Telecommunications Industry Thoughtware

On May 7, 2018, the Federal Communications Commission (FCC) issued Public Notice DA 18-465 which authorized an increase of more than $36 million in annual Alternative Connect America Cost Model (A-CAM) support to 217 carriers across 38 states. This offer also revised deployment obligations for those carriers accordingly. The offer fully funds all locations up to the $146.10 per location originally envisioned by the FCC, excluding the glide path carriers, which were offered support at $200 per location. The FCC originally gave carriers until June 21, 2018, to notify the FCC if they would elect to receive the revised support and meet the revised deployment obligations. The FCC later extended the deadline to June 29, 2018, in Public Notice DA 18-671.

This revised offer of support for A-CAM companies covers the full 10-year period of authorized support. In addition, the offer requires the Universal Service Administrative Company (USAC) to issue additional funding to any A-CAM carrier that elects the revised offer for all of 2017’s monthly payments plus any months already paid at the original offer support level.

In August 2018, the support payments for carriers electing the revised offer of support were made at the revised support level. In addition, USAC made the retroactive payments for 2017 and January–June 2018. It’s important to note payments run one month in arrears, so August 2018 payments are for the July period.

If your company elected to accept the revised offer of A-CAM support, the retroactive payment amounts can be found on the USAC website. You also can access the website for information regarding your original A-CAM monthly payment amount and the revised A-CAM monthly payment amount.

To see how these support changes may affect your other regulatory outcomes, or to be provided with the retroactive payment amount, contact Jamie or your trusted BKD advisor. BKD also can help explain your revised A-CAM monthly payment amount and/or the original A-CAM monthly payment amount.

The additional cash flow is a welcome sight for all, but carriers should contact their financial advisors to assess whether they’re adequately considering additional revenue when looking at tax estimate payments and year-end estimated tax liabilities. Carriers also will want to properly account for the additional revenue included in Part 32 – Uniform System of Accounts for Telecommunications Companies.

To review the tax effects of this additional revenue or for assistance with questions regarding that revenue in the Part 32 system of accounts, contact Jessica or your trusted BKD advisor.

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