Peter: Thank you, Rob, if you could get us started?
Director Osborn is on.
-: Thank you. Good morning.
My name is Robert Osborn and I'm the Director
of the Communications Division
at the California Public Utilities Commission.
Thank you for joining today's FCC webinar
on the Rural Digital Opportunity Fund also known RDOF.
Today FCC's Michael Janson will be presenting
an overview of the RDOF reverse auction,
the steps needed to participate in it.
I want to thank Michael for making time
in his busy schedule to provide this overview.
Thank you also to Robert Stanford in our IT department
for making the webinar possible and also
to Peter Pratt and Alex Abramson for organizing it.
RDOF represents a huge opportunity for California
to get federal dollars to close the digital divide.
California has over 475,000 eligible locations,
which is the largest number, state.
Now I would like to invite Commissioner Guzman Aceves
to make some opening remarks.
She has been a champion in closing
the digital divide in unserved parts of California.
And we're so happy to have her here today.
Commissioner.
-: Thank you, Director Osborne.
And thank you also to your staff,
Peter and Alex for making this happen.
And Robert and, there in San Francisco.
I'm very thankful for Michael Janson
for being here with us today and the FCC
really taking the time to make sure
that California is prepared for this auction.
I really had the opportunity to talk
to some of our colleagues throughout the nation yesterday.
And we really are looking for the best way to partner.
I think here in California, as you know,
our builds are more expensive and
we really are looking for guidance today.
And following up from today with your team Michael,
on how we can partner with the FCC.
This question of partnership is one
that we met with FCC Commissioners on
and has been continuing the dialogue.
But I think we're now at a point where we really
need to understand how you envision
that partnership best working.
And secondly, I obviously, we are still
in the midst of figuring out these
areas of opportunity and the amount of challenges
that came through through the incumbents
was really a concern and in particularly just
in the timing of preparing for these applications.
I know that our team here has been working hard
and has a map for the applicants
to really look at these opportunities.
And we are concerned about the timing
for our future applicants to know
if these are continued opportunities.
So we would love some guidance from you on how we can help,
if you are considering any challenges,
how we can help remedy and confirm those areas
at the state side with some of our resources,
to be able to do that with you.
So, anyway, overall, I'm very happy again
that you're here, Michael, to give us this guidance,
we really do want to partner and,
and I really look forward to the dialogue today.
Thank you.
-: Good morning.
I am Peter Pratt from the Communications Division as well.
Thank you so much Commissioner for your introductory remarks
following Rob this morning and for your leadership
all the way back through the many months
we've been working on this federal program,
it was a pleasure supporting you
as you went to see the FCC in February
when several of us were in the Capital as well.
And here we are a day after the final procedures were voted
by the voting meeting of FCC yesterday morning.
So in that regard, I just wanted to briefly mention
to the many folks that we have calling in and on WebEx,
you can ask questions at any time through WebEx Chat.
You can queue up over the Verizon conference lines,
which we will introduce
after Director Janson finishes
his 35 to 40 minutes slideshow.
We also have a brand new group email
that we will be monitoring here in San Francisco
for any of your questions.
And that is simply federalbroadbandfunding@cpuc.ca.gov.
We look forward to your questions.
And with that, I would like to say that Michael Janson,
our guest this morning is the Director
of the Federal Communication Commission,
Rural Broadband Auction Task Force.
That's quite a mouthful,
but he is the lead person managing this
now $20.4 billion program of the
Federal Communications Commission.
Michael had the distinct honor yesterday morning
of presenting the final RDOF Procedures
to the full Commission.
And Michael will leave out the fact
that Chairman Pie remarked that you were better dressed
than the chairman was at the time.
But in any case, Michael is greatly experienced
in federal telecommunications, regulatory
and funding matters.
He has been fully supportive of California's efforts
of everything that Commissioner and her colleagues
have done here over many months.
It was a pleasure meeting him in February in Washington.
And with that, I would ask the technicians
to bring up Director Michael Janson
and his slide presentation
from the nation's Capital.
Thank you, Michael.
Micheal: Thank you very much, Peter and,
have you to visit with you today.
Can everyone see the slide deck that I have shared?
Okay. Thank you very much.
I have had the good fortune of living in California
and working with some alumni from
the California Attorney General's office
on consumer protection matters.
And I very much appreciate the opportunity today to discuss
with you the Rural Digital Opportunity Fund, Phase I.
This is a tremendous opportunity for California,
as well as for other states throughout the country
to receive funds, to support the deployment
of phased broadband.
I'm going to go through this initial slide deck,
and then I'm going to answer questions.
I very much appreciate the questions and interest
in partnership and about the challenge process.
I think what we had agreed is that I would address
those after I go through the slide deck.
And before I start rolling through the slide deck,
I just want to make sure is everyone hearing me okay.
And can everyone see the first slide of the day?
Yes. Okay.
I'm going to take those nods as a yes.
So here we go.
Oh, the first thing I want to say is that for,
Commission has rules about making presentation to FCC staff,
and those rules are meant to provide transparency
in terms of the arguments that are being made
to Commission staff.
Today's presentation and participation in today's webinar
will not typically trigger an ex parte requirement,
meaning a filing in the docket.
Today is meant to be an opportunity for me
to share information with you and to take your questions.
But if an argument wants someone wants to make an argument
about this proceeding or how we should proceed,
that should be filed in our docket,
So that other entities that are participating
in this proceeding have an opportunity
to see that such advocacy was made.
I just heard a encouragement to speak louder.
So I am speaking loudly.
I hope this is loud enough.
And so I'm going to continue on
and speaking as sort of as loudly as I can,
hopefully you'll be able to hear me going forward.
-: So.
-: Everybody here, I'm looking at Peter,
and I think I'm getting a nod of him
that this is loud enough, so I should continue.
Okay. The thumbs up is, is helpful.
So the Rural Broadband Auctions Task Force
oversees the use of competitive bidding that is auctions
to award universal service support.
The Connect America Fund Phase II Auction
was completed in 2018 and it awarded
almost $1.5 billion over 10 years
for fixed broadband and voice services.
Rural Digital Opportunity Fund has been adopted
and they will award over $20 billion over 10 years
for fixed broadband and voice services.
Phase I will provide up to $16 billion.
That'll be called Auction 904 and Phase II
will be up to $4.4 billion
and the remainder of the Phase I budget.
And I'll unpack that more as we go forward,
but that is the contours, the policy framework
that has been adopted.
The Phase I Auction is expected to commence
on October 29th of this year.
Today's presentation concerns the use of auctions
to distribute money for fixed broadband.
We have a separate program for the use of auctions
to distribute funding for mobile broadband
and the Commission in April adopted
a notice of proposed rulemaking to establish
a 5G Fund for rural America that would provide
ongoing support for the deployment of mobile broadband
in unserved areas with up to $9 billion available
and up to $1 billion available for network deployments
that facilitate precision agriculture,
that is in the notice of proposed rulemaking stage.
And it won't be the focus of my remarks today,
but if any entities or stakeholders are interested
in that proceeding, they are welcome to file
a comment in the docket that has recently been opened
up for that proceeding.
So as Peter said, I am the Director
of the Commission's Rural Broadband Auctions Task Force,
which was developed and initiated a few years ago
to oversee the creation and implementation
of these auctions.
These are very, time consuming
and resource intensive projects
that draw in staff from throughout the Commission.
And we coordinate with multiple bureaus and offices
to develop these programs, implement the details
of these programs and to make sure
that they continue to run on time
and continue to move forward.
So how did we get here?
In 2011, the FCC adopted what is known as the USF,
the Universal Service Fund Transformation Order,
and it introduced a new funding approach
for price-cap areas, using a cost model
to identify the highest cost areas
that is the most difficult to serve
and to use competitive bidding,
to allocate support on an ongoing basis.
In 2014, the Commission adopted
the Connect America Cost Model.
And this was the cost model that estimated
the cost of providing service, number of locations
that were unserved and the number of blocks
that would need the support nationwide.
We identified census blocks as high cost
if they had costs above a specified benchmark.
