Commenters Diverge on CAF II Auction Tier Weights and on What Record Shows

USTelecom said the record shows the FCC should adopt a weighting approach for the Phase II auction that is "consistent" with USTelecom's proposal. "USTelecom’s proposal prioritized cost-effectiveness, faster speeds, higher usage allowances and lower latency consistent with the Communications Act’s requirement that USF support be directed towards reasonably comparable services that have 'been subscribed to by a substantial majority of residential customers,'" USTelecom said. "USTelecom’s proposal results in CAF Phase II support being directed towards subsidizing broadband networks that support real-time services, such as voice communications (including [VoIP]), virtual private networks (VPNs), and other time- and data-sensitive services."

The record shows the auction weights should be set "to maximize broadband deployment within the limited auction budget, rather than deplete the limited funds with large subsidies for the costliest performance tier," Verizon said. "Auction rules should support the deployment of broadband to locations in the territory of price cap LECs that declined the CAF II offer." The FCC shouldn't set a large weight for any particular performance tier "because large weights will deplete the auction budget more rapidly," the telco said.

NTCA said the FCC should "future proof" broadband networks built with CAF II support. "The Commission should utilize a CAF II competitive bidding mechanism that awards additional weight to bids that meet a higher set of performance standards (speed, usage, and latency)," NTCA said. "This approach is consistent with, and indeed substantially furthers, the Section 254 principles of 'reasonable comparability' and the notion of universal service as an 'evolving level of service.' It places additional value on the use of limited" USF money to go beyond merely "getting broadband out there,” said the group. The National Rural Electric Cooperative Association and Utilities Technology Council offered a similar view about the need for "future proofing" broadband networks in their reply. The American Cable Association said many initial comments proposed a weighting system that "strayed from the statute's 'reasonably comparable' requirement" and had emphasized the need to maximize the number of locations served within the budget."

Hughes Network Systems said most "initial comments are consistent with Hughes’s call for a weighting system that effectively balances the Commission’s interests in providing high-quality services with the need to serve the most consumers within the specified budget." Weighting shouldn't be applied above the baseline tier unless there's clearly sufficient support to fund bids for all areas for which bids are received, Hughes said. "Satellite broadband is one of the most cost-effective and efficient means of extending broadband service to those households that the Commission deems unserved within the very limited budget" for CAF Phase II, ViaSat said. The Wireless Internet Service Providers Association said, "the record reflects support for weighting percentages that prioritize cost-effectiveness, faster speeds, higher usage allowances and lower latency measured against the Commission’s statutory obligation to ensure that it supports 'reasonably comparable' service."