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FCC Proposes Special Access Incentive Regulation for Rate-Of-Return ILECs

Posted by Andrew Regitsky

Mar 30, 2018 10:00:00 AM

 

Last year the FCC determined that price cap ILEC special access and packet services should be almost entirely deregulated with only DS1 and DS3 transport subject to price cap regulation if the ILEC failed a highly criticized "competitive" market test.  This regulatory scheme became effective on August 1, 2017 when the Business Data Services (BDS) Order took effect.

That Order put many rate-of-return (ROR) ILECs in a unique position.  More than 200 ROR ILECs now receive universal service support based on a cost model called the Alternative Connect America Fund Cost Model (ACAM).  In return for a fixed amount of support, these ILECs are required to meet a specified level of broadband deployment.  This method to recover Connect America Fund (CAF) dollars has become very popular among ROR carriers.  However, as a result, these LECS are no longer in the NECA Common Line Pool and remain subject to rate regulation only for their special access services.  Some parties sought to change that.

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Topics: ILECs, FCC, CLECs, commissions order, federal trade commission, Business Data Services, clec, regulatory updates, rate of return

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