[Federal Register Volume 85, Number 52 (Tuesday, March 17, 2020)]
[Proposed Rules]
[Pages 15092-15108]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-05171]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 1 and 54

[AU Docket No. 20-34; WC Docket Nos. 10-90, 19-126; FCC 20-21; FRS 
16543]


Comment Sought on Competitive Bidding Procedures and Certain 
Program Requirements for the Rural Digital Opportunity Fund Auction 
(Auction 904)

AGENCY: Federal Communications Commission.

ACTION: Proposed rule; proposed auction procedures.

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SUMMARY: In this document, the Federal Communications Commission 
(Commission) proposes and seeks comment on the procedures to be used 
for Phase I of the Rural Digital Opportunity Fund auction, designated 
as Auction 904.

DATES: Comments are due on or before March 27, 2020, and reply comments 
are due on or before April 10, 2020.

ADDRESSES: Comments may be filed using the Commission's Electronic 
Comment Filing System (ECFS) or by filing paper copies. Electronic 
Filing of Documents in Rulemaking Proceedings, 63 FR 24121 (May 1, 
1998). All filings in response to the Auction 904 Comment Public Notice 
must refer to AU Docket No. 20-34; WC Docket No. 19-126; and WC Docket 
No. 10-90. The Commission strongly encourages interested parties to 
file comments electronically.
     Electronic Filers: Comments may be filed electronically 
using the internet by accessing the ECFS: https://www.fcc.gov/ecfs/. 
Filers should follow the instructions provided on the website for 
submitting comments. In completing the transmittal screen, filers 
should include their full name, U.S. Postal Service mailing address, 
and the applicable docket numbers, AU Docket No. 20-34; WC Docket No. 
19-126; WC Docket No. 10-90.
     Paper Filers: Parties who choose to file by paper must 
file an original and one copy of each filing. If more than one docket 
or rulemaking number appears in the caption of this proceeding, filers 
must submit two additional copies for each additional docket or 
rulemaking number. Filings can be sent by hand or messenger delivery, 
by commercial overnight courier, or by first-class or overnight U.S. 
Postal Service mail. All filings must be addressed to the Commission's 
Secretary, Office of the Secretary, Federal Communications Commission.
    All hand-delivered or messenger-delivered paper filings for the 
Commission's Secretary must be delivered to FCC Headquarters at 445 
12th St. SW, Room TW-A325, Washington, DC 20554. The filing hours are 
8:00 a.m. to 7:00 p.m. All hand deliveries must be held together with 
rubber bands or fasteners. Any envelopes and boxes must be disposed of 
before entering the building.
    Commercial overnight mail (other than U.S. Postal Service Express 
Mail and Priority Mail) must be sent to 9050 Junction Drive, Annapolis 
Junction, MD 20701.
    U.S. Postal Service first-class, Express, and Priority mail must be 
addressed to 445 12th Street SW, Washington, DC 20554.

FOR FURTHER INFORMATION CONTACT: For further information regarding this 
proceeding, contact Mark Montano in the Auctions Division of the Office 
of Economics and Analytics at (202) 418-0660 or Heidi Lankau in the 
Telecommunications Access and Policy Division, Wireline Competition 
Bureau, (202) 418-7400.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's 
document (Auction 904 Comment Public Notice), AU Docket No. 20-34; WC 
Docket Nos. 19-126 and 10-90; FCC 20-21, adopted on February 28, 2020 
and released on March 2, 2020. The complete text of this document is 
available for public inspection and copying from 8:00 a.m. to 4:30 p.m. 
Eastern Time (ET) Monday through Thursday or from 8:00 a.m. to 11:30 
a.m. ET on Fridays in the FCC Reference Information Center, 445 12th 
Street SW, Room CY-A257, Washington, DC 20554. The complete text is 
also available on the Commission's website at http://www.fcc.gov/auction/904/ or by using the search function for AU Docket No. 20-34, 
WC Docket 19-126, or WC Docket 10-90 on the Commission's ECFS web page 
at www.fcc.gov/ecfs/. Alternative formats are available to persons with 
disabilities by sending an email to [email protected] or by calling the 
Consumer & Governmental Affairs Bureau at (202) 418-0530 (voice), (202) 
418-0432 (TTY). Pursuant to sections 1.415 and 1.419 of the 
Commission's rules, 47 CFR 1.415, 1.419, interested parties may file 
comments and reply comments on or before the dates indicated in the 
Auction 904 Comment Public Notice in AU Docket No. 20-34; WC Docket 19-
126; and WC Docket 10-90.

I. Introduction

    1. By the Auction 904 Comment Public Notice, the Commission 
initiates the pre-auction process for Phase I of the Rural Digital 
Opportunity Fund auction (auction or Auction 904). The auction will 
award up to $16 billion over 10 years to service providers that commit 
to offer voice and broadband services to fixed locations in eligible 
unserved high-cost census blocks. Bidding is expected to begin on 
October 22, 2020.
    2. Auction 904 will be the Commission's second auction to award 
ongoing high-cost universal service support through competitive bidding 
in a multiple-round, reverse auction and follows the successful Connect 
America Fund (CAF) Phase II auction (Auction 903) that was completed in 
2018. As with the CAF Phase II auction, the Commission intends to 
maximize the value the American people receive for the universal 
service dollars the Commission spends, balancing the need for future-
proofed networks and higher-quality services against cost efficiencies. 
Therefore, the Commission will again use an auction mechanism designed 
to select bids from providers that would deploy high-speed broadband 
and voice services in unserved communities for lower relative levels of 
support.
    3. The pre-auction and bidding procedures and processes proposed 
for this auction are similar to those that proved effective in the CAF 
Phase II auction. The Commission is proposing some new pre-auction and 
bidding procedures and processes that would be expected to materially 
improve upon the Auction 904 based upon its experience with Auction 
903.
    4. The Commission proposes and seeks comment in this Public Notice 
on the procedures to be used in Auction 904, including (i) how an 
applicant can become qualified to participate in the auction, (ii) how 
bidders will submit bids, and (iii) how bids will be processed to 
determine winners and assign support amounts. The Commission also seeks 
comment on,

[[Page 15093]]

among other things, how to aggregate eligible areas into larger 
geographic units for bidding (``biddable areas'') and making auction 
information available to bidders and the public. Commenters advocating 
a particular procedure are asked to provide specific details regarding 
the costs and benefits of that procedure and explain how that procedure 
would improve upon the Commission's and the public's experience in 
Auction 903.
    5. The Commission will announce final procedures and other 
important information concerning Auction 904 after considering comments 
provided in response to the Auction 904 Comment Public Notice. Even 
though many interested parties may be familiar with the Commission's 
systems and processes from their participation in the CAF Phase II 
auction, the Commission will again provide timely educational materials 
and hands-on practice opportunities to help all potential bidders 
understand the procedures ultimately adopted to govern the auction.

II. Minimum Geographc Area for Bidding

    6. The Commission first seeks comment on the appropriate minimum 
geographic area for Phase I of the Rural Digital Opportunity Fund. In 
the interest of providing bidders flexibility in aligning their bidding 
strategies with future expansion and construction plans in Auction 903, 
the Commission adopted census block groups as the minimum biddable 
area. Although the Commission determined that support would be 
available only for specific eligible census blocks, the Commission 
determined that support would be available only for specific eligible 
census blocks, the Commission concluded it was appropriate to aggregate 
those eligible census blocks into their respective census block groups 
for purposes of bidding.
    7. In the Rural Digital Opportunity Fund Order, the Commission 
concluded that support would be available only to specific eligible 
census blocks, but indicated that the minimum geographic area for 
bidding would be no smaller than a census block group containing one or 
more eligible census blocks, and reserved the option to select tracts, 
or other groupings of areas, when the Commission finalized the auction 
design to limit the number of discrete biddable units. Based on the 
decisions the Commission made in the Rural Digital Opportunity Fund 
Order regarding the areas that will be eligible for bidding, the 
Commission estimates that prior to the challenge process, there will be 
more that 66,000 census block groups containing eligible census blocks 
and more that 33,000 census tracts containing eligible census blocks 
based on FCC Form 477 data as of December 31, 2018. In comparison, for 
the CAF Phase II auction, where the Commission adopted census block 
groups as the minimum geographic area for bidding, there were 
approximately 30,300 census block groups containing eligible census 
blocks.
    8. The Commission seeks comment on whether to retain census block 
groups or use census tracts as the minimum biddable area for Phase I of 
the Rural Digital Opportunity Fund. Do potential bidders foresee any 
difficulties manipulating and uploading large bidding files into the 
bidding system if the Commission uses census block groups for the 
minimum geographic area, which could be more than 66,000? The 
Commission also seek comment on alternative biddable areas it should 
consider and how they impact administrability of the auction and 
flexibility for bidders participating in it.
    9. The Wireless Competition Bureau will release a list and map of 
initially eligible census blocks, and these census blocks will be 
subject to a limited challenge process. Additionally, if more recent 
data become available for this purpose when the specific procedures for 
Auction 904 are adopted, the Commission will use the more recent data 
to determine the eligible areas. After the challenge process is 
completed, the Commission will publish a final list and map of eligible 
census blocks.
    10. The Commission proposes to round the reserve price for each 
biddable area to the nearest dollar consistent with its rounding 
approach for the CAF Phase II auction. In the Rural Digital Opportunity 
Fund Order, the Commission adopted a methodology for calculating area-
specific reserve prices. Because the Commission expects that auction 
participants will place bids for annual support amounts, the Commission 
proposes to multiply the monthly reserve price for a biddable area by 
12 and round that figure to the nearest dollar. Thus, any biddable area 
that has an annual reserve price of less than $0.50 would be ineligible 
for the Rural Digital Opportunity Fund auction.

III. Proposed Application Requirements

    11. The Rural Digital Opportunity Fund Order adopted a two-stage 
application filing process for the auction. The two stages consist of a 
pre-auction short-form application and a post-auction long-form 
application. In its short-form application, a potential bidder must 
establish its eligibility to participate in the auction. After the 
auction, and upon receipt of a winning bidder's long-form application, 
Commission staff will conduct a more extensive review of the winning 
bidder's technical and financial qualifications before authorizing 
support.
    12. Short-form Application. Commission rules require each applicant 
seeking to participate in the auction to provide in its short-form 
application basic ownership information, and certifications regarding 
its qualifications to receive support, and information regarding its 
operational and financial capabilities. The short-form application 
rules also provide for the collection of such additional information as 
the Commission may require to evaluate an applicant's qualifications to 
participate in the auction.
    13. Commission staff will review all timely submitted applications 
to determine whether each applicant has complied with the application 
requirements and provided all required information concerning its 
qualifications for bidding. After this review, the Office of Economics 
and Analytics (OEA), in conjunction with the Wireline Competition 
Bureau (Bureau), will issue a public notice identifying the 
applications that are complete and those that are incomplete. 
Applications that are incomplete because of minor defects may be 
corrected, and the public notice will set a deadline for the 
resubmission of corrected applications. After reviewing the resubmitted 
applications, and in advance of the start of bidding in Auction 904, 
OEA, in conjunction with the Bureau, will announce all qualified 
bidders for the auction. Qualified bidders are those applicants that 
submitted short-form applications deemed timely-filed, complete, and 
meeting the requirements to bid. However, the finding from Commission 
staff that a short-form application is complete and that an applicant 
is qualified to bid only qualifies the applicant to participate in the 
bidding; it does not authorize a winning bidder to receive Rural 
Digital Opportunity Fund support.
    14. Long-form Application. After Auction 904 concludes, each 
winning bidder must submit a long-form application that Commission 
staff will review to determine whether the winning bidder meets the 
eligibility requirements for receiving Rural Digital Opportunity Fund 
support and has the financial and technical qualifications to meet the 
obligations associated with

[[Page 15094]]

such support. Each winning bidder must submit information about its 
qualifications, funding and the network it intends to use to meet its 
obligations. Prior to being authorized to receive Rural Digital 
Opportunity Fund support, each winning bidder must demonstrate that it 
has been designated as an eligible telecommunications carrier (ETC) in 
the area(s) where it was awarded support and must obtain a letter of 
credit from a bank meeting the Commission's eligibility requirements. 
If a winning bidder is not authorized to receive a Rural Digital 
Opportunity Fund support (e.g., the bidder fails to file or prosecute 
its long-form application or its long-form application is dismissed or 
denied), the winning bidder is in default and therefore subject to 
forfeiture.

