Federal Communications Commission FCC 13-73
Before the
Federal Communications Commission
Washington, D.C. 20554
In the Matter of
Connect America Fund
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WC Docket No. 10-90
REPORT AND ORDER
Adopted:  May 21, 2013 Released:  May 22, 2013
By the Commission:  Acting Chairwoman Clyburn and Commissioner Pai issuing separate statements.
I. INTRODUCTION
1. On November 18, 2011, the Commission released the USF/ICC Transformation 
Order, which comprehensively reformed and modernized the high-cost universal service and 
intercarrier compensation systems.1 Recognizing, among other facts, that over 80 percent of the more 
than 18 million Americans who were unserved by broadband at that time lived in price cap territories, 
the Commission provided for two phases of funding to make broadband-capable networks available 
to as many unserved locations as possible in those areas.2 In Connect America Phase I, the 
Commission froze existing high-cost support for price cap carriers and provided up to $300 million of 
additional, incremental support in 2012 in order to advance deployment of broadband-capable 
infrastructure pending implementation of Phase II subject to strict accountability and efficiency 
measures.3 Approximately $115 million was accepted, which will deliver new broadband service to 
nearly 400,000 unserved Americans.4
2. We now provide for a second round of Connect America Phase I incremental funding 
in 2013 to further leverage private investment in rural America and accelerate the availability of 
broadband to consumers who lack access.  We allocate $300 million for this second round.5 Price cap 
carriers will be able to accept support to extend broadband-capable networks under the rules for the 
first round of Phase I.  In addition, they will have an opportunity to deploy into newly eligible areas 
  
1 See Connect America Fund et al., WC Docket No. 10-90 et al., Report and Order and Further Notice of 
Proposed Rulemaking, 26 FCC Rcd 17663 (2011) (USF/ICC Transformation Order), pets. for review pending 
sub nom. In re: FCC 11-161, No. 11-9900 (10th Cir. filed Dec. 18, 2011).
2 See USF/ICC Transformation Order, 26 FCC Rcd at 17673, para. 21.  This 18 million unserved were as of the 
release of the USF/ICC Transformation Order in 2011.  According to most recent available State Broadband 
Initiative data, there were approximately 15 million Americans unserved by fixed broadband with speeds of 3 
Mbps downstream and 768 kbps upstream speed as of June 2012.  
3 See id. at 17715-17, paras. 133-38.
4 See Press Release, FCC, FCC Releases New, Interactive Map Illustrating States Set to Receive “Connect 
America Fund” Support to Bring 400,000 Americans High-Speed Broadband (July 26, 2012).
5 As discussed below, in the event demand exceeds $300 million, we authorize up to an additional $185 million 
in funding.
Federal Communications Commission FCC 13-73
2
that are unserved by broadband, so long as they comply with additional requirements discussed 
below.  We also adopt a process to challenge the eligibility of particular census blocks, establish two 
different per-location support amounts based on the existing level of Internet access ($550 for homes 
with low-speed Internet access and $775, as in the first round, for homes with only dial-up access), 
and make certain other rule changes to encourage participation and ensure accountability and 
oversight.  Especially in light of several major carriers’ commitments to match new Connect America 
funding with an equal new investment of private capital,6 the additional funding we make available 
has the potential to expand broadband access to hundreds of thousands of additional, currently 
unserved Americans.  We expect this to be the last round of Phase I funding, given the significant 
progress to date on Phase II implementation. 
II. BACKGROUND
3. In the USF/ICC Transformation Order, the Commission adopted a framework for the 
Connect America Fund to provide support in the territories of price cap carriers and their rate-of-
return affiliates based on a combination of a forward-looking cost model and competitive bidding.7  
The Commission recognized, however, that developing a new cost model and bidding mechanism 
could be expected to take some time.8 To support the expansion of broadband-capable networks even 
as those mechanisms were being developed, the Commission established Connect America Phase I to 
transition support from the old high-cost support mechanisms for price cap carriers to the new 
Connect America Phase II mechanism.  In Phase I, the Commission provided up to $300 million 
annually in incremental support to promote new broadband deployment until Phase II could be 
implemented.9 The Commission concluded that to the extent incremental support was declined, the 
funding would be used in other ways to advance the Commission’s broadband objectives consistent 
with its statutory authority.10
4. Participation in the Connect America Phase I incremental support program is 
optional.  Under the Commission’s rules for the first round of Phase I, carriers that participated were 
required to deploy broadband-capable infrastructure within three years to a number of locations, 
currently unserved by fixed, terrestrial Internet access with minimum speeds of 768 kbps downstream 
and 200 kbps upstream (768 kbps/200 kbps), equal to the amount of incremental support the carrier 
accepted divided by $775.11 For the first round of Phase I incremental support, the $300 million 
available was allocated among price cap carriers using a formula to estimate wire center costs based 
on the prior high-cost proxy model.12 Price cap carriers were required to declare how much of their 
allocated support they planned to accept and to identify the locations to which they would deploy 
broadband-capable infrastructure in order to meet their deployment obligations.13 On July 24, 2012, 
  
6 See Letter from Glen F. Post. CEO and President, CenturyLink et al. to Marlene H. Dortch, Secretary, FCC, 
WC Docket No. 10-90 (filed Apr. 19, 2013).
7 See USF/ICC Transformation Order, 26 FCC Rcd 17729-33, paras. 171-79.
8 See id. at 17715, para. 132.   
9 See id. at 17715, para. 133.
10 See id. at 17717, para. 138.
11 See id. at 17715, para. 133.
12 See id.; see also Wireline Competition Bureau Announces Support Amounts for Connect America Fund Phase 
One Incremental Support, WC Docket Nos. 10-90, 05-337, Public Notice, 27 FCC Rcd 4203 (Wireline Comp. 
Bur. 2012) (Phase I Support Announcement PN).  
13 See Phase I Support Announcement PN, 27 FCC Rcd at 4206, para. 10.
Federal Communications Commission FCC 13-73
3
price cap carriers accepted nearly $115 million of Phase I incremental support for 2012, committing 
to bringing broadband to over 145,000 locations that previously had no access to even a minimal level 
of high-speed Internet access service, and little prospect of receiving service meeting our broadband 
standard within the next three years.
5. The USF/ICC Transformation Order specified that further rounds of Phase I 
incremental support would become available in subsequent years, as necessary, until Phase II is 
implemented.14 The Commission directed the Wireline Competition Bureau (Bureau) to announce 
the next round of Phase I incremental support by December 15 for the subsequent year, and provided 
the Bureau with discretion to provide partial funding for a year to take into account potential 
implementation of Phase II midway through a calendar year.
6. In the Phase I FNPRM, the Commission waived the December 15, 2012 deadline for 
the Bureau to announce the next round of Phase I incremental support.15 It proposed using the 
remaining funds from the first round of Phase I in the second round of Phase I support.16 The 
Commission also proposed various rule changes to be implemented for the second round of Phase I 
support.  These changes would encourage carriers to accept allocated Phase I support in order to spur 
broadband deployment.  Among other things, the Commission proposed expanding those areas 
eligible to satisfy a carrier’s Phase I obligations: while previously a location had to lack any form of 
Internet access (i.e. lacking service meeting at least a minimal speed threshold of 768 kbps/200 kbps), 
the Commission proposed expanding this to encompass additional locations with sub-standard 
Internet access.17 The Commission also sought comment on conducting a challenge process, whereby 
parties could present evidence challenging the designation of a census block as served or unserved.18  
Additionally, the Commission sought comment on two changes that would apply to both the 2012 
round of Phase I as well as any future rounds: first, whether Phase I recipients should be required to 
report the geocoded coordinates of the locations to which they ultimately deploy in order to satisfy 
their Phase I obligations,19 and second, whether Phase I elections should be afforded confidentiality.20
III. DISCUSSION
7. Overview. In this Order, the Commission provides for a second round of Phase I 
funding to occur in 2013 and revises the rules for Phase I going forward.21 We allocate a maximum 
of $300 million for this second round of Phase I incremental support.  Price cap carriers will be 
allocated funds through the same system used in the first round of Phase I.  However, carriers will 
have the option to accept above their allocated support, so as to have an opportunity to receive 
  
14 See USF/ICC Transformation Order, 26 FCC Rcd at 17722, para. 148.
15 Connect America Fund, WC Docket No. 10-90, Further Notice of Proposed Rulemaking, 27 FCC Rcd 14566, 
14576, para. 39 (2012) (Phase I FNPRM).
16 Id. at 14568, 14574-76, paras. 9, 36-38.  Throughout this Order, the term “Phase I support” means Phase I 
incremental support unless expressly stated otherwise.
17 Id. at 14569, paras. 10-12.
18 Id. at 14569-70, paras. 13-16.
19 Id. at 14577-78, paras. 46-47.
20 Id. at 14578, para. 48.
21 Unless otherwise noted in the text, the modifications discussed in this Report and Order apply only 
prospectively.  These changes do not affect the obligations carriers have already made following the acceptance 
of Phase I incremental support in 2012.
Federal Communications Commission FCC 13-73
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additional funding if other carriers decline the support.  Additionally, Phase I eligibility is expanded 
to any location currently unserved by Internet service with speeds of  3 Mbps downstream and 768 
kbps upstream (3 Mbps/768 kbps) or higher, though a lower dollar amount of support is provided for 
locations that already have some level of Internet access.  We adopt a process for challenges to the 
eligibility of specific areas where price cap carriers propose to extend broadband-capable 
infrastructure.  We require information regarding Phase I elections to be public and for carriers to 
provide geocoded location information when making certifications regarding their buildout to 
facilitate the Commission’s oversight.   
8. Second Round of Connect America Phase I.  While the Bureau has made significant 
progress in implementing Phase II of Connect America,22 we conclude that a second round of Phase I 
is an appropriate way to promote the rapid and efficient expansion of broadband-capable 
infrastructure to serve consumers lacking broadband that meets the Commission’s definition.  We 
therefore instruct the Bureau to provide a new round of Connect America Phase I incremental support 
for 2013.
9. The budget for the new round of Phase I is set at $300 million. The Commission 
previously set the budget for an additional round of Phase I support in 2013 at $300 million and 
provided the Bureau discretion to pro rate that amount if Phase II was implemented during 2013.23  
We now conclude that $300 million would be an appropriate amount for a second round of Phase I 
incremental support to be provided in 2013, given the remaining funding from 2012 and the progress 
of Phase II implementation.  A $300 million budget should provide a reasonable amount to 
accommodate potential demand for funding that leverages private investment to accelerate 
deployment of broadband-capable infrastructure to consumers who can quickly be served in the near-
  
