The FCC has identified affordable and universal broadband access as a national priority, relying on the market in most cases but on USF support in others to allow providers to offer service in communities with some of the most challenging economics in terms of network deployment. Last October, the FCC voted to create the Connect America Fund (CAF), which will allocate USF support to the construction and maintenance of broadband networks for the first time in the country's history.
In comments filed on Jan. 19, ACA noted that the FCC decided that for an initial period, CAF money would automatically flow to so-called price cap phone carriers, giving them a right of first refusal on a state-by-state basis to serve their traditional study areas. To the extent these price cap carriers decline the funding in certain states, the FCC proposes a competitive auction process to allocate funding to other willing broadband providers.
In terms of funding rules, ACA strongly supports competitive bidding in the study areas of price-cap carriers, with funds awarded to the lowest bidder and contingent upon meeting a host of performance standards. This reverse auction process is clearly the most efficient mechanism to provide quality service to consumers in high-cost areas for the lowest cost to the American public, which funds the USF program through monthly fees added to landline, wireless, and VoIP phone bills. With adoption of the additional proposals submitted by ACA in its comments, the trade group is confident that the FCC can conduct successful auctions.
To that end, ACA urged the FCC that to maximize the chances of a successful CAF distribution scheme, the agency must have clear goals focused on bringing quality broadband service to high-cost areas for the lowest cost; on making it objective, with all public interest obligations well-defined and known in advance; and on ensuring competitive neutrality, especially so that the maximum number of providers may participate in the auction.
ACA stressed that in order to eliminate bureaucratic obstacles to ACA members' participation in the auctions, the FCC had to revise the Eligible Telecom Carrier (ETC) qualification process, which as currently implemented is both onerous for smaller providers and is not necessary under the CAF program. ACA believes the FCC has the authority to design the ETC designation process for broadband service and should assert exclusive jurisdiction. Such exclusive jurisdiction is appropriate to support the USF's new mission of focusing on broadband deployment and facilitating a successful competitive bidding process.
ACA added that the existing state ETC designation process is inherently burdensome because it potentially requires that carriers file multiple applications, the FCC does not control the timing of decisions, and states often impose burdensome requirements that could severely affect providers' bids in the reverse auction or performance afterward.
In its comments, ACA submitted the following recommendations for achieving an effective auction process:
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