Interest in Rural Experiments Will Affect Level of Funding, FCC Official Says

The agency will use the expressions of interest it receives to determine the size of the budget, said Minard. “To the degree we get a lot of expressions of interest, that might drive the budget. To the degree we don’t get many, that might inform us as well.” A further NPRM contemplated potential funding levels of $50 million or $100 million, he said. Expressions of interest don’t need to be very detailed, said Minard. “Just give us an idea of who you are, what you want to do, and how much money you want.” The agency wants to see a focus on last-mile projects in high-cost areas that currently lack 3 Mbps downstream and 768 Kbps upstream broadband, he said.

So far, three NTCA member companies have submitted expressions of interest, a spokeswoman said. Hill Country Telecommunications in Texas proposed providing broadband service to 43 eligible high-cost locations in unserved high-cost census blocks, it said Wednesday (http://bit.ly/1pzBp1G). Pioneer Telephone Cooperative in Oklahoma wants to “compare traditional digital telephony services to IP based telephony services” by seeking to determine “customer reactions to QoS [quality of service], call functionality, device interoperability and call completion,” the telco said last week (http://bit.ly/1fMPrJh). Eastern Oregon Telecom proposed to serve the majority of its service area with a fiber-to-the-home service, it said (http://bit.ly/1o9jLOZ). It’s not currently a designated eligible telecom carrier (ETC), but if awarded funding it said it would “prepare the necessary regulatory filings,” said the telco. Minard said non-ETCs can apply “as long as, at the end of the day, where you want to be is an eligible telecommunications carrier."

What about companies that want to use technology that’s already in the ground? asked Klein Law Group attorney Philip Macres, co-chairman of the FCBA Wireline Committee which hosted the event. “I'm not sure it needs to be a greenfield approach,” but “what we're really looking for is next-generation networks,” Minard responded. “I'm assuming if there’s copper in the ground, it doesn’t take much to get to 3/768, so what we would want is something a little bit more robust than that."

"Would they be able to use the copper that’s in the ground, perhaps with their own technology?” Macres asked. “You're welcome to submit whatever proposal you have,” Minard said. “But I do think ... what we're looking for here is not necessarily an opportunity to upgrade existing facilities; what we're really looking for is who is going to build a robust network in these areas."

"If I recall the transformation order, there’s at least a hint that the spec might be increased over time,” said David Cosson, counsel for the Rural Independent Competitive Alliance, of the USF order that authorized the FCC to spend money to build out broadband. “So what if I build for 4/1, and then in year five the commission says ‘No, in order to continue getting support you've got to go to 6/2'? I'm going to have to make more investment, but if I'm not getting any more support I might not be able to do that."

"In the context of Phase II for the price cap areas, it’s true that we are offering only five years of support, at which point the commission said it expected to go [to a] competitive process everywhere,” Minard responded. “You're right that commission envisioned that the speed may be higher in those later years."

"This isn’t an opportunity to come in and do” an incremental build “or a slight upgrade to your existing infrastructure. We're looking more to find out who will build fiber, who will build fixed wireless, where is that break point?” said Minard. “Where does it make more economical sense for them to stop deploying fiber and instead to deploy fixed wireless, for cost reasons?” Minard said “we're looking to learn some stuff from these projects."

There seem to be some “open issues” about the sequencing of funding, said a telecom attorney in attendance. “The question is what’s the relationship in the timing between the application process, and the process by which at least price-cap carriers accept or decline CAF Phase II money, and the relationship between what areas might areas might be open for the rural broadband experiments, versus whether or not the price cap LEC has accepted money for that state or not,” he said. “Right now, it seems a little bit unclear.”