
to reflect the revenue a carrier may reasonably expect to recover from 
its customers now. The Commission believes the rate benchmark for 25/3 
Mbps in the most recent Urban Rate Survey reflects a reasonable 
estimate of end-user rates for a modern broadband network. Multiplying 
that rate benchmark of $90.98 by the 70% take rate yields a funding 
threshold of $63.69. Raising the funding threshold will have a direct 
impact on the distribution of Enhanced A-CAM support, causing support 
to be allocated to relatively higher cost locations than would have 
occurred if the prior funding threshold of $52.50 had been used. The 
Commission notes that changing the funding threshold in this manner 
does not require carriers to change their end-user rates, which are not 
set by the Commission.
    43. Consistent with the Coalition's proposal, support amounts for 
required locations in Enhanced A-CAM offers will be based on the 
greater of two alternative methodologies: (1) the model-estimated cost 
of serving the locations above the funding threshold up to a funding 
cap, or; (2) an alternative percentage of the difference between the 
model-estimated cost of serving the locations and the funding threshold 
(i.e., the uncapped support amount). In prior A-CAM offers, only the 
first methodology was used. For example, for A-CAM II, for non-Tribal 
locations, carriers received support equal to the amount the model-
estimated costs for serving a particular location that exceeded $52.50 
per month, up to $200 per month. The Coalition proposed increasing the 
funding cap to $300. The Coalition also proposed applying the second 
methodology, equaling 80% of the uncapped support amount, when it 
provided more support. The Commission finds that including an 
alternative funding percentage will have the effect of providing 
additional support to locations with estimated costs that significantly 
exceed the funding cap. The Commission believes increasing the support 
to the very high-cost locations is appropriate, given the requirement 
for each electing carrier to serve 100% of its required locations with 
100/20 Mbps service. As such, each carrier's support will be determined 
at the state level, which will include all its study areas in a state 
if it has more than one study area.
    44. The Commission does not specify at this time the funding cap or 
alternative funding percentage to be applied, and instead delegates to 
the Bureau the authority to set, in an Order prior to or concurrently 
with the Enhanced A-CAM offers, both the funding cap and an alternative 
funding percentage within guidelines set below. This delegation is 
necessary because the Commission cannot determine funding caps or 
funding percentages that would produce support amounts within the 
budget it adopts in this document until it has the updated model 
results. The Commission therefore directs the Bureau to aim for a 
funding cap for non-Tribal areas that is no higher than $300 per 
location per month, with an alternative funding percentage between 40% 
and 80%. While the Coalition's proposal of a $300 per location per 
month funding cap and an 80% alternative funding percentage may not fit 
within the budget the Commission establishes in this document, these 
funding guidelines set the Coalition's proposal as the upper boundary 
of support for Enhanced A-CAM required locations. The lower boundary on 
the alternative funding percentage ensures that an extra measure of 
support is provided to carriers that have a significant number of 
locations that are much higher than the funding cap. In setting the 
funding cap and the alternative funding percentage, the Bureau should 
balance the need to ensure adequate funding for as many locations as 
possible, while also taking into account the cost of serving extremely 
high-cost locations, and also fitting within the budget support for 
locations that are currently served, as discussed below.
    45. Support for Locations Served with 100/20 Mbps by the Incumbent 
Local Exchange Carrier (ILEC). The Commission limits support for 
locations that are currently served with 100/20 Mbps by the ILEC. In 
light of the budget that the Commission adopts in this document, it 
finds that targeting new support primarily to unserved locations would 
achieve its goal of widespread 100/20 Mbps deployment better than 
providing additional Enhanced A-CAM support to locations that already 
are capable of that level of service. In concluding that a full measure 
of support is not necessary for ILEC-served locations, the Commission 
finds that a carrier's deployment of 100/20 Mbps service with existing 
A-CAM support demonstrates that existing A-CAM support was sufficient 
to promote deployment, and that it is not necessary to further 
incentivize deployment for carriers that elect to participate in the 
Enhanced A-CAM program.
    46. The Commission recognizes that consumers at locations served 
with 100/20 Mbps or faster service by the ILEC only and not by an 
unsubsidized competitor will remain dependent on the Enhanced A-CAM 
carrier to maintain at least their current level of service. Those 
carriers will therefore continue to experience ongoing operational and 
depreciation costs associated with these already-constructed locations. 
The Commission therefore concludes that such locations should receive 
at least 50% of their current support A-CAM support amount for the 
duration of the Enhanced A-CAM term. Furthermore, in consideration of 
the available budget adopted herein, additional support for operating 
expenses and depreciation may be reasonable. Therefore, the Commission 
delegates to the Bureau the authority to determine whether support for 
these locations should be increased above the 50% rate, within the 
overall budget set by the Commission, up to 75% of the support that 
they would have received under A-CAM I or A-CAM II. While this range is 
somewhat less than $200 cap for served locations proposed by the 
Coalition, given the capital recovery that has already occurred for 
these locations, the Commission concludes a slight reduction from the 
prior A-CAM I or A-CAM II support levels is justified. Furthermore, 
because a primary purpose of this ongoing support is to ensure the

[[Page 55925]]

maintenance (or improvement) of service to locations that would 
otherwise be unserved, the Commission further extends the support for 
ILEC-only served locations to locations that were ineligible for prior 
A-CAM offers but which are not served with 100/20 Mbps or faster 
service by a competitor. In making this determination, the Bureau will 
take into consideration whether there is sufficient funding available 
to provide additional funds for already-constructed locations, once the 
Bureau has set a reasonable cap and alternative funding percentage for 
unserved locations.
    47. While the Commission declines to adopt the Coalition's proposal 
to provide additional support for Enhanced A-CAM for locations served 
with 100/20 Mbps by unsubsidized competitors, it finds that limited 
support is warranted to address costs incurred by Enhanced A-CAM 
recipients as a result of their expanded network obligations. Unlike 
with prior A-CAM offers, the Enhanced A-CAM program requires providers 
to deploy service to all eligible Enhanced A-CAM locations in their 
study areas. This expanded obligation to build such a network comes 
with certain costs associated, which additional support will help to 
defray. As a proxy to calculate support toward such costs, the 
Commission adopts limited support for locations served by the ILEC with 
service of at least 100/20 Mbps or greater and either (1) are served by 
an unsubsidized competitor with 100/20 Mbps or greater or (2) will be 
served by another provider subject to an enforceable commitment for 
deployment pursuant to another Federal or state program at the time the 
Enhanced A-CAM offer is extended. Dedicating additional funding to 
provide service to locations that are or will be served, without 
support from high-cost universal service mechanisms or other Federal 
programs, would not be a judicious use of the budget the Commission 
adopts in this document. However, in order to provide support to offset 
costs associated with their expanded networks, the Commission limits 
the Enhanced A-CAM offer to the total amount of support that those 
locations would have received pursuant to the A-CAM through the end of 
the existing A-CAM term, or 33% per month of their current A-CAM rate 
but these payments will continue for an additional 10 years beyond the 
original A-CAM term. This support will be paid over the Enhanced A-CAM 
term in order to minimize the burden on payers into the USF.
    48. Tribal Broadband Factor. The Commission next adopts a Tribal 
Broadband Factor for Enhanced A-CAM, as it did for A-CAM II, to address 
the unique challenges of deploying high-speed broadband in rural Tribal 
communities. The Commission found then that the assumptions underlying 
the $52.50 funding threshold, which is based on nationwide assumptions 
about take rates and potential average revenues per subscriber, may be 
unrealistic in rural, Tribal areas, given the concentration of low-
income individuals and few business subscribers. The Commission agrees 
with the National Tribal Telecommunications Association that the Tribal 
Broadband Factor continues to be necessary and should be included in 
Enhanced A-CAM offers. The Commission will use a funding threshold 
reduced by 25 percent in Tribal areas, as it did for A-CAM II. Because 
the Commission raises the funding threshold to $63.69, in this 
document, the funding threshold for Tribal locations will therefore be 
set at $47.76. The Commission also instructs the Bureau to use a 
funding cap for Tribal lands that is $15.93 higher than the funding cap 
for non-Tribal lands to effectuate the Tribal Broadband Factor. The 
Commission also will use the same definition of ``Tribal lands'' that 
it adopted for A-CAM II. The Commission expects that Enhanced A-CAM 
providers serving Tribal areas will immediately engage the relevant 
Tribal governments regarding deployment to Tribal locations and 
continue to participate in Tribal engagement throughout the support 
term, as required under its rules.
    49. Support Adjustments due to Updated Deployment Obligations. In 
this document, the Commission directs the Bureau to establish a process 
for updating the deployment obligations for carriers electing Enhanced 
A-CAM due to improvements in information related to locations, 
broadband coverage, and Federal and state funding. Further, as 
discussed in the following, there may be instances in which Enhanced A-
CAM carriers and Tribal governments mutually agree to forego the 
Enhanced A-CAM deployment obligations for Tribal locations that are 
awarded BEAD funds. In most cases, the Commission expects the change 
will be de minimis and therefore will not require an amendment to the 
amount of Enhanced A-CAM authorized by them. Consistent with prior A-
CAM offers, the Commission sets the de minimis threshold at 5% of the 
obligation, so that if the number of locations to which a carrier is 
obligated to deploy service are at least 95% of the obligated locations 
reflected in the authorization, no further adjustment to support will 
be required. To be clear, the Commission does not provide the same 5% 
flexibility that it previously provided to A-CAM carriers, which 
afforded carriers the unilateral flexibility to meet only 95% of their 
deployment obligations. For Enhanced A-CAM, the only basis for a 
reduction in obligations would be improved information associated with 
locations, broadband coverage, or enforceable commitments to deploy 
100/20 Mbps as of the date the Enhanced A-CAM offer is made, or a 
mutual agreement with a Tribal government to forgo deployment 
obligations to Tribal locations. The Commission directs the Bureau to 
provide, in the order setting forth the funding caps and alternative 
funding percentages, a methodology to gradually reduce support where 
the number of locations to which a carrier is obligated to deploy is 
less than 95% but greater than 85% of the obligated locations in the 
authorization. The methodology should balance the need to avoid 
wasteful spending on locations to which it is no longer necessary to 
obligate deployment with the need to avoid creating inappropriate 
disincentives for carriers to accurately report location data in a 
timely fashion. If the number of locations to which the Enhanced A-CAM 
carrier is required to deploy is less than 85% of the obligated 
locations in the authorization, the carrier's support will be 
recalculated consistent with the support parameters set forth above. 
This re-authorization will prevent a windfall to carriers electing 
Enhanced A-CAM in cases where they are likely to be aware that material 
errors or deficiencies in their favor in the Fabric, the National 
Broadband Map, or the National Broadband Funding Map.
    50. In the alternative case, in which deployment obligations are 
increased as the data improves because additional broadband serviceable 
locations are identified, additional funding will be provided only to 
the extent that it would not cause the Enhanced A-CAM program to exceed 
the budget set forth in this document. Allowing unlimited post-
authorization increases to support could cause Enhanced A-CAM to exceed 
the budget, but it is likely that at least some of the budgeted funds 
will not be allocated, either because not all eligible carriers will 
elect Enhanced A-CAM or because of reductions in support due to 
decreased deployment obligations in accordance with the procedures the 
Commission sets in this

