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FCC Should Update Performance Weighting Methodology for Auctions Study Finds
Regulation

FCC Should Update Performance Weighting Methodology for Auctions Study Finds

September 20, 2019

Today, the Fiber Broadband Association and strategy consulting firm Cartesian released research finding that the weighting methodology used in the Federal Communication Commission’s (FCC’s) 2018 Connect America Fund (CAF) Phase II auction penalized high-performance broadband providers and failed to account for the full socio-economic benefits of these networks. The researchers recommend new weights for future FCC auctions to reflect the benefits of high-performance networks and encourage participation from gigabit providers.

Below are the key findings from the study:

  • Despite the rapidly growing demand for high-speed connectivity, the weights used by the FCC in its CAF Phase II Auction 903 did not encourage meaningful participation by providers offering gigabit services. Few areas saw gigabit bids, and no areas saw bids from more than 3-gigabit providers.
  • The auction also failed to take into account tangible socioeconomic benefits produced by different access technologies such as telecommuting, remote health and learning, e-commerce, and video streaming. For instance, satellite connections are slower and high-latency and are therefore inadequate for many use cases — but the FCC’s methodology failed to reflect this.
  • Because the auction did not maximize participation from high-performance providers and did not account for the differences in consumer benefits between various technologies, it did not distribute support most cost-effectively.
  • To determine weights in future auctions, the FCC should use a bottom-up methodology that accounts for the benefits brought on by access service tier and latency – and should adopt weights that provide at least a 70% spread between the gigabit and baseline, low latency tiers.

To read more about the study, visit here.


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Written by:
Fiber Broadband Association

 
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