TR Daily FCC Urged to Focus on High-Quality Networks in RDOF Auction
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Monday, September 23, 2019

FCC Urged to Focus on High-Quality Networks in RDOF Auction

The FCC should adjust its criteria for evaluating bidders seeking to deploy broadband through its upcoming Rural Digital Opportunity Fund (RDOF) effort to give more weight to providers that offer higher-speed and higher-quality services, several commenters said.

“Rather than aiming low for minimal measures of broadband performance, the Commission should aim for networks that will meet subscribers’ needs for at least a decade to come, if not much longer,” NTCA said. “It would be far more efficient indeed to pay for networks built to last than for services that risk looking antiquated in just a few years’ time.”

NTCA was among several companies and organizations that submitted comments on the FCC’s plan to distribute $20 billion through a technology-neutral two-phase auction to support broadband deployment in high-cost areas.

Last month the Commission adopted a notice of proposed rulemaking (NPRM) in WC dockets 19-126 and 10-90 seeking input on the contours of the RDOF proposal, which is modeled on last year’s Connect America Fund Phase II reverse auction (TR Daily, Aug. 1). Comments were due Friday, and reply comments are due Oct. 21.

Issues addressed by the commenters included whether RDOF bids should be accepted for census blocks or groups of blocks, whether successful bidders should have to meet subscribership benchmarks, and what criteria providers should meet before being allowed to participate in the auction.

One of the more prominent issues, however, involved how to make the auction “technology-neutral” while still ensuring that the broadband services deployed would be high quality. That discussion pitted more traditional wireline carriers against providers of fixed wireless service and satellite service.

Wireline carriers, like those represented by NTCA, noted that fiber-based broadband was the more “future-proof” technology in that its capacity was easy to expand and it would be complementary to future deployments of 5G wireless networks that depend on robust wireline backhaul.

“Done right, the RDOF presents the chance to solve connectivity challenges for a generation by enabling meaningful, reliable, and sustainable access to robust voice and broadband services; done wrong, the networks enabled by RDOF could require significant ‘rebuilds’ within a short period of time to keep pace with consumer demand,” NTCA said.

“For an analogy that rings true in the infrastructure space, departments of transportation do not build two-lane roads when they can foresee that an eight-lane highway will be needed in the future, precisely because the costs and disruption of rebuilding a road multiple times over is inefficient and will ultimately exceed the cost of doing it right the first time,” it said.

“Thus, the RDOF auction weights should reflect the relative value of the networks to be built over the useful lives of those networks – if, in fact, a lower speed can be delivered at a materially lower cost, then that certainly could be an efficient result that should be recognized in the auction process. But the weights should not be utilized as a tool merely to ‘spread the winnings around’ under the auspices of technological neutrality,” it added.

NTCA’s request that the Commission adjust the “weights” used to determine winning bids to the advantage of fiber-based providers was echoed by USTelecom, which said the FCC should either exclude satellite operators from participating in phase one of the auction or should place more weight on whether a provider can offer low-latency service.

“While satellite broadband may be appropriate for those truly hardest-to-serve areas, it must be recognized that satellite broadband service is not a bridge to next-generation broadband services,” USTelecom said. “Funding satellite broadband through the Rural Digital Opportunity Fund will not lead to any new backhaul investments in rural America, and it will have no spillover benefits, including job creation, in the process of deploying new futureproof infrastructure.”

But satellite providers, some of which were successful bidders in the CAF Phase II auction, said the latency standard proposed by the Commission was already unfair. “Given Viasat’s successful participation in the CAF Phase II auction – and its critical role in extending cost-effective service offerings that meet Commission quality standards while tempering others’ bids – the rational next step for the Commission in establishing the RDOF program would be to further expand opportunities for satellite providers to bid for support and help bridge the digital divide in a cost-effective manner,” Viasat, Inc., said.

“Without good reason, however, the NPRM proposes moving in the opposite direction,” Viasat said. “Rather than eliminating or reducing the latency-related bidding penalty in order to foster intermodal competition, the NPRM proposes significantly increasing that penalty from 25% to 40% and possibly higher.”

The FCC’s established 100 millisecond threshold for “low-latency” service itself is arbitrary and doesn’t recognize that most Internet applications can tolerate greater latency, SES Americom, Inc., told the Commission.

“The latency benchmarks proposed in the NPRM are arbitrary and would unjustly penalize satellite operators that provide the same services as terrestrial operators, with no perceivable difference in customers’ experiences. Given the importance of expanding broadband access to rural America, the Commission should facilitate all available and effective methods of delivering rural broadband to the U.S. public,” SES Americom said.

Fixed wireless Internet service was also targeted by some wireline commenters that suggested such systems had trouble expanding capacity and reliably delivering bandwidth over rugged terrain. The Buckeye Hills Regional Council, which attempts to bring broadband service to the Appalachian region of Ohio, said fixed wireless service was ineffective in the terrain of southeast Ohio.