22 The Bureau recently released an order resolving the key network and engineering assumptions for the 
Connect America model and has solicited public input on more than 20 topics in a virtual workshop.  See
Connect America Fund et al., WC Docket No. 10-90 et al., Report and Order, DA 13-807 (Wireline Comp. Bur. 
Apr. 22, 2013); Wireline Competition Bureau Announces Connect America Phase II Cost Model Workshop, 
WC Docket Nos. 10-90, 05-337, Public Notice, 27 FCC Rcd 9882 (Wireline Comp. Bur. 2012); Wireline 
Competition Bureau Announces Connect America Phase II Cost Model Virtual Workshop, WC Docket Nos. 10-
90, 05-337, Public Notice, 27 FCC Rcd 11056 (Wireline Comp. Bur. 2012); Wireline Competition Bureau 
Releases Additional Discussion Topics for Connect America Phase II Cost Model Virtual Workshop, WC 
Docket Nos. 10-90, 05-337, Public Notice, 27 FCC Rcd 13212 (Wireline Comp. Bur. 2012); Wireline 
Competition Bureau Releases Further Discussion Topics for Connect America Cost Model Virtual Workshop, 
WC Docket Nos. 10-90, 05-337, Public Notice, 27 FCC Rcd 15795 (Wireline Comp. Bur. 2012); Wireline 
Competition Bureau Seeks Additional Comment in Connect America Cost Model Virtual Workshop, WC Docket 
Nos. 10-90, 05-337, Public Notice, 28 FCC Rcd 1007 (Wireline Comp. Bur. 2013); Wireline Competition 
Bureau Seeks Updates and Corrections to Telcomaster Table for Connect America Cost Model, WC Docket 
No. 10-90, Public Notice, 28 FCC Rcd 1151 (Wireline Comp. Bur. 2013); Wireline Competition Bureau 
Releases Further Discussion Topics and Seeks Additional Comment in Connect America Cost Model Virtual 
Workshop, WC Docket No. 10-90, Public Notice, 28 FCC Rcd 1447 (Wireline Comp. Bur. 2013); Wireline 
Competition Bureau Adds New Discussion Topic to Connect America Cost Model Virtual Workshop, WC 
Docket No. 10-90, Public Notice, 28 FCC Rcd 1961 (Wireline Comp. Bur. 2013).  See also Wireline 
Competition Bureau Announces Availability of Version Three of the Connect America Fund Phase II Cost 
Model, WC Docket No. 10-90, Public Notice, 28 FCC Rcd 2316 (Wireline Comp. Bur. 2013);  Wireline 
Competition Bureau Announces Availability of Version 3.1of the Connect America Fund Phase II Cost Model, 
Public Notice, DA 13-956 (Wireline Comp. Bur. rel. Apr. 29, 2013); Wireline Competition Bureau Announces 
Availability of Version 3.1.2. of the Connect America Fund Phase II Cost Model and Adds Additional 
Discussion Topics to Connect America Fund Cost Model Virtual Workshop, Public Notice, DA 13-1136 
(Wireline Comp. Bur. rel. May 17, 2013).  
23 USF/ICC Transformation Order, 26 FCC Rcd at 17722, para. 148.  
Federal Communications Commission FCC 13-73
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term.  As with the first round of Phase I, it is not our goal that all $300 million will be accepted.24  
Rather, we seek to use these funds now to spur rapid broadband deployment to “lower-cost areas 
where there is no private sector business case for deployment of broadband.”25 Any Phase I support 
that remain unclaimed at the end of the second round of support will be added to the budget for Phase 
II, pro-rated in equal annual amounts over the Phase II time period.26 This will have the effect of 
increasing the yearly budget for Phase II by an amount equal to one-fifth of the unclaimed funds.27
10. Price cap carriers will be allocated Phase I incremental support using the same 
allocations as in the first round of Phase I.28 Carriers will have 75 days from the release of this Order 
to make their elections.29
11. As with the first round of Phase I, each carrier may elect to receive all, none, or a 
portion of its allocated Phase I incremental support.  However, in contrast to Phase I, a carrier may 
also elect to receive an amount above its allocated incremental support, up to the total budget of $300 
million for this second round of Phase I.30 To the extent other carriers decline to accept Phase I 
incremental support, any remaining funds will be redistributed to carriers that are willing to commit 
to additional deployment if they receive funding above their initial allocations.  If the total demand of 
all carriers exceeds $300 million, we authorize up to an additional $185 million in funding.31 Under 
this approach, each carrier is assured of its allotted amount to expand broadband-capable 
  
24 See Connect America Fund et al., WC Docket No. 10-90 et al., Second Order on Reconsideration, 27 FCC 
Rcd 4648, 4654, para. 20 (2012) (Second Order on Reconsideration). 
25 USF/ICC Transformation Order, 26 FCC Rcd 17720, para. 145.
26 In the event the Bureau releases a preliminary list of census blocks eligible for Phase II prior to the election 
date of Phase I support, we direct the Bureau to indicate on that list which additional census blocks could be 
funded if less than $485 million in Phase I support is accepted.
27 The USF/ICC Transformation Order provides for a transition year between Phase I and Phase II for carriers 
that will receive more support under Phase II.  See id. at 17733, para. 180.  During this transition year, the 
support for each carrier will be equal to one half of the amount of support received the previous year plus one 
half the annual amount of support the carrier will receive under Phase II. This results in total support for the 
transition year being less than the annual budget for Phase II of $1.8 billion. Furthermore, if a carrier's Connect 
America Phase II support is less than the amount of Connect America Phase I support it received pursuant to 
Connect America Phase I, then the amount of support received during the transition year will also be less than it 
received pursuant to Connect America Phase I.
28 See Phase I Support Announcement PN.
29 In the first round of Phase I, carriers had 90 days to make their elections.  However, we conclude that carriers 
will require less time to prepare their second round elections: much of the analysis they carried out for the first 
round can be reused for the second round.
30 Elections above allocated support amounts may be made conditionally, such that a carrier is not obligated to 
accept an amount that is greater than its initial allocation, but less than its elected amount.  For example, assume 
a carrier was initially allocated $1,000,000 in support and conditionally elects to receive $1,500,000, planning 
to expand service using $500,000 for each of three separate projects.  However, if other carriers seek funding in 
excess of their original allocation, the carrier may ultimately be allocated only $1,200,000, which may not be 
sufficient to complete the third project.  The carrier may choose to accept any amount of funding between 
$1,000,000 and $1,200,000, taking on the accompanying service obligation to extend service to the appropriate 
number of locations. 
31 The additional $185 million in support would come from the unclaimed funds remaining from the first round 
of Phase I.  In the event that total demand exceeds $485 million, funds will be distributed proportionally based 
on initial allocations.
Federal Communications Commission FCC 13-73
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infrastructure to unserved consumers, while at the same time providing additional funds to those 
carriers willing and able to expand to more Phase I eligible locations.
12. We delegate authority to the Bureau to set the specific deadlines, including the 
deadlines for any certifications, for a second round of Phase I support and to take other steps to 
implement a second round, subject to the requirement that the amount of support offered does not 
exceed the total budget of $300 million.
13. With the exception of the rules we explicitly change in this Order, all the rules and 
requirements from the first round of Phase I apply mutatis mutandis to the second round of Phase I. 
14. Expanding Eligible Areas.  To meet its Phase I service obligations, a carrier must 
deploy to locations unserved by broadband.  Under the USF/ICC Transformation Order, however, 
only a subset of unserved locations was originally eligible for Phase I for support: specifically, only 
those locations that lacked Internet access service with speeds of at least 768 kbps/200 kbps (i.e. only 
dial-up Internet access).  In the Phase I NPRM, the Commission sought comment on whether to 
expand eligibility to a larger pool of locations unserved by broadband meeting the Commission’s 4 
Mbps/1 Mbps standard.32  
15. In addition to areas lacking 768 kbps/200 kbps Internet access, we now expand 
eligibility for Phase I support to any location that lacks 3 Mbps/768 kbps Internet access.33 We do so 
in recognition that carriers evaluate the economics of extending fiber to an area on a project-by-
project basis, with each project potentially containing some customers lacking 768 kbps/200 kbps, 
some lacking 1.5 Mbps/768 kbps, and others lacking 3 Mbps/768 kbps.34 By providing some support 
for those locations that lack 1.5 Mbps/768 kbps or 3 Mbps/768 kbps, carriers should find it more 
economical to extend fiber closer to those locations that only have dial-up Internet access.35 Thus, 
expanding eligibility to include locations with minimal non-dial-up Internet access, but without 
broadband, should also improve the economics of extending service to those customers who lack even 
768 kbps/200 kbps Internet access.36 Moreover, upgrading the most distant locations to receive 
  
