[Federal Register Volume 78, Number 177 (Thursday, September 12, 2013)]
[Proposed Rules]
[Pages 56188-56192]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-21888]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 54
[WC Docket No. 10-90; DA 13-1846]
Wireline Competition Bureau Announces Availability of Version 3.2
of the Connect America Fund Phase II Cost Model Illustrative Results
AGENCY: Federal Communications Commission.
ACTION: Proposed rule.
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SUMMARY: In this document, the Wireline Competition Bureau announces
the availability of the next version of the Connect America Cost Model
(CAM v3.2), which includes certain adjustments to the CAM to reflect
the unique circumstances and operating conditions in the non-contiguous
areas of the United States. The Bureau seeks comment on these changes,
specifically the addition of the capability to model costs for undersea
cable connecting non-contiguous areas to the contiguous United States,
plant mix values submitted by Alaska Communications Systems Group, Inc.
(ACS) for Alaska, and using the default value of ``1'' for the regional
cost adjustment for the U.S. Virgin Islands, which has the effect of
increasing labor costs. Lastly, the Bureau seeks comment on using the
plant mix values that were filed separately in models previously filed
by Puerto Rico Telephone Company, Inc. (PRTC) and Virgin Islands
Telephone Corporation d/b/a Innovative Telephone (Vitelco) in the next
version of the CAM.
DATES: Comments are due on or before September 12, 2013 and reply
comments are due on or before September 19, 2013.
ADDRESSES: Interested parties may file comments on or before September
12, 2013 and reply comments on or before September 19, 2013. All
pleadings are to reference WC Docket No. 10-90. Comments may be filed
using the Commission's Electronic Comment Filing System (ECFS) or by
filing paper copies, by any of the following methods:
Electronic Filers: Comments may be filed electronically
using the Internet by accessing the ECFS: http://fjallfoss.fcc.gov/ecfs2/.
Paper Filers: Parties who choose to file by paper must
file an original and one copy of each filing.
People with Disabilities: To request materials in
accessible formats for people with disabilities (Braille, large print,
electronic files, audio format), send an email to [email protected] or
call the Consumer & Governmental Affairs Bureau at (202) 418-0530
(voice), (202) 418-0432 (tty).
For detailed instructions for submitting comments and additional
information on the rulemaking process, see the SUPPLEMENTARY
INFORMATION section of this document.
FOR FURTHER INFORMATION CONTACT: Katie King, Wireline Competition
Bureau at (202) 418-7491 or TTY (202) 418-0484.
SUPPLEMENTARY INFORMATION: This is a synopsis of the Wireline
Competition Bureau's Public Notice (Notice) in WC Docket No. 10-90; DA
13-1846, released August 29, 2013. The complete text of this document
is available for inspection and copying during normal business hours in
the FCC Reference Information Center, Portals II, 445 12th Street SW.,
Room CY-A257, Washington DC 20554. The document may also be purchased
from the Commission's duplicating contractor, Best Copy and Printing,
Inc., 445 12th Street SW., Room CY-B402, Washington, DC 20554,
telephone (800) 378-3160 or (202) 863-2893, facsimile (202) 863-2898,
or via Internet at http://www.bcpiweb.com.
1. The Wireline Competition Bureau (Bureau) announces the
availability of the next version of the Connect America Cost Model (CAM
v3.2), which includes certain adjustments to the CAM to reflect the
unique circumstances and operating conditions in the non-contiguous
areas of the United States. The Bureau seeks comment on these changes,
specifically the addition of the capability to model costs for undersea
cable connecting non-contiguous areas to the contiguous United States,
plant mix values submitted by ACS for Alaska, and using the default
value of ``1'' for the regional cost adjustment for the U.S. Virgin
Islands, which has the effect of increasing labor costs. The Bureau
also seeks comment on using the
[[Page 56189]]
plant mix values that were filed separately in models previously filed
PRTC and Vitelco in the next version of the CAM.
2. Description of Changes in CAM v3.2. CAM v3.2 updates the prior
version (CAM v3.1.4) in a number of respects, and the Bureau seeks
comment on several of the changes. First, this version adds code
changes and a new Undersea tab in the Capital Expenditures (Capex)
workbook that includes inputs for undersea cable and landing stations.
These changes and inputs are used to calculate the investment and cost
for undersea and landing station facilities that connect areas outside
of the contiguous United States, including Alaska, Hawaii, Puerto Rico,
the U.S. Virgin Islands and Northern Mariana Islands, to the contiguous
United States. Second, this version includes plant mix values for
Alaska that were recently filed by ACS.
