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(a) Voluntary election of model-based support. A rate-of-return carrier (as that term is defined in § 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.
(1) For the purposes of this section, “A-CAM I” refers to carriers initially authorized to receive CAF-ACAM support as of January 24, 2017, including any carriers that later elected revised offers, except for carriers described in paragraph (a)(2) of this section. For such carriers, the first program year of CAF-ACAM is 2017.
(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 § 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 §§ 54.308(a)(1)(i) and 54.308(a)(3).
(1) A-CAM I and Revised A-CAM I carriers must complete deployment of 10/1 Mbps service to a number of eligible locations equal to 40 percent of fully funded locations by the end of 2020, to 50 percent of fully funded locations by the end of 2021, to 60 percent of fully funded locations by the end of 2022, to 70 percent of fully funded locations by the end of 2023, to 80 percent of fully funded locations by the end of 2024, to 90 percent of fully funded locations by the end of 2025, and to 100 percent of fully funded locations by the end of 2026. By the end of 2026, A-CAM I carriers must complete deployment of broadband meeting a standard of at least 25 Mbps downstream/3 Mbps upstream to the requisite number of locations specified in § 54.308(a)(1)(i). For Revised A-CAM I carriers, the deployment milestones for 10/1 Mbps service described in this paragraph shall be based on the number of locations that were fully funded pursuant to authorizations made prior to January 1, 2019.
(2) Revised A-CAM I and A-CAM II carriers must complete deployment of 25/3 Mbps service to a number of eligible locations equal to 40 percent of locations required by § 54.308(a)(1) of this subpart by the end of 2022, 50 percent of requisite locations by the end of 2023, 60 percent of requisite locations by the end of 2024, 70 percent of requisite location by the end of 2025, 80 percent of requisite locations by the end of 2026, 90 percent of requisite locations by the end of 2027, and 100 percent of requisite locations by the end of 2028.
(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 § 54.308(a)(1)(ii).
(4) Enhanced A-CAM carriers must complete deployment of 100/20 Mbps service to a number of locations equal to 50 percent of locations required by § 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 § 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:
(1) If the difference between a carrier's model-based support and its base year support, as determined by paragraph (e)(4) of this section, is ten percent or less, it will receive, in addition to model-based support, 50 percent of that difference in program year one, and then will receive model support in program years two through ten.
(2) If the difference between a carrier's model-based support and its base year support, as determined in paragraph (e)(4) of this section, is 25 percent or less, but more than 10 percent, it will receive, in addition to model-based support, an additional transition payment for up to four years, and then will receive model support in program years five through ten. The transition payments will be phased-down 20 percent per year, provided that each phase-down amount is at least five percent of the total base year support amount. If 20 percent of the difference between a carrier's model-based support and base year support is less than five percent of the total base year support amount, the transition payments will be phased-down five percent of the total base year support amount each year.
(3) If the difference between a carrier's model-based support and its base year support, as determined in paragraph (e)(4) of this section, is more than 25 percent, it will receive, in addition to model-based support, an additional transition payment for up to nine years, and then will receive model support in year ten. The transition payments will be phased-down ten percent per year, provided that each phase-down amount is at least five percent of the total base year support amount. If ten percent of the difference between a carrier's model-based support and its base year support is less than five percent of the total base year support amount, the transition payments will be phased-down five percent of the total base year support amount each year.
(4) The carrier's base year support for purposes of the calculation of transition payments is:
(i) For A-CAM I and Revised A-CAM I carriers, the amount of high-cost loop support and interstate common line support disbursed to the carrier for 2015 without regard to prior period adjustments related to years other than 2015, as determined by the Administrator as of January 31, 2016 and publicly announced prior to the election period for the voluntary path to the model; and
(ii) For A-CAM II carriers, the amount of high-cost loop support and Connect America Fund—Broadband Loop Support disbursed to the carrier for 2018 without regard to prior period adjustments related to years other than 2018, as determined by the Administrator as of January 31, 2019 and publicly announced prior to the election period for the voluntary path to the model.
(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.
(g) Alaska Connect Fund Transition support. Beginning January 1, 2025, and ending December 31, 2028, an A-CAM carrier that serves the State of Alaska that has made an election of support pursuant to paragraph (a) of this section and is authorized to receive support as of December 31, 2024, shall be authorized to receive an amount of monthly support during the ACF Transition equal to the amount of monthly support authorized as of December 1, 2024, multiplied by 1.30.