FCC Eyes FNPRM with Order on CAF Auction To Seek Comment on Bidding Details

Telcos and others this week lobbied on the reverse auction's structure before Sunshine Act restrictions took effect. Telcos sought technological flexibility while an electric utility group pushed for stringent broadband speed requirements. CenturyLink, Frontier Communications and USTelecom also urged the FCC to provide interim funding for voice service in extremely high-cost areas in states where price-cap ILECs accepted initial FCC offers of CAF II support, said a USTelecom filing Thursday in docket 10-90 summarizing a call with a Wheeler aide. “The commission has recognized that there’s no private business case to deliver voice service in those areas without support, and we’re hopeful the commission will take this opportunity to provide that support," USTelecom Senior Vice President Jonathan Banks told us.

The auction could put $215 million in annual support up for grabs to provide broadband-oriented service in rural areas served by price-cap ILECs, but in states where those telcos didn't accept $1.5 billion in annual high-cost funding (see 1508270068). The auction is complicated by the potential participation of broadband providers using different types of landline, wireless and satellite technology to provide different levels of service. Commissioner Mike O'Rielly, CTIA and satellite interests expressed concerns that a draft auction order circulated in September contained a bias toward fiber-based broadband (see 1511170063 and 1512290025). Fiber proponents were supportive (see 1601250031).

The FNPRM could seek comment on a potential scoring or weighting system to assign points/weights to funding bids based on broadband speeds, latency levels and usage allowances, telecom industry officials told us. For example, 50 Mbps service would be given more points/weight than 25 Mbps service, said one industry official, who said broadband buildout timetables could be another factor. "In many ways, the rubber will meet the road on the next turn,” said another industry official, referring to the potential further rulemaking. An FCC official told us, "We may seek comment on issues that would need to be addressed before we can finalize the auction. This will not replace the procedures PN, but would allow earlier comment on certain aspects of the auction."

ILEC officials "discussed the importance of avoiding mandating particular technologies or technological approaches to delivering voice and broadband," said a USTelecom filing on a meeting with an aide to Commissioner Jessica Rosenworcel, one of several such meetings. The ILECs said limited credits should be given to bidders that demonstrate they can offer "superior levels of service" but that all bidders should have to meet minimum broadband and voice requirements. "We also discussed the importance of a follow-on auction for residual areas and/or locations that would not be covered by winning auction bids in this round and the need for flexibility in the design of that auction," the filing said.

Verizon said rural broadband could be provided by wireline and wireless. The CAF "should provide participants with the flexibility to use a variety of technologies, in order to most effectively extend high-speed broadband to consumers in high-cost areas and to allow for the evolution of technology," the company said in filings on meetings with aides to commissioners. Verizon also urged the FCC to use "lowest-cost per location" to select winning bidders to maximize coverage, and "to limit the number of weights (i.e., the number of service tiers or speed, usage, and latency thresholds) in order to limit the complexity of the auction and the potential for unintended consequences." The commission should seek further comment on the appropriate weights, the telco said.

The FCC should adopt a "technology-neutral approach that prioritizes cost-effectiveness and the Commission's performance criteria of speed, latency and data caps," said the Wireless ISP Association in a filing on a meeting with an O'Rielly aide. It proposed establishing "different tiers within each performance criteria that would reward bidders that exceeded baseline criteria," and urged a fourth criterion on "accelerated deployment."

The FCC should promote "future proof" broadband deployment that brings rural areas service that is reasonably comparable to urban broadband, said the Utilities Technology Council. "The Commission should set minimum requirements for broadband in terms of speed, latency and usage allowances," said a UTC filing summarizing a meeting with a Wheeler aide and Wireline Bureau officials, one of several FCC meetings it held. "The Commission should require projects to provide minimum initial speeds of 25/3 Mbps, which is consistent with the FCC’s current definition of broadband. In addition, the Commission should require that the networks be capable of providing 100 Mbps downstream/25 Mbps upstream; have no more than 100 ms latency; and at least 100 GB usage allowance, consistent with the current requirements for Rural Broadband Experiments."

NTCA said the auction framework should measure efficiency and effectiveness "based on the capabilities that consumers can expect to receive over the life of a CAF-supported network," not "upon short-term deployment costs." In a filing on a meeting with an O'Rielly aide, NTCA said that "it will do consumers little, if any, long-term good -- and would represent a potentially significant waste of ratepayer resources -- to support networks that will be capacity-constrained in short order and/or that are incapable of supporting broadband services at the speeds that will be 'table stakes' in five or ten years."