Organizations representing broadband providers have asked the FCC to modify its proposal for the Connect America Fund (CAF II) Auction. The CAF II auction will award funding rejected by price cap carriers in parts of 20 states. The auction is designed to award funding to the provider that offers to deploy service at the lowest level of support.

In comments filed with the FCC, one broadband provider organization expressed concern that the proposed auction design could prevent the full amount of available funding from being awarded, while another argued against package bidding. At least two comment filings argued that measures aimed at preventing collusion were too harsh and could deter small broadband providers from participating.

CAF II Auction Proposal
The FCC last week provided details on its auction proposal, which uses a weighting system that gives preference to service providers that offer to build networks supporting higher speeds and lower latency. At least two comment filings asked the FCC to prevent providers from bidding in a low-latency or higher-bandwidth category using any technology that had not yet demonstrated its ability to support those requirements in real-world deployments – a recommendation that appears to be directed at satellite and fixed wireless providers.

The filings making that recommendation came from ITTA – The Voice of America’s Broadband Providers, which represents medium-size providers, and from a rural coalition including NTCA – The Rural Broadband Association as well as electric cooperatives and organizations representing electric cooperatives.

The rural coalition also asked the FCC to impose additional requirements on satellite and fixed wireless providers. Recommendations included requiring wireless operators to provide spectrum maps and requiring satellite providers to submit details about their capacity. In addition, the rural coalition recommended the FCC impose substantial penalties for providers that misrepresent their capabilities.

The rural coalition filing also expressed concern that under certain conditions, the proposed auction design could prevent the full amount of available funding from being awarded. The filing details two scenarios under which this might occur, including when a large bidder exits late in the auction process or in certain conditions involving package bidding.

The American Cable Association (ACA), which represents smaller cable companies, also expressed concern about package bidding, arguing that it would overly complicate the auction process. In addition, ACA and the rural coalition asked the FCC to reconsider rules aimed at preventing collusion that limit an independent consultant’s ability to work with multiple bidders. The organizations argued that there is a limited number of experienced consultants and that small companies might not be able to afford a consultant unless the cost could be spread across several bidders working together with the consultant.

In addition, the rural coalition recommended that bidders should be required to plan for broadband take rates of 70%.