"The task ahead of you requires integrity of planning, especially cost-to-performance analysis with the ability to compare different architectures/deployment options, and insight into potential competitive bids, guided by clear milestones and business objectives along the way." -Raj Singh, CEO, VCTI

Nothing in U.S. history has exposed the rural digital divide as has the COVID-19 pandemic. Too many students in rural communities are being asked to participate in “distance learning” but are being left behind because their community’s infrastructure is insufficient. Adults, too, in rural communities are struggling with access to job listings and unemployment benefit applications as these services are frequently only available online. Without access to broadband, working from home is not an option, nor are the video chat services that many of us use to catch up with our friends and family.

Prior to COVID-19, the FCC announced its next step to bridge the digital divide, the Rural Digital Opportunity Fund (RDOF). This $20 billion program aims to drive better broadband more deeply into the un-served and underserved communities around America. The final list of eligible locations is not yet published (as of this writing) but is expected to include approximately 6 million households.

The auctions for phase 1, with $16 billion allocated, are scheduled to begin on October 22, 2020.

Like its predecessor, the Connect America Fund II (CAF II), winning bids will be determined by a combination of committed speed (up and down) and latency performance. The performance tiers will also be weighted to provide a bias to speeds above 100/20 Mbps. Unlike CAF II, which gave incumbents the right of first refusal, there is no advantage to incumbency in the RDOF auctions.

Incumbents and Independents will be competing to out-underbid each other from the starting gate.

With more competition and less predictability to factor into bid decisions, the caliber of the analysis on prospective markets – the demographics, the services, and the best technology to deploy -- is more critical than ever to the development of bids that will have a high probability of success and profitability.

Develop the Framework

The task ahead of you requires integrity of planning, especially cost-to-performance analysis with the ability to compare different architectures/deployment options, and insight into potential competitive bids, guided by clear milestones and business objectives along the way.

Which takes us to the first best practice. Define the products/services and cost structure needed to win the bid for each specific target market, and the shortlist of deployment architecture options to be modeled.

The weighting gives an advantage to speed and performance, but that does not mean fiber is the only viable architecture. For homes that can’t be viably served by fiber, fixed wireless is a practical and attractive option.

Therefore, your shortlist of deployment options should include both fiber and fixed wireless architectures.

In bidding for multiple markets, maybe even hundreds of communities, establishing standard templates to model against is critical to work through the analytics efficiently. Anticipate running multiple iterations with different architecture criteria so that you can glean insight into the best end state architecture, technology, economic return and bid viability for each target market.

Here are four critical planning analytics that you need to guide your target market selection and bids:

Determine middle mile costs-options-constraints.

For the non-incumbent prospective service provider, understanding the options and costs involved with reaching remote locations is a critical component in building your cost model.

For the incumbent service provider, understanding capacity constraints and any required upgrades are one of the critical foundation data points for your cost model.

Review architecture options.

Analyze fiber reach to DLC/DSLAMs/Routers in current infrastructure (COs/remote cabinets/data centers/substations). Model adding fiber and converting current equipment to Ethernet-based backhaul, or model using wireless backhaul options, when the cost of extending fiber makes the upgrade out of reach.

Model Fiber-to-the-Premises (FTTP) and next generation XGS PON and beyond.

Model Fixed Wireless Access and propagation analysis and bandwidth estimation.

For service providers with cable infrastructure, model fiber closer to the customer, deep fiber and DOCSIS support for Symmetrical.

Evaluate service target penetration by architecture, including hybrid options. What percentage of the market will receive above average vs. baseline vs. minimum speeds? What individual or hybrid architecture delivers the best, broadest coverage?

Model cost and projected revenue per household with each of the service target scenarios. Be sure to include a complete cost per home as well as first cost to upgrade to the service targets and technology.

Preparation for the bidding process will require modeling numerous network scenarios. The fixed wireless modeling must include the specifics of the signal propagation, such as strength and reach, within the target coverage area. An automated planning tool that lets you analyze across technologies, such as fiber and fixed wireless and household demographics, is a necessity.

With focused decisions on fiber and fixed wireless architectures, supported by automated planning tools, you’ll be in a position to undertake in-depth, detailed comparative analysis of hundreds of markets and define your bid packages with greater precision and confidence.

Raj Singh serves as CEO ofVCTI, the broadband network services firm.

The FCC has authorized another $2.6 million in support for rural broadband, the latest in its Connect America Fund Phase II (CAF II) auction outlays. 

The money is going to Armstrong Telecommunications to serve approximately 2,000 people in rural Northwester Pennsylvania with gigabit-speed broadband. 

