Agency Should Adopt Rules That Will Allow Bidders To Pinpoint Their Bids To Areas They Can Serve Economically
For Immediate Release
Contact: Ted Hearn
PITTSBURGH, Sept. 25, 2019 – ACA Connects: America’s Communications Association, in comments filed with the Federal Communications Commission, applauded the FCC for launching the $20.4 billion Rural Digital Opportunity Fund (RDOF) and awarding support by using a reverse auction.
However, ACA Connects explained the proposed rules for the program would not maximize participation in the auction and therefore both waste scarce government support and fail to bring higher performance broadband services to unserved eligible areas.
ACA Connects recommended the FCC modify its weighting methodology to encourage providers to bid to offer higher performance services. The FCC also can increase participation by using individual census blocks as the minimum geographic area.
ACA Connects President and CEO Matthew M. Polka explained, “In proposing the Rural Digital Opportunity Fund, the FCC has ‘caught the broadband train.’ The RDOF has the potential to bring high performance broadband services to unserved rural America and best use limited government funds. But that will only occur if the FCC adopts rules that encourage the maximum number of potential bidders to participate.”
Unfortunately, the FCC’s proposed rules do not fix the shortcomings that deterred participation in last year’s Connect America Fund auction, despite the solutions being well-known. To maximize participation and increase cost-effective bids, ACA Connects calls upon the FCC to adjust its weighting methodology to ensure bidders for higher performance tiers are not disadvantaged and use census blocks as the minimum geographic unit so that providers can pinpoint their bids to areas they can serve economically.”
The RDOF will primarily replace the existing CAF Phase II cost-model (CAM) program, which provided about $1.6 billion in support annually to price cap carriers to bring relatively low-speed broadband to unserved census blocks in their service territories. The amounts awarded to price cap carriers were based on an FCC-developed cost model. However, last year’s CAF Phase II auction demonstrated that the FCC awarded far too much support to get low-speed service. ACA Connects commends the FCC for correcting this problem with the RDOF
But, the FCC’s RDOF proposals do not correct other problems. ACA Connects presented the FCC with data demonstrating that the methodology the FCC used in last year’s auction for weighting bids among the performance tiers failed to encourage potential bids for higher performance tiers. Yet, the FCC continues to rely on an arbitrary methodology, even while asking commenters to provide evidence to support their weighting proposals. ACA urges the FCC to use its methodology and adjust the weights accordingly.
In addition, ACA Connects presented the FCC with reports from its members that they would have bid in the auction to serve individual unserved census blocks but did not because the rules required them to bid only for larger census block groups, which often contained census blocks that were economic to serve and that were not. This problem too should be fixed.
ACA Connects also commented that the FCC should:
· Increase service provider performance requirements over time to ensure rural consumers receive “reasonably comparable” services to their urban counterparts and adopt a limited subscribership target to incentivize customer signups;
· Determine the areas eligible for RDOF Phase I funding without delay based on existing deployment data, hold off on lowering the current high-cost threshold, and establish safeguards to prevent overbuilding;
· Use the CAM to establish reserve prices for the areas eligible for RDOF Phase I support as it remains the most objective measure of per location service cost available today;
· Lower the RDOF short-form application requirements in certain circumstances for existing providers, which already demonstrated a track record of providing quality service to consumers;
· Provide limited additional support to price cap carriers that accepted CAF Phase II model-based funding in relevant areas to ensure consumers retain access to supported services while the RDOF is implemented; and
· Adopt principles to facilitate state broadband program engagement while ensuring support is allocated in a transparent and efficient manner.
About ACA Connects: America’s Communications Association – Based in Pittsburgh, ACA Connects is a trade organization representing more than 700 smaller and medium-sized, independent companies that provide broadband, phone and video services to nearly 8 million customers primarily located in rural and smaller suburban markets across America. Through active participation in the regulatory and legislative process in Washington, D.C., ACA Connects’ members work together to advance the interests of their customers and ensure the future competitiveness and viability of their business. For more information, visit: https://acaconnects.org