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What you Need to Know about CAF Phase II

The Connect America Fund (CAF) is an FCC program designed to expand access to voice/broadband services for communities where they are not available. Through CAF Phase II, the FCC provides funding to service providers to subsidize the cost of building new network infrastructure to provide voice/broadband service in areas where it is needed.
Connect America Fund (CAF) Phase II Model, commonly called “CAF Phase II,” provides assistance to price-cap carriers based on a forward-looking model of the cost of constructing modern networks for deploying voice and broadband services in states with unserved areas.


CAF Phase II support consists of two stages:

  1. First, the funding was offered to primarily larger local telephone companies on a state-by-state basis in certain high-cost unserved/underserved areas in exchange for those companies offering voice and broadband services that meet certain requirements to a required number of locations in qualified areas.
  2. Second, in areas where the support was declined and in certain other high-cost unserved/underserved areas located in the price cap carriers' service territories, support was allocated through the CAF Phase II auction. Service providers including electric cooperatives, wireless Internet service providers, cable operators, telecom carriers, and a satellite company — competed to receive funding in exchange for offering voice and broadband services meeting certain requirements to a required number of locations in the eligible areas covered by their winning bids.

Minimum requirements for broadband services under CAF Phase II:
The price cap carriers that accepted the first stage of CAF Phase II support must meet the following requirements for voice and broadband services:

  1. Speed: Service providers must offer broadband of at least 10 megabits per second (Mbps) downstream and 1 Mbps upstream.
  2. Latency: Service providers' network latency cannot be higher than 100 milliseconds round trip.
  3. Usage Allowance: Service providers must offer at least one plan with a minimum usage allowance of at least 150 gigabytes per month or a monthly usage allowance that reflects the average usage of a majority of fixed broadband customers as announced by the Wireline Competition Bureau annually, whichever is higher. Alternatively, service providers have the option of offering a usage allowance that is at or above the usage level for 80 percent of their broadband subscribers if it is at least 100 GB.
  4. Pricing: Service providers must offer service at rates reasonably comparable to rates in urban areas.

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