Carriers Want More Money for Mobility Fund Phase II
Carriers asked the FCC to allocate more money to Phase II of the Mobility Fund, arguing in reply comments this week that $500 million annual support for wireless eligible telecom carriers to accelerate mobile deployment is not nearly enough, and pales in comparison to the support offered to ILECs. But Verizon Wireless cautioned that consumers and business could suffer if the fund gets too large.
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"The implementation of Mobility Fund Phase II boils down to two key issues: time and money,” said U.S. Cellular, which claims that whether the commission provides enough of both “will determine the success or failure of Phase II in enabling the deployment and operation of mobile voice and broadband networks across rural America.” U.S. Cellular wants more funding available for mobile voice and broadband services before moving forward to Phase II. The commission could give carriers access to Phase I support that price cap carriers didn’t claim, it said. Delaying Phase II is important because it will give the commission time to collect and analyze “meaningful data” about the result of the Phase I auction, and to decide whether to use a single-winner reverse auction or a wireless broadband cost model for Phase II.
Any rules defining unserved areas should emphasize the promotion of 4G mobile broadband deployment while guarding against overstating existing coverage, U.S. Cellular said. The carrier argued that census blocks served by an unsubsidized carrier should be eligible for Phase II support unless the carrier is providing 4G broadband service. “The Commission has been unreasonably exclusionary in proposing to bar a service area” from getting Phase II support if 3G service is available from an unsubsidized carrier, USTelecom said. “The Commission provides no explanation for its tentative conclusion that the presence of unsubsidized 3G service is a reliable proxy for identifying areas where there is a business case for the deployment of 4G service.”
The Universal Service for America (USA) Coalition thinks the size of the Phase II fund should increase in order to “more accurately reflect both the need for additional support to deploy wireless networks in high cost areas and in recognition of the importance of a competitive wireless market” (http://xrl.us/bn9xnv). The annual $500 million outlay is “inadequate” to accomplish the commission’s goal of “ubiquitous” mobile broadband deployment, the group said. “Before doubling down upon a support figure that was first set forth well before the FCC’s actual experience with Mobility Fund Phase I, the Commission should pause to address the demonstrable shortcomings in the amount of Mobility Fund Phase II support available.” The coalition also opposes creation of a “single-winner” Phase II auction system as “inconsistent with the requirements of the [Communications] Act and the Commission’s own pro-competition policies.” If the FCC continues to use reverse auctions, it should auction at least two service packages in each area, USA Coalition said.
The Rural Telecommunications Group pressed for the use of “bidding credits” for small business, carriers that serve rural areas, and carriers that seek to serve unserved areas (http://xrl.us/bn9xni). That’s the easiest way for the FCC to target Phase II support to areas and carriers that need it, RTG said. USA Coalition also supported the use of bidding credits.
General Communication (GCI) also urged the commission to allocate more money to Phase II -- either from unused Phase I money or from other sources. The commission should develop a cost model even if it ultimately distributes support using reverse auction, GCI said. That will allow the commission to gauge whether the $500 million is “even close to sufficient to meet the universal service objectives that the Commission has established for mobile services,” GCI said (http://xrl.us/bn9xpc). GCI supported the use of bidding credits if tied to “the nature of the area to be served.” The Alaska Rural Coalition said the FCC’s proposed “centroid” method for determining support is “unlikely to accurately predict needs for support in Remote Alaska and other very rural areas” (http://xrl.us/bn9xpt).
Verizon Wireless rejected calls to increase the size and scope of the Phase II program (http://xrl.us/bn9xf8). If the fund gets too large, and subsidizes multiple carriers in the same area, consumers and businesses will suffer, Verizon said. “The Commission has an affirmative obligation under the Telecom Act to keep the fund from growing too large,” the carrier said. The commission was right to resist prior calls to set Phase II funding at higher levels and thus protect customers and keep the size of the fund manageable: “The Commission should not reverse course now solely to provide additional money to additional carriers that want it."
Verizon supported an AT&T proposal that Phase II offer a five-year term of support, rather than 10. AT&T had argued a shorter term was more appropriate in the wireless technology world, which evolves rapidly. Verizon said five years would be more consistent with other Connect America Fund programs. But U.S. Cellular opposed the idea, agreeing with Alaska Rural Cellular that areas that most need support “are likely to respond to dynamic changes slower than urban areas.” RTG also supported the 10-year term of support, “because it will provide the certainty needed” for carriers that serve high-cost remote areas. “Recovery of investment in these hard-to-serve areas cannot reasonably occur in a timeframe less than 10 years,” RTG said.