Related: FCC Gives Out $240M in Rural Broadband Bucks 

“Getting gigabit-speed broadband to rural communities in northwestern Pennsylvania will make a real difference in the region,” said FCC chair Ajit Pai of the latest investment in closing the rural digital divide, a divide that has been put under a spotlight during the COVID-19 pandemic. “Nearly 2,000 rural homes and businesses that don’t currently have broadband service will get connected to some of the highest speed internet available through this support," he said. 

Armstrong has six years to build out that broadband, 40% by year three, then another 20% each of the succeeding three years. 

The 2018 Phase II auction allocated $1.488 billion in an effort to get broadband to 700,000 more rural residents within 10 years, with over half of them getting at least 100 Mbps speeds. The FCC has now authorized over $1.4 billion in 11 tranches.  

The largest incumbent price cap carriers—AT&T, Verizon, CenturyLink—declined about $2 billion in Connect America Fund phase II (CAF II) support for building out broadband to high-cost, generally rural, areas, so the FCC opened that pot of money up to competitors, like cable broadband providers, via auction. 

The FCC has authorized more than $240 million in new rural broadband subsidies for auction winners in nine states. Those include New York, where the FCC has been criticized in some quarters over deciding that its new rural broadband buildout funds would not go to places getting other monies from states or other broadband subsidy programs (like those of the USDA), some areas of New York being a notable examples of that. 

The money is the ninth allocation stemming from the 2018 Connect America Fund (CAF) Phase II auction. The 2018 auction allocated $1.488 billion with a goal of reaching 700,000 unserved homes in the next 10 years. 

"The funding being authorized in New York is the third wave of matching funds provided through the FCC’s partnership with the state’s New NY Broadband Program," the FCC pointed out in announcing the authorizations. 

The other states divvying up the pot are Arkansas, Illinois, Indiana, Kansas, Massachusetts, Missouri, Oklahoma, and Wyoming (see chart below).  

Related: Hawley Seeks Status of Missouri Broadband Buildout 

Missouri is also a notable name in the list. Sen. Josh Hawley (R-Mo.) wrote FCC chair Ajit Pai only the day before (Feb. 12) to ask for the status of broadband buildout money for his state. 

The FCC has now provided an answer. The winning providers have to build out 40% of their homes within three years, and all of them by year six. 

“Today’s announcement is another important step in our efforts to close the digital divide and connect rural Americans with the economic, healthcare, and educational opportunities made possible by high-speed broadband,” said Pai in a statement. “Earlier this week, I had the opportunity to see firsthand how funding provided through the FCC’s Connect America Fund Phase II auction is having a positive impact on the Wind River Indian Reservation in rural Wyoming. And the funding we are authorizing today will bring those same benefits and connect more rural Americans with digital opportunity.” 

Related: FCC Hands Out More CAF II Subsidy Money 

The FCC is under pressure from Capitol Hill to find more money for rural broadband, including from upcoming 5G spectrum auctions, as well as to come up with better data on where that money should be put.

The FCC has handed out the eighth tranche of money stemming from last year's CAF II auction, which had carriers bidding for broadband subsidy money.

Related: More CAF II Bidders Authorized for More Rural Bucks

The latest round of funding will see $89.2 million go to connect 123,000 rural homes and businesses in 21 states over the next 10 years, with the lion's share going to Viasat, which will get $87.1 million of that to connect 121,700 of those homes and businesses in 17 states. The balance is going to three others, LTD Broadband, Horry Telephone Cooperative and JCWIFI.com.

California, the most populous state, is getting the most money with $13,918,362 going to serve 18,795 locations, but coming in second is the least populous state, Wyoming, with $9,301,915 going to serve 9,805 locations.

The CAF II money is being allocated over 10 years to unserved areas in 45 states. The largest incumbent price cap carriers—AT&T, Verizon, CenturyLink—declined about $2 billion in Connect America Fund phase II (CAF II) support for building out broadband to high-cost, generally rural, areas, in 20 states, so the FCC opened that pot of money up to competitors, like cable broadband providers, via the auction.

All that money is coming from the Universal Service fund for high-cost, mostly rural, areas for which there is no business case for building out broadband absent that subsidy.

Bidders on the FCC's Connect America II (CAF II) broadband buildout subsidies wound up agreeing to build out to over 700,000 homes for $1.488 billion, far below the $2 billion over 10 years that was available and way below the starting (reserve) price of $5 billion. The extra $500 million may be added to the remote areas fund, the next broadband subsidy auction in the pipeline.

That is according to the results of the CAF II auction, which closed Aug. 22. The FCC said that more than half of the locations (713,176 to be exact) that ISPs agreed to serve will get download speeds of at least 100 Mbps. 

Almost 20% will get 1 gig service, and all but a fraction (.25%) will get at least 25 Mbps, more than double the CAF minimum of 10 Mbps.