[[Page 55926]]

document. In addition, it is within the Bureau's delegated authority to 
reserve some or all of the extra $1 billion provided in the budget, 
above, to address increased deployment obligations. While this creates 
an asymmetrical risk for carriers electing offers--their support will 
decrease if their deployment obligations are later reduced, but their 
support may not increase if their deployment obligations are later 
increased and there are insufficient funds available under the budget--
the Commission finds that the carriers are well-placed to assess this 
risk when they accept the offer. The Commission emphasizes that the 
adjustments to deployment obligations and, if appropriate, a reduction 
in support will only be made based on circumstances that in fact 
existed at the time of the offer. The Commission believes that the 
carriers typically understand where in their service areas there are, 
in fact, broadband serviceable locations, deployment by unsubsidized 
competitors, and enforceable commitments to deploy broadband. They 
should not accept the Enhanced A-CAM offer if they believe the amount 
of support offered is insufficient, nor should they expect a windfall 
if they recognize the support offered is excessive, based on facts 
known to them but not reflected in the publicly available data used to 
calculate offers.
    51. Transitional Support for Legacy Carriers. The Commission has a 
``longstanding objective of transitioning away from legacy rate-of-
return support mechanisms'' based on embedded costs to programs based 
on forward-looking costs designed to incentivize operational 
efficiencies by providers. For this reason, in addition to current A-
CAM I and A-CAM II carriers, the Commission extends Enhanced A-CAM 
offers to carriers eligible to receive legacy support. To encourage 
participation, the Commission will provide electing legacy carriers 
with a fixed support transition, or ``glide path,'' from legacy support 
to their Enhanced A-CAM support amounts. The path will depend on 
whether or not the legacy carrier's 2022 support, based on the Connect 
America Fund Broadband Loop Support (CAF BLS) and High Cost Loop 
Support (HCLS), exceeds the annual amount of the Enhanced A-CAM offer.
    52. For legacy carriers whose 2022 support claims are equal to or 
greater than the Enhanced A-CAM offer, the Commission adapts a glide 
path from proposals by NTCA and the Southeastern Rural Broadband 
Alliance for a voluntary pathway to incentive regulation. Specifically, 
legacy carriers eligible for and electing Enhanced A-CAM will receive 
frozen support equal to their year 2022 support claims for six years, 
beginning January 1, 2024. Over the next five years, beginning January 
1, 2030, their support will step down to 80% of their 2022 support 
amount, in 4% increments. Finally, beginning January 1, 2035, electing 
carriers will then transition to model-based Enhanced A-CAM support, 
following the three-tiered transition schedule set forth in Sec.  
54.311 of the Commission's rules. Legacy carriers electing Enhanced A-
CAM would be required to deploy 100/20 Mbps or faster broadband service 
and voice service to 100% of the serviceable locations in their study 
areas, subject to the same interim milestones and deployment 
obligations as other Enhanced A-CAM participants.
    53. As the Commission has previously found, ``a tiered transition 
is preferable because it recognizes the magnitude of the difference in 
support for particular carriers.'' Further, ``[b]y specifying in 
advance how this transition will occur, carriers will have all the 
information necessary to evaluate the possibility of electing model 
support.'' Pursuant to Sec.  54.311(e) of the Commission's rules, which 
addresses a carrier's transition from receiving higher amounts to lower 
amounts of support, the transition payments are based on the percentage 
difference between model support and legacy support: if the difference 
between legacy and model-based support is 10% or less, the carrier will 
have a one-year transition; if greater than 10% but not more than 25%, 
then the transition period will be four years; and if the difference is 
greater than 25%, then the transition will occur over the full-term of 
the plan, with no extra transition support only in the final year of 
the term. For the purpose of calculating transitional support pursuant 
to this final stage, the Commission adopts a base year support amount 
equal to 80% of 2022 claims. The Commission recognizes this final 
transition schedule may extend past the end of the support term it 
adopts for Enhanced A-CAM.
    54. For an electing legacy carrier whose 2022 claims are less than 
its Enhanced A-CAM support offer, the Commission provides a transition 
to the carrier's full Enhanced A-CAM support, after the initial freeze, 
over a five-year period. Under this transition, support will be stepped 
up in five annual increments until the Enhanced A-CAM support level is 
reached by the electing carrier in 2034. This approach minimizes the 
impact to the Fund caused by demand increases on the legacy high-cost 
budget resulting from the transition payments in years 2030-2034. That 
is, electing carriers that are transitioning downward will incur 4% 
reductions in 2022 baseline support annually during years 2030-2034, 
which will work to offset the demand increases caused by electing 
carriers transitioning upwards.
    55. The Commission finds having an extended transition glide path 
to Enhanced A-CAM for legacy carriers is warranted. Moving legacy 
return carriers to model-based support furthers the Commission's core 
reform principles of: (1) ``Control[ling] the size of USF as it 
transitions to support broadband, including by reducing waste and 
inefficiency;'' (2) ``Requir[ing] accountability from companies 
receiving support to ensure that public investments are used wisely to 
deliver intended results;'' and (3) ``Transition[ing] to incentive-
based policies that encourage technologies and services that maximize 
the value of scarce program resources and the benefits to all 
consumers.'' The Commission has also emphasized the need ``to phase in 
reform with measured but certain transitions, so companies affected by 
reform have time to adapt to changing circumstances.''
    56. The Commission is embarking on its third offering of model-
based A-CAM support. Many legacy carriers have already committed to A-
CAM I and A-CAM II offerings, and the Commission provided a glide path 
with each offering to ease and encourage carriers to accept a 
predictable, fixed support amount in exchange for broadband deployment 
obligations. A number of legacy carriers, however, continue to find the 
business case for moving to model-based support uneconomical. 
Accordingly, for these remaining legacy carriers, the Commission finds 
a more generous glide path is needed to encourage the transition as 
compared to earlier A-CAM offerings.
    57. The proposal suggested by NTCA and the Southeastern Rural 
Broadband Alliance envisions an incentive regulation option that would 
serve as an alternative to Enhanced A-CAM for legacy carriers. The 
Commission rejects this proposal to offer a separate incentive 
regulation option, but it finds the proposal can also serve as an 
important building block to further encourage the transition of legacy 
carriers to Enhanced A-CAM support. This approach also provides several 
administrative efficiencies. For example, the Commission by using a 
frozen, fixed support path to Enhanced A-CAM can thus leverage earlier 
A-CAM efforts to address ancillary issues such as matters related to 
tariffing and rate regulation. Adopting the new

[[Page 55927]]

