Connect America Fund Phase II Auction – News Update
The Federal Communications Commission’s Connect America Fund (CAF) Phase II auction (Auction 903) ran from July 24, 2018 to August 21, 2018. When it concluded, there were 103 winning bidders, receiving a total of $1.488 billion in support over a 10-year period.[1] Of the 220 bidders that qualified for the auction, 173 placed bids. Winning bidders include ILECs, fixed wireless Internet service providers, electric co-operatives, cable operators, satellite providers, and others.
Of the 974,223 locations in the 30,033 census block groups eligible for support, approximately 73 percent were covered by winning bids. CAF II auction winning bidders are required to deploy broadband service to 713,176 homes and small businesses in 45 states. According to the FCC, 99.75 percent of those locations will receive service with speeds of 25/3 Mbps or higher. Winning bids for downstream speeds of at least 100 Mbps cover 53 percent of those locations. Below is an update on news related to the FCC’s CAF Phase II auction.
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FCC Fines Westfield Gas And Electric For Defaulting On CAF II Auction Winning Bid In Massachusetts
May 6, 2020 – The FCC’s Enforcement Bureau has imposed a Notice Of Apparent Liability For Forfeiture on Westfield Gas and Electric Light Department for defaulting on one of its winning bids in the Connect America Fund Phase II Auction (Auction 903). Westfield must pay a penalty of $3,000 for defaulting on the winning bid. Westfield participated in the CAF II Auction and was a successful bidder, winning $10,325,400.60 of support for 23 census block groups covering 5,163 locations in Massachusetts. However, Westfield subsequently notified the FCC’s Wireline Communications Bureau that it would default on one of its winning bids because the “logistical and financial barriers impeded the Town of Royalston, Massachusetts from successfully coordinating with the Company to fulfill the bid.” The matter was then turned over to the Enforcement Bureau, which determined Westfield apparently willfully violated the FCC’s rules and orders governing Auction 903 by partially defaulting on its winning bidder obligations. Westfield has 30 calendar days to pay the fine or challenge it.
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FCC Ready To Authorize CAF II Auction Support For Fond du Lac Communications & Viasat
May 4, 2020 – The FCC’s Rural Broadband Auctions Task Force, Wireline Competition Bureau, and Office of Economics and Analytics have announced they are ready to authorize Connect America Fund Phase II auction support for Fond du Lac Communications, Inc. – 3 winning bids in Minnesota, and Viasat Carrier Services, Inc. – 102 winning bids in Oregon. To receive the 10-year CAF II auction support, the two winning bidders must now submit acceptable irrevocable stand-by letters of credit and Bankruptcy Code opinion letters prior to 6:00 p.m. ET on Monday, May 18, 2020. The Wireline Competition Bureau also announced that Viasat received a waiver of the requirement that CAF II auction winning bidders certify they are eligible telecommunications carriers (ETCs) in all bid areas and submit appropriate documentation by February 25, 2019. Viasat filed an application for designation as an ETC with the Oregon PUC on September 26, 2018, which was within 30 days of the release of the CAF II Auction 903 Closing Public Notice. The Oregon PUC approved Viasat’s ETC application on November 25, 2019, but excluded Tribal lands from the ETC designation. Under the Oregon PUC’s ETC rules, each Tribe in a proposed ETC area must indicate that it supports or does not oppose a grant of ETC designation within its specific Tribal lands. Viasat has not received this evidence. Accordingly, Viasat’s 102 ready-to-be-authorized CAF II winning bids cover non-Tribal areas in Oregon. Once Viasat receives the relevant evidence, Viasat may request the Oregon PUC expand its ETC designation to cover the Tribal areas, and subsequently, may request the Bureau authorize CAF II support for the areas.
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CAF II Auction Winner Fond Du Lac Communications Receives ETC Designation In Minnesota
April 27, 2020 – The FCC’s Wireline Competition Bureau (WCB) has designated Fond du Lac Communications, Inc. as an eligible telecommunications carrier (ETC) in areas within Minnesota where Fond du Lac was awarded support from the Connect America Fund (CAF) Phase II auction. Because Fond du Lac is not subject to the Minnesota Public Utility Commission’s regulatory authority, the WCB, acting on delegated authority from the FCC, designated Fond du Lac as an ETCs. Fond du Lac applied for ETC designation within the boundaries of the Fond du Lac Band of Lake Superior Chippewa Reservation, which includes most census blocks where Fond du Lac is eligible to receive Phase II auction support and other additional areas. It also applied for ETC designation in limited areas outside the Reservation, which includes a few census blocks eligible for CAF Phase II support. The WCB found Fond du Lac met all applicable conditions and prerequisites for ETC designation. Fond du Lac’s ETC designation is effective only upon its authorization to receive CAF II auction support. In areas where FDLCI is not eligible to receive CAF Phase II auction support, it has been designated as a Lifeline-only ETC.
