Declined CAF Phase II Support Should Go to Mobility Fund, Says RCA

While the FCC is likely hard at work on Mobility Fund Phase I auction rules, mid-sized competitive wireless carriers are already looking ahead to Phase II. Representatives from the Rural Cellular Association (RCA), U.S. Cellular, and Cellular One held ex parte meetings with members of the Federal Communications Commission on April 12, 2012 to discuss various concerns about the Mobility Fund, namely that they believe “the existing support allocated for Phase II of the Mobility Fund will be inadequate to achieve vital universal service goals and that the Commission should use the further rulemaking to make additional funding available to competitive wireless providers.”

The competitive wireless carriers further argued that because Mobility Fund Phase I support is nonrecurring, some carriers might be discouraged from participating in the reverse auction without assurance that their ongoing operating expenses will be recoverable. RCA, U.S. Cellular, and Cellular One propose one solution to help ensure that future funding in the Mobility Fund is sufficient—or at least more sufficient than $500m per year: “Support foregone by price cap carriers that decline to exercise their statewide right of first refusal with respect to Connect America Fund support should be reallocated to the Mobility Fund.” Additionally, the FCC “should free up additional funds to support mobile wireless services by eliminating excessive support flowing to rural incumbent LECs, including by lowering the prescribed rate of return and limiting permissible recovery levels for capital and operating expenses.”