A Starting Point for CAF Post-ROFR Auction

[Commentary] A funny thing is happening on the way to enacting a reverse auction for a key portion of the high-cost Connect America Fund (CAF). Instead of installing a program based on competitive forces and free market principles, some people want the Commission staff to select winners and losers with an inappropriate bias against certain technologies. Such manipulation would be the surest way to produce greater inefficiency, overpay for service and leave many consumers unserved. Further, this would set bad precedent and undermine future Commission universal service efforts.

Accordingly, I suggest that we reject this approach, focus on the sound, broad principles that everyone should support, and then turn to implementing the details. The principles are:

• Serve as many unserved consumers as possible with service that meets specified baseline performance requirements.
• Eliminate artificial categories, which could discount providers capable of providing the requisite service, and are based on unsupported assumptions.
• Fiber should not be the default, nor should unlicensed, satellite or other qualified providers be sidelined.
• Establish a real auction – not sealed bids or subjective staff review. Multi-round structure enables competition, where it exists, to achieve greater cost-efficiencies.
• Funding should not flow to areas that already have broadband (i.e., 10/1 service for price cap areas).