Connect America Fund Phase II

Federal Communications Commission, Universal Service Administrative Company

Program Type:

Subsidy

Eligible Geography:

Nationwide

Summary:

Connect America Fund (CAF) Phase II, commonly called “CAF Phase II,” provides support to price- cap carriers based on a forward-looking model of the cost of constructing modern networks for deploying voice and broadband services in states with unserved areas. Funding was first offered to primarily larger local telephone companies (""price cap carriers"") on a state-by-state basis in certain high-cost unserved and underserved areas in exchange for those companies offering voice and broadband services meeting certain requirements to a required number of locations in eligible areas.

This is a six -year fund that began in 2015 when the FCC awarded 10 telecommunications carriers over $1.5 billion in annual support to build voice- and broadband-capable infrastructure in their areas.

Eligible Recipients:

Internet Service Provider

Eligible Recipients Detail:

Incumbent Price Cap Carrier; Internet Service Provider

Eligible Purpose:

Last Mile Connectivity

Eligible Purpose Detail:

In order to receive CAF II funding, carriers must offer at least one voice and one broadband service commercially. These services must meet the relevant service requirements and go to the required number of locations.

Carriers must complete:

-40 percent of deployments by the end of year 3
-60 percent of deployments by the end of year 4
-80 percent of deployments by the end of year 5
-100 percent of deployments by the end of year 6

Other Eligibility Criteria:

The price cap carriers that accepted the first stage of CAF Phase II support must meet the following requirements for voice and broadband services:

-Speed: Service providers must offer broadband at speeds of at least 10 megabits per second (Mbps) downstream and 1 Mbps upstream.
-Latency: Service providers' network latency cannot be higher than 100 milliseconds round trip. Latency is the time it takes for a data packet to travel back and forth through a network.
-Usage Allowance: Service providers must offer at least one plan with a minimum usage allowance of at least 150 gigabytes (GB) per month or a monthly usage allowance that reflects the average usage of a majority of fixed broadband customers as announced by the Wireline Competition Bureau annually, whichever is higher. Alternatively, service providers have the option of offering a usage allowance that is at or above the usage level for 80 percent of their broadband subscribers if it is at least 100 GB.
-Pricing: Service providers must offer service at rates reasonably comparable to rates in urban areas.

Note/Additional Resources:

https://www.fcc.gov/consumers/guides/connect-america-fund-phase-ii-faqs

https://www.fcc.gov/general/connect-america-fund-caf

https://www.fcc.gov/general/price-cap-resources