Summary of USF & ICC S f Reform Order & FNPRM

PartIIMobilityFundthruInterstate RateofReturnReprescription

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USF REFORM
CAF Mobility Fund CAFMobilityFund
o PhaseI
Reverseauctionin2012 $300Mofonetimesupportformobilevoiceand broadbandvia3Gor4Ginunservedareas Unserved areasidentifiedatthecensusblocklevel
AmericanRoamerdatausedtoidentifyifthegeometric centerofthecensusblockiscoveredby3Gor4G Biddingmaybeaggregatedatcensusblockgroupor tractlevel

Coverageunitsdefinedbyroadmiles,notpopulation Supportnotavailableinareaswherethereisa regulatorycommitmenttodeploy3Gor4Gservice

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USF REFORM
CAF Mobility Fund CAFMobilityFund
o PhaseI
Supportforoneproviderpergeographicarea Exceptiontoincreasenumberofunitsservedwith overlappingbids VoicePerformanceRequirements q Samevoicerequirementsaswirelinecarriers Voiceasastandaloneservice Reasonably comparable to service provided in urban Reasonablycomparabletoserviceprovidedinurban areas

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USF REFORM
CAF Mobility Fund CAFMobilityFund
o PhaseI
BroadbandPerformanceRequirements Outdoorminimumdataspeeds
3G=200Kbps/50Kbps 4G=768Kbps/200Kbps

Dataratesachievedinbothfixedandmobile conditions,includingtypicalroadspeeds Minimumdataratesmustbeachievedthroughoutthe u data ates ust be ac eved t oug out t e cellarea,includingthecelledge Latencythatenablesrealtimeapplications,likeVoIP Capacity requirements comparable to urban areas Capacityrequirementscomparabletourbanareas
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USF REFORM
CAF Mobility Fund CAFMobilityFund
o PhaseI
Buildoutrequirements Atleast75%ofroadmiles
3Gwithin2years 4Gwithin3years

IfsupportisdistributedattheCensusBlocklevel,FCC mayrequire>75%coverage Supportdistributedforroadmilescoveredasa%of Suppo t d st buted o oad es cove ed as a % o roadmilesinsupportedarea Drivetestdatamustbesubmittedasproofofcoverage

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USF REFORM
CAF Mobility Fund CAFMobilityFund
o PhaseI
CollocationRequirements
Providersthatnewlyconstructtowersmust:
Reasonablyaccommodatecollocations Reasonablynegotiatecollocationwithanyproviderthatmeets thetechnologicalrequirementsoftheMobilityFund the technological requirements of the Mobility Fund

Restrictionfromnegotiatingtowerleasesthatrestricttower ownfromallowingotherstocollocate

Voice and Data roaming is required on networks build VoiceandDataroamingisrequiredonnetworksbuild throughMobilityFundsupport,pursuanttoexistingrules

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USF REFORM
CAF Mobility Fund CAFMobilityFund
o PhaseI
Servicemustbeprovidedatreasonablycomparablerates
WirelessratesarenotregulatedbytheFCCorPUCs Ratesmustfallwithinareasonablerangeofurbanrates
FCCtodefinereasonablerange Carriersmustannuallycertifythatratesfallwithinthisrange forsimilarserviceplans Raterequirementsend5yearsaftersupportisawarded

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USF REFORM
CAF Mobility Fund CAFMobilityFund
o PhaseI
EligibilityforSupport(priortoauction)
MustbeanETCinthesupportedarea Musthaveaccesstospectrumnecessarytoprovide supportedservices Certificationoffinancialandtechnicalcapabilitywithout ongoingsupport,beforeandafterauction Certificationthatsupportwillnotbeusedinareaswitha publiccommitmenttodeploy3G/4Gby12/31/2012 public commitment to deploy 3G/4G by 12/31/2012

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USF REFORM
CAF Mobility Fund CAFMobilityFund
o PhaseI
ReverseAuctionProcedures
AuctionDesign
FCCpreferenceforsingleround,sealedbidprocess FinaldesignlefttoWirelessBureau

TwoStageApplicationProcess
ShortFormbasicownershipinformationandcertificationof eligibilitytoparticipate Long Form more extensive review of biddersqualifications LongForm moreextensivereviewofbidders qualifications