32 Phase I FNPRM, 27 FCC Rcd at 14569, paras. 10-12.
33 This expansion does not apply to the buildout obligations incurred as a result of accepting Phase I support in 
2012.  Buildout obligations from the first round of Phase I must still be satisfied by deploying to locations 
lacking Internet access with speeds of at least 768 kbps downstream and 200 kbps upstream.
34 See Letter from Malena F. Barzilai, Senior Counsel for Government Affairs, Windstream Corp., to Marlene 
H. Dortch, Secretary, FCC, WC Docket No. 10-90, at 3 (filed Apr. 8, 2013) (Windstream April 8 Ex Parte).  See 
also Declaration of Mike Skudin, Vice President of Network Planning and Capital Management, Windstream 
Corp., WC Docket No. 10-90 et al., at para. 4 (filed July 24, 2012).  It is overly simplistic to assume there are 
some feeder lines that only serve customers lacking 768 kbps/200 kbps and other feeder lines that only serve 
customers lacking 3 Mbps/768 kbps service, and that it would be efficient to extend fiber closer to the customer 
for the latter group only if the first group has been fully addressed. 
35 The first round of Phase I focused on those areas completely lacking high-speed Internet access, rather than 
those areas that have some level of access, albeit access that does not meet the Commission’s broadband 
performance requirements.  See Second Order on Reconsideration, 27 FCC Rcd at 4653, para. 15.  Because of 
the success of the first round of Phase I, we find it is appropriate to expand our focus.  The first round of Phase I 
has already resulted in commitments to build to a number of the economically viable locations that lack access 
to networks with speeds of at least 768 kbps/200 kbps.  For some carriers, the 768 kbps/200 kbps locations that 
now remain are not economically feasible to deploy to with $775 in support.  Therefore, by expanding our focus 
to include areas lacking 3 Mbps/768 kbps, we improve the economics for carriers to serve areas that do not meet 
the Commission’s broadband standards.
36 See Letter from Michael D. Saperstein, Vice President of Federal Regulatory Affairs, Frontier 
Communications, to Marlene H. Dortch, Secretary, FCC, WC Docket No. 10-90, at 2 (filed Apr. 8, 2013).  
Federal Communications Commission FCC 13-73
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service meeting our 4 Mbps/1 Mbps standard should have the added benefit of providing many 
consumers currently lacking broadband with access to speeds in excess of our 4 Mbps/1 Mbps 
standard.37  
16. At the same time, we remain committed to prioritizing broadband-capable 
infrastructure to those areas that completely lack even 768 kbps/200 kbps Internet access.38  
Therefore, we place certain strictures on carriers that seek to avail themselves of the opportunity to 
count towards their deployment obligation locations in the expanded areas of availability.   First, 
price cap carriers must accept support for a second round of Phase I under the rules governing the 
first round, to the extent they are able to do so, before they may avail themselves of the expanded 
eligibility of areas adopted in this Order.   Specifically, a carrier may not accept funding for locations 
already served by Internet access with speeds of 768 kbps/200 kbps unless the carrier has already 
accepted funding for all projects or routes including locations unserved by 768 kbps/200 kbps that can 
economically be built with $775 in Connect America funding for each location unserved by 768 
kbps/200 kbps plus an equal amount of non-Connect America carrier capital expenditure funding.39  
For example, to the extent a carrier analyzed its network under the previous Phase I rules to identify 
projects to extend broadband-capable infrastructure to locations lacking 768 kbps/200 kbps service, 
and the identified projects would be economic to build with a one-to-one match of Connect America 
and carrier resources, the carrier must prioritize these projects when it accepts funding, and may not 
count toward satisfaction of its deployment obligation locations already served by Internet access 
with speeds of 768 kbps/200 kbps, regardless of the fact that some locations served by 768 kbps/200 
kbps but not 3 Mbps/768 kbps will be reached through these identified projects. 
17. Second, if a carrier has accepted funding for all projects or routes to locations 
unserved by 768/200 kbps that can be economically reached as noted in the preceding paragraph, it 
may also accept funding for routes to locations unserved by 3 Mbps/768 kbps that would count 
  
37 Letter from Malena F. Barzilai, Senior Counsel for Government Affairs, Windstream Corp., to Marlene H. 
Dortch, Secretary, FCC, WC Docket No. 10-90, at 1 (filed Apr. 15, 2013) (estimating  that 80 percent of 
customers served by DSLAMs upgraded with fiber backhaul would  have access to  broadband with 10 Mbps 
download speed, and 85 percent would have access to broadband with download speed of 6 Mbps); see also 
Letter from Malena F. Barzilai, Senior Counsel for Government Affairs, Windstream Corp., to Marlene H. 
Dortch, Secretary, FCC, WC Docket No. 10-90, at 1 (filed Mar. 28, 2013) (explaining that Windstream expects 
most areas deployed to through Phase I would actually receive speeds above 4 Mbps/1 Mbps).
38 The Commission sought comment on expanding eligible locations to include any location unserved by 4 
Mbps/1 Mbps, and inquired whether to use a different standard than the National Broadband Map 3 Mbps/768 
kbps threshold for determining what locations are unserved by 4 Mbps/1 Mbps.  The decision to expand only to 
locations unserved by 3 Mbps/768 kbps strikes a balance between those parties that wished to expand eligible 
areas to those lacking 4 Mbps/1 Mbps, and those that wished for it to remain at 768 kbps/200 kbps.  Compare
Comments of the National Cable and Telecommunications Association, WC Docket No. 10-90, at 7-8 (filed 
Jan. 28, 2013) (NCTA Comments) (contending that the Commission should not expand Phase I to areas lacking 
4 Mbps/1 Mbps) with Comments of USTelecom, WC Docket No. 10-90, at 11-13 (filed Jan. 28, 2013) 
(USTelecom Comments) (arguing for eligibility for any location not served by 4 Mbps/1 Mbps, using a proxy 
of 6 Mbps/1.5 Mbps).  The Commission has consistently used 3 Mbps/768 kbps as a proxy for 4 Mbps/1 Mbps.  
Limiting eligible areas to those unserved by 3 Mbps/768 kbps also makes it easier to administer the challenge 
process, discussed below.  If we were to now adopt a 6 Mbps/1.5 Mbps proxy, the Bureau would need to 
adjudicate challenges that an area is accurately shown on the National Broadband Map as served by 3 Mbps/768 
kbps, but actual speeds still fall below 4 Mbps/1 Mbps.  We determine that the administrative burden of 
processing such challenges outweighs any marginal benefit.
39 “Non-Connect America carrier capital expenditure” in this context does not include Phase I incremental, 
Phase I frozen support, Phase II support, Mobility Fund support, or Remote Areas Fund support.
Federal Communications Commission FCC 13-73
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toward satisfaction of its deployment obligation.  However, to the extent that carrier has multiple 
projects or routes for which it would be economic to extend service with a one-for-one match of 
Connect America funding, it must prioritize funded projects or routes so as to maximize the number 
of newly served locations that are currently unserved by Internet access with speeds of 768 kbps/200 
kbps that will receive service as a result of Phase I funding.  To accept new Phase I funding and count 
deployment to locations served by 768 kbps/200 kbps but unserved by 3 Mbps/768 kbps, carriers will 
be required to certify that they have met both conditions.   
18. In conjunction with these rule changes, we adopt a different metric for the dollar 
amount of support for those locations lacking 3 Mbps/768 kbps, compared to the $775 available for 
locations unserved by 768 kbps/200 kbps.  We conclude that it is appropriate for carriers to be 
permitted to meet buildout obligations by deploying broadband-capable infrastructure to locations 
that have service of 768 kbps/200 kbps but not 3 Mbps/768 kbps for $550 per location.40 Less fiber 
should be needed to upgrade the locations with some form of Internet access, as they are likely to be 
closer to the central office or remote terminal.41  
19. In addition to expanding eligible locations to any location lacking 3 Mbps/768 kbps 
Internet access, we also provide limited eligibility for locations shown on the current version of the 
National Broadband Map (data as of June 2012) as served by 3 Mbps/768 Internet access.  A carrier 
may satisfy its Phase I obligations by deploying to certain locations in its own service territory that 
are shown on the National Broadband Map as being served by 3 Mbps/768 kbps where it is likely that 
such service is not in fact delivered, so long as no other provider is offering service at speeds of 3 
Mbps/768 kbps to those locations.  The carrier must identify those specific locations and certify that 
the locations are currently served from a copper-fed digital subscriber line access multiplexer 
(DSLAM) and are shown on the National Broadband Map as receiving speeds of 3 Mbps/768 kbps or 
less.42 It is likely that while locations served by a copper-fed DSLAM are shown as having an 
advertised speed of 3 Mbps/768 kbps, actual speeds to such locations fall below that.43 As noted in 
  
