The FCC voted today in favor of two important items that will deliver more funding for broadband to unserved rural areas and ensure that all USF funding is targeted to those areas that truly are unserved by requiring a new broadband deployment data collection. The FCC approved a Notice of Proposed Rulemaking (NPRM) for a new “Rural Digital Opportunities Fund” or RDOF, the next iteration of the Connect America Fund (CAF) for areas served by price cap carriers. The RDOF will disburse $20.4 billion in support over 10 years, with the first phase presumably occurring in 2020. The FCC also approved a Report and Order and Second Further Notice of Proposed Rulemaking for the Digital Opportunity Data Collection (DODC), which will collect more granular location data than the Form 477.

The following describes key aspects of both items and how they could impact clients based on the draft documents released prior to today’s meeting. In the coming weeks, JSI will provide further analyses of both, including opportunities to submit comments favorable to your company in the RDOF NPRM proceeding, how to comply with the new data collection, and ways that JSI will be assisting in this process.

Digital Opportunity Data Collection
Pressure has been mounting for the FCC to do something about the outdated and often flawed Form 477 data, particularly as broadband funding needs to become increasingly targeted and not duplicative or in places with an existing competitor. Throughout the year the issue has been the subject of Congressional hearings and letters to the FCC by members of Congress urging the Commission to implement a new system, arguing that the Form 477 has outlived its purpose and is not a good fit for accurately reporting broadband deployment. The FCC notes the “compelling and immediate need to develop granular, high-quality fixed broadband deployment data to improve our ability to target support from our Universal Service Fund programs.” Although the DODC does not replace the Form 477 yet, the FCC does make some changes to the Form 477 to reduce burdens, especially for mobile wireless filers.

The DODC will be a completely new data collection that requires all fixed broadband providers to submit “geospatial broadband coverage maps,” or polygons, showing much more precise coverage than the census block level data collected in the Form 477. The FCC has tasked USAC with developing a new portal to accept the broadband coverage maps. Broadband providers will have to submit a separate coverage polygon for each combination of download speed, upload speed, and technology; where different maximum speeds are offered to residential and business customers; and where offered speeds vary by location or distance from network facilities. After USAC announces that it has completed development of the new portal, fixed broadband providers will have six months to make the initial submission. Providers must then submit updates within six months of completing any broadband developments or acquiring new broadband facilities and certify by June 30 each year that the data as of Dec. 31 of the previous year continues to be accurate.

In addition to the data collection having a more granular geographic boundary than the Form 477 census block approach, the FCC further makes the data collection more precise by requiring that filers can only include locations in their polygons where they have a current broadband connection, or they could provide it within 10 business days of a customer request and without an extraordinary commitment of resources or costs. For wired providers, this means that they would only have to complete a drop cable. For fixed wireless, “the provider must have already installed enough base stations to cover and meet reasonably anticipated customer capacity demands.” USAC, along with other FCC offices, will develop the portal, filing process, and technical guidance; and the portal will allow local, state, Tribal, and the public to view and dispute coverage (“crowdsourcing”).

Rural Digital Opportunity Fund (CAF Phase III)
In the Transformation Order, the FCC ruled that after the price cap carriers end their CAF II model-based funding, a new “CAF Phase III” reverse auction would occur in areas where they serve that still lack broadband. This model support, which runs for six years, ends on December 31, 2020, with an optional one year of support if a price cap carrier does not win in the auction or chooses not to bid. The FCC has now renamed this “CAF Phase III” as the RDOF. In today’s NPRM, the FCC proposes to distribute $20.4 billion for 10 years of support, in two phases:

  • Phase I has a budget of $16 billion and will target census blocks in price cap areas where Form 477 data shows no 25/3 Mbps broadband. Given next year’s end of the six-year timeframe for price cap model support, RDOF Phase I must be held in 2020, which will not be sufficient time for the new DODC to be completed and utilized for this reverse auction.
  • Phase II will have the remaining budget of $4.4 billion and will follow and use the granular broadband deployment data collected in the DODC. It will fund areas where partial census blocks lack 25/3 Mbps, as well as any blocks that were not awarded funding under RDOF Phase I.

The RDOF will not provide funding for any services less than 25/3 Mbps, such as 10/1 Mbps services that were funded in the CAF Phase II auction. Otherwise, the FCC proposes generally to use the same methodology as the CAF Phase II auction for the RDOF, including a challenge process to allow competitors to update Form 477 data; a multi-round, descending clock auction format; reserve prices determined by the price cap model; and the same service milestones, reporting requirements, and application process.

If you have any questions on these items, please contact John Kuykendall or Cassandra Heyne in the Maryland office at 301-459-7590.