FCC Eyes Actions This Month on CAF II Auction, New Economics Office, Broadcast Filings
The FCC plans to take steps Jan. 30 to begin a Connect America Fund auction in July, said Jay Schwarz, wireline aide to Chairman Ajit Pai, in a speech Monday at the National Rural Electric Cooperative Association in Palm Desert, California. He was referring to the CAF Phase II reverse auction of up to $2 billion in cumulative broadband-oriented subsidies over 10 years for fixed services in areas traditionally served by large wireline incumbent telcos. The agenda also is seen including items on a new FCC economic analysis office and on broadcasters' documentation.
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"Today, Chairman Pai shared with his colleagues proposed bidding rules and procedures for this CAF 2 auction," Schwarz said, according to his written remarks. "He also has proposed an order resolving all remaining petitions for reconsideration regarding CAF 2 that will clear the way for the auction. At our next meeting on January 30, the Commission is expected to vote on these proposals -- the last significant step before we can begin the application process and get this auction underway." The preliminary agenda for the meeting is due Tuesday.
The agenda is expected also to include a draft order to create an office of economics and analytics, an FCC official told us. The new office would have four divisions -- economic analysis, industry analysis, auctions and data -- all of which would borrow from other parts of the agency, the official said. "This has the potential for a significant reorganization of the agency. The chairman held an all-hands meeting laying out his plan." An FCC spokesman didn't comment. "Movement" toward creating a new economics office was expected in early 2018, said Wayne Leighton, chief of the Office of Strategic Planning and Analysis, speaking in early December. The new office will allow economists to ask questions "early and consistently" in proceedings, and provide better advice to commissioners, he said (see 1712050035). Some have questioned whether the new office will lead to better economic analysis (see 1712210032).
In addition, the agenda is expected to include a proposal to allow broadcasters to upload contracts to their online public inspection file rather than file them with the FCC, agency and industry officials told us. The proposal will be the latest item in the agency’s media deregulation effort and isn't expected to be controversial, industry officials said. Under the current rule, broadcasters must file hard copies of contracts and organizational documents with the FCC, said Wilkinson Barker broadcast attorney Howard Liberman.
Schwarz encouraged electric cooperatives to participate in the CAF II auction. Most electric cooperatives are not in the broadband business, but "the early success of those who are has been pretty remarkable," he said. "Overall, the number of Americans receiving affordable, high-speed broadband Internet access from electric coops is still small, but together these examples add up to a big deal because they shatter some myths that have held back our efforts to connect rural America."
The first "myth" is that some parts of rural America are too expensive to connect, Schwarz said. "People have said there just aren’t enough customers or the terrain is too difficult to justify the costs," he said. "But in community after community, we see electric co-ops rolling out networks to unserved households in remote areas without significant subsidies. .... Second, these success stories blow up the idea that rural broadband service must inevitably be second-rate broadband service."
"Why are electric co-ops so well-suited to the task of delivering broadband to rural America?" Schwarz asked. "For starters, you already own much of the infrastructure. You already own the poles. You already have access to the rights of way. In many instances, you already have a fiber plant to help manage your electric grid. This dramatically lowers deployment costs. But perhaps your biggest asset is your membership and the trust you have built within the communities you serve. ... You also already provide essential electrical service to more than 40 million Americans. Closing the digital divide will require connecting many offline Americans who live and work within your service footprint. Common sense and economics tells us that we should try to leverage this relationship and your expertise."