At its August Open Meeting, the Federal Communications Commission (FCC) approved a Public Notice (“Notice”) that addresses the procedures for its upcoming Connect America Fund (“CAF”) Phase II auction (“Auction” or “Auction 903”), scheduled to begin in 2018. Auction 903 will be a competitive reverse auction wherein service providers will compete for up to $1.98 billion in financial support as part of an ongoing effort by the FCC to revise the high cost universal service support program. The Notice seeks comment on the FCC’s proposed process for how an applicant can become qualified to participate in the Auction, how bidders will submit bids, and how bids will be processed to determine winners and assign support amounts. Comments are due by September 18, 2017 and reply comments are due by October 18, 2017.

The Auction is the second part of CAF Phase II. The initial part of CAF Phase II occurred in 2015, when ten price cap carriers accepted offers of support calculated by a cost model in exchange for the providers’ commitment to deploy and maintain voice and broadband service in high cost areas. Service providers that seek to participate in the Auction will bid on providing service to eligible high cost areas including those areas where incumbent price cap carriers declined the support calculated by the cost-model. In 2016, the FCC adopted the Phase II Auction Order, which established the rules for the Auction’s bidding process including the bidder performance obligations, application mechanism, bidder eligibility criteria, eligible areas, and post-auction obligations. More recently, in March 2017, the FCC adopted bidding weights for the different performance category tiers for Auction 903 (as previously discussed here). The Notice takes final steps towards executing the Auction by resolving specific details of the mechanics established in these earlier proceedings.


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