In 2015, the Commission made an offer
model based support based upon that adopted cost model
to price cap carriers, and nine of those carriers
accepted over $1.5 billion a year to serve
3.6 million homes and businesses in their study areas
by the end of 2020.
The next phase of this program was that we began
the process for implementing the CAF Phase II Auction,
which was a reverse auction of support to high cost areas
where the price cap carriers had declined the offer,
the offer of model based support and certain other areas.
We excluded areas where carriers had already
reported service at speeds of over 10 down and one up
and voice services based upon the decision
that those were areas if they already had 10/1,
they were not the most needy.
Census blocks were aggregated into census block groups.
Each census block group had its own reserve price
and estimated number of locations.
In the auction there was about 30,000 census block groups
containing over 200,000 census blocks
with almost 1 million locations.
CAF Phase II Auction budget was $2.15 billion.
That means that is the amount of money
that was available to be won in the auction.
The CAF Phase II Auction completed in the summer of 2018,
we awarded approximately $1.5 billion in support
to close to 700,000 locations in 45 states.
These locations had an initial reserve price of over
$5 billion and so it represented
a significant cost savings and efficient result
for the Commission to be able to award support
at a fraction of what we initially
had estimated would it cost to serve these areas.
We have been authorizing support on an ongoing basis
since the auction concluded and long form applications
have been completed and as of the middle of May,
we have authorized $1.44 Billion
to over 600,000 locations in 45 states.
The Rural Digital Opportunity Fund Framework draws upon
the successes of the CAF II Auction.
It will allocate up to $20 billion in support over 10 years,
to areas that are judged to be high cost
and that lack voice and minimum speeds of 25/3.
We have adopted a two phased auction approach
with Phase I which is what Auction 904 is called
and what we are intending to initiate
in October of this year.
For census blocks that entirely lack voice
and broadband service and Phase II would address
partially served census blocks,
census blocks that are unserved in the Phase I Auction
and census blocks that we identify as unserved
through the new digital opportunity data collection.
Through the RDOF Auction, we are using a multi round
reverse clock auction that is similar
to the CAF Phase II Auction format.
For the upcoming auction, the areas that will be eligible
to be for support are all census blocks
that lack voice and 25/3,
except certain census blocks that have
a lower cost threshold, and they are less costly to serve.
Although that cost threshold has been modified
for tribal areas and areas where they still lack 10/1.
What that effectively means is that blocks
are not eligible if they are low cost areas,
but the threshold for being a low cost area
has been lowered for tribal areas and areas
that lack 10/1 so that more of those areas
will be considered eligible and potentially
will win support in the, auction.
Census blocks that were awarded funding
in the CAF Phase II Auction are not eligible.
Census blocks that have been awarded funding
through federal or state broadband programs
to provide over 25/3 and certain
rate of return service areas.
The Preliminary Eligible Areas Public Notice
was released in March and had identified
the preliminary eligible areas and
established a limited challenge process.
The Auction 904 Challenge Process provided an opportunity
to identify census blocks that have been served
with 25/3 and voice since the June, 2019,
Form 477 Filing, which was used to create
the preliminary eligible areas,
an opportunity to identify areas
that have been subsidized
by a federal or state program
where there was an enforceable commitment
to provide service of greater than 25/3,
and certain rate of return carriers
had an opportunity to identify areas
where they would not be able to meet USF obligations,
thus making those areas eligible for support in the auction.
California, as noted previously,
was the state with the most number
of preliminary eligible locations
that was announced in March.
It was almost a half a million locations.
The exact number was 473,522.
This image shows you where those locations were distributed
in California and is available on our website.
At the email address below,
you can access this interactive map.
You can zoom into municipalities
or counties or other municipal areas.
You can put in an actual street address and zoom in,
and you can see the eligibility and also
the annual reserve price that is potentially available
as well as the number of locations estimated in that area.
This has been available since March,
and this is currently available at the web address below.
As you can see on this chart,
there is a significant number of locations
that are potentially eligible throughout the country,
close to 6 million.
Although California obviously is a standout
with the most eligible locations,
at least at the preliminary stage.
As mentioned, the map is available as well
as the data files for download,
and you can download those and process them yourself
and look at the preliminary area report.
So what is the timeline for auction 904?
As Peter mentioned, the Commission
considered and adopted the procedures
that will be used for Auction 904
at the Commission's meeting yesterday.
Those are the procedures that are used for applying
to participate in the auction, to the procedures
that are used for bidding in the auction
and the procedures that will be used for evaluating
long form applications for winning bidders.
By June 15th, we will release an application tutorial.
This is an interactive online tutorial that will walk
potential applicants through the process of applying
to participate in this auction.
Short form filing window will open on July 1st at 12 noon,
Eastern Time.
Short form filing window will close on
July 15th at 6:00 P.M. Eastern Time.
By October 14th, we will make a bidding tutorial available.
This will be similar to the application tutorial
and that it will be an online interactive tutorial
that will walk potential bidders through the auction process
so that they understand how to bid and compete the auction.
On October 26th, we will conduct a mock auction
that will give applicants that have been qualified
to bid in the auction an opportunity to work through
and utilize and try out the auction software
so that they fully understand how to place bids.
And then on October 29th, we will commence auction bidding.
After the auction concludes, we will release a public notice
that announces that the auction has concluded
with the winning bidders.
After the winning bidders have been announced,
they will be required to file what are called
long form applications.
That is a deeper dive into their financial
and technical qualifications to make sure
that they should be receiving support.
And once they receive, they complete their
long form applications, the Commission will
designate them ready to authorize.
They have a few more things to do
and then authorize them to, for support.
And then USAC will begin equal monthly payments
for them over the 10 year term of support.
And that's the funding that is authorized
for winning bidders.
So how will bidding proceed in Auction 904?
It will be as CAF II was, a descending clock auction.
Each bid is a commitment to provide service
to an area at a percentage of the reserve price.
Clock is denominated in terms of a percentage.
Percentage decreases in each round
and to determine the implied support amounts,
you have to follow a formula that it is in
the Procedure's PN, but it is a pre-bid percentage
that is adjusted based upon the performance tier and latency
that the applicant or the bidder is bidding on
and multiplied by the area's reserve price.
Each performance tier and latency combination
has its own adjustment weight and the service
that is provided by winning bidders must meet
those minimum performance and latency requirements.
The Commission had to balance a number of competing issues
and priorities in the designing
of the RDOF Phase I Auction.
And as it did in CAF II, it has adopted performance
and latency tiers that weight certain bids in a way
that makes them more or less
comparative, rather competitive, compared to other bids.
The auction is technologically neutral,
but bids that offer faster speeds and lower latency
are more competitive in the auction
and bids that offer gigabit service with low latency
are the most competitive in the auction,
because they are not weighted down by the weights
that apply to bids that offer either above baseline,
baseline, or minimum speeds or high latency services.
As you can see the performance tiers come
with a speed requirement, as well as a usage allowance,
the latency requirement comes with latency requirements.
So how does Auction 904 clear?
And how does it close?
Well, the auction clears once the aggregate bids
are within the budget, that is once there is
a potential equilibrium between the demand for money
and the supply of money such that the budget,
$16 billion could be used to cover all of the bids
that is the demands for funds,
but the auction does not necessarily
conclude at the clearing round.
The support will be awarded to, in the clearing round,
to bidders that have the lowest T+L weight,
if there is only one bidder bidding
at the lowest T+L weight in that particular area
at the clearing round, if there is competition
between bidders that are bidding
for the same T+L weight, then competition can continue.
So there is an auction clearing,
which is the moment at which the auction could conclude.
And then there is an auction closing,
which is after the budget clears,
after we've reached that equilibrium,
potential equilibrium between the demand
and supply for funds.
And after all intra-area competition has been resolved,
then the auction will close.
And that's an important point because even though
the budget for the auction of $16 billion,
that does not mean that the auction will award $16 billion.
It potentially could award a number less than $16 billion
based upon the continuation of inter-area competition.
So what are the service obligations for winning bidders?
