Tribal Mobility Fund Phase I Auction Scheduled for October 24, 2013; Comment Sought on Competitive Bidding Procedures for Auction 902 and Certain Program Requirements, 21355-21364 [2013-08402]
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Federal Register / Vol. 78, No. 69 / Wednesday, April 10, 2013 / Notices
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Federal Communications Commission.
Barbara A. Kreisman,
Chief, Video Division, Media Bureau.
[FR Doc. 2013–08283 Filed 4–9–13; 8:45 am]
BILLING CODE 6712–01–P
FEDERAL COMMUNICATIONS
COMMISSION
[AU Docket No. 13–53; DA 13–323]
Tribal Mobility Fund Phase I Auction
Scheduled for October 24, 2013;
Comment Sought on Competitive
Bidding Procedures for Auction 902
and Certain Program Requirements
Federal Communications
Commission.
ACTION: Notice.
AGENCY:
In this document, the
Commission’s Wireless
Telecommunications and Wireline
Competition Bureaus announce a
reverse auction to award up to $50
million in one-time Tribal Mobility
Fund Phase I support scheduled to
commence on October 24, 2013. This
document also seeks comment on
competitive bidding procedures for
Auction 902 and certain program
requirements.
DATES: Comments are due on or before
May 10, 2013, and Reply comments are
due on or before May 24, 2013.
ADDRESSES: All filings in response to
this public notice must refer to AU
Docket No. 13–53. The Wireless
Telecommunications Bureau and
Wireline Competition Bureau strongly
encourage interested parties to file
comments electronically, and request
that an additional copy of all comments
and reply comments be submitted
electronically to the following address:
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SUMMARY:
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auction902@fcc.gov. To the extent that
commenters identify census blocks for
removal and/or addition to the list of
potentially eligible census blocks, the
Bureaus request that such lists be filed
in MS Excel format through the Auction
902 email box. Comments may be
submitted by any of the following
methods:
D Electronic Filers: Federal
Communications Commission’s Web
site: https://fjallfoss.fcc.gov/ecfs2/.
Follow the instructions for submitting
comments.
D Paper Filers: Parties who choose to
file by paper must file an original and
one copy of each filing. Filings can be
sent by hand or messenger delivery, by
commercial overnight courier, or by
first-class or overnight U.S. Postal
Service mail. All filings must be
addressed to the Commission’s
Secretary, Attn: WTB/ASAD, Office of
the Secretary, Federal Communications
Commission.
D All hand-delivered or messengerdelivered paper filings for the
Commission’s Secretary must be
delivered to FCC Headquarters at 445
12th Street SW., Room TW–A325,
Washington, DC 20554. The filing hours
are 8 a.m. to 7 p.m. Eastern Time. All
hand deliveries must be held together
with rubber bands or fasteners. Any
envelopes and boxes must be disposed
of before entering the building.
D Commercial overnight mail (other
than U.S. Postal Service Express Mail
and Priority Mail) must be sent to 9300
East Hampton Drive, Capitol Heights,
MD 20743.
D U.S. Postal Service first-class,
Express, and Priority mail must be
addressed to 445 12th Street SW.,
Washington, DC 20554.
D People with Disabilities: Contact the
FCC to request reasonable
accommodations (accessible format
documents, sign language interpreters,
CART, etc.) by email: FCC504@fcc.gov
or phone: 202–418–0530 or TTY: 202–
418–0432.
FOR FURTHER INFORMATION CONTACT:
Wireless Telecommunications Bureau,
Auctions and Spectrum Access Division:
For Tribal Mobility Fund Phase I
questions: Patricia Robbins at (202) 418–
0660; for auction process questions: Lisa
Stover at (717) 338–2868. Wireline
Competition Bureau,
Telecommunications Access Policy
Division: For general universal service
questions: Alex Minard at (202) 418–
7400. Consumer and Governmental
Affairs Bureau, Office of Native Affairs
and Policy: For questions regarding
Tribal lands and Tribal governments:
Geoffrey Blackwell at (202) 418–3629 or
Irene Flannery at (202) 418–1307.
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This is a
summary of the Auction 902 Comment
Public Notice released on March 29,
2013. The complete text of the Auction
902 Comment Public Notice, including
attachments and related Commission
documents, is available for public
inspection and copying from 8:00 a.m.
to 4:30 p.m. Eastern Time (ET) Monday
through Thursday or from 8:00 a.m. to
11:30 a.m. ET on Fridays in the FCC
Reference Information Center, 445 12th
Street SW., Room CY–A257,
Washington, DC 20554. The Auction
902 Comment Public Notice and related
Commission documents also may be
purchased from the Commission’s
duplicating contractor, Best Copy and
Printing, Inc. (BCPI), 445 12th Street
SW., Room CY–B402, Washington, DC
20554, telephone 202–488–5300, fax
202–488–5563, or you may contact BCPI
at its Web site: https://
www.BCPIWEB.com. When ordering
documents from BCPI, please provide
the appropriate FCC document number,
for example, DA 13–323 for the Auction
902 Comment Public Notice. The
Auction 902 Comment Public Notice
and related documents also are available
on the Internet at the Commission’s Web
site: https://wireless.fcc.gov/auctions/
902/, or by using the search function for
AU Docket No. 13–53 on the
Commission’s Electronic Comment
Filing System (ECFS) Web page at
https://www.fcc.gov/cgb/ecfs/.
SUPPLEMENTARY INFORMATION:
I. Introduction and Summary
1. The Wireless Telecommunications
and Wireline Competition Bureaus (the
Bureaus) announce a reverse auction to
award up to $50 million in one-time
Tribal Mobility Fund Phase I support
and seek comment on auction
procedures and certain related
programmatic issues. This auction is
scheduled to begin on October 24, 2013,
and is designated as Auction 902.
2. Tribal Mobility Fund Phase I will
provide one-time support to deploy
mobile voice and broadband services to
unserved Tribal lands, which have
significant telecommunications
deployment and connectivity
challenges. Auction 902 will award
high-cost universal service support
through reverse competitive bidding, as
envisioned by the Commission in the
USF/ICC Transformation Order, 76 FR
73830, November 29, 2011 and 76 FR
81562, December 28, 2011. Auction 902
will award one-time support to carriers
that commit to provide 3G or better
mobile voice and broadband services on
Tribal lands where such services are
unavailable, based on the bids that will
maximize the population covered by
new mobile services without exceeding
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the budget of $50 million. Because the
objective of this auction is to maximize
the expansion of advanced services with
the available funds, winning bids will
generally be those that would achieve
the deployment of such services for
relatively lower levels of support.
3. Many of the pre-auction processes
and bidding procedures for this auction
will be similar to those used in the
Commission’s first auction of universal
service support, Auction 901, which
were modeled on those regularly used
for the Commission’s spectrum license
auctions. In Auction 902, support for
Tribal lands generally will be awarded
on the same terms and subject to the
same rules as general Mobility Fund
Phase I support with a few exceptions
tailored to address the unique needs of
communities on Tribal lands.
Specifically, unlike general Mobility
Fund Phase I, for which the number of
units in a given unserved census block
were calculated according to the
number of road miles in that block, for
Tribal Mobility Fund Phase I, the
number of units in a given census block
will be the population of that block. The
Commission concluded in the USF/ICC
Transformation Order that a populationbased metric is appropriate for the
Tribal Mobility Fund Phase I auction.
The population-based coverage unit is
the basic unit that will be used to
determine the winners in Auction 902
and to measure compliance with the
applicable performance requirements.
4. Throughout this document, the
term per-pop means per population (or
per person) within a given geographic
area. The terms 3G, 3G or better, current
generation, and advanced are used
interchangeably in this document to
refer to mobile wireless services that
provide voice telephony service on
networks that also provide services such
as Internet access and email. Areas
without 3G or better services and the
population within them are referred to
as unserved. This document refers to
awarding or selecting awardees by
auction for simplicity of expression.
Each party that becomes a winning
bidder in the auction must file an
application for support. Only after
review of the application to confirm
compliance with all the applicable
requirements will a winning bidder
become authorized to receive support.
5. In the Auction 902 Comment Public
Notice, the Bureaus propose and seek
comment on: (1) Identifying geographic
areas eligible for support; (2)
determining the basic auction design,
whether and how to aggregate eligible
areas for bidding, and how awardees
will be selected; and (3) establishing
certain other bidding procedures,
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including information disclosure
procedures and methodologies for
calculating auction and performance
default payments. The Bureaus will
announce final procedures and other
important information such as
application deadlines and other dates
related to Auction 902 after considering
comments provided in response to the
Auction 902 Comment Public Notice,
pursuant to governing statutes and
Commission rules.
II. Background
6. In the USF/ICC Transformation
Order, the Commission
comprehensively reformed and
modernized the universal service
system to help ensure the universal
availability of fixed and mobile
communication networks capable of
providing voice and broadband services
where people live, work, and travel. The
Commission’s universal service reforms
include a commitment to fiscal
responsibility, accountability, and the
use of market-based mechanisms, such
as competitive bidding, to provide more
targeted and efficient support than in
the past. For the first time, the
Commission established a universal
service support mechanism dedicated
exclusively to mobile services—the
Mobility Fund.
7. Tribal Mobility Fund Phase I will
provide up to $50 million in one-time
support to address gaps in mobile
services by supporting the build-out of
current- and next-generation mobile
networks on Tribal lands where these
networks are unavailable. This support
will be awarded by reverse auction with
the objective of maximizing the
population covered in eligible unserved
areas on Tribal lands within the
established budget. The support offered
under Tribal Mobility Fund Phase I is in
addition to any ongoing support
provided under existing high-cost
universal service program mechanisms.
8. Applicant Eligibility. The USF/ICC
Transformation Order established
application, performance, and other
requirements for Mobility Fund Phase I,
including Tribal Mobility Fund Phase I.
In order to participate in an auction for
Tribal Mobility Fund Phase I support,
an applicant must be designated as an
eligible telecommunications carrier
(ETC) for the areas on which it wishes
to bid or, if it is a Tribally-owned or
-controlled entity, have a pending
application for ETC designation for the
relevant areas within the boundaries of
the Tribal land associated with the Tribe
that owns or controls the entity. A
Tribally-owned or -controlled entity
must have its application for ETC
designation pending at the relevant
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short-form application deadline. The
ETC designation must cover a sufficient
portion of the bidding area to allow the
applicant to satisfy the applicable
performance requirements. A Tribal
entity that wins support in Auction 902
while its ETC petition is pending must
receive an ETC designation prior to
support being authorized and disbursed.
Allowing a Tribally-owned or
-controlled entity to participate at
auction while its ETC petition is
pending in no way prejudges the
ultimate decision on its pending ETC
petition. An applicant for Auction 902
must also demonstrate that it has access
to the spectrum necessary to satisfy the
applicable performance requirements.
The requirement that parties have
access to spectrum applies equally to all
parties, including Tribally-owned or
-controlled entities.
9. Because of the lead time necessary
to receive designation as an ETC and to
acquire access to spectrum, prospective
applicants that need to do so are
strongly encouraged to initiate both
processes as soon as possible in order to
increase the likelihood that they will be
eligible to participate in Auction 902.
Carriers subject to the jurisdiction of a
state in which they seek designation
should petition that state’s commission
for designation as an ETC to provide
voice service. Carriers not subject to the
jurisdiction of the relevant state
commission should petition the
Commission for designation as an ETC.
The Commission has established a
framework for determining whether a
state commission or the Commission
itself has jurisdiction to designate ETCs
on Tribal lands. First, a carrier serving
Tribal lands must petition the
Commission for a determination on
whether the state has jurisdiction over
the carrier. The Commission then
determines whether the carrier is
subject to the jurisdiction of a state
commission or whether it is subject to
a Tribal authority given the Tribal
interests involved. In the latter case, the
Commission has jurisdiction to
designate the carrier as an ETC and will
proceed to consider the merits of the
carrier’s petition for designation. The
Bureaus have provided guidance on
existing requirements for filing an ETC
application with the Commission in a
separate public notice: Eligible
Telecommunications Carrier
Designation for Participation in Mobility
Fund Phase I, 77 FR 14012. Petitions for
designation as an ETC should be filed in
WC Docket No. 09–197 and WT Docket
No. 10–208, and should not be filed in
the docket for Auction 902, AU Docket
No. 13–53. The Bureaus adopted a
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protective order limiting access to
proprietary and confidential
information that may be filed in WC
Docket No. 09–197 and WT Docket No.
10–208 in connection with petitions
filed for designation as an ETC for
purposes of participation in any
Mobility Fund auction.
10. In addition, an Auction 902
applicant must certify that it is
financially and technically capable of
providing 3G or better service. An
applicant seeking to use the 25 percent
bidding credit preference for Triballyowned or -controlled providers must
certify that it is a Tribally-owned or
-controlled entity and identify the
applicable Tribe and Tribal land in its
application. To ensure that Tribal
Mobility Fund Phase I support meets
the Commission’s public interest
objectives, recipients will be subject to
a variety of obligations, including
performance, coverage, collocation,
voice and data roaming requirements,
and Tribal engagement obligations.
Among other things, winning bidders
will be required either to deploy 3G
service within two years, or 4G service
within three years, after the date on
which it is authorized to receive
support. Those seeking to participate in
the auction must file a short-form
application by a deadline to be
announced, providing information and
certifications as to their qualifications to
receive support. After the close of the
auction, winning bidders must submit a
detailed long-form application and
procure an irrevocable stand-by Letter
(or Letters) of Credit (LOC) to secure the
Commission’s financial commitment,
along with an opinion letter from
counsel.
11. Auction Process Overview. In the
USF/ICC Transformation Order, the
Commission delegated authority to the
Bureaus to implement Tribal Mobility
Fund Phase I, including the authority to
prepare for and conduct an auction and
administer program details. The Auction
902 Comment Public Notice focuses on
establishing the procedures and
processes needed to conduct Auction
902 and administer Tribal Mobility
Fund Phase I. Parties responding to the
Auction 902 Comment Public Notice
should be familiar with the details of
the USF/ICC Transformation Order and
the process established for the
Commission’s first auction of Mobility
Fund Phase I support (Auction 901),
which serve as the foundation for the
process the Bureaus propose here. After
reviewing the comments requested by
the Auction 902 Comment Public
Notice, the Bureaus will release a public
notice detailing final procedures for
Auction 902. That public notice will be
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released so that potential applicants will
have adequate time to familiarize
themselves with the specific procedures
that will govern the auction and with
the obligations of support, including
rates and coverage requirements that the
Bureaus address in the Auction 902
Comment Public Notice. The Auction
902 Comment Public Notice summarizes
the topics on which the Bureaus seek
comment. The Bureaus ask that
commenters advocating for particular
procedures provide input on the costs
and benefits of those procedures.
