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The American Cable Association says the FCC needs to simplify its proposed bidding rules for the upcoming CAF II reverse auction if the Commission wants to ensure maximum participation.

In comments filed in response to the Commission’s proposed rules for doling out the money, the ACA contends the “inordinate complexity” of the auction design will “deter, if not thwart, participation by a large number of providers.”                                

In February, the FCC set key rules for a competitive reverse auction to provide nearly $2 billion for rural broadband deployment over the next decade.

The auction focuses on census blocks unserved by broadband in 20 states where the nation’s largest carriers – known as “price cap” carriers – declined last year’s Connect America Fund offer of support. Locations across the country with very high deployment costs are also included in the auction.

In an effort to simplify, the ACA asks the Commission to at least eliminate package bidding, as well as eliminate the ability of a bidder to shift its performance/latency tier after it’s established in the initial bid to avoid complex gaming strategies.

The ACA also recommends the FCC allow third-party consultants to be shared among multiple bidding parties to encourage participation by smaller operators, as long as the conversations don’t facilitate prohibited communications.

“The FCC’s proposed design for the CAF Phase II auction is more complex than it needs to be and will limit participation and undermine robust bidding,” ACA President and CEO Matthew Polka comments. “All but the most sophisticated and well-funded potential bidders will at best struggle to understand all the bidding rules and potential strategies and at worst throw up their hands and ‘cry uncle.’ As a result, bids will be higher than they should be and universal service funding will be wasted.”

Final comments are due by Oct. 18 and the CAF II auction is set to begin next year.

 

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