They have to deploy service through the number of locations,
one on a statewide basis, there are mandatory
deployment milestones and there also
an optional deployment milestone.
They have to provide service to a hundred percent
of the locations that are estimated by the cost model,
by year six and a hundred percent of the actual locations
by year eight.
There is mandatory reporting on progress.
The Commission will monitor and make sure
that any winning bidder that receives support
is doing what it was supposed to do
in terms of building out to these locations,
deploying service at the required level.
Rates charged must be reasonably comparable
to rates that are offered, similar services in urban areas.
So how does Auction 904 compare to the CAF Phase II Auction
that we completed in the summer of 2018?
Well, the two-step auction application process
is largely the same and it's very similar
to the two step process that the Commission
has used in spectrum auctions for many, many years.
There was a short form application process
that you have to go through to be qualified,
to bid in the auction.
And then there is a long form process
for winning bidders to be authorized for support.
The per-location funding threshold is lower
than CAF Phase II, meaning that we are bringing
more areas into the auction, even though we estimate
the cost of serving them as lower than we did,
lower than the threshold was for CAF Phase II.
We have an even lower cost threshold for tribal areas and
areas lacking 10/1, which means more of those areas
are potentially eligible for support
and more of those eligible areas could win support
in this auction and the per-location support cap,
meaning the total amount of money that could be provided
is higher than it was in CAF Phase II, and we've increased
it even further for tribal areas and areas lacking 10/1,
meaning those areas have an opportunity to win
even more support than other locations in this auction.
And then the other thing that is different
is that we have adopted a preference for faster speeds
and lower latencies in the clearing round,
such that we could award support in the clearing round,
where there's only one bidder at the lowest T+L weight.
Whereas in CAF Phase II that competition
would have continued between bidders offering
different T+L weights even after the clearing round.
So if you are an entity that is interested
in participating in Auction 904,
I cannot emphasize enough that you should be
preparing now to apply for the auction.
You do not have very much more time to get ready
to submit your application.
The application window is expected,
will open on July 1st and close on July 15th.
Late applications can not be accepted
in order to maintain auction integrity.
We have had in the past some unfortunate cases
of applicants getting their applications in
not long after the deadline has closed,
and we cannot accept those applications.
If you are interested in participating in this auction,
you should be preparing now to complete the application.
You should get your answers, answers to your questions now,
and you should submit your application
with plenty of time to spare, meaning not on the last day
in case you have any technical difficulties in applying,
because we cannot accept late applications to this auction.
The process for participating in Auction 904
is very similar to the process
for participating in Auction 903.
We are continuing to roll out educational materials
and more of those will be coming for Auction 904.
But in the meantime, anyone that is interested
in participating in this auction can go on the FCC website
and go through the educational materials
for Auction 903, that is CAF Phase II
and read through all of the materials
that were provided to get ready,
to apply for CAF Phase II.
You can look at the instructions for filling
the short form application for CAF Phase II,
the application tutorial, which is the interactive video
that I mentioned before.
The checklist of information that is required
to complete the application.
And we even have a live workshop
that you could watch in terms of how to apply for CAF II.
There are some differences for Auction 904
that will be made clear in the materials
that we release soon, but much of it is the same.
And if you are unfamiliar with this process,
or you did not participate in CAF Phase II,
you will learn a lot about this process
by reviewing the Auction 903 material.
So if you were interested in applying for Auction 904,
I'm going to be a little repetitive here,
but I'll say it again, late applications will not
be accepted and you should be preparing to apply now.
If you submit us a short form application,
it does not obligate you to enter the auction,
to bid on the auction or to provide services.
It is just the necessary step that you must take if you are
interested in being qualified to participate in the auction.
And so if you are still determining internally,
whether or not you want to compete in this process,
it behooves you to get ready to apply
and to apply that you have the ability
to participate in the auction
if you choose that you want to do so.
To complete the short form application
you have to submit financial information,
ownership information, technical information,
and information detailing the previous provision
of telecommunication services, if applicable.
So what does that mean specifically?
Required financial information includes
financial statements.
There are different requirements for different types
of entities, but you have to prepare to submit
your financial statements so that we can evaluate
whether or not you should be qualified
to participate in the auction.
There are different requirements for different types
of entities and if you are a provider of electricity,
then you have a different set of requirements
that are detailed in the procedure's public notice.
If you have not been operating, then you will need
to submit a letter of interest from a qualified bank.
This program is designed to be open to new entrants
and to entrants that have not provided
telecommunication services in the past.
And these two provisions that I just showed,
show you how you can participate in this process,
be qualified to participate in the auction if you
have not been a telecommunications provider.
Technical information is required of all applicants,
applicants have to indicate which state they intend
to bid on, which performance tier they intend to bid on
in terms of the speed and the latency and the technology
that they intend to use to provide service
at that level of performance.
If you're planning to use wireless technology,
then you have to detail the spectrum bands
and the bandwidth that you have access to.
And you have to answer all of the questions that are listed
in appendix A of the Auction Procedures Public Notice,
a draft of which was released over three weeks ago
and the final version of which will be released soon.
You also have to submit ownership information
that would indicate the applicant's name
and legal classification, which individuals
are points of contact, communicate with Commission staff
and all parties, including non applicants,
which the applicant has any agreements with
regarding the applicant's participation in the auction.
The individuals and entities with an ownership interest,
whether direct or indirect in the applicant
and any FCC regulated businesses in which
the applicant has a direct interest.
There's also additional required information
that is detailed in the Auction Procedures PN,
certain certifications, certain identifying numbers
and certain specifications that are detailed
in the Auction Procedures Notice.
One of the questions that we often get is about
forming a consortium, interested parties
may form a consortium.
A consortium is an entity made up of multiple parties
that participate in the auction as one bidder.
There are a number of reasons why entities may
want to form a consortium.
They may want to cooperate and share the costs
of legal counsel or other counsel on how to participate
in the auction and a consortium is a vehicle
that allows multiple entities to work together,
to enter the auction as one bidder.
When they apply at the short form stage,
the consortium must choose a lead entity
to be the lead on the financial statements.
All other information, ownership, responses to appendix A,
technical questions, they all must be submitted
for each member of the consortium
and there must be an explanation of how
the consortium's members would plan to provide
the level of service that they intend
to bid on in the auction.
Consortium bids as its own, as a single entity
in the auction but then after the auction,
it may divide its winning bids among its members
after the auction concludes and that those members
then become authorized to receive support
and are the providers of service.
One of the other things that we get a number
of detailed questions about and which
I'll touch on briefly here is the
prohibited communications rule.
The FCC has detailed rules about prohibited communications
that are meant to maintain auction integrity.
An auction applicant is prohibited from communicating
with any other applicant in any manner,
the substance of its own or one another's
or any competing applicant's bid, or bidding strategy.
This applies to applicants starting
at the application deadline, whether or not they bid.
And it includes the entity submitting the application,
any party with control of the entity,
any party controlled by the applicant's entity
or by a party controlling the applicant.
Applicants and auction participants should be very careful
with communications to third parties that may be conduits.
The two aspects of this and maybe not intuitive,
are that this does not apply just during the auction.
The prohibited communications rule applies
from the application deadline and therefore
it has a much longer quiet period than might be expected.
And also there can be problems that arise
when information is provided advertently or inadvertently
to third parties, who then become conduits
for information to other,
so for some entities that may not be familiar with this,
you have any questions you should send your questions
to auction904@fcc.gov and get any questions
you have about the prohibited communications rule
answered in advance.
We have had unfortunate circumstances where entities
have not advertently meant to disclose information
about the bidding strategies but they have done so,
and these are serious violations that can result
in significant penalties from the FCC.
As mentioned before this applies from
the application deadline and particular care has to be made
of any type of communication to any third party
that indicates the bidding strategy of,
We have an additional resources that are posted,
we have a dedicated website for Auction 904.
We have an email address that is staffed
by our team of experts at auction904@fcc.gov
and entities interested in participating in this auction
should not feel shy about emailing Auction 904.
