FCC Expands on Bidding Procedures in Connect America Fund (CAF) Phase II Auction Webinar

Signaling a clear commitment to a successful reverse auction process for the Connect America Fund (“CAF”) Phase II proceeding, members of the FCC’s Rural Broadband Auctions Task Force hosted a webinar yesterday that provided an overview of the CAF Phase II application requirements, and an in-depth review of the bidding procedures for this first of its kind reverse auction. As we have outlined in prior advisories, the CAF Phase II auction will distribute up to $1.98 billion (over ten years) in support to competitive providers able to deliver broadband and voice service to unserved areas via a reverse auction process.

Anticipating the many questions arising from this initiative, the staff from the Auctions Task Force offered specific details of the auction bidding procedures, including: how bids are submitted, how winning bids are assigned, how support amounts are determined, and much more. To review the information that was communicated during the webinar, the slides provided during the presentation can be reviewed here. Additional background on bidding and application procedures can be found in our prior advisories.

Importantly, the bidding procedures discussed during the webinar, which were adopted in an August 2017 Public Notice, are still subject to further public comment. Initial comments on the proposed procedures are due September 18, 2017, and reply comments are due on October 18, 2017. The FCC cannot move forward with the CAF Phase II auction until the bidding procedure proposals up for comment are finalized.

The pending comment period provides some insight into the likely timeline for the FCC to initiate the reverse auction. As we see it, once all comments on the proposals have been received, the earliest the FCC would likely finalize the CAF Phase II auction procedures would be in a December 2017 order. Although it is unclear whether the FCC would move quickly enough to issue an order by December 2017, doing so would likely indicate that the CAF Phase II auction would begin towards the end of the first quarter in 2018. This timeline is a best case scenario. Of course, the worst case scenario is that this auction is delayed until the end of 2018. Notably, the FCC Auctions Task Force staff participating in the webinar offered no definitive information concerning timing, and indicated only that the auction is planned for “sometime in 2018.” Thus, the precise start date of the auction (and associated pre-auction filing requirements) remains to be seen.

Potential CAF Phase II auction participants should be analyzing areas of opportunity, and developing bidding strategies. Unfortunately, the FCC has yet to finalize the areas eligible for CAF Phase II support, and must publish the final eligible areas list prior to the commencement of the auction. Staff from the Auctions Task Force indicated that they are currently reviewing the newly-submitted Form 477 data, which the FCC will use to finalize the areas eligible for CAF II support. Once the FCC releases the final list of areas eligible for CAF II support, DWT will provide a further update on timing and auction specifics.