Related: FCC Approves Final Pieces of CAF II Auction

The money will be allocated over 10 years to unserved areas in 45 states.The largest incumbent price cap carriers—AT&T, Verizon, CenturyLink—declined about $2 billion in Connect America Fund phase II (CAF II) support for building out broadband to high-cost, generally rural, areas, in 20 states, so the FCC is opened that pot of money up to competitors, like cable broadband providers, via auction. 

All that money is coming from the Universal Service fund for high-cost, mostly rural, areas for which there is no business case for building out broadband absent that subsidy. The FCC gave incumbent telcos the first shot back in 2015, though incumbents could jump back in as well, as some did--winning bidders included Verizon ($9,476,934 for 3,361 locations in seven states) and Frontier ($51,553 for 23 locations in one state), both former Bells.

“The successful conclusion of this first-of-its kind auction is great news for the residents of these rural communities, who will finally be able to share in the 21st-century digital opportunities that broadband provides,” said FCC chair Ajit Pai in a statement.

“By tapping the mechanisms of the marketplace, the Phase II auction served as the most appropriate and cost-effective way to allocate funding for broadband in these unserved communities, bringing the highest-quality broadband services to the most consumers at the lowest cost to the ratepayer.”

Other winning bidders of note included Viasat with $122,499,877 for 190,595 in 20 states. Winning bidders must build out to 40% of homes and businesses within three years of becoming authorized for the money and all of them by year six, with 20% increases each year after year three. 

"This Connect America Fund auction is a major win for consumers and for all of us who want all Americans to have access to broadband Internet access and who believe federal funds should be used efficiently to achieve that purpose," said American Cable Association President Matt Polka. "The winning bidders for this auction will deliver to consumers in high-cost areas higher-performance broadband service using far less universal service support than the price cap carriers that received model-based support are now doing in the areas they elected to serve. This auction, while certainly requiring fine-tuning, establishes the paradigm for awarding by auction model-based support in price cap territories when the non-auction approach is expected to sunset in a few years."

To check out all the winning bidders and bids, go here.

The FCC says bidding has concluded in the CAF II advanced communications subsidies auction, though it will be "a few" days before the results are made public and the winning bidders identified.

The FCC gave incumbent telcos the first shot at its Connect America Fund (CAF) funds to deliver fixed broadband to rural communities. Beginning June 24, it gave competitors a shot at those funds in round two (CAF II), though incumbents could jump back in as well.

What is being bid on are subsidy monies to provide service in census blocks in states where the price cap carriers declined the support. 

Related: FCC Approves Final Pieces of CAF II Auction

Cox, Altice USA, Verizon, Frontier and Cingular were among those approved to bid. 

FCC chair Ajit Pai had encouraged participation by cable and satellite operators, rural co-ops, rural telcos and others.

Ten price cap carriers got first crack at the subsidy money in 2015. What they left on the table is being offered to rural electric cooperatives, fixed wireless providers, cable companies, and satellite providers (the incumbent local exchange carriers who passed on it in 2015 can also bid).

There was $198 million in annual support available in the auction (or $1.98 billion for 10 years). The Phase II budget was actually $2.15 billion, but the FCC early on set aside $170.4 million to dole out via a New York State broadband subsidy program. Winners will get their funds in monthly installments over those 10 years. Winners must provide "at least one broadband and voice service at rates that are reasonably comparable to the rates for similar service in urban areas.

They also must meet various targets, including: 40 percent of the required number of locations in a state by the end of third year of support; an additional 20 percent in each subsequent year; and 100 percent by the end of the sixth year of support.

The FCC granted New York state a waiver to use the CAF II subsidies for its own competitive New York Broadband Program for providing broadband in unserved rural areas, subject to conditions to ensure "broad participation and oversight."

The FCC Tuesday (July 24) began auctioning billions in broadband buildout subsidies to cable operators and other competitors to the incumbent telcos.

The FCC gave incumbent telcos the first shot at its Connect America Fund (CAF) subsidies to deliver fixed broadband to rural communities. Now it is giving competitors a shot at those funds in round two (CAF II), though incumbents can jump back in as well.

Round one of the Connect America Fund Phase II Auction (auction 903) began at 10 a.m. Rounds are six hours, and bidding is currently every other business day, which means the next round will be July 26, then Monday, July 30. The FCC could shorten rounds and increase the frequency to goose the bidding, as it did with the broadcast incentive auction, which was also a reverse auction.

In fact, it will move to daily, six-hour rounds starting with that July 30 round.

Related: FCC Approves 220 Applicants for $1.98 Billion CAF II Auction

Ten price cap carriers got first crack at the subsidy money in 2015. What they left on the table is being offered to rural electric cooperatives, fixed wireless providers, cable companies, and satellite providers (the incumbent local exchange carriers who passed on it in 2015 can also bid).

Cox, Altice USA, Verizon, Frontier and Cingular have all been approved to bid. 

