Mobility Fund Order Could Slip to Vote Beyond November Meeting
A draft order by FCC Chairman Tom Wheeler that would provide nearly $500 million in support every year for five years for Phase II of a mobility fund is facing some problems on the eighth floor with a vote scheduled for next week’s commissioners' meeting, agency and industry officials said Tuesday. One FCC official said the order could potentially be held for a later vote, possibly at the December meeting.
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The growing consensus in many of the commissioner offices is that the order needs additional work, industry and agency officials told us. Since the Democratic offices in particular have been focused on the broadband data services order, also on the agenda, some question whether the key staff on the eighth floor will also have the time and attention to take on the mobility fund. Industry has also raised concerns about aspects of the order, including an AT&T blog post Monday (see 1611070060).
Staff developed an order, with near lightning speed, with Wheeler promising action in September in a speech at the Competitive Carriers Association annual show (see 1609200058). The FCC declined to comment.
“The problem they have is that it was rushed,” said Caressa Bennet, counsel to the Rural Wireless Association, in an interview. ‘”The order is just a framework. There’s still a lot of issues that needed to be decided. From RWA’s standpoint, we’d like to see this fleshed out … and have further comment on the issues that they haven’t vetted.” Ideally, the FCC would still move forward with an order quickly, possibly with a further notice, that would leave additional decisions about the rules for the commissioners to decide, Bennet said.
“The focus on wireless is warranted as it is the fastest and most cost effective way to bring broadband to rural America,” said Roger Entner, analyst at Recon Analytics. “It is important to get the rules right. Mobility Fund II marks some important departures from Mobility Fund I, especially around the buildout requirements, which seem to be counterproductive to an effective and efficient rollout of services. A closer adherence to the proven Mobility Fund I rules would help everyone.”
“It is critical to move forward with a Mobility Fund II to preserve and expand mobile broadband in rural America,” emailed CCA President Steve Berry.
The agency created Phase I of the fund as part of the 2011 Connect America Fund order, with a total budget of $300 million to be awarded through a reverse USF auction. The CAF order, approved under then-Chairman Julius Genachowski, was supported by all four commissioners. Robert McDowell, the lone Republican at the time, approved the order in part and concurred in part. Commissioner Mignon Clyburn, an enthusiastic proponent of a new mobility fund (see 1609090016), was already a commissioner when the CAF order was approved.
"​In 2011, we set up USF reform to be an iterative framework that we anticipated would be changed many times over the years,” said McDowell, now at Cooley. “Facts and circumstances evolve over time, however, so it's not surprising that viewpoints might diverge accordingly. This will not be the last debate over the scope and size of the various USF subsidies."
Commissioner Ajit Pai has stressed that if the regulator approves a fund, it must get the rules right (see 1609210057). Commissioner Mike O’Rielly has expressed the most skepticism about creating a new mobility fund, dedicating a July blog post to the issue. “Serious questions should be raised over whether there should be a separate subsidy program for wireless carriers,” O’Rielly said then. “It seems illogical that we would have a technology-specific fund when the wireless and wired worlds are merging. Even the most objective person would see them as substitutes, rather than complements, which is backed up by user perspective and behavior.”
“A bipartisan vote on mobility fund is certainly in the cards,” said Doug Brake, telecom policy analyst at the Information Technology and Innovation Foundation. “Some reasonable changes to the fund, encouraging broad participation in bidding, targeting support for unserved areas, and minimizing overbuilding, could go a long ways in improving the impact of the support,” he said. “Pai has been explicit in the changes he hopes to see in the second round, and I can't imagine Chairman Wheeler would mind squeezing in a bipartisan vote after some controversial 3-2's.”
AT&T reported on meetings held with aides to Wheeler and Commissioner Jessica Rosenworcel, consistent with the blog post. “The company urged the Commission not to reinvent the wheel with Mobility Fund II but instead to strive for consistency among all CAF programs,” AT&T said in a filing in docket 10-208.
Meanwhile, U.S. Cellular said it largely supports the mobility fund proposal laid out in an FCC fact sheet. Representatives of the carrier met with aides to commissioners, said a filing. “We discussed the need to improve data submitted in connection with the Form 477 process, as the most recently available data appears to overstate coverage,” U.S. Cellular said. “The overstatement of coverage nationwide is unlikely to be corrected through a challenge process. Smaller rural carriers will be unlikely to invest significant upfront costs to drive test large geographic areas in the hopes of establishing that coverage in particular areas is overstated.”