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FCC Authorizes CAF II Auction Funding For Armstrong Telecommunications In Pennsylvania
April 14, 2020 – The FCC’s Wireline Competition Bureau has authorized Connect America Fund Phase II Auction support for 21 winning bids placed by Armstrong Telecommunications, Inc. in Pennsylvania. The Bureau authorized the support amounts after reviewing the information in Armstrong’s Auction 903 long-form application, including letters of credit and Bankruptcy Code opinion letters. The Universal Service Administrative Company may now obligate and disburse Universal Service Fund support, with payments beginning at the end of April 2020 and continuing until 120 equal monthly payments have been made. Armstrong, like other CAF II auction support recipients, must begin commercially offering broadband service to 40 percent of its requisite number of the locations by the end of the third year of funding, and to an additional 20 percent in each subsequent year, with 100 percent by the end of the sixth year. Additionally, the Bureau has announced it will post a state-level summary under the “Data” tab on the Auction 903 webpage. The summary will provide for each long-form applicant included in this most recent authorization: (1) the total support amount over 10 years and total number of locations that the long-form applicant is being authorized for in each state, (2) the total number of locations to which the authorized support recipient must offer the required voice and broadband services for each performance tier and latency in each state, and (3) the eligible census blocks included in the winning bids that are being authorized in each state
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FCC Issues Letter Of Credit Guidance For Winning Bidders In Universal Service Support Auctions
March 20, 2020 – The FCC’s Wireline Competition Bureau has released guidance regarding the eligibility of non-United States banks to issue letters of credit. Specifically, the Bureau has announced that a non-U.S. bank that has a branch office located in New York City, New York and will accept a letter of credit draw certificate from the Universal Service Administrative Company via overnight courier, in addition to in-person presentations, will be considered qualified to issue letters of credit if the bank also meets the FCC’s other non-U.S. bank eligibility requirements. Before an entity may be authorized to receive universal service support allocated through a competitive bidding mechanism, such as the Connect America Phase II auction and the upcoming Rural Digital Opportunity Fund Phase I auction, the entity must obtain a letter of credit issued by a qualified bank “to protect the public’s funds.” The FCC’s eligibility rules for non-U.S. banks issuing letters of credit require a non-U.S. bank to: (1) be among the 100 largest non-U.S. banks in the world; (2) have a branch office in Washington, D.C., or such other branch office agreed to by the FCC; (3) have a long-term unsecured credit rating issued by a widely-recognized credit rating agency that is equivalent to BBB- or better rating by Standard & Poor’s; and (4) issue the letter of credit payable in U.S. dollars.
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Ninth Wave! FCC Authorizes More CAF II Auction Funding
February 13, 2020 – The FCC’s Wireline Competition Bureau has authorized Connect America Fund Phase II Auction support for 1060 winning bids. A list of the authorized winning bids is available as Attachment A to the Bureau’s Public Notice. The Bureau authorized the support amounts after reviewing the information in each entity’s Auction 903 long-form application, including the letters of credit and Bankruptcy Code opinion letters. The Universal Service Administrative Company may now obligate and disburse Universal Service Fund support to each entity, with payments beginning at the end of February 2020 and continuing until 120 equal monthly payments have been made. These CAF II auction support recipients are required to begin commercially offering broadband service to 40 percent of their requisite number of the locations by the end of the third year of funding, and to an additional 20 percent in each subsequent year, with 100 percent by the end of the sixth year. Additionally, the Bureau has announced it will post a state-level summary under the “Data” tab on the Auction 903 webpage. The summary will provide for each long-form applicant included in this most recent authorization: (1) the total support amount over 10 years and total number of locations that the long-form applicant is being authorized for in each state, (2) the total number of locations to which the authorized support recipient must offer the required voice and broadband services for each performance tier and latency in each state, and (3) the eligible census blocks included in the winning bids that are being authorized in each state.
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FCC Authorizes $7 Million New York CAF Phase II Auction Support For Hughes Network Systems
February 13, 2020 – The FCC’s Wireline Competition Bureau has authorized Connect America Fund (CAF) Phase II New York state auction support for Hughes Network Systems, LLC. Over a ten-year period, Hughes Network will receive $7,026,075 to serve 22,305 locations in 5,379 census blocks in New York. The Bureau authorized the support amounts after reviewing the information in each entity’s Auction 903 long-form application, including the letters of credit and Bankruptcy Code opinion letters. The Universal Service Administrative Company may now obligate and disburse Universal Service Fund support to each entity, with payments beginning at the end of February 2020 and continuing until 120 equal monthly payments have been made.
