Before the
Federal Communications Commission
Washington, D.C. 20554
In the Matter of )
)
Universal Service Reform ) WT Docket No. 10-208
)
Mobility Fund )
To: Wireless Telecommunications Bureau
Comments of the Rural Telecommunications Group, Inc.
Caressa D. Bennet
Kenneth C. Johnson
Anthony K. Veach
Bennet & Bennet, PLLC
4350 East West Highway
Suite 201
Bethesda, MD 20814
(202) 371-1500
Its Attorneys
Date: December 16, 2010
TABLE OF CONTENTS
Summary??????????????????????????????..i
I. BACKGROUND???????????????????????? 1
II. THE MOBILITY FUND WILL BETTER SERVE THE PUBLIC
INTEREST IF THE SIZE IS INCREASED????????????.. 2
III. NETWORKS DEPLOYED USING MOBILITY FUND SUPPORT
WILL REQUIRE PERMANENT, ONGOING SUPPORT. ??????. 5
IV. REVERSE AUCTIONS WILL NOT ACCURATELY DETERMINE
THE AMOUNT OF SUPPORT NEEDED TO PROVIDE SERVICE
TO AREAS WITHOUT ADVANCED WIRELESS SERVICES AND A
QUALITATIVE MARKET MECHANISM EVALUATION PROCESS
SHOULD INSTEAD BE USED TO DISTRIBUTE FUNDING TO ALL
AREAS OF THE COUNTRY.??????????????????. 7
V. THE COMMISSION SHOULD ESTABLISH MINIMUM ELIGIBILITY
REQUIREMENTS FOR MOBILITY FUND SUPPORT THAT LIMIT
SUPPORT TO MEDIUM AND SMALL CARRIERS AND
ESTABLISH BIDDING CREDITS THAT FACILITATE THE
PROVISION OF ADVANCED WIRELESS SERVICES TO
RURAL AREAS AND OTHER AREAS THAT MEET SPECIFIED
PUBLIC INTEREST CRITERIA?????????????????..10
VI. A MANDATORY DATA ROAMING SERVICE REQUIREMENT
SHOULD BE IMPOSED ON RECIPIENTS OF THE MOBILITY
FUND AND MOBILITY FUND RECIPIENTS SHOULD NOT BE
DENIED DATA ROAMING BY OTHER WIRELESS CARRIERS???.14
VII. CONCLUSION?????????????????????????.16
Rural Telecommunications Group, Inc. WT Docket No. 10-208
December 16, 2010 Page i
SUMMARY
In its Mobility Fund Notice of Proposed Rulemaking (?NPRM?), the Federal
Communications Commission (?FCC? or Commission?) has correctly recognized that a
lack of advanced wireless service remains a problem for those who live, work, and travel
in areas without such service, and without support, these areas risk falling farther behind as
the wireless ecosystem transitions to next-generation high-speed wireless broadband
services. Unfortunately, the FCC?s proposed Mobility Fund fails to adequately address
this problem.
While the Mobility Fund is a proposed one-time shot of support to get wireless
networks to 3G or better, it does not provide for or take into account the ongoing costs of
providing essential mobile services in high-cost regions of the country. Networks
deployed using Mobility Fund support will require permanent, ongoing support.
Moreover, the proposed size of the Mobility Fund is woefully inadequate to
achieve the goals of the Fund. In order to provide support for the provision of broadband
services in areas currently lacking advanced wireless services, the Commission must
substantially increase the size of the Mobility Fund. Any increase should also be large
enough to support the provision of service to areas that also currently lack any wireless
service.
The proposed use of reverse auctions will unfairly favor the largest carriers who
have economies of scale and scope to provide services below the actual cost in a rural area.
The Commission should instead utilize a qualitative market mechanism evaluation process
that considers a full range of public interest factors. A qualitative market mechanism
evaluation process would determine what constitutes an unserved area by examining not
Rural Telecommunications Group, Inc. WT Docket No. 10-208
December 16, 2010 Page ii
only where individual Americans reside, but also where mobile traffic will occur, such as
highways between towns and cities, as well as roads near seasonal work areas, oil fields,
ranches, farms, and recreational areas.
