RLECs Urge FCC to Limit Proposed New CAF Auction; WISPA, NCTA Seek Wider Use

WTA and ITTA opposed using reverse auctions to award Connect America Fund support in broadband service areas "entirely" or "almost entirely" subject to competitive overlap, as proposed by the FCC. WTA rejected the approach used in the recent CAF Phase II subsidy auction for areas traditionally served by price-cap carriers. RLECs "deserve better than the proverbial kick in the seat after decades of providing service to consumers in hard-to-reach rural areas," said ITTA. A group of 56 Concerned Rural LECs said an auction should be used only in legacy rate-of-return areas 100 percent overlapped by qualifying competitors. The FCC in December said complete overlap was too stringent a standard, noting eight RLEC study areas with full percent overlap and seven with at least 95 percent, collectively receiving $12 million yearly.

An auction should target only RLEC study areas with at least 99 percent overlap, said NTCA and USTelecom, a standard WTA and ITTA could accept. "Moving to a search for study areas 99 percent overlapped is the logical next step," said NTCA, suggesting there would be about 10 affected areas. Dropping below 99 percent "is unnecessary and the FCC should use extreme caution in removing support from carriers that have made prior investments with the expectation of support," said USTelecom. RLEC consulting group FWA sought a "cautious approach."

NTCA urged a data-driven challenge process to confirm 99 percent overlap in areas and said any interested bidders should be required "to make detailed, upfront showings of their technical capability for delivering" on auction promises. RLEC consultants Vantage Point Solutions (here) and TCA (here) also sought a challenge process to determine competitive overlap, citing Form 477 data as unreliable. A group of 13 Midwest Carriers urged the FCC not to act against telcos that legitimately convert subscribers to broadband-only lines. Triangle Telephone Cooperative Association said it shouldn't suffer because others "game" such conversions.

The Wireless ISP Association supported the FCC's reverse auction proposals, with modifications. It's concerned the FCC may rely on "outdated information" derived from Form 477s, also urging a challenge process. Then, "the Commission should conduct simplified reverse auctions that are open to any broadband provider," said WISPA. "Areas eligible for auction should be census blocks where an unsubsidized competitor or a combination of unsubsidized competitors overlaps the carrier’s study area by 50 percent or more. Because the auctioned areas would be smaller census blocks, not census block groups, build-out milestones should require completion within five years."

The auction effort is "long overdue" but there's "no reason to limit competitive bidding only to those rate-of-return study areas with more than 95 percent competitive overlap," said NCTA. "Such an approach artificially and unnecessarily limits the number of areas eligible for competitive bidding." Don't "concoct a new mechanism" for distributing subsidies, said Adtran. "The CAF Phase II auction worked reasonably well," and regulators and providers "have experience with that process." It urged using "the CAF Phase II procedures as proposed" in the FNPRM, particularly "the same performance tiers and latency metrics."

The National Tribal Telecommunications Association backed a tribal broadband factor (TBF) proposed in the FNPRM. "Carriers serving rural Tribal areas experience a unique set of circumstances that increase not only deployment costs, but also the ongoing costs of operations and maintenance," said NTTA. Adtran backed NTTA's proposal for increasing tribal broadband support by reducing a BLS $42 a month per line funding threshold by 25 percent to $31.50. NTCA said the TBF should apply to all entities serving tribal areas.