TR Daily Draft FCC Order to Increase USVI Mobile Support 22-Fold
Thursday, September 5, 2019

Draft FCC Order to Increase USVI Mobile Support 22-Fold

A draft order on high-cost support for Puerto Rico and the U.S. Virgin Islands teed up for the FCC’s Sept. 26 meeting includes a 22-fold increase in mobile support for the USVI and a scoring system for competitive bids for fixed service that rewards higher monthly usage allowances as well as high speeds, low latency, and resiliency and redundancy design features such as path diversity and network backups, according to the text of the draft item released today.

A draft item on access arbitrage also intended for the Sept. 26 meeting includes the elimination of mandatory use requirements for the two centralized equal access providers whose section 214 authorizations include those requirements.

The FCC today also released a tentative agenda for the Sept. 26 meeting and draft versions of the other items on the agenda, which are a draft public notice for a 3.5 gigahertz band auction next year, a draft order to update and streamline its direct broadcast satellite (DBS) service licensing rules, and a draft item in the FCC’s media modernization initiative (TR Daily, Sept. 4).

The draft report and order and order on reconsideration in WC dockets 18-143, 10-90, and 14-58 addressing broadband issues in the U.S. territories in the Caribbean follows last year’s order establishing the Uniendo a Puerto Rico Fund (Bringing Puerto Rico Together) and Connect USVI Fund and an accompanying notice of proposed rulemaking (NPRM) that sought input on awarding support for fixed service based on competitive proposals submitted by carriers and on carving Puerto Rico and the U.S. Virgin Islands out of the Mobility Fund Phase II auction and instead allocating additional support for existing mobile carriers to rebuild their networks in the wake of the 2017 hurricanes Irma and Maria (TR Daily, May 8 and 29, 2018).

According to a fact sheet released with the draft report and order, the item would “take the next step by turning from post-storm restoration to facilitating the deployment and expansion of high-speed, storm-hardened networks throughout Puerto Rico and the U.S. Virgin Islands.”

Specifically, the draft order would create a competitive process to provide up to $691.2 million over 10 years to support fixed voice service and broadband service up to 1 gigabit per second, with $504.7 allocated to Puerto Rico and $186.5 million allocated for the USVI. In Puerto Rico, each of the 78 municipos would be a separate service area that providers could bid to serve. In the USVI, there would be two areas that providers could bid to serve, one covering St. Croix and one encompassing both St. Thomas and St. John. A bid in either territory would have to include plans to serve each of the homes and businesses in a service area.

FCC staff would evaluate bids based on “price per location served, network performance (speed and latency), and network resilience and redundancy,” the fact sheet said.

“Although commenters differ on how to weigh these factors relative to each other and some suggest additional factors, several commenters support the inclusion of these three key factors. We find it appropriate to give price per location the greatest weight. While our goal in this process is to award funding to the carrier that can provide the highest performing and most resilient network possible, we must do so in a fiscally responsible manner,” the draft order said.

Specifically, the order would create a 270-point scoring system, with (1) 100 points available for price per location, with 100 points awarded for meeting the reserve price and 1 point subtracted for each percentage point below the reserve price; (2) 90 points for network performance, with 50 speed/usage points awarded for meeting the minimum 25/3 megabits per second (Mbps) and 200 gigabyte or U.S. median for monthly usage limits, 25 points awarded for offering 100/20 Mbps service and a minimum monthly usage allowance of 2 terabytes, and 0 points for offering 1 Gbps/500 Mbps and a minimum monthly usage allowance of 2 TB, as well as 40 points for high latency (meeting the minimum 750 millisecond latency threshold) and 0 points for low latency (no more than 100 ms); and (3) 80 points for network resilience and redundancy, based on sliding scales of 0 to 20 points for a backup network or path diversity; 0 to 60 points for underground fiber; 40 to 60 points for satellite, fixed wireless end-user location connections, and microwave backhaul; and 60 points for aerial wireline deployment.

The reserve price would be set by determining the average price per location in a service area as determined by the Connect America cost model (CAM), and then using the relative average prices for each service to allocate the budget set for the territory across its service areas.

The lowest overall score would determine the winning bid for an area.

As for mobile service support, the draft order would also provide up to $258.8 million over three years “in high-cost support to eligible mobile voice and broadband providers in the Territories while the Commission develops and considers a long-term, competitive support plan.” This represents an increase of $7 million per year for each of the three years from the current high-cost mobile support of $78.9 million per year for Puerto Rico and $67,000 for the USVI. Support would be allotted among providers serving the Puerto Rican and USVI markets in 2017, based on their 2017 share of mobile service subscribers.

“We note that the budget we adopt increases annual mobile support to the U.S. Virgin Islands by almost twenty-two times the prior level—this large relative increase reflects our view that the existing, very modest level of mobile support for the U.S. Virgin Islands would be insufficient to support meaningful progress toward restoration, hardening, and expansion of 4G LTE and 5G mobile technology-based services during Stage 2 in light of the challenges of serving the Territory,” the draft order said.

