FCC Launches First-of-its-Kind Mobility Fund auction to Accelerate Delivery of 3G & 4G to Close Gaps in Mobile Coverage

The Federal Communications Commission announced the competitive bidding procedures for Phase I of the Mobility Fund, the first-ever reverse auction for Universal Service support, which will accelerate delivery of advanced mobile services to tens of thousands of road miles that currently lack 3G or 4G service. Winning bidders must deploy either 3G service within two years or 4G service within three years of the award. The Mobility Fund will award up to $300 million that was reserved out of savings from the FCC’s Universal Service Fund (USF) reforms. The auction is a market-based, fiscally responsible policy innovation to generate the greatest impact for every universal service dollar.

In this reverse auction, bidders will indicate the amount of one-time support they need to deploy service meeting rigorous performance standards in unserved areas within the required timeframe. Bidders will compete not only against other carriers that may be seeking support in the same areas, but also against carriers bidding for support in other areas nationwide. Support will be awarded based on the lowest bid amounts submitted, but will not be awarded to more than one provider per area. Successful bidders will be awarded support for an area at the price they bid.

The FCC’s Wireline and Wireless Bureaus released a Public Notice, which details the procedures for the Mobility Fund Phase I auction, designated as Auction 901, including pre-auction and post-auction requirements, determining the census blocks eligible for support, and establishing the window for parties to file applications to participate.

After considering filings made by parties in response to the Auction 901 Comment Public Notice, this public notice:

• Establishes a window for the filing of short form applications that opens June 27, 2012, and closes at 6 p.m. July 11, 2012;
• Identifies the final list of census blocks eligible for Mobility Fund Phase I support;
• Makes support possible for 98 percent or more of the total road miles in eligible census blocks in
• every state and territory;
• Provides that Auction 901 will be a single round, sealed bid auction;
• Provides for bidding on a census tract basis, except in Alaska, where bidding will be permitted on individual eligible census blocks; and
• Requires that each winning bidder provide coverage, consistent with the performance requirements of the rules adopted in the USF/ICC Transformation Order, to a minimum of 75 percent of the road miles in each census tract for which it wins support, calculated as the total of the road miles in the eligible census blocks in the tract.