ACA to FCC on CAF II Auction: Simplify

The American  Cable Association said the FCC has to simplify its CAF II auction framework if it wants to get the most fiscal bang for the buck.

That came in comments on the FCC proposal for handing out the money.

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.

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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.

ACA said the proposed auction design is "inordinately" complex, which will at best deter and at worst thwart, participation by many, including the "small town cable operators" FCC Chairman Ajit Pai has said he wanted to encourage participation.

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ACA said it wanted the FCC to rework and simplify the auction, which means, at a minimum, eliminate package bidding and take steps to avoid "complex gaming strategies."

ACA also argued that to help participation by smaller operators, the FCC should ensure that third-party consultants can be shared among multiple bidding parties so long as any cross talk does not facilitate prohibited communications.

ACA's bottom line, literally: "The Commission should change course and make the auction design and associated procedures more amenable to participation by all interested parties."

John Eggerton

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.