A. Applicants and State Selections

    15. The Commission proposes to require each applicant to identify 
in its short-form application each state in which it intends to bid for 
support in the Rural Digital Opportunity Fund auction. An applicant 
will be able to place bids for eligible areas only in the states 
identified in its application.
    16. In Auction 903, the Commission allowed entities that were 
commonly controlled to file separate applications so long as they did 
not select the same state(s), and if they were qualified, to bid 
separately. The Commission considers a different approach and proposes 
to prohibit the submission of more than one application by commonly 
controlled entities for Auction 904 under any circumstances.
    17. To identify commonly controlled entities, the Commission 
proposes to use the same definition of a controlling interest as the 
Commission used in the CAF Phase II auction. The Commission proposes to 
define a ``controlling interest'' for purposes of the Rural Digital 
Opportunity Fund auction as an individual or entity with positive or 
negative de jure or de facto control of the applicant.
    18. The Commission expects to adopt a Divide Winning Bids process 
for this auction similar to that employed in Auction 903. During the 
long-form application process, a winning bidder would have the 
opportunity to assign some or all of its winning bids to related 
operating companies. As in Auction 903, while the Commission would 
permit a winning bidder to assign winning bids to more than one 
operating company in each state, the Commission proposes that a winning 
bidder would not be allowed to split any winning bid among multiple 
operating companies. In addition, the Commission proposes that any 
operating company that is assigned one or more winning bids will be 
required to file a long-form application in its own name to seek 
authorization for Rural Digital Opportunity Fund support. The 
Commission would require that entities filing the long-form application 
be operating companies or consortium/joint venture members that were 
named in the short-form application or newly formed entities that are 
controlled by the applicant or one or more of its members. Further, the 
Commission proposes that the identified operating company be the entity 
that is designated as the ETC by the relevant states in the areas 
covered by the winning bids and is named in the letter of credit 
applicable to the specific winning bids for which it becomes authorized 
for support.
    19. If during short-form application review Commission staff 
identifies separate applicants that are commonly controlled, the 
Commission proposes that all such applications would be deemed to be 
incomplete on initial review. The applicants would be informed of the 
issue, and only one applicant would ultimately be deemed qualified to 
bid, assuming that there were no remaining issues with its application. 
Because the rule prohibiting certain communications in section 
1.21002(b) would prohibit the affected applicants from communicating 
with respect to their determination of which entity would be the single 
applicant, commonly controlled entities should coordinate on the 
submission of one application before the short-form application 
deadline.
    20. The Commission proposes to ban applicants from entering into 
joint bidding arrangements for Auction 904, consistent with its 
practice in spectrum auctions. For purposes of this prohibition, the 
Commission would define ``joint bidding arrangements'' as it did for 
Auction 903 as arrangements between or among applicants that (1) relate 
to any eligible area in the Rural Digital Opportunity Fund auction, and 
(2) address or communicate bids or bidding strategies, including 
arrangements regarding Rural Digital Opportunity Fund support levels 
(i.e., bidding percentages) and specific areas on which to bid, as well 
as any arrangements relating to the post-auction market structure in an 
eligible area. As a result, if two or more applicants are parties to an 
agreement that falls within this definition, they would be prohibited 
from bidding in the Rural Digital Opportunity Fund auction. To aid in 
the identification of such arrangements, the Commission proposes 
requiring an applicant to provide in its short-form application a brief 
description of any agreement related to the applicant's participation 
in the Rural Digital Opportunity Fund auction.
    21. The Commission would limit its proposal to auction applicants. 
The Commission cautions non-applicant entities that any joint venture, 
consortium, or other arrangement into which they enter must be 
consistent with the antitrust laws and must otherwise not be prohibited 
by law.
    22. The Commission proposes to require each applicant to certify in 
its short-form application that it has not entered into any explicit or 
implicit agreements, arrangements, or understandings of any kind 
related to the support to be sought through the Rural Digital 
Opportunity Fund auction, other than those disclosed in the short-form 
application. The Commission further proposes requiring each winning 
bidder to submit in its long-form application any updated information 
regarding the agreements, arrangements, or understandings related to 
its Rural Digital Opportunity Fund auction support disclosed in its 
short-form application. A winning bidder may also be required to 
disclose in its long-form application the specific terms, conditions, 
and parties involved in any agreement into which it has entered and the 
agreement itself.
    23. The rule prohibiting certain communications in universal 
service support auctions contains an exception for applicants that are 
members of a joint bidding arrangement that is identified on the short-
form application. The Commission seeks comment on its authority to 
prohibit joint bidding arrangements between or among applicants for 
Auction 904, which would render that exception to the prohibited 
communications rule inapplicable.
    24. The Commission is proposing no further modifications with 
respect to the applicability of the prohibited communications rule for 
Auction 904. As set forth in section 1.21002 of the Commission's rules, 
an applicant in Auction 904 (and any party that controls or is 
controlled by an applicant) is prohibited from cooperating or 
collaborating with any other applicant with respect to its own or any 
other applicant's bids or bidding strategies, and from communicating 
with any other applicant in any manner the substance of its own or any 
other applicant's bids or bidding strategies during the prohibition 
period.
    25. The Commission observes that NTCA asserts that an attestation 
made by a third-party consultant assisting multiple bidders could 
address its

[[Page 15095]]

concerns regarding collusive conduct by auction applicants. Even with 
such an attestation, however, the Commission would continue to be wary 
of the potential harm to competition in the auction from a third-party 
individual who is aware of one bidder's bids or bidding strategies 
while advising another bidder. Accordingly, the Commission proposes 
that the guidance in the Auction 903 Procedures Public Notice regarding 
the significant risk of applicants violating the prohibited 
communications by employing the same third party for bidding advice 
would continue to apply.
    26. The Commission seeks comment on these proposals and whether 
they efficiently and effectively promote straightforward bidding and 
safeguard the integrity of the auction.

B. Eligibility To Bid for Performance Tier and Latency Combinations

    27. In general, the Commission proposes to collect the same 
information and use the same process that was used for the CAF Phase II 
auction for Commission staff to determine, at the short-form 
application stage and in advance of the start of bidding in the 
auction, each applicant's eligibility to bid for the performance tier 
and latency combinations it has selected in its application. The 
Commission seeks comment on specific improvements to the CAF Phase II 
auction short-form application and the process used for that auction 
based on lessons learned to ensure that the Commission collects 
sufficient information to assess an applicant's technical 
qualifications to bid for specific performance tier and latency 
combinations while minimizing the burdens on applicants and Commission 
staff.
    28. In the Rural Digital Opportunity Fund Order, the Commission 
concluded that it would accept bids for four performance tiers with 
varying speed and usage allowances and, with respect to each tier, 
would provide for bids at either high or low latency. Each applicant 
for the Rural Digital Opportunity Fund auction must indicate in its 
short-form application the performance tier and latency combinations 
for which it intends to bid and the technologies it intends to deploy 
to meet the relevant public interest obligations. Additionally, each 
Rural Digital Opportunity Fund auction applicant must indicate whether 
it has at least two years' experience providing a voice, broadband, 
and/or electric distribution or transmission service and must submit 
certain financial information. The Commission's rules also require each 
applicant to submit any additional information that the Commission may 
require to establish its eligibility for the selected performance tier 
and latency combinations.
    29. The Commission intends to use the short-form application to 
assess the likelihood that an applicant would default if selected as a 
winning bidder. If the applicant becomes qualified to bid in the Rural 
Digital Opportunity Fund auction and subsequently becomes a winning 
bidder, Commission staff will evaluate the information submitted in the 
long-form application and will rely on the applicant's letter of credit 
to determine whether an applicant is capable of meeting its Rural 
Digital Opportunity Fund auction obligations in the specific areas 
where it has been selected as a winning bidder. Accordingly, a 
determination at the short-form stage that an applicant is eligible to 
bid for a performance tier and latency combination would not preclude a 
determination at the long-form application stage that an applicant does 
not meet the technical qualifications for the performance tier and 
latency combination and thus will not be authorized to receive Rural 
Digital Opportunity Fund support. In addition, the Commission's 
adoption of certain non-compliance measures in the event of default--
both before a winning bidder is authorized for support and if a winning 
bidder does not fulfill its Rural Digital Opportunity Fund obligations 
after it has been authorized--should encourage each applicant to select 
performance tier and latency combinations with public interest 
obligations that it can reasonably expect to meet.
    30. Operational Information. The Commission seeks comment on 
proposals for implementing its decision to collect high-level 
operational information from each applicant to enable its staff to 
determine whether the applicant is expected to be reasonably capable of 
meeting the public interest obligations (e.g., speed, usage, latency, 
and build-out milestones) for each performance tier and latency 
combination that it selected in its application. Each applicant seeking 
to participate in the Rural Digital Opportunity Fund auction is 
required to make certain certifications in its short-form application, 
including a certification that it is technically qualified to meet the 
public interest obligations in each tier and in each area for which it 
seeks support, and a certification regarding its experience in 
providing voice, broadband, and/or electric distribution or 
transmission service. The Commission's rules also require an applicant 
to submit certain information in its short-form application in 
connection with those certifications.
    31. The Commission proposes making such determinations on a state-
by-state basis. Accordingly, for each selected performance tier and 
latency combination, an applicant will be required to independently 
demonstrate how it intends to provision service if awarded support and 
that it is reasonably capable of meeting the relevant public interest 
obligations for each state it selects.
    32. The Commission proposes to require each applicant to answer the 
questions listed in Appendix A to the Public Notice for each state it 
selects in its application. The questions are substantially similar to 
the questions that were included in the CAF Phase II auction short-form 
application. The Commission found that in most instances the questions 
elicited information at a sufficient level of detail for its staff to 
verify that each applicant had developed a preliminary design or 
business case for meeting the public interest obligations for its 
selected performance tier and latency combinations, without imposing 
undue burdens on applicants or staff. However, the Commission proposes 
some edits to the questions to improve clarity and better elicit 
information that the Commission found useful in making eligibility 
determinations for the CAF Phase II auction. The Commission also 
proposes providing examples for the types of information the Commission 
would expect an applicant to submit. The Commission seeks comment on 
the questions proposed and whether there are other changes or 
clarifications the Commission should make, or additional questions the 
Commission should ask.
    33. Assumptions. The Commission seeks comment on the assumptions an 
applicant will need to make about network usage and subscription rates 
when determining whether it can meet the public interest obligations 
for its selected performance tier and latency combination(s). For 
example, the Commission's rules require that each long-form applicant 
provide in its long-form application a certification by a professional 
engineer that the applicant's proposed network can deliver the required 
service to at least 95% of the required number of locations. Because 
Rural Digital Opportunity Fund support recipients will ultimately be 
required to offer service to 100% of the actual locations in their 
service areas and offer service to newly built locations upon 
reasonable request that were built prior to milestone year eight, the 
Commission proposes that its staff also review the