While RTG supports the establishment of minimum eligibility requirements for
carriers seeking Mobility Fund support similar to those articulated in the NPRM, the
Commission should also employ a ?qualitative carrier eligibility? evaluation process that
would award ?bidding credits? to smaller carriers. Specifically, as part of any project
selection or reverse auction process, a rural carrier?s formal bid should be augmented to
reflect bidding credits earned for meeting additional stipulations that are deemed to meet
certain public interest objectives. For example bidding credits should be awarded to
carriers where provision of advanced wireless service will create new jobs and aid small
business development. Carriers that primarily serve rural subscribers or have continually
served predominately rural areas should also receive a bidding credit.
Additionally, a mandatory data roaming service requirement should be imposed on
recipients of Mobility Fund support and the FCC should adopt rules to ensure that no
carrier receiving support will be denied data roaming by other wireless carriers. Achieving
the National Broadband Plan?s and current Commission?s primary goal of increasing
broadband deployment throughout the country will only be accomplished by mandating
reciprocal data roaming on networks built using Mobility Fund support and among all
existing wireless carriers.
Rural Telecommunications Group, Inc. WT Docket No. 10-208
December 16, 2010 Page 1 of 16
Before the
Federal Communications Commission
Washington, D.C. 20554
In the Matter of )
)
Universal Service Reform ) WT Docket No. 10-208
)
Mobility Fund )
To: Wireless Telecommunications Bureau
Comments of the Rural Telecommunications Group, Inc.
The Rural Telecommunications Group, Inc. (?RTG?),1 by its attorneys, hereby
submits its comments in response to the Federal Communications Commission?s (?FCC?
or ?Commission?) Notice of Proposed Rulemaking (?NPRM?)2 in the above-captioned
proceeding.
I. BACKGROUND.
In its Mobility Fund NPRM, the Commission builds on a National Broadband Plan
(?NBP?) recommendation that the FCC create a Mobility Fund to provide one-time
support for deployment of 3G networks, to bring all states to a minimum level of 3G or
1 RTG is a Section 501(c)(6) trade association dedicated to promoting wireless
opportunities for rural telecommunications companies through advocacy and education.
RTG?s members have joined together to speed delivery of new, efficient, and innovative
communications technologies to the populations of remote and underserved sections of the
country. Many of RTG?s members are competitive eligible telecommunications carriers.
RTG?s members are comprised of both independent wireless carriers and wireless carriers
that are affiliated with rural telephone companies each of whom serves less than 100,000
subscribers.
2 In re Universal Service Reform; Mobility Fund, WT Docket No. 10-208, Notice of
Proposed Rulemaking (Oct. 14, 2010) (?Mobility Fund NPRM?).
Rural Telecommunications Group, Inc. WT Docket No. 10-208
December 16, 2010 Page 2 of 16
better mobile service availability.3 The proposed Mobility Fund would take a portion of
high-cost universal service support surrendered by Verizon Wireless and Sprint Nextel,
and redirect the funds to provide support for cost-effective network build-out in areas that
currently do not have advanced (i.e., 3G or higher) wireless services.4
Supporting the build-out of advanced wireless networks in states with 3G coverage
lagging the national average is expected to enable those states to catch up with the rest of
the nation and improve the business case for eventual 4G rollout in harder-to-serve areas.
However, for the Mobility Fund to be truly successful, the Commission should increase the
overall size of the fund, determine receipt of support based on a qualitative market
mechanism, provide ongoing support to Mobility Fund networks, and mandate data
roaming among technically compatible wireless carriers.
II. THE MOBILITY FUND WILL BETTER SERVE THE PUBLIC INTEREST
IF THE SIZE IS INCREASED.
A. A Larger Mobility Fund Will Enable The Commission To Distribute
Support To All Areas That Lack 3G Services.
To accelerate the nation?s ongoing efforts to close the mobility gap, the FCC
proposes to use $100 million to $300 million from the federal universal service fund
(?USF?) to create the Mobility Fund.5 A Mobility Fund of $100 to $300 million will only
make miniscule gains in closing the nation?s mobility gap. The size of any effective fund
would have to be substantially larger in order to truly jump-start deployment and expand
3 Federal Communications Commission, Connecting America: The National Broadband
Plan, 146 (Mar. 2010) (?NBP?).
4 Mobility Fund NPRM at ¶8. Unless noted otherwise, all references herein to ?unserved?
areas refer to areas without advanced wireless services.
5 Mobility Fund NPRM at ¶13.
Rural Telecommunications Group, Inc. WT Docket No. 10-208
December 16, 2010 Page 3 of 16
the coverage area of advanced wireless services in a short timeframe. The current
proposed size of the fund will help only a few areas in a few states that lack 3G services.