3. In addition, this version makes a number of other changes. It
adjusts the regional cost adjustment table to reflect that Zip 3 = 008,
which had been previously coded for Puerto Rico, is in the U.S. Virgin
Islands and sets the value of the cost adjustment for Zip 3 = 008 to
1.0 (i.e., no adjustment) in the absence of R.S. Means data regarding
labor costs for the Virgin Islands. It includes minor modifications to
some existing investment calculations to more accurately reflect
network infrastructure. Finally, it includes several updates to the
documentation and makes additional clean-up changes to the Capex
workbook. These changes are reflected in two solution sets that can be
accessed by accessing CAM v3.2, and visiting the Posted Data Sets page.
These solution sets can be found under the Model Outputs section of the
Posted Data Sets tab: SSYYYYMMDDCAM32ACF8UndSeaCpx and
SSYYYYMMDDCAM32ACF9UndSeaCpx solution sets under Model Outputs.
4. Issue for Comment: Submarine Cable. CAM v3.2 includes the
capability to model costs for undersea cable to non-contiguous areas.
CAM v3.2 also adds a new ``Undersea'' tab in the Capex workbook, which
includes the inputs used to calculate the investment and cost for
undersea cable and landing station facilities needed to transport
traffic to and from landing stations in non-contiguous areas to landing
stations in the contiguous United States. To help parties understand
and comment on the adjustments incorporated in v3.2, the Bureau
explains the modeling assumptions below.
5. First, the Bureau seeks comment on CAM v3.2's approach to
connecting the non-contiguous areas to the contiguous United States. In
the maps appended to the Public Notice, CAM v3.2 models undersea
cables: From Alaska to Oregon and Washington; from the Northern
Marianas to Guam and from Guam to Oregon; from Hawaii to California;
from the U.S. Virgin Islands to Puerto Rico and from Puerto Rico to
Florida; and from Puerto Rico to Florida. The specific endpoints of the
undersea cables are marked on the maps.
6. The length or ``footage'' of these undersea cable connections is
a key cost driver. The Bureau seeks comment on the footage estimates in
Table 1. Note that to ensure resiliency, the footage for each
connection includes the additional footage needed for path redundancy.
In addition, each spur connects independently to a tandem location
within the contiguous United States.
7. Table 1: Undersea Cable Footage
------------------------------------------------------------------------
Undersea cable
Area footage
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Alaska.................................................. 21,206,745
Hawaii.................................................. 26,029,830
North Marianas Islands.................................. 61,602,894
Puerto Rico............................................. 11,258,578
U.S. Virgin Islands..................................... 12,072,945
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8. The Bureau also seeks comment on CAM v3.2's assumption that the
cost of materials and labor per foot of undersea cable is $11.05. This
cost per foot is based on publicly available information regarding
AKORN, an undersea cable between Alaska and Oregon. It is the same for
each undersea cable because, unlike land-based connections where costs
vary by the soil type in a given area, CAM v3.2 assumes that the costs
for undersea cable do not vary based on the body of water in which the
cable is located.
9. Next, the Bureau seeks comment on CAM v3.2's methodology for
modeling whether a carrier would construct such an undersea cable or
instead lease capacity on an existing international undersea cable.
This version of the model input assumes that the presence and capacity
of international undersea cables are driven primarily by international
traffic demand, not by the traffic of the local exchange carrier (LEC)
in areas with landing stations. This version of the model inputs
assumes that, if the demand from the modeled network would outstrip
capacity on these existing international undersea systems, without
concurrent increases in demand for bandwidth that passes through the
location, then construction of a new system would be economically
justifiable. If, however, the capacity required would amount to only a
fraction of available capacity, CAM v3.2 assumes that a carrier would
lease capacity on an existing cable.
10. It is assumed that the cost of transport back to the contiguous
United States would be the fraction of cost associated with the
fraction of the cable being consumed by peak demand of the modeled
network. This assumes that the price for a LEC to buy capacity on an
existing cable would be comparable to the cost of providing that access
plus a rate of return comparable to the one assumed in CAM. Given that
each non-contiguous area with an international cable route is served by
multiple cable systems, we believe that this is a reasonable
assumption. To the extent commenters disagree with these assumptions
and instead argue that rates are substantially higher, they should
provide specific information on these rates to the Bureau, including
the route and amount of capacity being purchased.
11. To make that determination, Bureau staff first looked at
existing capacity. As seen in Table 2, below, most of the non-
contiguous areas have international cable routes with landing stations
on them, and most of the cable routes have additional capacity
available.