Providers could elect to use up to 75% of their allotted support to harden, expand, and complete restoration “to pre-hurricane coverage of 4G LTE networks with speeds of at least 10/1 Mbps” and “up to 25% of their allotted support to deploy cutting-edge 5G network technology with speeds of at least 35/3 Mbps,” according to the fact sheet.

The draft order would also “[r]equire fixed and mobile support recipients to maintain and implement a Disaster Preparation and Response Plan and perform mandatory reporting in the event of a hurricane or other disaster via the FCC’s Disaster Information Reporting System,” the fact sheet said.

The accompanying draft order on reconsideration would address two petitions related to the 2018 order establishing Uniendo a Puerto Rico Fund and Connect USVI Fund advance support and Stage 1 support.

It would deny a petition by WorldNet “to obtain support equal to the amount of advance support it declined. We recognize that WorldNet acted with incomplete information, because it declined the advance support at a time when the Commission had stated that the advance support would be offset by future support, but the Commission later decided to treat the advance support as a one-time payment that would not be offset. We must be responsible stewards of the Fund, however, and will not award funding meant for immediate post-hurricane relief two years after the fact,” the draft reconsideration order said.

It would also deny a reconsideration petition by Tri-County Telephone Association, Inc., in which it argued that “the Commission failed to undertake notice and comment or provide adequate record support for the immediate disbursement of Stage 1 support. Additionally, TCT alleges that Congress did not intend the high-cost program to be used for disaster relief and that in providing Stage 1 support the Commission has ‘unlawfully expanded the scope and purpose of the USF.’”

“We find the Commission was not required to undertake notice and comment for Stage 1 support and provided acceptable justification for doing so. Specifically, the PR-USVI Fund Order stated that using notice and comment procedures for the interim and one-time relief would delay its effectiveness, would be impracticable and contrary to the public interest,” the draft reconsideration order said.

“We also find that the Commission did not unlawfully expand the scope of the high-cost fund in contravention of congressional intent by establishing Stage 1 support. Congress recognized that universal service is ever evolving and requires the Commission to consider a variety of factors in determining what services are supported by the Fund, including public health and safety,” it added.

A draft public notice in AU docket 19-244 circulated for consideration at the Sept. 26 meeting would solicit comment on application and bidding procedures for an auction (Auction 105) of priority access licenses (PALs) in the 3550-3650 megahertz Citizens Broadband Radio Service. The auction is scheduled to begin on June 25, 2020.

The auction “will offer seven PALs in each county-based license area, for a total of 22,631 PALs nationwide,” a fact sheet on the item noted. “Each PAL will consist of a 10-megahertz unpaired channel. PALs are 10-year renewable licenses. Consistent with the Commission’s rules that permit Priority Access Licensees to aggregate up to four PALs in any license area at any given time, bidders in Auction 105 will be allowed to bid for up to four generic blocks of spectrum per county.”

The public notice would “[p]ropose to conduct Auction 105 as an ascending clock auction, in which bidders indicate their demands for generic license blocks in specific counties. The proposed procedures for Auction 105 would differ from the procedures in Auctions 102 [24 GHz] and 103 [37 GHz, 39 GHz, and 47 GHz] in several ways, the fact sheet noted.

“There would be no assignment phase in Auction 105. Priority Access Licensees will be authorized to use frequencies associated with their PALs as dynamically assigned by frequency coordinators, known as Spectrum Access Systems,” the fact sheet observed.

“The Public Notice would seek comment on a proposal to give any bidder the option to bid at a Cellular Market Area (CMA) level in the 172 CMAs that are classified as Metropolitan Statistical Areas and comprise multiple counties,” it added.

“The Public Notice would propose to incorporate an ‘activity upper limit’ that would allow a bidder to submit bids that exceed its current bidding eligibility to help mitigate the possibility of losing bidding eligibility under certain circumstances,” the fact sheet also said.

Meanwhile, the FCC in the public notice would “[p]ropose bidding credit caps of $25 million for small businesses and $10 million for rural service providers, as well as a $10 million cap on the overall amount of bidding credits that a small business bidder may apply to winning licenses in smaller markets,” the fact sheet said. The draft item also proposes “a $25 million cap on the total amount of bidding credits that may be awarded to an eligible small business …”

Comments on the public notice would be due Oct. 28 and replies Nov. 12.

Last October, the FCC, over the dissent of Democratic Commissioner Jessica Rosenworcel, adopted a report and order that increased the size of PAL areas from census tracts to counties and extended license terms from three to 10 years and made the licenses renewable (TR Daily, Oct. 23, 2018).

The item in GN docket 17-258 also indicated that the FCC would seek comment before an auction on whether it should allow package bidding for licenses in counties that comprise complete metropolitan statistical areas in the top 305 markets.

The order was adopted in the wake of a 2017 NPRM seeking comments on possible changes to the PAL rules, which were adopted in 2015 (TR Daily, Oct. 24, 2017). Commissioner Mike O’Rielly was the point person on the new item.