[[Page 15096]]

information provided in the short-form and long-form applications to 
verify the applicant has the plans and capability to scale the network 
if necessary.
    34. The Commission also seeks comment on the proposal to require 
each service provider to assume a subscription rate of at least 70% for 
both voice services and broadband services when determining whether it 
can meet the public interest obligations for its selected performance 
tier and latency combinations. This subscription rate is consistent 
with the assumptions made in the Connect America Cost Model (CAM) when 
calculating the amount of support made available and is also the 
subscription rate assumption required for CAF Phase II auction 
applicants.
    35. The Commission seeks comment on these assumptions and on 
whether the Commission should set any other parameters for assumptions 
about the network that will be used to meet Rural Digital Opportunity 
Fund obligations.
    36. Spectrum Access. The Commission seeks comment on the spectrum 
bands--both licensed and unlicensed--that could be used to meet Rural 
Digital Opportunity Fund public interest obligations. The Rural Digital 
Opportunity Fund auction rules require a short-form applicant that 
plans to use radiofrequency spectrum to demonstrate that it has (1) the 
proper spectrum use authorizations, if applicable; (2) access to 
operate on the spectrum it intends to use; and (3) sufficient spectrum 
resources to cover peak network usage and meet the minimum performance 
requirements to serve the fixed locations in eligible areas. For the 
described spectrum access to be sufficient as of the date of the short-
form application, the applicant must have obtained any necessary 
approvals from the Commission for the spectrum, if applicable. The 
Rural Digital Opportunity Fund auction short-form application rules 
also require an applicant to certify that it will retain such 
authorizations for 10 years.
    37. In Appendix B to the Public Notice, the Commission identifies 
the licensed and unlicensed spectrum bands that could be used by a 
service provider operating in these bands to, at a minimum, offer 
service meeting the requirements for the minimum performance tier 
provided that the service provider is using sufficient bandwidth in the 
spectrum band(s) and a technology that can operate on these spectrum 
bands consistent with applicable rules and regulations. This is a non-
exhaustive list of spectrum bands that an applicant could potentially 
use to meet its public interest obligations. The Commission updated the 
spectrum band chart used for the CAF Phase II auction to include some 
additional frequencies for the Upper Microwave Flexible Use Service.
    38. The Commission seeks comment on whether the individual bands 
proposed in Appendix B--or, in some cases, the blocks within them, 
individually or in combination with each other--provide sufficient 
uplink or downlink bandwidth to support the wireless technologies that 
a provider may use to meet the Rural Digital Opportunity Fund 
obligations. Are there other spectrum bands that can offer sufficient 
uplink or downlink bandwidth--individually or in combination--to meet 
the various performance tier and latency combination qualifications? If 
so, what last mile technologies and corresponding last mile network 
architecture can be used in those spectrum bands?
    39. The Commission also seeks comment on how an applicant can 
demonstrate that it has sufficient access to spectrum if it intends to 
participate in auction proceedings that are occurring around the same 
time of the Rural Digital Opportunity Fund short-form application 
process. In the Rural Digital Opportunity Fund Order, the Commission 
would permit an applicant that plans to operate on the 3550-3650 MHz 
band using a priority access license that will be subject to auction 
with bidding scheduled to begin in June 2020 to indicate the status of 
its participation in that auction (consistent with auction procedures 
regarding the disclosure of non-public auction-related information) as 
long as it provides alternatives for how it intends to meet its 
obligations if it were not awarded a license. But this is not the only 
spectrum auction with proceedings taking place this year. For example, 
the Commission has Spectrum Frontiers auction proceedings in various 
stages and the 2.5 GHz Rural Tribal Priority Window this year. As such, 
the Commission proposes allowing an applicant that intends to 
participate in any of these proceedings the same option of indicating 
the status of its participation and providing alternatives for if it 
does not ultimately obtain a license. Should the Commission also 
provide this option to an applicant that intends to participate in any 
other upcoming spectrum auction proceedings?
    40. Collection and Use of Identifiers Associated with Information 
Submitted to the Commission in Other Contexts. In addition to 
information provided in a short-form application, the Commission 
proposes to allow its staff to consider any information that a provider 
has submitted to the Commission in other contexts when determining 
whether a service provider is reasonably capable of meeting the public 
interest obligations for its selected performance tier and latency 
combinations. This other information would include but potentially not 
be limited to data reported in FCC Form 477 Voice Telephone Services 
and internet Access Services Reports (FCC Form 477), FCC Form 481 
Carrier Annual Reporting Data Collection Form (FCC Form 481), FCC Form 
499-A Annual Telecommunications Reporting Worksheet (FCC Form 499-A), 
and any public information. For example, Commission staff may consider 
whether an applicant already offers service that meets the public 
interest obligations associated with its selected performance tier and 
latency combinations and the number of subscribers to that service.
    41. The Commission proposes to collect information in the short-
form application about the unique identifiers a provider uses to submit 
this data to the Commission. Specifically, the Commission proposes to 
collect in the short-form application for any applicant or its parent 
company (or in the case of a holding company applicant, its operating 
companies): (1) Any FCC Registration Numbers (FRNs) used to submit 
their FCC Form 477 data for the past two years; (2) any associated 
study area codes (SAC) that indicate the applicant, its parent company, 
or its operating companies are an existing ETC; and (3) any FCC Form 
499 filer identification numbers used to file an FCC Form 499-A in the 
past year, if applicable.
    42. The Commission reminds all interested parties that because FCC 
Form 477 data are used to verify an applicant's operating history and 
current service offerings as well as to identify areas that are 
eligible for the auction, they should ensure that they have filed and 
will timely file all required FCC Form 477 data.
    43. The Commission seeks comment on its proposed collection and use 
of these various identifiers, and on whether there are other ways its 
staff can leverage data that are already reported to the Commission to 
assess the qualifications of Rural Digital Opportunity Fund applicants.
    44. Limiting Eligibility to Bid for Certain Performance Tier and 
Latency Combinations. The Commission proposes adopting prohibitions and 
presumptions for applicants selecting certain performance tier and 
latency combinations that may be inconsistent with the technologies 
they intend to use

[[Page 15097]]

to meet their Rural Digital Opportunity Fund auction public interest 
obligations.
    45. First, the Commission proposes prohibiting providers that 
intend to use geostationary or medium earth orbit satellites from 
selecting low latency in combination with any of the performance tiers. 
Some service providers that use these satellite technologies have 
acknowledged that they cannot meet the low latency requirement that 95% 
or more of all peak period measurements of network round trip latency 
are at or below 100 milliseconds. In contrast, SpaceX contends that its 
low-earth orbit satellite service can meet the low-latency threshold. 
The Commission seeks comment on whether such providers should also be 
prohibited from selecting low latency in combination with any of the 
performance tiers. Should applicants proposing to use any other types 
of technologies be prohibited from selecting low latency?
    46. Second, the Commission proposes prohibiting geostationary 
satellite providers from bidding in the Gigabit performance tier and 
the Above Baseline performance tier. The Commission sees no evidence 
that geostationary satellite providers already offer service that meets 
all the requirements for these performance tiers. An applicant that 
bids in the Gigabit tier must commit to offering broadband at speeds of 
at least 1 Gbps/500 Mbps with a monthly usage allowance of at least 2 
terabytes, and an applicant that bids in the Above Baseline tier must 
commit to offering broadband at speeds of at least 100/20 Mbps with a 
monthly usage allowance of at least 2 terabytes. Viasat is the only 
geostationary satellite provider that reports offering downstream 
speeds of 100 Mbps in FCC Form 477 data (as of December 31, 2018) to 
consumers in certain areas, and it reports associated upload speeds of 
only 4 Mbps. Notably, Viasat bid to provide service at speeds of 10/1 
Mbps and 25/3 Mbps in the CAF Phase II auction. While both Viasat and 
Hughes offer unlimited data plans in some areas, consumers may 
experience lower speeds once they exceed a certain data limit as low as 
150 GB. The Commission also seeks comment on whether to more generally 
prohibit any service provider that intends to place a high-latency bid 
from selecting either the Gigabit or Above Baseline performance tier. 
Are there any high-latency technologies that could reasonably be 
expected to meet the requirements for the Gigabit and Above Baseline 
performance tiers? Viasat was the only service provider that bid in the 
high-latency tier in the CAF Phase II auction.
    47. Third, the Commission proposes precluding any applicant that 
intends to use fixed wireless or DSL technologies from bidding in the 
Gigabit tier if the applicant has not reported offering Gigabit 
broadband service in its FCC Form 477 data. Based on FCC Form 477 data 
as of December 31, 2018, 98% of fixed wireless and DSL providers have 
not reported offering Gigabit speeds, and only 17% have reported 
offering speeds of 100 Mbps or above. By contrast, 82% of optical 
carrier/fiber-to-the-end-user providers report offering broadband at 
100 Mbps speeds. No service provider proposing to use either fixed 
wireless or DSL qualified to bid in the Gigabit tier for the CAF Phase 
II auction. Given the continued lack of widespread reported deployment 
at higher speeds, it appears unreasonable to expect that an applicant 
choosing to use either fixed wireless or DSL would be able to offer 
Gigabit speeds by the first service milestone unless it has a reported 
history of offering such speeds.
    48. The Commission seeks comment on the proposals for determining 
an applicant's eligibility to bid on the performance tier and latency 
combination(s) selected in its short-form application. Should the 
Commission adopt any additional prohibitions or presumptions for 
applicants intending to use other types of technologies? A party 
submitting alternative proposals should explain how its proposal 
appropriately balances the Commission's objectives of assessing an 
applicant's capability to meet the Rural Digital Opportunity Fund 
public interest obligations and not imposing undue costs on applicants 
or Commission staff.
    49. The Commission is not inclined to adopt performance tier and 
latency prohibitions for nascent technologies. Rather, the Commission 
proposes that its staff review applications from providers using 
nascent technologies on a case-by-case basis to determine whether they 
can reasonably be expected to meet the specific requirements of the 
Rural Digital Opportunity Fund. In such cases--as in all cases--
Commission staff would have the authority to determine the specific 
performance tier(s) and latency for which an applicant would be 
qualified, if any.
    50. Evaluating Eligibility to Bid on Selected Performance Tier and 
Latency Combinations. The Commission proposes that its staff review the 
information submitted by an applicant in its short-form application and 
any other relevant information available to staff to determine whether 
the applicant has planned how it would provide service if awarded 
support and is therefore expected to be reasonably capable of meeting 
the public interest obligations for its selected performance tier and 
latency combinations in its selected states. The Commission proposes 
that if staff finds that an applicant is reasonably expected to be 
capable of meeting the relevant public interest obligations in a state, 
the applicant would be eligible to bid for its selected performance 
tier and latency combinations in that state.
    51. If Commission staff, in its initial review, is unable to find 
that an applicant can reasonably be expected to meet the relevant 
public interest obligations based on the information submitted in its 
short-form application, Commission staff would deem the application 
incomplete, and the applicant would have another opportunity during the 
application resubmission period to submit additional information to 
demonstrate that it meets this standard. Commission staff would notify 
the applicant that additional information is required to assess the 
applicant's eligibility to bid for any or all of the specific states 
and performance tier and latency combinations selected in its short-
form application. During the application resubmission period, an 
applicant would be able to submit additional information to establish 
its eligibility to bid for the relevant performance tier and latency 
combinations. An applicant would also have the option of selecting a 
lesser performance tier and latency combination for which it might be 
more technically qualified. The Commission would consider this to be a 
permissible minor modification of the short-form application. Once the 
application resubmission period has ended, Commission staff would make 
its final determination of an applicant's eligibility to bid for any or 
all of the specific states and performance tier and latency 
combinations selected in its application, and then notify each 
applicant in which states and for which performance tier and latency 
combinations it is eligible to bid. The bidding system will be 
configured to permit a bidder to bid only in the state(s) and for the 
performance tier and latency combinations on which it is deemed 
eligible to bid.
    52. The Commission seeks comment on its proposals to use the same 
process as in the CAF Phase II auction and on whether any changes 
should be made to the standard of review or eligibility determination 
process to account for lessons learned.

