The FCC this week released lists of companies that have submitted complete and partially complete applications to participate in the upcoming $2 billion Connect America Fund (CAF) Phase II reverse auction to award broadband funding rejected by the nation’s largest local service providers in 20 states.
Among the potential CAF auction bidders that have submitted complete applications is Verizon, a company that rejected all CAF funding offered for its local service area when it was offered several years ago.
The FCC said it received 47 complete applications and 230 incomplete applications for the CAF auction. Both lists contain numerous rural telcos. Electric utility companies and smaller cable companies also can be found on both lists.
Potential CAF Auction Bidders
On the list of potential CAF auction bidders that have submitted partially complete applications are several of the larger price cap carriers, including Cincinnati Bell, Frontier, and Windstream, along with satellite broadband providers Hughes Network Systems and Viasat. U.S. Cellular, the wireless company owned by TDS, also is on that list, as is rural cable consolidator Vyve Broadband.
Those companies that submitted incomplete applications have until June 5 to provide additional information. The CAF auction, scheduled to begin July 24, will award funding to an unserved or underserved area to the carrier that bids to provide service at the lowest level of support.
Auction Rules
Price cap carriers in 2015 had a choice of accepting or rejected CAF-II broadband funding offered by the FCC on a state-by-state basis based on a cost model. If carriers accepted funding for a state, they were required to commit to deploying broadband to virtually all unserved locations in that state. In the CAF auction, however, they will have the option of bidding to provide service for just a portion of a state. They also will have the option of bidding on areas outside their local service territory.
Any of those factors could motivate a company like Verizon that initially rejected CAF funding to participate in the CAF auction. Another consideration is that fixed wireless technology has advanced considerably in the time since CAF funding was offered and that could cause some companies to rethink their participation in the program. It’s important to note, however, that no funding awarded for a location will exceed what the incumbent carrier was offered for that location.
Hughes and Viasat could be at a disadvantage in the CAF auction, as the FCC has set up an auction mechanism that will favor companies that bid to offer the highest broadband speeds and lower latency, and satellite broadband service may not meet the requirements to be considered a lower-latency service.
The list of potential CAF auction bidders, including those that submitted complete and incomplete applications, can be found at this link.