We get emails daily from some of the smallest
and some of the biggest and some of the least experienced
and some of the most experienced entities
that are asking about this process and it behooves you
to ask your questions early and so that you can make
a determination of whether or not you wanna apply
and participate in this auction.
We tend to try to get back to people within the business day
and so if you emailed auction904@fcc.gov
that will go to our team of experts
and we'll respond to you as soon as possible.
If you have more general questions about these programs
and our other efforts to expand rural broadband,
you can contact the task force
itself at ruralbroadband@fcc.gov.
If you are a state or local or county level official
that would like to engage our
Office of Intergovernmental Affairs,
Gregory Cook is our Chief of the
Office of Intergovernmental Affairs
and he's a point of contact for you.
If you have interests with regard to tribal areas
or tribal providers, we have an Office of Native Affairs
and Policy that takes point on these issues,
and you're welcome to contact
the chief of ONAP Matthew Duchesne, and he will respond
to you about any issues related to
tribal areas or tribal providers.
So that concludes my slide deck in terms of the overview
of this program and my understanding now is that I will
get questions from Peter, I believe that I will then answer.
And so I thank you for listening to this
and I look forward to your engagement.
-: Thank you so much, Michael.
We greatly appreciate the detail that you went into,
we're sure that it was of great assistance
to carriers and providers around California
and to the communities that are looking
for this federal funding and looking
for CPUC's help in doing so.
We have a happy coincidence Michael,
that you went through your slide deck
a little faster than we thought,
and that coincidence is our Commissioner is still with us.
And Michael, you heard what the Commissioner's
two lead questions were, and with the Commissioner
still here, Commissioner Guzman Aceves could I ask you
to repeat the questions maybe in light of what you heard
from Director Janson and what did you hear
from the National Governors Association yesterday
on these important topics?
Thank you, Commissioner.
-: Thank you. And thank you again, Michael,
for taking the time to really outline the process here.
Really there's two questions.
One is on the opportunity to be able to really partner
in these areas that are high cost, as you know,
and to have the successful ability
to use the federal funding as well as some
of our more limited state funding
to fill out some of these areas.
And there's, there's a multitude of ways.
I think there's some maybe confusion
based on my previous conversations
with some of the Commissioners and some of the prohibitions
that are in the order as far as using state commitments.
And I'm not sure if there's a distinction
between things that are, say, in a merger agreement
or something else versus state funding,
but one of your slides kind of outlines
one of these prohibitions.
So that's really one of the areas is how can we continue
to work with the FCC and still be
abiding by this limitation here?
Yes, thank you. That second bullet.
-: Commissioner Goodman Aceves, thank you
very much for your question.
You know, I very much appreciate California's engagement
and interest in this program.
And we very much want to support
California's efforts to expand broadband.
Michael: This program that we are administering is not
meant to displace or interfere with a state efforts.
It is a federal program that provides support to the areas
that we have determined are most in need.
And the universal service programs that we have adopted
have a long history that goes back decades
of trying to get our limited funds to the areas
that we have determined are most in need.
And in this particular context, the Commission said
that the areas that we're going to focus on
are the areas in which no provider, at least in Phase I,
says that it's providing 25/3 and voice services,
and then areas where there is another program
that is providing support to offer 25/3
would not be an area that is most in need.
And the Commission provided an opportunity
that was voluntary for interested providers
to identify such areas.
And we have in our public docket now received
a number of filings that indicate that there are areas
that have received funding or are in the process
of receiving funding to offer service at at least at 25/3.
And we are working through that process
and working through those challenges
and we will release soon an updated list
of preliminary areas that would again go
with the framework that the Commission has adopted,
which is to target our limited funds
at the areas that are the most in need.
There are numerous ways that states can build
upon this program and when we talked with your staff
in I think at this point it may have been
January or February when we talked with Peter,
we outlined a few particular ways that this could occur.
A number of states have thought about this
and are thinking about ways in which
they can provide funding that supports deployments.
The funding that we award is not meant to displace
those or to interfere with those.
You certainly can provide additional funding to those areas.
You can certainly see the auction results
and see which areas did not receive funding.
And there's a number of other potential ways
that you could work with bidders so that they understand
how much support they could receive
to provide service in certain areas.
The one caution that I will mention here is that
it's very important that no entity, state or otherwise,
becomes a conduit of information unwittingly or wittingly
between applicants for other bidding strategies.
And so once the short form filing deadline takes effect,
it will be important that applicants for the Auction
are not transmitting any of their information
about where they intend to bid through any third parties,
including a state government.
In CAF Phase II some states receive
more funding than other states.
And this is a competitive process.
And so there are some models that you can look at
in terms of what other states are thinking about doing,
but there there are no other limitations
other than the ones that I've already articulated.
There are certainly the possibility
for ones that I articulated and if you have
specific questions, I could follow up on it,
there are no limitations on who can bid in the auction.
It is open to private entities,
to public private partnerships,
as well as potentially public entities
that can otherwise qualify based upon
the financial and technical considerations
that were an ownership considerations
that were adopted in the procedure's Public Notice.
We are working towards resolving the challenges
as quickly as possible, the docket is open
and entities can see what challenges have been filed,
and we will hope to release an updated list
of eligible areas shortly.
Michael, thank you so much for that.
Commissioner, did you have any follow-on
questions on Michael's responses?
-: Well, thank you, Michael.
I think just to say that we appreciate
the continued dialogue and we certainly will
be following up with you on what those models,
those successful models look like
as we try to really line up our program
to fill in around yours and on the challenges, certainly,
any guidance moving forward on how we can help expedite
any disputes on that would also be helpful,
but we can, also follow up on that.
Thank you.
-: Thank you so much, Commissioner, and thank you
for those two critical questions and again,
for your leadership to all of us at Rob's division,
as we work through these issues
for the benefit of California communities.
Rob, since you were directly involved,
particularly in the challenges issue
in sending your letter out to Michael's Commission
two or three weeks ago, do you have any follow-on questions
for for Michael in these two important areas?
Rob: No, I don't, thank you, Peter.
-: Thank you, Rob.
With that, we have a received a handful of questions in
through our chat line, through WebEx
and I will also like to repeat the prompt.
If you have called in to us, we are pushing
just under 200 attendees now between WebEx
and our Verizon conference services.
If you're on the telephone, you can summon
the conference operator by simply hitting star sign one,
and then he, or she will put you in queue
and will tell us that there is a comment
or a question holding.
I would like to now start with a couple of questions
for you, Michael Janson that have come in
over our WebEx facility.
The first one we can answer directly,
will this presentation be archived?
The answer is yes, and we have
a special federal funding new webpage within CPUC.
We'll give that out in Rob's closing remarks
and I can give it out as we finish with questions as well.
But as soon as we can capture that from our technical staff
here in San Francisco, we will put that online.
It will be fully archived.
So thank you for your question there.
Number two is a question back to you, Michael Janson,
we have an interested provider asking
could you explain under the RDOF program,
what does the FCC mean by location, in specific
the number of actual households or potential subscribers
usually does not match locations.
For example, this provider says a block with 200 locations.
They only have say 50 structures or potential subscribers,
Director Janson could you answer a little drill down
on how your Commission defines a location for this program?
Michael: Thank you very much for the question.
And this gets at one of the differences between
the CAF II Auction and for Auction 904.
So in the CAF Phase II Auction, providers were required
to provide service to all of the locations
that had been identified through the cost model.
And there was a true-up process that was adopted
to deal with the potential increase or decrease
available locations that could result
in a change in the amount of funding that would be awarded.
Based upon intensive engagement, in the record,
on the RDOF Policy Framework in January,
the Commission adopted a different process
and a different set of milestones for Auction 904.
In Auction 904 there is a threshold, for two,
all of the cost models, by your six,
but a hundred percent of the actual locations,
And this gets at the letter of credit requirements
and it's a pretty technical discussion
that I would really don't want to try
to too many details at this time.
But to validate the point that, in your question,
which is that there are, and discrepancies,
number of locations that have been estimated
and the actual locations.
And that is why this particular aspect of the program was
changed in light of that feedback.