FCC chair Ajit Pai has encouraged participation by cable and satellite operators, rural co-ops, rural telcos and others.

Up to $2 billion in subsidies will be available over the next decade to deliver broadband to unserved rural areas as part of the FCC's ongoing transition of its advanced communications Universal Service Fund. 

Related: FCC Approves Final Pieces of CAF II Auction

"Through this first-of-its-kind multiround reverse auction, a wide variety of providers are competing for universal support funding to expand broadband deployment," Pai plans to tell Congress at a Hill hearing Wednesday (July 25). "The reverse auction mechanism will ensure that this money is distributed efficiently and that we get the most bang for our buck."

A reverse auction means the low bidder wins. What is being bid on is subsidies for providing service in census blocks in states where the price cap carriers declined the support, "extremely high-cost census blocks" excluding New York (see below), Alaska and the territories, and "certain other census blocks that were removed from the offer of model-based support." Winners will have to provide annual reports and build-out certifications. 

There is $198 million in annual support available (or $1.98 billion for 10 years). The Phase II budget was actually $2.15 billion, but the FCC early on set aside $170.4 million to dole out via a New York State broadband subsidy program. Winners will get their funds in monthly installments over those 10 years. Winners must provide "at least one broadband and voice service at rates that are reasonably comparable to the rates for similar service in urban areas.

They also must meet various targets, including: 40 percent of the required number of locations in a state by the end of third year of support; an additional 20 percent in each subsequent year; and 100 percent by the end of the sixth year of support.

The FCC granted New York state a waiver to use the CAF II subsidies for its own competitive New NY Broadband Program for providing broadband in unserved rural areas, subject to conditions to ensure "broad participation and oversight."

Click here to check out the qualified bidders.

The FCC voted Tuesday (Jan. 30) on the final touches on its bidding framework for the $2 billion reverse auction of Universal Service Fund subsidies for broadband deployment.

It also has resolved outstanding challenges to earlier auction decisions.

The auction will commence July 24, with applications to participate due by March 30 for up to $1.98 billion over the next 10 years. FCC chair Ajit Pai encouraged participation by cable and satellite operators, rural co-ops, rural telcos, and others.

The FCC gave incumbent telcos the first shot at its Connect America Fund subsidies to deliver fixed broadband to rural communities.

Now it is giving competitors a shot at those funds, though incumbents can jump back in as well.

RELATED: FCC Identifies Targets for CAF II Funds

The FCC is simplifying bidding options and allowing for bidding by smaller companies, and won't require companies to identify every area they will serve before bidding.

The largest incumbent price cap carriers — AT&T, Verizon, CenturyLink — declined about $2 billion in Connect America Fund phase II (CAF II) support for building out broadband to high-cost (generally rural) areas, in 20 states, so the FCC is opening that pot of money up to competitors, like cable broadband providers, via auction.

All that money is coming from the Universal Service fund for high-cost, mostly rural, areas for which there is no business case for building out broadband absent that subsidy.

In February, the FCC voted to establish rules for handing out the money and sought comment on how it should structure the bidding.

The FCC has taken a big step toward is auction for up to $2 billion in broadband subsidies to primarily rural areas as it tries to close the digital divide via its Connect America Fund (phase II) of Universal Service Fund subsidies. It said this week it has identified the unserved areas that will get the money, which is collected in the form of fees levied on providers--and passed along to subscribers on their monthly bills--to help provide advanced communications to low income and hard-to-reach areas.

The largest incumbent price cap carriers—AT&T, Verizon, CenturyLink—declined about $2 billion in Connect America Fund phase II (CAF II) support for building out broadband to high-cost, generally rural, areas, in 20 states, so the FCC is opening that pot of money up to competitors, like cable broadband providers, via auction.

All that money is coming from the Universal Service fund for high-cost, mostly rural, areas for which there is no business case for building out broadband absent that subsidy.

In February the FCC voted to establish rules for handing out the money and sought comment on how it should structure the bidding, with final comments due by Oct. 18. The CAF II auction is scheduled to begin next year.

The FCC voted unanimously in August to give the go-ahead to that framework and the next phase of the CAF subsidies.

 The FCC is auctioning the CAF II money, available over 10 years, to cable and telco ISPs to build out the almost 1 million homes and businesses in the contiguous 48 states the FCC has identified as currently not served by high-speed broadband (defined as 10 mbps downstream, 1 upstream).

“Closing the digital divide is my number one priority, and through this innovative Connect America Fund auction, we are poised to take the next big step in reaching that goal,” said FCC Chairman Ajit Pai of identifying the unserved locations.  “In rural America, broadband opens the doors of opportunity by connecting remote communities to global markets, jobs, education, health care and information.”

The auction is scheduled to begin in 2018.