Satellite CAF II Recon Petition Being Considered
At least one satellite operator is leaning toward filing a petition for reconsideration of the FCC's Connect America Fund Phase II bid weights decision, we were told. Satellite industry insiders said the overarching issue is the way the weighting system gives particular preference to issues like latency and speeds that result in satellite broadband services being unlikely to participate. Thursday is the deadline for petitions, the FCC confirmed Monday, but didn't comment further.
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A satellite executive at a company strongly considering a recon petition said it likely would ask the agency to revisit the weights given for latency and gigabit speeds. There are some merits to the FCC promoting low-latency service, but the policy decision resulted in weighting that's too skewed in favor of that, the executive said. The net result will be a select number of people who will receive higher-speed low-latency service, instead of CAF II funds being spent to provide service as broadly as possible, especially in rural areas, the executive said.
Commissioner Mike O'Rielly partially dissented on the February vote on the order (see 1702230019) and told satellite interests last month he would back reconsideration of the bid weights decision (see 1703070023). O'Rielly's office didn't comment.
Satellite Industry Association President Tom Stroup told us given the concerns that were expressed about the weighting and O'Rielly's encouragement, "I would expect at least one of the [satellite] companies to do so.”
Increasing awareness of the effects of the weighting decision could resonate with the commissioners, but reconsideration might be complicated by changes in the makeup of commissioners, a satellite official said. The speed at which the FCC addresses the petitions could be complicated by how long it takes the administration to nominate people to fill the current two vacancies, or if Commissioner Mignon Clyburn leaves in June when her term ends (see 1704140061), the official said.
Fiber interests almost surely will resist satellite petitions, given the competition in auctions that could come from satellite and wireless providers, satellite officials said. Meanwhile, wireless interests could be allied at least partially with satellite since they have a latency issue too under the CAF weighted scoring, the satellite executive said.
Hughes Network Systems lobbied Clyburn's office about the weighting, arguing the current score system effectively precludes satellite operators from the reverse auction (see 1704120053). ViaSat also met with the FCC (see 1703220039). In an emailed statement to us, ViaSat said that while it "appreciate[s] the Commission’s efforts to create a Fund that is technology neutral and which bridges the digital divide, we are concerned that the recent CAF II decision did not go far enough in providing a real chance for satellite broadband providers to participate in the reverse auction." ViaSat also said it's "exploring creative ways with the Commission, that will enable satellite broadband to help fill the broadband gap in the United States."