incentive regulation plan as proposed by NTCA and the Southeastern 
Rural Broadband Alliance, at this time, would in contrast require the 
Commission to address such issues anew for which there is limited 
advance time before carriers will need to complete the election process 
this fall. Further, by building on the proposal for an Enhanced A-CAM 
transition path, instead of having a completely new incentive-based 
option, the Commission eliminates the need to administer an additional 
support program and can better ensure the alignment of support terms 
and timelines. That said, NTCA and the Southeastern Rural Broadband 
Alliance can propose additional incentive-based options for legacy 
carriers in the associated NPRM proceeding if they find additional 
options are necessary.
    58. The Commission predicts the overall impact of these glide paths 
on the high-cost support budget will result in a decrease in support 
demand as it endeavors to constrain demand to decrease the USF 
contribution factor. As the Commission has acknowledged, ``American 
consumers and businesses ultimately pay for USF, and that if it grows 
too large this contribution burden may undermine the benefits of the 
program by discouraging adoption of communications services.'' By 
capping support at the 2022 level for electing carriers for six years, 
the Commission prevents future demand increases on the legacy high-cost 
support budget. While those electing carriers whose Enhanced A-CAM 
offer exceeds their 2022 support levels will receive an increase in 
support, increasing over years 7-11 to the Enhanced A-CAM offer of 
support. The Commission estimates that such increases will be more than 
offset by those carriers phasing down and then transitioning from 
higher legacy support levels to the level of their Enhanced A-CAM 
support offer.
    59. The Commission declines to apply different deployment 
obligations to legacy carriers electing Enhanced A-CAM than will be 
applied Enhanced A-CAM carriers generally. The Southeastern Rural 
Broadband Alliance, as part of its incentive regulation path option, 
proposed to exclude serviceable locations in an area where ``a provider 
submits cost data indicating the extreme cost to provide 100/20 Mbps 
service (e.g., when capital expenditures are estimated to be greater 
than $25,000 per location).'' And that for such locations, ``there 
could be a process by which companies could provide service via 
alternative technologies.'' While the Commission is sympathetic of the 
effort required to offer service to the hardest-to-reach areas of the 
country, it declines to adopt such an exclusion for the Enhanced A-CAM 
glide path. The Commission is committed to extending 100/20 Mbps or 
faster broadband and voice service to all Americans, including those 
living in high-cost areas. Further, to ensure locations funded with 
high-cost support do not become eligible for BEAD, and thus receive 
duplicative funding, the Commission must create a path to an 
enforceable commitment to serve all locations. If the Commission 
permits an exception allowing electing legacy carriers to escape the 
obligation to serve not-yet-identified locations subject to some future 
process, states applying the BEAD eligibility rules will not be able to 
determine whether an enforceable commitment has been made and may 
therefore be required to determine that there is no enforceable 
commitment for any locations. The Commission therefore cannot permit 
such an exclusion. Further, states, unlike this Commission, will have 
the ability to conclude that locations are extremely high-cost and 
therefore find a carrier's commitment to serve using a technology other 
than reliable broadband would still satisfy BEAD's requirements.
    60. Eligibility. The Commission adopts its proposal to permit each 
current A-CAM I or A-CAM II participant to elect, on a state-by-state 
basis, whether to participate in the Enhanced A-CAM program. The 
Commission will also extend eligibility (on a state-by-state basis) to 
rate-of-return carriers that are eligible to receive legacy support. 
Rate-of-return carriers that choose not to accept Enhanced A-CAM 
support offers will continue to receive support under the terms of 
their existing A-CAM authorizations or legacy rate-of-return plans.
    61. Consistent with the Commission's decision to provide capped 
support to locations where an A-CAM I or A-CAM II participant has 
already deployed broadband at speeds at 100/20 Mbps or greater, the 
Commission will permit all A-CAM I and A-CAM-II participants to elect 
to participate in the Enhanced A-CAM program even if a service provider 
has already deployed broadband at speeds of 100/20 Mbps or faster 
throughout its service area. The Commission is persuaded that it would 
be an effective use of Enhanced A-CAM funds to support the ongoing 
provision of 100/20 Mbps or faster service for the support term of 
Enhanced A-CAM and to provide service providers with the resources they 
need to repay loans and offer affordable rates. The Commission expects 
its decision to cap monthly support for these locations at an amount 
lower than that awarded to unserved locations will help balance its 
objectives of using support efficiently and ensuring that consumers 
remain served at these high speeds.
    62. Moreover, consistent with the Commission's longstanding 
objective of transitioning away from legacy rate-of-return support 
mechanisms and providing high-cost support based on a carrier's 
forward-looking, efficient costs, it will permit rate-of return 
carriers eligible to receive legacy support to elect to participate in 
the Enhanced A-CAM program instead. Commenters generally supported 
extending an offer to all rate-of-return carriers that are eligible to 
receive legacy support to maximize options for carriers and to maximize 
participation in the Enhanced A-CAM program. However, the Commission 
balances this objective with its longstanding goal of minimizing the 
overall burden of universal service contributions on American consumers 
and businesses. Specifically, in this document, the Commission takes 
measures to lessen the impact on the budget by freezing Enhanced A-CAM 
support for legacy carriers for six years at 2022 levels if their 
Enhanced A-CAM offer is more than their total 2022 legacy support 
(i.e., CAF BLS and HCLS) in the relevant state, and then gradually 
increasing their support to Enhanced A-CAM levels.
    63. The Commission notes that legacy rate-of-return carriers 
authorized to receive Enhanced A-CAM support will have requirements 
related to tariffs. Enhanced A-CAM recipients must exit the National 
Exchange Carrier Association (NECA) Common Line pool, although they 
have the option of continuing to use NECA to tariff their Common Line 
and Consumer Broadband-Only Loop charges. Such carriers must coordinate 
with NECA on making any required tariff filings in order to ease the 
administrative burden associated with implementation of any changes. 
Once USAC confirms that an authorized carrier has notified NECA of its 
intention to exit the Common Line pool, USAC may disburse A-CAM 
support. Pursuant to the Rate-of-Return BDS Order, 83 FR 67098, 
December 28, 2018, Enhanced A-CAM recipients that have not already done 
so will also be eligible to move their business data services offerings 
to incentive regulation.
    64. The Commission will permit otherwise eligible existing A-CAM 
and legacy rate-of-return carriers that are currently not in compliance 
with the deployment obligations associated with their current support 
programs to participate in the Enhanced A-CAM

[[Page 55928]]

program. However, to protect the public's funds, the Commission will 
take certain steps to reduce the Enhanced A-CAM support they receive 
until they come into compliance with their existing obligations. These 
steps will ensure that carriers cannot avoid compliance with existing 
obligations by accepting new obligations.
    65. Specifically, an existing A-CAM support recipient that has 
missed its December 31, 2022 service milestone and that is currently 
having its support withheld pursuant to one of the Sec.  54.320(d)(1) 
non-compliance tiers, will continue to remain subject to the support 
withholding associated with that non-compliance tier once its Enhanced 
A-CAM support term begins. The existing A-CAM support recipient will 
continue to receive its existing level of support that it received 
pursuant to its previous A-CAM program, excluding the support 
withholding associated with the applicable non-compliance tier, until 
it comes into compliance. At the time that the support recipient 
reports that it is eligible for Tier 1 status for the December 31, 2022 
service milestone pursuant to its original obligation (i.e., at the 
previous A-CAM program performance requirements and for the number of 
locations required by the December 31, 2022 service milestone), the 
support recipient will have its support fully restored to the level of 
support it is eligible to receive pursuant to the Enhanced A-CAM 
program, and USAC will repay any funds that were recovered or withheld.
    66. An existing A-CAM support recipient that misses the December 
31, 2023 service milestone for its previous A-CAM program will receive 
its ongoing Enhanced A-CAM support once its Enhanced A-CAM support term 
begins, but if its compliance gap with the December 31, 2023 service 
milestone makes it eligible for a Sec.  54.320(d)(1) non-compliance 
tier that requires support withholding, the Commission will withhold a 
percentage of the support recipient's ongoing Enhanced A-CAM support as 
required by the relevant non-compliance tier. At the time that the 
support recipient reports that it is eligible for Tier 1 status for the 
December 31, 2023 service milestone pursuant to its original obligation 
(i.e., at the previous A-CAM program performance requirements and for 
the number of locations required by the December 31, 2023 service 
milestone), it will have its support fully restored and USAC will repay 
any funds that were recovered or withheld.
    67. If the Commission determines that a legacy rate-of-return 
carrier receiving Enhanced A-CAM support has not met its legacy 
obligation to offer 25/3 Mbps to a required number of locations in its 
service area as required by December 31, 2023, it will treat the 25/3 
Mbps deployment obligation as a continuing obligation and subject the 
rate-of-return carrier to the Sec.  54.320(d)(1) non-compliance tiers 
depending on the size of its compliance gap. Accordingly, the 
Commission will withhold a portion of the rate-of-return carrier's 
ongoing Enhanced A-CAM support as required by the applicable non-
compliance tier. If it is verified that the rate-of-return carrier has 
come into compliance within the one-year cure period, the carrier will 
have its support fully restored and USAC will repay any funds that were 
recovered or withheld. If the rate-of-return carrier does not come into 
compliance within the one-year cure period, the Commission will recover 
support associated with the original five-year support term pursuant to 
Sec.  54.320(d)(2) for the locations to which it did not commercially 
offer 25/3 Mbps service. However, that carrier will be permitted to 
remain in the Enhanced A-CAM program and will continue to receive any 
remaining Enhanced A-CAM support. Like all high-cost recipients, 
Enhanced A-CAM participants will also remain subject to the 
Commission's other sanctions for non-compliance with the terms and 
conditions of high-cost funding, including but not limited to the 
Commission's existing enforcement procedures and penalties, reductions 
in support amounts, potential revocation of ETC designations, and 
suspension or debarment.
    68. The Commission declines to expand eligibility to include 
competitive service providers as part of this Enhanced A-CAM offer. The 
Commission is not persuaded that it would be an efficient use of funds 
at this time. While the Commission has increasingly relied on 
competitive processes for delivery of high-cost funding, areas funded 
by A-CAM carriers present distinct challenges to competitive entry. In 
areas served by price cap carriers, the Commission provided a limited 
term of model-based support to incumbents with the goal of moving 
towards allocating support on a competitive basis in the relevant 
areas. In contrast, the Commission adopted A-CAM as a longer-term 
support program with the goal of providing certainty and stability to 
permit the incumbent service providers to invest for the future. While 
the Commission acknowledges its approach precludes other service 
providers from participating that may also be qualified to offer 
service in these areas, it would be inefficient now to fund competitive 
carriers in A-CAM areas where incumbent service providers have existing 
long-term funding commitments. Moreover, the record lacks suggestions 
for how to efficiently implement a competitive process. Instead, the 
Commission concludes that it is better to address this issue on a 
longer term basis in the context of its proceeding regarding the future 
of high-cost support. In the concurrently adopted NOI, the Commission 
seeks to build a record on how to reform its high-cost programs in the 
face of the changing broadband landscape and specifically ask about 
alternatives to using a cost model, including using competitive 
processes.
    69. At the same time, the Commission recognizes the benefits of 
competitive processes to allocate government funding for broadband 
deployment. Thus, if the incumbent declines the Enhanced A-CAM offer, 
the Commission expects the unserved locations will become eligible for 
support through a competitive process (the BEAD Program).
    70. Elections. The Commission delegates to the Bureau the authority 
to implement the process for carriers to elect to receive Enhanced A-
CAM support, consistent with the same procedures adopted for its 
carriers electing to receive A-CAM II support. Commenters supported 
adopting the same procedures. Like with A-CAM II, elections will be 
voluntary, irrevocable, and made on a state-by-state basis.
    71. The Commission requires that carriers make their elections by 
no later than October 1, 2023. The Commission believes this timing 
should ensure that elections are made in time for states and grantees 
to be made aware of which areas will be subject to an enforceable 
commitment for the deployment of qualifying broadband, and thus 
ineligible for BEAD funding. If any of the dependent deadlines or 
timeframes are extended, the Commission grants the Bureau the 
flexibility to similarly extend the deadline for elections as long as 
the elections take place in time for the acceptances to qualify as an 
enforceable commitment for the deployment of qualifying broadband as 
defined by the BEAD Program Funding (BEAD Program NOFO).
    72. The Commission also requires carriers that accept an Enhanced 
A-CAM offer to identify in their election letters the technologies they 
plan to use to meet their Enhanced A-CAM deployment obligations. The 
Enhanced A-CAM deployment obligations are technologically neutral. The 
Commission expects that A-CAM