The Commission correctly recognizes that ?[m]illions of Americas live in
communities where current-generation mobile service is unavailable, and millions more
work in or travel through such areas.?6 However, there are areas throughout the country
where no wireless service exists ? areas where people live, work, and travel. A larger
Mobility Fund will enable the Commission to not only distribute support to all areas that
do not have current-generation wireless service, but also to areas that completely lack any
wireless service. The critical need for service in areas where people are not able to contact
Public Safety either because there is no service, or the existing level of service is not
reliable, is self evident.7
The Commission proposes to redirect a portion of USF support voluntarily
relinquished by Verizon Wireless and Sprint Nextel to create the Mobility Fund, and use
the rest of the surrendered funds for a ?down payment? on future broadband reforms.8
However, as discussed below, because the Commission lacks authority to fund broadband
services with universal service monies, surrendered USF support can only be used to
increase the size of the Mobility Fund, not for a down payment on some sort of broadband
reform in the distant future.
6 Id. at ¶1.
7 See, e.g., Letter from Senator John D. Rockefeller IV, Chairman, Senate Committee on
Commerce, Science, and Transportation, to Julius Genachowski, Chairman, FCC (Aug. 2,
2010) (detailing the communications problems experienced by citizens and Public Safety
workers during the Big Branch mine disaster in West Virginia due to ?inadequate
communications infrastructure?).
8 See High-Cost Universal Service Support; Federal-State Joint Board on Universal
Service; Request for Review of Decision of Universal Service Administrator by Corr
Wireless Communications, LLC, WC Docket No. 05-337, CC Docket No. 96-45, Order
and Notice of Proposed Rulemaking (Sep. 3, 2010) (?Corr Wireless Order?).
Rural Telecommunications Group, Inc. WT Docket No. 10-208
December 16, 2010 Page 4 of 16
B. The FCC Does Not Have The Authority To Use Reclaimed Support For
Unspecified Broadband Programs.
To create the Mobility Fund, the Commission proposes to ?take a portion of the
funds that would have gone to Verizon Wireless and Sprint Nextel to support wireless
service in areas that were largely served by one or more other providers, and redirect that
money to provide targeted support for cost-effective network build-out in unserved
communities.?9 The FCC has directed the Universal Service Administrative Company
(?USAC?) to hold the remainder of the surrendered Verizon and Sprint funds as a down
payment on proposed broadband universal service reforms.10
The record in the FCC?s Corr Wireless proceeding makes it clear that the FCC does
not have the authority to use any of the surrendered Verizon and Sprint support for a
?down payment? on future broadband reform.11 Furthermore, the Commission itself has
already acknowledged that the D.C. Circuit?s Comcast12 decision has weakened its ability
to carry out reforms aimed at increasing broadband access and adoption in rural America.13
Any use of reclaimed Verizon Wireless and Sprint Nextel funding for general broadband
purposes is legally suspect and could hold up the FCC?s proposed Mobility Fund in court.
9 Mobility Fund NPRM at ¶8.
10 See Corr Wireless Order at ¶20.
11 See, e.g., Comments of Sprint, WC Docket No. 05-337 (filed Oct. 7, 2010) at p. 4;
Comments of Verizon and Verizon Wireless at p. 5; Comments of RICA at p. 5.
12 Comcast Corp. v. FCC, 600 F.3d 642 (D.C. Cir. 2010)
13 Austin Schlick, Implications of Comcast Decision on National Broadband Plan
Implementation, BlogBand, The Official Blog of the National Broadband Plan (Apr. 7,
2010), http://blog.broadband.gov/?entryId=356610; see also Letter dated July 26, 2010
from J. Genachowski to Rep. John Dingell, Chairman, House Committee on Energy and
Commerce; Wall Street Journal, The Journal Report ? Technology, R4 (June 7, 2010),
available at:
http://online.wsj.com/article/SB10001424052748704183204575288363378490860.html.