12. Areas Eligible for Mobility Fund
Support. To assure that support is being
used in areas that are not covered by
current or next generation mobile
networks, the USF/ICC Transformation
Order provides that the Bureaus will
identify areas currently without such
services on a census block basis, and
publish a list of census blocks deemed
eligible for Tribal Mobility Fund Phase
I support. A list of potentially eligible
census blocks, as well as the population
associated with each, can be found at:
https://wireless.fcc.gov/auctions/902/.
The Bureaus seek comment on various
issues regarding the census blocks
identified as potentially eligible. The
Bureaus will finalize which areas are
eligible for support in a public notice
establishing final procedures for
Auction 902.
13. Auction Design and Bidding
Procedures. In the USF/ICC
Transformation Order, the Commission
concluded that distributing support
through a reverse auction would be the
best way to achieve its goal of
maximizing consumer benefits with the
funds available for Phase I of the
Mobility Fund and adopted general
competitive bidding rules for that
purpose. As envisioned by the
Commission, parties seeking support
will compete in Auction 902 by
indicating the amount of support they
need to meet the requirements of Tribal
Mobility Fund Phase I in the eligible
areas on which they bid. The
Commission indicated that a singleround sealed bid auction format would
be most appropriate for Tribal Mobility
Fund Phase I, but left the final
determination to the Bureaus. Based on
the Bureaus’ analysis of the Mobility
Fund Phase I auction results and the
opportunity for the Bureaus to refine the
auction format for the purposes of
Auction 902, which will offer support
for fewer eligible areas than Auction
901, the Bureaus now seek further
comment on the auction format for
Tribal Mobility Fund Phase I. As in the
Mobility Fund Phase I auction, the
Bureaus propose to award support to
maximize advanced services to eligible
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21357
census blocks that can gain 3G or better
mobile services under the Tribal
Mobility Fund Phase I budget. In this
case, however, the Bureaus will measure
coverage based on population rather
than road miles. Under the auction
design options discussed in the Auction
902 Comment Public Notice, bidders
would compete not only against other
carriers that may be bidding for support
in the same areas, but also against
carriers bidding for support in other
areas nationwide.
14. The list of potentially eligible
areas the Bureaus released in
connection with the Auction 902
Comment Public Notice contains 5,554
census blocks, which have an average
area of approximately 2.1 square miles
and may be smaller than the minimum
areas for which carriers seeking support
are likely to want to extend service.
Thus, carriers bidding for support are
likely to bid on groups of census blocks.
To address this need to aggregate census
blocks for bidding while maintaining a
manageable auction process, the
Bureaus propose an aggregation
approach and seek comment on any
alternative approaches.
15. The Bureaus seek comment on
whether to establish any maximum
acceptable bid amounts or reserve
amounts. In addition, consistent with
recent practice in spectrum license
auctions and Auction 901, the Bureaus
propose to withhold, until after the
close of bidding, information from
applicants’ short-form applications
regarding their interest in particular
eligible census blocks. The Bureaus seek
comment on this proposal.
16. Post-Auction Procedures. At the
conclusion of the auction, each winning
bidder will be required to file an indepth long-form application to
demonstrate that it qualifies for Tribal
Mobility Fund Phase I support. The
long-form application must include
information regarding the winning
bidder’s ownership, eligibility to receive
support, eligibility for a Tribal entity
bidding credit, if relevant, and network
construction details. An applicant’s
claim of eligibility for the bidding credit
available to Tribally-owned or
-controlled providers is subject to
review to verify the facts underlying the
claim of ownership or control. Winning
bidders must also certify that they will
offer service in supported areas at rates
comparable to those for similar services
in urban areas. In the Auction 902
Comment Public Notice, the Bureaus
describe and seek comment on a
proposed standard for demonstrating
compliance with this requirement. A
winning bidder will be liable for an
auction default payment if the bidder
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fails to timely file the long-form
application, is found ineligible, is
disqualified, or otherwise defaults for
any reason. In addition, a winning
bidder that fails to meet certain
obligations will be liable for a
performance default payment.
Accordingly, winning bidders will be
required to provide an irrevocable
stand-by LOC in an amount equal to the
amount of support, plus an additional
amount which would serve as a
performance default payment if
necessary. The Bureaus seek comment
on how to establish auction and
performance default payments.
17. Tribal Engagement. Any bidder
winning support for areas within Tribal
lands (any bidder winning support in
Auction 902) must notify the
appropriate Tribal governments of its
winning bid no later than five business
days after being identified by public
notice as a winning bidder. Thereafter,
at the long-form application stage and in
annual reports, a bidder winning
support in Auction 902 will be required
to certify that it has substantively
engaged appropriate Tribal officials
regarding certain minimum discussion
topics and provide a summary of the
results of such engagement. Appropriate
Tribal government officials are elected
or duly authorized government officials
of federally recognized American Indian
Tribes and Alaska Native Villages. In
the instance of the Hawaiian Home
Lands, this engagement must occur with
the State of Hawaii Department of
Hawaiian Home Lands and Office of
Hawaiian Affairs. A copy of the
certification and summary must be sent
to the appropriate Tribal officials when
it is sent to the Commission. A winning
bidder’s engagement with the applicable
Tribal governments must consist, at a
minimum, of discussion regarding: (1) a
needs assessment and deployment
planning with a focus on Tribal
community anchor institutions; (2)
feasibility and sustainability planning;
(3) marketing services in a culturally
sensitive manner; (4) rights of way
processes, land use permitting, facilities
siting, environmental and cultural
preservation review processes; and (5)
compliance with Tribal business and
licensing requirements.
III. Areas Eligible For Tribal Mobility
Fund Support
A. Identifying Eligible Unserved Census
Blocks
18. In the USF/ICC Transformation
Order, the Commission decided to target
Mobility Fund Phase I support,
including Tribal Mobility Fund Phase I
support, to census blocks without 3G or
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better service, and determined that
Mosaik Solutions (Mosaik) (formerly
known as American Roamer) data is the
best available data source for
determining the availability of such
service. Accordingly, the Bureaus have
identified potentially eligible blocks on
Tribal lands using census blocks from
the 2010 Census and the most recently
available Mosaik data, from January
2013.
19. The Bureaus identified census
blocks within Tribal lands using 2010
Census data. Tribal lands include any
federally recognized Indian tribe’s
reservation, pueblo or colony, including
former reservations in Oklahoma,
Alaska Native regions established
pursuant to the Alaska Native Claims
Settlement Act, and Indian Allotments,
as well as Hawaiian Home Lands—areas
held in trust for native Hawaiians by the
state of Hawaii, pursuant to the
Hawaiian Homes Commission Act, as
amended. Tribal lands in Alaska, i.e.,
the Annette Island Reserve and areas
where federally recognized Alaska
Native villages are located within the
Alaska Native regions, were identified
using 2010 Census data identifying the
Annette Island Reserve and Alaska
Native village statistical areas.
20. The Bureaus then used geographic
information system (GIS) software to
determine whether the Mosaik data
shows 3G or better wireless coverage at
the centroid of each census block. The
Bureaus use the term centroid to refer to
the internal point (latitude/longitude) of
a census block polygon. The Bureaus
used ArcGIS software from Esri to
determine whether the Mosaik data
showed 3G or better coverage at each
block’s centroid. The following
technologies were considered 3G or
better: EV–DO, EV–DO Rev A, UMTS/
HSPA, HSPA+, WiMAX, and LTE. If the
Mosaik data did not show such
coverage, the block was determined to
be potentially eligible for Tribal
Mobility Phase I support. Because
support will be awarded based on the
bids that will maximize the population
covered by new mobile services, any of
these census blocks without population
were excluded. The Bureaus then
excluded any blocks that, during the
Auction 901 challenge process, were
determined to be served or to be
ineligible for Mobility Fund Phase I
support because a provider had made a
regulatory commitment to provide 3G or
better wireless service or had received a
funding commitment from a federal
executive department or agency in
response to the provider’s commitment
to provide 3G or better wireless service
in that area. In addition, the Bureaus
identified those census blocks that were
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the subject of winning bids in Auction
901. Any census block that was the
subject of a winning bid in Auction 901
and for which support is authorized at
the conclusion of the Auction 901 longform application review will not be
eligible for Tribal Mobility Fund Phase
I support. If prior to the release of the
list of eligible census blocks the Bureaus
determine that any of the identified
winning bids from Auction 901 cannot
be authorized, but would otherwise be
eligible for Auction 902, then such
eligible blocks will be made available.
21. Pursuant to the USF/ICC
Transformation Order, the Bureaus will
also make ineligible for support any
additional census blocks for which,
notwithstanding the absence of 3G
service, any provider has made a
regulatory commitment to provide 3G or
better wireless service, or has received
a funding commitment from a federal
executive department or agency in
response to the carrier’s commitment to
provide 3G or better wireless service.
Such federal funding commitments may
have been made under, but are not
limited to, the Broadband Technology
Opportunities Program and the
Broadband Initiatives Program.
Furthermore, the Commission
established certain bidder-specific
restrictions. Specifically, each applicant
for Tribal Mobility Fund Phase I support
is required to certify that it will not seek
support for any areas in which it had
made a public commitment to deploy
3G or better wireless service by
December 31, 2012. In determining
whether an applicant had made such a
public commitment, the Bureaus
anticipate that they would consider any
public statement made with some
specificity as to both geographic area
and time period. This restriction will
not prevent a bidder from seeking and
receiving support for an unserved area
for which another provider had made
such a public commitment.
22. Attachment A–1 released with the
Auctions 902 Comment Public Notice
provides a summary of the list of
potentially eligible census blocks. For
each state and territory, Attachment A–
1 provides the total number of
potentially eligible census blocks and
the total number of tracts, counties,
Tribal lands, and proposed aggregated
bidding areas. For each state and
territory, Attachment A–1 also provides
the total population, area, and road
miles of the potentially eligible blocks.
Attachment A–2 released with the
Auction 902 Comment Public Notice
provides a list of the proposed
aggregated bidding areas. For each area,
Attachment A–2 provides the state,
county, and Tribal land; the number of
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potentially eligible blocks; and the total
population, area, and road miles of
those blocks. Due to the large number of
potentially eligible blocks, the complete
list of the individual blocks will be
provided in electronic format only,
available as a separate Attachment A file
at https://wireless.fcc.gov/auctions/902/.
For each potentially eligible block,
individually identified by its Federal
Information Processing Series (FIPS)
code, the Attachment A file provides the
population, area, and road miles of the
block; and the associated state, county,
tract, Tribe, Tribal land, and proposed
aggregated bidding area.
23. If commenters think certain blocks
included in the list should not be
eligible for support, they should
indicate which blocks and provide
supporting evidence. Similarly, if
commenters think certain blocks not
included in the list should be eligible
for support, they should indicate which
blocks and provide supporting
evidence. In particular, the Bureaus note
that, in the USF/ICC Transformation
Order, the Commission required all
wireless competitive ETCs in the highcost program to review the list of
eligible census blocks for the purpose of
identifying any areas for which they
have made a regulatory commitment to
provide 3G or better service or received
a federal executive department or
agency funding commitment in
exchange for their commitment to
provide 3G or better service. The
Bureaus will entertain challenges to the
list of potentially eligible census blocks
only in the form of comments to the
Auctions 902 Comment Public Notice.
The Commission concluded in the USF/
ICC Transformation Order that more
extended pre-auction review could
cause undue delay in making one-time
Phase I support available. Further, the
Commission decided that providing for
post-auction challenges would inject
uncertainty and delay into the process.
Commenters identifying census blocks
for removal and/or addition to the
Bureaus’ list of potentially eligible
census blocks are encouraged to provide
detailed information in support of their
views. In making such determinations
for Auction 901, the Bureaus found
demonstrations of coverage to be more
credible and convincing where they
were supported by maps, discussions of
drive tests, explanation of
methodologies for determining
coverage, and certifications by one or
more individuals as to the veracity of
the material provided. In light of the
population-based metric used to
determine the number of unserved units
for Tribal Mobility Fund Phase I, drive
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tests used to demonstrate coverage may
be conducted by means other than
automobiles on roads. Providers may
demonstrate coverage of an area with a
statistically significant number of tests
in the vicinity of residences being
covered. For Auction 901, the Bureaus
did not make changes to potentially
eligible areas based on submissions
making assertions of coverage without
any supporting evidence.
24. Based on a review of the
comments and any related information,
the Bureaus will provide a list of the
specific census blocks eligible for
support in Auction 902 when it releases
the public notice announcing
procedures for Auction 902. In addition
to providing files containing this final
list of census blocks and related data,
the Bureaus anticipate providing an
interactive mapping interface for this
information on the Commission Web
site. This interface could aid bidders in
matching up their own information on
the geographic areas in which they are
interested with the blocks available in
the auction. The files and/or the
interactive mapping interface will also
provide data such as associated
population and area. The Bureaus
anticipate that the file formats and the
interactive mapping interface will be
very similar to those provided for
Auction 901. If potential bidders believe
that the Bureaus should not provide the
same types of files and interactive
mapping interface as those provided for
Auction 901, or that the Bureaus should
provide additional information or other
tools, they should submit detailed
comments describing the types of files,
information, or tools requested and
explaining the reasons for the request.
B. Establishing Unserved PopulationBased Units
25. In Auction 902, the Bureaus will
use population as the basis for
calculating the number of units in each
eligible census block for purposes of
comparing bids and measuring the
performance of Tribal Mobility Fund
Phase I support recipients. To establish
the population associated with each
census block eligible for Tribal Mobility
Fund Phase I support, the Bureaus will
use the 2010 Census data made
available by the Census Bureau. The
Attachment A file at https://
wireless.fcc.gov/auctions/902/ includes
the population for each potentially
eligible census block.
26. The Bureaus propose to include as
eligible only those unserved census
blocks where there is a population
greater than zero. The Bureaus seek
comment on this proposal.
