CAF I funding was wasted money. CAF II ROFR funding was wasted money. Three-quarters of CAF II auction funding is wasted money. Is it too late for RDOF? That’s now up to the Rosenworcel FCC.
Recently, the FCC received a letter from members of Congress urging it to use the RDOF long-form application process to ensure that winning bidders are capable of meeting their obligations. Congress wants the FCC to scrutinize the winning bidders to ensure that the bidders will actually be able to deliver on their obligations. Since the RDOF obligations don’t entail any measurable requirements for 3-4 more years, Congress’ concern is well-founded. In particular, scrutiny is warranted for two types of winning bidders.
First, the Commission allowed certain companies to bid beyond their capacity to build fiber networks. The fundamental obligation of most RDOF recipients is to build networks capable of delivering Gigabit service. I submit that if any of the top twenty-five winning fiber bidders didn’t design and build as many fiber miles last year as they must construct this year, next year, and the year after, then such companies are in no position to do so.
To honor Congressional intent, safeguard the public’s money and deliver necessary services to rural America, I suggest the Commission should:
- Require financial projections that include the number of fiber miles to be constructed each year.
- Require documentary evidence that backs up the projections of construction costs.
- Require that the applicant has designed, built and/or managed fiber construction in the past year or two years that is within 50% of the pace of construction for the projected first three years. The pace of the first three years' construction must meet the RDOF 40% service milestone.
- As an alternative to number 3, the applicant could provide a complete network design for the first three years' construction, by which the Commission would be able to measure future construction progress.
- Require a commitment from fiber manufacturers and construction firms for the first year of construction with documentary evidence that the material costs and unit labor costs are consistent with the financial protections.
- At the end of the first year after receiving funds, and the second year after receiving funds, require that the actual construction is consistent with the pace of the financial projections.
Second, the Commission allowed certain companies to bid beyond today’s capacity of wireless technology. Nowhere in rural America do fixed wireless networks have the capacity to deliver Gigabit service to every home and business in any census block group. That’s the proper test, because that’s the obligation of a winning bidder. Last Spring, the Commission punted on the question of technological capability. Though the Commission collects billions of data points on broadband deployment, it behaved as if something that doesn’t exist in its data is already widely deployed. The Commission shouldn’t wait for three to four years to discover whether such capability will develop. As part of the long-form review, the Commission should require documentary evidence that currently rural homes and businesses over large rural areas, at least the size of a census tract, receive Gigabit service using the technology that is being proposed to meet the RDOF obligations. If the Commission grants funding to such technologies, it should then require the RDOF recipient supply real-world customer data with speed tests every six months until the RDOF 40% service milestone is met.
Our bidding consortium was successful in the RDOF auction as it was in the CAF auction, so I trust no one will take my proposals as sour grapes. In the CAF auction, our bidding consortium was the largest winning bidder at the Gigabit tier and the members of our consortium have already used the funding to build more miles of fiber and passed more homes and businesses with Gigabit service than any other CAF bidder. In the RDOF auction, our bidding consortium was the third largest winning bidder both in terms of funding and locations.
Unless remedied by the Rosenworcel FCC, the Pai FCC’s errors will be devastating to rural communities all across the country. We, those of us who live and work in rural America, have a stake in the FCC getting it right. Let’s get to work.