[[Page 55929]]

participants will disclose in good faith the technologies they intend 
to use to facilitate coordination with other funding programs. The 
Commission finds that requiring such disclosures will further its goal 
to maximize the deployment of high-quality broadband service by helping 
states and other eligible entities set allocations for the BEAD Program 
and further the efficient use of Federal broadband funding, including 
additional programs funded by other Federal agencies. The Commission 
directs the Bureau to make the acceptances public to inform, among 
other processes, the BEAD Program challenges conducted by states or 
other eligible entities and prevent any duplication of support to a 
location where it is determined that the Enhanced A-CAM service 
provider plans to deploy a technology that would satisfy the 
requirements for being deemed an enforceable commitment for the 
deployment of qualifying broadband to a location. Because acceptances 
will be made public, a carrier accepting an Enhanced A-CAM offer should 
not include any confidential trade secrets or commercial information in 
its acceptance.
    73. Participation Threshold. The Commission also adopts a minimum 
carrier participation threshold for implementing the Enhanced A-CAM 
program. Specifically, the Commission concludes that it may not serve 
the public interest to proceed if existing A-CAM participants 
collectively choose to accept Enhanced A-CAM offers that in total cover 
less than 50% of the unserved locations that are eligible for support 
across all the offers to current A-CAM recipients. The Commission will 
exclude from this formula any locations covered by offers received by 
legacy rate-of-return carriers eligible to receive legacy support. 
While the Commission encourages legacy rate-of-return carriers to elect 
Enhanced A-CAM and expect that many will do so, it will not forecast a 
reasonable participation rate for those carriers. If the 50% 
participation threshold is not reached, the Commission will not proceed 
with the Enhanced A-CAM program.
    74. The Commission believes that a minimum level of participation 
in Enhanced A-CAM will prevent the proliferation of high-cost 
mechanisms, each with its own rules and administrative requirements, 
and each self-selected by carriers to maximize universal service 
support. NTCA opposes the imposition of a participation threshold 
because it claims the Enhanced A-CAM program will most efficiently and 
effectively serve these areas. However, the Commission's goal for the 
Enhanced A-CAM program is to maximize the efficient use of universal 
service funds--both by leveraging existing A-CAM-supported networks to 
support the widespread deployment of 100/20 Mbps or faster broadband 
throughout rate-of-return carriers' service areas, and by preventing 
the duplication of funds across support programs in these areas. If 
fewer than half of the unserved locations included in offers to current 
A-CAM recipients are supported through Enhanced A-CAM, it seems 
unlikely that this goal will be met. The Commission also is not 
persuaded that it should decline to adopt a participation threshold 
simply because some commenters assume that ``a very substantial 
number'' of carriers will accept offers. Instead, the Commission finds 
that adopting a minimum participation threshold is a prudent approach 
that will enable us to safeguard the public funds by reassessing the 
program in the event that elections are too low to achieve its goals.
    75. Tribal Government Engagement. The Commission has long 
recognized the deep digital divide that persists between Tribal lands 
and the rest of the country and emphasized that engagement between 
Tribal governments and communications providers, either currently 
providing service or contemplating the provision of service on Tribal 
lands, is vitally important to the successful deployment and provision 
of service. All recipients of high-cost support that serve Tribal lands 
must, pursuant to Sec.  54.313(a)(5) of the Commission's rules, 
demonstrate that it has engaged with Tribal governments on a range of 
issues, including compliance with local rights of way, land use 
permitting facilities siting, and environmental and cultural 
preservation review processes, as well as Tribal business and licensing 
requirements, that are necessary for a carrier to obtain before 
fulfilling its deployment and service obligations. Through these 
obligatory Tribal engagements, and as demonstrated through successfully 
satisfying deployment obligations through previous high-cost programs, 
carriers receiving high-cost support through previous universal service 
programs should have received consent from the local Tribal government 
to satisfy the requisite permissions to deploy to certain locations. 
Further, because carriers that accept an Enhanced A-CAM offer already 
have an annual obligation to demonstrate they meaningfully engaged with 
the Tribal governments in their supported areas as existing high-cost 
support recipients, the Commission expects that they will be able to 
leverage any preexisting coordination and collaboration to immediately 
engage the relevant Tribal governments with respect to the steps 
necessary to complete the deployment required by Enhanced A-CAM. As 
such, and to continue the necessary consultation between carriers and 
the Tribal governments that oversee the lands which may contain 
eligible Enhanced A-CAM locations, Enhanced A-CAM carriers will also 
remain subject to the ongoing annual Tribal engagement obligations. Any 
carrier accepting an Enhanced A-CAM offer should be prepared to serve 
all locations in its study area, including those on Tribal lands.
    76. In addition to an annual obligation to demonstrate they 
meaningfully engaged with the Tribal governments in their supported 
areas, the Commission requires carriers receiving Enhanced A-CAM 
support to initiate engagement with any relevant Tribal governments 
within 90 days of the Bureau extending an Enhanced A-CAM offer. In 
engaging with Tribal governments, Enhanced A-CAM carriers must be aware 
that the BEAD Program will not recognize the acceptance of an Enhanced 
A-CAM offer as an enforceable commitment for the deployment of 
qualifying broadband, ``unless it includes a legally binding agreement, 
which includes a Tribal Government Resolution, between the Tribal 
Government of the Tribal Lands encompassing that location, or its 
authorized agent, and a service provider offering qualifying broadband 
service to that location.'' The Commission expects carriers that intend 
to accept Enhanced A-CAM offers will act in good faith to provide the 
relevant Tribe(s) with an opportunity to consent to the Enhanced A-CAM 
carrier's deployment of broadband in the Tribal area. To further the 
objectives of encouraging deployment on Tribal lands by facilitating 
communications between service providers and the Tribal governments, 
and avoiding duplicative support across Federal programs, the 
Commission expects that carriers that intend to accept Enhanced A-CAM 
offers will take reasonable steps necessary to obtain Tribal consent 
meeting the BEAD Program requirements in time for states and other 
eligible entities to conduct their challenge processes to identify 
locations that are eligible for BEAD Program funding. If the state 
concludes that there is no Tribal Government Resolution or

[[Page 55930]]

legally binding agreement expressing consent as required by the BEAD 
Program NOFO, the Tribal locations eligible for Enhanced A-CAM support 
may, according to the BEAD Program NOFO, nonetheless become eligible 
for BEAD support.
    77. To balance the Commission's goals of avoiding duplicative 
spending across Federal programs against the important and necessary 
engagement with Tribal governments over the deployment and provision of 
services over Tribal lands, if a state awards BEAD funds to another 
service provider to serve locations subject to an Enhanced A-CAM 
authorization, the Commission permits the Enhanced A-CAM carrier and 
the Tribal government to notify the Bureau that they mutually agree to 
forego the A-CAM deployment obligation, and the Bureau is directed to 
adjust the Enhanced A-CAM recipient's support and deployment 
obligations. The BEAD awards, unlike the other bases for adjustments to 
deployment obligations and support the Commission adopts in this 
document, would necessarily occur after the Enhanced A-CAM offers are 
made. The Commission finds, however, that carriers considering their 
Enhanced A-CAM offers will have adequate notice that Tribal locations 
may be de-authorized at a later date. The Commission finds that 
performing these adjustments is necessary to avoid duplication of 
funding across Federal programs.
    78. Adjusting the High-Cost Budget for Carriers Remaining on Legacy 
Support. As the Commission has in previous A-CAM elections, it re-set 
the legacy support budget for CAF BLS and HCLS to reflect the exit from 
the budget control mechanism of newly electing A-CAM carriers. To 
effectuate this reset, the Commission set the legacy budget for 2024-25 
at a level equal to 2023-24 legacy support claims less any frozen 
support received by carriers transitioning from legacy support to 
Enhanced A-CAM. The Commission will consider additional budget updates 
for legacy carriers proposed by NTCA and the Southeastern Rural 
Broadband Alliance in the concurrently adopted NPRM, as such proposals 
would benefit from additional comment by interested parties.
    79. Recalibrating the budget now provides the added benefit of 
mitigating the uncertainty to the remaining legacy carriers caused by 
application of the Commission's budget control mechanism as the 
Commission considers additional budget updates. Support demand has 
outpaced the Commission's predictive judgments made in the December 
2018 Rate-of-Return Reform Order, 84 FR 4711, February 19, 2019. The 
growth in projected support by carriers is due, in part, to an 
increased conversion of voice lines to broadband-only lines, which 
receive a higher support amount, and an increase in the number of new 
customers subscribing to broadband-only lines. This has ultimately 
resulted in projected estimated support demand substantially exceeding 
the annual high-cost budget in recent years and thus triggering the 
Commission's budget control mechanism. Absent recalibration, carriers 
would be under annual threat of increasing budget constraints going 
forward and the uncertainty of obtaining waiver relief while the 
Commission considers important and necessary budget updates.
    80. HCLS Cap. As the Commission has done previously with respect to 
A-CAM elections, it directs NECA to rebase the cap on HCLS to reflect 
the election of model-based support by HCLS-eligible rate-of-return 
carriers. In the first annual HCLS filing following the election of 
model-based support, NECA shall calculate the amount of HCLS that those 
carriers would have received in the absence of their election, subtract 
that amount from the HCLS cap, then recalculate HCLS for the remaining 
carriers using the rebased amount.
    81. Cybersecurity and Supply Chain Risk Requirements. The 
Commission requires Enhanced A-CAM carriers to implement operational 
cybersecurity and supply chain risk management plans by January 1, 
2024--the start of the Enhanced A-CAM support term. The Commission also 
requires carriers to submit such plans to USAC, and certify that they 
have done so, by January 2, 2024 or within 30 days of approval under 
the Paperwork Reduction Act, whichever is later. Failure to submit the 
plans and make the certification shall result in 25% of monthly support 
being withheld until the carrier comes into compliance. The 
Commission's actions emphasize the critical importance of cybersecurity 
and supply chain risk management in modern broadband networks, 
consistent with broader initiatives across the Federal government, 
while striking an appropriate balance to ensure compliance with this 
important requirement that avoids disproportionate disruption to 
carriers' support.
    82. Adopting this risk management requirement is necessary to 
ensure that the Enhanced A-CAM program does not deprive rural consumers 
in high-cost areas of broadband service that is as secure as the 
service deployed pursuant to other Federal funding initiatives, 
including through the BEAD Program. The BEAD Program will not fund 
areas where there is an enforceable commitment by an entity to build 
broadband. Therefore, if receipt of Enhanced A-CAM funding were not 
conditioned upon comparable cybersecurity and supply chain risk 
management requirements, the receipt of Enhanced A-CAM funding would 
likely leave those rural consumers served by Enhanced A-CAM carriers 
without comparable protection.
    83. Consistent with the BEAD Program, carriers' cybersecurity risk 
management plans must reflect the latest version of the National 
Institute of Standards and Technology (NIST) Framework for Improving 
Critical Infrastructure Cybersecurity, and must reflect an established 
set of cybersecurity best practices, such as the standards and controls 
set forth in the Cybersecurity & Infrastructure Security Agency 
Cybersecurity Cross-sector Performance Goals and Objectives or the 
Center for internet Security Critical Security Controls. Carriers' 
supply chain risk management plans must incorporate the key practices 
discussed in NISTIR 8276, Key Practices in Cyber Supply Chain Risk 
Management: Observations from Industry, and related supply chain risk 
management guidance from NIST 800-161.
    84. If an Enhanced A-CAM carrier makes a substantive modification 
to its cybersecurity or supply chain risk management plan, the 
Commission requires that carrier to submit its updated plan to USAC 
within 30 days of making that modification. A modification to a 
cybersecurity or supply chain risk management plan will be considered 
as substantive if at least one of the following conditions apply:
     There is a change in the plan's scope, including any 
addition, removal, or significant alternation to the types of risks 
covered by the plan (e.g., expanding a plan to cover new areas such as 
supply chain risks to Internet of Things devices or cloud security 
could be a substantive change);
     There is a change in the plan's risk mitigation strategies 
(e.g., implementing a new encryption protocol or deploying a different 
firewall architecture);
     There is a shift in organizational structure (e.g., 
creating a new information technology department or hiring a Chief 
Information Security Officer);
     There is a shift in the threat landscape prompting the 
organization to recognize that emergence of new threats

