CAF II Auction Winners Redwire and Viasat Petition FCC For ETC Designation
February 20, 2019 – The FCC’s Wireline Competition Bureau is seeking comment on two separate petitions for designation as an eligible telecommunications carrier (ETC) filed by Connect America Fund (CAF) Phase II auction winners Redwire, Inc. and Viasat Carrier Services, Inc.[1] If you’re interested, comments on either petition are due on or before March 6, 2019. Reply comments are due March 13, 2019. Redwire is seeking ETC designation in Tribal lands in Oklahoma, while Viasat CS is seeking ETC designation in parts of Alabama, California, Florida, and West Virginia.
Each ETC petition is before the FCC, rather than a state public utility commission because in the case of Redwire, it seeks to serve Tribal lands which are outside the jurisdiction of any state public utility commission. In all four states where Viasat CS seeks ETC designation, the state commissions have declined to exercise jurisdiction to designate Viasat CS as an ETC. Below is a review of the core requirements for being designated as an ETC, followed by a look at each petition.
What Requirements Must A Company Meet To Be Designated As An ETC?
But first, why are Redwire and Viasat applying for ETC designation? They need it to receive universal service fund support – the CAF II auction support they will receive as winning bidders. Section 254(e) of the Communications Act states that “only an eligible telecommunications carrier designated under Section 214(e) shall be eligible to receive specific Federal universal service support.”[2]
Under Section 214(e)(2), state public utility commissions have the primary role in designating common carriers as eligible telecommunications carriers.[3] It’s their domain, unless they reject it for some reason. If that happens, a company looking for ETC designation can ask the FCC to do it:
In the case of a common carrier providing telephone exchange service and exchange access that is not subject to the jurisdiction of a State commission, the Commission shall upon request designate such a common carrier that meets the requirements of paragraph (1) as an eligible telecommunications carrier for a service area designated by the Commission consistent with applicable Federal and State law.[4]
So that’s what happened here. Redwire seeks to serve Tribal lands which are outside the jurisdiction of any state public utility commission. In all four states where Viasat CS seeks ETC designation, the state commissions have declined to exercise jurisdiction to designate Viasat CS – or any other satellite provider – as an ETC. Viasat was a winning bidder in 20 states, so presumably in 16 of those states, the state public utility commission has exercised jurisdiction over satellite providers.
What are the requirements to be designated as an ETC? A carrier must offer the USF-supported services throughout its ETC designated service area either using its own facilities or a combination of its own facilities and resale of another carrier’s services. It also must advertise the availability and cost of those services. It’s up to the FCC to define the services that are supported by the USF mechanisms.
The last time the FCC updated the definition of services that are supported by the USF mechanisms was in the 2011 USF/ICC Transformation Order. All USF recipients must offer voice telephony service. Additionally, as a condition of receiving USF support, carriers must offer broadband Internet access service.[5] So what is voice telephony service? The FCC defines it as this:
[V]oice telephony services must provide voice grade access to the public switched network or its functional equivalent; minutes of use for local service provided at no additional charge to end users; access to the emergency services provided by local government or other public safety organizations, such as 911 and enhanced 911, to the extent the local government in an eligible carrier's service area has implemented 911 or enhanced 911 systems; and toll limitation services to qualifying low-income consumers.[6]
The definition of voice service focuses on functionalities, not the specific technology used to provide the service. In other words, an ETC may use any technology to provide voice telephony service.[7] This is very important because nowadays, many of the CAF II auction winners provide voice service using VoIP, which occupies a regulatory grey area – not a telecommunications service but not an information service either. What if this proceeding were taking place in Minnesota, where interconnected, fixed VoIP service is considered to be an “information service” under the Communications Act.[8] Can a company seeking ETC designation meet the voice telephony service requirements using an information service? Based on the FCC’s determination that “ETCs may use any technology in the provision of voice telephony service,” the answer is yes.[9]
There are other requirements too: it must be offered as a standalone service, the monthly service price must be reasonable, and any state-based obligations must be met. There are different requirements in different states and when the FCC makes the ETC determination, it too has different requirements.
OK, so what about broadband? What are the requirements? Well, it’s not as complicated as voice. Broadband is broadband – the capability to transmit and receive data from all or substantially all Internet endpoints. As for speeds, the particular USF program will dictate what must be provided. So if a CAF II auction winner bid to offer 100 Mbps service, then it must be able to provide that speed. If it doesn’t it is not meeting the broadband requirement.
Redwire’s ETC Petition – We Have No Network, But Will Build One With USF Support
Redwire, a Tribal entity owned by Otoe-Misouria Development Authority, is seeking ETC designation in 1,541 census blocks in Oklahoma, all of which is within the Tribal trust lands of the Otoe-Misouria Tribe of Oklahoma. Redwire intends to meet its CAF II obligations – offering voice and broadband services – by deploying a wireless network. In its petition, Redwire states that its wireless network “will utilize state-of-the-art technology,” enabling Redwire to offer up to 1 Gigabit service with low latency.[10] To be clear, Redwire was created to participate in the CAF II auction, meaning it really doesn’t have any facilities yet. It will start building a network once it gets CAF II money.
