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Most Phase II Awards Will Fund Greater Than 100 Mbps Service

Randy Sukow Sep 27, 2018

Yesterday’s monthly FCC meeting included a presentation from the Rural Broadband Auctions Task Force which reviewed the results of the recently concluded Phase II Connect America Fund Auction. As earlier reported, 103 bidders put in low bids totaling about $1.49 billion to reach 713,176 currently unserved homes and businesses.

The task force added a little more information about the level of service these homes can expect. A majority will be going from zero to greater than 100 Mbps downstream within the next 10 years.

In a PowerPoint presentation, the group provided a pie chart showing the speed levels low bidders have pledged to offer. Only a quarter of a percent indicated service between the bare minimum needed to qualify for support (10 Mbps downstream/1 Mbps upstream) and 25/3 Mbps.  Fifty-three percent indicated they would deliver service exceeding 100/20 Mbps. Of that majority, 19 percent said they would build fiber networks delivering a gigabit or more downstream and 500 Mbps upstream.

The FCC used a bid weighting system giving preference to companies offering the best speed, latency and usage-level performance at the lowest cost over a given geographic area. Most observers, at the time the Commission adopted the formula, believed that the system gave the greatest advantage to wireline, fiber optic proposals. The task force report appears to confirm that.

With the auction complete, Commissioner Michael O’Rielly observed that there will still be about 12 million unserved homes that Phase II will not reach. The Commission originally set aside $1.98 billion for the Phase II auction, meaning that there will be about $500 million left. He estimated that it might take $7 billion to reach those remaining 12 million. “Stretching this math out, that’s a pretty big shortfall,” O’Rielly said.

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