12. Table 2: International Cable Route and Capacity Table
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Total capacity LIT Capacity
Area Cable route name (Tbps) (Gbps)
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Alaska........................................ N/A............................. N/A N/A
Hawaii........................................ AAG............................. 2.88 700
Hawaii........................................ Southern Cross.................. 6 2,000
Hawaii........................................ TPC-5........................... 0.01 10
Northern Marianas Islands (Guam).............. AAG............................. 2.88 700
Northern Marianas Islands (Guam).............. TGN-Pacific..................... 7.68 5,120
Puerto Rico................................... America Movil-1................. 0.10 40
Puerto Rico................................... Americas-II..................... 0.21 80
[[Page 56190]]
Puerto Rico................................... ARCOS-1......................... 1.02 80
Puerto Rico................................... PCCS............................ 80 100
Puerto Rico................................... Sam-1........................... 1.92 310
U.S. Virgin Islands........................... Americas-I...................... 0.32 120
U.S. Virgin Islands........................... Americas-II..................... 0.21 80
U.S. Virgin Islands........................... MAC............................. 0.07 70
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13. Moreover, to evaluate whether capacity on these existing
undersea cables will be sufficient to meet future demand during Connect
America Phase II, the same busy hour offered load assumptions
incorporated into CAM v3.2 were used to compare demand (i.e. required
capacity) to supply (i.e. lit and total capacity of the international
fiber routes with landing sites on each non-contiguous area). The
comparison of future demand to current lit capacity (of the highest
capacity fiber in the area) may over-state the extent to which new
undersea systems are required, while the comparison to total capacity
(of the highest capacity fiber in the area) may understate costs in the
near-term. Therefore, the comparisons were averaged.
14. Table 3, below, shows the comparisons of capacity to both the
lit and total capacity of the largest single cable, as well as the
average of those comparisons. The Bureau seeks comment on this approach
to evaluating capacity and on the calculations reflected in the table.
15. Table 3: Comparisons of Demand to Supply
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Highest total Highest LIT
Area Demand (Gbps) capacity % Demand to capacity % Demand to Average
(Tbps) total capacity (Gbps) LIT capacity (percent)
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Hawaii.................................................. 213.6 6 3.956 2,000 11.867 7.91
North Marianas Islands (Guam to Oregon)................. 7.7 7.68 0.111 5,120 0.166 0.14
Puerto Rico............................................. 587.9 80 0.816 310 100 50.00
U.S. Virgin Islands (Puerto Rico to Florida)............ 20.0 80 0.028 310 7.168 3.60
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16. Finally, CAM v3.2 estimates the cost that carriers will face in
securing transport to and from the contiguous United States by applying
the averages listed in Table 3 to the CAM-calculated cost of the total
route. Because the Alaska route and the Northern Marianas to Guam
portion of the Northern Marianas route are not shared with any
international traffic, CAM v3.2 includes 50 percent of the costs of
connecting Alaska to Oregon and Washington, the Northern Marianas to
Guam, and the U.S. Virgin Islands to Puerto Rico, which is the default
middle mile allocation in CAM v3.2. Table 4, below, shows the resulting
cost per location per month. The Commission seeks comment on these
averages and/or allocations and whether the resulting monthly cost per
location is a reasonable estimate.
17. Table 4: Monthly Cost Per Location
------------------------------------------------------------------------
Investment for
Area the route Monthly cost
(millions) per location
------------------------------------------------------------------------
Alaska.................................. $85.6 $5.40
Hawaii.................................. 24.4 0.65
North Marianas Islands.................. 18.9 15.44
Puerto Rico............................. 72.9 0.72
U.S. Virgin Islands..................... 20.0 6.34
------------------------------------------------------------------------
18. Issue for Comment: Plant Mix. As noted above, CAM v3.2 includes
in the Plant Mix input collection table the Alaska-specific plant mix
values recently proposed by ACS. These values are reproduced in Table
5, below. The ACS filed plant mix values for suburban distribution and
suburban feeder as filed did not total 100%. (Total of aerial, buried
and underground plant mix values for distribution and feeder equaled
101 percent.) The values shown in the table reflect a staff adjustment
to force the filed values to equal 100%. Staff multiplied each of the
values by 100/101 to reflect the same relationship and make the sum of
aerial, buried and underground equal 100%.
