Over the partial dissents of Democratic Commissioners Jessica Rosenworcel and Geoffrey Starks, the FCC today proposed creating a new program to support broadband service in high-cost areas, which would distribute $20 billion through a technology-neutral two-phase auction, with added incentives for bidding on tribal and very high-cost areas.
Commissioners Rosenworcel and Starks raised concerns about distributing support without completing improvements to the agency’s broadband data collection, which was the subject of a separate Digital Data Opportunity Collection (DDOC) item adopted at today’s meeting (see separate story).
Commissioner Rosenworcel also criticized the Rural Digital Opportunity Fund (RDOF) proposal for being too modest in its goals for the speeds the funded networks should offer: a minimum of 25 megabits per second downstream and 3 Mbps upstream. However, the NPRM contemplates providing support for networks that offer up to gigabit speeds.
The notice of proposed rulemaking (NPRM) adopted in WC dockets 19-126 and 10-90 seeks input on a proposed successor program to last year’s Connect America Fund Phase II reverse auction. Under the RDOF proposal, an initial auction would offer at least $16 billion to serve census blocks that are currently wholly unserved, and then a second-phase auction would offer the remaining funding to serve unserved locations within census blocks that currently have some served locations. The proposal contemplates using the DDOC broadband data in determining which locations are unserved for purposes of the RDOF Phase II auction.
The NPRM seeks comment on making eligible areas that currently receive CAF-II support but do not receive 25 Mbps/3 Mbps service, as well as areas that did not receive winning bids in the CAF-II auction. It also seeks input on making eligible unserved areas that the FCC’s cost model suggests can be served without subsidies.
The NPRM also seeks comment on including a tribal bidding credit to incentivize parties in the auction to bid on and serve tribal census blocks, Lauren Gerry, an attorney-adviser in the Wireline Competition Bureau, said in presenting the item at the meeting.
Commissioner Mike O’Rielly expressed concern about this latter issue, arguing that tribal areas are not uniformly in need of such added incentives to attract service providers, but saying he was grateful that incentives for hard-to-serve areas in general were added to the proposal.
“Our policies shouldn’t favor certain consumers based on group identity,” he said.
He also said in his separate statement that he was worried that the initial draft of the NPRM “did not contain sufficient incentives for providers to bid on those hardest-to-serve census blocks that have never received broadband funding and completely lack broadband infrastructure. Unlike the CAF II areas accepted by price cap carriers under the right of first refusal, which will be eligible for Phase I despite already offering 25/3 Mbps service in certain areas, the Remote Area Fund areas will likely prove much more challenging. Perhaps we wouldn’t have found ourselves in this situation had the RAF been done at a much earlier point, which I have long-advocated.
“Adding such an incentive was especially important to me to counterbalance the item’s problematic proposals with respect to Tribal areas,” he added.
“[W]hile I have significant concerns over our proposals to implement a Tribal Broadband Factor — which I previously criticized as it applied in the 2018 Rate-of-Return reform item — and the arguably even more problematic Tribal bidding credit, I am willing to accept those components as long as the RAF areas are eligible for similar incentives. Further, I recognize that this item is still at the NPRM stage and look forward to the record shedding further light on maximizing the auction’s efficiency. The bulk of the real work and requisite details on this matter will come in future items,” Commissioner O’Rielly said.
Commissioner Brendan Carr said, “Today’s proposal will go a long way towards reaching those hardest-to-serve communities. It does so by proposing 10-year support terms, which provide the certainty needed for these builds. It seeks comment on subscribership milestones, which can ensure efficient builds and the delivery of services that consumers will purchase. And it gives greater weight to offerings that can serve as the backbone for 5G services, which can help support a broad array of next-gen builds.
“I would also like to thank my colleagues for agreeing to seek comment on a series of additional ideas. First, instead of treating every community with less than 25 Mbps fixed broadband the same, we now ask whether we should take a more granular approach. This might allow the FCC to prioritize communities that are truly unserved today over areas that already have 10 or 20 Mbps fixed broadband options. In addition, I am glad my colleagues agreed to ask whether mobile wireless offerings should be considered as part of that prioritization process, which could elevate the needs of communities that might have zero fixed or mobile service today. Second, we now ask whether there are more efficient ways to group census blocks in the auction — opening the proceeding to ideas that could achieve our goals without unnecessary federal outlays. Third, we now ask for feedback on how we might identify builds that are not succeeding earlier in the process, so we can ensure that ratepayer dollars are used wisely. Lastly, the document now provides even more clarity on how the mapping reforms we tee up in a separate item today can be used in these proposed auctions,” he added.