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FCC Establishes Uniform Deadlines For Deployment And Reporting Obligations For CAF Phase II Auction Support Recipients
January 27, 2020 – The FCC’s Wireline Competition Bureau has issued an Order establishing uniform deadlines related to deployment and reporting obligations for authorized Connect America Fund Phase II Auction support recipients and New York’s New NY Broadband Program support recipients. The uniform deadlines are intended to reduce confusion; ensure continued compliance with the obligations; and decrease administrative burdens. Accordingly, service milestone deadlines for all CAF Phase II Auction support recipients will fall at the end of the calendar year, and Section 54.316(c)(2) annual location filing and Section 54.316(b)(4) certification deadlines will fall on March 1. As a result, the Bureau will consider January 1, 2020 to be the commencement of the deployment timeline for all CAF Phase II support recipients, rather than the release date of the Bureau’s authorization public notice.
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FCC Ready To Authorize CAF II New York Broadband Support For Mid-Hudson Data Corp.
January 6, 2020 – The FCC’s Wireline Competition Bureau has announced it is ready to authorize Connect America Fund Phase II New York Broadband Program support for Mid-Hudson Data Corp. The total support to be authorized is $640,296, for 459 locations in 73 census blocks in New York. To receive the total 10-year support, Mid-Hudson must submit an acceptable irrevocable stand-by letter of credit and Bankruptcy Code opinion letter prior to 6:00 p.m. ET on January 21, 2020.
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FCC Ready To Authorize CAF II Auction Support For 2,121 Winning Bids
December 20, 2019 – The FCC’s Wireline Competition Bureau has announced it is ready to authorize Connect America Fund Phase II auction (Auction 903) support for 2,121 winning bids identified in Attachment A of this Public Notice. A list of the winning bids is available as Attachment A to the Bureau’s Public Notice. To be authorized to receive the CAF support, each winning bidder must submit an acceptable irrevocable stand-by letter of credit and Bankruptcy Code opinion letter prior to 6:00 p.m. ET on Friday, January 10, 2020. The Bureau has waived for Wisper ISP, Inc., in Oklahoma, the requirement that CAF II Auction winning bidders certify that they are eligible telecommunications carriers throughout their service territory and to submit appropriate documentation supporting such certification on or before February 25, 2019. Westfield Gas & Electric Light Department has notified the Bureau that it does not intend to pursue one of its winning bids, covering 60 census blocks and 498 locations, and therefore is in default for that bid. Westfield will not receive the $96,450 in support and is subject to forfeiture. The Bureau has referred the default to the FCC Enforcement Bureau.
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FCC Ready To Authorize CAF II New York Broadband Program Funding For Hughes Network Systems
December 20, 2019 – The FCC’s Wireline Competition Bureau has announced it is ready to authorize $7 million in Connect America Fund Phase II support for Hughes Network Systems, LLC in conjunction with the New York Broadband Program. To be authorized to receive the CAF support, Hughes must submit an acceptable irrevocable stand-by letter of credit and Bankruptcy Code opinion letter prior to 6:00 p.m. ET on Friday, January 10, 2020.
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Eighth Wave! FCC Authorizes $89.1 Million In CAF II Auction Funding
December 16, 2019 – The FCC’s Wireline Competition Bureau has authorized $89,184,858.40 in Connect America Fund Phase II Auction support for 669 winning bids. The Bureau authorized the support amounts after reviewing the information in each entity’s Auction 903 long-form application, including the letters of credit and Bankruptcy Code opinion letters. A list of the authorized winning bids is available as Attachment A to the Bureau’s Public Notice. The Universal Service Administrative Company may now obligate and disburse Universal Service Fund support to each entity, with payments beginning at the end of December 2019 and continuing until 120 equal monthly payments have been made. These CAF II auction support recipients are required to begin commercially offering broadband service to 40 percent of their requisite number of the locations by the end of the third year of funding, and to an additional 20 percent in each subsequent year, with 100 percent by the end of the sixth year. Additionally, the Bureau has announced it will post a state-level summary under the “Data” tab on the Auction 903 webpage. The summary will provide for each long-form applicant included in this most recent authorization: (1) the total support amount over 10 years and total number of locations that the long-form applicant is being authorized for in each state, (2) the total number of locations to which the authorized support recipient must offer the required voice and broadband services for each performance tier and latency in each state, and (3) the eligible census blocks included in the winning bids that are being authorized in each state.
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FCC Designates Red Spectrum LLC As An ETC In Idaho
November 22, 2019 – The FCC’s Wireline Competition Bureau has designated Red Spectrum LLC as an eligible telecommunications carrier (ETC) in areas within Idaho where Red Spectrum won Connect America Fund Phase II auction support. Red Spectrum is a 100% Tribal-government owned facilities-based telecommunications and broadband carrier of the Coeur d’Alene Tribe in Idaho that won $521,715 in CAF II auction support to serve 185 locations. The Bureau also designated Red Spectrum as a Lifeline-only ETC for Tribal lands outside of the CAF Phase II census block group for which it was awarded support.
