Robust Challenge Process Seen Key to Proposed New CAF Auction
Raising an issue that has arisen repeatedly about the Mobility Fund Phase II program, commenters urged the FCC to create a robust challenge process if it moves ahead with auction of subsidies in areas completely or almost completely served by unsubsidized broadband competitors. Form 477 data, by itself, isn’t good enough, commenters said. Rural telco interests earlier raised concerns about an auction in general (see 1903110032). The FCC sought comment in a December Further NPRM (see 1812120039) and replies came through Tuesday in docket 10-90.
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“The primary reason commenters object to the auction as proposed is because it does not contain a challenge process,” USTelecom commented. Most agree “there is clear and significant evidence already in the record that 477 data is flawed,” the group said. “As nearly every party commenting states, Form 477 data is simply not ‘up to the task’ of accurately identifying the presence of a competitor willing to provide broadband and voice services to an entire rural study area,” said NTCA. “It ought to be telling to the Commission that even providers that stand to benefit from the competitive overlap process recognize that Form 477 alone cannot form the basis of overlap findings.”
The Wireless ISP Association backed a robust challenge process. Comments were otherwise as expected, WISPA said. “The record unsurprisingly reflects division between those representing legacy rate-of-return carriers that seek a very narrow definition of ‘substantial overlap’ and infrequent reverse auctions, and those representing competitive providers that seek a more expansive definition and more frequent reverse auctions,” the group said.
CAF II appeared to go smoothly, but it’s too early to say whether it was a success since “no new facilities have been deployed under that reverse-auction subsidy program,” Adtran said. “ADTRAN agrees with those commenting parties that explained that a poorly-designed subsidy program could actually reduce rather than expand broadband deployment.” The telecom-gear vendor sought a challenge process that works: “Simply relying on the Form 477 data to determine which areas are almost entirely overlapped by an unsubsidized competitor is likely to overstate the areas where the new auctions should be utilized.”
GVNW Consulting said the FCC can't rely on Form 477 data alone. Comments showed "the need for a robust challenge process since the current Form 477 data submitted to the Commission does not accurately identify the presence of a competitor in rural study areas and may falsely overstate the number of locations actually served with broadband,” GVNW said.
WTA sees problems with a reverse auction to award subsidies. Auctions like CAF II “employ weighting factors that focus only upon bare future service promises with no consideration of local presence, staffing, experience and investment factors relevant to the ability to keep such promises” and “allow participation by any and all ‘eligible’ entities whether they have had any prior interest or experience in the auctioned study area,” WTA said. It said an auction requires a “robust, fact-based challenge process.”