FCC Upholds Bureau Rejection of Three Rural Broadband Experiment Bids
The FCC affirmed Wireline Bureau denial of petitions by three small companies seeking to participate in the agency’s rural broadband experiment program. In an order Thursday, the full commission denied applications for review filed by Last Mile Broadband, Lennon Telephone…
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Co. and Rural Broadband Service Corp. (RBSC), which sought waivers of financial qualification requirements. The companies were among the provisionally selected bidders that the bureau removed from consideration after they didn't provide three years of audited financial statements and/or a credit commitment letter from an acceptable bank. The full commission said the bureau’s strict enforcement of the filing duties was appropriate to ensure the experiments didn't delay offers of model-based Connect America Fund Phase II USF support to price-cap carriers. “Contrary to the suggestion of the petitioners, it was not arbitrary and capricious for the Bureau to apply those requirements evenly to all applicants, particularly given that there were so many other applicants that were able to meet the financial and technical information requirements without waiver,” the order said. “We find that it was appropriate for the Bureau to act expeditiously in order to finalize the list of areas that would be included and excluded from the Phase II offer of support.” The deadline for price-cap carrier CAF Phase II decisions was Thursday (see 1508270068). Commissioner Mignon Clyburn partially dissented, criticizing the “unnecessarily unyielding” denial of the Lennon application. She said Lennon submitted reviewed financial statements consistent with those it uses to receive high-cost USF support. “So, reviewed financial statements are sufficient for rate-of-return carriers to receive approximately $2,000,000,000 in universal service annually, but not sufficient to provide $60,000 in support to the same carrier for a rural broadband experiment?” Clyburn asked. She said the FCC had the means to address any concerns through Lennon’s USF participation. She also said the regulatory "inflexibility" could discourage small entities from participating in USF Phase II competitive bidding and leave some consumers in hard-to-serve areas without broadband. “While I appreciate that strict adherence to the rules may be appropriate for entities that do not currently receive universal service support because the Commission may be unable to recoup funding, that is not the case here,” she said. But the commission said Lennon mistakenly believed the reviewed financial statements were sufficient and didn't even seek a timely waiver. "Applicants were expected to familiarize themselves fully with the Commission's rules and requirements," the order said.