FCC RDOF Draft NPRM Gets Proposed Tweaks

The FCC wants to balance the need to attract as many potential providers as possible to draw down the cost of bids for subsidies and to increase likelihood those in even the most remote rural areas are ultimately served, against the mandate it protect USF from waste, fraud and abuse. "An auction with one person is no auction," said telecom lawyer Tom Cohen of Kelley Drye, outside counsel for America's Communications Association. He said many small rural providers have broadband service areas adjacent to those designated as unserved and would bid if it made economic sense. If required service geography is too large for the smaller operators to serve, it wouldn't be economic for them, he said. Cohen suggested the FCC include higher incentives for providers that offer to deploy fiber and promise higher performance.

Rural electric cooperatives, though not traditionally thought of as broadband providers, have been engaged in previous USF auctions and will likely be active here, said Jeffrey Connor, National Rural Electric Cooperative Association chief operating officer. Some NRECA members that bid in RDOF auctions will look to work with partners, and do feasibility studies to see what's required to reach the service areas up for award for lowest bid. "It's a significant investment," Connor said. "There's risk." Connor said NRECA is encouraged by the new proposed service requirements of at least 25/3 Mbps. "That's been our position from the start."

Winning bidders must be ready and able to serve the vast majority of their service area with a designated quality broadband product for the program's length, stakeholders said. NTCA wants the FCC to consider how it weights bids from providers that pledge higher-tier service compared to those that offer the baseline 25/3.

Seek comment on how service speed will have a meaningful impact 10 years from now, when the program will still be getting service out through new buildouts, recommended Mike Romano, NTCA senior vice president-industry affairs and business development. "Do we risk aiming too low?" He wants those involved to consider how broadband networks that may be required to last for a decade-plus can be designed to be upgradable and scalable to add new customers. Romano said the RDOF should have more robust technical vetting earlier in the application process to weed out unqualified bidders that might not have a real game plan or necessary assets.

When a provider wins an auction, that money and that service area is taken off the table, Romano said, and "if they can't perform later, consumers are left in the lurch." Shifting the technical screening to the front end might mean fewer potential bidders, Romano acknowledged, "but you'll get just as many qualified bidders, in theory."

Multiple technologies will increase participation with potential to cut costs, proponents said. Jennifer Manner, EchoStar senior vice president-regulatory affairs, said the FCC should look at the most-cost-effective ways "We are concerned about the proposed penalties on performance for satellite broadband, and we look forward to working with the commission to establish rules that are technology neutral and will lead to the cost effective buildout of broadband service to all areas ... including the most remote."

Industry wants the FCC to consider including additional questions. In a filing posted Wednesday in docket 19-126, USTelecom asked "whether an alternative approach to the two-phase RDOF could create a more efficient auction and serve more unserved Americans." USTelecom proposed the first phase of a two-phase reverse auction focus on census block groups that completely lack 25/3 Mbps. Its analysis uncovered 2,683 such blocks reported as entirely unserved at that benchmark. It suggested such an auction phase could be implemented "using largely the same auction procedures" as a recent Connect America Fund phase II auction "and, therefore, be designed and completed in a quick timeframe." USTelecom estimated almost 5 million locations lack 25/3 in census blocks marked as served by broadband.

NCTA posed additional NPRM questions. It said the draft should "ask what steps should be taken to ensure the Commission does not spend more than necessary" on an auction of "slow service" blocks and focus instead on delivering support to "no service" blocks. It said the FCC "should ask whether the existing cost model accurately estimates the cost in either type of area, and if not, how that might affect the Commission's ability to rely upon its method for setting reserve prices for bids." NCTA also wants the FCC to "explicitly ask whether conducting a series of auctions, rather than just two, and using a shorter funding term, rather than 10 years, might be more effective at delivering better broadband to more people." That came up at a NARUC conference Tuesday (see 1907230018).