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IV. Establishing Auction Procedures
A. Auction Design
27. The Bureaus discuss and seek
comment on which auction design is
most appropriate. The Bureaus also
discuss related auction design options,
including aggregation approaches, the
coverage requirement, and awardee
determination. The Bureaus ask for
input on these approaches and options,
and request that commenters explain
how their suggestions will promote the
Commission’s objective in Tribal
Mobility Fund Phase I of maximizing,
within the $50 million budget, the
population with newly available 3G or
better service.
i. Reverse Auction Design
28. The Bureaus seek comment on
which reverse auction design would be
the most appropriate for the Tribal
Mobility Fund Phase I auction. In the
Notice of Proposed Rulemaking for
Mobility Fund Phase I, the Commission
proposed a single-round auction format
to disburse funds. A variety of
commenters supported a format with
more than one round of bidding, arguing
that multiple rounds would maximize
the benefits of the program through
more informed bidding and more
competitive bidding. In the USF/ICC
Transformation Order, the Commission
indicated that a single-round sealed bid
auction format would be most
appropriate for Mobility Fund Phase I,
but left the final determination to the
Bureaus. For the general Mobility Fund
Phase I auction, the Bureaus decided to
implement a single-round auction
format because they believed that the
circumstances favoring a multipleround auction, i.e., when there are
strong interactions among items and
when bidders are unsure as to the
market value of the item, were not
significant enough in Auction 901 to
outweigh the Bureaus’ concerns about
the complexity it would add to the
auction. For the purposes of Auction
902, the Bureaus seek comment on
whether they should adopt a singleround or a multiple-round reverse
auction design.
29. Single-Round Auction. Under a
single-round approach, during the
single bidding round, each bid
submitted by a bidder would indicate a
per-pop support price at which the
bidder is willing to meet the Bureaus’
requirements to cover the population in
eligible blocks covered by the bid. One
advantage of the single-round format is
that it would be simple and quick. The
Bureaus seek comment on whether a
single-round approach would allow
bidders to make informed bid decisions
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and to submit competitive bids. The
purpose of the Tribal Mobility Fund
Phase I auction mechanism is to identify
whether and, if so, at what price
providers are willing to extend
advanced mobile coverage over
unserved areas in exchange for a onetime support payment. Absent strategic
behavior, these bid decisions largely
depend upon internal cost structures,
private assessments of risk, and other
factors related to the providers’ specific
circumstances. Thus, the Bureaus seek
comment on whether the bid amounts of
other auction participants are likely to
contain information that will
significantly affect an individual
bidder’s own cost assessments, and
whether bidders would prefer to have
the opportunity to react to the bids of
others.
30. Multiple-Round Auction. In the
particular context of the Tribal Mobility
Fund Phase I, the Bureaus seek further
comment on whether an alternative
auction design might be appropriate for
Auction 902. In particular, the Bureaus
seek comment on whether they should
use a multiple-round auction given the
knowledge gained from the Mobility
Fund Phase I auction and the smaller
number of eligible areas, the likely
fewer participants, and the smaller
budget. Observing the variation in
Auction 901 winning bids, potential
bidders in Auction 902 are likely to
realize the potential gain from
strategically shading up their bids to be
just low enough to be accepted, but no
lower. Calculating the optimal bid in
this situation can be difficult, imposing
a burden on bidders, and may result in
relatively low-cost providers losing
because they miscalculated. This
difficulty can be mitigated in a multipleround auction, such as a descending
clock auction, because it does not
provide the same opportunity for
strategic behavior. The Bureaus seek
comment on whether it would be easier
for bidders to formulate a successful bid
strategy in a multiple-round auction
such as a descending clock auction. If
commenters support a multiple-round
design, the Bureaus seek comment on
which design would be most
appropriate for Auction 902.
Possibilities could include a descending
clock auction (in which winning
bidders could all be paid the same
amount per-pop) and a descending
simultaneous multiple round format.
Because the Tribal Mobility Fund Phase
I auction is smaller in scale, with fewer
eligible areas, than the Mobility Fund
Phase I auction, the relative benefits of
a single-round auction design in terms
of simplicity of implementation and
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time to completion are likely reduced
relative to a multiple-round format.
ii. Census Blocks and Aggregations
31. The Commission determined that
the census block should be the
minimum geographic building block for
which support is provided, but left to
the Bureaus the task of deciding how to
facilitate bidding on aggregations of
eligible census blocks. Some aggregation
of census blocks may be necessary
because census blocks are numerous
and can be quite small. The 5,554
census blocks potentially eligible for
support under Tribal Mobility Fund
Phase I have an average area of
approximately 2.1 square miles. The
Bureaus believe that on average these
blocks are much smaller than the
average area covered by a single cell
site, which is likely to be the minimum
incremental geographic area of
expanded coverage with Tribal Mobility
Fund Phase I support. The Bureaus
propose bidding procedures that will
define biddable items consisting of
certain aggregations of eligible census
blocks and for this purpose suggest
using census tracts and Tribal land
boundaries.
32. Aggregation of census blocks by
tracts and Tribal lands. The Bureaus
seek comment on an approach that
would require bidding on biddable
items consisting of predefined
aggregations of eligible census blocks.
For purposes of bidding, all eligible
census blocks would be grouped by the
tracts in which they are located. In the
case of tracts with more than one Tribal
land, the blocks in that tract would be
grouped by Tribal land. Bidders would
bid by these aggregated areas, not on
individual blocks.
33. Under this approach, for each
aggregated area that a bidder bids on,
the bidder would indicate a per-unit
price to cover the population in the
eligible census blocks within that area.
The auction would assign support to
awardees equal to the per-pop rate of
their bid multiplied by the population
associated with the eligible census
blocks within the aggregated area as
shown in the information that will be
provided by the Bureaus prior to the
auction. Under this approach, bidders
would be able to bid on multiple
aggregated areas and win support for
any or all of them.
34. The Bureaus release with the
Auction 902 Comment Public Notice a
list of 5,554 census blocks that would be
considered potentially eligible under
their criteria. These blocks are located
within 258 Census tracts and 292 Tribal
lands. If the Bureaus bundled these
unserved blocks into tracts and parts of
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tracts within different Tribal lands for
bidding, there would be 417 aggregated
areas. One goal in suggesting aggregated
areas for this purpose is to create
biddable geographic areas closer in scale
to minimum buildout areas than census
blocks would be. This approach would
make it less important that bidders have
the ability to place all-or-nothing
package bids than would be the case if
the basic bidding units were individual
census blocks. Further, this approach
would lend itself to a simpler method of
determining winning bids.
35. In the USF/ICC Transformation
Order, the Commission noted that
because census blocks in Alaska are so
much larger on average than census
blocks elsewhere, the Bureaus should
consider permitting bidding on
individual census blocks in Alaska, a
suggestion the Bureaus adopted for
Mobility Fund Phase I. Under the tract
and Tribal land aggregation method
proposed, however, the size of the
biddable items in Alaska would be
similar to those in other states.
Therefore, the Bureaus propose and seek
comment on using the same aggregation
of blocks into biddable items in Alaska
as they do elsewhere.
36. The Bureaus ask whether
commenters believe that further
packaging of the predefined
aggregations would be helpful. If so,
they should explain the specific need
for package bidding and their proposed
approach. For example, could such a
need be met by allowing bidding on a
package of all of the tracts and parts of
tracts within a Tribal land? The Bureaus
also seek comment on whether a
multiple round format, such as a
descending clock auction, could
facilitate aggregation by allowing
bidders to shift bids if outbid on a piece
of a group of areas they were seeking to
serve.
37. Coverage requirement. Under this
approach, awardees would be required
to provide voice and broadband service
meeting the established minimum
standards over at least 75 percent of the
population associated with the eligible
blocks in each aggregated area for which
they receive support. The required
minimum standards for service will
depend on whether a winning bidder
elects to deploy 3G or 4G service. This
coverage requirement would apply to
the total population in the eligible
census blocks in each predefined
aggregated area on which bids are based.
Pursuant to the USF/ICC
Transformation Order, awardees
meeting the minimum coverage
requirement could receive their winning
bid amount for that population and for
any additional population covered in
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excess of the 75 percent minimum, up
to 100 percent of the population
associated with the unserved blocks,
subject to the rules on disbursement of
support. Because Census data does not
specify how population is distributed
within a census block, the Bureaus seek
comment on how to determine whether
the coverage requirement is met. If a
provider demonstrates new coverage
over the entirety of an eligible census
block, the Bureaus can assume coverage
of the entire population of that census
block. However, the Bureaus seek input
on how to evaluate the population
served by new coverage where a
provider demonstrates new coverage
over part of an eligible census block.
Should the Bureaus use the area covered
and assume that the population is
evenly distributed? For example, if an
awardee covered 75% of the area, the
Bureaus would conclude that the
awardee was covering 75% of the
population. The Bureaus seek comment
on this and other methods.
iii. Determining Awardees
38. Single-Round Auction. To
determine awardees in a single-round
auction under the Bureaus’ proposed
aggregation approach, the auction
system would rank all bids from lowest
to highest based on the per-pop bid
amount, and assign support first to the
lowest per-pop bid. The auction system
would continue to assign support to the
next lowest per-pop bids in turn, as long
as support had not already been
assigned for that geographic area, and
would continue until the sum of
support funds of the winning bids was
such that no further winning bids could
be supported given the funds available.
When calculating how much of the
budget remains, for each winning bid
the auction system will multiply the
per-pop rate bid by the total population
in the uncovered blocks. This is because
an awardee may receive support for up
to 100 percent of the population in the
blocks for which it receives support.
Ties among identical bids in the same
amount for covering the same
aggregated area would be resolved by
assigning a random number to each bid
and then assigning support to the tied
bid with the highest random number. A
bidder would be eligible to receive
support for each of its winning bids
equal to the per-pop rate of a winning
bid multiplied by the population in the
eligible census blocks covered by the
bid, subject to meeting the obligations
associated with receiving support. For
bidders claiming eligibility for the
bidding credit available to Triballyowned or -controlled providers, the
auction system would reduce the Tribal
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entity’s bid amount by 25 percent for
the purpose of comparing it to other
bids, thus increasing the likelihood that
Tribally-owned and -controlled entities
would receive funding.
39. Because using the ranking method
would likely result in monies remaining
available from the budget after
identifying the last lowest per-pop bid
that does not exceed the funds available,
the Bureaus seek comment on what to
do in these circumstances. If the
Bureaus use an approach similar to that
used for Auction 901, they would
continue to consider bids in order of
per-pop bid amount while skipping bids
that would require more support than is
available. The Bureaus would award
such bids as long as funds are available.
The Bureaus seek comment on this
approach and others. Alternatives could
include, for example, not awarding any
further support; awarding support as
long as the per-pop bid amount does not
exceed the last bid by more than twenty
percent; or, if there is a set of tied bids
all of which cannot be supported,
awarding support to that combination of
bids that will most nearly exhaust the
remaining funds.
40. Multiple-Round Auction. If
commenters support a multiple-round
design, the Bureaus seek comment on
appropriate methods for determining
awardees under proposed auction
design alternatives. In a descending
clock auction format, for example, the
auction system would announce a perpop price, and bidders would submit
bids for the eligible areas they would
cover. If the cost of accepting those bids
(population in the areas bid on times the
per-pop price) exceeds the budget, the
price would be lowered. In each round
bidders would be required to satisfy an
activity requirement, providing an
incentive for consistent bidding
throughout the auction. Rounds would
continue until the cost of accepting all
current bids was below the budget.
41. One issue that must be addressed
is the case of more than one bid for the
same area, since the Bureaus propose to
award only one subsidy per area. A
possible solution would be to continue
running the clock in those areas where
there are multiple bids until only one
bid remains. If the clock were initially
stopped when the budget requirement
was just met, continuing to run the
clock in the areas with multiple bids
would result in not spending all the
funds. The Bureaus seek comment on
how to address this overshooting.
Possible solutions may include
permitting intra-round bids that allow
bidders to indicate their change in
supply at specified prices between the
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opening and closing prices in each
round.
B. Auction Information Procedures
42. Under the Commission’s rules on
competitive bidding for high-cost
universal service support adopted in the
USF/ICC Transformation Order, the
Bureaus have discretion to limit public
disclosure of certain bidder-specific
application and bidding information
until after the auction, as they do in the
case of spectrum license auctions.
Consistent with practice in recent
spectrum license auctions and in
Auction 901, the Bureaus propose to
conduct Auction 902 using procedures
for limited information disclosure. The
Bureaus propose to withhold, until after
the close of bidding and announcement
of auction results, the public release of
information from bidders’ short-form
applications regarding their interest in
particular eligible census blocks. If a
single-round auction is used, the
Bureaus also propose not to reveal any
information that may reveal the
identities of bidders placing bids and
taking other bidding-related actions. If
the Bureaus decide to implement a
descending simultaneous multiple
round or descending clock auction, they
may wish to release additional
information about bidding-related
actions during the auction, and the
Bureaus seek comment on what
information should be released under
alternative auction design proposals.
After the close of bidding, bidders’ area
selections, bids, and any other biddingrelated actions and information would
be made publicly available. The Bureaus
seek comment on their proposal to
implement limited information
procedures in Auction 902.
C. Auction Structure
i. Bidding Period
43. The Bureaus will conduct Auction
902 over the Internet. For the single
round of bidding in Auction 901, the
Bureaus did not provide a telephonic
bidding option. In Commission
spectrum license auctions, telephonic
bidding has served as a backup to online bidding. The Bureaus seek
comment on whether telephonic
bidding should be available in Auction
902, particularly if they use a multipleround format.
44. The start time for bidding will be
announced in a public notice to be
released at least one week before the
start of the auction. The Bureaus seek
comment on this proposal.
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ii. Bid Removal
ii. Information Relating to Auction
Delay, Suspension, or Cancellation
45. For Auction 902, the Bureaus
propose that, by public notice or by
announcement during the auction, the
Bureaus may delay, suspend, or cancel
the auction in the event of natural
disaster, technical failures,
administrative or weather necessity,
evidence of an auction security breach
or unlawful bidding activity, or for any
other reason that affects the fair and
efficient conduct of competitive
bidding. In such cases, the Bureaus, in
their sole discretion, may elect to
resume the auction or cancel the auction
in its entirety. Network interruption
may cause the Bureaus to delay or
suspend the auction. The Bureaus
emphasize that exercise of this authority
would be solely within the discretion of
the Bureaus. The Bureaus seek comment
on this proposal.
D. Bidding Procedures
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i. Maximum Bids and Reserve Prices
46. Under the Commission’s rules on
competitive bidding for high-cost
universal service support adopted in the
USF/ICC Transformation Order, the
Bureaus have discretion to establish
maximum acceptable per-unit bid
amounts and reserve amounts, separate
and apart from any maximum opening
bids.
47. The Bureaus concluded that for
Auction 901, a reserve price was not
needed to guard against unreasonably
high winning bids because cross-area
competition for support from a budget
that was not likely to cover support for
all of the areas receiving bids would
constrain the bid amounts. The Bureaus
seek comment on whether any
maximum acceptable per-unit bid
amounts, reserve amounts, or maximum
opening bid amounts would be
appropriate for Auction 902. Although
the $50 million budget available for
Auction 902 is less than the $300
million budget available for Auction
901, the number of eligible census
blocks is also significantly lower in this
auction. Will cross-area competition for
support adequately constrain bid
amounts? The Bureaus further seek
comment on what methods should be
used to calculate reserve prices and/or
maximum or minimum bids if they are
adopted. Commenters are advised to
support their claims with valuation
analyses and suggested amounts or
formulas. The Bureaus also seek
comment on the appropriate policy if, at
the reserve price, less than the full
budget is exhausted.