[[Page 15098]]

C. Financial Qualifications

    53. In the Rural Digital Opportunity Fund Order, the Commission 
required all applicants to submit financial statements with their 
short-form applications. An applicant certifying that it has provided 
voice, broadband, and/or electric transmission or distribution services 
for at least two years and that it is audited in the ordinary course of 
business must submit audited financial statements from the prior fiscal 
year that have been audited by an independent certified public 
accountant, including balance sheets, and statements of net income and 
cash flow along with a financial statement audit opinion letter. If 
such an applicant is not audited in the ordinary course of business, it 
has the option of submitting audited financial statements with the 
long-form application by a certain deadline if it is announced as a 
winning bidder, but the applicant must submit unaudited financial 
statements with the short-form application. If an applicant cannot 
certify that it has provided voice, broadband, and or electric 
transmission or distribution services for at least two years, it must 
submit (1) audited financial statements for the three most recent 
consecutive fiscal years, including balance sheets, and statements of 
net income, and cash flow, and (2) a letter of interest from a 
qualified bank with terms acceptable to the Commission, stating that 
the bank would provide a letter of credit to the bidder if the bidder 
were selected for certain levels of support.
    54. The Commission seeks comment on how it should review the 
financial statements that an applicant submits with its short-form 
application. Based on its experience with the CAF Phase II auction, the 
Commission proposes to deviate from the approach it previously took 
during the short-form application process of requiring each applicant 
to identify specific metrics from its financial statements and scoring 
applications based on those metrics.
    55. The Commission proposes instead that an applicant submitting 
audited financial statements with its short-form application will be 
required to identify whether it has a clean opinion letter on its 
audited financial statements. The Commission will consider an opinion 
letter to be clean if it has an unmodified opinion without an emphasis-
of-matter paragraph regarding whether there is a going concern. An 
unmodified opinion is one where ``the auditor concludes that the 
[audited] financial statements are presented fairly, in all material 
respects, in accordance with the applicable financial reporting 
framework.'' An auditor's findings regarding an entity's inability to 
remain in business for a reasonable period of time would be reflected 
in a modified opinion or the opinion letter would include an emphasis-
of-matter paragraph regarding going concern.
    56. An applicant that submits the required audited financial 
statements and has a clean opinion letter on the submitted audited 
financial statements would be deemed financially qualified to 
participate in the auction.
    57. For an applicant that does not have a clean opinion letter, 
Commission staff would first review whether the issue is material to 
the applicant's participation in the auction. If so, any such 
applicants--and any applicants that submit unaudited financial 
statements--would be subject to a review of the full set of financial 
statements submitted with the short-form application, as well as other 
information submitted with the application and/or information submitted 
to the Commission in other contexts (e.g., financials filed with a FCC 
Form 481, revenues reported in FCC Form 499, etc.). To the extent this 
information does not sufficiently demonstrate that an applicant is 
financially qualified, the application will be deemed incomplete and 
the Commission may request further information from the applicant 
during the application resubmission period.
    58. While the proposed approach may subject more applicants to a 
more in-depth financial review, a more tailored financial review of 
each relevant application and other available information would help 
the Commission to better identify the applicants that may have 
difficulty meeting the relevant public interest obligations due to 
various factors including their financial situation. Although 
Commission staff would take into account the financial metrics in an 
applicant's financial statements as part of this review, those metrics 
would not by themselves definitively qualify or disqualify applicants. 
The Commission would decline to define specific parameters for the 
review of an applicant that does not have a clean opinion letter on its 
audited financial statements or an applicant that submits unaudited 
financial statements because the Commission observed for the CAF Phase 
II auction that each applicant's financial circumstances differ. 
Instead, the Commission would seek to tailor the review to each 
applicant's circumstances and determine based on the totality of 
information available whether it is reasonable to expect that the 
applicant is financially capable of fulfilling the Rural Digital 
Opportunity Fund obligations should it become a winning bidder. The 
Commission seeks comment on this proposed approach and also seek 
proposals for equitable and efficient approaches it could take to 
review submitted financial statements. How could the Commission further 
streamline its review of financial statements but still adequately 
verify an applicant's financial qualifications?
    59. The Commission staff's determination at the short-form stage 
that an applicant is financially qualified to bid would not preclude a 
determination at the long-form application review stage that an 
applicant is not authorized to receive Rural Digital Opportunity Fund 
support. The Commission's rules require that, during the long-form 
application stage, a winning bidder: (1) Certify that it will have 
available funds for all project costs that exceed the amount of Rural 
Digital Opportunity Fund support for the first two years, (2) submit a 
description of how the required construction will be funded, and (3) 
obtain a letter of credit from a bank meeting the Commission's 
requirements.

D. Long-Form Application Requirements

    60. The Commission proposes to require each winning bidder (or its 
designee) to submit certain information in its long-form application to 
aid Commission staff in evaluating whether the winning bidder (or its 
designee) is technically and financially qualified to meet the relevant 
Rural Digital Opportunity Fund public interest obligations in the areas 
where it was awarded support. A long-form applicant must also provide 
in its long-form application more in-depth information regarding the 
networks it intends to use to meet its Rural Digital Opportunity Fund 
obligations and how it intends to fund such networks. Among other 
things, the Commission proposes to require each applicant to provide in 
its long-form application any updates to its spectrum authorizations or 
spectrum access and to certify in its long-form application that it 
will retain access to the spectrum for at least 10 years from the date 
of the funding authorization. The Commission seeks comment on these 
proposals.
    61. The Commission also would provide guidance in a future public 
notice regarding the specific types of information the Commission 
expects each long-form applicant to include in its long-form 
application to successfully meet the requirement to provide a 
description of the technology and system design it will use to meet its 
Rural Digital Opportunity Fund public

[[Page 15099]]

interest obligations and a network diagram. The Commission invites 
parties to comment on whether and how the guidance it provided for the 
CAF Phase II auction should be updated or clarified for the Rural 
Digital Opportunity Fund auction.

IV. Proposed Bidding Procedures

    62. The Commission will use a descending clock auction to identify 
the providers that will be assigned to receive Rural Digital 
Opportunity Fund support and to establish the amount of support that 
each bidder will be eligible to receive, subject to post-auction 
application review. In the Rural Digital Opportunity Fund Order, the 
Commission concluded that bids for different areas at specified 
performance tier and latency levels will be compared to each other 
based on the percentage each bid represents of their respective areas' 
reserve prices; however, once the budget has cleared, the Commission 
will prioritize bids with lower tier and latency weights. The 
Commission also directs OEA, in conjunction with the Bureau, to release 
a guide that provides further technical and mathematical detail 
regarding the bidding, assignment, and support amount determination 
procedures proposed here. In addition, the Commission seeks comment on 
what types of additional information (e.g., fact sheets and user 
guides) it could make available to help educate parties, particularly 
those that have never participated in a Commission auction. The 
Commission also seeks comment on whether the Commission's Office of 
Communications Business Opportunities should engage with small 
providers interested in the auction process.
    63. The auction will be conducted over the internet, and bidders 
will upload bids in a specified file format for processing by the 
bidding system. The bidding system will announce a clock percentage 
before each round. The clock percentage is used to delimit the range of 
acceptable bid percentages in each round of the auction and as a common 
unit to compare bids for different performance tiers and latencies, 
which were assigned weights (``T+L weights'') in the Rural Digital 
Opportunity Fund Order.
    64. The Commission proposes to have the clock percentage begin at a 
high level, implying a support amount that is equal to or close to the 
full reserve price, even for bids at the largest T+L weight, and 
descend from one round to the next. In a round, a bidder can submit a 
bid for a given area at a specified performance tier and latency 
combination at any percentage that is greater than or equal to the 
round's clock percentage and less than the previous round's clock 
percentage. A bid indicates that the bidder is willing to provide 
service to the area that meets the specified performance tier and 
latency requirements in exchange for support that is no less than the 
support amount implied by the bid percentage.
    65. The clock percentage will continue to descend in a series of 
bidding rounds, implying diminishing support amounts, until the 
aggregate amount of requested support represented by the bids placed in 
a round at the clock percentage is no greater than the budget. At that 
point, when the budget ``clears,'' the bidding system will begin to 
assign support, prioritizing bids with lower T+L weights according to 
the proposed bid processing procedures. Bidding will continue for areas 
that were bid at the round's clock percentage and have not been 
assigned, and the clock will continue to descend in subsequent rounds. 
When there is no longer competition for any area, the auction will end. 
Because of the second-price rule, a winning bidder will be assigned 
support in amounts at least as high as the support amounts 
corresponding to its bid percentages.
    66. The bidding procedures the Commission proposes for the Rural 
Digital Opportunity Fund auction are the same as those used in the CAF 
Phase II auction, with several modifications. As adopted in the Rural 
Digital Opportunity Fund Order, once the budget has cleared, the bid 
processing procedures will prioritize bids with lower T+L weights. In 
line with this modification, the Commission proposes to require all 
areas within a package bid to be bid at the same T+L weight. The 
Commission also proposes to set a maximum amount of implied support for 
which a bidder may bid in a round, and the Commission proposes to set 
that limit at 100% of the Rural Digital Opportunity Fund budget. The 
Commission further proposes that the bidding system will consider bids 
submitted at the clock percentage of the previous round, if bid 
processing procedures in the clearing round cannot assign the full 
budget to bids submitted in the clearing round. Finally, the Commission 
seeks comment on a modification to the information available to bidders 
during the auction that would make available after each round the 
lowest T+L weight in each bidding area that has two or more bids at the 
prior round's clock percentage.

