Satellite Industry Pushing Back on Fiber-centric CAF Phase II Proposal
Citing concerns about being elbowed out of the Connect America Fund Phase II competitive bidding process, the satellite industry is pushing the FCC to ensure that satellite is evaluated on equal footing with fiber-to-the-home (FTTH). "The FCC has a longstanding policy favoring technology neutrality for CAF that has served the public interest resulting in increased innovation, service quality and reduced costs to consumers," the Satellite Industry Association said in a filing Tuesday in docket 10-90. Due to such satellite innovations as high-throughput space stations and broadband via nongeostationary constellations, SIA said, "It would be a mistake for the FCC to abandon such a policy now."
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The trigger for much of the satellite outcry was a Utilities Telecom Council ex parte filing this month in which UTC suggested a CAF Phase II reverse auction structure in two stages: the first stage for FTTH broadband projects, the second for projects that provide 25/3 Mbps speeds. That structure "would encourage the development of fiber optic broadband services in unserved areas and it would also provide access to other forms of broadband services in unserved areas where there were no bids submitted to provide fiber optic broadband services," UTC said.
The UTC proposal "incorporates precisely the type of technology-specific preference that Hughes Network Systems and numerous other parties have opposed in this proceeding and is inconsistent with long standing FCC precedent," Hughes said in a filing posted Tuesday. UTC's two-step idea runs contrary to broadband approaches in the National Broadband Plan and in the agency's 2011 Connect America Fund order, Hughes said, and setting up the first stage solely for fiber-centric providers "would abandon the Commission's longstanding universal service principle of competitive neutrality and the technology neutral approach ... and skew the allocation of scarce CAF funding towards fiber, even in areas where other technologies would be more efficient." Hughes has proposed both a bidding credit system (see here) and a system with points given for speed, latency, capacity and economic subsidy issues (see here). UTC didn't comment.
The industry has been pushing the FCC to craft satellite-friendly CAF Phase II participation criteria well before the UTC proposal (see 1507220049). In a meeting earlier this month with Commissioner Jessica Rosenworcel, a ViaSat filing said, ViaSat CEO Mark Dankberg said satellite broadband in CAF II would mean more competition and lower auction bids, but the satellite company's broadband network expansion wouldn't include capacity for "unserved" regions without CAF support. Commissioner Mike O'Rielly also has been critical that the reverse auction could end up having a fiber bias (see 1511170063).
The American Cable Association pushed its own proposed CAF Phase II criteria in a filing posted Monday, arguing that requiring only 25/3 Mbps would mean new wireline entrants such as neighboring cable operators would likely not take part in CAF Phase II "because incumbent price cap carriers have an inherent advantage in the auction by virtue of having already deployed capital and facilities in that eligible area." Those new wireline entrants also would have difficulty competing against other service providers -- including fixed wireless, mobile wireless and satellite -- since many of them also have infrastructure already in place to provide service in eligible areas, ACA said.