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48. For Auction 902, the Bureaus
propose and seek comment on bid
removal procedures. In the case of a
single-round auction, the Bureaus
propose that before the end of the single
round of bidding, a bidder would have
the option of removing any bid it has
placed. By removing selected bids, a
bidder may effectively undo any of its
bids placed within the single round of
bidding. Once the single round of
bidding ends, a bidder may no longer
remove any of its bids. For multipleround auction designs, the Bureaus seek
comment on potential bid removal
mechanisms and whether bidders
should be permitted to withdraw bids
from previous rounds and, if so, subject
to what limitations.
E. Default Payments
49. In the USF/ICC Transformation
Order, the Commission determined that
a winning bidder in a reverse auction
for high-cost universal service support
that defaults on its bid or on its
performance obligations will be liable
for a default payment. Bidders selected
by the auction process to receive
support have a binding obligation to file
a post-auction long-form application, by
the applicable deadline and consistent
with other requirements of the longform application process, and failure to
do so will constitute an auction default.
Likewise, an auction default occurs
when a winning bidder is found
ineligible to be a recipient of support or
is disqualified or has its long-form
application dismissed for any reason. In
addition, the Mobility Fund Phase I
rules provide that the failure, by any
winning bidder authorized to receive
support, to meet its minimum coverage
requirement or adequately comply with
quality of service or any other
requirements will constitute a
performance default. The Bureaus have
delegated authority to determine in
advance of Auction 902 the
methodologies for determining the
auction and performance default
payments. The Bureaus seek comment
on how to calculate the auction default
payments that will be applicable for
Auction 902. The Bureaus note that
neither an auction default nor a
performance default would result in a
change to the set of awardees originally
selected by the auction mechanism.
i. Auction Default Payment
50. As noted in the USF/ICC
Transformation Order, failure to fulfill
auction obligations, including those
undertaken prior to the award of any
support funds, may undermine the
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stability and predictability of the
auction process and impose costs on the
Commission and the Universal Service
Fund (USF). To safeguard the integrity
of the Tribal Mobility Fund Phase I
auction, the Bureaus seek comment on
an appropriate payment for auction
defaults, which occur if a bidder
selected by the auction mechanism does
not become authorized to receive
support after the close of the bidding,
e.g., fails to timely file a long-form
application, is found ineligible to be a
recipient of support or is disqualified, or
has its long-form application dismissed
for any reason. An auction default could
occur at any time between the close of
the bidding and the authorization of
support for each of the winning bidders.
For example, an auction default would
occur if a winning bidder failed to file
its long-form application by the
announced deadline. Similarly, an
auction default could occur later in the
long-form application review process if
a winning bidder that timely filed its
long-form application is determined to
be ineligible to be a recipient of support
or is disqualified.
51. In determining what size payment
would be appropriate for a bidder that
defaults in the auction, the Bureaus’
goals are to ensure the stability and
predictability of the auction process by
deterring insincere or uninformed
bidding without establishing such a
high amount as to unduly deter
participation in the auction. Such a
decision must be made in light of the
procedures established for the auction,
including auction design. According to
the Commission’s rules, if the auction
default payment is determined as a
percentage of the defaulted bid amount,
the default payment will not exceed 20
percent of the total defaulted bid. The
Bureaus propose to use a rate of five
percent of the total defaulted bid. The
Bureaus would apply the percentage to
the total amount of support based on the
bid amount for the geographic area
covered by the defaulted bid(s). The
Bureaus believe that this amount, below
the maximum percentage, will protect
against the costs to the Commission and
the USF of auction defaults and provide
bidders sufficient incentive to fully
inform themselves of the obligations
associated with participation in the
Tribal Mobility Fund Phase I program
and to commit to fulfilling those
obligations. Under this method of
calculating the default payment, bidders
would be aware ahead of time of the
exact amount of their potential liability
based on their bids. The Bureaus note
that this proposal is the same percentage
instituted for Auction 901.
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52. The Bureaus seek comment on
this proposal. The Bureaus ask
commenters to assess whether their
proposal to use an auction default
payment percentage of five percent will
be adequate to deter insincere or
uninformed bidding, and safeguard
against costs to the Commission and the
USF that may result from such auction
defaults, without unduly discouraging
auction participation, particularly given
that liability for the auction default
payment will be imposed without
regard to the intentions or fault of any
specific defaulting bidder. Are there any
circumstances unique to bids to serve
Tribal lands that should be considered
in the analysis? The Bureaus also seek
comment on whether they should use
an alternative methodology, such as
basing the auction default payment on
the difference between the defaulted bid
and the next best bid(s) to cover the
same population as without the default.
Commenters advocating such an
approach should explain with
specificity how such an approach might
work under the options the Bureaus
present for auction design. In addition,
the Bureaus seek comment on whether,
prior to bidding, all applicants for
Auction 902 should be required to
furnish a bond or place funds on deposit
with the Commission in the amount of
the maximum anticipated auction
default payment. The Bureaus ask for
specific input on whether a bond or
deposit would be preferable for this
purpose and on methodologies for
anticipating the maximum auction
default payment.
ii. Performance Default Payment
53. Pursuant to the Mobility Fund
Phase I rules adopted in the USF/ICC
Transformation Order, a winning bidder
will be subject to a performance default
payment if, after it is authorized to
receive support, it fails to meet its
minimum coverage requirement, other
service requirements, or any other
condition of Tribal Mobility Fund Phase
I support. In addition to being liable for
a performance default payment, the
recipient will be required to repay the
Mobility Fund all of the support it has
received and, depending on the
circumstances involved, could be
disqualified from receiving any
additional Tribal Mobility Fund, general
Mobility Fund, or other USF support.
The Bureaus may obtain its performance
default payment and repayment of a
recipient’s Tribal Mobility Fund Phase I
support by drawing upon the
irrevocable stand-by LOC that winning
bidders will be required to provide.
54. The Bureaus propose to assess a
10 percent default payment where a
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winning bidder fails to satisfy its
performance obligations or any of the
requirements and conditions for the
support. The percentage would be
applied to the total amount of support
based on the bid amount for the
geographic area covered by the
defaulted bid(s). Under this proposal,
the LOC would include an additional 10
percent based on the total level of
support for which a winning bidder is
eligible. In determining what size
payment would be appropriate for a
performance default, the Bureaus’ goals
are to ensure the stability and
predictability of the auction process by
deterring insincere or uninformed
bidding without establishing such a
high amount as to unduly deter
participation in the auction. While both
auction defaults and performance
defaults may threaten the integrity of
the auction process and impose costs on
the Commission and the USF, an
auction default occurs earlier in the
process and may permit an earlier
alternative use of the funds that were
assigned to the defaulted bid, consistent
with the purposes of the universal
service program. Thus, the Bureaus
believe that the amount of a
performance default payment should be
higher than the amount of the auction
default payment. The Bureaus proposed,
and adopted, a 10 percent performance
default penalty for Auction 901. The
Bureaus seek comment on their
proposal for calculating the performance
default payment. Will a performance
default payment of 10 percent of the
total amount of support for which the
winning bidder defaults be effective in
ensuring that those authorized to
receive support will be capable of
meeting their obligations and protect
against costs to the Commission and the
USF, without unduly discouraging
auction participation? Are there any
circumstances unique to provisioning
service to Tribal lands that should be
considered in the Bureaus’ analysis?
F. Reasonably Comparable Rates
55. Reasonably Comparable Rates.
Tribal Mobility Fund Phase I recipients
must certify that they offer service in
areas with support at consumer rates
that are within a reasonable range of
rates for similar service plans offered by
mobile wireless providers in urban
areas. Recipients will be subject to this
requirement for five years after the date
of award of support. Recipients must
offer service plans in supported areas
that meet the public interest obligations
specified in the Commission’s Mobility
Fund rules and that include a standalone voice service plan. The
Commission delegated authority to the
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21363
Bureaus to specify how support
recipients could demonstrate
compliance with this rate certification.
The Commission directed the Bureaus
to develop surveys of voice and
broadband rates generally that should be
completed before the later phases of the
Connect America Fund and the Mobility
Fund. In order to offer Mobility Fund
Phase I support at the earliest time
feasible, however, the Commission
recognized that the Bureaus might have
to implement an approach to the
reasonably comparable rates
requirement without being able to rely
upon the information that will be
collected through the surveys. The
Bureaus propose to do so in
implementing Tribal Mobility Fund
Phase I.
56. The Bureaus propose that
recipients of Tribal Mobility Fund Phase
I support may demonstrate compliance
with the reasonably comparable rates
requirement in the same manner as
recipients of general Mobility Fund
Phase I support. The Bureaus propose
that a supported provider must
demonstrate that its required standalone voice plan, and one service plan
that offers data services, if it offers such
plans, are (1) substantially similar to a
service plan offered by at least one
mobile wireless service provider in an
urban area, and (2) offered at or below
the rate for the matching urban service
plan. The Bureaus note that any
provider that itself offers the same
service plan for the same rate in a
supported area and in an urban area
would be able to meet this requirement.
The Bureaus seek comment on this
proposal and any alternatives.
Commenters offering alternatives to the
Bureaus’ proposal should address the
feasibility of implementing their
alternatives in advance of the deadlines
for parties to participate in competitive
bidding for Tribal Mobility Fund Phase
I support. In addition, the Bureaus
request that commenters describe the
costs and benefits associated with the
position they advocate. Adopting this
approach for purposes of Tribal
Mobility Fund Phase I does not prejudge
the approach to be taken with respect to
Phase II of the Mobility Fund or the
Connect America Fund generally. The
Bureaus note that in line with the
approach in Auction 901, they do not
propose to adopt an urban rate floor for
recipients of Tribal Mobility Fund Phase
I support.
57. For purposes of Tribal Mobility
Fund Phase I, any rate equal to or less
than the highest rate charged for a
matching service in an urban area
would be reasonably comparable to, i.e.,
within a reasonable range of, rates for
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similar service in urban areas. Under
this approach, the supported party must
offer services at rates within the range
but that do not exceed one particular
rate that is presumed to be a part of that
range. Previously, rates for supported
services in high-cost, insular and rural
areas served by non-rural carriers were
presumed to be reasonably comparable
to urban rates nationwide if they fell
below the national rate benchmark,
which was set at two standard
deviations above the average urban rate
as reported in an annual rate survey
published by the Wireline Competition
Bureau. Thus, while the approaches
differ, both serve to assure that rates for
supported services are reasonably
comparable to rates in urban areas.
Urban areas are generally served by
multiple and diverse providers offering
a range of rates and service offerings in
competition with one another.
Consequently, the Bureaus presume that
even the highest rate would qualify as
being within a reasonable range of rates
for similar service in urban areas,
because the rates for the matching urban
services reflect the effects of
competition in the urban area. Should
the Bureaus require additional
information to validate this assumption?
For example, should an urban service
used for matching be required to have
a certain number of subscribers or
percentage of the relevant market in
order to demonstrate its market
acceptance? A supported provider using
its own urban rates would have little
trouble making such a demonstration.
However, would other supported
providers find the range of urban plans
with publicly available subscriber data
by plan too limited? Are there
alternative criteria that urban plans
should meet before their rates may be
used for comparison? Do the Bureaus
need to be concerned that recipients
may seek to game this standard by using
an urban rate for comparison that does
not reflect a true market rate? How can
the Bureaus address any such concerns?
58. The Bureaus would retain
discretion to consider whether and how
variable rate structures should be taken
into account. For example, should a
supported stand-alone voice plan that
offers 1,000 minutes a month for $50
and additional minutes at $0.08 per
minute be considered more expensive
than a plan in an urban area that offers
2,000 minutes a month for $100 and
additional minutes at $0.10 per minute?
There may be circumstances under
which data plans with equivalent
prices-per-unit match each other even if
there are other differences in the plans.
The Bureaus propose to address such
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issues on a case-by-case basis and
welcome comment on how to address
such circumstances.
59. To provide recipients with
flexibility to tailor their offerings to
consumer demand while complying
with the rule, the Bureaus propose that
they deem a Tribal Mobility Fund Phase
I support recipient compliant with the
terms of the required certification if it
can demonstrate that its rates for
services satisfy the requirements, and if
it provides supporting documentation.
The Bureaus seek comment on all
aspects of this proposal, in particular
whether it meets the goal of assuring
that supported services are provided at
rates reasonably comparable to those in
urban areas, while allowing recipients
to have appropriate flexibility in
structuring their offerings. The Bureaus
also seek comment on any potential
alternatives. For example, is there a
readily available set of benchmark urban
rates for mobile voice and broadband
service that the Bureaus could use with
respect to Tribal Mobility Fund Phase I?
60. Urban Areas. For purposes of this
requirement, the Bureaus propose
defining urban area as one of the 100
most populated CMAs in the United
States. A list of the top 100 CMAs by
population is included in Attachment B
of the Auction 902 Comment Public
Notice. Multiple providers currently
serve these areas—99.2 percent of the
population in these markets is covered
by between four to six operators—
offering a range of different service
plans at prices generally constrained by
the numerous providers. Are there other
definitions of urban area that
commenters believe the Bureaus should
consider for purposes of this
requirement?
61. The Bureaus propose to make a
specific exception for supported parties
serving Alaska in light of the distinct
character of Alaska and the related costs
of providing service, and in line with
the approach adopted for Auction 901.
The Bureaus propose that supported
parties in Alaska may demonstrate
comparability by comparison with rates
offered in the CMA for Anchorage,
Alaska. In this regard, the Bureaus note
that the Anchorage, Alaska CMA has a
population of over 250,000 and four
wireless providers, which indicates that,
while reflecting the particular
challenges of offering service in Alaska,
competition for customers there could
act to keep rates for offered services
reasonable.
V. Ex Parte Rules
62. This proceeding shall be treated as
a permit-but-disclose proceeding in
accordance with the Commission’s ex
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parte rules. Persons making ex parte
presentations must file a copy of any
written presentation or a memorandum
summarizing any oral presentation
within two business days after the
presentation (unless a different deadline
applicable to the Sunshine period
applies). Persons making oral ex parte
presentations are reminded that
memoranda summarizing the
presentation must (1) list all persons
attending or otherwise participating in
the meeting at which the ex parte
presentation was made, and (2)
summarize all data presented and
arguments made during the
presentation. If the presentation
consisted in whole or in part of the
presentation of data or arguments
already reflected in the presenter’s
written comments, memoranda, or other
filings in the proceeding, the presenter
may provide citations to such data or
arguments in his or her prior comments,
memoranda, or other filings (specifying
the relevant page and/or paragraph
numbers where such data or arguments
can be found) in lieu of summarizing
them in the memorandum. Documents
shown or given to Commission staff
during ex parte meetings are deemed to
be written ex parte presentations and
must be filed consistent with 47 CFR
1.1206(b). In proceedings governed by
47 CFR 1.49(f) or for which the
Commission has made available a
method of electronic filing, written ex
parte presentations and memoranda
summarizing oral ex parte
presentations, and all attachments
thereto, must be filed through the
electronic comment filing system
available for that proceeding, and must
be filed in their native format.
