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80 | BROADBAND COMMUNITIES | www.broadbandcommunities.com | JULY 2015 THE LAW FCC Connect America Fund Advances Broadband Deployment The FCC hopes to encourage broadband deployment in underserved areas by allowing competitive bidding for up to $1.8 billion of Universal Service Fund monies annually. By Douglas Jarrett / Keller and Heckman T he next eight to 12 months may be the "best of times" for competitive providers to secure Universal Service Fund (USF) monies to support fber-based broadband services in unserved rural areas of the United States. Local governments, entrepreneurs, electric cooperatives and independent cable operators looking to deploy broadband services in their communities should have a working understanding of the FCC Connect America Fund. FCC REDIRECTS USF TO SUPPORT BROADBAND In response to criticisms of the growth and direction in its USF programs, the FCC adopted its USF/ICC Transformation Order in 2011. In May 2015, the Supreme Court declined to consider further appeals of the order, cutting of challenges to the FCC's authority to expend USF monies to support broadband infrastructure investment. In that 2011 decision, the agency capped the high-cost component of the USF program at $4.5 billion annually and redirected it to "advance universal availability of modern networks capable of delivering broadband and voice services to homes, businesses and community anchor institutions" and to ensure that rates for voice and broadband service available in rural, insular and high-cost areas are "reasonably comparable" to the rates for these services in urban areas. Consistent with this new focus, the high-cost program was renamed the Connect America Fund (CAF). Te FCC divided CAF funding into several categories: • a mobility fund, including a tribal mobility fund • a fund for remote and extremely high-cost areas • approximately $1.8 billion in annual support for wireline broadband and voice services in the high-cost areas that price-cap carriers serve • approximately $2.0 billion annually for broadband and voice services for the high- cost areas that rural rate-of-return carriers serve. To date, the FCC has set new rules and disbursed funds for the mobility fund and tribal mobility fund and is retargeting the $1.8 billion for rural areas served by the price-cap ILECs (the larger telephone companies) to support more robust, fxed wireline, rural broadband infrastructure. Long-term reform eforts for the USF support provided to rural rate-of-return carriers are just beginning. HIGH-COST CENSUS BLOCKS IN PRICE-CAP TERRITORIES Te FCC is now implementing its long-term plan for the $1.8 billion in annual funding for price-cap carrier service areas, generally referred