700,000 unserved rural homes will now be connected. The cost, $1.488B, just over $2,000/home, startled me. Rural builds are expensive; I was involved in one in Vermont that came in over $4,000 home. $2,000 is half or less of the costs in the CAF program for the big telcos or New York State's separate program. The government saved $billions.

Nearly all will have speeds of 25 megabits or more. Half will receive 100 megabits. Some will get gigabit fiber. About 1/4th will receive Internet from a Viasat satellite, which keeps getting better. Bids were rated by the speeds offered, with a preference for higher speeds. Favoring faster service in the bidding process paid off. 

Almost half the money went to independent wireless operators, WISPs. Rural electric coops also are deeply involved. The traditional telcos won few of the bids.

For a decade, I've been enormously skeptical about "reverse auctions" for extremely rural broadband. The FCC solved that problem. At first glance, writing rules that allowed the WISPs to bid was the primary driver of the unexpected results.

Robert Pepper deserves much of the credit for the $billion saving. He championed WISPs more than a decade ago at the FCC. Because most are small and do not publicly present results, the number of homes served by WISPs isn't known. 

The WISPs really came through for the budget.

 CONNECT AMERICA FUND AUCTION TO EXPAND BROADBAND TO OVER 700,000 RURAL HOMES AND BUSINESSES

Auction Allocates $1.488 Billion To Close the Digital Divide

  --

WASHINGTON, August 28, 2018—Over 700,000 rural homes and small businesses will gain access to high-speed Internet service for the first time through the Federal Communications Commission’s Connect America Fund Phase II auction, auction results released today show, and more than half of those 713,176 locations will have service available with download speeds of at least 100 megabits per second.

The auction allocated $1.488 billion in support to be distributed over the next 10 years to expand rural broadband service in unserved areas in 45 states.  A total of 103 providers won support from the Connect America Fund to expand broadband in rural areas where, absent this funding, this type of broadband expansion and ongoing service would not be economically feasible.

“The successful conclusion of this first-of-its kind auction is great news for the residents of these rural communities, who will finally be able to share in the 21st-century digital opportunities that broadband provides,” said FCC Chairman Ajit Pai.  “By tapping the mechanisms of the marketplace, the Phase II auction served as the most appropriate and cost-effective way to allocate funding for broadband in these unserved communities, bringing the highest-quality broadband services to the most consumers at the lowest cost to the ratepayer.”

The auction encouraged innovation and deployment of robust service by giving providers the flexibility to use any broadband technology to meet the FCC’s buildout and performance standards for fixed service.  The auction design included a weighted preference for service with higher speeds, higher usage allowances, and lower latency.

As a result, 53% of all homes and businesses served with support from the auction will have broadband available with download speeds of at least 100 megabits per second.  19% will have gigabit service available.  And 711,389 locations—all but 0.25%—will have at least 25 Mbps service available, more than twice the 10 Mbps minimum standard for the Connect America Fund program.

The auction also unleashed robust price competition that means more locations will be served at less cost to Americans who pay into the Fund.  Although the 713,176 locations assigned had an initial reserve price of $5 billion over the next decade, the final price tag to cover these locations is now only $1.488 billion.

Providers must build out to 40 percent of the assigned homes and businesses in a state within three years of becoming authorized to receive support.  Buildout must increase by 20 percent in each subsequent year, until complete buildout is reach at the end of the sixth year.

The Connect America Fund Phase II auction is part of a broader effort by the FCC to close the digital divide in rural America.  In addition to the funding that will provided by this auction, the Commission is working toward the launch of a $4.53 billion Mobility Fund Phase II auction to expand 4G LTE wireless coverage throughout rural America.  And the Connect America Fund is in the midst of providing over $9 billion over a six-year period for rural broadband in areas served by large carriers. 

In addition to modernizing its support programs, the FCC is also working to reduce the cost of broadband deployment by eliminating needless regulatory barriers and by freeing up more spectrum for wireless broadband.

Following are the results of the Connect America Fund Phase II auction by state. A separate chart below lists winning bidders. More information is available at https://www.fcc.gov/auction/903.  A map of winning bids is available at https://www.fcc.gov/reports-research/maps/caf2-auction903-results/

 

Paige Pearson Meyer at 605.275.6300

 

WINNING BIDDERS

 

Bidder

Total Assigned Support

Locations

States

3E8 Broadband Solutions, LLC

$3,621,847

811

1

Air Link Rural Broadband, LLC

$11,371,438

2,321

1

Allen's T.V. Cable Service, Inc.

$1,776,733

794

1

AMG Technology Investment Group LLC

$281,283,794

100,661

6

ArisWave Consortium

$12,298,811

7,680

5

Armstrong Telephone Company - Northern Division

$2,642,413

1,949

1

Barry Electric Cooperative

$6,103,454

2,308

1

BEK Communications Cooperative

$1,182,155

534

1

Ben Lomand Communications, LLC

$333,797

171

1

Benton Ridge Telephone Company

$52,371,819

23,957

3

Bloosurf, LLC

$5,468,497

5,091

2

Broadband Corp

$428,117

128

1

Bruce Telephone Company, Inc.

$177,933

34

1

Cal.net, Inc.

$50,516,652

20,859

1

California Internet, L.P.

$87,832,403

11,845

2

Casey Mutual Telephone Company

$244,923

107

1

Chariton Valley Communications Corporation

$4,179,666

847

1

Cincinnati Bell Inc.