40 The $550 support amount is in line with earlier estimates of the cost to deploy under the Broadband 
Initiatives Program.  See USF/ICC Transformation Order, 26 FCC Rcd at 17718, para. 140 (noting an average 
cost per location of $557).  This calculation included deployment to areas that were completely unserved, as 
well as those that already had some level of service.  As we expand eligible areas for Phase I to include some 
locations that have low-speed Internet access, we find the earlier analysis provides a reasonable basis to set a 
new dollar metric for locations served by 768 kbps/200 kbps but unserved by 3 Mbps/768 kbps.  The small 
difference between the Broadband Initiatives Program estimate ($557) and the new support level ($550) is 
justified by a degree of administrative judgment.  See also Letter from Thomas Cohen, Counsel, American 
Cable Association, to Marlene H. Dortch, Secretary, FCC, WC Docket No. 10-90, at 2 (filed Apr. 26, 2013) 
(suggesting $468 in support for locations with Internet access between 768 kbps/200 kbps and 3Mbps/768 kbps, 
based on its analysis of the average cost per location from the current version of the Connect America Cost 
Model).
41 Letter from Jeffery S. Lanning, Vice President for Federal Regulatory Affairs, CenturyLink, to Marelene H. 
Dortch, Secretary, FCC, WC Docket No. 10-90, at 1 (filed Apr. 23, 2013).
42 See Windstream April 8 Ex Parte at 3.
43 A price cap carrier that intends to accept funding to expand service to locations served by a copper-fed 
DSLAM is not required to identify those locations in the challenge process, discussed below.  To the extent that 
the National Broadband Map shows a census block location as receiving speeds above 3 Mbps/768 kbps, and 
the carrier or its affiliates are the only fixed broadband providers for that location, the carrier may file a 
certification that the location does not receive speeds above 3 Mbps/768 kbps because it is served through a 
copper-fed DSLAM, and the Commission will treat that location as served by 3 Mbps/768 kbps for the purposes 
of Phase I support.  Carriers are likely the only party to know whether a particular location is served by a 
copper-fed DSLAM, and we conclude that little benefit would be gained by allowing challenges on this point.  
Federal Communications Commission FCC 13-73
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the record, copper-fed DSLAMs have a maximum of 12 Mbps of backhaul available; as consumers 
increasingly use bandwidth-intensive applications, such as streaming video, the aggregate demand for 
bandwidth of all users on a DSLAM exceeds the DSLAM’s backhaul capacity, resulting in reduced 
speeds to the end user.44  
20. We will also limit support for any census block containing a project that received 
funding under the Broadband Initiatives Program (BIP) or the Broadband Technology Opportunities 
Program (BTOP), so long as the project meets the speed requirement that would disqualify the 
location from Phase I (i.e., the project will eventually provide speeds of 3 Mbps/768 kbps or greater).  
It would be an inefficient use of public funds to provide government support to two different projects 
aimed at serving the same location.  If a carrier wishes to satisfy its Phase I deployment obligations 
by building in census blocks with BIP or BTOP projects, it must certify that it has engaged in due 
diligence and reviewed publicly available data sources to ensure that the particular locations it plans 
to serve do not and will not receive funding under BIP or BTOP for the construction of a network 
meeting our broadband standards.45 We direct the Bureau to work with the Universal Service 
Administrative Company (USAC), the National Telecommunications and Information 
Administration, and/or the Rural Utilities Service, as appropriate, to take steps necessary to ensure 
Phase I support is not provided to areas receiving BIP or BTOP support.
21. Also, in order to use Connect America funds in the most efficient manner possible 
and avoid providing excess support to an area, we direct the Bureau to ensure the funding is not 
provided to the same census blocks under both Phase I incremental support and Phase II.  No carrier 
should be allowed to satisfy its Phase I obligations in any census block where it receives Phase II 
support.46 Carriers must be prepared to deploy to an equivalent number of locations that are unserved 
in a census block where they are not receiving Phase II support.47 If a carrier accepts Phase II support 
in a census block where it had initially planned to deploy broadband-capable networks to locations in 
order to meet its Phase I obligations, it must identify and deploy to the requisite number of locations 
in another census block for which it did not receive Phase II support.  
22. Service Obligations. A carrier electing to receive second round Phase I support must 
deploy to a number of unserved locations.  The number of locations varies depending on the speed of 
service currently available to that location.  As noted above, deploying broadband-capable 
infrastructure to an area lacking Internet access with speeds of 768 kbps/200 kbps will satisfy a 
greater portion of a carrier’s public service obligation than deploying to areas with some level of non-
broadband Internet access (i.e., a location that is served by Internet access at 768 kbps/200 kbps but 
not 4 Mbps/1 Mbps).  Deploying to a location unserved by 768 kbps/200 kbps will satisfy $775 of a 
  
44 Letter from Malena F. Barzilai, Senior Counsel for Government Affairs, Windstream Corp., to Marlene H. 
Dortch, Secretary, FCC, WC Docket No. 10-90, at 1 (filed Apr. 17, 2013).  For example, four users streaming 3 
Mbps would exhaust the DSLAM’s backhaul capacity, and each additional user beyond that would reduce the 
actual speeds to all users.
45 A map of BTOP projects, along with links to individual project summaries, is available at 
http://www2.ntia.doc.gov/BTOPmap/.  Information on BIP projects can be found at 
http://www.rurdev.usda.gov/UTP_BIPResources.html.  
46 After Phase I and Phase II elections are completed, we direct USAC to compare census blocks in which 
carriers have planned Phase I deployments and census blocks where carriers have elected to received Phase II 
support.  USAC should inform carriers within 60 days of the close of the Phase II election period regarding any 
overlap between a carrier’s planned Phase I deployments and its Phase II election, and remind those carriers that 
it may not count deployments in those census blocks toward their Phase I deployment obligations.
47 See USTelecom Comments at 26.
Federal Communications Commission FCC 13-73
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carrier’s Phase I obligations.  Deploying to a location served by 768 kbps/200 kbps but unserved by 3 
Mbps/768 kbps, as specified above,48 will satisfy $550 of a carrier’s Phase I obligation.
23. As in the first round of Phase I,49 when electing to accept support, the carrier must 
provide a list identifying the census blocks and wire centers in which it plans to use support.  In 
addition, the carrier must specify how many $775 locations and how many $550 locations it will 
deploy to. The carrier must certify that that deployment funded through Phase I incremental support 
will occur in areas shown on the most current version of the National Broadband Map (data as of June 
2012) as unserved by fixed Internet access with a minimum speed of 3 Mbps/768 kbps or that the 
carrier is challenging the National Broadband Map’s designation, and that, to the best of the carrier’s 
knowledge, the locations are, in fact, unserved by fixed Internet access with a minimum speed of 3 
Mbps/768 kbps.50 The carrier must also certify that its current capital improvement plan did not 
already include plans to complete broadband deployment to that area within the next three years, and 
that Phase I incremental support will not be used to satisfy any merger commitment or similar 
regulatory obligations.51  
24. As a change from the first round of Phase I, and as described above, the carrier must 
additionally make the following certifications regarding locations that it seeks to count to satisfy 
Phase I deployment obligations.52 The carrier must certify to the best of its knowledge that no 
locations are the subject of funding under BIP or BTOP for projects that will provide Internet access 
with speeds of at least 3 Mbps/768 kbps.  If a carrier seeks to count locations in its own service 
territory that are shown on the current version of the National Broadband Map (data as of June 2012) 
as served 3 Mbps/768 kbps, the carrier must certify that those locations are served through a copper-
fed DSLAM.  If the carrier seeks to satisfy any of its obligations by deploying to locations served by 
768 kbps/200 kbps but not 3 Mbps/768 kbps Internet service, it must certify that it has committed to 
all projects or routes to locations unserved by 768 kbps/200 kbps that can economically be built with 
$775 in Connect America funds plus an equal amount of non-Connect America carrier capital 
expenditure funding, and that it has prioritized funded routes so as to maximize the number of newly 
served locations that are currently unserved by Internet access with speeds of 768 kbps/200 kbps.
25. The buildout obligations mirror those in the first round of Phase I.  A carrier 
accepting Phase I support must complete deployment of broadband-capable infrastructure to two-
thirds of the required number of locations within two years and must complete deployment to all 
required locations within three years.  As a condition of this support, a carrier must offer broadband 
service to such locations of at least 4 Mbps downstream and 1 Mbps upstream, with latency 
sufficiently low to enable the use of real-time communications, including Voice over Internet 
  
48 See supra paras. 16-18.
49 USF/ICC Transformation Order, 26 FCC Rcd at 17720-21, para. 146.
50 A single version of the National Broadband Map will govern both the election and challenge process for the 
second round of Phase I.  
51 Phase I incremental support may be used in areas where the carrier may be subject to an existing regulatory 
obligation or merger commitment to deploy lower speed Internet access service that does not meet the 4 Mbps/1 
Mbps broadband speed threshold.  In this instance, the support would appropriately be used to support the cost 
of the upgrade to meet the Commission’s standards, not the cost of meeting the original regulatory obligation or 
merger commitment.
52 The Bureau will specify by public notice a deadline by which these certifications must be made after approval 
is obtained under the Paperwork Reduction Act of 1995 (PRA), Public Law 104-13.
Federal Communications Commission FCC 13-73
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Protocol, and with usage allowances, if any, associated with a specified price for a service offering 
that are reasonably comparable to comparable offerings in urban areas.53  
26. Phase I funding recipients will report that their networks meet the above standards 
through a process of self-certification.  We note that the Wireline Competition Bureau, the Wireless 
Telecommunications Bureau, and Office of Engineering & Technology have not specified a 
methodology for testing the performance of a funding recipient’s broadband-capable network.54 As 
Phase I incremental support is designed to provide one-time support for deployment to specific 
locations, we now conclude that the potential effort to implement a testing regime for Phase I 
incremental support recipients would exceed any marginal benefit that is gained as compared to self-
certification.  To the extent there are any issues with broadband performance, the consumer complaint 
process will help to inform the Commission of such instances.
27. Confidentiality. The Commission sought comment on whether Phase I elections 
should be afforded confidentiality.55 We now decide that Phase I elections in the second round 
should not be treated as confidential.  We strongly encourage Phase I recipients to discuss their 
elections with Commission staff at least 15 days prior to the election deadline in order to ensure facial 
compliance with the filing requirements.  While these discussions and documents related to them may 
be afforded confidentiality, the finalized elections must be filed publicly.  Public disclosure is 
generally preferred, especially when the use of public funds is at issue.  Furthermore, we find that the 
competitive harm to carriers from this disclosure is likely minimal.  Indeed, not all carriers requested 
confidentiality for first round Phase I filings.56
28. Challenge Process.  In the Phase I FNPRM, the Commission proposed conducting a 
challenge process whereby parties could challenge the status of census blocks as shown on the 
National Broadband Map.57 We conclude that such a challenge process would improve the accuracy 
and efficacy of a second round of Phase I support, allowing support to be appropriately targeted to 
unserved areas consistent with our overarching goals for Phase I.58 Consistent with the guidance 
contained herein, we delegate to the Bureau authority to implement the challenge process.
  
