ISPs Back Jan. 30 RDOF Vote, Phase I Auctions in 2020

"We are excited about the overall direction of the auction," said USTelecom Vice President-Policy and Advocacy Mike Saperstein. "It will allow our companies to participate in the auction and hopefully win." He's pleased the proceeding moved so quickly. Saperstein added RDOF sets up unique challenges and opportunities for small rural price cap carriers because it opens some of their territories for competitive bidding. USTelecom met with FCC Chairman Ajit Pai, Commissioners Brendan Carr and Geoffrey Starks, and officials from the Wireline Bureau Monday about concerns.

"There's every reason to have a unanimous vote, an auction this year, and then funding flow next year," said Kelley Drye's Tom Cohen, outside counsel for America's Communications Association. "Everybody should be in favor of moving this forward." Cohen said ACA wanted items that didn't end up in the draft, such as bidding by census blocks rather than larger census block groups, and a different weighting score for the auction, "but you have to look at it as a whole." He said ACA is "all in favor" of moving ahead promptly.

The fund would send upward of $20 billion to help deploy rural broadband through reverse auctions from bidding ISPs in two phases. The first, which could be held by year's end, would target areas unserved by at least 25/3 Mbps. Commissioners voted on an NPRM for docket 19-126 in August (see 1908010060). After much industry discussion, the draft order included changes. Saperstein said the FCC was responsive.

"The item as a whole is a significant positive step forward," said NTCA Senior Vice President-Industry Affairs and Business Development Mike Romano. The draft "strikes a good balance" between the goals of funding broadband networks of all kinds and aiming for high performance, he said. "We hope the other commissioners will see their way to support it."

"We were encouraged by what we heard" when the draft was released, said Fiber Broadband Association CEO Lisa Youngers. She will watch to see where parties lobby. FBA plans meetings with officials, too. Youngers supports a budget-clearing proposal that favors higher-performing networks. "It will encourage a great many more providers to bid for the gigabit tier," she said.

Concerns

The new clearing round proposal is a concern for Hughes Network Systems, said Senior Vice President-Regulatory Affairs Jennifer Manner. She said the draft means "once you hit the clearing round, it's not an auction based on money." Manner said rules duplicate ones that weight bids based on speed tiers and latency scores. "In a sense, you're getting penalized twice." She's disappointed the draft didn't offer bidding metrics for hybrid satellite-terrestrial networks that address latency issues, because the FCC says such hybrid networks aren't yet offered to residential customers. An HNS filing Wednesday discusses this.

Wireless ISP Association members could be left behind after the clearing round, and the rule could influence whether very small companies bid, said WISPA CEO Claude Aiken. He preferred the budget clearing round approach used in Connect America Fund Phase II auctions, the RDOF predecessor. "The RDOF clearing round bid processing approach could be seen to favor fiber over other technologies," Aiken said. "That's a choice we think comes at the cost of robust competition in the auction and will result in more dollars being spent." Aiken said it makes sense to deploy fixed wireless internet instead of fiber in some areas, especially where costly broadband service isn't in demand. He cited a member with the expertise to deploy fiber, "but it's so expensive that folks in the community won't be able to afford it."

Overall, WISPA is "pretty pleased" with the draft, Aiken said. He appreciates it added a fourth performance tier, at 50/5 Mbps, after WISPA requested it. USTelecom also supports that, Saperstein said: "It will make bidders more competitive and provide better service. They won't be forced to compete at baseline."

"We're not big fans of inserting a 50/5 megabit tier," NTCA's Romano said. "It's another tier in which rural consumers could get lower service than their urban counterparts."

Once the clearing round hits and the bids collectively fall within the budget for the first auction, the budget clearing will favor lower latency and faster speeds, said Mintz telecom lawyer Angela Kung. "The commission made it really clear they're favoring faster speeds."

Symmetrical Networks

"It seems unlikely 25/3 networks will be future-proof," said Jon Sallet, senior fellow at Benton Institute for Broadband & Society, which released its vision for 2020s broadband in October (see 1910300005). If RDOF spends on networks that aren't future proof, Sallet said, either government must spend more later or communities won't be tied into networks that can keep up. He said policymakers need a better understanding of the viability of a 25/3 or 50/5 network a decade from now: "What's the best use of public dollars in making sure consumers benefit in a time when broadband is essential to daily life?"

Benton wants RDOF to focus on 100 Mbps symmetrical. "Experts we talk to say if it's 100/100, it can be upgraded as demand indicates." He recommended striking a balance between future-proofing and what's attainable today. "It would be great to have a gigabit," Sallet said. "And cable says 10 gigabits."

"We advocate for fiber being the best future-proof technology," FBA's Youngers said. She believes the FCC goal is bridging the digital divide, using dollars most efficiently not balance the needs of individual technologies or industries.

NCTA "strongly supports" Pai's proposal to move ahead "and provide the support necessary to deliver broadband to areas that do not currently have access," emailed the group's spokesperson. "We particularly appreciate the Chairman's continued reliance on competitive bidding and other policies designed to ensure that funding is distributed in an efficient and targeted manner."

Groups representing rural incumbents want more clarity on price cap carriers money if RDOF recipients enter their markets or if they lose ongoing support because their areas aren't up for auction in phase one. "There should be some opportunity to get ongoing funding or support," Romano said. He suggested a cost model for operating expenses only for price cap carriers ineligible for RDOF. In talks with the FCC in approximately the next week, Saperstein said that USTelecom will "take a look at making sure all the transition issues are buttoned up."