A. Bid Collection

1. Round Structure
    67. The Commission proposes that the Rural Digital Opportunity Fund 
descending clock auction will consist of sequential bidding rounds 
according to an announced schedule providing the start time and closing 
time of each bidding round. The Commission proposes to retain the 
discretion to change the bidding schedule--with advance notice to 
bidders--in order to foster an auction pace that reasonably balances 
speed with giving bidders sufficient time to study round results and 
adjust bidding strategies. OEA may modify the amount of time for 
bidding rounds, the amount of time between rounds, or the number of 
rounds per day, depending on bidding activity and other factors. The 
Commission seeks comment on this proposal. Commenters suggesting 
alternatives to this proposal should address any other means to manage 
the auction pace.
2. Clock Percentages and Implied Support Amounts Based on Performance 
Tier and Latency Weights
    68. The Commission proposes that under the descending clock auction 
format, the clock will be denominated in terms of a percentage, which 
will be decremented for each round. To determine the annual support 
amount for an area implied at each percentage, the percentage is 
multiplied by the reserve price of the area, adjusted for the T+L 
weight of the bid.
    69. In the Rural Digital Opportunity Fund Order, the Commission 
concluded that it would accept bids for four performance tiers with 
varying speed and usage allowances and, for each performance tier, 
would provide for bids at either high or low latency. The Commission 
also decided to consider all bids simultaneously so that bidders 
proposing varying performance standards would be competing directly 
against each other for the limited Rural Digital Opportunity Fund 
budget, but to provide an assignment preference for bids with lower T+L 
weights once the budget has cleared. In addition, the Commission 
decided that bidders would bid for support expressed as a fraction of 
an area's reserve price.
    70. In the Rural Digital Opportunity Fund Order, the Commission 
adopted weights to compare bids for the different performance tiers and 
latency combinations. The Commission determined that Minimum 
performance tier bids will have a 50 weight; Baseline performance tier 
bids will have a 35 weight; Above Baseline performance tier bids will 
have a 20 weight; and Gigabit

[[Page 15100]]

performance tier bids will have zero weight. Moreover, high-latency 
bids will have a 40 weight and low latency bids will have zero weight 
added to their respective performance tier weight. The lowest possible 
weight for a performance tier and latency is 0, and the highest 
possible weight is 90. Each weight uniquely defines a performance tier 
and latency combination, as shown in the table.

                                   Weights for Performance Tiers and Latencies
----------------------------------------------------------------------------------------------------------------
           Minimum                     Baseline                 Above baseline                  Gigabit
----------------------------------------------------------------------------------------------------------------
 High latency   Low latency   High latency   Low latency  High latency   Low latency  High latency   Low latency
----------------------------------------------------------------------------------------------------------------
          90             50            75            35            60            20            40             0
----------------------------------------------------------------------------------------------------------------

The Commission's proposal for a clock auction format with a clock 
percentage and weights for performance tier and latency combinations 
implements these Commission decisions and provides a simple way to 
compare bids of multiple types. The Commission seeks comment on this 
proposal.
    71. The Commission proposes that the clock percentage in each round 
will imply a total amount of annual support in dollars for each area 
available for bidding, based on the area's reserve price and the T+L 
weight specified in the bid. The annual support amount implied at the 
clock percentage will be the smaller of the reserve price and the 
annual support amount obtained by using a formula that incorporates the 
T+L weights. Specifically:
[GRAPHIC] [TIFF OMITTED] TP17MR20.008

    72. Because the highest implied support amount can never exceed an 
area's reserve price, when the clock percentage is greater than 100, 
the total implied annual support for lower weighted performance tier 
and latency combinations may remain at an area's reserve price for one 
or more rounds, while the total implied annual support of one or more 
higher weighted performance tier and latency combinations may be lower 
than an area's reserve price. When the clock percentage is decremented 
below 100, the implied annual support for any performance tier and 
latency combination will be below an area's respective reserve price.
    73. The ``implied support formula'' can be used to determine the 
implied support at any price point percentage by substituting a given 
percentage for the clock percentage. The Commission seeks comment on 
these proposals.
3. Acceptable Bid Amounts
    74. The Commission proposes that, in the first round, a bidder may 
place a bid at any price point percentage equal to or greater than the 
clock percentage and equal to or less than the opening percentage, 
specified up to two decimal places. In each subsequent round, a bidder 
may place a bid at any price point percentage equal to or greater than 
the clock percentage and less than the previous round's clock 
percentage, specified up to two decimal places. This proposal will 
reduce the likelihood of ties and allow bids to correspond to smaller 
increments in annual support amounts. The Commission seeks comment on 
this proposal.
    75. The Commission proposes that bids must imply a support amount 
that is one percent or more of an area's reserve price to be 
acceptable. For a given performance tier and latency combination, when 
the price point percentage equals T+L, the formula implies that the 
annual support amount is zero. When the price point percentage equals 
T+L+1, the formula implies an annual support amount that is one percent 
of the area's reserve price. Hence, a bid percentage must be at least 
T+L+1 for the bid to be accepted by the bidding system. The Commission 
seeks comment on this proposal.
    76. The Commission anticipates that the ability to submit bids at 
price points other than the clock percentage, as proposed, will be 
especially useful to a bidder when the lowest support amount it will 
accept for an area corresponds to a percentage between the clock 
percentages for two consecutive rounds. In such a case, the proposed 
option will allow the bidder to more precisely indicate the point at 
which it wishes to drop out of bidding for the area. In contrast, a 
bidder still willing to accept a support amount equal to or less than 
that implied by the clock percentage will simply bid at the clock 
percentage. In rounds before the budget clears, a bidder may bid at an 
intermediate price point in one round and then bid again for the same 
area in a subsequent round, but its ability to do so is limited. In 
rounds after the budget clears, a bidder is not permitted to switch the 
areas for which it is bidding.
4. Bidding for Geographic Areas
    77. The Commission seeks comment on the appropriate minimum 
geographic area for bidding. A bid in a minimum geographic area is a 
bid for support for the locations within all eligible census blocks 
within that area.
    78. The Commission proposes to allow a bidder to place only one bid 
on a given geographic area in a round, whether that area is bid on 
singly or included in a package bid.
    79. The Commission further proposes that the total implied support 
of a single bidder's bids in any round not exceed the total Rural 
Digital Opportunity Fund budget. The proposed clock auction procedures 
are intended to encourage straightforward bidding, and it would not be 
possible for a single entity to win support that exceeds the full 
budget. The Commission seeks comment on this proposal. Should the 
Commission impose a different limit instead?

[[Page 15101]]

a. Bid for a Single Area
    80. A bid is an offer to serve all locations in eligible census 
blocks within the indicated minimum biddable area at the indicated 
performance tier and latency combination for a total annual amount of 
support that is not less than the implied annual support at the price 
point percentage specified by the bidder and not more than the reserve 
price. In each round, a bid for a single available biddable area with 
reserve price R consists of two pieces: A T+L weight and a price point 
that is a percentage not less than the current round's clock percentage 
and is less than the previous round's clock percentage. For a given 
round, a biddable area can be included in at most one bid--whether a 
bid on a single area or a package bid on multiple areas--made by a 
bidder, and a bidder can only bid on areas that are in states that the 
bidder selected on its application.
    81. The Commission proposes not to allow a bidder to change the 
performance tier and latency combination in a bid for a particular area 
from round to round. Once a bidder has submitted a bid for an area at a 
particular performance tier and latency combination (which must be a 
performance tier and latency combination for the state for which the 
bidder qualified at the application stage) any bids in subsequent 
rounds by that bidder for the same area must specify the same 
performance tier and latency combination. The Commission seeks comment 
on this proposal.
b. Bid for a Package of Areas
    82. The Commission proposes package bidding procedures that will 
give bidders the option to place bids to serve a bidder-specified list 
of biddable areas, with corresponding bid processing procedures that 
may assign fewer than the full list of areas to the bidder as long as 
the funding associated with the assigned areas is at least equal to a 
bidder-specified percentage of the funding requested for the complete 
list of areas in the package. The Commission proposes to allow a bidder 
to specify a package bid by providing a list of biddable areas, a 
single performance tier and latency combination, a single price point 
for the areas in the list, and a minimum scale percentage for the 
package. The minimum scale percentage must be no higher than a maximum 
value defined by the Commission, which will be less than 100%. Thus, a 
package bid is an offer by the bidder to serve any subset of areas in 
the list at the support amount implied at the bid percentage, provided 
that the ratio of the total implied support of the subset to the total 
implied support of the list meets or exceeds the bidder-specified 
minimum scale percentage.
    83. The Commission proposes that a bidder must bid to serve each 
biddable area in the package bid at the same performance tier and 
latency combination. Moreover, the Commission proposes that every area 
in a package bid must be in the same state. The Commission proposes 
that for a given round, a biddable area can appear in at most one bid--
either a single bid or a package bid--made by a given bidder. A bidder 
may change the minimum scale percentage in any package bid from round 
to round. The Commission seeks comment, as well, on whether it should 
set a limit on the total amount of implied support that may be included 
in a single package. Limiting packages to the biddable areas within a 
state will impose a de facto limit on the total support that may be 
included in a package bid, but the Commission asks whether a limit, 
lower than the maximum possible state-level amount of support, should 
also be implemented.
    84. The Commission also seeks comment on the appropriate upper 
limit of the bidder-specified minimum scale percentage. The Commission 
proposes 75% as its defined maximum of the minimum scale percentage. 
The Commission proposes to use an upper limit less than 100% so that 
small overlaps in the areas included in package bids do not prevent 
support from being assigned to a potentially much larger number of 
areas included in the package bids, which could occur if packages were 
assigned on an all-or-nothing basis.
    85. The proposed package bidding format permits a bidder to ensure 
that it will receive a minimum amount of support equal to the bidder's 
specified minimum scale requirement if the bid is assigned, or no 
support if the bid is not assigned. The Commission seeks comment on the 
proposed package bidding format. Will this package bidding format 
facilitate packages that include areas with diverse costs, population 
densities, and other characteristics, especially considering that the 
Commission proposes not to allow different T+L weights for the areas in 
the package? Would the option to submit package bids be useful to both 
bidders that have small networks and bidders that have large networks?
5. Bids Placed by Proxy Bidding Instructions
    86. The Commission proposes to permit proxy bidding, which could 
reduce bidders' need to submit bids manually every bidding round and 
provide bidders with a safeguard against accidentally failing to submit 
a bid. With proxy bidding, a bidder could submit instructions for the 
system to continue to bid automatically for an area with a specified 
performance tier and latency combination in every round until either 
the clock percentage falls below a bidder-specified proxy amount, the 
bidder intervenes to change its bid, or the area is assigned, whichever 
happens first. Proxy bidding instructions for a single area or a 
package of areas would contain all the information required for these 
bids, and the specified price point percentage would potentially be 
valid for multiple rounds. Proxy bidding instructions will not be 
permitted to include instructions for changes to the minimum scale 
percentage of a package bid nor to the specified area or areas.
    87. During a round, the bidding system will generate a bid at the 
clock percentage on behalf of the bidder as long as the percentage 
specified in the proxy instruction is less than or equal to the current 
clock percentage. If the proxy percentage exceeds the current clock 
percentage but is lower than the prior round's clock percentage, then 
the bidding system will generate a bid at the price point percentage of 
the proxy. These bids would be treated by the auction system in the 
same way as any other bids placed in the auction. During a bidding 
round, a bidder may cancel or enter new proxy bidding instructions. 
Because proxy instructions may expire as the clock percentage descends 
and as areas get assigned, even with proxy bidding, bidders are 
strongly urged to monitor the progress of the auction to ensure that 
they do not need to cancel or adjust their proxy instructions. The 
Commission seeks comment on whether to provide for proxy bidding in 
this way.
    88. Proxy bidding instructions will be treated as confidential 
information and would not be disclosed to the public at any time after 
the auction concludes, because they may reveal cost information that 
would not otherwise be made public (e.g., if proxy bidding instructions 
are not fully implemented because the clock percentage does not fall as 
low as the specified proxy percentage). However, all submitted bids and 
the amount of support awarded for any assigned bid, regardless of 
whether they were placed by the bidder or by the bidding system 
according to proxy bidding instructions, will be publicly disclosed. 
The Commission seeks comment on these proposals.

