The Connect America Fund Phase II and

Mobility Funds Phase II Auctions

National League of Cities

March 11, 2018

Overview of the CAF II Auction

oWill award up to $1.98 billion over 10

years

oSupport for broadband and voice

oReverse auction

oWinning bidders must become ETCs

and submit a Letter of Credit after the

auction

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CAF II Timing / Next Steps

Procedures PN – January 2018

Final eligible areas – February 2018

Bidder education Application workshop – March 14, 2018

Application filing window: March 19-30 Initial Review & Status PN

Resubmission Window

Qualified Bidders PN

Mock auction: Week of July 16

Bidding begins July 24

Closing PN

Long-Form filing window

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CAF II Auction Application Procedures

Two-step process: • Short-form application before auction

• Long-form application for winning bidders to receive support

Short-Form will collect:1. State(s), technology/ies and service tier(s) for which an

applicant intends to bid

2. Technical information (e.g., operational info, spectrum access)

3. Financial information (audited or unaudited)

• 5-point scale

• Low-scoring applicants subject to more in-depth review of

their finances

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CAF II Auction

Which areas will be

eligible for support?

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CAF II Eligible Areas

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Map and list on FCC website:

https://www.fcc.gov/maps/caf2-auction-final-areas/

• Eligible census blocks

grouped into census block

groups (CBGs) for bidding

• 30k CBGs, 210k blocks,

975k locations

• Where price cap carriers

declined model support and

other areas

• Each CBG has reserve price

and number of locations

CAF II Auction

How Much Support?

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CAF II Auction Reserve Prices

• Each CBG has a reserve price– Maximum amount of support that can be

awarded for an area

– Based on Connect America Cost Model

• Cap on Extremely High Cost blocks of

$146.10 per location

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CAF II Auction

What services can be

supported?

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CAF II Auction Service Tiers

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CAF II Auction

Bidding

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CAF II Auction Reserve Prices and Bidding

• Bids in the auction will be expressed as a

percentage of the reserve price for each area

• In each round, bidders are asked if they will

provide service to an area at a percentage of an

area’s reserve price, which will decrease in each

round

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CAF II Auction Reserve Prices and Bidding

• Areas winning support will be those where bidders

accept the lowest percentages of the area’s reserve

price

– Lowest bidder within each winning area will receive

support

• Different service tiers are not considered in

determining winners

– Bidders with different service tiers compete head-to-

head based on percentage of the reserve price

– Support amounts will be adjusted for service tier

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CAF II Auction Reserve Prices and Bidding

• No area will receive support exceeding its

reserve price

• No support will be awarded until total

implied support for all eligible areas is at or

below the auction’s budget (the auction has

“cleared”).

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CAF II Auction Close

• The auction ends after

– the budget has cleared and

– there is no area with more than one bid

at the base clock percentage

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CAF II Auction

Post-Auction

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CAF II Auction

• After Bidding Closes:

– Commission announces winners by CBG,

service tiers and latencies

– Winners file Long-Form Applications

• More detailed technical showing

– Commission processes LF Applications and

authorizes support

– Support begins

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Service Obligations

• Winners must deploy service to locations in

the CBG – 40% of the number of locations by year 3

– Additional 20% in each subsequent year

– 100% of locations by year 6

– Measured at state level

• Data on locations served filed with USAC

• Rates must be reasonably comparable to

rates for similar services in urban areas.

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Location Service Obligations

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Census Block Groups (CBGs) Won in

Michigan

Number of EligibleCensus Blocks

Locations Determined by

the Model

Actual Locations

On The Ground

261450101001 2 5 3

261450101002 4 32 35

261450101005 1 1 1

261450108003 1 3 5

261450111001 3 5 4

261450112002 1 29 27

TOTAL 12 75 75

SERVICE OBLIGATION = 75 locations across 12 blocks

• If actual is less than model, can use true-up process

• Guidance on what constitutes a “location” can be found in DA 16-1363

Example in Michigan…

CAF II - More Information

Additional information available at

www.fcc.gov/connect-america-fund-phase-ii-auction

Email questions to auction903@fcc.gov

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Mobility Fund Phase II Auction

• Earlier in process than CAF II – MF II Auction

expected in 2019

• MF II will auction support for 4G LTE in eligible

areas

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Mobility Fund Phase II Auction

• MF II eligible areas are being determined

through a two-stage process:

– 4G LTE data collection

• Providers submit coverage data meeting

specification

• Completed January 2018 – Aggregate Map

Released February 2018

– Challenge process

• Five-month period in which providers, local

governments, others [with waiver], can challenge

the data in the initial map with speed-test data

• Commences March 29, 2018

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Mobility Fund Phase II Auction

MF II Auction Next Steps– Challenge Process – through August 27, 2018

– Commission adjudication of challenges

– Final eligible areas

– MF II Auction Procedures – comment cycle

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Mobility Fund Phase II Auction

More Information

MF II Webpage:

https://www.fcc.gov/mobility-fund-phase-2

Initial eligible areas map:

www.fcc.gov/maps/mobility-fund-ii-initial-eligible-areas-map

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National Broadband Map

The FCC has recently completed an update and

modernization of its National Broadband Map

– Based on FCC Form 477 fixed service deployment

data

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National Broadband Map

• Features in the National Broadband Map

include:

– Deployment summaries available for seven different

geographical types: nation, state, county, congressional district,

city or town (census place), Tribal area, and Core-based

Statistical Area (such as New York-Newark-Jersey City NY-NJ-

PA)

– Deployment comparisons between geographic areas

– Satellite imagery map overlay that shows buildings, roads, and

geography

– Graphs that show what fraction of an area’s population has

access to broadband at a given speed

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National Broadband Map

The map can be accessed at:

https://broadbandmap.fcc.gov

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Questions?

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