19. Table 5: ACS Proposed Plant Mix Values
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Distribution Feeder IOF
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State Density Under- Under- Under-
Aerial Buried ground Aerial Buried ground Aerial Buried ground
(percent) (percent) (percent) (percent) (percent) (percent) (percent) (percent) (percent)
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AK......................................... Rural......................... 25.0 61.0 14.0 25.0 61.0 14.0 28.0 58.0 14.0
AK......................................... Suburban...................... 23.8 48.5 27.7 23.8 48.5 27.7 24.0 55.0 21.0
AK......................................... Urban......................... 20.0 40.0 40.0 20.0 40.0 40.0 15.0 50.0 35.0
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[[Page 56191]]
20. ACS also submitted its current plant mix values which are
reproduced in Table 6, below.
21. Table 6: ACS Current Plant Mix Values
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Aerial Buried Underground
Density (percent) (percent) (percent)
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Plant Mix: All
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Rural........................................................... 27 63 10
Suburban........................................................ 32 64 4
Urban........................................................... 33 43 24
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Plant Mix: Copper
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Rural........................................................... 28 68 4
Suburban........................................................ 33 64 3
Urban........................................................... 35 47 19
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Plant Mix: Fiber
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Rural........................................................... 19 19 61
Suburban........................................................ 16 62 22
Urban........................................................... 23 21 56
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22. The current plant mix submitted by ACS differs from what ACS
proposes should be used in the CAM. For the other carriers, CAM v3.2
uses carrier-supplied plant mix values that reflect their current plant
mix. The Bureau seeks comment on whether to make any adjustments to the
Alaska-specific plant mix values contained in CAM v3.2, in light of
ACS's current plant mix.
23. The Bureau also seeks comment on whether it should incorporate
into the next version of the CAM the plant mix values for Puerto Rico
and the Virgin Islands that PRTC and Vitelco previously submitted in
conjunction with their proposals for standalone models.
24. Issue for Comment: Cost Adjustment for the U.S. Virgin Islands.
Because the source that CAM relies on for regional cost adjustments for
the rest of the United States does not include values for the U.S.
Virgin Islands, CAM v3.2 sets the value of the cost adjustment for Zip
3 = 008 to 1.0 (i.e., no adjustment). The Bureau seeks comment on using
this value for the U.S. Virgin Islands.
25. Other Proposals. The Bureau notes that ACS has proposed
additional modifications to the CAM that it contends would more
appropriately reflect the costs of serving Alaska. The Bureau is
continuing to evaluate those proposals.
26. If parties, including carriers serving other non-contiguous
areas, have other proposals or data that they wish to file concerning
the treatment of non-contiguous areas in the CAM, such information
should be filed by the reply comment deadline specified on the first
page of this Public Notice. All submissions should be in a form that
can be readily incorporated into the CAM. Parties should contact Bureau
staff indicated at the beginning of this summary if they wish to file
any information confidentially in order to discuss how to submit that
information in a way that can be incorporated into the next version of
the CAM.
27. Access to CAM v3.2. To access CAM v3.2, parties should follow
the same procedures announced for previous versions. In particular,
parties may access CAM v3.2 at http://www.fcc.gov/encyclopedia/caf-phase-ii-models or https://cacm.usac.org. Additionally, authorized
users who have signed the attachments to the protective order will have
access to a system evaluator package that provides a test environment
populated with a sample database, allowing users to view database
structures, observe the processing steps of CAM for a subset of the
country, and see changes in the database.
28. Updated Documentation. In conjunction with the release of CAM
v3.2, the Bureau also announces the availability of updated methodology
documentation for CAM v3.2, to assist the public in understanding the
current model architecture, processing steps, and data sources. The
methodology documentation is available at http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-323071A1.pdf.
29. Illustrative Results. The Bureau also is releasing illustrative
model outputs from running CAM v3.2 using different combinations of
possible model inputs and support assumptions. To demonstrate a range
of potential outcomes, the Bureau is providing illustrative model
outputs with funding thresholds of $49.15, $52, and $55.40. The reports
show potential support amounts and number of supported locations, by
carrier, by study area, and by state, using the default input values in
CAM v3.2. The reports are available at http://www.fcc.gov/encyclopedia/connect-america-cost-model-illustrative-results. Because the Bureau has
not yet finalized and adopted a cost model, the illustrative results
that the Bureau is releasing are not final support amounts.
I. Procedural Matters
A. Initial Regulatory Flexibility Act Analysis
30. The Non-Contiguous Areas PN, 78 FR 12006, February 21, 2013,
included an Initial Regulatory Flexibility Analysis (IRFA) pursuant to
5 U.S.C. 603, exploring the possible significant economic impact on
small entities of the policies and rules proposed therein. The
Commission invites parties to file comments on the IRFA in light of
this additional Public Notice.
