High Cost
About High Cost:
- Overview of the Program
- Overview of the Process
- Site Visits
- Training Events
- Filing Appeals
- Red Light Status (FCC site)
- Requesting Confidential Information
- Understanding Audits
- Understanding Disaggregation
- USAC FCC Filings
High Cost Tools:
Step 1: High Cost Model Support
High Cost Model (HCM) support, also known as forward-looking support, is available to competitive carriers providing service in the eligible wire centers of non-rural incumbent carriers (mostly price-cap carriers) and designated as eligible telecommunications carriers (ETCs) by their state commissions or the Federal Communications Commission (FCC).
High Cost Model support keeps the cost for telephone service comparable in all areas (urban and rural) of a state. HCM support is distributed at the wire center level and is targeted to carriers serving wire centers with forward-looking costs that exceed the national benchmark.
HCM support is based on a forward-looking economic cost model. The model generates the statewide average cost per line, which is then compared to the national average cost per line to determine eligibility for forward-looking support. If the statewide average cost per line exceeds two standard deviations of the national average cost per line (the "national cost benchmark"), the state qualifies for HCM support. Support is provided for all intrastate costs per line that exceed the national benchmark. Forward-looking intrastate costs per line equal 76% of the forward-looking costs generated by the model. The remaining 24% are recovered through the interstate jurisdiction.
The most recent data used to calculate forward-looking HCM support indicates that non-rural carriers in ten states (Alabama, Kentucky, Maine, Mississippi, Montana, Nebraska, South Dakota, Vermont, West Virginia, and Wyoming) are eligible in 2007.
HCM is covered in Part 54.309 of the FCC's rules (47 C.F.R. § 54.309).