$1,098,830

342

2

Citynet LLC

$6,517,708

898

1

ClearSKY Systems, Inc.

$127,414

207

1

Commnet Wireless, LLC

$79,941,691

31,824

6

Computer 5 Inc. d/b/a LocalTel Communications

$6,847,092

1,910

1

Consolidated Telephone Company

$934,934

358

1

Consortium 903

$5,357,649

13,657

1

Crocker Communications, Inc.

$1,193,077

404

1

Crystal Automation Systems, Inc.

$27,299,087

17,610

1

Declaration Networks Group, Inc

$6,784,141

5,383

2

Echo Wireless Broadband, Inc.

$5,475,911

1,717

2

Farmers Mutual Telephone Company

$348,992

163

1

Federated Telephone Cooperative

$1,431,039

808

1

Fidelity Communications Company

$72,827

19

2

Fond du Lac Reservation Business Committee

$55,011

13

1

Frontier Communications Corporation

$51,553

23

1

Garden Valley Telephone Company

$880,346

95

1

Gila Local Exchange Carrier, Inc.

$104,499

29

1

Halstad Telephone Company

$19,635

7

1

Hankins Information Technology

$1,911,329

1,083

1

Hanson Communications, Inc.

$205,818

35

1

Hardy Telecommunications, Inc

$47,435

7

1

Hawaiian Telcom, Inc.

$18,160,638

3,936

1

Hilliary Communications Consortium

$3,992,041

1,335

2

HolstonConnect, LLC

$535,417

517

1

Horry Telephone Cooperative, Inc.

$233,490

80

1

IdeaTek Telcom, LLC

$6,186,882

2,490

1

Illinois Electric Cooperative

$2,276,419

804

1

Independent Networks, Inc.

$288,834

123

1

Interstate Telecommunications Cooperative, Inc.

$552,330

209

1

Inventive Wireless of Nebraska, LLC

$5,240,646

1,692

3

Jaguar Communication, Inc

$510,588

672

1

JCWIFI.com LLC

$486,424

175

1

Johnson Telephone Company

$81,273

47

1

Lake Region Technology & Communications, LLC

$4,024,501

2,247

1

LTD Broadband LLC

$1,264,673

1,407

5

Maquoketa Valley Rural Electric Cooperative

$2,262,039

1,107

1

Mark Twain Communications Company

$3,053,366

676

1

Mercury Wireless

$4,610,330

11,092

5

Meriwether Lewis Connect LLC

$1,183,627

290

1

MGW Networks, LLC

$417,807

238

1

Midcontinent Communications

$38,902,342

9,371

3

Mid-States Services, LLC

$1,868,060

358

1

Mountain West Technologies Corporation

$2,658,057

550

1

Mutual Telephone Company of Sioux Center, Iowa

$627,920

191

1

NBVDS Investment, L.L.C.

$2,776,942

667

1

NE Colorado Cellular, Inc.

$3,097,732

807

3

Newmax, LLC dba Intermax Networks

$11,556,872

7,952

2

Northern Arapaho Tribal Industries

$4,070,664

849

1

Orange County REMC

$10,200,496

4,046

1

Otelco, Inc.

$921,505

772

1

Paul Bunyan Rural Telephone Cooperative

$1,313,543

315

1

PC Telcorp, Inc.

$387,303

33

1

Perry-Spencer Rural Telephone Cooperative, Inc.

$1,182,426

359

1

Pine Cellular Phones, Inc.

$4,695,551

1,979

1

Plains internet, LLC

$6,153,040

4,642

3

Red Spectrum Communications LLC

$521,715

185

1

Redwire, Inc.

$4,766,846

8,041

1

Roseau Electric Cooperative, Inc.

$2,081,770

326

1

RTC Communications Corp

$1,326,394

1,203

1

Rural Electric Cooperative Consortium

$186,022,490

66,322

8

Shawnee Communications, Inc.

$1,714,708

567

1

Sunset Digital Communications, Inc.

$29,575,007

9,093

2

SW DinehNet LLC

$2,038,738

869

1

SyncWave, LLC

$24,844

21

1

Tombigbee Communications, LLC

$1,691,879

279

1

Total Highspeed LLC

$640,560

386

1

Townes Wireless, Inc.

$190,098

20

1

Tri County Rural Electric Cooperative, Inc.

$32,326,228

7,015

1

Tri County Telephone Association, Inc.

$7,017,178

3,186

2

Tri-County Electric Cooperative

$117,784

106

1

Twin Valley Communications, Inc

$45,610

9

1

Union Telephone Company

$5,437,562

1,468

1

Valley Communications Association, LLC

$404,754

153

1

Velocity.Net Communications, Inc.

$230,016

39

1

Verizon Communications Inc.

$9,476,934

3,361

7

Viasat, Inc.

$122,499,877

190,595

20

Wabash Independent Networks, Inc.

$669,462

359

1

West Central Telephone Association

$611,934

532

1

Westfield Gas & Electric Light Department

$10,325,401

5,163

1

Wikstrom Telephone Company

$532,557

56

1

Wilkes Telephone Membership Corporation

$32,820,017

13,886

2

Winnebago Cooperative Telecom Association

$179,957

101

1

Wisper ISP, Inc

$220,319,375

80,149

6

Wood County Telephone Company d/b/a Solarus

$81,920

15

1

WPS

$324,009

954

1

Total

$1,488,329,864

713,176