Participants in this proceeding should
familiarize themselves with the
Commission’s ex parte rules.
Federal Communications Commission.
Gary D. Michaels,
Deputy Chief, Auctions and Spectrum Access
Division, WTB.
[FR Doc. 2013–08402 Filed 4–9–13; 8:45 am]
BILLING CODE 6712–01–P
FEDERAL MARITIME COMMISSION
Notice of Agreements Filed
The Commission hereby gives notice
of the filing of the following agreements
under the Shipping Act of 1984.
Interested parties may submit comments
on the agreements to the Secretary,
Federal Maritime Commission,
Washington, DC 20573, within ten days
of the date this notice appears in the
Federal Register. Copies of the
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Agencies
[Federal Register Volume 78, Number 69 (Wednesday, April 10, 2013)]
[Notices]
[Pages 21355-21364]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2013-08402]
-----------------------------------------------------------------------
FEDERAL COMMUNICATIONS COMMISSION
[AU Docket No. 13-53; DA 13-323]
Tribal Mobility Fund Phase I Auction Scheduled for October 24,
2013; Comment Sought on Competitive Bidding Procedures for Auction 902
and Certain Program Requirements
AGENCY: Federal Communications Commission.
ACTION: Notice.
-----------------------------------------------------------------------
SUMMARY: In this document, the Commission's Wireless Telecommunications
and Wireline Competition Bureaus announce a reverse auction to award up
to $50 million in one-time Tribal Mobility Fund Phase I support
scheduled to commence on October 24, 2013. This document also seeks
comment on competitive bidding procedures for Auction 902 and certain
program requirements.
DATES: Comments are due on or before May 10, 2013, and Reply comments
are due on or before May 24, 2013.
ADDRESSES: All filings in response to this public notice must refer to
AU Docket No. 13-53. The Wireless Telecommunications Bureau and
Wireline Competition Bureau strongly encourage interested parties to
file comments electronically, and request that an additional copy of
all comments and reply comments be submitted electronically to the
following address: auction902@fcc.gov. To the extent that commenters
identify census blocks for removal and/or addition to the list of
potentially eligible census blocks, the Bureaus request that such lists
be filed in MS Excel format through the Auction 902 email box. Comments
may be submitted by any of the following methods:
[ssquf] Electronic Filers: Federal Communications Commission's Web
site: https://fjallfoss.fcc.gov/ecfs2/. Follow the instructions for
submitting comments.
[ssquf] Paper Filers: Parties who choose to file by paper must file
an original and one copy of each filing. Filings can be sent by hand or
messenger delivery, by commercial overnight courier, or by first-class
or overnight U.S. Postal Service mail. All filings must be addressed to
the Commission's Secretary, Attn: WTB/ASAD, Office of the Secretary,
Federal Communications Commission.
[ssquf] All hand-delivered or messenger-delivered paper filings for
the Commission's Secretary must be delivered to FCC Headquarters at 445
12th Street SW., Room TW-A325, Washington, DC 20554. The filing hours
are 8 a.m. to 7 p.m. Eastern Time. All hand deliveries must be held
together with rubber bands or fasteners. Any envelopes and boxes must
be disposed of before entering the building.
[ssquf] Commercial overnight mail (other than U.S. Postal Service
Express Mail and Priority Mail) must be sent to 9300 East Hampton
Drive, Capitol Heights, MD 20743.
[ssquf] U.S. Postal Service first-class, Express, and Priority mail
must be addressed to 445 12th Street SW., Washington, DC 20554.
[ssquf] People with Disabilities: Contact the FCC to request
reasonable accommodations (accessible format documents, sign language
interpreters, CART, etc.) by email: FCC504@fcc.gov or phone: 202-418-
0530 or TTY: 202-418-0432.
FOR FURTHER INFORMATION CONTACT: Wireless Telecommunications Bureau,
Auctions and Spectrum Access Division: For Tribal Mobility Fund Phase I
questions: Patricia Robbins at (202) 418-0660; for auction process
questions: Lisa Stover at (717) 338-2868. Wireline Competition Bureau,
Telecommunications Access Policy Division: For general universal
service questions: Alex Minard at (202) 418-7400. Consumer and
Governmental Affairs Bureau, Office of Native Affairs and Policy: For
questions regarding Tribal lands and Tribal governments: Geoffrey
Blackwell at (202) 418-3629 or Irene Flannery at (202) 418-1307.
SUPPLEMENTARY INFORMATION: This is a summary of the Auction 902 Comment
Public Notice released on March 29, 2013. The complete text of the
Auction 902 Comment Public Notice, including attachments and related
Commission documents, is available for public inspection and copying
from 8:00 a.m. to 4:30 p.m. Eastern Time (ET) Monday through Thursday
or from 8:00 a.m. to 11:30 a.m. ET on Fridays in the FCC Reference
Information Center, 445 12th Street SW., Room CY-A257, Washington, DC
20554. The Auction 902 Comment Public Notice and related Commission
documents also may be purchased from the Commission's duplicating
contractor, Best Copy and Printing, Inc. (BCPI), 445 12th Street SW.,
Room CY-B402, Washington, DC 20554, telephone 202-488-5300, fax 202-
488-5563, or you may contact BCPI at its Web site: https://www.BCPIWEB.com. When ordering documents from BCPI, please provide the
appropriate FCC document number, for example, DA 13-323 for the Auction
902 Comment Public Notice. The Auction 902 Comment Public Notice and
related documents also are available on the Internet at the
Commission's Web site: https://wireless.fcc.gov/auctions/902/, or by
using the search function for AU Docket No. 13-53 on the Commission's
Electronic Comment Filing System (ECFS) Web page at https://www.fcc.gov/cgb/ecfs/.
I. Introduction and Summary
1. The Wireless Telecommunications and Wireline Competition Bureaus
(the Bureaus) announce a reverse auction to award up to $50 million in
one-time Tribal Mobility Fund Phase I support and seek comment on
auction procedures and certain related programmatic issues. This
auction is scheduled to begin on October 24, 2013, and is designated as
Auction 902.
2. Tribal Mobility Fund Phase I will provide one-time support to
deploy mobile voice and broadband services to unserved Tribal lands,
which have significant telecommunications deployment and connectivity
challenges. Auction 902 will award high-cost universal service support
through reverse competitive bidding, as envisioned by the Commission in
the USF/ICC Transformation Order, 76 FR 73830, November 29, 2011 and 76
FR 81562, December 28, 2011. Auction 902 will award one-time support to
carriers that commit to provide 3G or better mobile voice and broadband
services on Tribal lands where such services are unavailable, based on
the bids that will maximize the population covered by new mobile
services without exceeding
[[Page 21356]]
the budget of $50 million. Because the objective of this auction is to
maximize the expansion of advanced services with the available funds,
winning bids will generally be those that would achieve the deployment
of such services for relatively lower levels of support.
3. Many of the pre-auction processes and bidding procedures for
this auction will be similar to those used in the Commission's first
auction of universal service support, Auction 901, which were modeled
on those regularly used for the Commission's spectrum license auctions.
In Auction 902, support for Tribal lands generally will be awarded on
the same terms and subject to the same rules as general Mobility Fund
Phase I support with a few exceptions tailored to address the unique
needs of communities on Tribal lands. Specifically, unlike general
Mobility Fund Phase I, for which the number of units in a given
unserved census block were calculated according to the number of road
miles in that block, for Tribal Mobility Fund Phase I, the number of
units in a given census block will be the population of that block. The
Commission concluded in the USF/ICC Transformation Order that a
population-based metric is appropriate for the Tribal Mobility Fund
Phase I auction. The population-based coverage unit is the basic unit
that will be used to determine the winners in Auction 902 and to
measure compliance with the applicable performance requirements.
4. Throughout this document, the term per-pop means per population
(or per person) within a given geographic area. The terms 3G, 3G or
better, current generation, and advanced are used interchangeably in
this document to refer to mobile wireless services that provide voice
telephony service on networks that also provide services such as
Internet access and email. Areas without 3G or better services and the
population within them are referred to as unserved. This document
refers to awarding or selecting awardees by auction for simplicity of
expression. Each party that becomes a winning bidder in the auction
must file an application for support. Only after review of the
application to confirm compliance with all the applicable requirements
will a winning bidder become authorized to receive support.
5. In the Auction 902 Comment Public Notice, the Bureaus propose
and seek comment on: (1) Identifying geographic areas eligible for
support; (2) determining the basic auction design, whether and how to
aggregate eligible areas for bidding, and how awardees will be
selected; and (3) establishing certain other bidding procedures,
including information disclosure procedures and methodologies for
calculating auction and performance default payments. The Bureaus will
announce final procedures and other important information such as
application deadlines and other dates related to Auction 902 after
considering comments provided in response to the Auction 902 Comment
Public Notice, pursuant to governing statutes and Commission rules.
II. Background
6. In the USF/ICC Transformation Order, the Commission
comprehensively reformed and modernized the universal service system to
help ensure the universal availability of fixed and mobile
communication networks capable of providing voice and broadband
services where people live, work, and travel. The Commission's
universal service reforms include a commitment to fiscal
responsibility, accountability, and the use of market-based mechanisms,
such as competitive bidding, to provide more targeted and efficient
support than in the past. For the first time, the Commission
established a universal service support mechanism dedicated exclusively
to mobile services--the Mobility Fund.
7. Tribal Mobility Fund Phase I will provide up to $50 million in
one-time support to address gaps in mobile services by supporting the
build-out of current- and next-generation mobile networks on Tribal
lands where these networks are unavailable. This support will be
awarded by reverse auction with the objective of maximizing the
population covered in eligible unserved areas on Tribal lands within
the established budget. The support offered under Tribal Mobility Fund
Phase I is in addition to any ongoing support provided under existing
high-cost universal service program mechanisms.
8. Applicant Eligibility. The USF/ICC Transformation Order
established application, performance, and other requirements for
Mobility Fund Phase I, including Tribal Mobility Fund Phase I. In order
to participate in an auction for Tribal Mobility Fund Phase I support,
an applicant must be designated as an eligible telecommunications
carrier (ETC) for the areas on which it wishes to bid or, if it is a
Tribally-owned or -controlled entity, have a pending application for
ETC designation for the relevant areas within the boundaries of the
Tribal land associated with the Tribe that owns or controls the entity.
A Tribally-owned or -controlled entity must have its application for
ETC designation pending at the relevant short-form application
deadline. The ETC designation must cover a sufficient portion of the
bidding area to allow the applicant to satisfy the applicable
performance requirements. A Tribal entity that wins support in Auction
902 while its ETC petition is pending must receive an ETC designation
prior to support being authorized and disbursed. Allowing a Tribally-
owned or -controlled entity to participate at auction while its ETC
petition is pending in no way prejudges the ultimate decision on its
pending ETC petition. An applicant for Auction 902 must also
demonstrate that it has access to the spectrum necessary to satisfy the
applicable performance requirements. The requirement that parties have
access to spectrum applies equally to all parties, including Tribally-
owned or -controlled entities.
9. Because of the lead time necessary to receive designation as an
ETC and to acquire access to spectrum, prospective applicants that need
to do so are strongly encouraged to initiate both processes as soon as
possible in order to increase the likelihood that they will be eligible
to participate in Auction 902. Carriers subject to the jurisdiction of
a state in which they seek designation should petition that state's
commission for designation as an ETC to provide voice service. Carriers
not subject to the jurisdiction of the relevant state commission should
petition the Commission for designation as an ETC. The Commission has
established a framework for determining whether a state commission or
the Commission itself has jurisdiction to designate ETCs on Tribal
lands. First, a carrier serving Tribal lands must petition the
Commission for a determination on whether the state has jurisdiction
over the carrier. The Commission then determines whether the carrier is
subject to the jurisdiction of a state commission or whether it is
subject to a Tribal authority given the Tribal interests involved. In
the latter case, the Commission has jurisdiction to designate the
carrier as an ETC and will proceed to consider the merits of the
carrier's petition for designation. The Bureaus have provided guidance
on existing requirements for filing an ETC application with the
Commission in a separate public notice: Eligible Telecommunications
Carrier Designation for Participation in Mobility Fund Phase I, 77 FR
14012. Petitions for designation as an ETC should be filed in WC Docket
No. 09-197 and WT Docket No. 10-208, and should not be filed in the
docket for Auction 902, AU Docket No. 13-53. The Bureaus adopted a
[[Page 21357]]
protective order limiting access to proprietary and confidential
information that may be filed in WC Docket No. 09-197 and WT Docket No.
10-208 in connection with petitions filed for designation as an ETC for
purposes of participation in any Mobility Fund auction.
10. In addition, an Auction 902 applicant must certify that it is
financially and technically capable of providing 3G or better service.
An applicant seeking to use the 25 percent bidding credit preference
for Tribally-owned or -controlled providers must certify that it is a
Tribally-owned or -controlled entity and identify the applicable Tribe
and Tribal land in its application. To ensure that Tribal Mobility Fund
Phase I support meets the Commission's public interest objectives,
recipients will be subject to a variety of obligations, including
performance, coverage, collocation, voice and data roaming
requirements, and Tribal engagement obligations. Among other things,
winning bidders will be required either to deploy 3G service within two
years, or 4G service within three years, after the date on which it is
authorized to receive support. Those seeking to participate in the
auction must file a short-form application by a deadline to be
announced, providing information and certifications as to their
qualifications to receive support. After the close of the auction,
winning bidders must submit a detailed long-form application and
procure an irrevocable stand-by Letter (or Letters) of Credit (LOC) to
secure the Commission's financial commitment, along with an opinion
letter from counsel.