53 For purposes of demonstrating compliance with this reasonable comparability requirement, a price cap carrier 
may certify it is offering identical plans providing the same usage allowances for a given price in both urban 
and rural areas.
54 Connect America Fund et al., WC Docket 10-90 et al., Order, 28 FCC Rcd 2051, 2057, para. 16 (Wireline 
Comp. Bur. 2013).
55 Phase I FNPRM, 27 FCC Rcd at 14578, para. 48.  This proposal was supported in the record, and no party 
opposed.  See, e.g., Reply of the National Cable and Telecommunications Association, WC Docket No. 10-90, 
at 7-8 (filed Feb. 11, 2013).
56 See, e.g., Letter from Melissa E. Newman, Vice President for Federal Regulatory Affairs, CenturyLink, to 
Marlene H. Dortch, Secretary, FCC, WC Docket No. 10-90 et al. (filed July 24, 2012) (accepting support 
allocated to CenturyLink and not requesting confidential treatment for planned deployment locations).
57 Phase I FNPRM, 27 FCC Rcd at 14569-70, paras. 13-16.
58 As directed by the Commission, the Bureau solicited updates to the National Broadband Map (reflecting data 
as of December 2011) after the FNPRM was released.  See Wireline Competition Bureau Seeks Comment on 
Areas Shown as Unserved on the National Broadband Map for Connect America Phase I Incremental Support, 
WC Docket No. 10-90, Public Notice, 27 FCC Rcd 15165 (Wireline Comp. Bur. 2012).  While this provided 
valuable insight into some of the issues that may arise in a challenge process, we agree with commenters that it 
would be an inefficient use of Bureau resources to evaluate that record if no carrier intends to use Phase I 
support in specific areas where commenters provided updated information.  Furthermore, many comments 
related to changes that had already been submitted to the State Broadband Initiative grantees, and thus will be 
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Federal Communications Commission FCC 13-73
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29. Based on our review of the record, we are persuaded that the appropriate way to 
conduct a Phase I challenge process is to require price cap carriers first to identify the specific census 
blocks and wire centers where they propose to deploy broadband-capable infrastructure with second 
round Phase I support. This will reduce the burden on parties both making and responding to 
challenges, and the administrative burden of processing such challenges.59 The price cap carriers 
should identify where they intend to build based on the current version of the National Broadband 
Map (i.e., the map reflecting data as of June 2012).  
30. In the first round of Phase I, several carriers initially sought to meet their Phase I 
deployment commitments in areas that were already served or failed to identify enough census blocks 
to account for the required number of newly served locations.  To ensure that carriers properly 
identify the blocks that will be subject to the challenge process, we strongly encourage those electing 
funding to submit their intended elections and planned buildout locations by census block to the 
Bureau on a confidential basis at least 15 days in advance of the acceptance deadline.  The Bureau 
will evaluate the submissions to determine facial compliance with our requirements and will work 
with Phase I recipients to resolve any possible inconsistencies prior to the acceptance deadline.  To 
the extent carriers do not avail themselves of this procedure, they run the risk of having their 
respective commitment amounts reduced, to the extent they fail to identify enough census blocks to 
account for the required number of new locations; carriers will not be permitted to amend their 
elections once the challenge process has commenced to add additional census blocks.  Once the 
Bureau completes its review of the elections made on the deadline, it will publicly announce the 
acceptance amounts and census blocks for planned buildout.  The challenge process then will be 
conducted, as described below.
31. When electing to receive second round Phase I support, price cap carriers must 
provide a list of census blocks unserved by 3 Mbps/768 kbps Internet access in which they intend to 
deploy to meet their buildout obligations.60 In submitting such a list,61 price cap carriers may argue 
no providers in the area are offering broadband, challenging the National Broadband Map’s 
designation of a census block as being served by 3 Mbps/768 kbps Internet access or as being served 
by 768 kbps/200 kbps Internet access.62 When making an election to accept Phase I support, a price 
(Continued from previous page)   
reflected in updated versions of the National Broadband Map.  Accordingly, the Bureau will not be processing 
challenges based on the December 2011 SBI data, but providers may resubmit or reference their prior 
submissions in the forthcoming challenge process to the extent they remain relevant based on June 2012 data.
59 Conducting the challenge process after the initial acceptances also has broad support in the record.  See, e.g., 
USTelecom Comments at 17; Comments of the Wireless Internet Service Providers Association, WC Docket 
10-90, at 6-8 (filed Jan. 28, 2013) (WISPA Comments); NCTA Comments at 9.
60 Under our existing rules, the census blocks listed in a recipient’s Phase I election are merely a good faith 
statement of the recipient’s initial intentions of where it plans to deploy broadband-capable infrastructure.  The 
recipient is not bound by this list: a carrier is free to deploy to blocks not on the list and is free to not deploy to 
all blocks on the list.  This flexibility allows recipients to adjust their plans as needed, if future conditions 
necessitate a reevaluation of capital improvement plans.
61 When making challenges along with their initial elections, price cap carriers must submit evidence in support 
of those challenges.
62 Parties may contend that a census block is completely unserved (i.e., lacks speeds of 768 kbps/200 kbps and 
thus is eligible for $775 in funding), is unserved by 3 Mbps/768 kbps but served by 768 kbps/200 kbps (thus is 
eligible for $550 in funding), or is served by 3 Mbps/768 kbps (and thus is eligible for no support).  For 
example, assume Census Block A is shown on the National Broadband Map as served by 3 Mbps/768 kbps, 
Census Block B is shown as served by 768 kbps/200 kbps, and Census Block C is shown as completely 
unserved.  A price cap carrier could raise a challenge that Census Block A should be treated as unserved by 3 
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Federal Communications Commission FCC 13-73
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cap carrier may condition all or a portion of its acceptance on its challenge being granted.63 To 
eliminate the incentive to make blanket challenges in areas where the carrier has little intent to serve, 
however, if a carrier challenges the designation of a census block as served on the National 
Broadband Map and that challenge is ultimately granted, it will be obligated to deploy in that 
particular census block, absent extraordinary circumstances beyond its control.64
32. Following the price cap carriers’ initial submissions identifying where they intend to 
serve and which census blocks they are challenging the National Broadband Map classification as 
served, the Bureau will publish a list of all census blocks that carriers propose to serve to meet their 
Phase I obligations.  Interested parties will have 30 days to challenge this list by demonstrating that 
the block is in fact served by fixed Internet access65 with speeds of 3 Mbps/768 kbps or higher.66  
Carriers will then be given an additional 30 days to respond to these challenges.  To the extent a more 
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Mbps/768 kbps (making it eligible for $550/location in support) or that it should be treated as unserved by 768 
kbps/200 kbps (making it eligible for $775/location in support).  A price cap carrier could argue that Census 
Block B should be treated as unserved by 768 kbps/200 kbps (making it eligible for $775/location in support), 
while an unsubsidized provider could argue that Census Block B should be treated as served by 3 Mbps/768 
kbps (making the price cap carrier ineligible for support).  An unsubsidized provider could challenge the 
designation of Census Block C, arguing either that it should be treated as served by 768 kbps/200 kbps (making 
the price cap carrier eligible for only $550/location in support) or that it should be treated as served by 3 
Mbps/768 kbps (making the price cap carrier ineligible for any support).
63 Some parties have argued that partial census block challenges should be considered.  See, e.g., Letter from 
Melissa E. Newman, Senior Vice Presdient for Federal Policy and Regulatory Affairs, CenturyLink, to Marlene 
H. Dortch, Secretary, FCC, WC Docket No. 10-90 (filed Apr. 15, 2013).  We reiterate what was stated in the 
Second Order on Reconsideration: if the data underlying the National Broadband Map show that a location is 
not served by a particular provider, then, for purposes of this rule, the location is “shown as unserved” by that 
provider.  Second Order on Reconsideration, 27 FCC Rcd at 4651, para. 11.  For example, assume that the 
underlying data of the National Broadband Map contain a shapefile showing Census Block A as completely 
covered by WISP service, while the shapefile only covers the eastern half of Census Block B.  A price cap 
carrier may build to the locations in the western half of Census Block B without filing a challenge.  If it wishes 
to build to the eastern half of Census Block B, it must file a challenge stating that the census block is completely 
unserved by the WISP.  Because we conclude that it is not administratively feasible to allow  partial census 
block challenges, the price cap carrier may not allege that the WISP serves a smaller portion of Census Block B.  
Similarly, if the price cap carrier wishes to serve in Census Block A, it must contend that Census Block A is 
completely unserved by the WISP.
64 By requiring deployment to a census block when the block’s status on the National Broadband Map is 
challenged, recipients will be deterred from making frivolous challenges that unnecessarily consume the 
resources of the Bureau and external parties.
65 The term “served by fixed Internet access” for the purposes of the second round of Phase I includes areas 
identified as served by at least one of the following technologies: asymmetric xDSL; symmetric xDSL; other 
copper wireline; cable modem – DOCSIS 3.0; cable modem – other; optical carrier/fiber to the end user; electric 
power line; terrestrial fixed wireless – unlicensed; and terrestrial fixed wireless – licensed.  Cf. USF/ICC 
Transformation Order, 26 FCC Rcd at 17720, para. 146 n.231.
66 While metrics such as latency, capacity, and price, along with the availability of voice service from the 
putative unsubsidized competitor, will be considered when implementing other aspects of Connect America, for 
simplicity and ease of administration, we direct the Bureau to focus only on speed of broadband service when 
determining areas that are eligible for Connect America Phase I incremental support, consistent with the 
Commission’s objective of quickly utilizing these Phase I funds to expand access to broadband.  
Federal Communications Commission FCC 13-73
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recent National Broadband Map becomes available in this time period, interested parties are free to 
bring new information regarding availability as shown on the map to the Bureau’s attention.67
33. All filings in the challenge process, whether from a price cap carrier or another 
provider, must be supported by some form of documented evidence.  The Bureau should not consider 
conclusory assertions without supporting evidence that a census block’s designation as served or 
unserved should be changed.  In cases where another provider contests the price cap carrier’s 
intention to serve, the Bureau may consider such evidence as a signed certification from an officer of 
the provider under penalty of perjury that it offers 3 Mbps/768 kbps Internet service to customers in 
that particular census block.  Such a certification could be accompanied by current customer billing 
records, appropriately redacted to preserve customer privacy.  In cases where the price cap carrier 
seeks to contest the classification of a census block on the map as served by broadband, the Bureau 
may consider such evidence as statements from residents of an area noting that they have attempted 
and failed to receive service from a putative unsubsidized competitor.68 The Bureau may also 
consider FCC Form 477 data in evaluating whether a provider is providing broadband in a particular 
census block. Where the Bureau finds it more likely than not that the status of a census block should 
be treated differently than the status shown on the National Broadband Map, the Bureau will deem 
that census block as served or unserved, as appropriate, for the purposes of Connect America Phase 
I.69
  
