FCC Opens Review of Arvig, BEVCOMM Broadband Support Claims

WASHINGTON, Aug 15 2024 – A federal agency is planning to take a close look at whether two broadband providers deserve millions more dollars in future support after what they say was a flawed allocation process.

The Federal Communications Commission is seeking input on claims that two Midwest broadband providers saw lower Enhanced ACAM support because a competitor was misclassified. 

The companies, Minnesota providers Arvig and BEVCOMM, told the agency in July they lost out on support for more than 3,500 homes and businesses – more than $2.8 million each year – because a third company was miscategorized as an “unsubsidized competitor,” making its service areas ineligible under program rules.

They said the company, Midcontinent Communications, did not offer voice service, a necessary component of the unsubsidized competitor classification, and submitted data from Midco’s website backing up the claim. Voice subscriptions were reported at the state level when Enhanced ACAM’s predecessor program was stood up. 

“We seek comment on Arvig’s and BEVCOMM’s assertions,” the Wireline Competition Bureau wrote yesterday. “We encourage interested parties that have relevant information to first reach out to the providers involved in this matter before filing comments with the Commission.”

The companies met with commission staff prior to filing the July comment to raise similar concerns. In those meetings, Arvig and BEVCOMM also noted that Midco received money from a separate FCC subsidy to serve the areas in question, another point against the unsubsidized designation, and said the locations would benefit from having access to their fiber service versus Midco’s fixed wireless. The more formal July comments stuck to the voice service argument.

The Enhanced ACAM program is the successor to the Alternative Connect America Cost Model. It was stood up in 2023 to continue subsidizing rural broadband through the FCC’s Universal Service Fund and will distribute about $18 billion over 15 years to deploy or maintain broadband for 2.7 million locations. The agency will adjust the initial awards through 2025.

Rural providers have been flagging the potential for overstated unsubsidized competition, either by misclassification or by exaggerated coverage claims, since the agency made Enhanced ACAM offers last summer. They argued at the time, and in a subsequent petition for review, for a process in which companies in potential Enhanced ACAM areas would have to back up their coverage claims with evidence.

The FCC is currently taking comment on minor changes to its broadband data collection efforts, one of which would involve collecting extra information from fixed wireless providers to better verify coverage.