WISPA Statement on FCC's RDOF Proposal

The following statement may be attributed to Claude Aiken, president and CEO of WISPA:
 
Washington, DC, January 30, 2020 – Ending the rural digital divide remains an ongoing challenge for America.  Its stubborn presence, which affects approximately 20 million Americans, undermines opportunity and broad-based prosperity for all.  Thankfully, the FCC, Congress and the Administration have demonstrated a keen desire to get Americans online no matter where they live and have made tremendous strides to eradicate this debilitating situation. 
 
One such effort is the FCC’s $20.4 billion Rural Digital Opportunities Fund (RDOF) plan to get more broadband out to rural Americans.  Its main feature uses a competitive reverse auction process – similar in many regards to the successful CAF Phase II auction – which brought a diverse field of players and business models together to compete and deliver broadband to unserved Americans.  A number of WISPA’s members – that is, small innovators who deliver evolving broadband services to 6 million rural Americans – won funding in CAF Phase II, helping the FCC not only meet its charge to reduce the rural divide, but also do so in a taxpayer-friendly manner.     
 
WISPA is thankful for having the opportunity to present alternatives to its ambitious RDOF proposal. Though we have not yet seen the Order, it appears from prior reports and statements made in today’s Open Meeting that the Commission has worked to make the RDOF auction process fair and inclusive for all players. 
 
An example of this can be seen in the Commission’s initially circumscribed reliance on the use of letters of credit (LoC) to secure taxpayer investment in the RDOF.  WISPA believes today’s Order strikes a better balance, which will work to bring small rural innovators into the RDOF process and ensure their success.  While it is prudent and right for government fiduciaries to closely shepherd the use of taxpayer funds, it is much more likely that RDOF recipients will default if it is too hard or expensive to obtain an LoC.  WISPA greatly appreciates that the Commission has reduced this burden with rules that substantially diminish the value of an LoC over time as buildout milestones are met.  Reduction of LoC obligations allows more money to go to broadband deployment instead of bankers.  This benefits rural communities if small innovators already in the marketplace want to bid, and thereafter, assuming they have won funding, remain more viable during buildout of their new networks.  
 
Other reported benefits for small innovators in the Order include the addition of the 50/5 megabit per second performance tier, the adoption of a streamlined application process, and rejection of a proposal to require RDOF recipients to meet specified subscription benchmarks.  
These aspects of the Order will benefit small rural innovators who nimbly and cost-consciously provide broadband services to rural Americans.
 
Another aspect of the Order is more troubling, however.  More specifically, it does not adhere to the proven CAF II model.  Instead, it institutes a novel feature which allows only the fastest broadband speeds to continue past the “clearing round,” significantly limiting the players and diverse solutions brought to any given market.  This could result in expensive networks which lock in today’s technology, hamstringing the future needs of communities.  It sacrifices speed-to-market and cost-effectiveness in favor of expensive services that few Americans may fully utilize.  Moreover, it could actually thwart broader extension of broadband in unserved and underserved communities by reducing funds available in the more targeted Phase II of the RDOF auction plan. 
 
Promoting robust competition in all rounds of the bidding process will save taxpayer dollars and result in solutions that more properly map to the needs of rural communities.  The novel “clearing round” plan, however, arbitrarily attenuates this, which we believe will significantly limit RDOF’s success.
 
Twenty billion dollars is a lot of money to bridge the digital divide.  Getting it right is hard, and tough choices must be made to move this expeditiously forward.  Rural Americans cannot wait and deserve being enfranchised with the rest of the country.  We believe that at the end of the day, the Commission will make good on its RDOF proposal for the heartland of our country.  WISPA looks forward to studying the Order, and to working with the FCC as we all endeavor to get all Americans online no matter where they live. 
 
About WISPA
WISPA’s approximately 850 members are composed of fixed Wireless Internet Service Providers (WISPs) and the industry that supports fixed wireless broadband, including equipment suppliers, support services, and other components needed to run a successful business. Our members, and WISPs, in general, provide broadband access to over 6 million residential and business customers, often in exclusively rural areas.
 
Contact
Mike Wendy
WISPA
202-763-5257