11. Auction Process Overview. In the USF/ICC Transformation Order,
the Commission delegated authority to the Bureaus to implement Tribal
Mobility Fund Phase I, including the authority to prepare for and
conduct an auction and administer program details. The Auction 902
Comment Public Notice focuses on establishing the procedures and
processes needed to conduct Auction 902 and administer Tribal Mobility
Fund Phase I. Parties responding to the Auction 902 Comment Public
Notice should be familiar with the details of the USF/ICC
Transformation Order and the process established for the Commission's
first auction of Mobility Fund Phase I support (Auction 901), which
serve as the foundation for the process the Bureaus propose here. After
reviewing the comments requested by the Auction 902 Comment Public
Notice, the Bureaus will release a public notice detailing final
procedures for Auction 902. That public notice will be released so that
potential applicants will have adequate time to familiarize themselves
with the specific procedures that will govern the auction and with the
obligations of support, including rates and coverage requirements that
the Bureaus address in the Auction 902 Comment Public Notice. The
Auction 902 Comment Public Notice summarizes the topics on which the
Bureaus seek comment. The Bureaus ask that commenters advocating for
particular procedures provide input on the costs and benefits of those
procedures.
12. Areas Eligible for Mobility Fund Support. To assure that
support is being used in areas that are not covered by current or next
generation mobile networks, the USF/ICC Transformation Order provides
that the Bureaus will identify areas currently without such services on
a census block basis, and publish a list of census blocks deemed
eligible for Tribal Mobility Fund Phase I support. A list of
potentially eligible census blocks, as well as the population
associated with each, can be found at: https://wireless.fcc.gov/auctions/902/. The Bureaus seek comment on various issues regarding the
census blocks identified as potentially eligible. The Bureaus will
finalize which areas are eligible for support in a public notice
establishing final procedures for Auction 902.
13. Auction Design and Bidding Procedures. In the USF/ICC
Transformation Order, the Commission concluded that distributing
support through a reverse auction would be the best way to achieve its
goal of maximizing consumer benefits with the funds available for Phase
I of the Mobility Fund and adopted general competitive bidding rules
for that purpose. As envisioned by the Commission, parties seeking
support will compete in Auction 902 by indicating the amount of support
they need to meet the requirements of Tribal Mobility Fund Phase I in
the eligible areas on which they bid. The Commission indicated that a
single-round sealed bid auction format would be most appropriate for
Tribal Mobility Fund Phase I, but left the final determination to the
Bureaus. Based on the Bureaus' analysis of the Mobility Fund Phase I
auction results and the opportunity for the Bureaus to refine the
auction format for the purposes of Auction 902, which will offer
support for fewer eligible areas than Auction 901, the Bureaus now seek
further comment on the auction format for Tribal Mobility Fund Phase I.
As in the Mobility Fund Phase I auction, the Bureaus propose to award
support to maximize advanced services to eligible census blocks that
can gain 3G or better mobile services under the Tribal Mobility Fund
Phase I budget. In this case, however, the Bureaus will measure
coverage based on population rather than road miles. Under the auction
design options discussed in the Auction 902 Comment Public Notice,
bidders would compete not only against other carriers that may be
bidding for support in the same areas, but also against carriers
bidding for support in other areas nationwide.
14. The list of potentially eligible areas the Bureaus released in
connection with the Auction 902 Comment Public Notice contains 5,554
census blocks, which have an average area of approximately 2.1 square
miles and may be smaller than the minimum areas for which carriers
seeking support are likely to want to extend service. Thus, carriers
bidding for support are likely to bid on groups of census blocks. To
address this need to aggregate census blocks for bidding while
maintaining a manageable auction process, the Bureaus propose an
aggregation approach and seek comment on any alternative approaches.
15. The Bureaus seek comment on whether to establish any maximum
acceptable bid amounts or reserve amounts. In addition, consistent with
recent practice in spectrum license auctions and Auction 901, the
Bureaus propose to withhold, until after the close of bidding,
information from applicants' short-form applications regarding their
interest in particular eligible census blocks. The Bureaus seek comment
on this proposal.
16. Post-Auction Procedures. At the conclusion of the auction, each
winning bidder will be required to file an in-depth long-form
application to demonstrate that it qualifies for Tribal Mobility Fund
Phase I support. The long-form application must include information
regarding the winning bidder's ownership, eligibility to receive
support, eligibility for a Tribal entity bidding credit, if relevant,
and network construction details. An applicant's claim of eligibility
for the bidding credit available to Tribally-owned or -controlled
providers is subject to review to verify the facts underlying the claim
of ownership or control. Winning bidders must also certify that they
will offer service in supported areas at rates comparable to those for
similar services in urban areas. In the Auction 902 Comment Public
Notice, the Bureaus describe and seek comment on a proposed standard
for demonstrating compliance with this requirement. A winning bidder
will be liable for an auction default payment if the bidder
[[Page 21358]]
fails to timely file the long-form application, is found ineligible, is
disqualified, or otherwise defaults for any reason. In addition, a
winning bidder that fails to meet certain obligations will be liable
for a performance default payment. Accordingly, winning bidders will be
required to provide an irrevocable stand-by LOC in an amount equal to
the amount of support, plus an additional amount which would serve as a
performance default payment if necessary. The Bureaus seek comment on
how to establish auction and performance default payments.
17. Tribal Engagement. Any bidder winning support for areas within
Tribal lands (any bidder winning support in Auction 902) must notify
the appropriate Tribal governments of its winning bid no later than
five business days after being identified by public notice as a winning
bidder. Thereafter, at the long-form application stage and in annual
reports, a bidder winning support in Auction 902 will be required to
certify that it has substantively engaged appropriate Tribal officials
regarding certain minimum discussion topics and provide a summary of
the results of such engagement. Appropriate Tribal government officials
are elected or duly authorized government officials of federally
recognized American Indian Tribes and Alaska Native Villages. In the
instance of the Hawaiian Home Lands, this engagement must occur with
the State of Hawaii Department of Hawaiian Home Lands and Office of
Hawaiian Affairs. A copy of the certification and summary must be sent
to the appropriate Tribal officials when it is sent to the Commission.
A winning bidder's engagement with the applicable Tribal governments
must consist, at a minimum, of discussion regarding: (1) a needs
assessment and deployment planning with a focus on Tribal community
anchor institutions; (2) feasibility and sustainability planning; (3)
marketing services in a culturally sensitive manner; (4) rights of way
processes, land use permitting, facilities siting, environmental and
cultural preservation review processes; and (5) compliance with Tribal
business and licensing requirements.
III. Areas Eligible For Tribal Mobility Fund Support
A. Identifying Eligible Unserved Census Blocks
18. In the USF/ICC Transformation Order, the Commission decided to
target Mobility Fund Phase I support, including Tribal Mobility Fund
Phase I support, to census blocks without 3G or better service, and
determined that Mosaik Solutions (Mosaik) (formerly known as American
Roamer) data is the best available data source for determining the
availability of such service. Accordingly, the Bureaus have identified
potentially eligible blocks on Tribal lands using census blocks from
the 2010 Census and the most recently available Mosaik data, from
January 2013.
19. The Bureaus identified census blocks within Tribal lands using
2010 Census data. Tribal lands include any federally recognized Indian
tribe's reservation, pueblo or colony, including former reservations in
Oklahoma, Alaska Native regions established pursuant to the Alaska
Native Claims Settlement Act, and Indian Allotments, as well as
Hawaiian Home Lands--areas held in trust for native Hawaiians by the
state of Hawaii, pursuant to the Hawaiian Homes Commission Act, as
amended. Tribal lands in Alaska, i.e., the Annette Island Reserve and
areas where federally recognized Alaska Native villages are located
within the Alaska Native regions, were identified using 2010 Census
data identifying the Annette Island Reserve and Alaska Native village
statistical areas.
20. The Bureaus then used geographic information system (GIS)
software to determine whether the Mosaik data shows 3G or better
wireless coverage at the centroid of each census block. The Bureaus use
the term centroid to refer to the internal point (latitude/longitude)
of a census block polygon. The Bureaus used ArcGIS software from Esri
to determine whether the Mosaik data showed 3G or better coverage at
each block's centroid. The following technologies were considered 3G or
better: EV-DO, EV-DO Rev A, UMTS/HSPA, HSPA+, WiMAX, and LTE. If the
Mosaik data did not show such coverage, the block was determined to be
potentially eligible for Tribal Mobility Phase I support. Because
support will be awarded based on the bids that will maximize the
population covered by new mobile services, any of these census blocks
without population were excluded. The Bureaus then excluded any blocks
that, during the Auction 901 challenge process, were determined to be
served or to be ineligible for Mobility Fund Phase I support because a
provider had made a regulatory commitment to provide 3G or better
wireless service or had received a funding commitment from a federal
executive department or agency in response to the provider's commitment
to provide 3G or better wireless service in that area. In addition, the
Bureaus identified those census blocks that were the subject of winning
bids in Auction 901. Any census block that was the subject of a winning
bid in Auction 901 and for which support is authorized at the
conclusion of the Auction 901 long-form application review will not be
eligible for Tribal Mobility Fund Phase I support. If prior to the
release of the list of eligible census blocks the Bureaus determine
that any of the identified winning bids from Auction 901 cannot be
authorized, but would otherwise be eligible for Auction 902, then such
eligible blocks will be made available.
21. Pursuant to the USF/ICC Transformation Order, the Bureaus will
also make ineligible for support any additional census blocks for
which, notwithstanding the absence of 3G service, any provider has made
a regulatory commitment to provide 3G or better wireless service, or
has received a funding commitment from a federal executive department
or agency in response to the carrier's commitment to provide 3G or
better wireless service. Such federal funding commitments may have been
made under, but are not limited to, the Broadband Technology
Opportunities Program and the Broadband Initiatives Program.
Furthermore, the Commission established certain bidder-specific
restrictions. Specifically, each applicant for Tribal Mobility Fund
Phase I support is required to certify that it will not seek support
for any areas in which it had made a public commitment to deploy 3G or
better wireless service by December 31, 2012. In determining whether an
applicant had made such a public commitment, the Bureaus anticipate
that they would consider any public statement made with some
specificity as to both geographic area and time period. This
restriction will not prevent a bidder from seeking and receiving
support for an unserved area for which another provider had made such a
public commitment.
22. Attachment A-1 released with the Auctions 902 Comment Public
Notice provides a summary of the list of potentially eligible census
blocks. For each state and territory, Attachment A-1 provides the total
number of potentially eligible census blocks and the total number of
tracts, counties, Tribal lands, and proposed aggregated bidding areas.
For each state and territory, Attachment A-1 also provides the total
population, area, and road miles of the potentially eligible blocks.
Attachment A-2 released with the Auction 902 Comment Public Notice
provides a list of the proposed aggregated bidding areas. For each
area, Attachment A-2 provides the state, county, and Tribal land; the
number of
[[Page 21359]]
potentially eligible blocks; and the total population, area, and road
miles of those blocks. Due to the large number of potentially eligible
blocks, the complete list of the individual blocks will be provided in
electronic format only, available as a separate Attachment A file at
https://wireless.fcc.gov/auctions/902/. For each potentially eligible
block, individually identified by its Federal Information Processing
Series (FIPS) code, the Attachment A file provides the population,
area, and road miles of the block; and the associated state, county,
tract, Tribe, Tribal land, and proposed aggregated bidding area.
23. If commenters think certain blocks included in the list should
not be eligible for support, they should indicate which blocks and
provide supporting evidence. Similarly, if commenters think certain
blocks not included in the list should be eligible for support, they
should indicate which blocks and provide supporting evidence. In
particular, the Bureaus note that, in the USF/ICC Transformation Order,
the Commission required all wireless competitive ETCs in the high-cost
program to review the list of eligible census blocks for the purpose of
identifying any areas for which they have made a regulatory commitment
to provide 3G or better service or received a federal executive
department or agency funding commitment in exchange for their
commitment to provide 3G or better service. The Bureaus will entertain
challenges to the list of potentially eligible census blocks only in
the form of comments to the Auctions 902 Comment Public Notice. The
Commission concluded in the USF/ICC Transformation Order that more
extended pre-auction review could cause undue delay in making one-time
Phase I support available. Further, the Commission decided that
providing for post-auction challenges would inject uncertainty and
delay into the process. Commenters identifying census blocks for
removal and/or addition to the Bureaus' list of potentially eligible
census blocks are encouraged to provide detailed information in support
of their views. In making such determinations for Auction 901, the
Bureaus found demonstrations of coverage to be more credible and
convincing where they were supported by maps, discussions of drive
tests, explanation of methodologies for determining coverage, and
certifications by one or more individuals as to the veracity of the
material provided. In light of the population-based metric used to
determine the number of unserved units for Tribal Mobility Fund Phase
I, drive tests used to demonstrate coverage may be conducted by means
other than automobiles on roads. Providers may demonstrate coverage of
an area with a statistically significant number of tests in the
vicinity of residences being covered. For Auction 901, the Bureaus did
not make changes to potentially eligible areas based on submissions
making assertions of coverage without any supporting evidence.
24. Based on a review of the comments and any related information,
the Bureaus will provide a list of the specific census blocks eligible
for support in Auction 902 when it releases the public notice
announcing procedures for Auction 902. In addition to providing files
containing this final list of census blocks and related data, the
Bureaus anticipate providing an interactive mapping interface for this
information on the Commission Web site. This interface could aid
bidders in matching up their own information on the geographic areas in
which they are interested with the blocks available in the auction. The
files and/or the interactive mapping interface will also provide data
such as associated population and area. The Bureaus anticipate that the
file formats and the interactive mapping interface will be very similar
to those provided for Auction 901. If potential bidders believe that
the Bureaus should not provide the same types of files and interactive
mapping interface as those provided for Auction 901, or that the
Bureaus should provide additional information or other tools, they
should submit detailed comments describing the types of files,
information, or tools requested and explaining the reasons for the
request.
B. Establishing Unserved Population-Based Units
25. In Auction 902, the Bureaus will use population as the basis
for calculating the number of units in each eligible census block for
purposes of comparing bids and measuring the performance of Tribal
Mobility Fund Phase I support recipients. To establish the population
associated with each census block eligible for Tribal Mobility Fund
Phase I support, the Bureaus will use the 2010 Census data made
available by the Census Bureau. The Attachment A file at https://wireless.fcc.gov/auctions/902/ includes the population for each
potentially eligible census block.
26. The Bureaus propose to include as eligible only those unserved
census blocks where there is a population greater than zero. The
Bureaus seek comment on this proposal.
IV. Establishing Auction Procedures
A. Auction Design
27. The Bureaus discuss and seek comment on which auction design is
most appropriate. The Bureaus also discuss related auction design
options, including aggregation approaches, the coverage requirement,
and awardee determination. The Bureaus ask for input on these
approaches and options, and request that commenters explain how their
suggestions will promote the Commission's objective in Tribal Mobility
Fund Phase I of maximizing, within the $50 million budget, the
population with newly available 3G or better service.
i. Reverse Auction Design
28. The Bureaus seek comment on which reverse auction design would
be the most appropriate for the Tribal Mobility Fund Phase I auction.