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Seventh Wave! FCC Authorizes $13.5 Million In CAF II Auction Funding
November 13, 2019 – The FCC’s Wireline Competition Bureau has authorized $13,468,201.20 in Connect America Fund (CAF) Phase II Auction support for 14 winning bids for Hankins Information Technology, and 52 winning bids for Newmax, LLC dba Intermax Networks. The Bureau authorized the support amounts after reviewing the information in each entity’s Auction 903 long-form application, including the letters of credit and Bankruptcy Code opinion letters. A list of the authorized winning bids is available as Attachment A to the Bureau’s Public Notice. The Universal Service Administrative Company may now obligate and disburse Universal Service Fund support to each entity, with payments beginning at the end of November 2019 and continuing until 120 equal monthly payments have been made. These CAF II auction support recipients are required to begin commercially offering broadband service to 40 percent of their requisite number of the locations by the end of the third year of funding, and to an additional 20 percent in each subsequent year, with 100 percent by the end of the sixth year. Additionally, the Bureau has announced it will post a state-level summary under the “Data” tab on the Auction 903 webpage. The summary will provide for each long-form applicant included in this most recent authorization: (1) the total support amount over 10 years and total number of locations that the long-form applicant is being authorized for in each state, (2) the total number of locations to which the authorized support recipient must offer the required voice and broadband services for each performance tier and latency in each state, and (3) the eligible census blocks included in the winning bids that are being authorized in each state.
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FCC Creates Eligible Locations Adjustment Process For CAF II Auction Winning Bidders
November 12, 2109 – The FCC’s Wireline Competition Bureau has issued an Order establishing procedures for adjusting Connect America Fund (CAF) eligible locations. Winning bidders in the CAF II Auction must deploy broadband service to a certain number of funded locations in their winning service areas. However, many winning bidders have discovered discrepancies between the number of funded locations and the number of actual locations. The Bureau’s Order creates a voluntary Eligible Locations Adjustment Process (ELAP) to facilitate review of the defined deployment obligations and associated support, on a state-by-state basis, when the total number of actual locations in a CAF II Auction winning bidder’s eligible area is less than the number of funded locations. In general, the ELAP consists of an information collection, a challenge process, a Bureau adjudication, and if necessary, location adjustments and support reductions.
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FCC Designates Mid-Hudson Data Corp. As An ETC In CAF II Areas In New York
October 18, 2019 – The FCC’s Wireline Competition Bureau has designated Mid-Hudson Data Corp. as an eligible telecommunications carrier (ETC) in certain high-cost areas within the state of New York. Specifically, the ETC designation is limited to those areas where Mid-Hudson is authorized to receive Connect America Fund support awarded in coordination with New York’s New NY Broadband Program. In January 2018, Mid-Hudson was awarded funding for a broadband deployment project that will serve 459 locations in New York. The project will be supported with a combination of equity funding, New York State grant funding, and federal CAF support. Mid-Hudson Data is a wholly owned subsidiary of Mid-Hudson Cablevision Holdings, Inc. Together with its affiliates, including Mid-Hudson Cablevision, Inc. and Mid-Hudson Broadband, LLC, the company provides broadband, video, and VOIP phone services to customers in Massachusetts and the State of New York.
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Sixth Waive! FCC Authorizes $61.8 Million In CAF II Auction Funding
October 10, 2019 – The FCC’s Wireline Competition Bureau has authorized $61,825,182.50 in Connect America Fund Phase II Auction support for 387 winning bids. This is the sixth wave of CAF II Auction support that has been authorized, bringing total authorized funding to nearly $1.2 billion, which is expected to expand broadband connectivity to 409,661 homes and businesses nationwide. The Bureau authorized the support amounts after reviewing the information in each entity’s Auction 903 long-form application, including the letters of credit and Bankruptcy Code opinion letters. A list of the authorized long-form applicants and their winning bids is available as Attachment A to the Bureau’s Public Notice. The following entities will receive the authorized support over the next 10 years to expand broadband to nearly 22,000 unserved rural homes and businesses in 14 states:
Allen's T.V. Cable Service, Inc.
Broadband Corp
Computer 5 Inc. d/b/a LocalTel Communications
CRC Communications LLC
Farmers Mutual Telephone Company
Frontier California Inc
Gallatin Wireless Internet, LLC
Independent Networks, L.C.
Inventive Wireless of Nebraska, LLC
Maquoketa Valley Rural Electric Cooperative
Oklahoma Fiber, LLC
Sunset Digital Communications, LLC
Tri County Telephone Association, Inc.
Twin Valley Communications, Inc
Union Telephone Company
The Universal Service Administrative Company may now obligate and disburse Universal Service Fund support to each entity, with payments beginning at the end of October 2019 and continuing until 120 equal monthly payments have been made. These CAF II auction support recipients are required to begin commercially offering broadband service to 40 percent of their requisite number of the locations by the end of the third year of funding, and to an additional 20 percent in each subsequent year, with 100 percent by the end of the sixth year. Additionally, the Bureau has announced it will post a state-level summary under the “Data” tab on the Auction 903 webpage. The summary will provide for each long-form applicant included in this most recent authorization: (1) the total support amount over 10 years and total number of locations that the long-form applicant is being authorized for in each state, (2) the total number of locations to which the authorized support recipient must offer the required voice and broadband services for each performance tier and latency in each state, and (3) the eligible census blocks included in the winning bids that are being authorized in each state.
