§  54.310   Connect America Fund for Price Cap Territories—Phase II.

   (a) Geographic areas eligible for support. Connect America Phase II
   support may be made available for census blocks or other areas
   identified as eligible by public notice, including locations identified
   by the forward-looking cost model as extremely high-cost. The number of
   supported locations will be identified for each area eligible for
   support will be identified by public notice.

   (b) Term of support. Connect America Phase II model-based support shall
   be provided to price cap carriers that elect to make a state-level
   commitment for six years. Connect America Phase II support awarded
   through a competitive bidding process shall be provided for ten years.

   (c) Deployment obligation. Recipients of Connect America Phase II
   model-based support must complete deployment to 40 percent of supported
   locations by December 31, 2017, to 60 percent of supported locations by
   December 31, 2018, to 80 percent of supported locations by December 31,
   2019, and to 100 percent of supported locations by December 31, 2020.
   Recipients of Connect America Phase II awarded through a competitive
   bidding process must complete deployment to 40 percent of supported
   locations by the end of the third year, to 60 percent of supported
   locations by the end of the fourth year, to 80 percent of supported
   locations by the end of the fifth year, and to 100 percent of supported
   locations by the end of the sixth year. Compliance shall be determined
   based on the total number of supported locations in a state.

   (1) For purposes of meeting the obligation to deploy to the requisite
   number of supported locations in a state, recipients of Connect America
   Phase II model-based support may serve unserved locations in census
   blocks with costs above the extremely high-cost threshold instead of
   locations in eligible census blocks, provided that they meet the public
   interest obligations set forth in § 54.309(a) introductory text and
   (a)(1) for those locations and provided that the total number of
   locations covered is greater than or equal to the number of supported
   locations in the state.

   (2) Recipients of Connect America Phase II support may elect to deploy
   to 95 percent of the number of supported locations in a given state
   with a corresponding reduction in support computed based on the average
   support per location in the state times 1.89.

   (d) Disbursement of Phase II funding. An eligible telecommunications
   carrier will be advised by public notice when it is authorized to
   receive support. The public notice will detail how disbursements will
   be made.

   (e) Provider eligibility. Any eligible telecommunications carrier is
   eligible to receive Connect America Phase II support in eligible areas.

   (1) An entity may obtain eligible telecommunications carrier
   designation after public notice of winning bidders in a competitive
   bidding process for the offer of Phase II Connect America support. An
   applicant in the competitive bidding process shall certify that it is
   financially and technically qualified to provide the services supported
   by Connect America Phase II in order to receive such support.

   (2) To the extent an applicant in the competitive bidding process seeks
   eligible telecommunications carrier designation prior to public notice
   of winning bidders for Phase II Connect America support, its
   designation as an eligible telecommunications carrier may be
   conditional subject to the receipt of Phase II Connect America support.

   (f) Transition to model-based support. Eligible telecommunications
   carriers electing model-based support in states where that support is
   less than their Phase I frozen support will transition to model-based
   support as follows: In addition to model-based support, in the first
   year of Phase II, they will receive 75% of the difference between Phase
   I frozen support and model-based support; in the second year of Phase
   II, they will receive 50% of the difference between Phase I frozen
   support and model-based support; and in the third year of Phase II,
   they will receive 25% of the difference between Phase I frozen support
   and model-based support.

   (g) Extended term of model-based support. Eligible telecommunications
   carriers receiving model-based support may elect to receive a seventh
   year of such support. An eligible telecommunications carrier electing
   to receive this additional year of support makes a state-level
   commitment to maintain the required voice and broadband services in the
   areas for which it receives support during this extended term. The
   Wireline Competition Bureau will implement a mechanism to enable an
   eligible telecommunications carrier to elect whether to receive an
   additional seventh year of support.

   (h) Transition to Rural Digital Opportunity Fund support. (1) In areas
   where the eligible telecommunications carrier elects to receive an
   optional seventh year of model-based support pursuant to paragraph (g)
   of this section, it shall receive such support for a full calendar
   year, regardless of the disposition of these areas in the Rural Digital
   Opportunity Fund auction.

   (i) If the eligible telecommunications carrier becomes the winning
   bidder in the Rural Digital Opportunity Fund auction in these areas, it
   shall continue to receive model-based support through December 31,
   2021. Thereafter, it shall receive monthly support in the amount of its
   Rural Digital Opportunity Fund winning bid.

   (ii) If another provider is the winning bidder in the Rural Digital
   Opportunity Fund auction in these areas, the new provider shall receive
   monthly support in the amount of its Rural Digital Opportunity Fund
   winning bid starting the first day of the month following its
   authorization by the Wireline Competition Bureau. The eligible
   telecommunications carrier shall continue to receive model-based
   support for these areas through December 31, 2021.

   (iii) If there is no authorized Rural Digital Opportunity Fund auction
   support recipient in these areas or if these areas are deemed
   ineligible for the Rural Digital Opportunity Fund auction, the eligible
   telecommunications carrier shall continue to receive model-based
   support for these areas through December 31, 2021. Thereafter, it shall
   receive no additional support.

   (2) In areas where the eligible telecommunications carrier declines to
   receive an optional seventh year of model-based support pursuant to
   paragraph (g) of this section, it shall cease receiving model-based
   support for these areas on December 31, 2020.

   [ 79 FR 11335 , Feb. 28, 2014, as amended at  79 FR 39188 , July 9, 2014;
    80 FR 4477 , Jan. 27, 2015;  81 FR 44449 , July 7, 2016;  85 FR 13797 , Mar.
   10, 2020]