Summary of USF ICC Reform - Mobility Thru Waivers

8/3/2019 Summary of USF ICC Reform - Mobility Thru Waivers

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ummary o

Reform Order & FNPRM

Part II Mobility Fund thru Interstate

Rate of Return Represcription

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USF REFORM

o Phase I Reverse auction in 2012

$300M of onetime support for mobile voice andbroadband via 3G or 4G in unserved areas

Unserved areas identified at the census block level

American Roamer data used to identify if the geometric

center of the census block is covered by 3G or 4G

Bidding may be aggregated at census block group or

tract levelCoverage units defined by road miles, not population

Support not available in areas where there is a

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regulatory commitment to deploy 3G or 4G service


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USF REFORM

o Phase I Support for one provider per geographic area

Exception to increase number of units served withoverlapping bids

Voice Performance Requirements

Same voice requirements as wireline carriers

Voice as a standalone service

areas

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USF REFORM

o Phase I Broadband Performance Requirements

Outdoor minimum data speeds

3G = 200 Kbps/50 Kbps

4G = 768 Kbps/200 Kbps

Data rates achieved in both fixed and mobileconditions, including typical road speeds

Minimum data rates must be achieved throu hout thecell area, including the cell edge

Latency that enables realtime applications, like VoIP

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USF REFORM

o Phase I Buildout requirements

At least 75% of road miles

3G within 2 years

4G within 3 years

If support is distributed at the Census Block level, FCCmay require > 75% coverage

Su ort distributed for road miles covered as a % of

road miles in supported area

Drive test data must be submitted as proof of coverage

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USF REFORM

o Phase I Collocation Requirements

Providers that newly construct towers must:

Reasonably accommodate collocations

Reasonably negotiate collocation with any provider that meets

Restriction from negotiating tower leases that restrict towerown from allowing others to collocate

through Mobility Fund support, pursuant to existing rules

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USF REFORM

o Phase I Service must be provided at reasonably comparable rates

Wireless rates are not regulated by the FCC or PUCs

Rates must fall within a reasonable range of urban rates

FCC to define reasonable range

Carriers must annually certify that rates fall within this rangefor similar service plans

Rate requirements end 5 years after support is awarded

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USF REFORM

o Phase I Eligibility for Support (prior to auction)

Must be an ETC in the supported area

Must have access to spectrum necessary to provide

supported services Certification of financial and technical capability without

ongoing support, before and after auction

Certification that support will not be used in areas with a

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USF REFORM

o Phase I Reverse Auction Procedures

Auction Design

FCC preference for single round, sealed bid process

Final design left to Wireless Bureau

Two Stage Application Process

Short Form basic ownership information and certification ofeligibility to participate

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USF REFORM



Long Form Application due w/in 10 days of close of auction

Disclosure of ownership and real parties and parties in interest

Proof of ETC designation in all areas for support

Proof of access to spectrum

Frequency Bands

Nature of Access (licensed or leased)

Project construction 3G or 4G network and proposed technology choice

Network design, including contracting, construction, and deploymentand maintenance periods

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USF REFORM




Financial Security and Guarantee of Performance

the support plus an additional default payment

Other Funding Restrictions

No Mobility Fund support for carriers that have previously committedto 3G or has received support from another federal agency

Post Auction Certifications Certification of availability of funds to cover costs that exceed support

Certification that services will be offered at rates reasonablycomparable to urban areas

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USF REFORM




Auction Defaults

Default payment not to exceed 20% of the winning bid

Winning bidders that default after receiving support


Repayment of all support received

support

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USF REFORM




Auction Defaults


Winning bidders that default after receiving support


Repayment of all support received

support

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USF REFORM


Bidding Process

Left to the Wireless Bureau to determine process

Reserve prices to be established, above which bids will not be

Wireless Bureau to address package bidding

Wireless Bureau to address limited funding availability

Tie Bids

Maximum support reached

Penalties imposed for withdrawn bids

Prohibition of certain communications during auction

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re ess ureau as au or y o e ay, suspen or cance


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USF REFORM CAF Mobility Fund

o Phase I Accountability and Oversight

1/3 distribution once long form application is granted

1/3 distribution upon showing of 50% of minimum coverage

Final distribution at re uired ercenta e of road miles

Support adjusted for difference between 100% and required %

Annual reports based on drive test data for 5 years

Maps illustrating coverage area for new service

Population residing in newly covered areas Linear road miles covered

Updated project information (description, budget and schedule)

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ecor e en on

Retain records for 10 years from the date of final disbursement


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USF REFORM

o Tribal Mobility Fund Phase I $50M of onetime support to deploy mobile broadband on

Tribal lands

Reverse auction following Mobility Fund Phase I auction

Generally, same terms/rules as Mobility Fund Phase I

Tribal engagement obligations to work with tribes in advance

of deploying service (following longform application)

25% bidding credits for Triballyowned or controlled

providers Unserved units defined by population, not road miles

ETC designation at least pending, not granted

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USF REFORM

o Phase II details address in FNPRM Up to $500M in ongoing support

Including $100M Tribal Fund

o

Identical Support Rule eliminated 1/1/2012 ,1/1/2012 6/30/2012 = 2011 baseline monthly

7/1/2012 6/30/2013 = 80% of baseline

7/1/2013 6/30/2014 = 60% of baseline7/1/2014 6/30/2015 = 40% of baseline

7 1 2015 6 30 2016 = 20% of baseline

MOSS ADAMS LLP | 177/1/2016 = No support


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USF REFORM

o Identical Support Rule eliminated 1/1/2012 Baseline support is capped at $3,000 per line

