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FCC Approves CAF Bidding Framework for Competitive ISPs

The FCC has voted on a framework for letting competitive broadband/telco providers including cable ISPs bid for over $2 billion in Connect America Fund (CAF) Universal Service Fund money the price cap carriers—Verizon, AT&T, for example—chose not to take.

The CAF fund is the subsidy for high-cost advanced communications services (to mostly rural areas) that the FCC is migrating from phone to broadband. Incumbents with all that incumbent infrastructure were given first crack at the funds, and took $9 million, but that left $2 billion for competitive carriers.

The framework sets the following requirements for bidders:

"A minimum performance tier that requires bidders to commit to provide broadband speeds of at least 10 Mbps downstream and 1 Mbps upstream (10/1 Mbps) and offer at least 150 gigabytes (GB) of monthly usage.

"A baseline performance tier that requires bidders to commit to provide at least 25 Mbps downstream and 3 Mbps upstream (25/3 Mbps) and offer a minimum usage allowance of 150 GB per month, or that reflects the average usage of a majority of fixed broadband customers nationwide, using Measuring Broadband America data or a similar data source, whichever is higher.

"An above-baseline performance tier that requires bidders commit to provide at least 100 Mbps downstream and 20 Mbps upstream (100/20 Mbps) and offer an unlimited monthly usage allowance.

"A Gigabit performance tier that requires bidders commit to provide at least 1 Gigabit per second (Gbps) downstream and 500 Mbps upstream and offer an unlimited monthly usage allowance."

It also has buildout benchmarks of 40% after three years, 60% after four years, 80% after five years, and 100% by six years.

Smaller ISPs, wired and wireless, were praising the move.

"The American Cable Association applauds the FCC for moving forward on creating a sensible framework for distributing Connect America Fund support through a competitive bidding process in eligible areas served by price cap incumbent carriers," said American Cable Association president Matt Polka.

"The FCC's next task is to develop the detailed procedures necessary to ensure that residents in these eligible unserved areas get the same high-performance broadband service that urban residents enjoy and will have access to over the next decade," he said.

"On behalf of thousands of wireless Internet Service Providers (WISPs) serving more than 3 million consumers across America, the Wireless Internet Service Providers Association (WISPA) is applauding the Federal Communications Commission’s new plan for a competitive 'reverse auction' for broadband deployment subsidies under Phase II of the Connect America Fund (CAF II)," the groups said in a statement.

"The auction will provide an opportunity to bid on more than $200 million per year for the next 10 years to support voice and broadband deployment in unserved areas."