Rural Telecommunications Group, Inc. WT Docket No. 10-208
December 16, 2010 Page 5 of 16
According to section 254(b)(5) of the Communications Act of 1934, as amended
(?the Act?), the Commission?s universal service policies must be based on specific,
predictable and sufficient mechanisms.14 Furthermore, the contribution obligation found in
section 254(d) requires every carrier that provides interstate telecommunications services
?to contribute?to the specific, predictable, and sufficient mechanisms established by the
Commission to preserve and advance universal service.?15 The Commission?s proposed
Mobility Fund and future broadband mechanisms are speculative, uncertain, and
unpredictable, with the reserve support being earmarked for programs that are yet to be
created.16 Reclaiming support that was intended for a specific, established support
mechanism and banking it while waiting for the creation of an undetermined mechanism
violates the specific and predictable requirements in both Section 254(b)(5) and Section
254(d). The appropriate action is for the Commission to use the reclaimed high-cost
support to increase the size of the Mobility Fund as long as the Mobility Fund is defined as
a specific universal service mechanism and support flows, as required by law, to eligible
telecommunications carriers.
III. NETWORKS DEPLOYED USING MOBILITY FUND SUPPORT WILL
REQUIRE PERMANENT, ONGOING SUPPORT.
The Mobility Fund as proposed would provide one-time support to wireless carriers
to deploy 3G or better networks in areas where these services are currently unavailable.
The NPRM does not propose any type of permanent, ongoing support for Mobility Fund
recipients once funding is used to construct advanced wireless networks. While such a
14 47 U.S.C. § 254(b)(5).
15 47 U.S.C. § 254(d).
16 See Letter from Caressa D. Bennet, RTG General Counsel, to Marlene H. Dortch,
Secretary, FCC, WC Docket No. 05-337, CC Docket No. 96-45 (Nov. 1, 2010).
Rural Telecommunications Group, Inc. WT Docket No. 10-208
December 16, 2010 Page 6 of 16
?one-shot? injection of funding may be helpful, the Mobility Fund, in and of itself, does
not take into account the ongoing capital upgrade costs of providing essential mobile
services in high-cost regions of the country.
The proposed one-time Mobility Fund cannot be used to replace ongoing high-cost
support for wireless competitive eligible telecommunications carriers and should not be
viewed as any kind of substitute for continued high-cost support. Rural wireless carriers
will require ongoing support so that they may continue to provide advanced wireless
services to high-cost, hard-to-serve areas. RTG opposes any Mobility Fund that is simply
a ?bone? thrown to the rural wireless industry to replace ongoing high-cost support and
specifically requests the FCC acknowledge in its order that there must be a mechanism for
ongoing support of advanced wireless service in rural areas.
In its 2007 Recommended Decision which first proposed a Mobility Fund, the Joint
Board on universal service correctly recognized the need to provide continuing operating
support to carriers where service is essential but where usage is so slight that there is not a
business case to support ongoing operations, even with substantial support for
construction.17 The FCC should not abandon this conclusion when it fashions a new
Mobility Fund. Accordingly, the Commission should set aside a portion of the reclaimed
Verizon Wireless and Sprint/Nextel high-cost funds to provide permanent, ongoing
support.
17 In re High-Cost Universal Service Support; Federal-State Joint Board on Universal
Service, WC Docket No. 05-337, CC Docket No. 96-45, Recommended Decision, ¶16
(Nov. 20, 2007).
Rural Telecommunications Group, Inc. WT Docket No. 10-208
December 16, 2010 Page 7 of 16
IV. REVERSE AUCTIONS WILL NOT ACCURATELY DETERMINE THE
AMOUNT OF SUPPORT NEEDED TO PROVIDE SERVICE TO AREAS
WITHOUT ADVANCED WIRELESS SERVICES AND A QUALITATIVE
MARKET MECHANISM EVALUATION PROCESS SHOULD INSTEAD
BE USED TO DISTRIBUTE FUNDING TO ALL AREAS OF THE
COUNTRY.
A. Reverse Auctions Will Not Accurately Determine The Amount of Support
Needed to Provide Service to Areas Without Advanced Wireless Services
and Will Instead Produce a Race to the Bottom.
The Commission proposes using a single-round reverse auction in order to
determine which entities will receive support from the Mobility Fund. In other words, the
entity that submits the lowest bid will receive support. The Commission believes a reverse
auction will reveal the actual cost of providing advanced services to any given area.18 The
Commission assumes that ?submitted bids should present a good estimate of the actual
costs to the bidders of providing advanced mobile services?in the areas on which
[carriers] bid to expand service.?19 However, RTG fears that the use of reverse auctions
will produce a ?race to the bottom? in which participants submit bids that are too low and
provide inferior services. Also, the potential for anticompetitive conduct is high when
reverse auctions are used because they unfairly favor the largest carriers who have
economies of scale and scope to provide services below the actual cost in a rural area.