“The combination of terrain and foliage makes uniform fixed wireless coverage prohibitively expensive and low capacity,” the council said. “Fiber-to-the-premise solutions offer the capacity and longevity to match the FCC’s objectives and [offer] infrastructure that would transform Appalachia. Given our rugged terrain and heavy foliage, our analysis finds FTTP to be the only option for achieving 100% coverage.”

But the Wireless Internet Service Providers Association defended fixed wireless technology and asked the FCC to remove provisions in the NPRM that would disadvantage fixed wireless providers by requiring them to provide voice service to participate in the RDOF auction.

“RDOF recipients should not be required to offer stand-alone voice service. As a practical matter, there are few if any consumers that lack access to voice capability, either through an existing carrier, interconnected VoIP, or an over-the-top VoIP application,” WISPA said.

Several commenters noted that the Commission was proceeding with developing the RDOF program using broadband maps and data that had been found to be incomplete or inaccurate. There was a debate among commenters about whether the FCC should complete an effort to improve its broadband data-collection first or should proceed simultaneously with RDOF planning.

“Given the magnitude of the RDOF – not only in terms of the potential funding level at play, but also it finally being the opportunity to target support to the highest-cost, hardest-to-reach unserved and underserved locations – it is imperative that the auction have the benefit of a granular, accurate, and thorough accounting of unserved and underserved locations in eligible areas,” ITTA said.

“Normatively, the Commission would delay the RDOF auction until it has the benefit of complete information. On a macro level, the NPRM proposes the next best approach: conduct the auction in two phases, with the first largely auctioning areas that the Commission is reasonably certain, even without more granular deployment information that it does not currently possess, are unserved or underserved; and with the second being partially served areas where more thorough and accurate broadband mapping information is needed to target support with greater precision,” ITTA added.

“ITTA supports this macro framework insofar as it balances worthwhile objectives of auctioning these areas as soon as possible to bring the benefits of broadband more expeditiously to Americans in these areas, with reserving auction of partially served areas where the Commission does not currently have granular deployment information until the complete roster of location information is available to more effectively and efficiently pinpoint where support needs to be allocated in such areas,” it said.

Other commenters asked the Commission to lower the barriers to participation in the auction by, among other things, forgoing requiring established broadband service providers from having to obtain letters of credit.

@Link Services LLC, an Oklahoma provider, said it found “complying with the letter of credit requirement of the CAF II program excessively time-demanding, at times impossible, at other times impractical, and ultimately expensive.”

“We entered into the CAF II process as a successful Oklahoma wireless Internet and VoIP service company with over 14 years of experience and 15,000 paying customers. We were sound financially and profitable with many years of audited financial statements to prove it. We also had over a decade of successful, unblemished participation in United States Department of Agriculture (USDA) programs for the development of high-speed Internet in rural Oklahoma.”

“We thought @Link would find a letter of credit issuer with relative ease. We were wrong,” the company said. “For successful USDA/FCC program participants with demonstrated financial and technical capability, the letter of credit requirement poses a needless complication and expense.” It suggested the FCC find another way of certifying bidders’ creditworthiness and said the FCC and USDA should aim to harmonize their requirements for rural broadband grants.

State utility commissions and other commenters also urged the Commission to find ways for the RDOF effort to mesh with state-level programs to extend broadband to rural areas. The Illinois Department of Innovation & Technology reported that it was leading a Connect Illinois initiative that would provide $400 million in state broadband grants.

“Robust lines of communication and coordination will help ensure optimal outcomes that advance state and federal broadband policy alike, while avoiding waste of public funds,” the department said. “The Commission should require winning RDOF bidders that have applied for other forms of broadband financial assistance to amend any other pending applications for broadband financial assistance to disclose the census blocks and deployment obligations where they have won RDOF support.”

“That will ensure that state-level awarding agencies receive prompt notice of any overlap directly from their applicants, which are in the best position to quickly assess the interplay between RDOF and other broadband financial assistance programs,” it said.

The Nebraska Public Service Commission recommended that the FCC “coordinate with states that have broadband programs and with carriers to determine which areas will likely be unserved at the time of the auction,” while the California Public Utilities Commission said the RDOF program should “include an option for states to pursue a federal-state partnering approach.”

The CPUC noted that the FCC had “granted a petition filed by New York seeking waiver of the Connect America Phase II auction program rules to allow use of phase II support in eligible areas in New York in coordination with New York's New NY Broadband Program.”

“The New NY Broadband Program is a successful model for a federal-state broadband funding partnership. Allowing California and other interested states to directly leverage federal funding like New York will support the development of new and upgraded broadband networks where they are most needed across rural America,” the CPUC said.

“The CPUC staff collect and validate broadband deployment data to better understand the digital divide in rural California,” it added. “This state-level expertise and data combined with federal expertise and funding can further ensure the areas that need broadband deployment receive it.” —Tom Leithauser, [email protected]

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