FCC Rural Broadband Experiments.August.2014

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FCC Rural Broadband Experiments
Panelists:
Carol Mattey, Deputy Chief
Wireline Competition Bureau
Jonathan Chambers, Chief
Office of Strategic Planning & Policy Analysis
Moderator:
Edyael Casaperalta, coordinator
Rural Broadband Policy Group
Center for Rural Strategies
Rural Broadband Experiments Webinar
Edyael Casaperalta
Center for Rural Strategies
Edyael joined Rural Strategies after serving as a consultant for
our efforts in the Gulf Coast in the fall and winter of 2006-2007.
She directs our telecommunications policy efforts and
coordinates the Rural Broadband Policy Group, a national
coalition of rural groups advocating for policies that increase
access to fast, affordable, and reliable Internet service in rural
areas. She also advices the Immigration and Rural Communities
Working Group of the National Rural Assembly. Edyael received a
B.A. from Occidental College in Los Angeles and a master's
degree in Latin American Studies at Ohio University in Athens.
Rural Broadband Experiments Webinar
Carol Mattey
Deputy Chief of the Wireline Competition Bureau
Mattey has served in her current position since April 2010. Prior to
that she was Senior Policy Advisor on the Omnibus Broadband
Initiative, focusing on developing universal service recommendations
for the National Broadband Plan. She has over 25 years of
experience developing telecommunications public policy and
advising private sector clients on the intersection of business and
regulation. Mattey was a director at Deloitte & Touche LLP, providing
consulting services to telecommunications and media clients, and
private equity firms. She joined Deloitte in 2005 after over 10 years
at the FCC, where she was Deputy Bureau Chief of the Wireline
Competition Bureau from 2000-2005. She holds a J.D. and M.A. in
Public Policy Analysis from the University of Pennsylvania, and B.A.
from the University of Virginia.
Rural Broadband Experiments Webinar
Jonathan Chambers
Chief of the Office of Strategic Planning and Policy Analysis
Mr. Chambers has been at the FCC since May 2012, first as senior
adviser and then as acting chief of the Office of Strategic Planning
and Policy Analysis (OSP).
He previously served in government from 1987 to 1994, as the
Republican staff director of the Senate Committee on Commerce,
Science and Transportation, legislative director for Sen. John C.
Danforth (R-Mo.) and as a professional staff member to the U.S.
Senate Select Committee on Intelligence.
Chambers’ private sector experience has involved roles in law, public
policy and strategic planning working for wireless, cable, and Internet
service providers in the United States and in Europe.
Rural Broadband Experiments
Carol Mattey, Deputy Chief, Wireline Competition Bureau
Jonathan Chambers, Chief, Office of Strategic Planning & Policy Analysis
Overview
• $100 million budget
• Three categories of experiments in price cap territories:
– Category 1: $75 million for projects offering at least 25 Mbps/5 Mbps in high-cost areas ($20M perproject cap)
– Category 2: $15 million for projects offering at least 10 Mbps/1 Mbps in high-cost areas ($7.5M perproject cap)
– Category 3: $10 million for projects offering at least 10 Mbps/1 Mbps in extremely high-cost areas ($5M
per-project cap)
• Entities may choose to submit multiple bids in the same category and different proposals in
multiple categories; each entity, including its affiliates, is subject to a $20 million limit
• Support will be provided in equal monthly installments over a 10-year term
• Winning bidders must be designated eligible telecommunications carriers, but can wait to
obtain designation from the state or FCC until after notification that they have won
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Eligible Areas
• Projects must propose to serve census blocks in price cap areas
– Category 1 and 2: census blocks must be high-cost areas, as determined by FCC’s Connect America Phase
II cost model
– Category 3: all price cap locations in the census block must be extremely high-cost, as determined by
FCC’s model
• Census blocks must be unserved by an unsubsidized competitor offering voice service and
Internet access providing 3 Mbps downstream/768 kbps upstream
• Wireline Competition Bureau has released a list of census blocks eligible for rural broadband
experiment support: http://www.fcc.gov/document/release-eligible-census-blocks-ruralbroadband-experiments
– Eligible census block list is available at: http://www.fcc.gov/encyclopedia/rural-broadband-experiments
– Challenge process underway to determine whether “unserved” blocks are in fact served
• Check FCC’s Phase II Challenge Process website before bidding to see list of blocks that are subject to
challenge: http://www.fcc.gov/encyclopedia/connect-america-phase-ii-challenge-process
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Connect America Phase II - Initial Eligible Areas Map
An interactive map of census tracts eligible for Connect America Phase II to help
identify possible project areas is available at: http://www.fcc.gov/maps/fccconnect-america-fund-phase-ii-initial-eligible-areas-map
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Selection Methodology
• The most cost-effective projects in each category will be selected until the budget is exhausted:
– Categories 1 and 2: most cost-effective bids as compared to model-calculated support will be selected
• Example: FCC’s cost model calculates $100,000 support to serve the 100 locations in census block A
for 10 years ($1,000 per location) and $200,000 to serve the 100 locations in census block B for 10
years ($2,000 per location). Bidder 1 proposes to serve census block A for $90,000 for 10 years ($900
per location); Bidder 1 will have a score of .90 ($900/$1,000). Bidder 2 proposes to serve census block
B for $150,000 ($1,500 per location); Bidder 2 will have a score of .75 ($1,500/$2,000). Bidder 2’s
project is more cost-effective.