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USF REFORM
CAF Mobility Fund CAFMobilityFund
o PhaseI
ReverseAuctionProcedures
TwoStageApplicationProcess
LongFormApplicationduew/in10daysofcloseofauction
Disclosureofownershipandrealpartiesandpartiesininterest Eligibility to receive support Eligibilitytoreceivesupport
ProofofETCdesignationinallareasforsupport Proofofaccesstospectrum
FrequencyBands NatureofAccess(licensedorleased)

Projectconstruction
3Gor4Gnetworkandproposedtechnologychoice Networkdesign,includingcontracting,construction,anddeployment andmaintenanceperiods Completeprojectbudget,projectscheduleandtimeline. Complete project budget project schedule and timeline
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USF REFORM
CAF Mobility Fund CAFMobilityFund
o PhaseI
ReverseAuctionProcedures
TwoStageApplicationProcess
LongFormApplicationduew/in10daysofcloseofauction
FinancialSecurityandGuaranteeofPerformance
Irrevocablestandbylineofcreditissuedbyabankfortheamountof Irrevocable standby line of credit issued by a bank for the amount of thesupportplusanadditionaldefaultpayment NoMobilityFundsupportforcarriersthathavepreviouslycommitted to3Gorhasreceivedsupportfromanotherfederalagency Certificationofavailabilityoffundstocovercoststhatexceedsupport Certificationthatserviceswillbeofferedatratesreasonably comparabletourbanareas

OtherFundingRestrictions

PostAuctionCertifications

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USF REFORM
CAF Mobility Fund CAFMobilityFund
o PhaseI
ReverseAuctionProcedures
TwoStageApplicationProcess
LongFormApplicationduew/in10daysofcloseofauction
AuctionDefaults
Winningbiddersthatdefaultpriortoreceivingsupport Winning bidders that default prior to receiving support
Defaultpaymentnottoexceed20%ofthewinningbid Defaultpaymentnottoexceed20%ofthewinningbid Repaymentofallsupportreceived PotentialdisqualificationfromadditionalMobilityFundorotherUSF Potential disqualification from additional Mobility Fund or other USF support

Winningbiddersthatdefaultafterreceivingsupport

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USF REFORM
CAF Mobility Fund CAFMobilityFund
o PhaseI
ReverseAuctionProcedures
TwoStageApplicationProcess
LongFormApplicationduew/in10daysofcloseofauction
AuctionDefaults
Winningbiddersthatdefaultpriortoreceivingsupport Winning bidders that default prior to receiving support
Defaultpaymentnottoexceed20%ofthewinningbid Defaultpaymentnottoexceed20%ofthewinningbid Repaymentofallsupportreceived PotentialdisqualificationfromadditionalMobilityFundorotherUSF Potential disqualification from additional Mobility Fund or other USF support

Winningbiddersthatdefaultafterreceivingsupport

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USF REFORM
CAF Mobility Fund CAFMobilityFund
o PhaseI
ReverseAuctionProcedures
BiddingProcess
LefttotheWirelessBureautodetermineprocess Reservepricestobeestablished,abovewhichbidswillnotbe accepted WirelessBureautoaddresspackagebidding WirelessBureautoaddresslimitedfundingavailability
TieBids Maximumsupportreached

Penaltiesimposedforwithdrawnbids Prohibitionofcertaincommunicationsduringauction Wi l WirelessBureauhasauthoritytodelay,suspendorcancel B h th it t d l d l

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USF REFORM
CAFMobilityFund
o PhaseI
AccountabilityandOversight
Disbursement of support Disbursementofsupport
1/3distributiononcelongformapplicationisgranted 1/3distributionuponshowingof50%ofminimumcoverage Finaldistributionatrequiredpercentageofroadmiles q p g
Supportadjustedfordifferencebetween100%andrequired%

Annualreportsbasedondrivetestdatafor5years
Mapsillustratingcoverageareafornewservice Populationresidinginnewlycoveredareas Linearroadmilescovered Updatedprojectinformation(description,budgetandschedule)

R RecordRetention d R t ti
Retainrecordsfor10yearsfromthedateoffinaldisbursement
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USF REFORM
CAF Mobility Fund CAFMobilityFund
o TribalMobilityFundPhaseI
$50Mofonetimesupporttodeploymobilebroadbandon Triballands ReverseauctionfollowingMobilityFundPhaseIauction Generally,sameterms/rulesasMobilityFundPhaseI y / y
Tribalengagementobligationstoworkwithtribesinadvance ofdeployingservice(followinglongformapplication) 25%biddingcreditsforTriballyownedorcontrolled providers

