Before the FCC can implement its Connect America Cost Model, it must settle a more fundamental question than what capabilities should be added to the model, said commenters on a December rulemaking notice on the features. The real question, they said in filings and interviews, is whether to use a greenfield or a brownfield approach to estimating costs. “Of any changes that could be made to the model, this is by far the biggest,” said Ross Lieberman, American Cable Association vice president-government affairs. The ACA has been a primary proponent of the brownfield model, one option offered in the latest version of the CACM.

The American Cable Association recommended several capabilities be added to the Connect America Fund cost model (http://xrl.us/boaeu7). It should provide the ability to separate operating and capital expenditures in the reporting model; include or exclude “telco served” locations with a new reporting toggle; and exclude capital expenditures for all locations that are “telco served;” provide for inclusion of existing download and upload speed data for each geographic area from the national broadband map. ACA also sought a toggle to exclude Alaska from the calculations; a new summary report that shows expected annual capital expenditure cash flows by asset category for each year; and new fields in the support model detail report indicating which census blocks were previously eligible for USF support. The additions would facilitate more detailed analysis and better modeling transparency, ACA said. The model helps calculate USF costs for broadband that gets USF funds.

Multichannel video programming distributors remain divided on whether the FCC should adopt a standard of rebuttable presumptions against withholding from other MVPDs channels that are affiliated with cable operators, comments on a rulemaking show. NCTA and programmers and operators that own channels opposed the presumptions that program access rules are violated by exclusive contracts for cable-affiliated regional sports networks (RSN) and national sports networks. Vertically-integrated operator/programmers also opposed the notion that once a channel affiliated with an operator is found to have one unfair exclusive contact, it can’t get more. The presumptions would be rebuttable by defendants.

The expectation by price cap LECs that the Connect America Fund should be responsible for paying pre-CAF expenses is “baseless and arbitrary,” the American Cable Association wrote the FCC Friday (http://xrl.us/bn5b8t). It responded to a Nov. 20 USTelecom filing describing ACA’s approach to the Phase II cost model -- limiting recovery for investments made prior to adoption of the CAF -- as “legally indefensible.” Price cap LECs’ expectation for recovery for prior investments is unreasonable because those investments served locations never supported by the high-cost USF fund, ACA said. Many of those investments in the voice network were likely made years ago, and may be fully depreciated, it said. “There is no economic rationale for providing recovery anew for already depreciated assets.” On USF-supported investments in networks where price cap LECs also deployed broadband capabilities, “the price cap LECs were under no regulatory obligation to use pre-CAF high-cost support for this additional purpose,” and they should have “no expectation of receiving guaranteed government support,” ACA said. “The price cap LECs have failed to demonstrate they are deserving of any capital recovery of legacy copper plant investment under the Phase II regime.” Ross Lieberman, ACA vice president of government affairs, told us the price cap proposal was “not really grounded in reality."

FCC staff delayed by a year and a half the date when cable operators must begin including Internet Protocol outputs on interactive HD set-top boxes they deploy. A Media Bureau order Wednesday partly granted TiVo’s waiver request, as expected (CD Nov 16 p4). The order came three days before an interoperability deadline that makers of consumer electronics, cable operators large and small and Verizon backed extending. The new deadline is June 2, 2014, for all but small operators, which get an additional three months. That was half the extra time the American Cable Association sought, though the ACA said it was happy to get the accommodation.

The FCC is meeting with stakeholders to decide what to do with the unallocated Connect America Fund Phase I money, according to industry officials and ex parte filings. Carriers accepted only $115 million of the original $300 million, leaving about $185 million still available (CD July 26 p3). The commission is teeing up several questions for a potential rulemaking about how to use that money, industry officials said. The notice, circulating on the eighth floor, proposes adding the unused money into another Phase I round of funding that could dole out $485 million for broadband buildout, an agency official said. As an alternative the notice also contemplates rolling the unused money into Phase II, the official said.

After months of delay, the FCC released an order that will let cable operators fully encrypt their services in all-digital systems. The order, published Friday (http://xrl.us/bnuci7), had been expected as far back as February (CD Jan 26 p6). But a presentation by Boxee, which introduced a device designed to use cable operators’ unencrypted basic tier signals, slowed its approval (CD Feb 8 p4). The order is largely consistent with what an earlier draft proposed, but adopts a series of commitments by the six largest cable operators for accommodating devices like Boxee’s. The commission concluded that a limited number of customers will be affected by the rule change. Communications industry attorneys following the rulemaking said they don’t expect the order to be challenged.

Cable associations and wireless ISPs opposed FairPoint’s petition for a waiver of the FCC’s requirement that recipients of Connect America Fund Phase I money wire unserved locations for $775 each in subsidy. The telco was offered nearly $5 million to accelerate broadband buildout to Vermont and Maine, but accepted less than half the offer, saying in July it was unable to meet funding conditions (CD July 24 p20). FairPoint last month sought a waiver to allow it to accept the full amount, “conditioned on the favorable disposition of litigation currently pending with the Maine Public Utilities Commission” (CD Sept 12 p14). The Maine PUC believes FairPoint is already obligated to extend broadband service to locations throughout the state, pursuant to its prior merger commitments.

Online video distributors don’t completely replace multichannel video programming distributor service, MVPDs and a top OVD told the FCC. Both industries outlined product improvements, in comments on a notice of inquiry for an upcoming commission report to Congress on MVPD competition covering the 52 weeks through June 30. Public Knowledge wants the agency to allow OVDs to operate as MVPDs, which some pay-TV companies oppose. The last, 14th MVPD competition report -- covering four years because annual documents weren’t released as the Telecom Act required -- for the first time reviewed OVDs, and the NOI asked questions about it (http://xrl.us/bnpcgy) for the 15th report (CD July 23 p6).

The FCC Public Safety Bureau has pressed for emergency alert system rule compliance after getting waiver requests in past months from rural cable operators and TV stations, some of those seeking exemptions told us. The requests claimed insufficient broadband availability prevented them from upgrading EAS for a new format that requires Internet connectivity (CD July 2 p9) by a June 30 deadline. One radio station’s waiver request was denied, while the bureau wanted more details about others’ efforts to acquire broadband service before ruling on waivers, industry officials said. They said some inquiries inspired EAS participants to find innovative ways to connect rural stations and cable headends to broadband.