[[Page 55931]]

or vulnerabilities that weren't previously accounted for in the plan;
     Updates are made to comply with new cybersecurity 
regulations, standards, or laws;
     Significant changes are made in the supply chain, 
including offboarding major suppliers or vendors, or shifts in 
procurement strategies that may impact the security of the supply 
chain; or
     A large-scale technological change is made, including the 
adoption of new systems or technologies, migrating to a new information 
technology infrastructure, or significantly changing the information 
technology architecture.
    Further, in their FCC Form 481 filings following each subsequent 
support year, carriers shall certify that they have maintained their 
plans, whether they have submitted modifications in the prior year, and 
the date any modifications were submitted. At any point during the 
support term, if an Enhanced A-CAM carrier does not have in place 
operational cybersecurity and supply chain risk management plans 
meeting the Commission's requirements, it directs the Bureau to 
withhold 25% of the Enhanced A-CAM carrier's support until the Enhanced 
A-CAM carrier is able to come into compliance. The requirements the 
Commission adopts here will improve the cybersecurity of the nation's 
broadband networks and protect consumers from online risks such as 
fraud, theft, and ransomware that can be mitigated or eliminated 
through the implementation of accepted security measures.
    85. The Commission also takes steps to mitigate concerns that 
development and implementation of cybersecurity plans are expensive and 
time consuming particularly for eligible carriers. The Commission 
affords carriers flexibility to include standards and controls in their 
cybersecurity management plans that are reasonably tailored to their 
business needs. The Commission believes that implementation of these 
approaches would facilitate the nation's cybersecurity goals.
    86. The Commission's approach will also likely reduce compliance 
costs by allowing carriers that have already implemented the NIST 
Framework for Improving Critical Infrastructure Cybersecurity to comply 
with this requirement without redoing their plan so long as they 
implement an established set of cybersecurity best practices. To 
further mitigate costs for small providers, as suggested by NTCA, the 
Commission encourages Enhanced A-CAM providers to take advantage of 
existing Federal government resources designed to share supply chain 
security risk information with trusted communications providers and 
suppliers and facilitate the creation of cybersecurity and supply-chain 
risk management plans.

III. Procedural Matters

A. Paperwork Reduction Act

    87. This final rule has new and modified information collection 
requirements subject to the Paperwork Reduction Act of 1995 (PRA) 
Public Law 104-13. It will be submitted to the Office of Management and 
Budget (OMB) for review under section 3507(d) of the PRA. OMB, the 
general public, and other Federal agencies will be invited to comment 
on the new and modified information collection requirements contained 
in this proceeding. In addition, the Commission notes that pursuant to 
the Small Business Paperwork Relief Act of 2002, it previously sought 
specific comment on how they might further reduce the information 
collection burden for small business concerns with fewer than 25 
employees. The Commission describes impacts that might affect small 
businesses, which includes most businesses with fewer than 25 
employees.

B. Congressional Review Act

    88. The Commission has determined, and the Administrator of the 
Office of Information and Regulatory Affairs, OMB, concurs, that this 
rule is non-major under the Congressional Review Act, 5 U.S.C. 804(2). 
The Commission will send a copy of this final rule to Congress and the 
Government Accountability Office pursuant to 5 U.S.C. 801(a)(1)(A).
    89. Effective Date. The Commission concludes that good cause exists 
to make this final rule effective immediately upon publication in the 
Federal Register, pursuant to section 553(d)(3) of the Administrative 
Procedure Act, except for those portions containing information 
collection requirements that have not been approved by the OMB. 
Agencies determining whether there is good cause to make an order take 
effect less than 30 days after Federal Register publication must 
balance the necessity for immediate implementation against principles 
of fundamental fairness that require that all affected persons be 
afforded reasonable time to prepare for the effective date.
    90. Here, the Commission finds that implementing the rules for the 
Enhanced A-CAM program as expeditiously as possible is necessary for 
aligning Enhanced A-CAM offers with the allocation of support through 
the BEAD program to avoid the duplication of funds across programs and 
promote the efficient use of Federal funds in supporting broadband 
deployment. The Commission concludes that furthering this objective 
outweighs any potential impact on affected parties. This final rule 
does not require affected parties to take any specific action until the 
Bureau extends Enhanced A-CAM offers, and this final rule delegates to 
the Bureau the task of implementing the process for carriers to accept 
offers, consistent with the same procedures the Commission adopted for 
carriers electing to receive A-CAM II support. Accordingly, even with 
immediate implementation, eligible rate-of-return carriers will still 
be afforded reasonable time to take any necessary steps to prepare to 
accept an Enhanced A-CAM offer before and after the Bureau extends such 
offers.
    91. As required by the Regulatory Flexibility Act of 1980, as 
amended (RFA), an Initial Regulatory Flexibility Analysis (IRFA) was 
incorporated in the Connect America Fund: A National Broadband Plan for 
Our Future High-Cost Universal Service Support, Notice of Proposed 
Rulemaking (Enhanced ACAM FNPRM) released in May of 2022. The 
Commission sought written public comment on the proposals in the 
Enhanced ACAM NPRM, including comment on the IRFA. No comments were 
filed addressing the IRFA. This Final Regulatory Flexibility Analysis 
(FRFA) conforms to the RFA.
    92. In this final rule, the Commission adopts the Enhanced A-CAM 
program as a voluntary path for supporting the widespread deployment of 
100/20 Mbps broadband service throughout the rural areas served by 
carriers currently receiving A-CAM support and in areas served by rate-
of-return carriers eligible to receive legacy support by the end of 
2028. In adopting this program, the Commission furthers its long-
standing goals by promoting the universal availability of voice and 
broadband networks, while also taking measures to minimize the burden 
on the nation's ratepayers. The Commission also adopts requirements for 
the Enhanced A-CAM program to complement existing Federal, state, and 
local funding programs, so that broadband funding can be used 
efficiently to maximize the deployment of high-quality broadband 
service across the United States.
    93. In exchange for the commitment to complete this deployment, the 
Commission will extend offers to current A-CAM carriers and current 
legacy support recipients within a

[[Page 55932]]