– For categories 1 and 3, entities may also improve their cost-effectiveness score by proposing to serve
additional locations that are extremely high cost
• Example: Assume $100,000 in support is available to serve the 100 locations in high-cost census block
C for 10 years ($1,000 per location) and $200,000 in the support to serve the 100 locations in high-cost
census block D ($2,000 per location). Bidder 1 proposes to serve census block C and an additional 50
locations from an adjacent extremely high-cost census block for $90,000 for 10 years; the support for
all of the locations proposed to be served is $600 per location ($90,000/150), so Bidder 1 will have a
score of .6 ($600/$1,000). Bidder 2 proposes to serve census block D for $150,000 for 10 years
($1,500 per location), which is a score of .75 ($1,500/$2,000). Bidder 1’s project is more cost-effective.
– Category 3: most cost-effective bids based on a support per location basis will be selected
• Example: Bidder 1 proposes to serve the 100 locations in census block C for $500,000 for 10 years
($5,000 per location). Bidder 2 proposes to serve the 100 locations in census block D for $300,000 for
10 years ($3,000 per location). Bidder 2’s project is more cost-effective.
• Entities proposing to serve only Tribal census blocks will receive a 25 percent bidding credit
9
Application Requirements
• Applications due no later than October 14, 2014 by 6 PM EST. Entities will file applications
online using the Commission’s Auction System.
• The Wireline Competition Bureau recently released greater details regarding the application
process:
• Applicants will have a filing window of at least 15 days before the October 14th deadline
in which to complete applications.
• Applications will include:
 Background information on the applicant, direct and indirect ownership interests, a
description of the project, and planned voice and broadband offerings, including
Lifeline offerings
 Descriptive data forms will include information such as the type of provider and
technology to be deployed, whether the applicant currently is an ETC, and whether
the applicant will elect to receive 30 percent of its funding upfront
 Bid forms will include census block identification numbers, total amount of requested
support (annual support x 10), and total number of eligible locations and extremely
high-cost locations, if any, to be served
• Following OMB approval, the Bureau will release a public notice announcing the opening of the
application filing window and releasing the bid form and descriptive data form.
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Post-Selection Review of Winning Bidders
• A public notice will be released announcing the winning bidders
– Within 10 business days, winning bidders must submit certain financial and technical
information
– Within 60 days, winning bidders must submit a letter from an acceptable bank committing to
issue a letter of credit (LOC)
– Within 90 days, winning bidders must submit appropriate documentation of its eligible
telecommunications carrier designation in all areas for which it will receive support
• If winning bidder deemed financially and technically qualified, entity must
submit a LOC that must remain open and renewed until 120 days after support
term ends
11
Conditions for Rural Broadband Support
• Build-out obligations
– 85 percent of required number of locations by the end of the third year; 100 percent of required locations
by the end of the fifth year
– Accelerated option: may request 30 percent of support upfront; if requested, must deploy to 25 percent
of required number locations within first 15 months
– Voice and broadband services must meet certain defined requirements, including latency, usage, and
reasonably comparable pricing
• Accountability requirements, including reporting and certifications, 10 year record retention,
and compliance reviews
• Cooperation with data gathering efforts
• Failure to comply will result in support reductions, then a draw on the letter of credit to
recover past support and a prohibition on future support; may also result in forfeitures
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Resources
• January 2014 Commission order adopting rural broadband experiments:
http://www.fcc.gov/document/fcc-oks-voluntary-experiments-testing-impact-technologytransitions-0
• July 2014 Commission order implementing rural broadband experiments:
http://www.fcc.gov/document/rural-broadband-experiments-order
• List of census blocks eligible for rural broadband experiment support:
http://www.fcc.gov/document/release-eligible-census-blocks-rural-broadband-experiments
• August 2014 Bureau public notice detailing rural broadband experiment application process:
http://www.fcc.gov/document/rural-broadband-experiments-application-process-public-notice
• “What’s New” on Connect America Fund home page:
http://www.fcc.gov/encyclopedia/connecting-america
13
Contact Information for Additional Questions
Ian Forbes
Attorney Advisor, Telecommunications Access Policy Division, Wireline Competition Bureau
Phone: (202) 418-0091, Email: [email protected]
Heidi Lankau
Attorney Advisor, Telecommunications Access Policy Division, Wireline Competition Bureau
Phone: (202) 418-2876, Email: [email protected]
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The National Rural Assembly and the Rural Broadband
Policy Group are supported in part by grants from:
Visit us at: National Rural Assembly
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