Defining Success in the FCC's Connect America Fund Phase II Auction

[Commentary] If some areas end up with no winning bidder, does that mean the Federal Communications Commission's Connect America Fund Phase II auction is a failure? The answer is “No!” The FCC will need to look at the results of the Phase II auction to evaluate how universal service auctions are different in practice from spectrum auctions, and adjust accordingly, as necessary. The FCC will learn from the Phase II auction, just as it learned from its prior Mobility Fund Phase I auctionin 2012 to award up to $300 million in one-time support to extend mobile service, and its Rural Broadband Experiments in 2014 to award up to $10 million annually for ongoing support to extend broadband service in rural areas. No matter what happens in the Phase II auction, it should be viewed as a success because it will help the FCC refine its thinking on how best to award USF subsidies to serve these rural areas. In many respects, future USF auctions are far more important than the Phase II auction. Both potential bidders and localities will have more time to get organized, and may be more motivated once they see the results of the Phase II auction. The Phase II auction is merely the warm-up. Game on!