In the Notice of Proposed Rulemaking for Mobility Fund Phase I, the
Commission proposed a single-round auction format to disburse funds. A
variety of commenters supported a format with more than one round of
bidding, arguing that multiple rounds would maximize the benefits of
the program through more informed bidding and more competitive bidding.
In the USF/ICC Transformation Order, the Commission indicated that a
single-round sealed bid auction format would be most appropriate for
Mobility Fund Phase I, but left the final determination to the Bureaus.
For the general Mobility Fund Phase I auction, the Bureaus decided to
implement a single-round auction format because they believed that the
circumstances favoring a multiple-round auction, i.e., when there are
strong interactions among items and when bidders are unsure as to the
market value of the item, were not significant enough in Auction 901 to
outweigh the Bureaus' concerns about the complexity it would add to the
auction. For the purposes of Auction 902, the Bureaus seek comment on
whether they should adopt a single-round or a multiple-round reverse
auction design.
29. Single-Round Auction. Under a single-round approach, during the
single bidding round, each bid submitted by a bidder would indicate a
per-pop support price at which the bidder is willing to meet the
Bureaus' requirements to cover the population in eligible blocks
covered by the bid. One advantage of the single-round format is that it
would be simple and quick. The Bureaus seek comment on whether a
single-round approach would allow bidders to make informed bid
decisions
[[Page 21360]]
and to submit competitive bids. The purpose of the Tribal Mobility Fund
Phase I auction mechanism is to identify whether and, if so, at what
price providers are willing to extend advanced mobile coverage over
unserved areas in exchange for a one-time support payment. Absent
strategic behavior, these bid decisions largely depend upon internal
cost structures, private assessments of risk, and other factors related
to the providers' specific circumstances. Thus, the Bureaus seek
comment on whether the bid amounts of other auction participants are
likely to contain information that will significantly affect an
individual bidder's own cost assessments, and whether bidders would
prefer to have the opportunity to react to the bids of others.
30. Multiple-Round Auction. In the particular context of the Tribal
Mobility Fund Phase I, the Bureaus seek further comment on whether an
alternative auction design might be appropriate for Auction 902. In
particular, the Bureaus seek comment on whether they should use a
multiple-round auction given the knowledge gained from the Mobility
Fund Phase I auction and the smaller number of eligible areas, the
likely fewer participants, and the smaller budget. Observing the
variation in Auction 901 winning bids, potential bidders in Auction 902
are likely to realize the potential gain from strategically shading up
their bids to be just low enough to be accepted, but no lower.
Calculating the optimal bid in this situation can be difficult,
imposing a burden on bidders, and may result in relatively low-cost
providers losing because they miscalculated. This difficulty can be
mitigated in a multiple-round auction, such as a descending clock
auction, because it does not provide the same opportunity for strategic
behavior. The Bureaus seek comment on whether it would be easier for
bidders to formulate a successful bid strategy in a multiple-round
auction such as a descending clock auction. If commenters support a
multiple-round design, the Bureaus seek comment on which design would
be most appropriate for Auction 902. Possibilities could include a
descending clock auction (in which winning bidders could all be paid
the same amount per-pop) and a descending simultaneous multiple round
format. Because the Tribal Mobility Fund Phase I auction is smaller in
scale, with fewer eligible areas, than the Mobility Fund Phase I
auction, the relative benefits of a single-round auction design in
terms of simplicity of implementation and time to completion are likely
reduced relative to a multiple-round format.
ii. Census Blocks and Aggregations
31. The Commission determined that the census block should be the
minimum geographic building block for which support is provided, but
left to the Bureaus the task of deciding how to facilitate bidding on
aggregations of eligible census blocks. Some aggregation of census
blocks may be necessary because census blocks are numerous and can be
quite small. The 5,554 census blocks potentially eligible for support
under Tribal Mobility Fund Phase I have an average area of
approximately 2.1 square miles. The Bureaus believe that on average
these blocks are much smaller than the average area covered by a single
cell site, which is likely to be the minimum incremental geographic
area of expanded coverage with Tribal Mobility Fund Phase I support.
The Bureaus propose bidding procedures that will define biddable items
consisting of certain aggregations of eligible census blocks and for
this purpose suggest using census tracts and Tribal land boundaries.
32. Aggregation of census blocks by tracts and Tribal lands. The
Bureaus seek comment on an approach that would require bidding on
biddable items consisting of predefined aggregations of eligible census
blocks. For purposes of bidding, all eligible census blocks would be
grouped by the tracts in which they are located. In the case of tracts
with more than one Tribal land, the blocks in that tract would be
grouped by Tribal land. Bidders would bid by these aggregated areas,
not on individual blocks.
33. Under this approach, for each aggregated area that a bidder
bids on, the bidder would indicate a per-unit price to cover the
population in the eligible census blocks within that area. The auction
would assign support to awardees equal to the per-pop rate of their bid
multiplied by the population associated with the eligible census blocks
within the aggregated area as shown in the information that will be
provided by the Bureaus prior to the auction. Under this approach,
bidders would be able to bid on multiple aggregated areas and win
support for any or all of them.
34. The Bureaus release with the Auction 902 Comment Public Notice
a list of 5,554 census blocks that would be considered potentially
eligible under their criteria. These blocks are located within 258
Census tracts and 292 Tribal lands. If the Bureaus bundled these
unserved blocks into tracts and parts of tracts within different Tribal
lands for bidding, there would be 417 aggregated areas. One goal in
suggesting aggregated areas for this purpose is to create biddable
geographic areas closer in scale to minimum buildout areas than census
blocks would be. This approach would make it less important that
bidders have the ability to place all-or-nothing package bids than
would be the case if the basic bidding units were individual census
blocks. Further, this approach would lend itself to a simpler method of
determining winning bids.
35. In the USF/ICC Transformation Order, the Commission noted that
because census blocks in Alaska are so much larger on average than
census blocks elsewhere, the Bureaus should consider permitting bidding
on individual census blocks in Alaska, a suggestion the Bureaus adopted
for Mobility Fund Phase I. Under the tract and Tribal land aggregation
method proposed, however, the size of the biddable items in Alaska
would be similar to those in other states. Therefore, the Bureaus
propose and seek comment on using the same aggregation of blocks into
biddable items in Alaska as they do elsewhere.
36. The Bureaus ask whether commenters believe that further
packaging of the predefined aggregations would be helpful. If so, they
should explain the specific need for package bidding and their proposed
approach. For example, could such a need be met by allowing bidding on
a package of all of the tracts and parts of tracts within a Tribal
land? The Bureaus also seek comment on whether a multiple round format,
such as a descending clock auction, could facilitate aggregation by
allowing bidders to shift bids if outbid on a piece of a group of areas
they were seeking to serve.
37. Coverage requirement. Under this approach, awardees would be
required to provide voice and broadband service meeting the established
minimum standards over at least 75 percent of the population associated
with the eligible blocks in each aggregated area for which they receive
support. The required minimum standards for service will depend on
whether a winning bidder elects to deploy 3G or 4G service. This
coverage requirement would apply to the total population in the
eligible census blocks in each predefined aggregated area on which bids
are based. Pursuant to the USF/ICC Transformation Order, awardees
meeting the minimum coverage requirement could receive their winning
bid amount for that population and for any additional population
covered in
[[Page 21361]]
excess of the 75 percent minimum, up to 100 percent of the population
associated with the unserved blocks, subject to the rules on
disbursement of support. Because Census data does not specify how
population is distributed within a census block, the Bureaus seek
comment on how to determine whether the coverage requirement is met. If
a provider demonstrates new coverage over the entirety of an eligible
census block, the Bureaus can assume coverage of the entire population
of that census block. However, the Bureaus seek input on how to
evaluate the population served by new coverage where a provider
demonstrates new coverage over part of an eligible census block. Should
the Bureaus use the area covered and assume that the population is
evenly distributed? For example, if an awardee covered 75% of the area,
the Bureaus would conclude that the awardee was covering 75% of the
population. The Bureaus seek comment on this and other methods.
iii. Determining Awardees
38. Single-Round Auction. To determine awardees in a single-round
auction under the Bureaus' proposed aggregation approach, the auction
system would rank all bids from lowest to highest based on the per-pop
bid amount, and assign support first to the lowest per-pop bid. The
auction system would continue to assign support to the next lowest per-
pop bids in turn, as long as support had not already been assigned for
that geographic area, and would continue until the sum of support funds
of the winning bids was such that no further winning bids could be
supported given the funds available. When calculating how much of the
budget remains, for each winning bid the auction system will multiply
the per-pop rate bid by the total population in the uncovered blocks.
This is because an awardee may receive support for up to 100 percent of
the population in the blocks for which it receives support. Ties among
identical bids in the same amount for covering the same aggregated area
would be resolved by assigning a random number to each bid and then
assigning support to the tied bid with the highest random number. A
bidder would be eligible to receive support for each of its winning
bids equal to the per-pop rate of a winning bid multiplied by the
population in the eligible census blocks covered by the bid, subject to
meeting the obligations associated with receiving support. For bidders
claiming eligibility for the bidding credit available to Tribally-owned
or -controlled providers, the auction system would reduce the Tribal
entity's bid amount by 25 percent for the purpose of comparing it to
other bids, thus increasing the likelihood that Tribally-owned and -
controlled entities would receive funding.
39. Because using the ranking method would likely result in monies
remaining available from the budget after identifying the last lowest
per-pop bid that does not exceed the funds available, the Bureaus seek
comment on what to do in these circumstances. If the Bureaus use an
approach similar to that used for Auction 901, they would continue to
consider bids in order of per-pop bid amount while skipping bids that
would require more support than is available. The Bureaus would award
such bids as long as funds are available. The Bureaus seek comment on
this approach and others. Alternatives could include, for example, not
awarding any further support; awarding support as long as the per-pop
bid amount does not exceed the last bid by more than twenty percent;
or, if there is a set of tied bids all of which cannot be supported,
awarding support to that combination of bids that will most nearly
exhaust the remaining funds.
40. Multiple-Round Auction. If commenters support a multiple-round
design, the Bureaus seek comment on appropriate methods for determining
awardees under proposed auction design alternatives. In a descending
clock auction format, for example, the auction system would announce a
per-pop price, and bidders would submit bids for the eligible areas
they would cover. If the cost of accepting those bids (population in
the areas bid on times the per-pop price) exceeds the budget, the price
would be lowered. In each round bidders would be required to satisfy an
activity requirement, providing an incentive for consistent bidding
throughout the auction. Rounds would continue until the cost of
accepting all current bids was below the budget.
41. One issue that must be addressed is the case of more than one
bid for the same area, since the Bureaus propose to award only one
subsidy per area. A possible solution would be to continue running the
clock in those areas where there are multiple bids until only one bid
remains. If the clock were initially stopped when the budget
requirement was just met, continuing to run the clock in the areas with
multiple bids would result in not spending all the funds. The Bureaus
seek comment on how to address this overshooting. Possible solutions
may include permitting intra-round bids that allow bidders to indicate
their change in supply at specified prices between the opening and
closing prices in each round.
B. Auction Information Procedures
42. Under the Commission's rules on competitive bidding for high-
cost universal service support adopted in the USF/ICC Transformation
Order, the Bureaus have discretion to limit public disclosure of
certain bidder-specific application and bidding information until after
the auction, as they do in the case of spectrum license auctions.
Consistent with practice in recent spectrum license auctions and in
Auction 901, the Bureaus propose to conduct Auction 902 using
procedures for limited information disclosure. The Bureaus propose to
withhold, until after the close of bidding and announcement of auction
results, the public release of information from bidders' short-form
applications regarding their interest in particular eligible census
blocks. If a single-round auction is used, the Bureaus also propose not
to reveal any information that may reveal the identities of bidders
placing bids and taking other bidding-related actions. If the Bureaus
decide to implement a descending simultaneous multiple round or
descending clock auction, they may wish to release additional
information about bidding-related actions during the auction, and the
Bureaus seek comment on what information should be released under
alternative auction design proposals. After the close of bidding,
bidders' area selections, bids, and any other bidding-related actions
and information would be made publicly available. The Bureaus seek
comment on their proposal to implement limited information procedures
in Auction 902.
C. Auction Structure
i. Bidding Period
43. The Bureaus will conduct Auction 902 over the Internet. For the
single round of bidding in Auction 901, the Bureaus did not provide a
telephonic bidding option. In Commission spectrum license auctions,
telephonic bidding has served as a backup to on-line bidding. The
Bureaus seek comment on whether telephonic bidding should be available
in Auction 902, particularly if they use a multiple-round format.
44. The start time for bidding will be announced in a public notice
to be released at least one week before the start of the auction. The
Bureaus seek comment on this proposal.
[[Page 21362]]
ii. Information Relating to Auction Delay, Suspension, or Cancellation
45. For Auction 902, the Bureaus propose that, by public notice or
by announcement during the auction, the Bureaus may delay, suspend, or
cancel the auction in the event of natural disaster, technical
failures, administrative or weather necessity, evidence of an auction
security breach or unlawful bidding activity, or for any other reason
that affects the fair and efficient conduct of competitive bidding. In
such cases, the Bureaus, in their sole discretion, may elect to resume
the auction or cancel the auction in its entirety. Network interruption
may cause the Bureaus to delay or suspend the auction. The Bureaus
emphasize that exercise of this authority would be solely within the
discretion of the Bureaus. The Bureaus seek comment on this proposal.
D. Bidding Procedures
i. Maximum Bids and Reserve Prices
46. Under the Commission's rules on competitive bidding for high-
cost universal service support adopted in the USF/ICC Transformation
Order, the Bureaus have discretion to establish maximum acceptable per-
unit bid amounts and reserve amounts, separate and apart from any
maximum opening bids.
47. The Bureaus concluded that for Auction 901, a reserve price was
not needed to guard against unreasonably high winning bids because
cross-area competition for support from a budget that was not likely to
cover support for all of the areas receiving bids would constrain the
bid amounts. The Bureaus seek comment on whether any maximum acceptable
per-unit bid amounts, reserve amounts, or maximum opening bid amounts
would be appropriate for Auction 902. Although the $50 million budget
available for Auction 902 is less than the $300 million budget
available for Auction 901, the number of eligible census blocks is also
significantly lower in this auction. Will cross-area competition for
support adequately constrain bid amounts? The Bureaus further seek
comment on what methods should be used to calculate reserve prices and/
or maximum or minimum bids if they are adopted. Commenters are advised
to support their claims with valuation analyses and suggested amounts
or formulas. The Bureaus also seek comment on the appropriate policy
if, at the reserve price, less than the full budget is exhausted.
ii. Bid Removal
48. For Auction 902, the Bureaus propose and seek comment on bid
removal procedures. In the case of a single-round auction, the Bureaus
propose that before the end of the single round of bidding, a bidder
would have the option of removing any bid it has placed. By removing
selected bids, a bidder may effectively undo any of its bids placed
within the single round of bidding. Once the single round of bidding
ends, a bidder may no longer remove any of its bids. For multiple-round
auction designs, the Bureaus seek comment on potential bid removal
mechanisms and whether bidders should be permitted to withdraw bids
from previous rounds and, if so, subject to what limitations.
