The CAF II Auction is Over, But Commissioner O'Rielly Adds Confusion As to What Happens Next For Rural Areas That Aren't Covered

With the Connect America Fund (CAF) Phase II auction completed, the Federal Communications Commission’s next CAF responsibility will be to establish plans for the CAF remote area auction, which aims to help bring broadband to remote areas not currently addressed through the CAF program. And FCC Commissioner Michael O'Rielly is questioning whether there is sufficient funding for that auction. He said at the Sept 26 FCC meeting that the CAF II auction results suggest that $5-7 billion dollars would be needed to bring broadband to locations that will remain unserved after the CAF II auction. But he noted that only about $500 million remains available for the remote area auction.

However, it is unclear how Commissioner O’Rielly arrived at his estimated deployment cost. He said 12 million people or 12 million locations in the US will still be without broadband. It’s not clear where the 12 million number came from or how he used it, in combination with the $2,000 average winning bid, to arrive at the estimate of $5-7 billion to reach the unserved locations. Additionally, his number differs dramatically from the official FCC line, at least regarding the CAF program, who said there are now 261,047 locations without a winning bid. The 261,047-location number is a lot lower than 12 million — or even 4.6 million (if Commissioner O’Rielly meant 12 million people, not 12 million locations.) A possible explanation relates to ongoing concerns that some stakeholders have expressed about the FCC’s data about served and unserved areas. Even if the numbers presented by FCC staffers Sept 26 are correct and there really are only 261,047 locations to which no one is on tap to bring broadband, it’s not yet possible to say if there will be sufficient funding for the CAF remote area auction.