The largest wireless carriers will be able to make bids that are substantially lower
than the cost of serving an area because they are able to spread their costs across their
entire service area which includes low-cost-to-serve and higher-populated areas. Large
carriers may be motivated to keep their bids low in order to put rural competitors out of
business. Large providers have an obvious economic incentive to accept the economic loss
18 Mobility Fund NPRM at ¶16.
19 Id. at ¶17.
Rural Telecommunications Group, Inc. WT Docket No. 10-208
December 16, 2010 Page 8 of 16
resulting from below cost bidding in order to put smaller competitors out of business. More
importantly, such ?low-ball? bids will disadvantage customers seeking mobile service in
high-cost areas because low bids will lead to less investment and less infrastructure in
high-cost areas, creating a sub-class of rural consumers lacking in up-to-date mobile
services. The Commission must ensure that it does not increase the concentration of
wireless network ownership through reverse auctions that favor large carriers to the
detriment of rural competitors and the consumers they serve.
B. Utilizing A Qualitative Market Mechanism Evaluation Process That
Considers a Full Range of Factors Would Allow the Commission to
Distribute Mobility Fund Support in a More Targeted and Efficient
Manner.
The FCC is seeking comment on whether to make support available to any
unserved area nationwide or whether to target support only to a limited set of unserved
areas, such as those in counties or states where the percentage of the population with
access to 3G services is more than three percentage points below the percentage of
nationwide population with such access, which according to data currently available is
98.5 percent. Further, the Commission proposes to determine winning bidders for
Mobility Fund support based on the lowest per-unit bids, using the population of unserved
areas and perhaps other characteristics, such as road miles.20 These additional
characteristics cannot be an afterthought. In fact, the Commission correctly notes that in
order to consider the full range of potential public benefits that may result from providing
new access to mobile services, many additional factors should be considered.21
20 Id. at ¶18 (emphasis added).
21 Id. at ¶27.
Rural Telecommunications Group, Inc. WT Docket No. 10-208
December 16, 2010 Page 9 of 16
In order to overcome inherent flaws that favor bidding by large carriers, any reverse
auction should employ a ?qualitative market mechanism? evaluation process. A qualitative
market mechanism evaluation process would distribute funding in a more targeted and
efficient manner than a simple, cost-based reverse auction by allowing the Commission to
consider additional allocation factors that go beyond mere population when calculating the
number of unserved ?units? in a given geographic area. If the Commission is to create a
Mobility Fund that serves its intended purposes, it should determine what constitutes an
unserved area by examining not only where individual Americans reside, but also where
mobile traffic will occur, such as highways between towns and cities, as well as roads near
seasonal work areas, oil fields, ranches, farms, and recreational areas, regardless of the size
of the population residing in these areas.
In other words, the Commission must also recognize that unserved ?units? consist
of not only residences, but also individuals requiring wireless coverage in:
? Transportation Corridors (e.g. highways, railways, navigable waterways);
? Military Installations;
? Homeland Security, Law Enforcement and Public Safety Facilities;
? Tribal Lands;
? Federal and State Parks, Monuments and Recreational Areas;
? Anchor institutions (e.g. schools, colleges and universities, hospitals and
clinics, prisons);
? Energy and Communications Infrastructure Facilities (e.g. hydroelectric
dams, wind and solar farms, petroleum refineries, nuclear reactors, satellite
dish arrays);
? Agriculture and Food Production Facilities (e.g. farms, meatpacking plants,
timber cuts and mills);
? Oil, Gas and Mineral Exploration Facilities (e.g. surface mines, oil and gas
derricks); and
? All other areas where ?roaming coverage? is likely to occur but where, by a
strict definition of population, there may be few or no actual permanent
residents.
Rural Telecommunications Group, Inc. WT Docket No. 10-208
December 16, 2010 Page 10 of 16
Potential unserved ?units? can be easily calculated by extrapolating verifiable
mobile wireless usage on existing transportation corridors or at similar existing facilities or
locations. The most obvious non-residential rural areas that lack mobile wireless coverage
are transportation corridors, especially non-interstate highways and roads. Small and rural
carriers have years of experience providing mobile wireless service to outlying roads and
highways that are true ?lifelines? to remote communities and that facilitate the commerce
that keeps those areas afloat. State and Federal departments of transportation can provide
statistics on ?road-miles? for wide-ranging types of highways and roads and carriers who
already provide service to nearby roads and highways can use existing usage statistics as a
foundation for calculating anticipated usage in the unserved corridor.