A location is a home or business that could receive
service within 10 days of a request from a consumer
and the discrepancies and the inadequacies of the data
have been addressed in the January report in order
that adopted a different framework for this auction
that will require a deployment to a hundred percent
of the actual locations in an area that receives support.
-: I will read another question appending
on our WebEx chat system and that is still
in this same subject area of locations
as they're recognized by the RDOF program,
I'll read it close to verbatim.
After viewing the FCC preliminary map,
our region in California has very few opportunities,
but our region has 14,083 households out of 32,000
that are unserved.
How do we work with the FCC while the map is
in preliminary stage to include more opportunities
in our region?
Michael, if you would like to kind of enhance
your remarks about locations and the handshake there,
if you will, to RDOF eligibility, I could also mention
that we would ask this questioner
to reach out to the CPUC for our resources,
but if you could take a swing at that question, Michael,
again, this person, a broadband development official
out in one of our rural counties is saying,
"I don't think RDOF covers enough
of the locations we know are unserved."
Thank you, Michael.
Michael: I very much appreciate this question.
The Commission agrees that our fixed broadband
and our mobile broadband data collections
need to improve, and we have launched
a new digital opportunity data collection
that will collect more granular and more reliable data,
both from fixed and mobile providers.
And there is a whole team of FCC staff
that are working constantly on those proceedings
to improve our data collection.
The Commission, when it was adopting the RDOF framework
had to balance, trust and getting money, to unserved areas,
our interest in better data and what the Commission
chose to do, to adopt a multi-phase approach
in which Phase I would target funds to areas
that are completely unserved, is that no provider
claims to offer service to no location,
to any location in that census block.
And that area then is considered completely unserved
and the Commission's view isn't, in Phase I,
we have to direct our limited funds to those areas
that are,
In Phase II we intend to address areas
that are partially served, areas that
don't receive support in Phase I,
in areas that we identify as unserved through
the, Trinity data collection, a number of states
have begun working on this issue of,
and particularly rural broadband deployment.
And some other states have their own
Rural Broadband Task Forces that are focused on,
your teeing up.
One is the data in terms of where is broadband
in our state and where it is not.
And in terms of how do we get support
to the areas that need it the most.
And some of the solutions in these regards
are going to come at the state level.
And there is an ongoing proceeding about how to reform
our data collections that could be informed
by your efforts to address these issues in your area.
At this time, the preliminary eligible areas for Phase I
are the areas that are completely unserved.
There may be some ancillary benefits for other areas,
but that is the framework that was adopted
for Phase, and areas in, near you that are either
partially served or identified as,
digital opportunity data collection, would presumably
be eligible for Phase II of the program.
-: Excellent Michael, thank you for that detailed answer
and the person that asked that question.
Let me again, give you our new email address.
We would like to work with you to answer
specifically the question that you asked for your
rural County or your rural region here in California.
And please pipe that question.
So our GIS and policy experts can get back to you.
That new email is federalbroadbandfunding@cpuc.ca.gov.
I recognize your name active in our consortia program,
and we would really enjoy working with you.
You heard our Director our Commissioner,
and none other than Director Janson in Washington,
say that we all want to assist you
in doing exactly this, specifying
your fundable eligible locations here in California,
and working with you to get a provider
to go after this funding, going through some
of the other questions tied into this same
technical issue under RDOF.
Michael, we have a question that we believe
was resolved in the Commission vote of yesterday.
What will be under Phase I of RDOF Auction 904?
What will be the minimum geographic bidding unit please?
Michael: Thank you for the question.
The Commission adopted census block groups
as the minimum geographic area, as indicated
in the draft procedures Public Notice
that was released a few weeks ago.
This is one of those issues where the Commission
has to balance competing concerns with our,
the administration of an auction.
We, it's very challenging for us to administer auctions
with tens of thousands of potential biddable units.
At the same time, we recognize the interests
of different entities, small to large,
and either smaller or larger biddable units.
But in this case, the Commission chose to adopt
census block groups as the biddable unit,
which will roll up census blocks and roll up
the locations in those census blocks.
-: Excellent Michael, thank you again,
I guess the industry press can't always
be expected to cover your Commissioners correctly.
So thank you so much for the clarification.
That's extremely important, particularly for California,
because as you said, we are working with you
to justify eligibility and upwards
of 473,000 locations around rural California.
Looking for another question here,
this goes, Michael, to this questioner's understanding
of the reserve price upward limit for household.
I'll read the question verbatim.
Why is the cost per household limited to $4,000
in rural areas, this is substantially higher
in cost and build as well.
So again, could you drill down a little bit Michael,
on how the Commission sets a so-called reserve price
and is this upward limit of $4,000 either annually
or monthly on a per-location basis?
Is that basically correct?
Thank you for thinking this through Michael,
Michael: Thank you for the question.
Let me get to the slide that addresses that.
So this slide indicates that the cost threshold
for inclusion in the auction and the inclusion
for the auction is the threshold at which
the location is sufficiently low cost,
that it would not be considered eligible
for the purposes of this auction.
The per-location funding cap is the other number
that I provided previously.
I will,
show you that slide as well.
So the Commission has to balance getting more money
out to fewer locations versus more efficiently
or less money to more locations.
And in the January report, in order, the Commission adopted
the framework that is on this slide,
which is a lower threshold for inclusion in the auction,
but a higher level of support.
And so the amount of support and the threshold
is based upon the Connect America cost model
that was adopted in 2014, the Commission's
use of competitive bidding offers us the opportunity
to award supports at levels that are lower
than the cost model.
And also because we have modified the threshold
for some areas, implicitly suggest that perhaps
the cost model has underestimated the cost
of providing service to those areas,
specifically tribal areas and areas that lack 10/1.
I do not know if there's more that I can say
about that today, other than to say
that the cost threshold and the per-location support cap
was adopted in the January order
and it is based upon the cost model.
Each location has an individual reserve price,
which is then rolled up into a census block group
through the census blocks themselves.
-: Thank you, Michael, thank you.
I wanted to bring up a question that's
kind of related to that question.
Is it possible for a hundred megabit tier
to win a bid against a one gigabit speed bid?
Is that only possible if the one gigabit bidder
steps down for an area before the clearing round?
Kind of associated, little different,
if you can take that, Michael.
Michael: So the Commission adopted a protocol
that will award support to the lowest T+L
at the clock percentage in the clearance round.
And if there are either competing bids between entities
of same T+L, or if the lowest T+L is not bidding
at the clock percentage, and this particular provision
would not be triggered.
So that is to say, there are cases where
entity with a higher T+L could win.
I recommend this questioner to review the auction,
technical guide in which we have close to two dozen examples
of which bid will win in certain hypothetical examples,
including in this type of situation.
I think it might be off the top of my head
Example 18, that is posted on our Auction 904 website
and then we'll walk you through specific examples of,
if the bid is at this T+L and it's at this percentage
of the clock price against this bid, which bid will win.
-: Excellent. Michael, thank you for that.
I'd like to switch to two questions that are related
vis-a-vis what we here at the CPUC can do
for rural communities to access this program.
The first one is as follows.
What should communities do to encourage
local exchange carriers, to apply to these
funding opportunities, to bring in more broadband service
in their respective areas, and this questioner mentions
Covello, Hoopa and Mariposa come to mind,
all three of which have tribal health programs
that lack adequate broadband service.
Michael, could you speak briefly if you can,
to the FCC's Telehealth Program, and then I can swing back
to the resources that the Commission
and Director Osborne's staff here can provide
to communities like this.
Michael: I'm happy to do so.
The program that I am talking about
is the use of competitive auctions to award support
within the universal service funds high cost program,
which is the largest of the four programs
that we use to advance the principle of universal service
that everybody should receive the most advanced
telecommunication services at reasonable cost.
The other components of this program include
the Lifeline program, which provides subsidies
to low income individuals to make sure that they
have access to these services.
We also have a schools and library program called E-rate
that makes sure that those anchor institutions
receive the broadband that they need.
And we also have a program that focuses on Rural Healthcare.
We also in light of the recent events with the pandemic
have a program that is providing funding to rural hospitals,
and that is making grants already.