E. Default Payments
49. In the USF/ICC Transformation Order, the Commission determined
that a winning bidder in a reverse auction for high-cost universal
service support that defaults on its bid or on its performance
obligations will be liable for a default payment. Bidders selected by
the auction process to receive support have a binding obligation to
file a post-auction long-form application, by the applicable deadline
and consistent with other requirements of the long-form application
process, and failure to do so will constitute an auction default.
Likewise, an auction default occurs when a winning bidder is found
ineligible to be a recipient of support or is disqualified or has its
long-form application dismissed for any reason. In addition, the
Mobility Fund Phase I rules provide that the failure, by any winning
bidder authorized to receive support, to meet its minimum coverage
requirement or adequately comply with quality of service or any other
requirements will constitute a performance default. The Bureaus have
delegated authority to determine in advance of Auction 902 the
methodologies for determining the auction and performance default
payments. The Bureaus seek comment on how to calculate the auction
default payments that will be applicable for Auction 902. The Bureaus
note that neither an auction default nor a performance default would
result in a change to the set of awardees originally selected by the
auction mechanism.
i. Auction Default Payment
50. As noted in the USF/ICC Transformation Order, failure to
fulfill auction obligations, including those undertaken prior to the
award of any support funds, may undermine the stability and
predictability of the auction process and impose costs on the
Commission and the Universal Service Fund (USF). To safeguard the
integrity of the Tribal Mobility Fund Phase I auction, the Bureaus seek
comment on an appropriate payment for auction defaults, which occur if
a bidder selected by the auction mechanism does not become authorized
to receive support after the close of the bidding, e.g., fails to
timely file a long-form application, is found ineligible to be a
recipient of support or is disqualified, or has its long-form
application dismissed for any reason. An auction default could occur at
any time between the close of the bidding and the authorization of
support for each of the winning bidders. For example, an auction
default would occur if a winning bidder failed to file its long-form
application by the announced deadline. Similarly, an auction default
could occur later in the long-form application review process if a
winning bidder that timely filed its long-form application is
determined to be ineligible to be a recipient of support or is
disqualified.
51. In determining what size payment would be appropriate for a
bidder that defaults in the auction, the Bureaus' goals are to ensure
the stability and predictability of the auction process by deterring
insincere or uninformed bidding without establishing such a high amount
as to unduly deter participation in the auction. Such a decision must
be made in light of the procedures established for the auction,
including auction design. According to the Commission's rules, if the
auction default payment is determined as a percentage of the defaulted
bid amount, the default payment will not exceed 20 percent of the total
defaulted bid. The Bureaus propose to use a rate of five percent of the
total defaulted bid. The Bureaus would apply the percentage to the
total amount of support based on the bid amount for the geographic area
covered by the defaulted bid(s). The Bureaus believe that this amount,
below the maximum percentage, will protect against the costs to the
Commission and the USF of auction defaults and provide bidders
sufficient incentive to fully inform themselves of the obligations
associated with participation in the Tribal Mobility Fund Phase I
program and to commit to fulfilling those obligations. Under this
method of calculating the default payment, bidders would be aware ahead
of time of the exact amount of their potential liability based on their
bids. The Bureaus note that this proposal is the same percentage
instituted for Auction 901.
[[Page 21363]]
52. The Bureaus seek comment on this proposal. The Bureaus ask
commenters to assess whether their proposal to use an auction default
payment percentage of five percent will be adequate to deter insincere
or uninformed bidding, and safeguard against costs to the Commission
and the USF that may result from such auction defaults, without unduly
discouraging auction participation, particularly given that liability
for the auction default payment will be imposed without regard to the
intentions or fault of any specific defaulting bidder. Are there any
circumstances unique to bids to serve Tribal lands that should be
considered in the analysis? The Bureaus also seek comment on whether
they should use an alternative methodology, such as basing the auction
default payment on the difference between the defaulted bid and the
next best bid(s) to cover the same population as without the default.
Commenters advocating such an approach should explain with specificity
how such an approach might work under the options the Bureaus present
for auction design. In addition, the Bureaus seek comment on whether,
prior to bidding, all applicants for Auction 902 should be required to
furnish a bond or place funds on deposit with the Commission in the
amount of the maximum anticipated auction default payment. The Bureaus
ask for specific input on whether a bond or deposit would be preferable
for this purpose and on methodologies for anticipating the maximum
auction default payment.
ii. Performance Default Payment
53. Pursuant to the Mobility Fund Phase I rules adopted in the USF/
ICC Transformation Order, a winning bidder will be subject to a
performance default payment if, after it is authorized to receive
support, it fails to meet its minimum coverage requirement, other
service requirements, or any other condition of Tribal Mobility Fund
Phase I support. In addition to being liable for a performance default
payment, the recipient will be required to repay the Mobility Fund all
of the support it has received and, depending on the circumstances
involved, could be disqualified from receiving any additional Tribal
Mobility Fund, general Mobility Fund, or other USF support. The Bureaus
may obtain its performance default payment and repayment of a
recipient's Tribal Mobility Fund Phase I support by drawing upon the
irrevocable stand-by LOC that winning bidders will be required to
provide.
54. The Bureaus propose to assess a 10 percent default payment
where a winning bidder fails to satisfy its performance obligations or
any of the requirements and conditions for the support. The percentage
would be applied to the total amount of support based on the bid amount
for the geographic area covered by the defaulted bid(s). Under this
proposal, the LOC would include an additional 10 percent based on the
total level of support for which a winning bidder is eligible. In
determining what size payment would be appropriate for a performance
default, the Bureaus' goals are to ensure the stability and
predictability of the auction process by deterring insincere or
uninformed bidding without establishing such a high amount as to unduly
deter participation in the auction. While both auction defaults and
performance defaults may threaten the integrity of the auction process
and impose costs on the Commission and the USF, an auction default
occurs earlier in the process and may permit an earlier alternative use
of the funds that were assigned to the defaulted bid, consistent with
the purposes of the universal service program. Thus, the Bureaus
believe that the amount of a performance default payment should be
higher than the amount of the auction default payment. The Bureaus
proposed, and adopted, a 10 percent performance default penalty for
Auction 901. The Bureaus seek comment on their proposal for calculating
the performance default payment. Will a performance default payment of
10 percent of the total amount of support for which the winning bidder
defaults be effective in ensuring that those authorized to receive
support will be capable of meeting their obligations and protect
against costs to the Commission and the USF, without unduly
discouraging auction participation? Are there any circumstances unique
to provisioning service to Tribal lands that should be considered in
the Bureaus' analysis?
F. Reasonably Comparable Rates
55. Reasonably Comparable Rates. Tribal Mobility Fund Phase I
recipients must certify that they offer service in areas with support
at consumer rates that are within a reasonable range of rates for
similar service plans offered by mobile wireless providers in urban
areas. Recipients will be subject to this requirement for five years
after the date of award of support. Recipients must offer service plans
in supported areas that meet the public interest obligations specified
in the Commission's Mobility Fund rules and that include a stand-alone
voice service plan. The Commission delegated authority to the Bureaus
to specify how support recipients could demonstrate compliance with
this rate certification. The Commission directed the Bureaus to develop
surveys of voice and broadband rates generally that should be completed
before the later phases of the Connect America Fund and the Mobility
Fund. In order to offer Mobility Fund Phase I support at the earliest
time feasible, however, the Commission recognized that the Bureaus
might have to implement an approach to the reasonably comparable rates
requirement without being able to rely upon the information that will
be collected through the surveys. The Bureaus propose to do so in
implementing Tribal Mobility Fund Phase I.
56. The Bureaus propose that recipients of Tribal Mobility Fund
Phase I support may demonstrate compliance with the reasonably
comparable rates requirement in the same manner as recipients of
general Mobility Fund Phase I support. The Bureaus propose that a
supported provider must demonstrate that its required stand-alone voice
plan, and one service plan that offers data services, if it offers such
plans, are (1) substantially similar to a service plan offered by at
least one mobile wireless service provider in an urban area, and (2)
offered at or below the rate for the matching urban service plan. The
Bureaus note that any provider that itself offers the same service plan
for the same rate in a supported area and in an urban area would be
able to meet this requirement. The Bureaus seek comment on this
proposal and any alternatives. Commenters offering alternatives to the
Bureaus' proposal should address the feasibility of implementing their
alternatives in advance of the deadlines for parties to participate in
competitive bidding for Tribal Mobility Fund Phase I support. In
addition, the Bureaus request that commenters describe the costs and
benefits associated with the position they advocate. Adopting this
approach for purposes of Tribal Mobility Fund Phase I does not prejudge
the approach to be taken with respect to Phase II of the Mobility Fund
or the Connect America Fund generally. The Bureaus note that in line
with the approach in Auction 901, they do not propose to adopt an urban
rate floor for recipients of Tribal Mobility Fund Phase I support.
57. For purposes of Tribal Mobility Fund Phase I, any rate equal to
or less than the highest rate charged for a matching service in an
urban area would be reasonably comparable to, i.e., within a reasonable
range of, rates for
[[Page 21364]]
similar service in urban areas. Under this approach, the supported
party must offer services at rates within the range but that do not
exceed one particular rate that is presumed to be a part of that range.
Previously, rates for supported services in high-cost, insular and
rural areas served by non-rural carriers were presumed to be reasonably
comparable to urban rates nationwide if they fell below the national
rate benchmark, which was set at two standard deviations above the
average urban rate as reported in an annual rate survey published by
the Wireline Competition Bureau. Thus, while the approaches differ,
both serve to assure that rates for supported services are reasonably
comparable to rates in urban areas. Urban areas are generally served by
multiple and diverse providers offering a range of rates and service
offerings in competition with one another. Consequently, the Bureaus
presume that even the highest rate would qualify as being within a
reasonable range of rates for similar service in urban areas, because
the rates for the matching urban services reflect the effects of
competition in the urban area. Should the Bureaus require additional
information to validate this assumption? For example, should an urban
service used for matching be required to have a certain number of
subscribers or percentage of the relevant market in order to
demonstrate its market acceptance? A supported provider using its own
urban rates would have little trouble making such a demonstration.
However, would other supported providers find the range of urban plans
with publicly available subscriber data by plan too limited? Are there
alternative criteria that urban plans should meet before their rates
may be used for comparison? Do the Bureaus need to be concerned that
recipients may seek to game this standard by using an urban rate for
comparison that does not reflect a true market rate? How can the
Bureaus address any such concerns?
58. The Bureaus would retain discretion to consider whether and how
variable rate structures should be taken into account. For example,
should a supported stand-alone voice plan that offers 1,000 minutes a
month for $50 and additional minutes at $0.08 per minute be considered
more expensive than a plan in an urban area that offers 2,000 minutes a
month for $100 and additional minutes at $0.10 per minute? There may be
circumstances under which data plans with equivalent prices-per-unit
match each other even if there are other differences in the plans. The
Bureaus propose to address such issues on a case-by-case basis and
welcome comment on how to address such circumstances.
59. To provide recipients with flexibility to tailor their
offerings to consumer demand while complying with the rule, the Bureaus
propose that they deem a Tribal Mobility Fund Phase I support recipient
compliant with the terms of the required certification if it can
demonstrate that its rates for services satisfy the requirements, and
if it provides supporting documentation. The Bureaus seek comment on
all aspects of this proposal, in particular whether it meets the goal
of assuring that supported services are provided at rates reasonably
comparable to those in urban areas, while allowing recipients to have
appropriate flexibility in structuring their offerings. The Bureaus
also seek comment on any potential alternatives. For example, is there
a readily available set of benchmark urban rates for mobile voice and
broadband service that the Bureaus could use with respect to Tribal
Mobility Fund Phase I?
60. Urban Areas. For purposes of this requirement, the Bureaus
propose defining urban area as one of the 100 most populated CMAs in
the United States. A list of the top 100 CMAs by population is included
in Attachment B of the Auction 902 Comment Public Notice. Multiple
providers currently serve these areas--99.2 percent of the population
in these markets is covered by between four to six operators--offering
a range of different service plans at prices generally constrained by
the numerous providers. Are there other definitions of urban area that
commenters believe the Bureaus should consider for purposes of this
requirement?
61. The Bureaus propose to make a specific exception for supported
parties serving Alaska in light of the distinct character of Alaska and
the related costs of providing service, and in line with the approach
adopted for Auction 901. The Bureaus propose that supported parties in
Alaska may demonstrate comparability by comparison with rates offered
in the CMA for Anchorage, Alaska. In this regard, the Bureaus note that
the Anchorage, Alaska CMA has a population of over 250,000 and four
wireless providers, which indicates that, while reflecting the
particular challenges of offering service in Alaska, competition for
customers there could act to keep rates for offered services
reasonable.
V. Ex Parte Rules
62. This proceeding shall be treated as a permit-but-disclose
proceeding in accordance with the Commission's ex parte rules. Persons
making ex parte presentations must file a copy of any written
presentation or a memorandum summarizing any oral presentation within
two business days after the presentation (unless a different deadline
applicable to the Sunshine period applies). Persons making oral ex
parte presentations are reminded that memoranda summarizing the
presentation must (1) list all persons attending or otherwise
participating in the meeting at which the ex parte presentation was
made, and (2) summarize all data presented and arguments made during
the presentation. If the presentation consisted in whole or in part of
the presentation of data or arguments already reflected in the
presenter's written comments, memoranda, or other filings in the
proceeding, the presenter may provide citations to such data or
arguments in his or her prior comments, memoranda, or other filings
(specifying the relevant page and/or paragraph numbers where such data
or arguments can be found) in lieu of summarizing them in the
memorandum. Documents shown or given to Commission staff during ex
parte meetings are deemed to be written ex parte presentations and must
be filed consistent with 47 CFR 1.1206(b). In proceedings governed by
47 CFR 1.49(f) or for which the Commission has made available a method
of electronic filing, written ex parte presentations and memoranda
summarizing oral ex parte presentations, and all attachments thereto,
must be filed through the electronic comment filing system available
for that proceeding, and must be filed in their native format.
Participants in this proceeding should familiarize themselves with the
Commission's ex parte rules.
Federal Communications Commission.
Gary D. Michaels,
Deputy Chief, Auctions and Spectrum Access Division, WTB.
[FR Doc. 2013-08402 Filed 4-9-13; 8:45 am]
BILLING CODE 6712-01-P