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ACA Wants FCC to Fatten CAF

7/25/2016 8:00 AM Eastern

WASHINGTON — The American Cable Association agrees that, when deciding on doling out broadband funds, the Federal Communications Commission should give weight toward more advanced networks and higher-quality service rather than going with the lowest bidder.

 

That opinion came in formal comments filed at the commission ahead of the ACA’s national convention, The Independent Show, with the National Cable Television Cooperative in Orlando, Fla.

 

The FCC voted in May on a framework for letting competitive broadband and telco providers, including cable ISPs, bid for more than $2 billion in Connect America Fund (CAF) Universal Service Fund money that the biggest carriers — Verizon and AT&T, for example — chose not to take.

 

The CAF fund backs building out high-cost advanced communications services (to mostly rural areas) that the FCC is migrating from phone to broadband. Incumbent local-exchange carriers had first crack at the money and took $9 billion. That left $2 billion over 10 years for competitive carriers, and the FCC is making it available through, appropriately enough, competitive bidding.

 

The FCC proposed that the funds not just be awarded to the lowest bidder, as that would tend to lead to lower-performance networks and the FCC wants to encourage high-speed everywhere. Cable operators and other competitive carriers would be entering markets where they have not built out infrastructure, and would want to get enough of a subsidy to build out a product at competitive speeds. They might also be facing incumbent LECs that turned down the money the first time but now want to bid on upgrading networks in some parts of their territory.

 

The FCC asked for input on how to weight different bids for different tiers of service. The ACA suggested factoring in what consumers are going to want in terms of speed and data usage over the program’s 10-year period, and what consumer preferences will be in urban areas for the two different levels of latency envisioned in the program (satellite broadband has higher latency than wired broadband) over the program period.

 

The ACA also said the formula should use weighting that normalizes deployment costs based on the technology being used. The group noted as an example that it costs 450 times more to provide fiber to the home in a new market than to deploy satellite broadband, as the satellites are already in place.

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