And so that is a separate program
and a separate source of support.
-: Excellent. Thank you for that, Michael.
And I would add from the CPUC's perspective again,
if I could generically give out our new email address,
where we want to support communities
and interested residents around California
in just this type of question that the questioner proposed,
what can CPUC do with FCC to reach out in areas
that we know are unserved.
And this question is also pointing to a specific FCC program
that's for, Telehealth, give that email address out again,
federalbroadbandfunding, all one word,
federalbroadbandfunding@cpuc.ca.gov.
So please don't hesitate to send us any questions
we would like to work with you, reach out to our
regional broadband planning, consortia structure
to help you find a provider that can go after
this funding that Michael has done
such a great job in talking about.
We covered the gigabit versus a hundred megabit question.
Let's see what else we have.
There is a questioner citing the federal register
as it requires a carrier to certify that support
during the preceding calendar year
and support in the upcoming calendar year
only be used for the provision, maintenance and upgrading
of facility services, for which support is intended.
It's a rather complex question that spans
into the specific guidelines of FCC.
What I'd like to do.
We have this questioner's name.
It is a broadband provider.
We're aware of what we can do is field
this rather technical question over to Michael as well.
And we will answer you, provider, who quoted
the applicable Federal Register notice
on what provision of service means under this program.
Again, Michael, if you'd like to just generally touch on it,
I think you're on the right slide now,
what does FCC look for as an RDOF awardee has to
comply with what in the years going forward?
Michael: Well, there are two components
to this question, and it's a very good question.
The first is that the FCC has adopted specific requirements
for recipients of funding through this program.
And those requirements are articulated in
the important order that was adopted in January
and in the Auction Procedures Public Notice
that was adopted yesterday.
And in general, what it requires you to do
is to deploy based upon the timelines that are required
to the locations in the area that you have
received support that you offer standalone voice
and broadband at the level of speed
with the usage allowances and at the level of latency
that you said that you would provide,
that you report on your progress
and that you charge consumers, reasonably comparable rates
to the similar services offered in urban areas.
There is also an obligation under the act to use
universal service funds for the purposes for which
they awarded and all high costs recipients are required
generally to abide by that statutory requirement.
And the language that I think this questioner
is asking about refers to 47 U.S.C. 254,
which includes those generally applicable requirements
that if you take high cost funding,
you have to use high cost funding for the purposes
for which it was awarded and not for any other purposes.
-: Thank you, like to read another question again, Michael,
this goes to the process in the bidding rounds.
The question is, do you qualify the size of bids
that can be submitted by an entity
based on their financial history?
Michael: Thank you for that question.
No, a bidder has to make their own decisions
about how much to bid in the auction.
There is a limitation that was adopted.
This is a pretty technical one,
which is that a bidder cannot bid for more
than a hundred percent of the reserve price in the auction,
but otherwise bidders have to make their own decisions
about how many areas to bid on
and how much to bid in those areas.
The caution that I would remind potential applicants
is that as much as applying to participate in the auction
does not require you to participate in the auction.
Once you participate in the auction and bid in the auction,
you are subject to default penalties.
If you win areas for support and you do not
provide service in those areas, and those default penalties
can be very significant.
So, and the default penalties are calculated
based upon the size of the bid
and the amount of areas that were won.
And so applicants that are qualified to participate
in the auction should review the default penalty provisions
that are in the January report in order
so that they understand the consequences of bidding
and providing that indication that you are willing
to provide service in a particular area
at a particular price.
-: Excellent. Michael, thank you for that.
I'd like to bring up two questions that have come in
relative to the voice services requirement
of the RDOF program, the first one says,
With so much in current Internet services,
going over the Internet as packets
rather than standard voice.
Why has the FCC chosen to require a voice be deployed
as by an RDOF winning bidder?
Michael: Thank you for the question, we've received
a number of questions about why the FCC requires
providers to offer standalone voice.
And there are a number of policy reasons
and statutory reasons for this.
The most fundamental of which is that under the Act,
voice is the supported service and entities need to provide
standalone voice services to consumers that want
it as part of the program.
And that has been a longstanding historical part
of the program, it was part of the program in CAF Phase II,
which was regarded as a very successful program.
There are obviously different ways that winning bidders
can offer a standalone voice services,
but that is the policy framework that was adopted
and it flows from the requirements of the Act.
-: Got it. Michael, thank you for that.
And associated a question from a WISP operator,
wireless services Internet provider here in California,
I'll read it verbatim so you get the flavor of it.
What can WISP's who are already covering these areas
with speeds in the range of a hundred down, 12.5 up,
but but are not directly providing voice services
due to work with the CPUC and FCC to show these areas
have full coverage of Internet and access to services
so that they are not worried about fiber
or terrestrial services coming in and displacing
years of work to gain mindshare because the FCC slash CPUC
believes they are underserved areas.
Michael, if you could take a swing at that?
We'd appreciate it.
Michael: So the policy framework that the Commission
adopted was to target support, to areas that lacked 25/3,
or voice as reported in the most recently available
Form 477 Filing, and the Form 477 Filing that was available
was the June 2019 Form 477 Filing and that was what was used
to create the preliminary eligible locations.
And so if deployment has not been, was not indicated
on the June, 2019 filing, then there was an opportunity,
limited opportunity for entities to indicate
as of April 10th, to the limited challenge process
that they had been deploying to those areas
and thus those areas would not be eligible.
And I presume that that is what this questioner
is asking about, is how to reduce eligibility
so that someone can not subsidize to provide services
in that particular area.
-: Exactly right.
Michael: We will be providing an updated list
of eligible locations that reflects the resolution
of the challenges that we received.
A number of which as shown in the public docket,
involve entities, trying to exclude areas
and thus reduce the number of locations
that could receive support in a particular state.
An entity that is interested in providing service
is welcome to bid, to provide service
in the eligible locations, and they can compete
for the support and if they win the support,
then they would need to provide service
at the performance and tier that the latency tier
that they bid on with a standalone of voice as well.
-: Excellent, Michael.
To a little closer definition of the non-collusion rules
in the bidding process, the questioner asks
what are some of the challenges that ISP's have in
collaborating with CPUC for the development
of rural broadband projects.
So that I look at that as a generic question,
but since you're with us, Michael, could we focus in
on as providers come to the California Commission
and staff here, what should we be aware of?
What types of communications do we have to avoid
in working with those providers
to go after your program's funding?
Michael: The first thing I'll say is that questions
about the Prohibited Communications Rule that deal with
specific issues or hypotheticals, should be addressed
to our dedicated email address auction904@fcc.gov.
We have a team of experts that have been working
on prohibited communications issues for many, many years,
and they are happy to answer your questions
about these issues.
If you have any question about this,
I would encourage you to defer on the side
of asking about it before engaging in any type
of communications that may run afoul of the rule.
It is very important that third parties
do not become wittingly or unwittingly conduits
for applicants' bidding information.
And that could mean a situation where an applicant
discusses its bidding strategy with another entity
who is also talking with another applicant
and thus the entity could unwittingly become
a conduit for information between the two applicants.
The applicants have an extended quiet period
in the FCC auctions that begins with the filing deadline
and it does not end until the auction is over
and entities that are interested in talking to California
or elsewise about broadband have to be
very, very careful not to disclose their bidding strategies
to other applicants through witting
or unwitting conduits of information.
And if any state entity or local entity has questions
about this, I would encourage you to be proactive
and reach out to us and potentially
to retain competent telecommunications council
that can talk with you about the precedents
and the violations that we've had in the past
and the penalties that we've announced in the past,
because there can be aspects that are not intuitive.
We have already received inquiries from other states
on this question, and I would encourage you to do so.
-: Excellent, Michael, thank you very much.
To that questioner that asked working with the CPUC,
again, to pursue either state or federal funding,
again, because you're asking about both programs,
please use our federal funding email,
federalbroadbandfunding, all one word @cpuc.ca.gov.
We also have a federal funding, a new website.
You just simply Google CPUC, federal funding,
and that new website should come up
and we will re-read that longer address to you.
www.cpuc.ca.gov\broadbandfederalfunding.
