FCC Learned Lessons From Rural Broadband Experiment, Official Says
The FCC’s Rural Broadband Experiment was a success, with 575 bids from 181 different entities covering homes and small businesses in more than 75,000 census blocks in rural areas in every state in the country, said Jonathan Chambers, chief of…
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the FCC Office of Strategic Planning and Policy Analysis, Wednesday in a blog post. The amount of funding requested was nine times higher than what was available, he noted. “It appears that the auction succeeded in drawing bidders who believe they can provide service very economically,” he said. “For example, when we compared the bids to the amount of support calculated by the FCC's cost model, the total requested in the auction in the aggregate is less than half the model-based support for those census blocks.” The amount offered was relatively small, Chambers said, at $10 million a year for 10 years, "or just over two-tenths of one percent of the FCC's $4.5 billion annual fund for rural universal service support." Some predicted bidding would focus on just the lowest-cost eligible census blocks, Chambers wrote. But bidders “sought support in all types of geographic areas with varying cost characteristics, with the majority of bids in the most expensive to serve areas that will be eligible for Connect America Phase II support,” he said. Next, the FCC is starting the process of reviewing low bids, he said. Provisionally selected bidders must demonstrate technical and financial qualifications and obtain a letter of credit and designation as an eligible telecommunications carrier, before they can start receiving funding, he said. “At the same, time, we are starting to design a rural broadband auction on a larger scale. While hard questions remain, we are glad to have results from this experiment to help guide our answers, and we are appreciative of the interest shown by every bidder in the auction.”