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The Connect America Fund Phase II (Phase II) is part of the Commission’s reform and modernization of its universal service support programs. In 2018, the Commission conducted an auction (Auction 903) to allocate Phase II support to certain eligible areas across the United States. Auction 903 ran from July 24, 2018 to August 21, 2018. 103 bidders won $1.49 billion over 10 years to provide fixed broadband and voice services to over 700,000 locations in 45 states. (See full auction results.)

The 2018 Phase II auction followed an earlier allocation of Phase II support to price cap carriers based on a cost model. In 2015, ten price cap carriers accepted an offer of Phase II support calculated by this model in exchange for deploying and maintaining voice and broadband service in the high-cost areas in their respective states. The areas for which price cap carriers did not accept model-based support, as well as other areas, were made available in the Phase II auction.

Phase II Auction Information

  • Budget
  • Support Term
  • Deployment
  • Technology-Neutral Service Tiers
  • Eligible Areas
  • Two-Stage Application Process
  • Timeline
  • Contact

Budget

$198 million in annual support (a total of $1.98 billion for 10 years). The Commission adopted a $2.15 billion total budget for the Phase II auction, but set aside up to $170.4 million total to allocate through New York’s New NY Broadband Program.

Support Term

10 years of support; support disbursed in equal monthly installments. Disbursements to winning bidders begin after the winning bidder submits a long-form application and becomes authorized to receive support.

Deployment

Phase II support recipients must:

  • Offer commercially at least one voice and one broadband service meeting the relevant service requirements to the required number of locations in the following timeframe:
    • 40% of the required number of locations in a state by the end of third year of support
    • An additional 20% in each subsequent year
    • 100% by the end of the sixth year of support
    • The exact deployment schedule is determined by the carriers themselves, not the FCC.
  • File with USAC annual reports and build-out milestone certifications, as well as data on the locations where service is available. Failure to meet the terms and conditions of support can result in increased reporting obligations and possible withholding and/or recovery of support.
  • Offer at least one broadband and voice service at rates that are reasonably comparable to the rates for similar service in urban areas. The FCC uses its annual Urban Rate Survey to determine the range of rates that are reasonably comparable.

Technology-Neutral Service Tiers

Bids were accepted for four service tiers, each with varying speed and usage allowances, and two latency tiers, one high latency and one low latency. Winning bidders must offer the service associated with their winning bid.

Performance Tier

Speed

Usage Allowance

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Weight

Minimum

≥ 10/1 Mbps

≥ 150 GB

65

Baseline

≥ 25/3 Mbps

≥ 150 GB or U.S. median, whichever is higher

45

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Above Baseline

≥ 100/20 Mbps

2 TB

15

Gigabit

≥ 1 Gbps/500 Mbps

2 TB

0

Latency

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Requirement

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Weight

Low Latency

≤ 100 ms

0

High Latency

≤ 750 ms & MOS of ≥4

25

Short Form Application Filing Window Opened March 19, 2018 Short-Form Application Filing Deadline March 30, 2018 Mock Auction July 18 – 20, 2018 Bidding Began July 24, 2018 Bidding Ended August 21, 2018 Form 683 Divide Winning Bids Window Opens September 4, 2018, 10:00 a.m. ET Form 683 Divide Winning Bids Window Closes September 14, 2018, 6:00 p.m. ET Form 683 Long-Form Filing Window Opens October 1, 2018, 10:00 a.m. ET Form 683 Long-Form Filing Deadline October 15, 2018, 6:00 p.m. ET Form 683 Letter of credit commitment letters, detailed technology and system design descriptions due November 5, 2018, 6:00 p.m. ET Form 683 ETC designations and certification letters, and auditied financial statements (if applicable), due February 25, 2019, 6:00 p.m. ET

Contact

Please email questions about the Phase II auction to [email protected] You can also contact members of the Commission’s Rural Broadband Auctions Task Force at [email protected]

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