As for spectrum, according to Redwire’s spectrum access attachment to its CAF II auction application, Redwire will use unlicensed spectrum, and hopefully licensed spectrum. Here is what Redwire said in its auction application:
Redwire, Inc. will utilize a combination of available spectrum in both unlicensed and licensed bands. The first spectrum choice will be to use the 5 GHz bands, U-NII-1: 5150 - 5250 U-NII-2A: 5250 - 5350 MHz U-NII-2C: 5470 - 5725 MHz U-NII-3: 5725 – 5850. The second spectrum choice will be the 3.65 band that is currently allocated along with the 3.65 CBRS band that is currently under FCC rulemaking. The new CBRS band will provide up to 150 MHz in a combination of dedicated spectrum ownership and shared spectrum access. The third spectrum option is to obtain licensed spectrum. We have been working on solutions in the 600 MHz, 2.5 GHz, and AWS bands but do not have any solutions at this time.[11]
The network will be built out in conformance with the CAF II service deployment timeline – or deadlines if you like. Redwire will utilize interconnected VoIP to provide voice telephony service.[12] It pledges that it will provide service on a common carrier basis.
Viasat’s ETC Petition – The First Ever Satellite Broadband Provider ETC
Viasat Carrier Services, Inc. is a wholly-owned subsidiary of CAF II auction winner and satellite broadband provider Viasat, Inc. Viasat CS is seeking ETC designation in 10,272 census blocks in Alabama, California, Florida, and West Virginia. As required, Viasat CS will offer the services supported by federal universal service support mechanisms: voice telephony and broadband services. Viasat CS will use VoIP technology to provide voice service on a common carrier basis. In its petition, Viasat CS states its voice telephony service will include all of the capabilities required by the FCC’s rules.
Viasat CS will use its own facilities – its parent company Viasat, Inc.’s facilities really – or a combination of its own facilities and resale of another carrier’s services to provide voice telephony and broadband services. Viasat, Inc. is “a facilities-based satellite provider with its own fleet of satellites, earth stations, gateways, switching facilities, and other associated facilities.”
Viasat has two networks currently providing service to end users – ViaSat-1 and ViaSat 2. ViaSat-1, a first generation high-capacity Ka-band spot-beam satellite, was placed into service in January 2012. ViaSat-2, a second-generation high-capacity Ka-band satellite design, was launched in June 2017 and went live late February 2018. Viasat plans to have two more networks, each using a third-generation high-capacity Ka-band satellite design ViaSat-3. These were labeled as the Network at 79º W.L. and the Network at 88.9º W.L. in Viasat’s auction application.
What Will Happen? What Should Happen? What Will The FCC Do?
The FCC’s Wireline Competition Bureau will probably grant each petition. It will be interesting to see what the FCC says though. Redwire doesn’t have any facilities in place right now because it was formed solely to participate in the CAF II auction. Redwire will start building out a wireless network as soon as it knows it will receive CAF money, but in order to receive that money, Redwire must be designated as an ETC. Of course, if at any time after being designated as an ETC, Redwire does not meet the CAF II buildout requirements, its USF support will be turned off.
If Viasat CS’s petition is approved, it will become the first ever satellite provider to be designated as an ETC. Correct? Also, Viasat winning CAF II auction support presents an interesting situation. Viasat’s satellites already cover the areas its seeks ETC designation. Viasat doesn’t have to do anything different than it is already doing, right? It just has to continue providing service. It may have to conduct a new marketing campaign, and there are numerous reporting requirements that it will have to meet. So stay tuned for the FCC’s decision.
***** footnotes *****
[1] Wireline Competition Bureau Seeks Comment On Petitions For Designation As An Eligible Telecommunications Carrier For The Purpose Of Becoming Eligible To Receive Connect America Fund Phase II Auction Support, WC Docket No. 09-197, Public Notice, DA 19-101 (Feb. 20, 2019).
[2] 47 U.S.C. § 254(e)(1).
[3] 47 U.S.C. § 214(e)(2).
[4] 47 U.S.C. § 214(e)(6).
[5] Connect America Fund et al., WC Docket No. 10-90 et al., Report and Order and Further Notice of Proposed Rulemaking, FCC 11-161, ¶77-78 (Nov. 18, 2011), aff’d, 753 F.3d 1015 (10th Cir. 2014) (USF Transformation Order).
[6] 47 C.F.R. § 54.101(a)(1).
[7] The FCC has said “ETCs may use any technology in the provision of voice telephony service.” USF Transformation Order ¶80.
[8] See Charter Advanced Services (MN), LLC v. Nancy Lange, Case No. 17-2290 (8th Cir. 2018).
[9] USF/ICC Transformation Order at ¶80.
[10] Redwire Petition at p. 4.
[11] Redwire CAF II auction application, spectrum access attachment, available at https://auctionfiling.fcc.gov/form175/search175/index.htm.
[12] Interconnected VoIP is a service that: (1) enables real-time, two-way voice communications; (2) requires a broadband connection from the user’s location; (3) requires Internet protocol-compatible customer premises equipment (CPE); and (4) permits users generally to receive calls that originate on the public switched telephone network and terminate calls to the public switched network. 47 C.F.R. § 9.3.
