Ready the Fatted “CAF”: FCC Takes Further Steps to Finalize $1.9 Billion Connect America Fund (CAF) Phase II Reverse Auction

As we anticipated in a recent advisory, earlier today the FCC formally adopted further plans to implement its pre-auction procedures for the Connect America Fund Phase II auction (the “CAF Phase II Auction”). The agency is also seeking further comment on its proposed application and auction eligibility procedures, auction reserve prices, and bidding procedures.

Through this auction the FCC will distribute up to $1.9 billion over the next ten years to service providers that commit to offer fixed voice and broadband services to residences and small businesses in rural areas that are currently unserved by broadband. Notably, this auction marks the first time that the FCC will distribute ongoing universal support to wireline and fixed wireless competitive providers through the CAF program. In addition, the auction is also notable because it will be the first time the agency will award support through a reverse auction process, which will direct support to those providers submitting the lowest bid using the most robust service technology platform.

Chairman Pai’s comments in support of this latest step towards finalizing the Phase II auction suggest that the Commission will be able to initiate the auction in 2018. As a result, interested participants should immediately begin their due diligence review and evaluation of potential opportunities, and costs, associated with participation in this program.

In doing so we encourage potential participants to review DWT’s prior advisories outlining various aspects of the CAF Phase II auction. Specifically, participants should review our prior advisories outlining areas eligible for support, the criteria that will be used to evaluate bids, and the weighting methodology that will be used to weigh various competing bids.

At the same time, interested parties may also submit comments on the FCC’s tentative conclusions surrounding its plan to use census block groups as the minimum geographic area; its proposed use of both a short-form and long-form application; and its multi-round, reverse auction bidding procedures. The FCC has not yet finalized the comment deadline for the issues raised in this notice, but we expect the deadlines will be announced soon.

DWT continues to advise clients and interested participants on CAF Phase II auction procedures.  Please contact us at your convenience to inquire further about this unique and innovative opportunity to deploy broadband to rural areas.