Fiber, Satellite, Wireless Advocates Push Differing Agendas for CAF II Auction

The FNPRM and order approved May 25 will provide $215 million in annual broadband/voice support through a CAF II reverse auction targeting unsubsidized rural price-cap telco areas (see 1605250046 and 1605260034). Low bids generally beat higher bids, but different providers, technologies and service levels complicate the equation. The order set technology-neutral performance standards in four tiers, with bidder flexibility to designate either low or high latency for each. The FNPRM sought comment on how to apply weights to the different performance levels, measures to ensure appropriate support for all of states, and measures to expand broadband on tribal lands.

NTCA said CAF II bidding procedures should spark "future-proof" broadband buildout "that can stand the test of time and meet an evolving level of universal service." The FCC should adopt a "mechanism that awards additional weight to bids that meet a higher set of performance standards," it commented. It said the Communications Act favors using USF support to "deploy for the long-haul rather than focusing on near-term deployment costs along" and "getting broadband out there.”

The Fiber to the Home Council didn't favor the FCC's four-tiered plan, but said the approach shows the agency "recognizes that greater levels of broadband performance can produce greater benefits for consumers." The council cited survey data that it said showed consumer preference for "high-performance broadband" is increasing. It said the FCC should give greater weight "to bids from applicants seeking to deploy broadband service that is preferred by urban users and required by consumers to use applications and access content.”

The American Cable Association backed the FCC plan not to favor "the lowest cost, lowest performance networks." Members "understand the great value high-performance broadband service brings" to rural communities, ACA said. The bid weights should account for urban consumer preferences, it said. The National Rural Electric Cooperative Association and Utilities Technology Council jointly endorsed the principle that the auction "should value higher speeds over lower speeds, higher usage allowances over lower usage allowances, lower latency over high latency." The FCC "should assign the greatest weights to the Gigabit performance tier and to low latency option proposed in the Further Notice. By contrast, the Minimum performance tier and the high latency should be entitled to zero weights," they said.

ViaSat voiced concern the proposal to use comparative weights to evaluate bids, particularly if applied subjectively, could prevent the auction from yielding "the most efficient solution" and undermine USF objectives. The weights should "objectively reflect actual consumer preferences and needs" it said. "The CAF program rules should be competitively and technologically neutral" and satellite broadband shouldn't face "more aggressive interim deployment milestones." Hughes Network Systems said the FCC should begin the weighting process by determining, based on the bids received, if there's sufficient funding available within the budget to provide CAF funding to all unserved locations at the baseline levels adopted in the order. "Only if the funding available for award exceeds this amount should the Commission weight bids within each tier," Hughes said.

The agency "should establish bidding weights to maximize the number of locations that obtain broadband service at the baseline or above-baseline performance tiers, rather than deplete the limited funds with large subsidies for the costliest performance tier," Verizon said: It should "design the auction rules to maximize the number of newly-served locations in the territory of price cap LECs that declined the CAF II offer.”

The Rural Wireless Association said it "remains concerned that the 'Baseline' 25/3 Mbps speed requirement, usage allowance obligations for all tiers, and 100 millisecond 'lower' latency standard ignore the fact that spectrum-based networks have capacity limitations, and that these 'technology-neutral' requirements on paper may be exclusionary in practice." The bid weighting "must not exclude mobile wireless technology," the RWA said. It supported creating performance tiers in which no weight would be assigned to bids committed to the "minimum" or "Gigabit" tiers, with incrementally increasing weight for bids committing to the "baseline" and "above baseline" tiers.

The Wireless Internet Service Provider Association favors giving more weight to bids with "faster speeds, lower latency and higher data allowances." WISPA proposed a "comprehensive specific bidding weight plan" to support “reasonably comparable” rural/urban service and accelerated broadband deployment. It backed "a nationwide auction that does not divert support to those states where price cap carriers declined the offer of funding.”

USTelecom said subsidies should focus on broadband that provides satisfactory real-time services, such as voice communications, virtual private networks (VPNs), and other time- and data-sensitive services." The FCC "should develop appropriate weighting criteria that maximize the impact of the available support and maintain the principle that supported broadband service should provide rural consumers who to-date have been uneconomic to serve with a satisfactory and comparable offering," it said. ITTA said the FCC "should emphasize breadth of deployment efficient use of limited universal service funds, and fairness to consumers in all states.”

Agencies from Massachusetts, New York and Pennsylvania said (here, here, here) that the CAF II support Verizon declined in their states shouldn't go elsewhere. "To ensure the equitable and timely distribution of funding, the Commission should allow broadband providers in affected states to 'step into the shoes' of the carriers that previously declined the CAF funding and access that funding if certain conditions are met," said New York state agencies.

The FCC "should 1) increase the Tribal credit amount available to potential bidders to ensure meaningful participation from providers that will actually deploy broadband on Tribal lands, and 2) remove collateral barriers to participation faced by Tribal entities," Native Public Media said.