In section V.F above, we discussed how the lowest cost technology varies from area to area. In section V.J above we recommended that Wyoming consider adapting its universal service policy to supplement and complete the FCC’s broadband initiative. Both of these factors suggest that Wyoming should make some initial decisions that differentiate geographically regarding the technologies that the WUSF will support and as to the kinds of mechanisms that will distribute that support.
Although the FCC denominated its whole support structure as a single CAF Fund, in reality that structure applies quite different rules in different geographic areas. The FCC has proposed one funding mechanism for “remote areas.” Another set of mechanisms apply to wireless carriers. Finally, different support mechanisms apply to price cap wireline carriers and rate-of-return wireline carriers. The FCC has not identified the extent of these areas, nor has it fully clarified the
interactions among the various funds.214 Although the details of the FCC’s plan are not fully developed at present, enough of the structure has been disclosed for Wyoming to make some basic decisions.
The authors recommend that Wyoming define and publish a map that identifies areas within Wyoming that are eligible for support of various kinds. We believe that the Commission has the
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For example, the extent of “remote areas” will not be finally defined until after the FCC completes a process, now underway, to define a new cost model. Furthermore, it is unclear at the time of writing whether a “remote area” designation will affect areas currently served by rate-of- return wireline ILECs.
technical capacity to make such a map, but the first step would be for Wyoming policy makers to decide that such a map is desirable.
The WUSF map would cover all parts of Wyoming, including areas currently without voice or broadband service. We suggest that the map comprise three zones:
Unsubsidized Zone. Even rural states like Wyoming have some areas where no support is
needed. These include both low-cost areas and areas where competition already exists without subsidy. The Unsubsidized Zone would include all areas where an independent cable television system currently offers broadband, voice, or both. The Unsubsidized Zone would also include areas where, pursuant to a cost model results, the cost to provide broadband service is low enough to justify requiring service providers to rely entirely on non-public revenues.215 Wyoming might also decide that the Unsubsidized Zone should include any areas where fixed wireless broadband service is well established, essentially treating fixed wireless in the same manner as wireline service. No WUSF support would be available in the Unsubsidized Zone. 216
Wireline Zone. Most populated areas outside the Unsubsidized Zone are areas where in 2012
an ILEC is serving are under a carrier of last resort obligation. In the Wireline Zone, ILEC networks would be eligible to receive ongoing support to provide and maintain a network capable of providing broadband and voice grade service throughout the supported area.217 If Wyoming decides to support as many as two carriers per area, wireless carriers could also receive support in these areas.
Remote Areas Zone. Wyoming has many areas that are neither in the Unsubsidized Zone or
the Wireline Zone. The Remote Areas Zone would include all areas not currently served by any ILEC, any cable television system, or any fixed wireless carrier. The Remote Areas Zone would comprise a large portion of the state.218 Support to remote areas would be delivered through grants for specific facilities upgrades by wireline or wireless carriers.
215
Some parties before the FCC have proposed a low cost “benchmark” of $80.00 per line per month for the expected combined revenues of a voice and broadband network. The Wyoming Commission could adopt that benchmark or use a higher or lower benchmark.
216
The zones suggested here do not necessarily match existing zones used by carriers like
Qwest/CenturyLink. The Commission might use existing Qwest zones as a first approximation, if it finds those zones approximate what we suggest here. For example, Qwest zones 1 and 2 may approximate the Competitive Areas Zone.
217
For Qwest, the Wireline Zone might include current Qwest Zone 3.
218
The FCC has proposed that its Remote Areas Fund will provide support in areas with a cost per subscriber per month above a “extremely high cost threshold.” CAF Order ¶ 168. The Wyoming Remote Areas Zone will not necessarily coincide entirely with what the FCC will define for federal purposes as a “remote area.”
The FCC and the National Telecommunications Information Agency (NTIA) have decided to use census blocks as the fundamental geographic unit for broadband reporting and for FUSF support mechanisms. This decision makes a variety of census data available for universal service purposes, such as population and housing units data. On the other hand, using data that has been aggregated to the census block can oversimplify a geographic analysis.219 In rural areas, census blocks can be large, and they can straddle a local exchange boundary. If the census data are then mapped to ILEC exchange area maps, some of the census data such as housing units or population can be
misattributed to the wrong carrier. In addition, if census blocks are also used to evaluate the extent of broadband availability, it can oversimplify reality, leading to overestimation of the extent of competition.220 The FCC’s approach may also leave some portions of census blocks without a carrier obligated to provide service.221 The authors recommend that Wyoming carefully consider the extent of errors that will arise from using census blocks as the smallest geographic unit of analysis.
Mapping the state is not a task traditionally assigned to state utility commissions, and it may seem daunting to the Wyoming commission. Other Wyoming agencies no doubt could do the task, if so assigned. We recommend using the Commission, however, because the new USF map would differentiate areas primarily based on criteria within the specialized expertise of the Commission such as the extent of wireline competition, the boundaries of ILEC exchange areas, the cost of providing service, and the revenues likely to be available to a broadband carrier.
We recommend beginning the mapping process gradually. Despite our reservations about the federal mapping conventions, the authors propose that the Commission initially use the National Telecommunications and Information Administration (“NTIA”) sponsored broadband map as the starting point for the Unsubsidized Zone of the WUSF map. That broadband map identifies by census block areas of Wyoming that currently have broadband service and areas of the state that do not have such service.222 Over time, the FCC will publish the results of its new cost model,223 and
219
The FCC typically uses the “centroid” method of assigning census data to study area maps. Using this method, all of the population, housing and other attributes of a census block are assigned to the single point that is the centroid of the census block. Where a census block straddles a service area boundary, the likely result is overstated data in one study area and understated data in another.
220
For example, the NTIA applies a rule in which a census block that contains at least two square miles is treated as though broadband exists throughout the entire census block or is absent from the entire census block. As a result, an entire census block is deemed served by broadband if one or more customers has broadband service. The NTIA map thus overstates the extent of broadband availability in many areas.
221
Under the current FCC proposal, price cap carriers must commit to provide broadband and voice service in unserved areas. However, a census block can be considered served if any person in that census block already has broadband service. This creates a possibility that a supported broadband carrier may not have an obligation to serve anyone in a “competitive” census block, regardless of whether that person actually can purchase service from another provider.
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Appendix C includes a map based on NTIA released data that shows where there is more than one broadband provider serving a Wyoming census block.
the Commission can adopt the results of this model for the cost-based element in the definition of the Unsubsidized Zone. Reliance on the NTIA map and the FCC’s model will allow the Commission to establish its Wyoming universal service fund without having to construct its own map or model. Likewise, the Commission can rely on data from existing ILECs to clarify the boundary between Zones 2 and 3.
We are not suggesting that the Commission should accept the NTIA map uncritically. The Commission should have and should exercise the power to correct the map when necessary. Splitting census blocks between supported and unsupported areas is first and most obvious kind of possible map modifications.224