Combining unserved residence units with other unserved ?units? on a one-to-one
basis in its qualitative market mechanism evaluation process will enable the Commission
to deliver funding to where Americans truly need it the most
V. THE COMMISSION SHOULD ESTABLISH MINIMUM ELIGIBILITY
REQUIREMENTS FOR MOBILITY FUND SUPPORT THAT LIMIT
SUPPORT TO MEDIUM AND SMALL CARRIERS AND ESTABLISH
BIDDING CREDITS THAT FACILITATE THE PROVISION OF
ADVANCED WIRELESS SERVICES TO RURAL AREAS AND OTHER
AREAS THAT MEET SPECIFIED PUBLIC INTEREST CRITERIA.
RTG supports the establishment of minimum eligibility requirements for carriers
seeking Mobility Fund support. Specifically, RTG supports minimum eligibility
requirements similar to those articulated in the NPRM. Under these requirements, a carrier
seeking Mobility Fund support must (1) be designated as an eligible telecommunications
carrier pursuant to Section 214(e) of the Act in the areas it seeks to serve; (2) have access
to spectrum that is capable of supporting advanced services in the areas it seeks to serve;
Rural Telecommunications Group, Inc. WT Docket No. 10-208
December 16, 2010 Page 11 of 16
and (3) certify that it is both financially and technically capable of providing advanced
services in the areas it seeks to serve.22
Restricting Mobility Fund eligibility to existing ETCs will ensure support will be
distributed only to carriers that have already shown a commitment to serving high-cost
areas. ETCs currently holding a spectrum license should be deemed eligible for Mobility
Fund support. Carriers that have a long-term spectrum lease of at least five years
remaining should also be deemed eligible. In addition to the minimum eligibility
requirements, the Commission should adopt the further requirement that Tier I23 carriers
are not eligible for Mobility Fund support. This will help ensure the participation of small,
rural wireless carriers. A substantial credit (auction bidding credit) should be awarded to
wireless carriers that have already shown a commitment to providing service in rural, hard-
to-serve areas. Further, Mobility Fund support should be targeted to less-populated, rural
areas, rather than urban ?dead spots.? It would be contrary to the public interest and ironic
for Verizon and Sprint Nextel that voluntarily gave up support in order to merge with other
entities to become even larger to be able to reclaim support they previously gave up
through the Mobility Fund.
Additionally, the Commission should employ a ?qualitative carrier eligibility?
evaluation process that would award ?bidding credits? to carriers that meet certain public
interest objectives associated with delivering mobile broadband to unserved markets.24
22 Mobility Fund NPRM at ¶45.
23 Tier I carriers are the four wireless carriers with the largest market share.
24 The FCC has used bidding credits in numerous wireless spectrum auctions. Bidding
credits awarded to auction participants who qualify as ?Designated Entities? (entities such
as small businesses, minority or women-owned businesses, and rural telephone companies
who the FCC has determined serve the public interest by providing wireless service, as
well as entities who would serve the public interest by bringing service to areas in need of
Rural Telecommunications Group, Inc. WT Docket No. 10-208
December 16, 2010 Page 12 of 16
Specifically, as part of any project selection or reverse auction process, a carrier?s formal
bid would be augmented to reflect bidding credits earned for meeting additional
stipulations that are deemed in the public interest. These bidding credits would be used to
lower a carrier?s bid even though the carrier?s actual funding may be higher. It is well
documented that access to broadband will in itself spur economic development.25
Accordingly, in an effort to initiate and maintain economic development in rural areas, the
Commission should grant carriers bidding credits that would be used to lower their bid
amounts for meeting specific criteria, including:
? Job Creation. Bidding credits should be awarded to a carrier if new jobs are
projected to be created as a result of providing the advanced wireless
services.26
it such as tribal lands) allow such entities to place higher bids than they would otherwise,
based on the discounts awarded by virtue of holding bidding credits. See 47 C.F.R. §
1.2110(f). Through the use of bidding credits, the FCC has historically achieved its policy
goals of encouraging the provision of service to high cost and other difficult to serve areas.