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Fifth Wave: FCC Authorizes $112 Million In CAF II Auction Funding
September 12, 2019 – The FCC’s Wireline Competition Bureau has authorized $112,183,454.30 in Connect America Fund Phase II auction support for 1,031winning bids. The Bureau authorized the support amounts after reviewing the information in each entity’s Auction 903 long-form application, including the letters of credit and Bankruptcy Code opinion letters. The Universal Service Administrative Company may now obligate and disburse Universal Service Fund support to each entity, with payments beginning at the end of September 2019 and continuing until 120 equal monthly payments have been made. These CAF II auction support recipients are required to begin commercially offering broadband service to 40 percent of their requisite number of the locations by the end of the third year of funding, and to an additional 20 percent in each subsequent year, with 100 percent by the end of the sixth year. Additionally, the Bureau has announced it will post a state-level summary under the “Data” tab on the Auction 903 webpage at https://www.fcc.gov/auction/903. The summary will provide for each long-form applicant included in this most recent authorization: (1) the total support amount over 10 years and total number of locations that the long-form applicant is being authorized for in each state, (2) the total number of locations to which the authorized support recipient must offer the required voice and broadband services for each performance tier and latency in each state, and (3) the eligible census blocks included in the winning bids that are being authorized in each state.
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FCC Fines AMG $100,000 For Prohibited Communications During CAF II Auction
September 6, 2019 – The FCC’s Enforcement Bureau has proposed a forfeiture of $100,000 against AMG Technology Investment Group, LLC (AMG), for apparently repeatedly engaging in prohibited communications of its bidding and bidding strategies during the Connect America Fund (CAF) Phase II auction, and its failure to timely report such prohibited communications. AMG, which provides service as NextLink, was a CAF II auction winning bidder in six states: Kansas, Illinois, Iowa, Nebraska, Oklahoma, and Texas. AMG was awarded CAF II auction support amounting to $281 million over 10 years, in exchange for deploying broadband services to 100,581 total locations.
According to the FCC’s Notice Of Apparent Liability For Forfeiture, AMG engaged in prohibited communications of its bidding, bidding strategies, and bidding results to AT&T Services, Inc. (AT&T), the parent company of CAF Phase II auction applicant New Cingular Wireless PCS, LLC, and reported the prohibited communications to the FCC outside of the required five-day reporting period. During the auction’s quiet period, one of AMG’s authorized bidders “sent more than a half-dozen e-mails to AT&T, including management-level personnel, discussing AMG’s [CAF II auction] bids, its bidding strategies, and bidding results.” AMG subsequently engaged in prohibited communications with AT&T following the close of the auction. AMG has 30 days to pay the full amount or file a written statement seeking reduction or cancellation of the proposed forfeiture.
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FCC Fines AT&T $75,000 For Prohibited Communications During CAF II Auction
September 6, 2019 – The FCC’s Enforcement Bureau has proposed a forfeiture of $75,000 against AT&T Services, Inc., for apparently repeatedly engaging in prohibited communications during the Connect America Fund (CAF) Phase II auction, and its failure to timely report such prohibited communications. According to the FCC’s Notice Of Apparent Liability For Forfeiture, AT&T, the parent company of CAF II auction applicant New Cingular Wireless PCS, LLC, apparently violated the FCC’s rules by engaging in prohibited communications with AMG Technology Investment Group, LLC during the auction. More specifically, during the CAF II auction’s quiet period, AT&T received and responded to more than a half-dozen e-mails sent to various AT&T employees by AMG personnel, including one of AMG’s authorized bidders. The e-mails discussed AMG’s bidding, bidding strategies, and bidding results, and AT&T and AMG also met in person and by video conference within the quiet period and discussed CAF II auction related business opportunities. In a separate action, the FCC’s Enforcement Bureau proposed a forfeiture of $100,000 against AMG for these prohibited communications. AT&T has 30 days to pay the full amount or file a written statement seeking reduction or cancellation of the proposed forfeiture.
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FCC Ready To Authorize CAF II Auction Support For 375 Winning Bids
August 26, 2019 – The FCC’s Wireline Competition Bureau has announced it is ready to authorize Connect America Fund Phase II auction support for 375 winning bids. A list of the winning bids that are ready to be authorized is available as Attachment A to the Bureau’s Public Notice. Before the long-form applicants receive the total 10-year support amounts associated with their winning bids, the applicants must submit acceptable irrevocable stand-by letters of credit and Bankruptcy Code opinion letters for each state where they have winning bids that are ready to be authorized prior to 6:00 p.m. ET on Tuesday, September 10, 2019. In a future public notice, the Bureau will authorize support for specific winning bids for which all requirements have been met.
