FCC Unveils Rules for First Reverse Auction Under USF
The FCC Wednesday released rules for its first-ever reverse auction, for Phase I of the Mobility Fund, offering $300 million for carriers willing to offer 3G or 4G wireless service in areas of the U.S. found to be unserved. The window for filing short-term applications to participate in the auction opens on June 27, and closes at 6 p.m. July 11. The auction is tentatively slated to start Sept. 27. Winners must deploy service within three years of the award for 4G service, two years for 3G service.
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"In this reverse auction, bidders will indicate the amount of one-time support they need to deploy service meeting rigorous performance standards in unserved areas within the required timeframe,” the FCC said in a news release. “Bidders will compete not only against other carriers that may be seeking support in the same areas, but also against carriers bidding for support in other areas nationwide. Support will be awarded based on the lowest bid amounts submitted, but will not be awarded to more than one provider per area. Successful bidders will be awarded support for an area at the price they bid.” Auction 901 will be a single round, sealed bid auction, the FCC said.
"For too many, dead zones in mobile coverage are too common, and today’s action will help close those gaps,” said FCC Chairman Julius Genachowski. “Through the launch of this Mobility Fund, the Commission has recognized mobility as a universal service priority for the first time. And by using market-based mechanisms, we'll ensure more gaps in mobile coverage are closed, and that every dollar is spent wisely and efficiently.” Phase II of the Mobility Fund, still to come, will provide $500 million annually for ongoing support of mobile services.
The FCC also released a map (http://xrl.us/bm5z8o) of areas eligible for coverage. The map shows unserved areas to be largely where expected -- the Upper Peninsula of Michigan, northern Minnesota and Maine, broadband-deprived West Virginia and vast stretches of the West. The FCC updated its map based on “comments of the 15 carriers that provided sufficiently credible and convincing demonstrations” that areas listed as unserved were really served, and other information, said a public notice released Wednesday (http://xrl.us/bm52eh). “We recognize that no such list will be perfect or perfectly up-to-date,” the notice said. “We are mindful of the Commission’s goal of moving quickly to expand the availability of advanced mobile services by providing one-time support with the limited funds budgeted for this purpose. We also heed the Commission’s warning that more extended dialog and pre-auction review of these issues might risk undue delay in the award of this support.” The FCC decided to include areas served by “unpaved dirt trails where a four-wheel drive vehicle is required, service drives that typically connect to highways and other types of roads, and private roads that are used in areas with logging, mining, oil fields, and ranches” as well as primary roads, secondary roads and local and rural roads and city streets, the notice said.
Among other details, carriers will be required to offer “voice service with coverage of at least 75 percent or more of the designated road miles within the area for which support is provided,” the FCC said. The FCC defines a network as offering 3G service if it achieves outdoor minimum data transmission rates of 50 kbps uplink and 200 kbps downlink at vehicle speeds appropriate for the roads covered. 4G service is defined as offering outdoor minimum data transmissions rates of 200 kbps for uplink and 768 kbps for downlink. “Those parties committing to provide service over a 3G network must do so for at least 75 percent or more of the designated road miles within the relevant area within two (2) years of being authorized to receive support,” the notice said. “Winning bidders committing to provide service over a 4G network must do so for at least 75 percent or more of the designated road miles within the relevant area within three (3) years of being authorized to receive support."
Participants will have to commit to offer support at rates “within a reasonable range of rates for similar service plans offered by mobile wireless providers in urban areas” for at least five years, the notice said. Auction winners must also commit to offering collocation rights to other providers on newly constructed towers that the recipient owns or manages in the area for which it receives support and to offer voice and data roaming rights to competitors consistent with FCC rules. Carriers can only participate if they have been designated as an eligible telecommunications carrier in the tract served and must be able to demonstrate they have “access to the spectrum necessary to satisfy the applicable performance requirements.”