During a press conference after the meeting, Commissioner Carr said that he was glad that the final version of the NPRM includes questions on whether to grant prioritization to mobile services, while saying that he just wants to be sure that the public gets a chance to weigh in on whether that’s a good idea.
Commissioner Rosenworcel said, “[T]here’s something fundamentally wrong here. We do not start with maps. We do not start with data. In fact, take a look at the draft rulemaking before us and it barely mentions the fact that we have a separate proceeding we are voting on today involving maps.
“In fact, this rulemaking rushes past that effort and simply proposes a successor to our existing Connected America Fund, distributing $16 billion dollars before any new data comes before this agency. Before any new maps are developed. I understand the impulse to move fast. I know that we should be working at warp speed to get modern communications to too many places that have waited too long for digital opportunity. So let’s do it. But let’s commit to doing it right,” she added.
Regarding the speeds contemplated by the proposal, Commissioner Rosenworcel said, “It’s also a shame that as we plan for the next decade our goals are so modest. We should be aiming high, with broadband speeds faster than today’s standard of 25 megabits per second. If you look back ten years, you’ll find that the FCC’s broadband standard was 200 kilobits per second. That is comically slow today. But with this proposal we’re taking today’s standard and assuming it makes sense ten years hence. That’s not right.”
Commissioner Starks said, “I don’t agree with some of the fundamental proposals in the NPRM before us. Our experience with using USF [the Universal Service Fund] to support broadband buildout has shown us that we have to understand, in detail, the problem we are trying to solve before us and before we start spending money to solve it. If we don’t, we run the risk of throwing money to the wind and hoping that it lands in places where it will help the most. Specifically, we have learned that in order to understand the problem we need to know where broadband service is and is not available in the United States.”
He added, “Ultimately, I think that plans for the future of Universal Service need to start from a foundation of accurate data and maps and build from there. I am hopeful that the Digital Opportunity Data Collection that we are launching today will lead to such a foundation, but I have concerns about starting the next phase of the Commission’s USF Program without having better data and maps in place.
“That said, I also recognize that … the Rural Digital Opportunities Fund proposal builds off of the success of the Commission’s Connect America Fund support auction and that it contains many good ideas for continuing the Commission’s work in this area. I do look forward to reviewing the record and to working with my colleagues to plan for and shape the future of universal service. This is our greatest responsibility — the mission of eliminating internet inequality is too important, and the dollars are too precious to get this wrong,” Commissioner Starks said.
Chairman Ajit Pai said, “[W]hile some have suggested that we should not move forward on Phase I until the data needed for Phase II has been collected, I strongly oppose this idea. Indeed, it makes about as much sense as deciding not to provide medicine to anyone suffering from an illness outbreak until everyone who is sick from that outbreak has been identified. There is simply no reason to delay action to provide broadband to Americans we know don’t have access to it.”
He added, “Today’s Notice proposes other consumer-friendly steps. For instance, we’re eliminating support for 10/1 Mbps service in the auction. The FCC has defined broadband as 25/3 Mbps for some time now, and in any case, the CAF II experience suggests that providing support for 10/1 Mbps service isn’t necessary; over 99% of locations won in that auction will get 25/3 Mbps service or greater. And we’re exploring ways to make eligible for auction support additional areas that haven’t previously qualified but are still on the wrong side of the digital divide.”
Industry reaction to the agency’s action was generally positive, although they found some areas for improvements.
USTelecom President and Chief Executive Officer Jonathan Spalter said, “The Rural Digital Opportunity Fund is a once in a generation opportunity to expand broadband service, and today the FCC made clear it should be governed by the best and most granular broadband availability maps we can deploy. We all know we have to get this right, and that is why we are excited to work with the Commission in nailing down the critical next steps and sequencing to ensure broadband support can be directed to rural communities and enterprises as quickly, efficiently, accurately, and sustainably as possible.”