Unservedunitsdefinedbypopulation,notroadmiles ETCdesignationatleastpending,notgranted
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USF REFORM
CAF Mobility Fund CAFMobilityFund
o PhaseIIdetailsaddressinFNPRM
Upto$500Minongoingsupport Including$100MTribalFund

o IdenticalSupportRuleeliminated1/1/2012
5 year transition to CAF from baseline of 2011 support 5yeartransitiontoCAF,frombaselineof2011support 1/1/20126/30/2012=2011baselinemonthly 7/1/20126/30/2013=80%ofbaseline 7/1/2013 6/30/2014=60%ofbaseline 7/1/20146/30/2015=40%ofbaseline 7/1/2015 6/30/2016=20%ofbaseline / / / / 7/1/2016=Nosupport

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USF REFORM
CAF Mobility Fund CAFMobilityFund
o IdenticalSupportRuleeliminated1/1/2012
Baselinesupportiscappedat$3,000perline RecipientsofCAFMobilityFundPhaseIIsupportarenot eligibleforphaseddownIdenticalSupport
PhaseIrecipientscontinuetobeeligible PhaseIIsupportindifferentareasdoesnotimpact

PhasedownhaltsifMobilityFundPhaseIIisnot operationalby6/30/2014 CETCsrelievedofobligationtofilequarterlylinecounts ExistingCoveredLocationsforTriballandsalsosubjectto 5yearphaseddown y p

2yeardelayforremoteareasofAlaska&StandingRock(ND)
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USF REFORM
Remote Areas Fund RemoteAreasFund
o Atleast$100Mannualsupporttoextremelyhigh costareas
Fewerthan1%ofallAmericanhomes

o Supportsaccesstoalternativetechnologies
Satellite Unlicensedwireless

o Implementedin2013 o DetailstobedefinedintheFNPRM

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USF REFORM
Waivers Waivers
o WaiverprocesstoseekrelieffromsomeorallUSF reforms
FCCdoesnotexpecttograntwaiversroutinely Subjecttoatotalcompanyearningsreview

o Carrier must demonstrate that reduction in existing Carriermustdemonstratethatreductioninexisting supportwouldputvoiceserviceatrisk

Nomentionofbroadbandatrisk

o Considerationgivenifreformwouldcauseaprovider todefaultonexistingloansorbecomeinsolvent

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USF REFORM
Waivers Waivers
o Requirements
Explanationofwhythewaiverstandardismet Includeallfinancialdatatoverifycarriersassertions AdditionalRequirements
DensityCharacteristics y
Squaremiles Subscriberspersquaremile Roadmiles Subscriberspersquaremile Mountainsandbodiesofwater Challengesandextraordinarycosts Etc. Etc
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USF REFORM
Waivers Waivers
o Requirements
AdditionalRequirements
Existingorlackofalternativeproviders Howunused/spareequipmentisaccountfor(Parts32&36) Detailsoncorporateoperationsexpenses Enduserrateplans Formobileproviders,mapsshowing
Licensedarea Servicearea CETCdesignatedarea Areainwhichcarrieristhesoleproviderofservice Locationofcellsites Location of cell sites
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USF REFORM
Waivers Waivers
o Requirements
AdditionalRequirements
Formobileproviders,evidencethatitistheonlymobile provider Formobileproviders,revenueandexpensedataforeachcell siteforthe3mostrecentfiscalyears it f th 3 t t fi l Formobileproviders,projectedrevenueandexpenseforeach cellsitefor5years,withandwithoutthewaiver A list of services other than voice provided on supported plant Alistofservices,otherthanvoice,providedonsupportedplant ForLECs,proceduresforallocatingsharedorcommoncosts Auditedfinancialstatementsfor3mostrecentfiscalyears Information regarding outstanding loans Informationregardingoutstandingloans
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USF REFORM
Waivers Waivers
o Requirements
AdditionalRequirements
Identificationoffacilitiesthatwillbetakenoutofserviceif waiverisnotgranted ForTriballandsandinsularareas,additionalinformationon theuniquecharacteristicsofthearea th i h t i ti f th AdditionalinformationrequestedbytheFCC