budget totaling no more than $1.27 billion annually, or no more than 
$1.33 billion annually if certain conditions are met, over a 15-year 
term beginning January 1, 2024. The Commission requires that carriers 
make their Enhanced A-CAM elections by no later than October 1, 2023 to 
ensure alignment with the expected BEAD Program timeline as required by 
the Infrastructure Act and obligate them to serve 100% of unserved 
locations with service levels consistent with the standard established 
in the Infrastructure Act. The Commission also establishes a framework 
to avoid duplicating existing efforts from other government programs 
funding broadband deployment. To address the unique challenges of 
deploying high-speed broadband in rural Tribal communities, the 
Commission also adopts a Tribal Broadband Factor for Enhanced A-CAM. 
The Commission adopts requirements and safeguards for Enhanced A-CAM 
that address other concerns expressed by commenters requesting that 
they wait before implementing Enhanced A-CAM. In response to concerns 
that areas will not be served as quickly as they might be if they were 
funded by the BEAD Program, the Commission aligns the deployment 
timeline for Enhanced A-CAM recipients with the timeline required by 
the Infrastructure Act. The Commission also requires performance 
requirements that align with the Infrastructure Act, and subject 
Enhanced A-CAM recipients to the reporting requirements and non-
compliance measures that we apply to all high-cost support recipients 
so that they can monitor and incentivize deployment. The Commission 
also adopts a minimum carrier participation threshold of 50% for 
implementing the Enhanced A-CAM program. As the Commission extends 
Enhanced A-CAM offers to carriers serving Tribal lands, it requires 
Enhanced A-CAM recipients engage, within 90 days of their Enhanced A-
CAM elections and at least annually thereafter, with relevant Tribal 
government(s) regarding deployment to Tribal locations.
    94. The RFA directs agencies to provide a description of and, where 
feasible, an estimate of the number of small entities that may be 
affected by the rules adopted herein. The RFA generally defines the 
term ``small entity'' as having the same meaning as the terms ``small 
business,'' ``small organization,'' and ``small governmental 
jurisdiction.'' In addition, the term ``small business'' has the same 
meaning as the term ``small-business concern'' under the Small Business 
Act. A ``small-business concern'' is one that: (1) is independently 
owned and operated; (2) is not dominant in its field of operation; and 
(3) satisfies any additional criteria established by the Small Business 
Administration (SBA).
    95. Small Businesses, Small Organizations, Small Governmental 
Jurisdictions. The Commission's actions, over time, may affect small 
entities that are not easily categorized at present. The Commission 
therefore describes, at the outset, three broad groups of small 
entities that could be directly affected herein. First, while there are 
industry specific size standards for small businesses that are used in 
the regulatory flexibility analysis, according to data from the SBA, 
Office of Advocacy, in general a small business is an independent 
business having fewer than 500 employees. These types of small 
businesses represent 99.9% of all businesses in the United States, 
which translates to 33.2 million businesses.
    96. Next, the type of small entity described as a ``small 
organization'' is generally ``any not-for-profit enterprise which is 
independently owned and operated and is not dominant in its field.'' 
The Internal Revenue Service (IRS) uses a revenue benchmark of $50,000 
or less to delineate its annual electronic filing requirements for 
small exempt organizations. Nationwide, for tax year 2020, there were 
approximately 447,689 small exempt organizations in the U.S. reporting 
revenues of $50,000 or less according to the registration and tax data 
for exempt organizations available from the IRS.
    97. Finally, the small entity described as a ``small governmental 
jurisdiction'' is defined generally as ``governments of cities, 
counties, towns, townships, villages, school districts, or special 
districts, with a population of less than fifty thousand.'' U.S. Census 
Bureau data from the 2017 Census of Governments indicate there were 
90,075 local governmental jurisdictions consisting of general purpose 
governments and special purpose governments in the United States. Of 
this number, there were 36,931 general purpose governments (county, 
municipal, and town or township) with populations of less than 50,000 
and 12,040 special purpose governments--independent school districts 
with enrollment populations of less than 50,000. Accordingly, based on 
the 2017 U.S. Census of Governments data, the Commission estimates that 
at least 48,971 entities fall into the category of ``small governmental 
jurisdictions.''
    98. Small entities potentially affected by the rules herein include 
Wired Telecommunications Carriers, Local Exchange Carriers (LECs), 
Incumbent Local Exchange Carriers (Incumbent LECs), Competitive Local 
Exchange Carriers (LECs), Interexchange Carriers (IXCs), Local 
Resellers, Toll Resellers, Other Toll Carriers, Prepaid Calling Card 
Providers, Wireless Telecommunications Carriers (except Satellite), 
Cable and Other Subscription Programming, Cable Companies and Systems 
(Rate Regulation), Cable System Operators (Telecom Act Standard), All 
Other Telecommunications, Wired Broadband internet Access Service 
Providers (Wired ISPs), Wireless Broadband internet Access Service 
Providers (Wireless ISPs or WISPs), internet Service Providers (Non-
Broadband), All Other Information Services.
    99. In this final rule, the Commission adopts rules that will 
create recordkeeping, reporting and other compliance obligations for 
small and other recipients of the Enhanced A-CAM program. The 
Commission adopts a 15-year support term and deployment obligations 
that require every Enhanced A-CAM recipient to deploy, over a four-year 
term, 100/20 Mbps or faster broadband service, with latency of 100 
milliseconds or less, and usage allowances reasonably comparable to 
those available through comparable offerings in urban areas, to all 
unserved locations in their service areas. Enhanced A-CAM recipients 
must also offer voice service to their required locations, and must 
offer their voice and broadband services at rates that are reasonably 
comparable to offerings of comparable services in urban areas. 
Additionally, Enhanced A-CAM recipients must participate in the 
Affordable Connectivity Program as well as any successor program and 
describe and certify their compliance with this requirement. Enhanced 
A-CAM carriers must also implement operational cybersecurity and supply 
chain risk management plans by January 1, 2024, submit and certify such 
plans, and file updates for the plans when there are substantive 
modifications with 30 days of the modification. Enhanced A-CAM carriers 
must annually certify that they have maintained their cybersecurity and 
supply chain risk management plans, report whether they filed any 
substantive modifications, and the date the modification was filed.
    100. Like all high-cost support recipients, Enhanced A-CAM 
recipients must participate in the Lifeline Program. Enhanced A-CAM 
recipients also remain subject to the Commission's National Security 
Supply Chain proceeding and remain subject to the annual requirement to 
demonstrate they

[[Page 55933]]

meaningfully engaged with the Tribal governments in their supported 
areas. To the extent a carrier's Enhanced A-CAM offer covers Tribal 
lands, the Commission requires Enhanced A-CAM recipients engage, within 
90 days of the Bureau extending an Enhanced A-CAM offer, and at least 
annually thereafter--as they currently are, with relevant Tribal 
government(s) regarding deployment to Tribal locations.
    101. The Commission also adopts interim deployment milestones. 
Specifically, at the end of a carrier's second year of Enhanced A-CAM 
support, the carrier must deploy 100/20 Mbps or faster broadband 
service to at least 50% of required new locations, and the carrier must 
deploy such service to an additional 25% of required new locations at 
the end of each subsequent year, until the carrier deploys to 100% of 
required new locations at the end of the fourth year of Enhanced A-CAM 
support. Enhanced A-CAM recipients will also be subject to the same 
performance testing requirements as other high-cost support recipients, 
along with the same support withholding and recovery provisions 
currently applicable to A-CAM carriers and other high-cost support 
recipients, with the exception that the Commission does not extend to 
Enhanced A-CAM the flexibility for A-CAM carriers to deploy to only 95% 
of their required locations by the end of their final milestone without 
a reduction in support.
    102. To make efforts to avoid duplicative Federal broadband 
funding, Enhanced A-CAM recipients will be required to participate, in 
good faith, in any relevant BEAD Program challenge processes conducted 
by the states or other BEAD Program eligible entities. Additionally, 
they will be required to certify annually that they are not receiving 
or using BEAD Program funding or other future Federal grant funding, 
unless otherwise specified herein, that supports broadband deployment 
to those areas in which they are receiving Enhanced A-CAM support. 
Eligible carriers that elect to participate in the Enhanced A-CAM 
program must identify in their election letters the technology they 
intend to use to meet their deployment obligations on a state-by-state 
basis. Legacy rate-of-return carriers that choose to accept an Enhanced 
A-CAM offer will have requirements related to their tariffs. To monitor 
the use of Enhanced A-CAM support to ensure that it is being used for 
its intended purposes, support recipients will be required to file 
location data on an annual basis in the online High Cost Universal 
Broadband (HUBB) portal and to make certifications when they have met 
their service milestones. Recipients must also file annual FCC Form 481 
reports. Additionally, support recipients will be subject to the annual 
Sec.  54.314 certifications and the same record retention and audit 
requirements as other high-cost ETCs.
    103. The Commission does not have sufficient information on the 
record to determine whether small entities will be required to hire 
professionals to comply with its decisions or to quantify the cost of 
compliance for small entities. The Commission, however, anticipates the 
approaches it has taken to implement the requirements will have minimal 
or de minimis cost implications and may reduce compliance requirements 
for small entities that may have smaller staff and fewer resources.
    104. The RFA requires an agency to provide, ``a description of the 
steps the agency has taken to minimize the significant economic impact 
on small entities . . . including a statement of the factual, policy, 
and legal reasons for selecting the alternative adopted in this final 
rule and why each one of the other significant alternatives to the rule 
considered by the agency which affect the impact on small entities was 
rejected.''
    105. The Commission has considered the economic impact on small 
entities in reaching its final conclusions and taking action in this 
proceeding. The rules that the Commission adopts in this final rule 
will provide greater certainty and flexibility for all carriers, 
including small entities. For example, the Commission adopts a process 
for calculating Enhanced A-CAM offers that takes into account the 
challenges that all Enhanced A-CAM recipients, including small 
businesses, may face in serving high-cost areas. Specifically, the 
Commission adopts a voluntary election process that allows each 
eligible carrier to consider whether accepting an Enhanced A-CAM offer 
will be most beneficial to that carrier. The Commission adopts a Tribal 
Broadband Factor to address the unique challenges for deploying high-
speed broadband in rural Tribal communities. Moreover, the Commission 
delegated to the Bureau consideration of whether Enhanced A-CAM support 
should be increased to cover operational costs for carriers that 
already deployed broadband at speeds of 100/20 Mbps, which may ease the 
economic burden on small carriers.
    106. The Commission creates a voluntary pathway to model-based 
support for small carriers that currently receive support under legacy 
embedded cost support mechanisms. The Commission also provides 
transitional support to those legacy rate-of-return carriers that 
accept an Enhanced A-CAM offer that is lower than their existing legacy 
support, easing the economic burden on small entities that choose to 
accept Enhanced A-CAM offers by giving them time to adapt to the 
reduction in support. The legacy carriers that elect model-based 
support will also be eligible to elect incentive regulation for their 
business data service offerings, reducing the economic burden of 
providing those services. The Commission also takes action to re-set 
the legacy support budget for CAF BLS and HCLS to reflect the exit from 
the budget control mechanism of newly electing A-CAM carriers. This 
recalibration will mitigate the uncertainty for rate-of-return carriers 
that continue to receive legacy support, many of which are small 
businesses, caused by application of the Commission's budget control 
mechanism as the Commission considers additional budget updates. Absent 
recalibration, carriers would be under annual threat of increasing 
budget constraints going forward and the uncertainty of obtaining 
waiver relief while the Commission considers important and necessary 
budget updates.
    107. The Commission also considered the Coalition's proposal to 
require complete deployment within eight years, but rejects this in 
favor of a four-year deployment timeline for Enhanced A-CAM, beginning 
in 2025 and ending in 2028. The additional time may favor small 
carriers who may require more time to implement a construction and 
deployment plan, however that timeline runs counter to the Commission's 
goal of achieving buildout to all locations within four years. Instead, 
the Commission directs the Bureau to consider, in 2027, whether a one-
year extension for Enhanced A-CAM carriers' final deployment milestones 
would be appropriate in light of any such BEAD Program deployment 
delays. In adopting cybersecurity requirements, the Commission took 
steps to mitigate concerns that development and implementation of 
cybersecurity plans are expensive and time consuming. The Commission 
affords carriers flexibility to include standards and controls in their 
cybersecurity management plans that are reasonably tailored to their 
business needs. The Commission's approach will also likely reduce 
compliance costs because it allows carriers that have already 
implemented the NIST Framework for Improving Critical Infrastructure 
Cybersecurity to comply with the requirement without

[[Page 55934]]

redoing their plan so long as they implement an established set of 
cybersecurity best practices. To further mitigate costs for small 
providers the Commission encouraged Enhanced A-CAM carriers to take 
advantage of existing Federal government resources designed to share 
supply chain security risk information with trusted communications 
providers and suppliers and facilitate the creation of cybersecurity 
and supply-chain risk management plans.
    108. Finally, the reporting requirements the Commission adopts for 
all Enhanced A-CAM support recipients are tailored to ensuring that 
support is used for its intended purpose and so that it can monitor the 
progress of recipients in meeting their service milestones. The 
Commission finds that the importance of monitoring the use of the 
public's funds outweighs the burden of filing the required information 
on all entities, including small entities, particularly because much of 
the information that it requires they report is information the 
Commission expects they will already be collecting to ensure they 
comply with the terms and conditions of support and they will be able 
to submit their location data on a rolling basis to help minimize the 
burden of uploading a large number of locations at once.