“With America leading the world in 5G deployments, we’re thrilled to see Chairman Pai move forward with plans to free critical mid-band spectrum,” said Scott Bergmann, senior vice president-regulatory affairs for CTIA. “This is an important milestone that will help maintain our leadership and we encourage the FCC to continue to move quickly on implementing the Chairman’s 5G Fast plan.”

“Mid-band spectrum is critical to deploying next-generation and 5G technologies, and I am pleased to see the FCC moving forward with the 3.5 GHz auction,” said Steve Berry, president and chief executive officer of the Competitive Carriers Association. “CCA worked hard to ensure the band presents opportunities for our members to participate. Competitive carriers must have access to additional spectrum to enhance and expand their networks, especially in rural areas, and CCA welcomes any additional opportunities for carriers to acquire valuable spectrum.”

The access arbitrage draft report and order and modification of section 214 authorizations in WC docket 18-155 follows last year’s NPRM seeking input on proposals for eliminating access-stimulation arbitrage opportunities in its intercarrier compensation regime by giving access-stimulating local exchange carriers (LECs) two options for connecting to interexchange carriers (IXCs): taking financial responsibility for calls that IXCs deliver to the LEC’s network or allowing IXCs to deliver traffic directly or through an intermediate carrier of the IXC’s choice or allowing IXCs to bypass intermediate access providers selected by the access-stimulating LEC.

The draft order would require “access-stimulating LECs—rather than IXCs—to bear financial responsibility for the tariffed tandem switching and transport charges associated with the delivery of traffic from an IXC to the access-stimulating LEC’s end office or its functional equivalent”; “expand the current definition of ‘access stimulation’ in the Commission’s rules to include situations in which the access-stimulating LEC does not have a revenue sharing agreement, but has at least 6 times more minutes of inbound calling traffic than outbound calling traffic”; and “eliminate decades-old requirements that force IXCs delivering traffic to access-stimulating LECs that subtend certain intermediate access providers (known as centralized equal access or CEA providers) to use those CEA providers for tariffed tandem switching and transport services,” according to the fact sheet released with the draft order.

The draft modification of section 214 authorizations would “modify the section 214 authorizations for Aureon and SDN—the only CEA providers with mandatory use requirements—to permit traffic terminating at access-stimulating LECs that subtend those CEA providers’ tandems to bypass the CEA tandems. By eliminating the mandatory use requirements, we enable IXCs to use whatever intermediate access provider an access-stimulating LEC that otherwise subtends Aureon or SDN chooses. Eliminating the mandatory use requirements for traffic bound for access-stimulating LECs will also allow IXCs to directly connect to access-stimulating LECs where such connections are mutually negotiated and where doing so would be more efficient and cost-effective,” the draft item said.

A draft report and order in IB docket 06-160 “would modernize the procedures and rules governing direct broadcast satellite (DBS) service,” a fact sheet noted. “These actions would largely align DBS processing procedures with recently streamlined processing procedures for GSO [geostationary orbit] fixed-satellite service (FSS) satellites. They would also reflect changes in the regulation and provision of satellite communications services since the Commission last examined the licensing provisions for DBS over a decade ago. This Report and Order would be a step towards increased use of spectrum and orbital resources, while also protecting existing consumers of satellite television from harmful interference to their service.”

The fact sheet noted that the order would (1) “[a]dopt rules to process requests for new DBS service on a ‘first-come, first-served’ basis, including an optional, two-step application process that was previously adopted for GSO FSS”; (2) “[a]dopt the milestone and bond requirements for DBS service that match those for GSO FSS”; (3) “[i]ncrease the license term of non-broadcast DBS from 10 to 15 years”; (4) “[c]onsider requests for new DBS service, including requests at reduced orbital spacing from existing DBS operations, provided that they include a demonstration that either no other U.S. filing would be affected under the rules of Appendices 30 and 30A of the International Telecommunication Union (ITU) Radio Regulations, or that they have been successfully coordinated with affected parties”; and (5) “[e]nd the current ‘freeze’ on applications for DBS licenses.”

Last October, the FCC adopted a second NPRM in IB docket 06-160 proposing revisions to the agency’s procedures and rules for DBS service providers using geostationary orbit (GSO) satellites (TR Daily, Nov. 13, 2018).

Though they suggested some modifications, several companies and groups offered support for the second NPRM (TR Daily, March 27).

Finally, the tentative agenda also includes a draft further NPRM in MB dockets 05-06, 17-105, and 17-264, seeking input on the means by which broadcasters provide notice to the public when they file broadcast applications, proposing to replace the obligation to publish notices in print newspapers with requirements for either online notices on on-air announcements.

The Sept. 26 meeting is scheduled to start at 10:30 a.m. —Lynn Stanton, [email protected], and Paul Kirby, [email protected]

MainStory: FCC FederalNews SpectrumAllocation WirelessDeployment Satellites UniversalServiceLifeline PuertoRicoNews VirginIslandsNews

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