CAF II Auction Rules: FCC Explains How Proposed Auction to Fund Rural Broadband Would Work

Federal Communications Commission officials conducted a webinar explaining how proposed Connect America Fund (CAF) II auction rules would work. The auction will award funding to help cover the cost of deploying broadband in unserved rural areas. It is expected to take place in 2018, officials said. The rules discussed were proposed in a public notice adopted in Aug. Interested parties have until September 17 to comment on the public notice, with reply comments due October 17.

The CAF II auction is a reverse auction, meaning that funding, in general, is designed to go to the service provider that offers to provide service at the lowest level of support (with some caveats). The maximum amount of support that any service provider will receive in the CAF II auction, also known as the “reserve price,” is the amount of support that was previously rejected by the incumbent price cap carrier. Collectively, the price cap carriers accepted the majority of funding offered, but up to nearly $2 billion (up to $200 million annually for 10 years) remains to be awarded for parts of 20 states. The FCC previously established weighting factors for the auction, designed to incentivize service providers to deliver higher-speed service with low latency.