B. Paperwork Reduction Act
31. This document does not contain proposed information
collection(s) subject to the Paperwork Reduction Act of 1995 (PRA),
Public Law 104-13. In addition, therefore, it does not contain any new
or modified information collection burden for small business concerns
with fewer than 25 employees, pursuant to the Small Business Paperwork
Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 3506(c)(4).
C. Filing Requirements
32. Pursuant to Sec. Sec. 1.415 and 1.419 of the Commission's
rules, 47 CFR 1.415, 1.419, interested parties may file comments and
reply comments on or
[[Page 56192]]
before the dates indicated on the first page of this document. Comments
are to reference WC Docket No. 10-90 and DA 13-1846, and may be filed
by paper or by using the Commission's Electronic Comment Filing System
(ECFS).
[ssquf] Electronic Filers: Comments may be filed electronically
using the Internet by accessing the ECFS: http://fjallfoss.fcc.gov/ecfs2/.
[ssquf] Paper Filers: Parties who choose to file by paper must file
an original and one copy of each filing. Filings can be sent by hand or
messenger delivery, by commercial overnight courier, or by first-class
or overnight U.S. Postal Service mail. All filings must be addressed to
the Commission's Secretary, Office of the Secretary, Federal
Communications Commission.
[ssquf] All hand-delivered or messenger-delivered paper filings for
the Commission's Secretary must be delivered to FCC Headquarters at 445
12th St. SW., Room TW-A325, Washington, DC 20554. The filing hours are
8:00 a.m. to 7:00 p.m. All hand deliveries must be held together with
rubber bands or fasteners. Any envelopes and boxes must be disposed of
before entering the building.
[ssquf] Commercial overnight mail (other than U.S. Postal Service
Express Mail and Priority Mail) must be sent to 9300 East Hampton
Drive, Capitol Heights, MD 20743.
[ssquf] U.S. Postal Service first-class, Express, and Priority mail
must be addressed to 445 12th Street SW., Washington, DC 20554.
33. In addition, we request that one copy of each pleading be sent
to each of the following:
(1) Dania Ayoubi, Telecommunications Access Policy Division,
Wireline Competition Bureau, 445 12th Street SW., Room 6-A322,
Washington, DC 20554; email: [email protected];
(2) Charles Tyler, Telecommunications Access Policy Division,
Wireline Competition Bureau, 445 12th Street SW., Room 5-A452,
Washington, DC 20554; email: mailto:[email protected].
34. People with Disabilities: To request materials in accessible
formats for people with disabilities (braille, large print, electronic
files, audio format), send an email to [email protected] or call the
Consumer & Governmental Affairs Bureau at 202-418-0530 (voice), 202-
418-0432 (tty).
The proceeding this Notice initiates shall be treated as a
``permit-but-disclose'' proceeding in accordance with the Commission's
ex parte rules. Persons making ex parte presentations must file a copy
of any written presentation or a memorandum summarizing any oral
presentation within two business days after the presentation (unless a
different deadline applicable to the Sunshine period applies). Persons
making oral ex parte presentations are reminded that memoranda
summarizing the presentation must (1) list all persons attending or
otherwise participating in the meeting at which the ex parte
presentation was made, and (2) summarize all data presented and
arguments made during the presentation. If the presentation consisted
in whole or in part of the presentation of data or arguments already
reflected in the presenter's written comments, memoranda or other
filings in the proceeding, the presenter may provide citations to such
data or arguments in his or her prior comments, memoranda, or other
filings (specifying the relevant page and/or paragraph numbers where
such data or arguments can be found) in lieu of summarizing them in the
memorandum. Documents shown or given to Commission staff during ex
parte meetings are deemed to be written ex parte presentations and must
be filed consistent with rule Sec. 1.1206(b). In proceedings governed
by rule Sec. 1.49(f) or for which the Commission has made available a
method of electronic filing, written ex parte presentations and
memoranda summarizing oral ex parte presentations, and all attachments
thereto, must be filed through the electronic comment filing system
available for that proceeding, and must be filed in their native format
(e.g., .doc, .xml, .ppt, searchable .pdf). Participants in this
proceeding should familiarize themselves with the Commission's ex parte
rules.
Federal Communications Commission.
Kimberly A. Scardino,
Chief, Telecommunications Access Policy Division, Wireline Competition
Bureau.
[FR Doc. 2013-21888 Filed 9-11-13; 8:45 am]
BILLING CODE 6712-01-P