Uniendo a Puerto Rico and Connect USVI Fund Stage 2
- Budget and Term
- Eligible Providers and Areas
- Deployment Obligations
- Technology-Neutral Service Tiers & Application Evaluation
- Application Process
- Application Requirements
- Frequently Asked Questions
- Related Links
[Top] Stage 2 Competition Budget and Term
The Uniendo a Puerto Rico Fund and the Connect USVI Fund Stage 2 Competition (PR-USVI Stage 2 Competition, Stage 2 Competition, or the Competition) will award up to $691.2 million annually for 10 years to service providers that commit to offer voice and broadband services to all fixed locations in the Commonwealth of Puerto Rico and the U.S. Virgin Islands (USVI) (together, the “Territories”). For Stage 2 of the Uniendo a Puerto Rico Fund, the Commission allocated more than $504.7 million over ten years in fixed broadband support. The Commission also allocated $186.5 million over ten years for Stage 2 Connect USVI Fund fixed support.
[Top] Eligible Providers and Areas
The Commission determined that all providers that had existing fixed network facilities and made broadband service available in Puerto Rico or in the USVI, according to June 2018 FCC Form 477 data, to be eligible to participate in their respective territory’s competitive process. In addition, the Commission determined that broadband providers, according to June 2018 FCC Form 477 data, that serve only business locations can participate. The Commission also allowed participation by fixed providers who rely on any technology, including satellite, that can meet the Stage 2 service requirements. There were 15 unique June 2018 fixed broadband Form 477 filers in Puerto Rico and 6 in the U.S. Virgin Islands. The Commission notes that in addition to meeting this eligibility requirement, any winning recipient that is not already an eligible telecommunications carrier (ETC), will need to become an ETC to receive support. An ETC must use its own facilities or a combination of its own facilities and resale of another carrier’s services when offering the supported services.
As directed by the Commission, the Bureau released a public notice (DA 20-839) detailing the reserve prices for the 78 municipios in Puerto Rico and two areas in USVI that would be eligible for competitive bids. This list includes the number of locations the providers would be obligated to serve.
[Top] Deployment Obligations
Each winning applicant that is authorized to receive Stage 2 Fixed support will be required to offer voice and broadband services meeting the relevant performance requirements to all fixed locations associated with the minimum geographic area for which it is the winning applicant. Stage 2 support recipients may offer a variety of broadband service offerings as long as they offer at least one standalone voice plan and one service plan that provides broadband at the relevant performance tier and latency requirements, and these plans must be offered to retail customers at rates that are reasonably comparable to rates offered in urban areas. For voice service, a support recipient will be required to certify annually that the pricing of its service is no more than the applicable reasonably comparable rate benchmark that the Bureau releases each year. For broadband services, a support recipient will be required to certify that the pricing of a service that meets the required performance tier and latency performance requirements is no more than the applicable reasonably comparable rate benchmark, or that it is no more than the non-promotional price charged for a comparable fixed wireline broadband service in the state or U.S. territory where the ETC receives support.
The Commission has adopted specific service deployment milestones that require each winning applicant authorized to receive Stage 2 support to offer service to all locations associated with the minimum geographic area included in its authorized winning application. Specifically, each support recipient must complete construction and begin offering retail service to at least 40% of the locations in an area by the end of the third year of support, to at least 60% by the end of the fourth year, at least 80% and by the end of the fifth year, and to 100% by the end of the sixth year. A support recipient is deemed to be commercially offering voice and/or broadband service to a location if it provides service to the location or could provide it within 10 business days upon request.
[Top] Technology-Neutral Service Tiers & Application Evaluation
The Stage 2 fixed competitive process will award support based on the weighting of price and network performance, including speed, latency, and usage allowance. The Stage 2 fixed competitive process will also assign scores based on resiliency and redundancy to account for the particular circumstances of the Territories. Under this competitive process, applicants for fixed high-cost support will submit proposals that will be scored using a 270-point scale for price, performance, and network resiliency and redundancy for each geographic area for which it seeks support. The applicant with the lowest combined overall score for a specific geographic area will win support for that area.
Price Per Location
The Bureau will use the Proposal Price (the amount of support the applicant is willing to receive per location per month in a geographic area) submitted by the applicant to determine the score for price per location. An applicant who proposes to accept the reserve price for a geographic area will receive the highest score of 100 points for price per location category. The Bureau will subtract one point from 100 for each percentage point the Proposal Price is below the reserve price. Applicants may submit a Proposal Price below the reserve price to the nearest hundredth of one percent. In such cases, the Bureau will round the percentage to the nearest whole percentage for the purpose of scoring. In the event two applicants have equal overall final scores, the applicant with the lowest Proposal Price will be selected the winning applicant. For example, if Applicant A commits to a Proposal Price that is 10.55 percent less than the reserve price, Applicant A will receive an 11-point reduction from the possible 100 points. In the event a second applicant, Applicant B, submits a Proposal Price for the same geographic area that is 10.75 percent and receives the same final score, Applicant A will be the winning applicant.