Additionally, the Bureau has announced it has waived the requirement that CAF II auction long-form applicants certify that they are eligible telecommunications carriers (ETCs) on or before February 25, 2019, for Oklahoma Fiber, LLC in Oklahoma. The FCC previously explained that it would presume an auction long-form applicant has undertaken good faith efforts to obtain ETC designation if that applicant submitted an ETC petition to the relevant authority within 30 days of the release of the Auction 903 Closing Public Notice. Because Oklahoma Fiber, LLC filed its petition with the Oklahoma Corporation Commission within the 30-day time frame, the Bureau concluded Oklahoma Fiber, LLC demonstrated due diligence and acted in good faith.
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FCC Delays CAF II Post-Auction Location Adjustment Process
August 19, 2019 – The FCC’s Wireline Competition Bureau has delayed initiation of the Connect America Fund (CAF) Phase II post-auction eligible location adjustment process. It would have allowed CAF II auction winners to adjust their deployment obligations and support amounts when the total number of actual locations are less than the number of funded locations in the eligible census blocks within their winning bid areas in a state. Those participating in the eligible location adjustment process were required to submit, within one year after release of the CAF Phase II auction closing public notice (August 28, 2019), evidence of the total number of locations in their eligible areas, including geolocation data, in a format specified by the Bureau. However, the Bureau never issued a public notice or order detailing specific instructions, deadlines, and requirements for filing valid geolocation data and evidence. It released a Public Notice in September 2018, seeking comment on several eligible location adjustment proposals, and then in June 2019, it sought comment on approaches to identify and resolve location discrepancies for rate-of-return carriers receiving A-CAM support. At a future date, the Bureau will adopt specific procedures and requirements for the eligible location adjustment process and announce a new filing deadline for participants.
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CAF II Auction Winner Sunset Digital Communications, LLC Designated An ETC In Parts Of Tennessee & Virginia
August 13, 2019 – The FCC’s Wireline Competition Bureau has designated Sunset Digital Communications, LLC as an eligible telecommunications carrier (ETC) in parts of Tennessee and Virginia. SDC LLC’s ETC designation applies in high-cost areas where it was a winner bidder in the CAF Phase II Auction. SDC LLC won $ 5,595,554.80 in CAF II Auction funding in Tennessee and $ 23,979,452.60 in Virginia to serve 2,095 and 6,998 locations, respectively. In the ETC designation Order, the Bureau waived, on its own motion, the requirement that SDC LLC submit proof of its ETC designation on or before February 25, 2019.
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Fourth Wave: FCC Authorizes $121 Million CAF II Auction Funding For 539 Winning Bids
August 12, 2019 – The FCC’s Wireline Competition Bureau has authorized $121,177,648.80 in Connect America Fund Phase II Auction support for 593 winning bids. The Bureau authorized the support amounts after reviewing the information in each entity’s Auction 903 long-form application, including the letters of credit and Bankruptcy Code opinion letters. The Universal Service Administrative Company may now obligate and disburse Universal Service Fund support to each entity, with payments beginning at the end of August 2019 and continuing until 120 equal monthly payments have been made. These CAF II auction support recipients are required to begin commercially offering broadband service to 40 percent of their requisite number of the locations by the end of the third year of funding, and to an additional 20 percent in each subsequent year, with 100 percent by the end of the sixth year. Additionally, the Bureau has announced it will soon post a state-level summary under the “Data” tab on the Auction 903 webpage at https://www.fcc.gov/auction/903. The summary will provide for each long-form applicant included in this most recent authorization: (1) the total support amount over 10 years and total number of locations that the long-form applicant is being authorized for in each state, (2) the total number of locations to which the authorized support recipient must offer the required voice and broadband services for each performance tier and latency in each state, and (3) the eligible census blocks included in the winning bids that are being authorized in each state.
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Second NY Wave: FCC Authorizes CAF Phase II Support For Three New York Broadband Providers
August 12, 2019 – The FCC’s Wireline Competition Bureau has authorized million Connect America Fund Phase II support for the following three New York broadband providers: Armstrong Telecommunications, Inc.; DTC Cable Inc.; and Haefele TV Inc. The total support is $16,183,329 over ten years. The three broadband providers will use the funding to bring broadband service to 8,088 locations in 571 census blocks. The Bureau authorized the support amounts after reviewing the information in each entity’s long-form application, including the letters of credit and Bankruptcy Code opinion letters. The Universal Service Administrative Company may now obligate and disburse Universal Service Fund support to each entity, with payments beginning at the end of August 2019 and continuing until 120 equal monthly payments have been made. These CAF II support recipients are required to begin commercially offering broadband service to 40 percent of their requisite number of the locations by the end of the third year of funding, and to an additional 20 percent in each subsequent year, with 100 percent by the end of the sixth year. In an attachment to the Public Notice announcing the funding, the Bureau has provided a summary of CAF II funding authorized for New York broadband providers: (1) total support amounts over 10 years and total number of funded locations; (2) the total number of locations to which each authorized support recipient must offer the required voice and broadband services for each performance tier and latency; and (3) the eligible census blocks included in the winning bids that are being authorized.