[[Page 15102]]

6. Activity Rules
    89. The Commission proposes to measure a bidder's bidding activity 
in a round in terms of implied support dollars and to adopt activity 
rules that prevent a bidder's activity in a round from exceeding its 
activity in the previous round.
    90. The Commission proposes that a bidder's activity in a round: 
(1) Be calculated as the sum of the implied support amounts (calculated 
at the bid percentage) for all the areas bid for in the round, and (2) 
not exceed its activity from the previous round. The Commission further 
proposes that a bidder be limited in its ability to switch to bidding 
for support in different areas from round to round. Specifically, a 
bidder's activity in a round from areas that the bidder did not bid on 
at the previous round's clock percentage cannot exceed an amount 
determined by a percentage (the ``switching percentage'') of the 
bidder's total implied support from bids at the previous round's clock 
percentage. The Commission proposes to set this switching percentage at 
20% for the second round of the auction only, at 10% for subsequent 
rounds, and to give OEA the discretion to change the switching 
percentage, with adequate notice, before a round begins. The Commission 
also proposes not to allow any switching once the budget has cleared, 
that is, under this proposal, a bidder would be allowed to bid for an 
area only if the bidder bid for that area at the previous round's clock 
percentage and if that area has not yet been assigned.
    91. The Commission seeks comment on these proposed activity rules. 
In addition, the Commission asks for comment on the appropriate size of 
the switching percentage, and, if it is to be changed across rounds, 
when and how it should be changed. Will the proposed 20/10 switching 
percentage allow a bidder sufficient flexibility to react to other 
bidders' bids from the prior round?

B. Bid Processing

    92. The Commission proposes that once a bidding round closes, the 
bidding system will consider the submitted bids to determine whether an 
additional round of bidding at a lower clock percentage is needed to 
bring the amount of requested support down to a level within the 
available budget. If the total requested support at the clock 
percentage exceeds the budget, another bidding round occurs. In a round 
in which the amount of overall requested support falls to a level 
within the budget (i.e., the budget ``clears''), bid processing will 
take the additional steps of beginning to assign support.
    93. If, after the bids have been processed in the clearing round, 
some areas bid at the clock percentage have not been assigned (e.g., 
because there were multiple bids for an area at the same T+L weight at 
the clock percentage), the bidding system will commence another round 
of bidding to resolve the competition, and rounds will continue with 
bidding for these areas at lower clock percentages.
    94. As a result of these proposed procedures, the bids that can be 
assigned under the budget in the round when the budget clears and in 
any later rounds will determine the areas that will be provided support 
under the Rural Digital Opportunity Fund. At most, one bid per area 
will be assigned support. The specifications of that bid, in turn, 
determine the performance tier and latency combination at which service 
will be provided to the eligible locations in the area. Additional 
details and examples of bid processing will be provided in the 
technical guide.
    95. The Commission seeks comment generally on its proposed approach 
to assigning bids and determining support amounts. The Commission asks 
any commenters supporting an alternative approach to consider the goals 
of the Commission in the Rural Digital Opportunity Fund proceeding, the 
decisions made to date on auction design, and how any suggested 
alternatives would integrate with other aspects of the auction design.
1. Clock Percentage
    96. The Commission proposes that in each of a series of discrete 
bidding rounds, a bidder will be offered an amount of support for an 
area at a specified performance tier and latency combination that is 
determined by the clock percentage for the round and the area's reserve 
price. By bidding at that clock percentage, the bidder indicates that 
it is willing to provide the required service within the bid area in 
exchange for a payment at least as large as that implied by the clock 
percentage and the T+L weight. The opening percentage will determine 
the highest support amount that the bidder will be offered in the 
auction for a given area and performance tier and latency combination.
a. Opening Percentage
    97. The Commission proposes to start the clock percentage at 100% 
plus an additional percentage equal to the largest T+L weight that is 
submitted by any qualified bidder in the auction. Therefore, if any 
applicant is qualified to bid to provide service at the Minimum 
performance tier and high latency--a performance tier and latency 
combination assigned a weight of 90--the Commission proposes that the 
clock percentage will start at 190%. Starting the auction at this level 
will allow bidders at higher T+L weights multiple bidding rounds in 
which to compete for support simultaneously with bidders offering lower 
T+L weights (i.e., higher performance).
    98. The Commission seeks comment on this approach to setting the 
opening percentage, and request that commenters, in considering the 
proposal, bear in mind the Commission's previous decisions to: (1) 
Provide an opportunity for bidders offering different performance 
standards to compete against each other for the budget, and (2) balance 
this approach with the use of performance scoring weights previously 
determined by the Commission.
b. Clock Decrements
    99. The Commission proposes to decrement the clock percentage by 10 
points in each round. However, the Commission also proposes to provide 
OEA with the discretion to change that amount during the auction if it 
appears that a lower or higher decrement would better manage the pace 
of the auction. For example, if bidding is proceeding particularly 
slowly, the Commission may increase the bid decrement to speed up the 
auction, recognizing that bidders have the option of bidding at an 
intra-round price point percentage if the clock percentage falls to a 
percentage corresponding to an amount of support that is no longer 
sufficient. The Commission would begin the auction with a decrement of 
10% and limit any further changes to the decrement to between 5% and 
20%.
    100. The Commission seeks comment on this proposal. Alternatively, 
the Commission seeks comment on using a decrement larger than 10% in 
the early rounds of the auction, when the implied support amounts of 
many bidders are capped at the reserve price and therefore are not 
changing from round to round. The Commission also seeks comment on 
circumstances under which it should consider changing the decrement 
during the auction.
2. Bid Processing After a Clock Round Before the Clearing Round
a. Aggregate Cost at the Clock Percentage
    101. After each round until the budget has cleared, the bidding 
system will

[[Page 15103]]

calculate an ``aggregate cost,'' an estimate of what it would cost to 
assign support at the clock percentage to the bids submitted in the 
round, in order to determine whether the budget will clear in that 
round. More precisely, the aggregate cost is the sum of the implied 
support amounts for all the areas receiving bids at the clock 
percentage for the round, evaluated at the clock percentage. The 
calculation counts each area only once, even if the area receives bids, 
potentially including package bids, from multiple bidders. If there are 
multiple bids for an area at different performance tier and latency 
combinations, the calculation uses the bid with the highest implied 
support amount. If the aggregate cost for the round exceeds the budget, 
the bidding system will implement another round with a lower clock 
percentage. The Commission seeks comment on this proposed approach.
b. Clearing Determination
    102. The first round in which the aggregate cost is less than or 
equal to the overall support budget is considered the ``clearing 
round.'' In the clearing round, the Commission proposes to have the 
bidding system further process bids submitted in the round and, if 
necessary, bids submitted at the previous round's clock percentage, to 
determine those areas that can be assigned and the support amounts 
winning bidders will receive. Once the clearing round has been 
identified, the system no longer calculates the aggregate cost, even if 
there are subsequent bidding rounds. The Commission seeks comment on 
this proposal.
3. Bid Processing in the Clearing Round
    103. In the clearing round, the bidding system will consider bids 
in more detail to determine which can be identified as winning, or 
``assigned,'' bids in that round; the ``second prices'' to be paid for 
winning bids; and which bids will carry over for bidding in an 
additional bidding round or rounds. The Commission addresses the 
proposed procedures for these determinations.
a. Assignment
    104. The Commission proposes that once bid processing has 
determined that the current round is the clearing round, the bidding 
system will begin to assign winning bids, awarding support to at most 
one bid for a given area. The system considers all the bids submitted 
in the round in ascending order of price point percentage to determine 
which bids can be assigned within the budget. Bids at the same price 
point would be considered in ascending order of T+L weight.
    105. As it considers bids in ascending price point percentage order 
and then in ascending T+L weight order, the system assigns a bid with a 
given T+L weight if no other bid for the same area has already been 
assigned, as long as the area did not receive bids at the clock 
percentage at the same or at a lower T+L weight and the areas to be 
assigned in a package bid meet the bid's minimum scale percentage. The 
bidding system also checks to ensure that sufficient budget is 
available to assign the bid.
    106. To determine whether there is sufficient budget to support a 
bid, the bidding system keeps a running sum of support costs. This cost 
calculation at price point percentages between and including the 
current and previous clock percentages extends the concept of the 
aggregate cost calculation (which identifies the clearing round) to 
take into account, at sequential intermediate price points, the cost of 
bids that have been assigned so far and the estimated cost for areas 
bid at the clock percentage that have not been assigned.
    107. The Commission proposes that at each ascending price point 
increment, starting at the clock percentage, the running cost 
calculation is the sum of support for three types of bids: (1) For 
assigned bids for which there were no other bids for support for their 
respective areas at price points lower than the currently-considered 
price point percentage, the system calculates the cost of providing 
support as the amount of support implied by the currently considered 
price point, (2) for assigned bids for areas that did receive other 
bids at price points lower than the currently-considered price point, 
support is generally calculated as the amount implied by the next-
higher price point at which the area received a bid (where next-higher 
is relative to the price point of the assigned bid, not the currently-
considered price point), and (3) bids at the clearing round's clock 
percentage that have not been assigned are evaluated as they were in 
the pre-clearing aggregate cost calculation: Only one bid per area is 
included in the calculation, namely, the bid with the highest implied 
support amount (i.e., the lowest T+L weight) evaluated at the clock 
percentage.
    108. Once the system has determined which of the bids submitted in 
the round are assigned, it then determines the highest price point 
percentage at which the total support cost of the assigned bids does 
not exceed the budget (the ``clearing price point''). There will be no 
assigned bids at price point percentages above the clearing price 
point.
    109. The Commission further proposes that, once the system has 
processed all the bids submitted in the round, if the system has 
determined that the clearing price point is equal to the clock 
percentage of the previous round and there is still available budget, 
the system will proceed to consider bids submitted at the clock 
percentage of the previous round. These carried-forward bids will be 
considered in ascending order of T+L weights, and bid-specific pseudo-
random numbers will be used to break ties. This process will be 
addressed in more detail in the technical guide.
b. Support Amount Determination
    110. To determine the support amount for an assigned area, the 
system considers whether there were any other bids for the area in the 
round below the clearing price point. If there were no other bids below 
the clearing price point, the assigned area is supported at the 
clearing price point.
    111. If a bid is assigned for an area that received more than one 
bid in the round below the clearing price point, the assigned bid is 
generally supported at the next higher price point percentage at which 
there is a bid for the area. For example, if there are two bids for an 
area below the clearing price point, the lower bid is supported at the 
bid percentage of the higher bid.
    112. For any carried-forward bids assigned in the clearing round, 
the support amounts will be calculated based on the clock percentage of 
the previous round. A carried-forward bid can be assigned in the 
clearing round only if the system has determined that the clearing 
price point is equal to the clock percentage of the previous round.
    113. The Commission seeks comment on these assignment and pricing 
proposals for the clearing round.
4. Bids and Bid Processing if the Budge Cleared in a Previous Round
a. Carried-Forward and Acceptable Bids
    114. Once the budget clears, further bidding resolves competition 
for areas that were bid at the clock percentage of the previous round 
and have not yet been assigned. Therefore, bidding rounds continue 
after the clearing round at lower clock percentages, but bids are 
restricted to areas for which the bidder had bid at the previous 
round's clock percentage but which could not be assigned. Such bids may 
be for a given unassigned area that received multiple single bids, 
package bids that were not assigned because the bidder's minimum

