Both the National Cable & Telecommunications Association and the American Cable Association are in agreement that the FCC needs to set up a process to verify that government broadband subsidies are going to unserved areas rather than to overbuilders of existing broadband service.
The FCC, in implementing its Connect America Fund Phase II of its move of Universal Service Funds from phone to broadband subsidies, proposed to use the National Broadband Map to identify eligible census blocks.
The FCC also proposed that eligibility be based on a definition of available broadband service be tied to a definition of 4 Mpbs downstream and 1 Mbps upstream. But it also recognized that might be tough since the map info was collected on a definition of 3 Mbps/768Kbps.
In comments on the Phase II rollout, both ACA and NCTA urged the FCC to adopt the lower standard. ACA pointed out that the proposal by the price cap LECs to up the standard to 6/1.5 Mbps would bring some census blocks with 4/1 provided by cable operators under the unserved definition. "Such a misguided policy would undermine the FCC’s objective of not providing support where an unsubsidized competitor provides service."
ACA also says the FCC should not make latency or capacity benchmarks part of the unserved definition, at least until it better defines those terms. ACA also says that while the FCC is correct not to treat purely speculative deployments as served areas, it should count those areas where "the provider has publicly announced that service will be available within a reasonable period" if progress toward that service can be documented.
The FCC is also creating an appeals process for cable operators and other competitive carriers to challenge unserved desgnations that would trigger the ILEC support. Both associations agree that the FCC should treat partially served census blocks as ineligible for LEC subsidies, saying it would be too tough to drill down to the sub-census block level.
NCTA has also asked the commission to publish the challenges to the initial census block list and explain why they were or were not accepted. NCTA also wants it to publish the price cap
LEC's acceptance or rejection of support. "[A]llowing providers access to this information benefits the public because providers are less likely to expend their resources to build in new areas where price cap LECs will shortly be providing subsidized service, and can instead direct their buildout efforts to areas that do not receive government support," NCTA said.
In the first phase of the program, the two largest potential recipients, AT&T and Verizon, declined to accept the funding, deciding instead to build out on their own timetable and without the restrictions the FCC put on the funding. They also had to specify where they would deploy and how much of their eligible funding they would use.
The first phase of the fund is $300 million of transitional support as the FCC moves from the old high-cost support mechanisms for price cap carriers to the Connect America Phase II mechanism, in which the FCC will offer $1.8 billion annually to subsidize broadband build-outs in price cap territories via a combination of cost modeling and competitive bidding.
With Verizon and AT&T sitting out, the majority of the Phase I money went unspent and the FCC is currently trying to modify the rules there to make it more attractive to the price cap LECS.