FCC Provides Guidance Regarding the 100 Percent CAF Phase II Auction Service Milestone

The Federal Communications Commission's Wireline Competition Bureau (WCB or Bureau) provided guidance to Connect America Fund (CAF) Phase II auction carriers regarding the upcoming December 31, 2025 100 percent service milestone. Specifically, WCB discusses how and when support recovery and support adjustments will be calculated if a carrier does not serve 100% of its required locations and also summarized carriers’ ongoing obligations after the deployment period has ended. Compliance with service milestones is determined on a state-level basis—i.e., the Bureau will confirm a carrier is serving the required location totals across all of its eligible census blocks within a state, rather than on a census block-by-census block basis. Carriers have been reporting the locations where they are offering service meeting the required performance obligations in the High Cost Universal Broadband (HUBB) portal on an annual basis. If a CAF Phase II auction carrier fails to meet the 100% service milestone by December 31, 2025, it must notify WCB within 10 business days of the milestone (i.e., January 15, 2026) that it has not met the service milestone. The CAF Phase II auction carrier will then have the one-year cure period (i.e., until December 31, 2026) to serve any remaining locations, and then must report and certify in the HUBB by March 1, 2027 any further locations it has served during the cure period. The Bureau will review compliance with the 100% service milestone by checking the number of locations (units) certified in the HUBB against the carrier’s minimum required obligation number. Anticipating that CAF Phase II auction carriers might face unexpected obstacles in building out their networks, the Commission provided CAF Phase II auction carriers with the flexibility to deploy to 95% of their defined deployment obligation and refund a certain amount of support in lieu of being found in default. If a CAF Phase II auction carrier fails to serve at least 95% of its required number of locations after the cure period, the Commission requires that the Bureau recover support associated with the extent of non-compliance.