CCA, Small Carriers Say FCC Should Rethink Mobility Fund

Carriers accepted only $115 million of the original $300 million in CAF dollars for wireline broadband, leaving about $185 million on the table (CD July 26 p3), while Phase I of the Mobility Fund was fully subscribed, CCA observes (http://xrl.us/bn73h2). “The price cap carriers’ refusal of more than half of the funding made available during Phase I of the CAF program ... strongly supports CCA’s argument that such funding can be more efficiently and effectively ... used by wireless providers,” CCA said. “Wireless carriers can and will utilize efficient amounts of support to deploy broadband -- a very positive ‘bang for the buck’ result for the High Cost Fund -- and the FCC should harness this energy and efficiency to provide ongoing broadband services to more of the country."

While CCA urged a fundamental rethinking of how the USF program should be structured, the group did recommend several smaller fixes addressing the implementation issues raised by the public notice. Among them, the FCC should “streamline the application process and, more importantly, enable participants to submit more cost-efficient bids,” CCA said. The FCC should also expand the number of areas eligible for support “to ensure that the actual number of eligible areas (or more importantly the smaller number of areas where support is in fact won) is not so small as to foreclose access to more than one broadband service,” CCA said. “Finally, the Commission can increase participation in Mobility Fund Phase II by reducing some of the implementation challenges, like drive testing on private roads and protected parkland, for example. Increased participation will lead to more efficient broadband deployment for the High Cost Funds as a whole."

A $500 million Mobility Fund is too small, especially since $100 million of that amount is set aside for tribal areas, U.S. Cellular said. “It is not too late for the Commission to re-examine and remedy the enormous barrier it has placed in the way of its own efforts to facilitate mobile broadband deployment throughout rural America,” the carrier said (http://xrl.us/bn73i7). “The level of funding the Commission has established is, on its face, markedly inadequate to do the job the Commission has committed to undertake."

CTIA said the FCC should put in place four clear principles for the Mobility Fund. The “scope of all public interest obligations must be crystal clear in time for bidders to formulate their strategies prior to deciding whether or how to participate in the program” and obligations should be narrowly tailored, CTIA said (http://xrl.us/bn73ic). “For example, outage reporting and overbroad Tribal engagement obligations would be burdensome, unnecessary, and inappropriate in the context of this proceeding.” Requirements should also be “tailored to reflect the characteristics of mobile service” and accountability and oversight requirements “should be carefully calibrated with the term of support,” CTIA said. “For example, if the Commission adopts a shorter term of support, it should craft accountability and oversight requirements accordingly.”

But CTIA noted that key decisions remain to be made, including whether the USF will utilize a reverse auction or an economic cost model for determining funding. “Whether a reverse auction or a cost model is used to distribute support will affect many of the issues raised in the Notice, including how support areas should be identified, the term of support, and the public interest obligations of recipients,” CTIA said. “Commenters are less likely to be able to provide adequate, informed, and targeted feedback on many important issues without knowing which approach the Commission will use."

Verizon and Verizon Wireless said the FCC should make sure that obligations carriers face under Phase II are “clear and consistent.” “The Notice seeks comment on whether the obligations ’should be modified during the proposed 10-year term of support to reflect anticipated advances in technology,'” Verizon said (http://xrl.us/bn73ip). “But, if the obligations are to change during the term of support, the parameters and timing of any changes must be known to bidders at the outset, prior to the solicitation of bids in the auction.” Verizon also said the FCC should determine which areas are eligible for service based on Mosaik data, but allow carriers to suggest corrections, as the commission did under Phase I of the program. “Although Mosaik data is the best available for this purpose, it is not without limitations. ... For example, in some cases, the Mosaik data may indicate that a particular area lacks 3G or better coverage when carrier data may indicate that coverage exists in the same area because of reporting lag times and other issues."

The FCC needs to improve the program and shouldn’t just adopt what it did in Phase I of the mobile program, AT&T said. “Based on the questions and lack of new proposals in the Public Notice, we are concerned that the Commission is poised to rubber stamp the Phase I methodology without giving careful consideration to the fundamental difference in purpose between the two phases,” AT&T said (http://xrl.us/bn73it). The methodology for determining which areas should be served presents the most concern, AT&T said: “The Commission seems guaranteed of disbursing more support than is necessary if it simply applies the Phase I methodology to Phase II."

Rules for Phase II shouldn’t be set in stone while it remains unclear how much good was done in Phase I of the program, the Alaska Rural Coalition said. “Thus far, only the auction portion of Phase I has actually occurred,” the coalition said (http://xrl.us/bn73jb). “There have been no buildouts by carriers using the funds awarded during the auction, and the Commission has yet to gather any data on whether or not the funds awarded have led to substantially improved end-user service, or even to carriers’ completion of the Commission’s service milestones. Unlike the one-time nature of Phase I support, Phase II support represents an ongoing, long-term commitment of significant amounts of public funds.”