Rate-of-Return Carrier USF Reforms New Compliance Requirements Telecommunications Consulting Rate-of-Return Carrier USF Reforms New Compliance Requirements * Chris Barron Regulatory Manager May 17, 2016

New Reporting Annual ETC Reporting One-time items Broadband Deployment Reporting Certifications Miscellaneous

Annual ETC Reporting Removed 54.313(a)(1) – Five year service quality improvement plans and progress reports Revision to 54.313(a)(10), reasonably comparable rate certification Changed “letter certifying…” to “certification…” Revision to 54.313(f)(1)(i) – certification regarding providing service upon reasonable request Updated to reflect 10/1 speeds (vs 4/1) FNPRM proposes to: Eliminate Form 481 reporting for outages, unfulfilled service requests, number of complaints per 1000 customers, pricing for voice and broadband services, certification of compliance with service quality standards Eliminate requirement to file duplicate copies of Form 481 with FCC and state commission/Tribal government

One-Time Items Voluntary Model-based support path Election Current locations served with 10/1 broadband (due 3/1/2019) Election of cost per location method 54.308(a)(2)(ii) (A) The higher of (1) the weighted average unseparated cost per loop for carriers of similar density that offer 10/1 Mbps or better broadband service to at least 95 percent of locations, based on the most current FCC Form 477 data as determined by the Wireline Competition Bureau, but excluding carriers subject to the current $250 per line per month cap set forth in §54.302 and carriers subject to limitations on operating expenses set forth in §54.303, or (2) 150% of the weighted average of the cost per loop for carriers of similar density, but excluding carriers subject to the current $250 per line per month cap set forth in §54.302 and carriers subject to limitations on operating expenses set forth in §54.303, with a similar level of deployment of 10/1 Mbps or better broadband based on the most current FCC Form 477 data, as determined by Wireline Competition Bureau; or (B) The average cost per location for census blocks lacking 10/1 Mbps broadband service in the carrier’s study area as determined by the A-CAM.

Broadband Deployment Reporting All RoR carriers - 54.316(a)(1) Recipients of high-cost support with defined broadband deployment obligations pursuant to §54.308(a) or §54.310(c) shall provide to the Administrator on a recurring basis information regarding the locations to which the eligible telecommunications carrier is offering broadband service in satisfaction of its public interest obligations, as defined in either §54.308 or §54.309. ACAM RoR Carriers – 54.316(a)(2) Recipients subject to the requirements of §54.308(a)(1) shall report the number of locations for each state and locational information, including geocodes, separately indicating whether they are offering service providing speeds of at least 4 Mbps downstream/1 Mbps upstream, 10 Mbps downstream/1 Mbps upstream, and 25 Mbps downstream/3 Mbps upstream. 54.316(b)(2)(i) No later than March 1, 2021, and every year thereafter ending on no later than March 1, 2027, a certification that by the end of the prior calendar year, it was offering broadband meeting the requisite public interest obligations specified in §54.308 to the required percentage of its fully funded locations in the state, pursuant to the interim deployment milestones set forth in §54.311(d). 54.316(b)(2)(ii) No later than March 1, 2027, a certification that as of December 31, 2026, it was offering broadband meeting the requisite public interest obligations specified in §54.308 to all of its fully funded locations in the state and to the required percentage of its capped locations in the state.

Broadband Deployment Reporting Legacy RoR Carriers 54.316(a)(3) Recipients subject to the requirements of §54.308(a)(2) shall report the number of newly served locations for each study area and locational information, including geocodes, separately indicating whether they are offering service providing speeds of at least 4 Mbps downstream/1 Mbps upstream, 10 Mbps downstream/1 Mbps upstream, and 25 Mbps downstream/3 Mbps upstream. 54.316(b)(3)(i) No later than March 1, 2022, a certification that it fulfilled the deployment obligation meeting the requisite public interest obligations as specified in §54.308(a)(2) to the required number of locations as of December 31, 2021. 54.316(b)(3)(ii) Every subsequent five-year period thereafter, a certification that it fulfilled the deployment obligation meeting the requisite public interest obligations as specified in §54.308(a)(4) All reports and certifications due March 1 each year

Miscellaneous Competitive coverage challenge process For HCLS and BLS only, 85% coverage Capex allowances (legacy RoR) 54.303(i) A carrier subject to this section will maintain subsidiary records of accumulated Excess Loop Plant Investment for accounts referenced in paragraph (c)(1) of this section in addition to the corresponding depreciation accounts. In the event a carrier makes Loop Plant Investment for an account at a level below the AALPI for the account, the carrier may reduce accumulated Excess Loop Plant Investment effective for the Reference Year by an amount up to, but not in excess of the amount by which AALPI for the Reference Year exceeds Loop Plant Investment for the account during the same year.

Miscellaneous (cont’d) Capex Allowances, Special Circumstances 54.303(k) The AALPI for Loop Plant Investment may be adjusted by the Administrator by adding the applicable adjustment below to the amount of AALPI for the year in which additions to plant are booked to the accounts described in paragraph (c)(1) of this section, associated with any of the following: Geographic areas within the study area where there are currently no existing wireline loop facilities; Geographic areas within the study area where grant funds are used for Loop Plant Investment Geographic areas within the study area for which loan funds were disbursed for the purposes of Loop Plant Investment before the effective date of this rule; and Construction projects for which the carrier, prior to the effective date of this rule, had awarded a contract to a vendor for a loop plant construction project within the study area. The Administrator will not make these adjustments without appropriate documentation from the carrier.

Miscellaneous (cont’d) 54.903(a)(1) Line count reporting to USAC revised to include BLS lines 54.903(a)(3) Projections due on March 31 revised to include BLS 54.903(a)(4) True-ups due December 31 revised to include BLS

Questions? Chris Barron cbarron@alexicon.net (803)547-9571