For example, in its Tribal Lands Order, the FCC adopted bidding credits to provide
incentives for wireless telecommunications carriers to serve individuals living on tribal
lands, concluding that ?properly targeted bidding credits will encourage participation in
auctions by carriers who are in a position to provide service to tribal lands, and will help to
mitigate the economic risk associated with this type of service.? See Extending Wireless
Telecommunications Services to Tribal Lands, Report and Order and Further Notice of
Proposed Rulemaking, WT Docket No. 99-266 at ¶¶ 1, 16 (rel. June 30, 2000).
25 See NBP, Chapter 13 Economic Opportunity (2010); see also Executive Office of the
President, National Economic Council, Recovery Act Investments in Broadband:
Leveraging Federal Dollars to Create Jobs and Connect America (Dec. 2009) (explaining
how broadband investment creates jobs and stimulates the economy on a short and long
term basis).
26 For example, both the National Telecommunications and Information Administration?s
Broadband Technology Opportunities Program and the Rural Utilities Service?s Broadband
Initiatives Program evaluated and selected project applications that advanced the statutory
purpose of creating jobs and stimulating economic recovery found in the Recovery Act.
Carriers seeking Mobility Fund support would receive a bidding credit for making a
similar showing. See U.S. Dept. of Agriculture, Rural Utilities Service, Broadband
Initiatives Program, Second Round Notice of Funds Availability, Sec. V., C, 1, e. (requiring
last mile and middle mile BIP project applications to provide an estimate of the number of
jobs created and the number of jobs retained by the project or activity).
Rural Telecommunications Group, Inc. WT Docket No. 10-208
December 16, 2010 Page 13 of 16
? Small Business. Bidding credits should be awarded to carriers that are
small businesses. For example, businesses with fewer than 100 employees
would receive a larger bidding credit than businesses with 100-500
employees and businesses with over 500 employees would receive no
credits.
? Rural Subscriber Coverage. Bidding credits should be awarded to carriers
already providing mobile wireless service to progressively more rural
communities, with the size of the credit increasing with the proportion of
rural coverage area (e.g. 100% rural, 75-99% rural, 51-74% rural).27
? Rural Service Dedication Status. Bidding credits should be awarded to
carriers for previously offering telecommunications services to rural
markets, with the size of the credit increasing with the number of years of
service (e.g. 1-5 years of service, 6-10 years of service).
For example, a carrier that has served a specific rural region for at least five years
could get a five percent ?credit? on its bid, and a carrier serving for at least ten years could
get a ten percent credit. Thus, if a carrier providing service for ten years or more bids
$100,000 for a specific area, the FCC should consider that a ?lower? $90,000 bid.
Similarly, a carrier employing fewer than 100 employees, or whose employees work in the
same census block or licensed area where unserved ?units? exist could be awarded a five
percent bidding credit for each criterion for a total 10 percent discount bid. While the FCC
should also institute a reasonable ?cap? on such bidding credits, their implementation
would recognize the importance of rural economic development.
In sum, the lowering of a carrier?s bid through a uniform set of criteria will ensure
that numerous public policy goals are met and that a ?race to the bottom? does not take
27 For example, under the Broadband Initiatives Program, the Rural Utilities Service?s last
mile and middle mile projects were evaluated using systematic criteria that assigned point
values for serving rural residents in unserved areas. For every 10 percent of unserved
households compared to the total households to be served that would receive broadband
service through the proposed project, RUS awarded 1 point up to a maximum of 10 points.
See U.S. Dept. of Agriculture, Rural Utilities Service, Broadband Initiatives Program,
Second Round Notice of Funds Availability, Sec. VI., A, 1-3.
Rural Telecommunications Group, Inc. WT Docket No. 10-208
December 16, 2010 Page 14 of 16
place, minimizing the likelihood that the U.S. experiences harm similar to that resulting
from the utilization of reverse auctions in Chile and India.28
VI. A MANDATORY DATA ROAMING SERVICE REQUIREMENT SHOULD
BE IMPOSED ON RECIPIENTS OF THE MOBILITY FUND AND
MOBILITY FUND RECIPIENTS SHOULD NOT BE DENIED DATA
ROAMING BY OTHER WIRELESS CARRIERS.