FCCwelcomesinputfromthestatePUC

o FCCwillplacepetitiononpublicnoticewith45days forcommentsandreplycomments

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USF REFORM
$4 5B Annual Budget $4.5BAnnualBudget
o For20122017,contributionsshallnotexceed$4.5B annually
Demandstillsetquarterly,at$1.125B Excessfrompriorquarterstofundanycurrentquarterthat wouldexceed$1.125B

o Fundallowedtoaccumulatereservestofacilitate transitiontoCAFandfundonetimeexpenses o CorrWirelessreservetofund2012MobilityFund l f d bl d PhaseIandotherCAFPhaseI

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USF REFORM
Accountability and Oversight AccountabilityandOversight
o ETCstoprovideannualreportsandcertificationsby April1stofeachyear,startingin2012
UnderlyingsupportforannualETCcertification(10/1) ExtendscurrentfederalreportingrequirementstoallETCs, includingthosedesignatedbythestates g g y Certifiedbyanofficerofthecompany CETCswithphaseddownsupportnotrequiredtosubmit broadbandreportingdata,onlyvoice broadband reporting data, only voice

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USF REFORM
Accountability and Oversight AccountabilityandOversight
o ReportingRequirements
SpeedandLatencynetworkperformanceresultssubmitted annually,startingin2013 3yearsafterimplementationofCAFPhaseII,pricecap carriersmustcertifythattheyaremeetingmilestones 5yearsafterimplementationofCAFPhaseII,pricecap carriersmustcertifythattheyaremeetingstandards Capacity startingin2013,allETCsmustcertifythat p y g y capacityrequirementsarecomparabletourbanareas Buildout/ServiceallETCsmustfileanew5yearbuildout planby4/1/2013andupdateannually y y
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USF REFORM
Accountability and Oversight AccountabilityandOversight
o ReportingRequirements
Rateofreturncarriersmustselfcertifythattheyaretaking reasonablestepstoofferbroadbandatrequirements ETCsinpricecapterritoriesmustselfcertifythattheyare meetinginterimmilestones Pricing
AllETCsmustselfcertifythattheirvoiceserviceispricedno morethan2standarddeviationsabovethenationalaverage MobilityFundPhaseImustselfcertifythatratesarewithina reasonablerangeofsimilarplansinurbanareas Annuallysubmitpricinginformationforvoiceandbroadband

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USF REFORM
Accountability and Oversight AccountabilityandOversight
o ReportingRequirements
AnnualFinancialReporting
Privatelyheld,rateofreturncarriersmustsubmitaudited financialstatementsannually
RUSborrowersmaysubmitRUSfinancialreport

Fi Financialdisclosurestobemadepubliclyavailable i l di l b d bli l il bl

AnnualOwnershipInformation
Holdingcompany,operatingcompanies,affiliates,andDBAs ReportUSFidentifiersforeachstudyareacode

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USF REFORM
Accountability and Oversight AccountabilityandOversight
o ReportingRequirements
TribalEngagementincludedinannualreport
NeedsassessmentanddeploymentplanningfocusedonTribal anchorinstitutions Feasibilityandsustainabilityplanning Marketinginaculturallysensitivemanner Rightofway,landuse,facilitiessiting,environmentaland culturalpreservationreviewprocesses C CompliancewithTribalbusinessandlicensingrequirements li i h T ib l b i d li i i

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USF REFORM
Accountability and Oversight AccountabilityandOversight
o ReportingRequirements
ConsequencesforNonCompliance
ExistingrulesapplytoallETCs Supportreducedforfailuretofulfillpublicinterestobligations FNPRMseeksfurthercommentonenforcementoptionsfor partialnonperformance

RecordRetention
Current5yearperiodextendedto10years RequirementsapplytoallrecipientsofHighCostandCAF support AlldocumentsmustbemadeavailableuponrequestoftheFCC, USAC,andtheirrespectiveauditors USAC d th i ti dit
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INTERSTATE RATE OF RETURN

Prescription
o ReprescriptiontobeaddressedintheFNPRM
Orderwaivescertainproceduralrequirementstostreamline theprocess
Primarilyrelatedtothefilingofpapercopiesandservice

Noticeandcommentprocesstobeused

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