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Notes from the Sandbox - The Rural Broadband Experiment Auction Results

by Jonathan Chambers, Chief, Office of Strategic Planning and Policy Analysis
December 24, 2014 - 09:10 AM

Recently, the FCC released a full list of bidders in the Rural Broadband Experiment auction, collected information from the low bidders on that list, and released a notice providing an opportunity for those who bid to indicate by January 6 their interest in continuing with the Rural Broadband Experiment and participating in a future auction. Over the past year, I have often been asked what we sought to learn from this experiment. Let me answer that by starting with a little history.

For decades, Universal Service – access to telephone service for all – has been an obligation of telephone companies and federal funding has been provided to help meet that obligation. In 2011, the FCC decided to move to a competitive bidding process to award ongoing support to serve rural and high cost areas in certain circumstances. The FCC has become skilled at running auctions. But the auctions we typically run are spectrum auctions, and a Universal Service reverse auction is a different animal.

So, the Rural Broadband Experiment was designed to answer questions about auctions for Universal Service funding. How should such a bidding process be structured? Who would participate? Would incumbent telephone companies cross into neighboring service territories? Would other types of entities step in – cable companies, satellite broadband, electric utilities? What types of technologies would be proposed? What amount of support would be requested? What happens if the FCC's cost model, which we are currently using to allocate universal service funding, is used to set a reserve price? Is competitive bidding for universal service funds scalable to the nation? What happens in areas where there are no bids?

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Setting the Record Straight on Open Internet Comments

December 23, 2014 - 11:22 AM

Over the past week, there have been two reports raising questions about the number of Open Internet comments that were included in a set of XML files the FCC released to the public on October 22.  We made available these XML files so members of the public could analyze the approximately 2.5 million comments filed during the reply comment period of July 19-September 15.  In light of these questions, the Commission undertook a fresh accounting of the comments, and, consistent with our commitment to transparency throughout this process, we wanted to share the results of our analysis.

Before sharing those results, we think it’s important that people understand that much of the confusion stems from the fact that the Commission has an 18-year-old Electronic Comment Filing system (ECFS), which was not built to handle this unprecedented volume of comments nor initially designed to export comments via XML. This forced the Commission’s information technology team to cobble solutions together MacGyver-style.  Thanks to these creative efforts, we have been able to accommodate the surge in comments and release the comments as XML files for the first time in the FCC’s history, but not without some glitches that we will explain in this post.

Here are some key takeaways from our inquiry:

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An Update on Process Reform Streamlining Initiatives

by Diane Cornell, Special Counsel, Office of the Chairman
December 22, 2014 - 12:10 PM

In October, I provided an update on the FCC’s efforts to reduce our backlogs.   As 2014 draws to a close, I want to provide an update on another key reform objective:  streamlining the Commission’s processes.  We have had several working groups as well as staff throughout the Commission focusing on new approaches to simplify how we do business, with the goal of improving the efficiency, effectiveness and transparency of the Commission’s work.  Just in these last few months we’ve made tremendous progress on many fronts.  A few of these initiatives are highlighted below:

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Closing the 911 Location Accuracy Gap

by Admiral David Simpson, Chief, Public Safety and Homeland Security Bureau
December 17, 2014 - 06:01 PM

Earlier this year, the Commission proposed rules to help first responders better locate indoor wireless 911 callers. The reason was clear: the vast majority of 911 calls are from mobile phones, and we are not where we need to be on location accuracy for wireless 911 calls. This puts American lives at risk and requires swift action from the FCC, from wireless carriers, and from public safety officials. Next Wednesday marks a deadline for public comments on the latest proposal we have received in this proceeding. To get this right, it is important that the Commission hear from stakeholders on many key questions.

Make no mistake, locating wireless 911 callers indoors is not easy. The technologies used to locate outdoor callers simply don’t work as well indoors. Additionally, today’s 911 location technologies can’t tell a 911 call center what floor a call is coming from.  Imagine the challenge this creates for an EMS technician when responding to a medical emergency in a 50-story skyscraper! 