The Commission proposes that the use of Mobility Fund support be conditioned on
the recipient providing data roaming on reasonable and not unreasonably discriminatory
terms.29 RTG strongly supports this performance requirement and believes that it must be
made a condition to receiving this support. Data roaming is critical to building a
competitive, retail mobile marketplace in rural America and throughout the country. A
data roaming requirement for Mobility Fund recipients would serve the public interest by
enabling citizens in rural areas to obtain the same services that their urban counterparts
enjoy (i.e., nationwide mobile data services), and would allow small and regional wireless
carriers to compete on a national level. The receipt of federal support should come with an
obligation to ?share? this publicly supported network.
In order to achieve the National Broadband Plan?s essential goal ? increasing
broadband deployment throughout the country ? RTG suggests that the Commission not
only mandate reciprocal data roaming on networks built using Mobility Fund support, but
among all wireless carriers. The number of American consumers that access the Internet
28 A series of wireless infrastructure reverse auctions in 2007 resulted in India?s oldest and
largest communications provider, BSNL, winning over 75% of the auctions. Irene S. Wu,
Maximum Impact for Minimum Subsidy: Reverse Auctions for Universal Access in Chile
and India, FCC Working Paper 2, 17 (Oct. 2010). India?s most recent universal service
fund reverse auctions resulted in bids from companies for zero or negative support. Id. at
11.
29 Mobility Fund NPRM at ¶36.
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December 16, 2010 Page 15 of 16
using smartphones continues to grow at a fast pace. The question is not if all U.S. mobile
consumers will permanently migrate to smartphones but when.
As a result of large, nationwide carriers refusing to enter into data roaming
agreements with smaller carriers,30 many mobile customers are not able to use all the data
functions of their devices when roaming, even in situations where it is technically feasible
for all of those functions to work.31 Without Commission mandated automatic data
roaming, the largest national carriers will be able to choose which mobile customers can
get online, therefore dictating the development of the marketplace. Such a scenario is
detrimental to consumers. The FCC should use its authority to adopt an automatic data
roaming requirement through its authority to regulate commercial mobile radio service
(?CMRS?) providers.
Any data roaming requirement, be it imposed on Mobility Fund recipients or
CMRS carriers in general, should also prohibit priority access that would treat customers
of different carriers differently. Specifically, the FCC should not allow the home network
operator to give its own customers preferential treatment over a data roaming partner?s
customers. This type of discrimination is anticompetitive and should not be allowed. A
roaming partner?s customer who has a bad experience while roaming is not going to
associate the bad experience with the roamed-on network; rather the customer will
30 See Letter from Caressa D. Bennet, RTG General Counsel, to Marlene H. Dortch,
Secretary, FCC, WT Docket No. 05-265, (Nov. 3, 2010); see also Joint Letter from
Caressa D. Bennet, RTG General Counsel, and Rebecca Murphy Thompson, RCA General
Counsel to Marlene H. Dortch, Secretary, FCC, WT Docket No. 05-265, (Nov. 9, 2010)
(providing specific examples of anticompetitive behavior experienced by RTG and RCA
members when attempting to obtain data roaming agreements with AT&T and/or Verizon
Wireless).
31 See NBP at p.48 (acknowledging that a lack of data roaming requirements limit the use
of smartphones when roaming).
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December 16, 2010 Page 16 of 16
associate it with its home carrier, thus putting the home carrier at an unfair competitive
disadvantage.
VII. CONCLUSION.
The lack of advanced wireless service remains a problem for those who live, work, and
travel in areas without such service. Without support, these areas risk falling farther
behind as the wireless ecosystem transitions to next-generation high-speed wireless
broadband services. RTG urges the Commission to support the build-out of advanced
wireless services in all areas without such service by increasing the overall size of the
Mobility Fund. Additionally, the Commission should determine receipt of support based
on Qualitative Market Mechanism factors that take into account the location of roads and
workplaces, and Public Safety considerations. The Commission should also create a
mechanism for providing ongoing support to Mobility Fund networks in this proceeding or
as part of broader USF reforms. Finally, to achieve the NBP?s goal of universal broadband
service as soon as possible, the Commission should mandate data roaming not only for
mobility fund recipients, but for all wireless carriers.
Respectfully submitted,
RURAL TELECOMMUNICATIONS GROUP, INC.
By: ____________/s/________________
Caressa D. Bennet
Kenneth C. Johnson
Anthony K. Veach
Bennet & Bennet, PLLC
4350 East West Highway, Suite 201
Bethesda, MD 20814
(202) 371-1500
Its Attorneys
Date: December 16, 2010