Connect America Fund, FCC, WC Docket
No. 10-90, 06/27/12
The FCC will forbear from requiring that the service area of an eligible
telecommunications carrier (ETC) applyiing for support from the new Mobility
Fund conform to the service area of any rural telephone company serving the same
Eliminating the matching service area requirement should maximize the number
of broadband service providers participating in the Mobility Fund Phase I
auction while removing the necessity of considering a large number of individual
waiver requests, which would have been an impossible task in light of the short
time remaining before the auction application deadline.
By Robert Emeritz
In an attempt to reduce barriers to participation in Phase I of the
Commission's new mobility fund, the FCC adopted June 27 a limited forbearance
from requiring that the service area of an eligible telecommunications carrier
(ETC) conform to the service area of any rural telephone company serving the
same area, pursuant to Section 214(e)(5) of the Act and section 54.207(b) of the
Commission's rules (Connect America
Fund, FCC, No. WC Docket No. 10-90, 06/27/12).
“Enabling new ETC service areas to be defined in a more targeted manner for
Mobility Fund Phase I is consistent with our approach of targeting support to
areas with a specific need for the support, helps preserve those efficiencies,
and thus serves the public interest,” the Commission declared.
The limited forbearance applies only with respect to conditional ETC
designations for participating in the Mobility Fund Phase I auction--that is,
ETC designations conditioned on receipt of Mobility Fund Phase I support.
As part of the comprehensive reform and modernization of the universal
service system undertaken in the recent USF/ICC Transformation Order, FCC
11-61 [54 CR 637], the Commission created the Mobility Fund to ensure
availability of mobile broadband networks in areas where a private-sector
business case for those networks was lacking. The Commission announced that it
would award by reverse auction up to $300 million in one-time support to
immediately accelerate deployment of current and next generation networks
providing mobile voice and broadband services in areas not presently covered by
such networks. The auction is scheduled for September 27, and applications are
due July 11. Applicants, except for Tribally-owned and controlled entities, must
be designated as ETCs in the areas on which they wish to bid prior to filing
their auction applications.
When a competitive carrier seeks to serve an area already served by a rural
telephone company, Section 214(e)(5) of the Act requires that the competitive
ETC's service area must conform to the rural telephone company's service area.
Commenters pointed out that the service area conformance requirement could
create uncertainty for potential Mobility Fund applicants and discourage
participation, and suggested that the Commission take steps to prevent this from
In response, the Commission chose to grant blanket forbearance from
conformance of service areas because of the short time available to applicants
and the high priority placed on broadband deployment in unserved and poorly
served areas. Handling petitions on an individual basis would clearly not have
been feasible under the circumstances.
While forbearing from the conformance requirements eliminates the need for
redefinition of any rural telephone company service areas in the context of
Mobility Fund Phase I, the Commission emphasized that it did not change the
requirements that apply if a party petitions to be an ETC for other purposes in
part of a service area served by a rural telephone company.
“By granting blanket forbearance of the conformance requirement for the
limited purpose of petitions for conditional designation to participate in the
auction, we seek to prevent that requirement from creating an obstacle to
participation by any carrier considering it. Removing such disincentives to
participation may increase competition in the auction resulting in lower bids
for support and enabling greater coverage within the Mobility Fund Phase I
budget,” the Commission declared.
The Commission's forbearance decision did not address redefinition of the
service areas of existing ETCs with respect to new targeted support mechanisms
other than Mobility Fund Phase I. “To the extent that an existing ETC seeks
Mobility Fund Phase I support for areas within its existing service area, the
new obligations will apply only to the portion of their existing service area
for which they win such support and will not have any impact on pre-existing
obligations and support mechanisms with respect to the existing service
The Commission was not concerned that an ETC serving only a relatively low
cost portion of a rural carrier's service area might “cream skim” by receiving
per line support based on the rural carrier's costs of serving the entire area,
because the amount of Mobility Fund Phase I support is not linked to the support
received by an overlapping rural carrier but is determined by the results of
competitive bidding for support.