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FCC Ready To Authorize CAF II Auction Support For 1,122 Winning Bids
July 22, 2019 – The FCC’s Wireline Competition Bureau has announced it is ready to authorize Connect America Fund Phase II auction support for 1,122 winning bids. A list of the winning bids that are ready to be authorized is available as Attachment A to the Bureau’s Public Notice. Before the long-form applicants receive the total 10-year support amounts associated with their winning bids, the applicants must submit acceptable irrevocable stand-by letters of credit and Bankruptcy Code opinion letters for each state where they have winning bids that are ready to be authorized prior to 6:00 p.m. ET on Monday, August 5, 2019. The Bureau also announced that Crocker Communications, Inc. voluntarily defaulted on two winning bids in Massachusetts, totaling $1.193 million. Crocker Communications has been referred to the Enforcement Bureau and will be subject to forfeiture for defaulting on the two winning bids.
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Third Wave: FCC Authorizes CAF II Auction Funding For 2,413 Winning Bids
July 15, 2019 – The FCC’s Wireline Competition Bureau has authorized Connect America Fund Phase II Auction support for 2,413 winning bids, which are identified in Attachment A of the Bureau’s Public Notice. According to the FCC News Release, this third wave of CAF II Auction funding amounts to over $524 million in support over the next decade to expand broadband service to 205,520 unserved rural homes and businesses in 23 states. Total authorized CAF II Auction funding now stands at nearly $803 million, or over half of the $1.488 billion allocated through the auction, and is expected to expand broadband connectivity to 305,518 homes and businesses. The Bureau authorized the support amounts after reviewing the information in each entity’s Auction 903 long-form application, including the letters of credit and Bankruptcy Code opinion letters. The Universal Service Administrative Company may now obligate and disburse Universal Service Fund support to each entity, with payments beginning at the end of July 2019 and continuing until 120 equal monthly payments have been made. These CAF II auction support recipients are required to begin commercially offering broadband service to 40 percent of their requisite number of the locations by the end of the third year of funding, and to an additional 20 percent in each subsequent year, with 100 percent by the end of the sixth year. Additionally, the Bureau has announced it will soon post a state-level summary under the “Data” tab on the Auction 903 webpage at https://www.fcc.gov/auction/903. The summary will provide for each long-form applicant included in this most recent authorization: (1) the total support amount over 10 years and total number of locations that the long-form applicant is being authorized for in each state, (2) the total number of locations to which the authorized support recipient must offer the required voice and broadband services for each performance tier and latency in each state, and (3) the eligible census blocks included in the winning bids that are being authorized in each state.
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First NY Wave: FCC Authorizes CAF Phase II Support In Five New York For 5 Broadband Providers
July 15, 2019 – The FCC’s Wireline Competition Bureau has authorized over $39.2 million Connect America Fund Phase II support for the following five New York broadband providers:
Gtel Teleconnections ($854,652)
MTC Cable ($4,276,982)
Otsego Electric Cooperative ($4,298,62)
Slic Network Solutions ($11,296,264)
Verizon Communications ($18,511,546)
According to the FCC’s News Release, over the next 10 years, support will be used to expand broadband service to 15,442 unserved rural New York homes and businesses, in partnership with the state’s New NY Broadband Program. The Bureau authorized the support amounts after reviewing the information in each entity’s long-form application, including the letters of credit and Bankruptcy Code opinion letters. The Universal Service Administrative Company may now obligate and disburse Universal Service Fund support to each entity, with payments beginning at the end of July 2019 and continuing until 120 equal monthly payments have been made. These CAF II support recipients are required to begin commercially offering broadband service to 40 percent of their requisite number of the locations by the end of the third year of funding, and to an additional 20 percent in each subsequent year, with 100 percent by the end of the sixth year.
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Second Wave: FCC Authorizes CAF II Auction Support For 11 Entities & 459 Winning Bids
May 14, 2019 – The FCC’s Wireline Competition Bureau has authorized Connect America Fund Phase II auction support for 11 entities, after reviewing the information in each entity’s Auction 903 long-form application, including the letters of credit and Bankruptcy Code opinion letters. The Universal Service Administrative Company may now obligate and disburse Universal Service Fund support to each entity, with payments beginning at the end of May 2019 and continuing until 120 equal monthly payments have been made. These CAF II auction support recipients are required to begin commercially offering broadband service to 40 percent of their requisite number of the locations by the end of the third year of funding, and to an additional 20 percent in each subsequent year, with 100 percent by the end of the sixth year. A list of the 11 entities and their 459 winning bids is available as an attachment to the Bureau’s Public Notice.
