June 18, 2019 – Conexon, LLC has asked the Federal Communications Commission to declare that Wisper ISP, Inc. is in default of its Connect America Fund (CAF) Phase II compliance obligations in the state of Kansas.[1] Conexon asserts that Wisper should be deemed to be in default because Wisper misstated its broadband speed obligations in its Kansas eligible telecommunications carrier (ETC) application, which has already been granted.

Conexon made the request in a June 12, 2019 filing opposing Wisper’s petition for waiver of the February 25, 2019, deadline for Wisper to obtain ETC designation in Oklahoma. Most of the Conexon filing argues Wisper did not act in good faith to obtain ETC designation in a timely manner. This blog post focuses on the portion of the Conexon filing that addresses Wisper’s Kansas ETC petition and designation.

For those that don’t know, Wisper was the winner of the second-largest amount of funding in last year’s CAF Phase II auction – $220.3 million to provide broadband service to just over 80,000 locations in rural areas in six states: Arkansas, Kansas, Illinois, Indiana, Missouri, and Oklahoma. Wisper was awarded a total of $1.6 million to serve 414 locations in nine Kansas counties with broadband service that provides speeds of 100 Mbps for downloads and 20 Mbps for uploads. Prior to the CAF Phase II auction, Wisper was not an ETC in any state.

Conexon is a broadband consulting company that helps plan, design, and construct fiber networks. Conexon participated in the CAF Phase II auction as part of the Rural Electric Cooperative Consortium, another big winner of funding.

As Conexon explains in its filing, when Wisper applied for ETC designation in Kansas, Wisper incorrectly stated its broadband speed obligations in the areas of Kansas where it was a winning bidder in the CAF Phase II auction. Specifically, in its ETC application submitted to the Kansas Corporation Commission (KCC), Wisper incorrectly stated that it is obligated to provide broadband service with speeds of at least 25 Mbps for downloads and 3 Mbps for uploads in its CAF II-supported areas of Kansas.[2]

Actually, Wisper was awarded CAF II funding in nine Kansas counties to provide broadband service with speeds of at least 100 Mbps for downloads and 20 Mbps for uploads (the above baseline performance tier). Despite this fact, the KCC, which apparently failed to verify the information Wisper submitted, granted the application, designating Wisper an ETC in its CAF II areas in Kansas.[3]

If you’re still reading, here’s the part of Conexon’s filing that will make you go hmmm...

Wisper made the same inaccurate representation about its CAF Phase II broadband performance obligations, representing that its CAF II broadband performance obligation was to provide only 25/3 Mbps broadband service, in all six of its initial ETC applications. In reality, Wisper’s actual CAF II obligation is to provide 100/20 Mbps broadband service in most areas where Wisper was declared the winning bidder in the CAF II auction.[4]

Well, Wisper filed its Kansas ETC petition three months after the CAF II auction closed, so maybe it forgot the broadband speeds it was obligated to provide. But then again, Wisper only placed bids in Kansas for the above baseline performance tier – speeds of 100/20 Mbps and usage allowance of 2 TB. It didn’t place any bids requiring 25/3 Mbps.[5] So it’s hard to understand how this got messed up. And, for Wisper to misstate its broadband speed obligations in every initial ETC petition is hard to believe.

But wait, there’s more. Conexon points out that Wisper corrected the erroneous information in its initial ETC applications in every state but Kansas:

In the majority of the states where Wisper sought ETC designation status following the CAF II auction, Wisper eventually supplemented the record in some manner to correct the fundamental error regarding Wisper’s CAF II broadband performance obligations, once the error was identified by state officials or another party (e.g., Conexon). However, Wisper never corrected the record in Kansas.[6]

So, what’s really going on here? Some type of gamesmanship? An overworked telecom law attorney? An honest-to-god mistake? A rush job? Whatever the case may be, this does not make Wisper look good.

The KCC also looks bad here. It seems the KCC fell short with respect to due diligence. Of course, state regulatory commissions assume an ETC applicant would never willfully provide misleading or false information. But still, every critical piece of information in an ETC petition must be verified. That’s why they are lengthy, fact-intensive exercises. And, it should be noted, the ETC applicant also verifies all critical information before the application is handed in. But, in actuality, the KCC probably thought “OK the FCC has defined broadband as 25/3 Mbps, so that’s what an ETC will be required to provide in order to receive federal funding.” That’s probably what happened.

So what happens now? Good question. Undoubtedly, Wisper’s Kansas ETC designation is based on incorrect information. Surely the FCC will not authorize Wisper to receive any CAF II support until this is fixed. At this point, Wisper should probably petition the KCC to amend its ETC designation. Strange this hasn’t happened already.

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[1] Connect America Fund, WC Docket No. 10-90, Connect America Fund Phase II Auction, AU Docket No. 17-182, ETC Annual Report and Certifications, WC Docket No. 14-58, Opposition Of Conexon, LLC To Wisper ISP Inc. Petition For Waiver Of Deadline For ETC Designation (June 12, 2019) (Conexon Opposition), available at https://www.fcc.gov/ecfs/filing/106120494418206.

[2] Application for Designation as an Eligible Telecommunications Carrier for Purposes of Receiving Federal Universal Service Support From the FCC Connect America Fund – Phase II, KCC Docket No. 19-WIIZ-225-ETC, Application Of Wisper ISP Inc. For Designation As An Eligible Telecommunications Carrier (Public Version), p. 13 (Dec. 7, 2018).

[3] In the Matter of the Application for Wisper ISP Inc. For Designation as an Eligible Telecommunications Carrier for Purposes of Receiving Federal Universal Service Support From the FCC Connect America Fund - Phase II, KCC Docket No. 19-WIIZ-225-ETC, Order Granting Eligible Telecommunications Carrier Status (Feb. 14, 2019).

[4] Conexon Opposition at p. 17.

[5] You can do your own due diligence on Wisper’s CAF II auction bids and winning bids here: https://auctiondata.fcc.gov/public/projects/auction903.

[6] Conexon Opposition at p. 17-18.