USTelecom submitted a proposal for a state- and...

concept is “complicated” here by the commission’s need to support affordable broadband for as many consumers as possible, while staying with fixed budgetary constraints, USTelecom said. A dearth of bidders in some areas, “combined with the potential for strategic behavior,” could lead to bids that are far above the forward-looking costs of service in those areas, the association said. The commission should set an overall cap on funding for some geographic regions, and use an “optimization algorithm” to decide which combination of bids would produce the greatest number of locations served within the budget established, USTelecom said. The association suggested the commission use state-boundaries to define the geographic areas. Another set of issues is how bids within each state should be structured, USTelecom said, encouraging a system to place bids for all eligible census blocks within specific counties. “Counties are large enough to enable a winning county-wide bidder to realize many of the scale economies that bidders could otherwise capture only through package bidding if census tracts were the geographic bidding unit,” it said. Each bidder would specify the support amount it requires for each county, along with the number of eligible locations it commits to serve within the county. A “statewide algorithm” would select a combination of bids that would lead to the largest number of new served locations within the state’s budget, USTelecom said. “This approach will simultaneously maximize bidding competition within a state, reduce the exposure problem for bidders, and do so without creating the computational challenges of user defined package bidding,” it said.