First responders must be able to locate 911 callers – indoors or outdoors – quickly and accurately.  Even a few minutes of delay can cost lives. We must do better to close the gaps in our 911 safety net. And there’s good reason to think we will.

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On Risks, Breaking Past the Status Quo, and IT Transformation

by Dr. David A. Bray, FCC Chief Information Officer
December 15, 2014 - 04:01 PM

As the FCC presses forward with our plans to transform our IT systems, the question of risk is an important one. Doing anything new inherently is risky. All too often it is easier for folks to say the status quo is good enough, the challenges are too high to overcome, or there's no way to complete a project in time. Such skepticism is healthy—we should always weigh multiple perspectives when deciding the right path to take. At the same time, we must also recognize the risk of doing nothing. At a certain point, the status quo no longer will be good enough. Technology becomes obsolete, further patches on discontinued software will be unavailable, and the total cost of maintaining outdated systems will far exceed moving to something new.

As in most organizations where technology is central to their mission, it's the Chief Information Officer's job to help navigate this landscape. There are risks in embracing new IT, as there are risks in any new effort. To mitigate those risks, we have assembled a strong action plan with controls in place to monitor our progress. We will be working with the agency's stakeholders, both external and internal, to identify and meet their priority needs.

In addition, we have assembled a strong team with staff members who have strengths that complement each other. At the FCC we have a diverse team with backgrounds spanning former military veterans, former Silicon Valley startup entrepreneurs, PhD candidates at prestigious universities who opted instead to support this effort, folks who helped with early Gov 2.0 efforts, and experienced team members who have seen the FCC's IT systems evolve through the 1990s, 2000s, and the present day. This breadth of expertise helps us scan for potential blind-spots and opportunities that we might otherwise have missed as we continue our IT transformation journey.

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Making Good on the Promise of Independent Minority Ownership of Television Stations

December 4, 2014 - 01:52 PM

Increasing minority ownership of television broadcast stations has been an often-stated, but elusive goal.  While there is widespread agreement on the need for progress, there has been very little by way of new ideas to solve the twin problems of access and opportunity.  For several years, the only path available to minority entrepreneurs required troubling financial dependency and constrained programming choices.  With the Media Bureau’s approval of several transactions today, however, we see the emergence of new ownership models that will not only bring more independent voices to the station ownership ranks in a manner that promotes diversity, competition, and localism. 

Each recent success detailed below is grounded in steps the Commission took this year to rein in abuse of the “sidecar” business model.  This allowed television station owners to structure broadcast transactions in ways that openly circumvented our local TV ownership rule, which generally forbids ownership of more than one station in a local market.  The effect was to deny opportunities for minority ownership and management. 

In aligning our treatment of Joint Sales Agreements (JSAs) for TV stations -- which permitted the larger, financially dominant station in a market to sell advertising for a weaker station -- with that of radio stations, we sought to reduce any influence on programming at the smaller station that might naturally attach to such arrangements. Moreover, allowing major broadcasters to tie up stations as sidecars made it harder for truly independent would-be broadcasters to compete to buy available stations. 

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Closing the Digital Divide in Rural America

by Tom Wheeler, FCC Chairman
November 20, 2014 - 03:39 PM

High-speed Internet access has become fundamental to modern life, whether we’re on the job, at home, or going to school. Broadband connectivity can overcome geographic isolation and put a world of information and economic opportunity at the fingertips of citizens in even the most remote communities. But the hard truth is there is a digital divide that particularly impacts rural America.

Americans living in urban areas are three times more likely to have access to Next Generation broadband than Americans in rural areas. An estimated 15 million Americans, primarily in rural communities, don’t even have access to entry-level broadband in their homes. Forty-one percent of American’s rural schools couldn’t get a high-speed connection if they tried.

The FCC can play an important role in bridging these gaps, and today, I’m circulating two items that will expand access to robust broadband across rural America.

Bringing High-Speed Broadband to Rural Schools and Libraries

One proposal would close the digital divide in rural schools and libraries by modernizing the FCC’s E-rate program. Since 1997, the program has helped connect schools and libraries to the Internet, but it’s falling short of delivering the bandwidth required for 21st Century learning. That’s particularly true in rural America, where 41% of schools lack access to the fast fiber connections required compared to 31% in urban areas.