Recipients of CAF Mobility Fund Phase II support are noteligible for phased down Identical Support

Phase I recipients continue to be eligible

Phase II support in different areas does not impact

Phase down halts if Mobility Fund Phase II is notoperational by 6/30/2014

CETCs relieved of obligation to file quarterly line counts

Existing Covered Locations for Tribal lands also subject to5 ear hased down

MOSS ADAMS LLP | 18 2year delay for remote areas of Alaska & Standing Rock (ND)


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USF REFORM

o At least $100M annual support to extremely highcost areas

Fewer than 1% of all American homes

o Supports access to alternative technologies

Unlicensed wireless

o Implemented in 2013

o Details to be defined in the FNPRM

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USF REFORM

o Waiver process to seek relief from some or all USFreforms

FCC does not expect to grant waivers routinely

Subject to a total company earnings review

support would put voice service at risk

No mention of broadband at risk

o Consideration given if reform would cause a providerto default on existing loans or become insolvent

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USF REFORM

o Requirements Explanation of why the waiver standard is met

Include all financial data to verify carriers assertions

Additional Requirements

Densit Characteristics

Square miles

Subscribers per square mile

Road miles

Subscribers per square mile Mountains and bodies of water

Challenges and extraordinary costs

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USF REFORM

o Requirements Additional Requirements

Existing or lack of alternative providers

How unused/spare equipment is account for (Parts 32 & 36)

Details on corporate operations expenses

End user rate plans

For mobile providers, maps showing

Licensed area

Service area CETC designated area

Area in which carrier is the sole provider of service

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USF REFORM


For mobile providers, evidence that it is the only mobileprovider

For mobile providers, revenue and expense data for each cells te or t e most recent sca years

For mobile providers, projected revenue and expense for eachcell site for 5 years, with and without the waiver

, ,

For LECs, procedures for allocating shared or common costs

Audited financial statements for 3 most recent fiscal years

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USF REFORM


Identification of facilities that will be taken out of service ifwaiver is not granted

For Tribal lands and insular areas, additional information ont e un que c aracter st cs o t e area

Additional information requested by the FCC

FCC welcomes input from the state PUC

o FCC will place petition on public notice with 45 daysfor comments and reply comments

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USF REFORM

.

o For 2012 2017, contributions shall not exceed $4.5Bannually

Demand still set quarterly, at $1.125B

Excess from prior quarters to fund any current quarter that

would exceed $1.125B

o Fund allowed to accumulate reserves to facilitatetransition to CAF and fund onetime expenses

o Corr Wire ess reserve to un 2012 Mo i ity FunPhase I and other CAF Phase I

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USF REFORM

o ETCs to provide annual reports and certifications byApril 1stof each year, starting in 2012

Underlying support for annual ETC certification (10/1)

Extends current federal reporting requirements to all ETCs,

including those designated by the states

Certified by an officer of the company

CETCs with phased down support not required to submitbroadband re ortin data onl voice

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USF REFORM

o Reporting Requirements Speed and Latency network performance results submitted

annually, starting in 2013

3 years after implementation of CAF Phase II, price cap

carriers must certify that they are meeting milestones5 years after implementation of CAF Phase II, price cap

carriers must certify that they are meeting standards

Capacity starting in 2013, all ETCs must certify that

capacity requirements are comparable to urban areas Buildout/Service all ETCs must file a new 5year buildout

plan by 4/1/2013 and update annually

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USF REFORM

o Reporting Requirements Rate of return carriers must selfcertify that they are taking

reasonable steps to offer broadband at requirements

ETCs in price cap territories must selfcertify that they are

meeting interim milestones Pricing

All ETCs must self certify that their voice service is priced no

more than 2 standard deviations above the national average

Mobility Fund Phase I must self certify that rates are within areasonable range of similar plans in urban areas

Annually submit pricing information for voice and broadband

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USF REFORM

o Reporting Requirements Annual Financial Reporting

Privately held, rate of return carriers must submit auditedfinancial statements annually

RUS borrowers may submit RUS financial report Financia isc osures to e ma e pu ic y avai a e

Annual Ownership Information

Holding company, operating companies, affiliates, and DBAs

Report USF identifiers for each study area code

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USF REFORM

o Reporting Requirements Tribal Engagement included in annual report

Needs assessment and deployment planning focused on Tribalanchor institutions

Feasibility and sustainability planning Marketing in a culturally sensitive manner

Right of way, land use, facilities siting, environmental and

cultural preservation review processes

omp ance w t r a us ness an cens ng requ rements

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USF REFORM

o Reporting Requirements Consequences for NonCompliance

Existing rules apply to all ETCs

Support reduced for failure to fulfill public interest obligations

FNPRM seeks further comment on enforcement options forpartial nonperformance

Record Retention

Current 5year period extended to 10years

Requirements apply to all recipients of High Cost and CAFsupport

All documents must be made available upon request of the FCC,

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, an t e r respect ve au tors


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INTERSTATE RATE OF RETURN

o Represcription to be addressed in the FNPRM Order waives certain procedural requirements to streamline

the process

Primarily related to the filing of paper copies and service

Notice and comment process to be used

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QUESTIONS?

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Summary of USF ICC Reform - Mobility Thru Waivers

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