NTCA Chief Executive Officer Shirley Bloomfield said, “The Rural Digital Opportunity Fund represents a potentially significant step to bridging the digital divide in our country by, among other things, creating opportunities for the nearly 850 independent, community-based broadband providers in NTCA’s membership to deploy and sustain service in more rural locations.
“That said, NTCA urges the FCC to carefully consider the technical vetting of possible RDOF participants, as buildout in high-cost, rural areas requires significant long-term commitment and technology suitable to the vast array of challenges encountered in serving the most remote parts of our country. We also appreciate that the FCC seeks to raise the minimum speed threshold from 10/1Mbps to 25/3Mbps but caution that the standard might need to be adjusted for higher speeds as technologies advance,” she added.
Joan Marsh, AT&T, Inc.’s executive vice president–federal and state external affairs, said, “We are proud to already be offering broadband to over 700,000 rural homes and small businesses as part of our CAF II commitment. And we applaud the Commission for moving forward to develop its successor — the Rural Digital Opportunity Fund — so that there is no pause in the progress.” However, she also called for rapid action on improving information on where broadband is available through the agency’s Digital Opportunity Data Collection proceeding (see separate story).
ACA President and CEO Matthew Polka said, “Last year, the FCC demonstrated that by awarding universal service support via auction, it can bring higher-performance broadband service to unserved areas far more cost-effectively that using a cost model. We therefore are heartened that the FCC proposes that the RDOF too should award support via auction. But the FCC should not merely rest on the laurels of the last auction. As ACA Connects has demonstrated, too many potential providers sat out the last auction because of flaws in the FCC’s rules — and those flaws can be readily corrected. By adopting rules that maximize participation, the FCC can drive even higher-performance broadband service using less federal support. We look forward to working with the FCC to make these refinements and to expediting implementation of the RDOF.”
Claude Aiken, president and CEO of the Wireless Internet Service Providers Association, said, “The Commission should be commended for kicking off the RDOF. The investment being made here is massive, and the FCC properly recognizes the many technological paths that can be taken to get rural Americans online.”
WISPA said that “[u]ntil CAF II, WISPA had been excluded from accessing subsidies because they were not traditional telephone companies. The RDOF would moot this concern.” Mr. Aiken said, “A CAF II approach means that our members, who serve four million individuals and businesses with fixed wireless broadband services, can play a prominent role in getting their communities into the digital economy. It will vastly extend the effectiveness of the program and will result in more rural Americans having high-speed broadband.”
Lisa Youngers, president and CEO of the Fiber Broadband Association, said, “This new program holds out the promise of bringing high-performance broadband service, especially all-fiber broadband service, to unserved areas throughout the country. But, to make that happen, the FCC will need to amend its previous Connect America Fund rules and recognize that all-fiber networks have become the transmission medium of choice for consumers because of the enormous benefits they offer. Our research, often cited by Chairman Pai, shows that fiber was deployed to more new homes in the United States last year than ever before. FBA, therefore, encourages the FCC to use this proceeding to bring the benefits of all-fiber networks to those consumers who so far have been left behind. We stand ready to work with the FCC to make this happen.”
Public Knowledge was more critical. Public Knowledge Senior Vice President Harold Feld said, “It is a good thing for Chairman Pai to propose essentially extending the Obama-era ‘Connect America Fund’ (CAF) under a new name. But whether we call it the Connect America Fund, the Rural Digital Opportunity Fund, or some other happy name, we need to recognize that this program won’t be enough to provide all Americans the real broadband they both need and deserve.
“Additionally, Chairman Ajit Pai’s proposal to cap the Universal Service Fund, the source of money for RDOF, places the future of RDOF at risk. Finally, we need to recognize that while RDOF would cover initial deployments, it does nothing to help rural communities keep pace as urban broadband speeds increase. All this underscores that this is no time to declare ‘Mission Accomplished,’” Mr. Feld continued.
“Due to this Commission’s abdication of clear authority over broadband, only Congress can provide a real answer to the challenge of providing all Americans affordable access to real broadband,” he added. —Lynn Stanton, [email protected]
MainStory: FederalNews FCC UniversalServiceLifeline
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