Why does this Rural Fiber Gap exist? Fiber connection costs are much higher for rural schools and libraries. As a result, either there is no fiber, or that level of connectivity is only available at an unreasonably high price. It may not be unusual, but it is unacceptable that these realities are allowed to hurt students.

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Lessons of the 2014 Plenipot

by Michael O'Rielly, FCC Commissioner
November 17, 2014 - 02:33 PM

Last month, I was honored to join FCC Chairman Tom Wheeler as part of the U.S. delegation to the 2014 International Telecommunication Union’s (ITU) Plenipotentiary Conference (Plenipot) held in Busan, South Korea.  Since the conference recently concluded, it seems the appropriate time to share my thoughts about this experience.  Before doing so, however, I must express my deep appreciation to the head of the delegation, U.S. Ambassador Daniel Sepulveda of the Department of State, the FCC staff, the members of the U.S. delegation, and all dignitaries with whom I was able to meet, including the newly-elected Secretary-General of the ITU, Mr. Houlin Zhao of China, and Deputy Secretary-General, Mr. Malcom Johnson of the United Kingdom. 

As a member of the delegation, I attended the official plenary meetings of the conference, which included the elections for various ITU positions and discussions of various resolutions, and joined U.S.-led bilateral meetings with representatives of countries present at the Plenipot, including Germany and Chile.  I attended meetings with a subset of our delegation to discuss U.S. positions on specific issues (e.g., cybersecurity and Internet governance).  In addition, I participated in a number of FCC-led bilateral meetings with officials from the regulatory agencies of other countries, including Pakistan, Lebanon, Ghana, Australia and Guinea-Bissau.  These meetings put into perspective the high standing that the FCC has internationally, and I was able to share the Commission’s pro-market approach to spectrum auctions, unlicensed spectrum, broadband deployment, and many other issues. 

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Taking the Next Step in E-rate Modernization

by Jon Wilkins, Managing Director
November 17, 2014 - 11:52 AM

Today, Chairman Wheeler announced that he will be circulating a draft order to his fellow Commissioners for consideration at the December Commission Meeting to take the next step in his comprehensive effort to modernize the E-rate program. If you recall, the Commission adopted an Order in July to make the program more efficient and transparent so that schools get the most bang for their E-rate buck. At the same time, the Commission moved to close the Wi-Fi gap by targeting $1 billion annually to expand Wi-Fi connections in all the nation’s schools and libraries to support modern digital learning. As significant a step as that was, the Commission was able to accomplish this without increasing E-rate’s $2.4 billion cap by phasing down support for legacy services which will save an estimated $3.5 billion over five years, funds that can be redeployed for broadband services. 

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Taking Broadcaster Outreach on the Road

by Howard Symons, Vice Chair of the FCC’s Incentive Auction Task Force
November 13, 2014 - 09:39 AM

Last month marked a major milestone in our ongoing effort to educate broadcasters about the opportunities afford by the first-ever incentive auction. We sent an information package, prepared by the investment banking firm Greenhill and Co. for the FCC, to the owners of every station eligible to participate in the auction. The package explained the unparalleled business opportunity and for the first time gave broadcasters high end estimates of compensation for relinquishing spectrum usage rights. In just the few weeks since we released the package, numerous broadcasters have reached out to learn more about the auction.

Building on the momentum generated by the information package, we are poised to begin the next phase of our outreach. FCC staff, again advised by Greenhill, will continue the dialogue with broadcasters in field visits to television markets around the country. We are currently planning more than a dozen trips that will cover about 50 markets between January and April 2015 (see list below). The field visits will include town hall meetings during which we will explain the opportunities presented by the auction and address questions that have been raised by broadcasters in the weeks since the Greenhill information package release. We will also provide further detail about opening bid prices and different participation options such as channel sharing, moving from a UHF channel to a VHF channel and moving from a high VHF channel to a lower one. Additionally, we will meet confidentially one-on-one with individual broadcasters who express an interest in learning more.

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