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FCC Sets New CAF Price Benchmarks

The FCC's Wireline Competition Bureau has released its 2015 broadband pricing benchmarks for incumbent eligible telecommunications carriers receiving Universal Service Fund high-cost CAF (Connect America Fund) support.

The high-cost fund subsidies incumbent telecommunications carrier phone, and increasingly broadband, service to hard-to-reach areas--rural, in particular--for which there is no business case.

The new benchmarks range from $72.40 for 10 Mbps downstream/1 Mbps upstream service with a 100 gig allowance, to $96.89 for 25/5 unlimited service. High-cost fund recipients that are subject to broadband performance obligations are required to offer service at or below the benchmark rates to qualify for the subsidies.

The FCC has signaled that 25 Mbps downstream is the new table stakes, but has not extended that to its USF subsidy floors.

The high-cost fund is part of the FCC's Connect America Fund migration of advanced telecommunications subsidies from traditional phone to voice and broadband, fixed annd mobile, at rates reasonably comparable to those of urban areas.

ILECs have fist dibs on the money, which cable operators, who compete with the ILEC's argue amounts to a sole source contract regime. Cable operators large and small have pushed the FCC to adopt a competitive bidding mechanism for the support rather than giving ILEC's a right of first refusal, after which cable operators could apply if the ILEC's opted not to apply.

The FCC has provided for competitive bidding in "limited" areas.

To check out all the speed subsidy benchmarks, click here