FCC's CAF II Auction Closes

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."

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.