IV. Ordering Clauses

    109. Accordingly, it is ordered, pursuant to the authority 
contained in sections 4(i), 214, 218-220, 254, 303(r), and 403 of the 
Communications Act of 1934, as amended, 47 U.S.C. 154(i), 214, 218-220, 
254, 303(r), and 403, and Sec. Sec.  1.1 and 1.425 of the Commission's 
rules, 47 CFR 1.1 and 1.425 this Report and Order is adopted. The 
Report and Order shall be effective upon publication in the Federal 
Register, except for portions containing information collection 
requirements in Sec. Sec.  54.308, 54.313 and 54.316 that have not been 
approved by OMB. The Federal Communications Commission will publish a 
document in the Federal Register announcing the effective date of these 
provisions.
    110. It is further ordered that part 54 of the Commission's rules 
is amended as set forth in the following, and that any such rule 
amendments that contain new or modified information collection 
requirements that require approval by the OMB under the Paperwork 
Reduction Act shall be effective after announcement in the Federal 
Register of OMB approval of the rules, and on the effective date 
announced therein.

List of Subjects in 47 CFR Part 54

    Communications common carriers, Health facilities, Infants and 
children, Internet, Libraries, Puerto Rico, Reporting and recordkeeping 
requirements, Schools, Telecommunications, Telephone, Virgin Islands.

Federal Communications Commission.
Marlene Dortch,
Secretary.

Final Rules

    For the reasons discussed in the preamble, the Federal 
Communications Commission amends 47 CFR part 54 as follows:

PART 54--UNIVERSAL SERVICE

0
1. The authority for part 54 continues to read as follows:

    Authority:  47 U.S.C. 151, 154(i), 155, 201, 205, 214, 219, 220, 
229, 254, 303(r), 403, 1004, 1302, 1601-1609, and 1752, unless 
otherwise noted.


0
2. Amend Sec.  54.5 by revising the definition of ``High-cost support'' 
to read as follows:


Sec.  54.5  Terms and definitions.

* * * * *
    High-cost support. ``High-cost support'' refers to those support 
mechanisms provided pursuant to subparts D, J, K, L, M, and O of this 
part.
* * * * *

0
3. Amend Sec.  54.308 by revising paragraph (a)(1) introductory text 
and adding paragraphs (a)(1)(v), (a)(3) and (e) to read as follows:


Sec.  54.308  Broadband public interest obligations for recipients of 
high-cost support.

    (a) * * *
    (1) Carriers that have elected to receive Connect America Fund-
Alternative Connect America Cost Model (CAF-ACAM) support pursuant to 
Sec.  54.311, other than Enhanced A-CAM support, are required to offer 
broadband service at actual speeds of at least 10 Mbps downstream/1 
Mbps upstream to a defined number of locations as specified by public 
notice, with a minimum usage allowance of 150 GB per month, subject to 
the requirement that usage allowances remain consistent with mean usage 
in the United States over the course of the term. In addition, such 
carriers must offer other speeds to subsets of locations, as specified 
in paragraphs (a)(1)(i) through (v) of this section:
* * * * *
    (v) After December 31, 2023, to the extent that an Enhanced A-CAM 
carrier was previously subject to the foregoing deployment obligations 
pursuant to A-CAM I, Revised A-CAM I, or A-CAM II, the Enhanced A-CAM 
carrier will instead be subject to Sec.  54.308(a)(3).
* * * * *
    (3) An Enhanced A-CAM carrier, as defined by Sec.  54.311(a)(4), 
must offer broadband speeds of at least 100 Mbps downstream/20 Mbps 
upstream to 100 percent of locations in its study areas within the 
state by the end of 2028.
    (i) Enhanced A-CAM required locations are those locations 
identified in the National Broadband Map within the carrier's service 
area where voice and terrestrial broadband services of speeds 100 Mbps 
downstream/20 Mbps upstream or faster are not yet available or lack an 
enforceable commitment for deployment of such broadband service. In the 
context of Enhanced A-CAM, an enforceable commitment exists where a 
carrier commits to deploying broadband service as a condition of any 
federal or state grants or other funding. The Wireline Competition 
Bureau shall provide a list of Enhanced A-CAM required locations for 
each carrier concurrently with the Enhanced A-CAM offer pursuant to 
Sec.  54.311(a), and will update such list to reflect any additional 
information related locations, broadband coverage, or enforceable 
commitments determined to have existed at the time of the offer.
    (ii) An Enhanced A-CAM carrier that has reported deployment of 100 
Mbps downstream/20 Mbps upstream or faster service to particular 
locations in its Enhanced A-CAM study area(s) in the National Broadband 
Map or the Universal Service Administrative Company's High Cost 
Universal Broadband Portal must maintain the same or faster service at 
those locations through the end of the Enhanced A-CAM term.
* * * * *
    (e) Enhanced A-CAM Cybersecurity and Supply Chain Risk Management 
Requirements. (1) An Enhanced A-CAM carrier shall implement operational 
cybersecurity and supply chain risk management plans meeting the 
requirements of this section by January 1, 2024.
    (2) An Enhanced A-CAM carrier shall certify that it has implemented 
plans required under paragraph (e)(1) of this section and submit the 
plans to the Administrator by January 2, 2024 or within 30 days of 
approval under the Paperwork Reduction Act, whichever is later.
    (3) Enhanced A-CAM carriers that fail to comply with Enhanced A-CAM 
cybersecurity and supply chain risk

[[Page 55935]]

management requirements are subject to the following non-compliance 
measures:
    (i) The Wireline Competition Bureau shall direct the Administrator 
to withhold 25 percent of the Enhanced A-CAM carrier's monthly support 
for failure to comply with paragraph (e)(2) of this section until the 
carrier makes the required certification and submits the required 
plans.
    (ii) At any time during the support term, if an Enhanced A-CAM 
carrier does not have in place operational cybersecurity and supply 
chain risk management plans meeting the requirements of this section, 
Wireline Competition Bureau shall direct the Administrator to withhold 
25 percent of the carrier's monthly support.
    (iii) Once the carrier comes into compliance, the Administrator 
shall stop withholding support, and the carrier will receive all of the 
support that had been withheld pursuant to this section.
    (4) An Enhanced A-CAM carrier's cybersecurity risk management plans 
shall reflect the latest version of the National Institute of Standards 
and Technology (NIST) Framework for Improving Critical Infrastructure 
Cybersecurity, and shall reflect an established set of cybersecurity 
best practices, such as the standards and controls set forth in the 
Cybersecurity & Infrastructure Security Agency (CISA) Cybersecurity 
Cross-sector Performance Goals and Objectives or the Center for 
Internet Security Critical Security Controls.
    (5) An Enhanced A-CAM carrier's supply chain risk management plans 
shall incorporate the key practices discussed in NISTIR 8276, Key 
Practices in Cyber Supply Chain Risk Management: Observations from 
Industry, and related supply chain risk management guidance from NIST 
800-161.
    (6) If an Enhanced A-CAM carrier makes a substantive modification 
to its plans under this section, the carrier shall file an updated plan 
with the Administrator within 30 days of making the modification. A 
modification to a plan under this section is substantive if at least 
one of the following conditions apply:
    (i) There is a change in the plan's scope, including any addition, 
removal, or significant alternation to the types of risks covered by 
the plan (e.g., expanding a plan to cover new areas such as supply 
chain risks to Internet of Things devices or cloud security could be a 
substantive change);
    (ii) There is a change in the plan's risk mitigation strategies 
(e.g., implementing a new encryption protocol or deploying a different 
firewall architecture);
    (iii) There is a shift in organizational structure (e.g., creating 
a new information technology department or hiring a Chief Information 
Security Officer);
    (iv) There is a shift in the threat landscape prompting the 
organization to recognize that emergence of new threats or 
vulnerabilities that weren't previously accounted for in the plan;
    (v) Any updates made to comply with new cybersecurity regulations, 
standards, or laws;
    (vi) Significant changes in the supply chain, including offboarding 
major suppliers or vendors, or shifts in procurement strategies that 
may impact the security of the supply chain; or
    (vii) Any large-scale technological changes, including the adoption 
of new systems or technologies, migrating to a new information 
technology infrastructure, or significantly changing the information 
technology architecture.

0
4. Amend Sec.  54.311 by:
0
a. Revising paragraphs (a) introductory text, (a)(2) and (3);
0
b. Adding paragraph (a)(4);
0
c. Revising paragraphs (b) and (c);
0
d. Revising paragraph (d) introductory text;
0
e. Adding paragraphs (d)(3) and (4);
0
f. Revising paragraph (e) introductory text; and
0
g. Adding paragraphs (e)(4)(iii), (e)(5) and (6), and (f);
    The revisions and additions read as follows:


