FCC Seeks Quick Auction for Rural Digital Opportunity Fund Support

February 13, 2020 | by Andrew Regitsky

FCC Seeks Quick Auction for Rural Digital Opportunity Fund Support

The FCC, stung by the criticism it’s gotten for its abominable broadband measurement problems and the lack of operable broadband service in too many rural areas, is quickly working to bring its new Rural Digital Opportunity Fund (RDOF) to Eligible Telephone Companies. On February 7, 2020 it released the RDOF Report and Order, and on February 28, 2020, it plans to adopt a Public Notice seeking industry comments on a proposed auction schedule and procedures to distribute the RDOF payments.

The RDOF will use competitive bidding to target up to $20.4 billion over ten years to support gigabit speed broadband networks in areas that lack access to 25/3 (download/upload) Mbps broadband service. It will allocate up to $16 billion in Phase I for support targeting census blocks that Commission data show are clearly unserved by 25/3 Mbps broadband service and at least $4.4 billion in Phase II for unserved locations in partially served census blocks and areas not won in Phase I.

In a draft Public Notice in Docket 19-126, the agency requests comments by March 27, 2020, on the following proposals:

  • Adopting an October 22, 2020 start date for bidding in the Rural Digital Opportunity Phase I auction;
  • Continuing to use census block groups rather than census tracts for the minimum geographic area for bidding even though there are more than 66,000 census blocks compared to 33,000 tracts;
  • Continuing with a two-stage application process (a short and long-form) to establish eligibility for bidding:
  • The short-form application would include information such as applicant ownership information and other information about the applicant’s operational and financial capabilities;
  • The post-auction long-form application would provide information from winning bidders to ensure they have the technical and financial ability to meet broadband deployment obligations and public interest requirements for all carriers receiving support;
  • Bidders stating in advance which states they will bid on;
  • Bidders indicating in their short-form application the performance tier and latency combinations for which they intend to bid and the technologies they intend to deploy to meet the relevant public interest obligations. Additionally, each applicant must indicate whether it has at least two years’ experience providing a voice, broadband, and/or electric distribution or transmission service;
  • Continuing with benchmarks each successful applicant would need to meet regarding its network usage and subscription rates to fulfill the public interest obligations for its selected performance tier and latency combination(s). Specifically, should the successful bidder have to demonstrate it can deliver service to 95 percent of the locations in the geographic area and have at least 70 percent of the population subscribed to both its voice and broadband service?
  • Continuing to use a descending clock auction to identify the providers that will be assigned to receive RDOF support and to establish the amount of support that each bidder will be eligible to receive, subject to post-auction application review:
  • Conducting the auction over the Internet, with bidders uploading bids in a specified file format for processing by the bidding system in sequential bidding rounds;
  • Limiting the availability of bidding information during the auction and adopting limited information procedures for the RDOF auction concerning the application and bidding data that will be publicly available before, during, and after the auction.

While FCC Chairman Ajit Pai is thrilled with the RDOF, as usual it takes Commissioner Jessica Rosenworcel to point out the Fund’s shortcomings. In a masterful partial dissent to the RDOF Report and Order, she writes,

First: We need maps before money and data before deployment. With today’s decision we commit the vast majority of universal service funds—$16 billion!—for the next ten years without first doing anything to improve our maps, survey service accurately, or fix the data disaster we have about the state of service today. That means if your home is marked as served by the FCC’s maps today and it is not, then for the next decade you are on your own. Good luck. It means millions of Americans will slip deeper into the digital divide...

Second: We fail to recognize that cost is a barrier to broadband availability. This proceeding is a missed opportunity to honestly acknowledge that there are more than deployment barriers to broadband—there are adoption barriers too. The FCC could have asked funding recipients to offer a low-cost service for consumers when they are receiving billions in support from the government. But if you comb through the text of this decision, you’ll find we took a pass. That’s unfortunate...

Third: This broadband fund is backward-looking with stale service speeds and data caps. It seems crazy that we are going to sit here today and pronounce what service speeds are adequate ten years hence. But we do just that with the baseline speed of 25 megabits per second that we propose. If you want a demonstration of just how ridiculous that is, know that a decade ago this agency called service at 200 kilobits per second broadband...

In the end, this is not the broadband plan we need. It is not guided by maps. It is not guided by data. It is guided by a desire to rush out the door, claim credit and pronounce our nation’s broadband problems solved.