And we are updating that routinely.
That again, we'll have this presentation uploaded
as quickly as we can get it from our tech folks.
We will have a copy of yesterday's voted decision
as soon as it is public and any notes from our own resources
to help you, as you go.
Tied in Michael, back to the eligibility question,
we had a questioner saying that he or she has gone
into your FCC RDOF-map and see some eligible areas
in what that person knows our urban areas is, the fact that
they are in an urban area, is that prohibitive?
And are there any other considerations
that they should draw?
Thank you.
Michael: So the criteria for eligibility in the auction,
as much as this is a program that is primarily
about providing services to rural areas
is based upon the reported speeds and voice deployment
and the cost threshold under the framework
that was adopted in January.
It is not based upon a separate data sets coding
of the area based upon population density or otherwise.
-: Got it. Thank you.
So anyone following the other federal program
that we have talked about within the last year or so,
that makes it distinct from the USDA's reconnect program
that has certain collateral definitions
of virality as USDA calls it.
I think maybe the questioner was maybe thinking about that.
Back to some issues of speed and latency,
data caps and voice services, they question
where Michael says on the ground, we are noticing
that some ISP are increasing speeds,
but having data caps that are making service unaffordable.
Is the FCC thinking about data caps in relation to cost,
as it looks at, whether census blocks are served.
And obviously the questioner is talking about
within the context of the RDOF-program.
Michael: So the criteria that was used to establish
eligibility is based upon the reporting of service
at a certain speed benchmark
and the presence of voice services
and the cost threshold under the cost model.
It is not based upon additional criteria generally.
The Commission is aware of the issue of data caps
and has adopted usage, allowance requirements
for potential bidders.
If a bidder wants to bid on gigabit service,
then they have to provide at least
two terabytes of data per month.
The lower performance tiers are at least 250 gigabytes
or the median as calculated by the bureaus
on an ongoing basis going forward.
-: Got it. Thank you.
We have another voice services question
from a employee on a fixed wireless provider, a WISP.
At present, We do not provide voice services.
However, we are planning to roll out with voice services
by fourth quarter of 2020, fourth quarter of this year.
These are companies still eligible
to submit an application for RDOF.
Michael: Yes, this program is open to entities
that provide broadband today,
but don't provide voice services.
It's open to entities that don't even provide
broadband today because the program is designed
to be open for a new entrance that would use
the amount of support awarded to deploy new services.
And so an entity that plans to deploy a standalone voice
in the future would be well positioned to apply
and be competitive in this auction process.
There are different requirements for different providers
based upon what they have done in the past
with regard to their financial information.
But those are not triggered based upon
whether or not, they're not meant to prohibit anyone
because they have not provided
stand alone voice in the past.
And in CAF Phase II, you can look at the results
from CAF Phase II, which included awards
to a number of entities that had not provided
voice services in the past.
Now on that note that we have not discussed in this webinar,
but that high cost fund recipients must be
eligible telecommunications carriers.
-: And by, which you are authorized to receive support,
you must be designate as an ETC.
For many states, the state ETC is the ETC designating,
and, winning bidder must become designated as an ETC.
You do not need to be an ETC to apply to participate
in the auction or to participate in the auction or to,
but the provider that received the support
must be designated as an ETC or is authorized.
-: Excellent, Michael, thank you for that.
We have a few more VOIP ans WISP related questions.
I wanted to pick up on your statement on ETC's,
eligible telecommunication carriers.
Here at the CPUC our Commissioners recently voted through
a resolution that takes the first steps
for setting up a streamlined process for the CPUC
to issue ETC's to assist in RDOF-bidders or winners
that have qualified for the short form,
but do not have an ETC in place yet.
As Michael just said, you can qualify for the entrance
into the RDOF bidding auction via the short form
without being an ETC.
But you must have your applicable state's ETC certification.
If you win a bid in order to be certified
through the long form to walk away with those funds.
So later on this year, that kind of streamlined,
ETC issuance process will be undertaken by the Commission,
Commissioner Guzman Aceves who unfortunately
had to leave us, was in the lead of getting
her fellow Commissioners to act on that
as they were all aware, this is important for authorizing
RDOF here in California.
And again, on that new federal funding page,
we will have a link to the new ETC streamlining resolution.
There are other requirements that our Commission has
at the state level.
I won't bore you and get into those here, but again,
Commissioner Guzman Aceves and her colleagues have set up
a specific process to assist those of you that may want
to bid in this process but are not today ETC's.
So thank you Michael, so much for bringing that up.
Couple of more WISP questions, two or three
from the same questioner.
Number one, can we only bid on projects
in the FCC listed opportunity area?
I would call that RDOF eligibility area.
If we know that the 477 derived map is inaccurate
in a particular area, for example, so this WIPS provider
is saying, can we go in and seek RDOF funds, Michael,
if we know there's in our mind, a fault in the underlying
477-data that generated the RDOF eligibility.
Michael: Now thank you for the question, but I would need
a bit more information to be able to answer it.
I mean, it sounds as though the question is
if we disagree with the eligibility determination,
can we bid on the area?
Well, first of all, this would only arise
in a situation where there's an area that is designated
as eligible, but a provider thinks that it should
be ineligible and providers are able to bid
on the areas that are eligible.
You know, we have to take images of the data
at certain points of time and move forward.
And we are going to release a new list
and updated list of eligibility.
And then providers are welcome to bid on all of the areas
that are designated as eligible for the auction.
-: Excellent Michael.
On that particular question, could you again send an email
of inquiry to our email address,
federalbroadbandfunding@cpuc.ca.gov.
And we will work with you to look at what our data says.
You can look at the California interactive broadband map
to assist you there as well.
And we will certainly reach out to Michael and his staff
to help you answer that question about eligibility
and what California or FCC may show.
Again, we have no questions holding on our phone lines.
If you're on a phone line and would like
to issue a question, please hit star one.
And the operator will flag our tech staff here.
Otherwise I believe we have
gone through all of our questions.
We'll give it a moment or so to see if any others come in.
And again, if we haven't answered your question,
either ourselves or I take it as my fault,
if I didn't interpret your question correctly for Michael.
Please send us an inquiry over that new email address.
We will work with Michael and our own staff
to answer it the very best we can and to bring you
into other the appropriate CPUC or the RDOF program
or other federal programs that may be applicable.
Alex: Peter, it looks like we have one question
that's currently being written in,
one question regarding standalone voice service,
-: Thank you. Thank you, Alex.
Yes.
We just have a follow-on question that has come in
Michael, in regards to questions about bids
on eligible RDOF areas, I think folks are asking
if there is any possibility of a winning bid
being challenged by a carrier saying they serve
the location already.
So Michael that's, a little more information
about the 477-based question that I just asked.
If a RDOF winning bid is awarded by FCC,
what can provider do that believes that they
already serve that area?
Michael: Once the final eligible areas are established,
then the auction will proceed to award funding
to the potentially eligible areas is guaranteed
to be won in the auction.
Once the final eligible areas are established,
then the auction proceeds to potentially
award support to those areas.
Not all aware areas will win support,
can be successful bids on any of those areas, are awarded.
Then if the applicant completes, the process,
support will be authorized.
-: Thank you for that.
Verizon conference operator, we understand
you have a call holding.
Could you send that question over to us?
We're waiting for the conference operator
to bring forward a verbal question
we have on the phone lines.
Robert, Joe, is there anything else we should do
to bring that forward?
Participants, please hold just a moment
where we thought we had a call.
We're checking it across the conference bridge.
Male: Calling user two.
Is this the Verizon operator?
Caller: Hi, can you hear me?
-: That's fine.
We can hear you.
Caller: Thank you.
You can't hear me?
-: We can hear you fine.
Caller: Oh, beautiful, thank you.
My question is in regards to a previous statement
that Michael said, when an awardee wins a bid,
he was mentioning that we need to serve
a hundred percent of the area by year eight.
I believe is what he said.
I was hoping for some clarification on that.
Did he mean that we have to have a hundred percent
of the location and offer the service?
