TDS Telecom, a long-time supporter for the government’s Alternative Connect America Model (A-CAM), announced Thursday it’s elected to receive extended support from the program.
Founded in 2016, the A-CAM program is part of the Federal Communications Commission’s High Cost fund, which subsidizes broadband deployments in high-cost rural areas.
The FCC this summer adopted the A-CAM extension (i.e., Enhanced A-CAM), which bumped up the speed requirement from 25 Mbps downstream and 3 Mbps upstream to 100/20 Mbps for participating ISPs. The Commission is also extending program support by an additional 10 years – through 2038.
For TDS’ part, it intends to accept $90 million per year in A-CAM support for 24 states – all but one of the states where it offers wireline services, according to SVP of Corporate Affairs Drew Petersen.
He told Fierce TDS in Ohio “got an offer that would actually produce less support for us over the 15-year lifespan” than what the operator would receive under the current A-CAM program, which runs through 2028.
“The offer just wasn’t economic enough for us to take,” Petersen said. “So we will stay on the old A-CAM program [in Ohio] and continue to meet our obligations as we’re anticipated.”
But because TDS didn’t accept Enhanced A-CAM support for Ohio, he noted those addresses will be eligible for Broadband Equity, Access and Deployment (BEAD) funding.
Earlier this year, TDS CFO Michelle Brukwicki said the extended A-CAM support would allow the operator to get fiber to “almost all of our 160,000 A-CAM addresses.”
With Enhanced A-CAM, “that number escalates to about 270,000,” said Petersen. Roughly 40% of those locations are unserved addresses not receiving federal support.
He explained “there’s an additional series of addresses that are along the route to get to our A-CAM customers” that fall below the FCC’s new monthly funding threshold of $63.69 per location.
“The benchmark is just a view from the FCC…that the average broadband user pays a certain rate for broadband. And if it’s below what this benchmark is…you can build to those locations and recoup your revenues for that investment from the direct consumer,” Petersen said.
He added TDS’s A-CAM work is separate from its fiber expansion, “so in all of our markets where we’ve accepted [Enhanced] A-CAM, we were prohibited from applying for BEAD.”
“And that makes a lot of sense, right? Because you don’t want to have two networks being funded by the federal government,” said Petersen. “And because we’ve accepted the E A-CAM offers, no other carrier can apply for BEAD in those markets either.”
TDS is part of the ACAM Broadband Coalition, a group of rural operators that support the A-CAM changes. Other members include Arvig, Great Plains Communications and Ritter Communications.
Petersen noted there are “other smaller rural carriers” currently using A-CAM support “that may not accept” the extension.
“There’s not a ton of them, but there are some that…when they were building out their networks, they had a lot of fiber in their build to get their speeds up,” he said. “They took their A-CAM money but said, ‘I’m going to put some more private capital in there so I can get my network more future-proof.”
The cable side of the industry has expressed opposition to the A-CAM extension. NCTA – The Internet & Television Association, along with Comcast, Charter and Cox, met with the FCC on several occasions to dissuade the Commission from moving forward with Enhanced A-CAM.
“It is concerning that the FCC would commit over $13 billion to specific broadband providers without a competitive process that is open to all qualified providers,” an NCTA rep told Fierce earlier this month.