[[Page 15104]]

scale percentage for the package was not met, or remainders of package 
bids--unassigned areas that formed part of package bids that were 
partially assigned.
    115. The Commission proposes that these bids at the clock 
percentage for unassigned areas will carry forward automatically to the 
next bidding round at the previous round's clock percentage, since the 
bidder had previously accepted that percentage. In the round into which 
the bids carry forward, the bidder may also bid for support for these 
areas at the current round's clock percentage or at intermediate price 
points. In rounds after the clearing round, a bidder cannot switch to 
bidding for an area for which it did not bid at the previous round's 
clock percentage.
    116. While bids for unassigned packages will carry forward at the 
previous clock percentage, the bidder for such a package may group the 
bids for the areas in the package into smaller packages and bid on 
those smaller packages at the current round's percentages. However, the 
unassigned remainders of package bids partially assigned to the bidder 
will carry forward as individual area bids. Any bids the bidder places 
for the remainder areas at the new round's percentages must be bids for 
individual areas--that is, the bidder cannot create a new package of 
any of the unassigned remainders.
    117. The Commission proposes that proxy instructions, if at a price 
point percentage below the clock percentage of the previous round, 
generally continue to apply in rounds after the clearing round under 
the same conditions that apply to other bids. For package bids made by 
proxy that are only partially assigned to the bidder, the proxy 
instructions continue to apply to the unassigned areas in the package 
bid. That is, the price point percentage specified in the proxy 
instructions would apply to bids for the individual remainder areas.
b. Bid Processing
    118. When processing the bids of a round after the clearing round, 
the system considers bids for assignment and support amount 
determination in ascending order of T+L weight and then in ascending 
order of price point percentage. The system assigns a bid with a given 
T+L weight if the area has not already been assigned, as long as the 
area did not receive bids at the clock percentage at the same or at a 
lower T+L weight and, in the case of a package bid, as long as the 
areas to be assigned in the package meet the bid's minimum scale 
percentage.
    119. To determine the support amount for an assigned area, the 
system considers whether there were any other bids for the area in the 
round at the same or at a lower T+L weight. If there were no other 
bids, the assigned area is supported at the clock percentage of the 
previous round, consistent with the second-price rule. If a bid is 
assigned for an area that received more than one bid in the round at 
the same or at a lower T+L weight, the assigned bid is generally 
supported at the next higher price point percentage at which there is a 
bid for the area at the same or at a lower T+L weight.
    120. If, after the bids of the round have been processed, one or 
more of the areas with bids at the clock percentage have not yet been 
assigned, there will be another bidding round at a lower clock 
percentage, with the same restrictions on bids and following the same 
assignment and pricing procedures.
    121. The Commission seeks comment on these proposed procedures for 
assigning bids and determining support amounts in rounds after the 
clearing round.
c. Closing Conditions
    122. The auction will end once the overall budget has cleared if 
all areas that were bid at the round's clock percentage were assigned 
during the bid processing of the round.
d. Availability of Auction-Related Information
    123. The Commission proposes that the public will have access to 
certain auction information, while auction participants will have 
secure access to additional, non-public information.
(i) Information Available to Bidders During the Auction
    124. The Commission proposes to limit the disclosure of information 
regarding bidding in the auction. After each round ends and before the 
next round begins, the Commission proposes to make the following 
information available to individual bidders:
     The clock percentage for the upcoming round.
     The aggregate cost at the previous round's clock 
percentage up until the budget clears.
    [cir] The aggregate cost at the clock percentage is not disclosed 
for the clearing round or any later round.
     The bidder's activity, based on all bids in the previous 
round, the implied support of the bidder's bids at the clock 
percentage, and the implied support of the bidder's carried-forward 
bids.
    [cir] In rounds after the clearing round, the bidder's assigned 
support will also be available.
     Summary statistics of the bidder's bidding in the previous 
round, including:
    [cir] The number of areas for which it bid, at the clock percentage 
and at other price points, and the number of areas for which proxy 
instructions are in effect for future rounds.
    [cir] A list of the bidder's carried-forward bids.
    [cir] After the clearing round, areas and support amounts that have 
been assigned to the bidder.
     For all eligible areas in all states, including those in 
which the bidder was not qualified to bid or is not bidding, whether 
the number of bidders that placed bids at the previous round's clock 
percentage was 0, 1, or 2 or more.
    [cir] For the clearing round and any subsequent round, bidders are 
also informed about which areas have been assigned.
    125. Prior to each round, the Commission also proposes to make 
available to each bidder the implied support amounts at the round's 
clock percentage for the areas and performance tier and latency 
combinations for which the bidder is eligible to bid.
    126. In addition to informing bidders whether the number of bidders 
that placed bids at the previous round's clock percentage was 0, 1, or 
2 or more, the Commission seeks comment on making available to bidders 
the lowest T+L weight of any bid for each area in which there were 2 or 
more bids at the round's clock percentage. This information could 
encourage bidders with relatively higher T+L weights to move some bids 
to areas where they may be more likely to win support, thereby 
increasing the number of areas receiving winning bids. Commenters 
should also consider whether this modification might negatively impact 
the auction, such as by risking collusion or discouraging participation 
by bidders with higher T+L weights. The Commission seeks comment on how 
this proposal could impact competition in the auction or affect 
potential bidders' interest.
(ii) Application Information Procedures
    127. The Commission proposes to withhold from the public, as well 
as other applicants, the following information related to the short-
form application process at least until the auction closes and the 
results are announced:
     The state(s) selected by an applicant.

[[Page 15105]]

     The state(s) for which the applicant has been determined 
to be qualified to bid.
     The performance tier and latency combination(s) selected 
by an applicant.
     The spectrum access attachment submitted with the short-
form application.
     The performance tier and latency combination(s) for which 
the applicant has been determined to be eligible to bid and the 
associated weight for each combination.
     An applicant's responses to the questions in Appendix A 
and any supporting documentation submitted in any attachment(s) that 
are intended to demonstrate an applicant's ability to meet the public 
interest obligations for each performance tier and latency combination 
that the applicant has selected in its application.
     Any financial information contained in an applicant's 
short-form application for which the applicant has requested 
confidential treatment under the abbreviated process.
     An applicant's letter of interest from a qualified bank 
that the bank would provide a letter of credit to the applicant.

All other application information that is not subject to a request for 
confidential treatment under section 0.459 of the Commission's rules 
would be publicly available upon the release of the public notice 
announcing the status of submitted short-form applications after 
initial review.
    128. The Commission proposes to permit any applicant to use the 
abbreviated process under section 0.459(a)(4) to request confidential 
treatment of the financial information contained in its short-form 
application. The abbreviated process would allow all applicants to 
answer a simple yes/no question on FCC Form 183 as to whether they wish 
their information to be withheld from public inspection. The Commission 
will not grant requests to withhold financial data that applicants 
elsewhere disclose to the public, and that information will be 
disclosed in the normal course.
    129. The Commission would withhold information on the progress of 
the auction from the general public until after the close of bidding 
when auction results are announced. Accordingly, during the auction, 
the public would not have access to such interim information as the 
current round, clock percentage, aggregate cost, or any summary 
statistics on bidding or assigned bids that may reveal or suggest the 
identities of bidders associated with any specific bids.
    130. After the close of bidding and announcement of auction 
results, the Commission proposes to make publicly available all short-
form application information and bidding data, except for an 
applicant's operational information, letter of interest, confidential 
financial information, and proxy bidding instructions.
    131. The Commission seeks comment on its proposals to limit the 
availability of bidding information during the auction and to adopt 
limited information procedures for the Rural Digital Opportunity Fund 
auction concerning the application and bidding data that will be 
publicly available before, during, and after the auction.

Proposed Auction 904 Short-Form Application Operational Questions

    132. Operational History.
    1. Has the applicant previously deployed consumer broadband 
networks (Yes/No)? If so:
    a. Provide the date range when broadband service was offered and in 
which state(s) service was offered. Specify dates for each state.
    b. Provide an estimate of how many subscribers are currently served 
in each state. (If the applicant is no longer providing service in any 
state, estimate the number of customers that were served at the 
beginning of the last full year that the applicant did provide 
service.)
    c. What services (e.g., voice, video, broadband internet access) 
were or are provided in each state?
    d. List any data-usage limit (data cap) used as part of existing 
broadband access services.
    e. What specific technologies and network architecture are used for 
last-mile; middle-mile/backhaul; and internet interconnections?
    f. What are the deployed voice technologies and how are these voice 
services implemented?
    133. Proposed Network(s) Using Funding from the Rural Digital 
Opportunity Fund Auction.
    Answer for each state the applicant selected in its application:
    2. Network Infrastructures:
    a. Briefly describe from a high-level network perspective which 
network architectures and technologies will be used in the applicant's 
proposed deployment. If there are variations by state, region, or other 
criteria, describe each network or location.
    b. Last-mile: What are the relevant topologies, technologies and 
protocols and the corresponding industry standards for the last-mile 
network infrastructure in the applicant's proposed deployment?
    c. Middle-Mile/Backhaul: What are the relevant topologies, 
technologies and protocols and the corresponding industry standards for 
the middle-mile/backhaul network infrastructure in the applicant's 
proposal?
    d. Internet Access: What are the relevant topologies, technologies 
and protocols and the corresponding industry standards for the internet 
access network infrastructure in the applicant's proposal? This is the 
connection to major IXPs, transit providers, etc.
    e. If the applicant is proposing to use non-standard technologies 
and protocols, the applicant should identify which vendor(s) and 
product(s) are being considered and provide links to the vendors' 
websites and to publicly available technical specifications of the 
product(s).
    3. Voice Services: Briefly describe the anticipated system(s) that 
will be used to provide voice services to the applicant's subscribers. 
Examples of such solutions could include: (1) Internally designed and 
operated; (2) provided by a Managed Voice Service Provider; or (3) or 
an OTT (Over-The-Top) solution available to subscribers via the 
applicant. If the applicant is considering multiple solutions, provide 
information on each one and identify possible vendors or service 
providers.
    4. Network Performance:
    a. Can the applicant demonstrate that the technology and the 
engineering design will fully support the proposed performance tier, 
latency and voice service requirements for the requisite number of 
locations during peak periods (Yes/No)?
    b. Briefly describe the capabilities of the network technologies 
that will enable performance tier (speed and usage allowance), latency 
and (where applicable) voice service mean opinion score (MOS) 
requirements to be met. This can include traffic management, Quality of 
Service, over-building/scalability, using equipment that easily allows 
upgrades and other techniques.
    c. State the target or design peak period over-subscription 
ratio(s) for the last-mile, middle-mile/backhaul and internet 
interconnection that will be used. Additionally, describe the basic 
assumptions and calculation that will be used in determining these 
ratios.
    d. What general rules-of-thumb will be used to determine if any 
portion of the network infrastructure needs to be improved, upgraded or 
expanded to ensure the network is able to meet the required speed, 
latency and where required voice quality? For example, taking action 
when (1) when middle-mile link average peak period load is