Or could he mean that regardless of whether or not
the person wants the service
that we have to build up to their promise?
So I was hoping for some clarification on that, please.
-: Thank you, caller.
Michael, could you assist that caller
in clarifying the build-out requirements?
It sounds like.
Michael: Yes. And this is a great question.
Thank you.
The requirement is that you be able
to serve that location within 10 days.
So no, you do not need to wire every location,
but you need to have the ability
to serve the location within 10 days.
Caller: Thank you
-: Caller, do you have a follow-up question or was that it?
Caller: That was it. Thank you.
-: Thank you so much for calling in.
Thank you, Michael.
I'll swing back to another text question again.
It co-mingles the issues of a WISP
without current voice services
and the rules of a consortium.
I'll read it to you.
Can a WISP, who does not provide voice services today
form a consortium, sounds like a partnership,
with a VIOP provider.
Michael: So the consortium allows various entities
to bid together in the auction
as one applicant and one bidder.
And there are not restrictions
on which applicants can enter,
which type of applicants can enter a consortium.
So you can have an existing telecommunications provider
and a non-telecommunications provider
in the same consortium.
When the auction is complete, if the consortium
has been awarded support, it can divide its winning bids
and the authorized recipient will then be subject
to the build-out requirements, which include
the deployment of standalone voice services.
And so, yes, a non-voice subscriber can enter
into a consortium with a voice subscriber
or other non-voice subscribers, but support
will only be authorized to entities that are designated
as ETC's and are required under the program rules
to offer standalone voice during the support term.
-: Excellent. And Michael, just as you were answering that,
a live question came in.
What makes voice service quote, stand-alone, close quotes,
what does stand-alone mean under FCC regs?
Michael: We have some documents that address this
and if you email auction904@fcc.gov,
we can show you the specific language.
Generally, what it means is that a consumer can subscribe
to voice services as a standalone offering
from that provider and that provider
will support that subscription.
-: Okay.
Thank you for that.
A lot of questions on voice services obviously,
back to an eligibility question, but at this point,
looking at a corporate form, if you will,
are bankrupt companies eligible for RDOF?
If so, then what do financials really mean?
Michael: Well, the first part of that question
is answered in paragraph 77 of the report in order
that was adopted in January.
And what the Commission said there
is that we declined to bar participants that have defaulted
in other universal service programs
or that have filed for bankruptcy,
or that have been bankrupt in the past
from participating in the program.
The financial review that is conducted
as part of the short form application
is an initial determination of whether or not
the applicant should be qualified
to participate in the auction.
And that is what is the purpose of that particular appeal.
Any more detailed analysis, as well as the submission
of our irrevocable letter of credit
with bankruptcy protection is required
during the long form application process
before any support is authorized.
-: Excellent. Michael, thank you for that.
One of our regional broadband consortia managers
covering a lot of Northern California is asking
a question relative to the CAF II Program.
He says in previous CAF Auctions, some awardees
switched awarded areas to other areas,
less expensive to deploy.
Would RDOF grantees be allowed to switch awarded areas
to other areas that are less expensive to build network in?
Michael: Without knowing the specifics
of this questioner's interpretation of the CAF II results.
And what has come out of CAF II,
I cannot comment on what has occurred in the past
or in that context because, but what I can say
is that applicants apply to participate in the auction
by indicating which states they intend to compete in
and compliance is also determined at the state level.
-: Excellent. Thank you for that.
And again, questioner, if you want to follow up,
as Michael says with specifics in your given area, please
email us right away, federalbroadbandfunding@cpuc.ca.gov.
We'll work with you and our GIS team to look
at the specific CAF awardee that's involved.
And thank you for that.
Michael, we work closely with the state outreach side
of USARC, and they were very supportive
of helping us run down answers for questions like this.
Lastly, I wanted to say, we have about 15 minutes left.
We see several questions that I wanted to make sure
we from the CPC staff answered several similar questions.
How does a small unserved rural community
without a provider or without a provider that's interested
in upgrading their network to at least
these RDOF minimum standards of 25/3.
What can this community do to reach out,
to try to secure some of this federal money
or state money?
Again, please do not hesitate to reach us
in the communications division of the CPUC.
The Director of our state CAF program, Louise Fisher,
was just sitting in with us here in the auditorium
and federal effort in the state effort
are closely coordinated to provide as much funding
as possible to rural communities across California.
So please email us if you can identify
a specific carrier, a specific community.
Again, that's a broadbandfederalfunding@cpuc.ca.gov.
That should get it to us. Thank you.
With that, we don't see more questions
on the phone lines or had come in over WebEx.
Thank you, Robert, with that, I'd like to ask
our Director Rob Osborne for any concluding remarks
and to talk a little bit, I'm looking at the slide
that we've prepared for resources, communities
and providers, go after these funds.
Thank you, Rob.
Alex: Sorry to interrupt.
We actually do have one more question.
I did not, I did not see it, Alex.
Alex, on the line, would you like to read it please?
I'm not on my screen.
I apologize.
Alex: The question is, are RDOF
and USDA broadband programs like Reconnect,
Community Connect, Broadband Loans,
mutually exclusive in order to eligibility.
Thank you, Alex.
And Michael, could you take that you're well briefed
in the other federal programs, how do they relate to RDOF?
Michael: Areas that have received Reconnect grants,
The Commission decided in January that those
would not be areas that are most in need of support.
And so those areas would not be eligible.
I don't have more to say at this point about loans,
although I can say that I anticipate
finding additional guidance on that as soon as possible.
With regard to the California programs,
insofar as this question is about
the limited challenge process.
The challenge process was an opportunity to identify areas
that have already been funded to provide 25/3 by state.
And if those funding awards have already been made
or there's an execution commitment,
then those funding awards could remove those areas
from the auction based upon the Commission's view
that those areas would not be the ones
that are most in need of support.
-: Excellent, Michael, thanks so much for that.
With that, I'd ask our Director, Rob Osborn
to close and talk about resources that have come
up to support providers, carriers, and communities
interested in federal and state funding.
Thank you, Rob.
-: Thank you, Peter.
So this has been a very helpful overview
on the Rural Digital Opportunity Fund
as evidenced by the number of questions.
I hope your takeaway from today's webinar
are the following points.
First' RDOF offers an unprecedented opportunity
for California to get federal money
for broadband deployment.
Second, the purpose of this webinar is to raise awareness
and to get as many as bidders as possible
to participate in the October 29th reverse auction.
This isn't a grant program.
So if nobody bids, California doesn't get any money.
So, and just to follow on with that.
If you don't file a short form, you can't bid.
So just to reiterate, the very tight timeline
as Director Janson said, you should begin
preparing your application now.
June 15th, which is next Monday will be
an auction application tutorial available online.
The short form application window filing deadline
will begin, the window will open on July 1st
and end on July 15th.
So that's two weeks.
And that will start in about two weeks.
October 14th, there'll be an auction bidding tutorial
so that bidders can go through the process,
sort of a dry run.
And then I'm sorry, the tutorial will be on the 14th.
The 26th will be the mock auction
where bidders can go through a dry run.
And then the 29th of October the auction will begin.
I want to thank Director Janssen for making the time
in your busy schedule to provide
this very informative overview for us in California.
I also want to thank Peter for your incredible hosting
of this event and thanks to Michael Pierce
and Alex for fielding audience questions,
and also thanks to Robert Stanford
for making this all possible online.
In closing, we look forward to seeing
many bidders filing short form applications,
so California can maximize federal dollars
coming into the state,
Thank you.
-: Our techs will bring up the last slide
so yes, there we are.
Please don't hesitate to consult these resources.
I note on the agenda, we think we transposed
one of the new email addresses we'll try to bring up,
it is correct on the slide you see here.
I'll take that as my fault fully.
We'll try to correct that on any other publication.
These are the new resources we're working
to bring up mapping to assist providers
and carriers as well.
Thanks to our Commissioner,
Commissioner, Martha Gusman Aceves, Rob Osborne,
and particularly to you, Michael Janson,
good day from the CPUC here
at our headquarters in San Francisco.
Thank you so much.