67 While the Bureau should consider any updates shown on a more recent version of the National Broadband 
Map when adjudicating challenges, that information, by itself, will not necessarily be determinative if the price 
cap carrier introduces other evidence indicating that the block in question is not served.  Parties that provide 
updated map information therefore may wish to submit other evidence supplementing their showing. 
68 We would also consider a signed certification from an officer of the price cap carrier under penalty of 
perjury, that it has not ported a telephone number to the provider shown on the National Broadband Map as 
serving that block with service that meets the 3 Mbps/768 kbps proxy, as potentially relevant to whether that 
provider is providing service in the area.  See Comments of Windstream Corp., WC Docket No. 10-90, at 7-9 
(filed Jan. 9, 2013).  If a cable provider or fixed wireless Internet service provider (WISP) purports to serve the 
entire area with broadband and offers VoIP, it would be reasonable to expect that some of the provider’s 
customers would opt to use that provider’s VoIP service.  A complete lack of number porting to a number of 
census blocks over a sufficiently long time period would therefore bring into question whether the cable 
company or WISP is actually offering broadband in that area.  On the other hand, we recognize that in some 
instances, customers may drop their landline service altogether, relying on mobile voice service from a wireless 
company and broadband from another provider.  The absence of any porting activity from the incumbent to the 
other provider does not necessarily prove that the cable company or WISP is not providing broadband in the 
area.  Thus, while the lack of porting is relevant evidence, it is not determinative.  We encourage price cap 
carriers to supplement any evidence related to number porting with other evidence, such as information from 
commercial data sources regarding the presence, or lack thereof, of a broadband provider.
69 A challenge process is also being developed for Phase II of Connect America.  See Wireline Competition 
Bureau Seeks Comment on Procedures Relating to Areas Eligible for Funding and Election to Make a 
Statewide Commitment in Phase II of the Connect America Fund, WC Docket No. 10-90, Public Notice, 27 
FCC Rcd 15970 (Wireline Comp. Bur. 2012).  It is possible that the Phase I and Phase II challenge processes 
will occur close to one another in time.  A challenge or rebuttal filed in the Phase I challenge process will not 
automatically be considered for the Phase II challenge process.  If a party wishes its challenge to be considered 
in both the Phase I and Phase II challenge processes, it must file two distinct challenges.  Furthermore, a 
decision in the Phase I challenge process that an area is served or unserved will not be treated as determinative 
for purposes of the Phase II challenge process and vice versa, though we direct the Bureau to coordinate its 
efforts in the two processes insofar as possible.   
Federal Communications Commission FCC 13-73
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34. Reporting Requirements.  We adopt our two proposals regarding the reporting 
requirements for Phase I of Connect America.70 These changes apply both to support already 
accepted in the first round of Phase I and support that will be accepted in the second round of Phase I.  
We also adopt measures to ensure greater transparency for the public about how Phase I funds are 
being used, in response to a commenter’s suggestions.71
35. First, in their two- and three-year milestone certifications, recipients of Phase I 
support must provide geocoded latitude and longitude location information, along with census block 
and wire center information, for each location the carrier intends to count toward its deployment 
requirement.  As recipients should know by that point in time to which locations they are deploying in 
order to satisfy their buildout requirements, it is unlikely this additional reporting requirement will 
substantially burden Phase I recipients.  While the additional burden will be minimal, requiring 
geocoded location information will considerably improve the Commission’s ability to ensure 
accountability of Phase I funds.72 We direct the Bureau to work with USAC to publish a map 
indicating the location of projects funded with Phase I incremental support.  
36. Second, in the event a recipient intends to deploy to areas other than those identified 
in its initial acceptance, it is permitted (but not required) to make a supplemental filing providing 
updated deployment plans at any time.  Compliance with the deployment requirements will be 
determined based on the recipient’s final deployment certification.  As this interim reporting is 
completely optional, it should not unnecessarily burden any recipient that decides to file such reports.
37. In addition, we require carriers that elect to take Phase I funding under these revised 
rules to report annually on the dollar amount of investment they have made in the prior calendar year, 
using Phase I incremental support, beginning with the annual report due July 1, 2015.  In their annual 
reports required under section 54.313, recipients should provide the total amount of capital funding 
expended in the previous year in meeting Connect America Phase I deployment obligations, 
accompanied by a list of census blocks indicating where funding was spent.
38. Alternative Proposals.  We are not persuaded by arguments we should make more 
fundamental changes to Phase I.73 The Commission is implementing a multi-faceted strategy to 
  
