RDOF Hopefuls Look Toward 2020 Auction Rulemaking

ISPs expect wide participation in the first phase of the $20 billion Rural Digital Opportunity Fund auctions FCC Chairman Ajit Pai signaled he wants in 2020, they said in interviews this month. RDOF replaces the Connect America Fund phase II USF program that supports deployment in high-cost, sparsely populated areas (see 1907110031). "We'll start to see the pace of things quicken in 2020," said Mike Saperstein, USTelecom vice president-policy and advocacy.

A rulemaking could be on commissioners' meeting calendar as early as January or February, industry officials said. "We know it's a priority of the chairman's," said Kelley Drye's Tom Cohen, America's Communications Association outside counsel. "We support moving expeditiously." Holding the reverse auction in 2020 is "doable," Cohen said, because FCC staff gained experience with the auction structure in CAF II auctions. To hold RDOF auctions, the agency must adopt a rulemaking, set auction procedural rules and release a short-form application, he noted.

"If the goal is to conduct an auction in 2020, the earlier the order, the easier that will be to effectuate," said ITTA President Genny Morelli.

Activity heated up in recent weeks (docket 19-126), leading many to speculate a rulemaking could come.

Lobbying

Structural changes that would slow down implementation aren't expected. Stakeholders are lobbying on smaller tweaks.

ITTA wants the FCC to modify letter of credit requirements, give more weight to higher latency bids than the CAF II auctions did, and remove proposed subscriber milestones, Morelli said. "By and large, the procedures utilized in CAF II seem to make sense."

NCTA members are concerned about requirements providers be designated eligible telecom carriers (ETCs) to participate, said Jennifer McKee, associate general counsel. "That's a hurdle" for some cable operators, McKee said. She acknowledged revision would need a statutory change for VoIP providers to meet eligibility requirements, unless the FCC were to forbear ETC mandates here.

USTelecom wants to ensure traditional ILECs that don't win RDOF bids for their territories are supported during the move from CAF to RDOF subsidies. "There will be a period of transition," said Saperstein. "We want to make sure that goes right." During CAF II, some ILEC territories were auctioned after an ILEC decided not to participate in the first round. RDOF is the first time an incumbent might bid on high-cost support and lose. During such a transition, "it comes down to who has what obligations and when they come into effect," Saperstein said. "The new winner should be responsible for providing voice service from day one. That's the definition" of ETC.

Morelli said she wants "adequate transition support for price cap carriers" participating in Connect America.

High-cost USF support move from an ILEC to a new ETC is like a baton hand-off in a relay, said Mike Romano, NTCA senior vice president-industry affairs and business development: "The timing of that transition is important."

In the first RDOF round, which could allocate as much as $16 billion, applicants will bid on only areas considered unserved by broadband, which the new program defines as 25/3 Mbps upload/download. Romano said that could inadvertently cut off support for prior CAF winners that had obligations to build 10/1 but built faster fiber to the home. Those areas would be considered served, so they would be ineligible for early RDOF support, but the networks "still may not be self-sustaining" due to very low subscriber levels and maintenance costs, he said. "It's a deterrent to building better networks."

Performance Tiers

Most National Rural Electric Cooperative Association members think 25/3 is too low, said Brian O'Hara, senior director-regulatory issues for telecom and broadband. He's thankful the FCC is dropping 10/1 for RDOF. "If we're going out for a 10-year build, we've got to be thinking about the future." He suggested bidders that plan gigabit speeds get precedence over lower tiers if they come in under the FCC cost model. "If you have two gigabit bidders, they should continue to bid against each other, but if it's a gigabit and 25/3," the better network should win once it's below budget, he said.

Preference should go to ISPs that can deliver symmetrical speeds, said Derrick Owens, WTA senior vice president-government affairs. He noted reliability is important, as is ability to serve subscribers regardless of on-the-ground conditions. "Localized maintenance, that should count," said Owens. Voice and E-911 capabilities are important, too, he said.

Hughes urged FCC set rules on performance metrics for hybrid networks that combine satellite broadband with terrestrial technologies such as fixed wireless to fill in when low-latency service is needed, such as during videogaming, said Jennifer Manner, senior vice president-regulatory affairs. "It's an option we'd like to pursue." Hughes wants the FCC to reconsider an increased penalty for latency. In an FCC filing posted Monday in docket 19-126, Viasat said facilitating the use of hybrid technologies could bolster the competitiveness of the RDOF auction.

"We like that the FCC is continuing the technology neutral approach," said Justin Forde, Midco senior director-government relations. "We deliver broadband in multiple ways, and we'd like the RDOF to focus on areas that are truly unserved." Forde would like areas to come up for bid in lots smaller than the census blocks in for the CAF II to allow providers like his cable operator to deliver broadband to neighbors just outside service territories.

The Wireless ISP Association seeks a 50/5 tier, just above the lowest 25/3, said Louis Peraertz, vice president-policy. WISPA prefers the FCC delay its first auction until it updates its broadband maps with serviceable location data, or at least seeks more accurate polygon mapping data.

CenturyLink has been in talks with the agency "at the conceptual level" on how the FCC might update location counts tied to winning bidder obligations during the course of the 10-year program, said Randy Clarke, vice president-federal regulatory affairs. "It's an opportunity to take another look at better data when it's available." That's so the FCC can use the best data to calibrate buildout obligations, Clarke said.

WISPA questioned a proposal providers meet subscriber milestones as high as 70 percent of their territory, said Peraertz: "There's no way for a universal service participant to know or control the demand." Romano said NTCA doesn't mind the concept of subscribership metrics but thinks the 70 percent mark is too high for new entrants, especially if there's an incumbent ISP delivering even 10/1.

RDOF "is one of the most important universal subsidy projects the current commission is starting," said Peraertz. "They're going to take their time to get the framework right."