Cable, Rural Groups Oppose Hughes CAF II Recon Bid; WISPA Backs Narrower Weight Gap
Small-cable and rural electric/telco groups opposed Hughes Network Systems' petition for FCC reconsideration of bid weights in a planned Connect America Fund Phase II reverse auction of broadband subsidies. The Wireless Internet Service Providers Association backed Hughes' request to narrow the weighting gap between high-capacity and low-capacity broadband performance tiers in the CAF II auction, which they both say unduly favors fiber efforts. WISPA opposed Hughes' request to reduce high-latency penalty, and it opposed a Pennsylvania recon petition seeking help in obtaining CAF II support. Verizon was supportive of the latter. Comments were posted Thursday and Friday in docket 10-90.
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The FCC bid weights favor higher-speed, low-latency performance tiers in the reverse auction that will award $2 billion in subsidy support over 10 years to low bids (less weight lowers a bid): the "minimum" tier (10/1 Mbps) is weighted at 65, "baseline" (25/3 Mbps) at 45, "above baseline" (100/20 Mbps) at 15, and "gigabit" (1 Gbps/500 Mbps) at zero; high-latency service is weighted at 25 and low-latency service at zero (see 1702230019 and 1703020029). Commissioner Michael O'Rielly partially dissented and said he would welcome recon proposals. Hughes' petition said higher speeds and lower latency shouldn't be so heavily favored, given consumer satisfaction with satellite broadband; it proposed bid weights of 25 Mbps for minimum service, 15 Mbps for baseline service, 10 Mbps for above-baseline service and zero for gigabit service, with a latency penalty of no more than 10 (see 1704210016).
The American Cable Association said Hughes' proposals would "unnecessarily" delay an auction and "disserve consumers" who have been waiting "far too long" for broadband service. "[A]lthough ACA does not agree with every aspect of the weighting methodology, the Commission’s methodology is far superior to the methodology Hughes proposes in its petition, which will lead to the deployment of low-speed, high latency services that cannot meet current consumer demand," said its opposition. "Hughes fails to meet the standard for Commission reconsideration by not identifying any material error or omission in the Order or raising any facts not known or not existing until after its last opportunity to respond."
ACA Senior Vice President Ross Lieberman said the auction is needed to bring broadband to areas traditionally served by price-cap telcos that declined the FCC's initial offers of CAF II support. The FCC's February order "took an important step towards meeting their needs, and it appears that the Commission is finally getting close to holding the auction," he emailed Friday. "The FCC's decision wasn't any one provider's preferred approach, and it was indisputably a reasoned decision based on a record. Most importantly, it is far more balanced and likely to result in efficient auction outcomes than the Hughes proposal. Now is not the time for the FCC to second guess its 3-0 decision, but to move forward with delivering broadband to the unserved." A Hughes official didn't comment.
Rural electric power and telco interests said Hughes failed to raise new arguments or explain the basis for factual assumptions. "It is well settled that parties should not use petitions for reconsideration to 'relitigate issues' that the Commission has already decided unless 'new facts or circumstances' call the Commission’s decision into question. ... Hughes’s petition raises no new facts or circumstances," said the joint opposition of the Association of Missouri Electric Cooperatives, Midwest Energy Cooperative, HomeWorks Tri-County Electric Cooperative, Alger Delta Cooperative Electric Association, Great Lakes Energy, NTCA, Utilities Technology Council, and National Rural Electric Cooperative Association. They said the Hughes arguments "also overlook the fact that high latency services remain unable to support several important applications, including some that are critical to public health and safety."
WISPA said it backed Hughes' request to narrow the weighting gap among performance tiers from 65 Mbps to 25 Mbps. The FCC's bid matrix "disproportionately favors Gigabit and Above Baseline Tier proposals at the expense of 25/3 Mbps Baseline Tier service, which will result in subsidizing fewer areas at higher support amounts," said WISPA's comments. "A narrower gap of 25 ... would direct more support to 'reasonably comparable' broadband service." WISPA opposed Hughes bid to reduce the weight for high-latency service.
WISPA "strongly" opposed the "preferential treatment" sought by Pennsylvania agencies. "The Commission should not reward Pennsylvania for its failed policies of incentivizing only ILECs to deploy broadband service to unserved areas of the Commonwealth," WISPA wrote. Verizon, which declined the FCC's initial CAF II offers, provided some support for the state in comments.