Sec.  54.311  Connect America Fund Alternative-Connect America Cost 
Model

    (a) Voluntary election of model-based support. A rate-of-return 
carrier (as that term is defined in Sec.  54.5) receiving support 
pursuant to subparts K or M of this part shall have the opportunity to 
voluntarily elect, on a state-level basis, to receive Connect America 
Fund-Alternative Connect America Cost Model (CAF-ACAM) support as 
calculated by the Alternative-Connect America Cost Model (A-CAM) 
adopted by the Commission in lieu of support calculated pursuant to 
subparts K or M of this part, subject to the conditions specific to 
each A-CAM offer as determined by the Commission. Any rate-of-return 
carrier not electing support pursuant to this section shall continue to 
receive support calculated pursuant to those mechanisms as specified in 
Commission rules for high-cost support.
* * * * *
    (2) For the purposes of this section, ``Revised A-CAM I'' refers to 
carriers initially authorized to receive CAF-ACAM support as of January 
24, 2017, and were subsequently authorized to receive CAF-ACAM pursuant 
to a revised offer on April 29, 2019. For such carriers, the first 
program year of CAF-ACAM is 2017.
    (3) For the purposes of this section, ``A-CAM II'' refers to 
carriers initially authorized to receive A-CAM support on August 22, 
2019 or November 13, 2020. For such carriers, the first program year of 
CAF-ACAM is 2019.
    (4) For purposes of this section, ``Enhanced A-CAM'' refers to 
carriers authorized to receive Enhanced A-CAM support after October 1, 
2023. For the purpose of determining deployment obligations for such 
carriers, the first program year of CAF-ACAM is 2025.
    (b) Geographic areas eligible for support. (1) CAF-ACAM model-based 
support, except for Enhanced A-CAM support, will be made available for 
a specific number of locations in census blocks identified as eligible 
for each carrier by public notice. The eligible areas and number of 
locations for each state identified by the public notice shall not 
change during the term of support identified in paragraph (c) of this 
section.
    (2) Enhanced A-CAM support will be made available for each 
carrier's service areas within the state, in consideration for the 
deployment and maintenance obligations described in Sec.  54.308(a)(3).
    (c) Term of support. CAF-ACAM model-based support shall be provided 
to A-CAM I carriers for a term that extends until December 31, 2026, to 
Revised A-CAM I and A-CAM II carriers for a term that extends until 
December 31, 2028, and to Enhanced A-CAM carriers for a term that 
extends from January 1, 2024, until December 31, 2038.
    (d) Interim deployment milestones. Recipients of CAF-ACAM model-
based support must meet the following interim milestones with respect 
to their deployment obligations set forth in Sec. Sec.  54.308(a)(1)(i) 
and 54.308(a)(3).
* * * * *
    (3) For the purposes of A-CAM I, Revised A-CAM I, and A-CAM II, 
compliance shall be determined based on the total number of fully 
funded locations in a state. Carriers that complete deployment to at 
least 95 percent of the requisite number of locations will be deemed to 
be in compliance with their deployment obligations. The remaining 
locations that receive capped support are subject to the standard 
specified in Sec.  54.308(a)(1)(ii).
    (4) Enhanced A-CAM carriers must complete deployment of 100/20 Mbps

[[Page 55936]]

service to a number of locations equal to 50 percent of locations 
required by Sec.  54.308(a)(3)(i) by the end of 2026, 75 percent of 
requisite locations by the end of 2027, and 100 percent of requisite 
locations by the end of 2028. After December 31, 2023, to the extent 
that an Enhanced A-CAM carrier was subject to the interim deployment 
milestones set forth in Sec.  54.311(d)(1) and (2), the Enhanced A-CAM 
carrier will instead be subject to the interim deployment milestones 
set forth in this paragraph (d)(4).
    (e) Transition to CAF-ACAM Support. An A-CAM I, Revised A-CAM I, A-
CAM II, or Enhanced A-CAM carrier not previously subject to A-CAM 
support, any of whose final model-based support is less than the 
carrier's legacy rate-of-return support in its base year as defined in 
paragraph (e)(4) of this section, will transition as follows:
* * * * *
    (4) * * *
    (iii) For Enhanced A-CAM carriers not previously subject to A-CAM 
I, Revised A-CAM I, or A-CAM II, the amount of high-cost loop support 
and Connect America Fund--Broadband Loop Support disbursed to the 
carrier for 2022 without regard to prior period adjustments related to 
years other than 2022, as determined by the Administrator as of July 
31, 2023 and publicly announced prior to the election period for the 
voluntary path to the model. The first year of the transition pursuant 
to this paragraph (e) will be 2035.
    (5) An Enhanced A-CAM carrier not previously subject to A-CAM I, 
Revised A-CAM I, or A-CAM II, and whose final model-based support is 
less than the carrier's legacy rate-of-return support in its base year 
as defined in paragraph (e)(4)(iii) of this section, will transition 
from its frozen base year support to its full Enhanced A-CAM support on 
the following schedule:
    (i) In 2024-2029, it will receive its frozen base year support.
    (ii) In 2030, it will receive its base year support minus 4% of the 
base year support;
    (iii) In 2031, it will receive its base year support minus 8% of 
the base year support;
    (iv) In 2032, it will receive its base year support minus 12% of 
the base year support;
    (v) In 2033, it will receive its base year support minus 16% of the 
base year support;
    (vi) In 2034, it will receive its base year support minus 20% of 
the base year support;
    (vii) In 2035-2038, it will transition to its Enhanced A-CAM 
support pursuant to paragraphs (e)(1) through (3) of this section.
    (6) An Enhanced A-CAM carrier that was previously subject to A-CAM 
I, Revised A-CAM I, or A-CAM II and will continue to receive 
transitional support consistent with its prior A-CAM I, Revised A-CAM 
I, or A-CAM II authorization, and will not have its transitional 
support amount adjusted to reflect its Enhanced A-CAM support amounts.
    (f) Legacy Carrier Transitioning to Higher Enhanced A-CAM. An 
Enhanced A-CAM carrier that was not subject to A-CAM I, Revised A-CAM 
I, or A-CAM II and whose final model-based support is more than the 
carrier's legacy rate-of-return support in its base year as defined in 
paragraph (f)(2) of this section, will transition from its frozen base 
year support to its full Enhanced A-CAM support.
    (1) The transition will occur on the following schedule:
    (i) In 2024-2029, it will receive its frozen base year support.
    (ii) In 2030, it will receive its base year support plus 20% of the 
difference between its base year support and its Enhanced A-CAM 
support;
    (iii) In 2031, it will receive its base year support plus 40% of 
the difference between its base year support and its Enhanced A-CAM 
support;
    (iv) In 2032, it will receive its base year support plus 60% of the 
difference between its base year support and its Enhanced A-CAM 
support;
    (v) In 2033, it will receive its base year support plus 80% of the 
difference between its base year support and its Enhanced A-CAM 
support; and
    (vi) In 2034, it will receive its Enhanced A-CAM support.
    (2) The carrier's base year support for purposes of the calculation 
of transition payments is the amount of high-cost loop support and 
Connect America Fund--Broadband Loop Support disbursed to the carrier 
for 2022 without regard to prior period adjustments related to years 
other than 2022, as determined by the Administrator as of July 31, 2023 
and publicly announced prior to the election period for the voluntary 
path to the model.

0
5. Amend Sec.  54.313 by revising paragraph (f)(1) introductory text, 
(f)(1)(i), and adding paragraph (f)(6) to read as follows:


Sec.  54.313  Annual reporting requirements for high-cost recipients.

* * * * *
    (f) * * *
    (1) Beginning July 1, 2015 and Every Year Thereafter. The following 
information:
    (i) If the rate-of-return carrier is receiving support pursuant to 
subparts K and M of this part, a certification that it is taking 
reasonable steps to provide upon reasonable request broadband service 
at actual speeds of at least 25 Mbps downstream/3 Mbps upstream, with 
latency suitable for real-time applications, including Voice over 
internet Protocol, and usage capacity that is reasonably comparable to 
comparable offerings in urban areas as determined in an annual survey, 
and that requests for such service are met within a reasonable amount 
of time; if the rate-of-return carrier receives CAF-ACAM support, 
except for Enhanced A-CAM support, a certification that it is meeting 
the relevant reasonable request standard; if the carrier is receiving 
Enhanced A-CAM support, a certification that it is offering broadband 
service with latency suitable for real-time applications, including 
Voice over internet Protocol, and usage capacity that is reasonably 
comparable to comparable offerings in urban areas; or if the rate-of-
return carrier is receiving Alaska Plan support pursuant to Sec.  
54.306, a certification that it is offering broadband service with 
latency suitable for real-time applications, including Voice over 
internet Protocol, and usage capacity that is reasonably comparable to 
comparable offerings in urban areas, and at speeds committed to in its 
approved performance plan to the locations it has reported pursuant to 
Sec.  54.316(a), subject to any limitations due to the availability of 
backhaul as specified in paragraph (g) of this section.
* * * * *
    (6) Enhanced A-CAM carriers must provide the following:
    (i) Enhanced A-CAM carriers must certify that, in the previous 
calendar year, they participated, in good faith, in any relevant BEAD 
Program challenge processes or other processes conducted by states or 
other BEAD Program eligible entities to determine the eligibility of 
locations for the BEAD Program, and that they otherwise coordinated 
with states, Tribes, and other eligible entities to help avoid 
duplicative federal broadband funding. Additionally, Enhanced A-CAM 
carriers must certify that, in the previous calendar year, they 
complied with the obligation not to receive or use BEAD Program funding 
or other future federal grant funding, unless otherwise specified by 
the Commission or Bureau, that supports broadband deployment for those 
locations for which they are receiving Enhanced A-CAM support.

[[Page 55937]]

    (ii) Enhanced A-CAM carriers must describe how and certify that, in 
the previous calendar year, they continued to participate in the 
Affordable Connectivity Program or any substantially similar successor 
program, as required by the terms of their Enhanced A-CAM offers.
    (iii) Enhanced A-CAM carriers must certify that they have 
maintained their cybersecurity and supply chain risk management plans 
pursuant to Sec.  54.308(e), report whether they filed any substantive 
modifications pursuant to Sec.  54.308(e)(6) in the prior year, and 
report the date they filed any substantive modifications.
* * * * *

0
6. Amend Sec.  54.316 by adding paragraph (a)(9), revising paragraph 
(b)(2), and adding paragraph (b)(8) to read as follows:


Sec.  54.316  Broadband deployment reporting and certification 
requirements for high-cost recipients.

    (a) * * *
    (9) Recipients subject to the requirements of Sec.  54.308(a)(3) 
shall report the number of locations for each state and locational 
information, including geocodes, indicating whether they are offering 
service providing speeds of at least 100 Mbps downstream/20 Mbps 
upstream.
    (b) * * *
    (2) Rate-of-return carriers electing CAF-ACAM support pursuant to 
Sec.  54.311, other than Enhanced A-CAM carriers, shall provide:
* * * * *
    (8) Enhanced A-CAM carriers shall provide, no later than March 1 
following each service milestone specified in Sec.  54.311(d)(3), a 
certification that by the end of the prior calendar year, it was 
offering broadband meeting the requisite public interest obligations to 
the required percentage of its required locations in the state.
* * * * *
[FR Doc. 2023-16674 Filed 8-16-23; 8:45 am]
BILLING CODE 6712-01-P