70 See Phase I FNPRM, 27 FCC Rcd at 14577-78, paras. 46-47.  We also take this opportunity to clarify that if a 
price cap carrier is not otherwise subject to Connect America reporting requirements, its receipt of Phase I 
incremental support triggers reporting requirements only with respect to those locations which the carrier seeks 
to count toward the satisfaction of its Phase I incremental deployment obligations.  Cf. Letter from Mary L. 
Henze, Assistant Vice President for Regulatory Affairs, AT&T, to Marlene H. Dortch, Secretary, FCC, WC 
Docket No. 10-90 (filed Oct. 1, 2012) (urging that the Commission to clarify that Phase II recipients would be 
subject to the broadband performance measurement and reporting for the geographic areas in which they 
receive support).  Furthermore, the reporting obligations related to those locations apply only until the final 
report on Phase I incremental buildout is submitted. 47 C.F.R. § 54.313(b).  There is no ongoing reporting 
requirement after the three-year milestone.  If a carrier is also subject to the reporting requirements in section 
54.313(a) of the Commission’s rules, it should include any Phase I incremental support locations in its section 
54.313(a) report.  There is no requirement to distinguish incremental support locations from non-incremental 
support locations in the section 54.313(a) report.
71 See Letter from Thomas Cohen, Counsel, ACA, to Marlene H. Dortch, Secretary, FCC, WC Docket No 10-
90, at 3-4 (filed May 6, 2013).
72 Consistent with existing requirements for Connect America, see 47 C.F.R §54.320, recipients of funding must 
retain asset records relating to the deployment of new facilities in Phase I buildout and produce those records 
upon request in an audit or investigation.  
73 Proposed changes included: (1) expanding parties eligible for Phase I support beyond price cap carriers, 
Reply of Utilities Telecom Council, WC Docket No. 10-90, at 5-7 (filed Feb. 11, 2013) (recommending that all 
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expand the availability of broadband, both fixed and mobile, throughout the nation.  We decline at 
this time to revisit the relative allocation of funding among the various programs designed to achieve 
our broadband objectives for the nation.  Phase I was limited to price cap carriers in order to address a 
specific issue: over 80 percent of unserved Americans live in price cap territories.74 The most direct 
and expedient way to address that issue is to provide a discrete amount of support to price cap carriers 
that will leverage their private capital in exchange for a clearly defined obligation to deploy to those 
unserved locations in the near term.  A second round of Phase I can be quickly implemented in the 
months ahead.  In contrast, other proposals, such as developing an auction by which to distribute 
Phase I funds, would take longer to implement.  Thus, Phase I as refined today is a reasonable step 
forward in achieving our goal of rapidly deploying broadband-capable infrastructure to unserved 
Americans living in price cap territories.75
IV. PROCEDURAL MATTERS
A. Paperwork Reduction Act
39. This document contains modified information collection requirements subject to the 
PRA.  It will be submitted to the Office of Management and Budget (OMB) for review under section 
3507(d) of the PRA.  OMB, the general public, and other Federal agencies are invited to comment on 
the new or modified information collection requirements contained in this proceeding.  In addition, 
we note that pursuant to the Small Business Paperwork Relief Act of 2002, Public Law 107-198,76 we 
previously sought specific comment on how the Commission might further reduce the information 
collection burden for small business concerns with fewer than 25 employees.
40. In this present document, we have assessed the effects of requiring carriers to submit 
new elections for the second round of Connect America Phase I support, as well as requiring 
geocoded location information for all Phase I certifications, and find that it will not impact businesses 
with fewer than 25 employees.  Only price cap carriers or rate-of-return carriers affiliated with price 
cap carriers are eligible for Phase I support.  All such entities have more than 25 employees.
B. Final Regulatory Flexibility Certification
41. The Regulatory Flexibility Act (RFA)77 requires that agencies prepare a regulatory 
flexibility analysis for notice-and-comment rulemaking proceedings, unless the agency certifies that 
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entities, including utility companies providing telecommunications services, should be eligible for Phase I); 
Reply of US Cellular, WC Docket No. 10-90, at 22 (filed Feb. 11, 2013) (recommending that funds be available 
to mobile providers); (2) distributing support through an auction or other market-based mechanism, Comments 
of General Communication, Inc., WC Docket No. 10-90, at 2 (filed Feb. 11, 2013) (recommending that funds be 
distributed through a reverse auction); and/or (3) diverting Phase I funds into the Remote Areas Fund or other 
universal service mechanisms, Comments of Viasat, WC Docket No. 10-90, at 9 (filed Jan. 28, 2013) 
(recommending funds from Phase I be added to the Remote Areas Fund); Reply of the Wireless Internet Service 
Providers Association, WC Docket No. 10-90, at 4 (filed Feb. 11, 2013) (recommending that unclaimed Phase I 
funds be added to the Remote Areas Fund); Reply of Fred Williamson and Associates, WC Docket No. 10-90, 
at 5 (filed Feb. 11, 2013) (recommending that funds be provided to support rural local exchange carriers).
74 USF/ICC Transformation Order, 26 FCC Rcd at 17712, para. 127.
75 See, e.g., Comments of the National Rural Electric Cooperative Association, WC Docket No. 10-90, at 2-3 
(filed Jan. 28, 2013); Comments of the National Association of Telecommunications Officers and Advisors, 
WC Docket No. 10-90, at 2 (filed Jan. 28, 2013).
76 See 44 U.S.C. § 3506(c)(4).
77 See 5 U.S.C. § 601 et seq.  The RFA has been amended by the Small Business Regulatory Enforcement 
Fairness Act of 1996 (SBREFA), Pub. L. No. 104-121, Title II, 110 Stat. 857.
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“the rule will not have a significant economic impact on a substantial number of small entities.”78  
The RFA generally defines “small entity” as having the same meaning as the terms “small business,” 
“small organization,” and “small governmental jurisdiction.”79 In addition, the term “small business” 
has the same meaning as the term “small business concern” under the Small Business Act.80 A small 
business concern is one which: (1) is independently owned and operated; (2) is not dominant in its 
field of operation; and (3) satisfies any additional criteria established by the SBA.81
42. This document modifies and clarifies the Phase I rules adopted by the Commission 
in USF/ICC Transformation Order.82 These modifications and clarifications do not create any 
burdens, benefits, or requirements that were not addressed by the Final Regulatory Flexibility 
Analysis attached to USF/ICC Transformation Order.83 Therefore, we certify that the requirements 
adopted in this Report and Order will not have a significant economic impact on a substantial number 
of small entities. The Commission will send a copy of the Order, including a copy of this final 
certification, in a report to Congress pursuant to SBREFA.84 In addition, the Report and Order and 
this certification will be sent to the Chief Counsel for Advocacy of the SBA, and will be published in 
the Federal Register.85  
C. Congressional Review Act
43. The Commission will send a copy of this Report and Order to Congress and the 
Government Accountability Office pursuant to the Congressional Review Act.86
V. ORDERING CLAUSES
44. Accordingly, IT IS ORDERED, pursuant to the authority contained in sections 1, 
4(i), 4(j), 5, 201(b), 214, 218-220, and 254 of the Communications Act of 1934, as amended, and 
section 706 of the Telecommunications Act of 1996, 47 U.S.C. §§ 151, 154(i), 154(j), 155, 201(b), 
214, 218-220, 254, 1302, that this Report and Order IS ADOPTED, effective thirty (30) days after 
publication of the text or summary thereof in the Federal Register, except for those rules and 
requirements involving Paperwork Reduction Act burdens, which shall become effective immediately 
upon announcement in the Federal Register of OMB approval and an effective date.  
45. IT IS FURTHER ORDERED that authority to implement a Connect America Phase I 
challenge process IS DELEGATED to the Wireline Competition Bureau, consistent with paragraphs 
[[28-33]] of this Report and Order.
  