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FCC Ready To Authorize CAF Phase II Auction Support
April 3, 2019 – The FCC’s Wireline Competition Bureau has released a Public Notice announcing it is ready to authorize Connect America Fund Phase II auction support for winning bids placed by 32 entities. A list of the winning bids that are ready to be authorized is available as Attachment A. To be authorized to receive the total 10-year support amounts, each entity must submit acceptable irrevocable stand-by letters of credit and Bankruptcy Code opinion letters from their legal counsel for each state where they have winning bids that are ready to be authorized in accordance with the instructions provided in the Public Notice prior to 6:00 p.m. ET on Wednesday, April 17, 2019. The Bureau has also announced that 10 entities have defaulted on 38 CAF II auction winning bids. A list of these entities along with their bids that are in default is available as Attachment B to the Public Notice.
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FCC Ready To Authorize CAF II Auction Support For 962 Winning Bids
February 27, 2019 – The FCC has announced it is ready to authorize Connect America Fund Phase II auction support for 962 winning bids made by 27 entities that filed post-auction long-form applications. However, the authorizations of support are subject to the submission of (1) an irrevocable stand-by letter of credit, and (2) a Bankruptcy Code opinion letter. More specifically, each of the 27 long-form applicants must provide the FCC with a separate letter of credit for each state where the applicant has winning bids that are ready to be authorized in an amount equal to at least the first year of support in the state. And, each applicant must submit “an opinion letter from legal counsel clearly stating, subject only to customary assumptions, limitations, and qualifications, that, in a proceeding under the Bankruptcy Code, the bankruptcy court would not treat the letter of credit or proceeds of the letter of credit as property of the long-form applicant’s bankruptcy estate, or the bankruptcy estate of any other bidder-related entity requesting issuance of the letter of credit, under section 541 of the Bankruptcy Code.” Letters of credit and bankruptcy opinion letters must be submitted to the FCC prior to 6:00 p.m. ET on Wednesday, March 13, 2019. Any long-form applicant that fails to file the required documents for any of its winning bids by the deadline will be in default on such bids and subject to forfeiture. There were 103 winning bidders in the CAF II auction, and after some of them assigned all or part of their winning bids to related entities, a total of 134 companies filed CAF II auction long-form applications. FCC staff is continuing to review information submitted by other long-form applicants, and will make decisions on those applications on a rolling basis.
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FCC Seeking Comment On Two ETC Petitions Filed By CAF II Auction Winners
February 20, 2019 – The FCC’s Wireline Competition Bureau is seeking comment on two separate petitions for designation as an eligible telecommunications carrier filed by CAF Phase II auction winners Redwire, Inc. and Viasat Carrier Services, Inc. Redwire, a Tribal entity owned by Otoe-Misouria Development Authority, is seeking ETC designation in 1,541 census blocks in Oklahoma. Viasat, a satellite broadband provider, is seeking ETC designation in 10,272 census blocks in Alabama, California, Florida, and West Virginia. Comments on either petition are due on or before March 6, 2019. Reply comments are due March 13, 2019.
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FCC Order Transitions CAF Phase I Support In Areas Where CAF II Auction Support Was Awarded
February 15, 2019 – The Federal Communications Commission has adopted a Report and Order that explains how the FCC will phase down Connect America Fund (CAF) Phase I frozen support in areas where price cap carriers declined the offer of model-based CAF Phase II support. Roughly seven years ago during the first phase of the CAF implementation, price cap carriers’ high-cost support amounts were frozen, and each carrier was offered CAF II support on a state-wide basis. If a carrier turned down CAF II support, its areas were included in the CAF II auction, which closed in August 2018. The next step is to transition legacy support – for price cap carriers and fixed competitive ETCs – prior to authorizing CAF Phase II auction support to winning bidders.
For price cap carriers, the FCC’s Report and Order addresses how to allocate Phase I frozen support to areas won at auction, areas not eligible for the auction, and areas eligible but not won at auction:
For auction-eligible census blocks where price cap carriers receive CAF Phase I frozen support, starting the first day of the month following the authorization of Phase II auction support in a price cap carrier’s designated service area within a state, the price cap carrier’s legacy support will be (1) converted to Phase II support (for a winning price cap carrier bidder); (2) maintained for an interim period (for the price cap carrier in areas without a winning bidder); or (3) eliminated (for price cap carriers in areas won by another carrier).
For fixed competitive ETCs, their legacy support will be erased over two years, beginning on the first day of the month immediately following the first authorization of any Phase II auction support. They will receive support equal to two-thirds of their total legacy support for the first 12 months and one-third over the following 12 months.
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[1] Connect America Fund Phase II Auction (Auction 903) Closes Winning Bidders Announced FCC Form 683 Due October 15, 2018, AU Docket No. 17-182, WC Docket No. 10-90, Public Notice, DA 18-887 (Aug. 28, 2018).