[[Page 15106]]

greater than 70%; when a link peak period load exceeds 95% more than 10 
times; when a router's average peak period processing utilization 
exceeds 70%; when an internet access link load exceeds 75% for a 
specified time period; when call setup, call drop, call completion 
rates meet or exceed applicant targets.
    e. For fixed broadband wireless access networks, describe how the 
proposed frequency band(s) and technology attributes, for both last 
mile and backhaul, will achieve the performance tier(s) and latency 
requirements to all locations. Specifically, describe how the planned 
frequency bands, base station configuration, channel bandwidths, 
traffic assumptions and propagation assumptions and calculations yield 
sufficient capacity to all the planned locations.
    5. Network Buildout: Can the applicant demonstrate that all the 
network buildout requirements to achieve all service milestones can be 
met (Yes/No)? The applicant will be required to submit a detailed 
project plan in the long-form application if it is named as a winning 
bidder. Describe concisely the information that the applicant would 
make available in such a detailed project plan.
    6. Network Equipment, Consultants and Deployment Vendors: For the 
proposed performance tier and latency combination, can the applicant 
demonstrate that potential vendors, integrators and other partners are 
able to provide commercially available and fully compatible network 
equipment/systems, interconnection, last mile technology and customer 
premise equipment (CPE) at cost consistent with applicant's buildout 
budget and in time to meet service milestones (Yes/No)? Describe 
concisely the information and sources of such information that the 
applicant could make available to support this response.
    7. Network Management:
    a. Briefly describe the method(s) that will be used to monitor, 
operate, problem resolution, provision and optimize the network and 
associated services such as voice. Identify if the proposed solution is 
internally developed and operated; expands existing systems; uses a 
third-party network management provider; or is some variant or 
combination of these methods.
    b. Remember to include how voice operations will be monitored, 
operated, problems resolved, provisioned and optimized as appropriate.
    c. If the applicant will expand existing network management 
systems, describe how the current system provides successful 
operations.
    d. If the applicant will use third-party network management 
provider, identify any providers the applicant is currently 
considering.
    e. If the applicant will develop, deploy and operate a new system 
can the applicant demonstrate that it can provide internally developed 
operations systems for provisioning and maintaining the proposed 
network including equipment and segments, interconnections, CPE and 
customer services at cost consistent with applicant's buildout budget 
and in time to meet service milestones (Yes/No)? If not, can the 
applicant demonstrate that potential vendors, integrators, and other 
partners are able to provide commercially available and fully 
compatible operations systems and tools for provisioning and 
maintaining the proposed network at cost consistent with applicant's 
buildout budget and in time to meet service milestones (Yes/No)? 
Describe concisely the information and sources of such information that 
the applicant could make available to support these responses.
    8. Satellite Networks: If the applicant is using satellite 
technologies, identify which satellites would be used, and describe 
concisely the total satellite capacity available, that is, capacity 
that is not currently in use for existing subscribers.

                                       Proposed Auction 904 Spectrum Chart
----------------------------------------------------------------------------------------------------------------
                                              Paired licensed              Unpaired licensed      Unlicensed
                                 -------------------------------------------------------------------------------
      Spectrum band/service          Uplink freq.,      Downlink freq.,    Uplink & downlink
                                         (MHz)               (MHz)           freq., (MHz)      Unlicensed, (MHz)
----------------------------------------------------------------------------------------------------------------
600 MHz.........................  663-698...........  617-652...........  ..................  ..................
Lower 700 MHz...................  698-716...........  728-746...........  716-728 (Downlink   ..................
                                                                           only).
Upper 700 MHz...................  776-787...........  746-757...........  ..................  ..................
800 MHz SMR.....................  813.5/817-824.....  858.5/862-869.....  ..................  ..................
Cellular........................  824-849...........  869-894...........  ..................  ..................
Broadband PCS...................  1850-1915.........  1930-1995.........  ..................  ..................
AWS-1...........................  1710-1755.........  2110-2155.........  ..................  ..................
AWS (H Block)...................  1915-1920.........  1995-2000.........  ..................  ..................
AWS-3...........................  1755-1780.........  2155-2180.........  1695-1710 (Uplink   ..................
                                                                           only).
AWS-4...........................  ..................  ..................  2000-2020, 2180-    ..................
                                                                           2200, (Downlink
                                                                           only).
BRS/EBS.........................  ..................  ..................  2496-2690.........  ..................
WCS.............................  2305-2315.........  2350-2360.........  2315-2320, 2345-    ..................
                                                                           2350.
CBRS (3.5 GHz)..................  ..................  ..................  3550-3700.........  ..................
UMFUS (terrestrial).............  ..................  ..................  24,250-24,450,      ..................
                                                                           24,750-25,250,
                                                                           27,500-28,350,
                                                                           37,600-38,600,
                                                                           38,600-40,000,
                                                                           47,200-48,200.
                                 ----------------------------------------
70-80-90 GHz unpaired & 70-80       Point-to-Point Pairs for 70-80 GHz    71,000-76,000,      ..................
 GHz paired (point-to-point           71,000-76,000 with 81,000-86,000     81,000-86,000,
 terrestrial).                                                             92,000-94,000,
                                                                           94,100-95,000.
                                 ----------------------------------------
TV White Spaces.................  ..................  ..................  ..................  54-72, 76-88, 174-
                                                                                               216, 470-698.
900 MHz.........................  ..................  ..................  ..................  902-928.
2.4 GHz.........................  ..................  ..................  ..................  2400-2483.5.
5 GHz...........................  ..................  ..................  ..................  5150-5250, 5250-
                                                                                               5350, 5470-5725,
                                                                                               5725-5850.

[[Page 15107]]

 
24 GHz..........................  ..................  ..................  ..................  24,000-24,250.
57-71 GHz.......................  ..................  ..................  ..................  57,000--71,000.
Ku Band (satellite).............  12,750-13,250,      10,700-12,700.....  ..................  ..................
                                   14,000-14,500.
Ka Band (satellite).............  27,500-30,000.....  17,700-20,200.....  ..................  ..................
V Band (satellite)..............  47,200-50,200,      37,500-42,000.....  ..................  ..................
                                   50,400-52,400.
----------------------------------------------------------------------------------------------------------------

Abbreviations
AWS Advanced Wireless Services
BRS/EBS Broadband Radio Service/Education Broadband Service
CBRS Citizens Broadband Radio Service
PCS Personal Communications Service
SMR Specialized Mobile Radio
 UMFUS Upper Microwave Flexible Use Service
WCS Wireless Communications Service

V. Procedural Matters

    134. Supplemental Initial Regulatory Flexibility Analysis. As 
required by the Regulatory Flexibility Act of 1980 (RFA), the 
Commission prepared an Initial Regulatory Flexibility Analysis (IRFA) 
in connection with the Rural Digital Opportunity Fund NPRM, 84 FR 
43543, August 21, 2019, and a Final Regulatory Flexibility Analysis 
(FRFA) in connection with the Rural Digital Opportunity Fund Order. The 
Commission sought written public comment on the proposals in the Rural 
Digital Opportunity Fund NPRM, including comments on the IRFA. The 
Commission did not receive any comments in response to the Regulatory 
Flexibility Analyses.
    135. The IRFA for the Rural Digital Opportunity Fund NPRM and the 
FRFA for the Rural Digital Opportunity Fund Order set forth the need 
for and objectives of the Commission's rules for the Rural Digital 
Opportunity Fund auction; the legal basis for those rules; a 
description and estimate of the number of small entities to which the 
rules apply; a description of projected reporting, recordkeeping, and 
other compliance requirements for small entities; steps taken to 
minimize the significant economic impact on small entities and 
significant alternatives considered; and a statement that there are no 
federal rules that may duplicate, overlap, or conflict with the rules. 
The proposals in the document do not change any of those descriptions. 
However, because the Public Notice proposes specific procedures for 
implementing the rules proposed in the Rural Digital Opportunity Fund 
NPRM and adopted in the Rural Digital Opportunity Fund Order, the 
Commission has prepared a supplemental IRFA seeking comment on how the 
proposals in the document could affect those Regulatory Flexibility 
Analyses.
    136. The proposals in the document include procedures for awarding 
Rural Digital Opportunity Fund support through a multi-round, reverse 
auction and the availability of application and auction information to 
bidders and to the public during and after the auction. The document 
also includes detailed proposed bidding procedures for a descending 
clock auction, including bid collection, clock prices, proposed bid 
format, package bidding format, proxy bidding, bidder activity rules, 
bid processing, and how support amounts are determined. The bidding 
procedures proposed are designed to facilitate the participation of 
qualified service providers of all kinds, including small entities, in 
the Rural Digital Opportunity Fund program, and to give all bidders, 
including small entities, the flexibility to place bids that align with 
their intended network construction or expansion, regardless of the 
size of their current network footprints. In addition, the document 
specifically seeks comment on information the Commission could make 
available to help educate parties that have not previously participated 
in a Commission auction, and on whether OEA and the Bureau should work 
with the Commission's Office of Communications Business Opportunities 
to engage with small providers.
    137. To implement the rules adopted by the Commission in the Rural 
Digital Opportunity Fund Order for the pre-auction process, the 
document proposes specific procedures and requirements for applying to 
participate and becoming qualified to bid in the Rural Digital 
Opportunity Fund auction, including designating the state(s) in which 
an applicant intends to bid and providing operational and financial 
information designed to allow the Commission to assess the applicant's 
qualifications to meet the Rural Digital Opportunity Fund public 
interest obligations for each area for which it seeks support. The 
document also makes proposals that address the types of further 
information that may be required in the post-auction long-form 
application that a winning bidder must file to become authorized to 
receive support. The application procedures proposed are intended to 
require applicants to submit enough information to permit the 
Commission to determine their qualifications to participate in the 
Rural Digital Opportunity Fund auction, without requiring so much 
information that it is cost-prohibitive for any entity, including small 
entities, to participate.
    138. The Commission seeks comment on how the proposals in the 
document could affect the IRFA for the Rural Digital Opportunity Fund 
NPRM or the FRFA in the Rural Digital Opportunity Fund Order. Such 
comments must be filed in accordance with the same filing deadlines for 
responses to the Public Notice and have a separate and distinct heading 
designating them as responses to the IRFA and FRFA.
    139. Ex Parte Rules. The proceeding has been designated as a 
``permit-but-disclose'' proceeding in accordance with the Commission's 
ex parte rules. Persons making ex parte presentations must file a copy 
of any written presentation or a memorandum summarizing any oral 
presentation within two business days after the presentation (unless a 
different deadline applicable to the Sunshine period applies). Persons 
making oral ex parte presentations are reminded that memoranda 
summarizing the presentation must (1) list all persons attending or 
otherwise participating in the meeting at which the ex parte 
presentation was made, and (2) summarize all data presented and 
arguments made during the

[[Page 15108]]

presentation. If the presentation consisted in whole or in part of the 
presentation of data or arguments already reflected in the presenter's 
written comments, memoranda or other filings in the proceeding, the 
presenter may provide citations to such data or arguments in his or her 
prior comments, memoranda, or other filings (specifying the relevant 
page and/or paragraph numbers where such data or arguments can be 
found) in lieu of summarizing them in the memorandum. Documents shown 
or given to Commission staff during ex parte meetings are deemed to be 
written ex parte presentations and must be filed consistent with rule 
1.1206(b). In proceedings governed by rule 1.49(f) or for which the 
Commission has made available a method of electronic filing, written ex 
parte presentations and memoranda summarizing oral ex parte 
presentations, and all attachments thereto, must be filed through the 
electronic comment filing system available for that proceeding, and 
must be filed in their native format (e.g., .doc, .xml, .ppt, 
searchable .pdf). Participants in this proceeding should familiarize 
themselves with the Commission's ex parte rules.

Federal Communications Commission.
Cecilia Sigmund,
Federal Register Liaison Officer Office of the Secretary.
[FR Doc. 2020-05171 Filed 3-16-20; 8:45 am]
 BILLING CODE 6712-01-P