78 5 U.S.C. § 605(b).
79 5 U.S.C. § 601(6).
80 5 U.S.C. § 601(3) (incorporating by reference the definition of “small business concern” in the Small 
Business Act, 15 U.S.C. § 632).  Pursuant to 5 U.S.C. § 601(3), the statutory definition of a small business 
applies “unless an agency, after consultation with the Office of Advocacy of the Small Business Administration 
(SBA) and after opportunity for public comment, establishes one or more definitions of such term which are 
appropriate to the activities of the agency and publishes such definition(s) in the Federal Register.”
81 Small Business Act, 15 U.S.C. § 632. 
82 See USF/ICC Transformation Order, 26 FCC Rcd at 17716-22, paras. 136-47.
83 See id. at 18324-63, App. O.
84 See 5 U.S.C. § 801(a)(1)(A).
85 See 5 U.S.C. § 605(b).
86 See 5 U.S.C. § 801(a)(1)(A).
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46. IT IS FURTHER ORDERED that authority to set the timeline for a second round of 
Phase I support, including certifications related to the second round of Connect America Phase I, IS 
DELEGATED to the Wireline Competition Bureau.
47. IT IS FURTHER ORDERED that Part 54 of the Commission’s rules, 47 C.F.R. Part 
54, is AMENDED as set forth in the Appendix, and such rule amendments shall be effective 30 days 
after the date of publication of the rules amendments in the Federal Register, except to the extent they 
contain information collections subject to Paperwork Reduction Act review.  The rules that contain 
information collections subject to Paperwork Reduction Act review WILL BECOME EFFECTIVE 
upon announcement in the Federal Register of OMB approval and an effective date. 
48. IT IS FURTHER ORDERED that the Commission SHALL SEND a copy of this 
Report and Order to Congress and the Government Accountability Office pursuant to the 
Congressional Review Act, see 5 U.S.C. § 801(a)(1)(A).
49. IT IS FURTHER ORDERED, that the Commission’s Consumer and Governmental 
Affairs Bureau, Reference Information Center, SHALL SEND a copy of this Order, including the 
Final Regulatory Flexibility Certification, to the Chief Counsel for Advocacy of the Small Business 
Administration.
FEDERAL COMMUNICATIONS COMMISSION
Marlene H. Dortch
Secretary
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APPENDIX
Final Rules
For the reasons discussed in the Report and Order, the Federal Communications Commission amends 
47 C.F.R. Part 54 to read as follows:
PART 54 – UNIVERSAL SERVICE
1. The authority citation for Part 54 is modified to read as follows:
Authority: Sections 1, 4(i), 5, 201, 205, 214, 219, 220, 254, 303(r), and 403 of the Communications 
Act of 1934, as amended, and section 706 of the Communications Act of 1996, as amended; 47 
U.S.C. 151, 154(i), 155, 201, 205, 214, 219, 220, 254, 303(r), 403, and 1302 unless otherwise noted.
2. Amend § 54.312 by revising paragraph (b) and adding paragraph (c) as follows:
§ 54.312 Connect America Fund in Price Cap Territories – Phase I.
*****
(b) Incremental Support in 2012. From January 1, 2012, to December 31, 2012, support in addition to 
baseline support defined in paragraph (a) of this section will be available for certain price cap local 
exchange carriers and rate-of-return carriers affiliated with price cap local exchange carriers as 
follows.
*****
(c) Incremental Support in 2013. From  January 1, 2013, to December 31, 2013, support in addition to 
baseline support defined in paragraph (a) of this section will be available for certain price cap local 
exchange carriers and rate-of-return carriers affiliated with price cap local exchange carriers as 
follows:
(1) For each carrier for which the Wireline Competition Bureau determines that it has 
appropriate data or for which it determines that it can make reasonable estimates, the Bureau 
will determine an average per-location cost for each wire center using a simplified cost-
estimation function derived from the Commission's high-cost proxy model. Incremental 
support will be based on the wire centers for which the estimated per-location cost exceeds 
the funding threshold. The funding threshold will be determined by calculating which funding 
threshold would allocate all available incremental support, if each carrier that would be 
offered incremental support were to accept it.
(2) An eligible telecommunications carrier accepting incremental support must deploy 
broadband to a number of unserved locations, shown as unserved by fixed Internet access 
with speeds of at least 768 kbps downstream and 200 kbps upstream on the then-current 
version of the National Broadband Map, equal to the amount of incremental support it accepts 
divided by $775.
(3)  An eligible telecommunications carrier must accept funding pursuant to (c)(2) before it 
may accept funding pursuant to (c)(3). If an eligible telecommunications carrier has 
committed to deploy to all locations eligible for support under (c)(2) on routes or projects that 
can economically be built with $775 in Connect America funding for each location unserved 
Federal Communications Commission FCC 13-73
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by 768 kbps downstream and 200 kbps upstream plus an equal amount of non-Connect 
America carrier capital expenditure funding, but the carrier has not fully utilized its allotted 
funding,  it may also count towards its deployment obligation locations shown as unserved by 
fixed Internet access with speeds of at least 3 Mbps downstream and 768 kbps upstream equal 
to the amount of remaining incremental support divided by $550.  
(4) A carrier may elect to accept or decline incremental support.  A holding company may do 
so on a holding-company basis on behalf of its operating companies that are eligible 
telecommunications carriers, whose eligibility for incremental support, for these purposes, 
shall be considered on an aggregated basis.  A carrier must provide notice to the Commission, 
the Administrator, relevant state commissions, and any affected Tribal government, stating 
the amount of incremental support it wishes to accept, the number of locations at the $775 
amount, the number of locations at the $550 amount, and identifying the areas by wire center 
and census block in which the designated eligible telecommunications carrier will deploy 
broadband to meet its deployment obligation, or stating that it declines incremental support.  
Such notification must be made within 75 days of being notified of any incremental support 
for which it would be eligible.  
(5) Along with its notification, an eligible telecommunications carrier accepting incremental 
support must submit the following certifications:
(i) the locations to be served to satisfy the deployment obligation are not shown as 
served by fixed broadband at the speeds specified in (c)(2) or (c)(3) provided by any 
entity other than the certifying entity or its affiliate on the then-current version of the 
National Broadband Map or that it is challenging the National Broadband Map’s 
designation of that census block under the challenge process in paragraph (c)(7) of 
this section;
(ii) to the best of the carrier’s knowledge, the locations are, in fact, unserved by fixed 
Internet access with speeds of at least 3 Mbps downstream and 768 kbps upstream, or 
768 kbps downstream and 200 kbps upstream, as appropriate; 
(iii) the carrier’s current capital improvement plan did not already include plans to 
complete broadband deployment within the next three years to the locations to be 
counted to satisfy the deployment obligation; 
(iv) incremental support will not be used to satisfy any merger commitment or similar 
regulatory obligation; and
(v) the carrier has undertaken due diligence to determine the locations in question are 
not within the service area of either Broadband Initiatives Program or the Broadband 
Technology Opportunities Program projects that will provide Internet access with 
speeds of at least 3 Mbps downstream and 768 upstream.
(6)  An eligible telecommunications carrier deploying to locations unserved by 3 Mbps 
downstream and 768 kbps upstream under paragraph (c)(3) of this section must also certify 
that it has prioritized its planned projects or routes so as to maximize the deployment of 
broadband-capable infrastructure to locations lacking Internet access with speeds of 768 kbps 
downstream and 200 kbps upstream.
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(7) A person may challenge the designation of a census block as served or unserved by a 
certain speed as shown on the National Broadband Map.  When the Wireline Competition 
Bureau determines that the evidence presented makes it more likely than not that the census 
block should be designated as served by broadband with speeds of at least 3 Mbps 
downstream and 768 kbps upstream, that locations in that census block will be treated as 
served by broadband and therefore ineligible to be counted for the purposes of paragraph 
(c)(3) of this section.  When the Wireline Competition Bureau determines that the evidence 
presented makes it more likely than not that the census block should be designated as served 
by Internet service with speeds of 768 kbps downstream and 200 kbps upstream, but unserved 
by broadband with speeds of at least 3 Mbps downstream and 768 kbps upstream, locations in 
that census block will be treated as served by Internet access with speeds of 768 kbps 
downstream and 200 kbps upstream and therefore eligible to be counted for the purposes of 
paragraph (c)(3) of this section.  When the Wireline Competition Bureau determines that the 
evidence presented makes it more likely than not that the census block should be designated 
as unserved by Internet service with speeds of 768 kbps downstream and 200 kbps upstream, 
locations in that census block will be treated as unserved by Internet access with speeds of 
768 kbps downstream and 200 kbps upstream and therefore eligible to be counted for the 
purposes of paragraph (c)(2) of this section.  
(8)  If no entity other than the carrier or its affiliate provides Internet service with speeds of 3 
Mbps downstream and 768 kbps upstream or greater as shown on the National Broadband 
Map or as determined by the process described in paragraph (c)(7), the carrier may satisfy its 
deployment obligations at a location shown by the National Broadband Map as being served 
by that carrier or its affiliate with such service by certifying that it is the only entity providing 
such service, that the location does not actually receive speeds of 3 Mbps downstream and 
768 kbps upstream, and the location is served through a copper-fed digital subscriber line 
access multiplexer.  The carrier must specifically identify such locations in its election.  Such 
locations will be treated the same as locations under paragraph (c)(3) of this section.
(9) An eligible telecommunications carrier must complete deployment of broadband-capable 
infrastructure to two-thirds of the required number of locations within two years of providing 
notification of acceptance of funding, and must complete deployment to all required locations 
within three years.  To satisfy its deployment obligation, the eligible telecommunications 
carrier must offer broadband service to such locations of at least 4 Mbps downstream and 1 
Mbps upstream, with latency sufficiently low to enable the use of real-time communications, 
including Voice over Internet Protocol, and with usage allowances, if any, associated with a 
specified price for a service offering that are reasonably comparable to comparable offerings 
in urban areas.
3. Amend § 54.313 by revising paragraph (b) as follows:
§ 54.313 Annual reporting requirements for high-cost recipients.
*****
(b) In addition to the information and certifications in paragraph (a) of this section:
(1) Any recipient of incremental Connect America Phase I support pursuant to § 54.312(b)-
(c) shall provide:
Federal Communications Commission FCC 13-73
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(i) In its next annual report due after two years after filing a notice of acceptance of 
funding pursuant to § 54.312(b)-(c), a certification that the company has deployed to 
no fewer than two-thirds of the required number of locations; and
(ii) In its next annual report due after three years after filing a notice of acceptance of 
funding pursuant to § 54.312(b)-(c), a certification that the company has deployed to 
all required locations and that it is offering broadband service of at least 4 Mbps 
downstream and 1 Mbps upstream, with latency sufficiently low to enable the use of 
real-time communications, including Voice over Internet Protocol, and with usage 
allowances, if any, associated with a specified price for a service offering that are 
reasonably comparable to comparable offerings in urban areas.
(2) In addition to the information and certifications required in paragraph (b)(1) of this 
section, any recipient of incremental Connect America Phase I support pursuant to § 
54.312(c) shall provide:
(i) In its annual reports due after one, two, and three years after filing a notice of 
acceptance of funding pursuant to § 54.312(c), a certification that, to the best of the 
recipient’s knowledge, the locations in question are not receiving support under the 
Broadband Initiatives Program or the Broadband Technology Opportunities Program 
for projects that will provide broadband with speeds of at least 4 Mbps/1 Mbps; and
(ii) In its annual reports due after one, two, and three years after filing a notice of 
acceptance of funding pursuant to § 54.312(c), a statement of the total amount of 
capital funding expended in the previous year in meeting Connect America Phase I 
deployment obligations, accompanied by a list of census blocks indicating where 
funding was spent.
*****
Federal Communications Commission FCC 13-73
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STATEMENT OF 
ACTING CHAIRWOMAN MIGNON L. CLYBURN
Re: Connect America Fund, WC Docket No. 10-90.
Broadband is no longer a luxury, but a necessity.  It is the gateway through which most 
Americans obtain critical information and services, find jobs, communicate with their teachers and 
health care providers, and keep up to date with their family and friends.  The sad reality, however, is 
that millions of Americans still lack access to broadband networks, and for those living in areas where 
the business case will not likely be made for rapid deployment, government engagement is essential.  
Today’s Order, which leverages private investment and universal service funding, will 
potentially connect hundreds of thousands of unserved consumers to robust broadband networks. 
Providers electing to receive funding under the new rules for incremental support must include a one-
for-one matching of private investment for each dollar of universal service support.  This public-
private partnership stretches the impact of federal funding to reach more communities.  In addition, it 
provides a mechanism to make available additional universal service support if the demand exceeds 
$300 million, and commits to using any unclaimed funding to reach unserved communities through 
Connect America Phase II.  
We take significant steps to connect these unserved communities and consumers today, and 
in so doing are moving another step closer to fulfilling goals set forth in our historical overhaul of the 
high-cost Universal Service Fund: to ensure that all Americans have access to voice and broadband 
services.  Comprehensive reforms made this Order possible, and I want to thank former Chairman 
Genachowski for his leadership on these issues.
None of this would be possible without the support of my fellow Commissioners, whose 
collaborative efforts to reach a unanimous decision and unleash funding, should help to close the 
digital divide for hundreds of thousands of Americans.
Federal Communications Commission FCC 13-73
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STATEMENT OF
COMMISSIONER AJIT PAI
Re: Connect America Fund, WC Docket No. 10-90.
This is a good day for rural America.  Today’s order makes available almost half a billion dollars 
for the deployment of broadband in areas served by price-cap carriers, while ensuring that public funding 
does not displace private investment.  Any money that is not accepted will roll over into the next phase of 
the Connect America Fund and support broadband build-out in these same areas.  And all of this will be 
done within the budget set forth by the Universal Service Transformation Order.1
I hope that these reforms herald the arrival of broadband in currently unserved parts of our 
country.  And I thank my colleagues—particularly Chairwoman Clyburn and staff of the Wireline 
Competition Bureau—for collaborating with me on this item and incorporating a number of my 
suggestions.
  
1 Connect America Fund et al., WC Docket No. 10-90 et al., Report and Order and Further Notice of Proposed 
Rulemaking, 26 FCC Rcd 17663 (2011) (Universal Service Transformation Order), pets. for review pending sub 
nom. In re: FCC 11-161, No. 11-9900 (10th Cir. filed Dec. 18, 2011).