The Commission established three tiers for a combination of network speed and usage allowances, and two tiers for network latency. The Commission requires applicants to commit to the deployment of a network capable of providing a minimum upload and download speeds of at least 25/3 Mbps with at least 200 gigabytes (GB) of monthly data usage. For each geographic area the applicant seeks support, the applicant specifies the specific speed, usage, and latency in Schedule B of the Application Form. The Bureau will add the designated point weight selected performance tier and latency. The Commission does not require an applicant to propose the same network performance measures for each geographic area it proposes to provide voice and broadband service in the selected territory.
Network Resilience and Redundancy
The Bureau staff will evaluate resiliency and redundancy by assigning points for a few key, objective criteria specified in FCC Form 5634 Schedule B. Applicants must provide the total network miles within the geographic area and detail the amount of buried fiber, aerial wireline using standard poles, aerial wireline using composite high-wind rated poles, and fixed wireless technology. An applicant will receive a score for network resilience based on the percentage of these technologies, as measured by network miles, that comprise the entire network within the geographic area. The Bureau assign the full 60 points for this category to a network comprised entirely of aerial fiber using standard poles and assign as little as 0 points to a network comprised of an all-buried fiber network.
In addition, the Bureau will assign up to 20 points depending on the redundancy solution within the network. Specifically, staff will assign no points for a proposal that includes either a backup network or path redundancy, and staff will assign 20 points to a proposal that includes neither a backup network or path redundancy. Applicants must specify the amount of network miles within the geographic area that include a backup network, path diversity, or both. Bureau staff will not deduct points for satellite providers for redundancy simply based on the availability of a backup satellite path. Satellite providers will receive a reduction in points based on the percentage of locations that it intends to reach with a backup network.
[Top] Application Process
The Bureau will conduct the Stage 2 Competition using a single-round, confidential submission, objective scoring process. The Bureau will consider all eligible Stage 2 applications simultaneously and select applicants based on the lowest score for a series of weighted objective criteria. Those wishing to participate in the Competition must submit FCC Form 5634 and all required documentation for Stage 2 of the Uniendo a Puerto Rico Fund or the Connect USVI Fund (FCC Form 5634) via electronic mail at ConnectAmerica@fcc.gov prior to September 3, 2020 as announced by the Bureau’s public notice (DA 20-844).
Each applicant should submit a single FCC Form 5634 for each territory in which it seeks to provide qualifying voice and broadband services. FCC Form 5634 should include all proposals for each geographic area within the territory for which the applicant seeks to provide service. For each geographic area an applicant wishes to be considered, the applicant must submit a Proposal Price representing the percentage of that area’s Reserve Price it would be willing to accept. In addition to the Proposal Price, an applicant must provide necessary detail regarding technological and financial capabilities for the Bureau staff to evaluate the application’s merits.
Once FCC Form 5634 is submitted, an applicant will receive an email recognizing the submission. The application will be evaluated for completeness, and the Bureau staff may ask for any Minor Modifications necessary to bring the application into completeness. After submission, an applicant will only be permitted to make Minor Modifications (e.g., name, address, telephone number, etc.). No Major Modifications will be permitted (e.g., changes in ownership that would constitute an assignment or transfer of control of the applicant, change in applicant’s legal classification that results in a change in control, change in the area(s) for which proposals are submitted). Following a determination of completeness, the Bureau staff will evaluate proposals in accordance with the objective competition criteria to determine a single winning applicant for each applicable geographic area. The Bureau will announce the winners by public notice and the corresponding dates for submission of Eligible Telecommunications Carrier designation (if applicable), bankruptcy letter, and letter of credit. Once a winning applicant submits these required documents, the Bureau will release an authorization public notice making the support available to the winning applicant.
FCC Form 5634
[Top] Application Requirements
Stage 2 Competition applicants should review all related Commission materials for application requirements and detailed discussion of the Stage 2 Competition process. In general, Stage 2 applications must include:
- Disclosure of Agreements – identifying all real parties in interest to any agreements relating to the participation in the Stage 2 Competition
- Ownership Disclosure – identifying all real party- or parties-in-interest in the applicant and the ownership structure of the applicant, including both direct and indirect ownership interests of 10% or more, as prescribed in section 1.2112(a) of the Commission’s rules.
- Universal Service Certifications – certifying compliance with all statutory and regulatory requirements for receiving Stage 2 universal service support.
- Operational History & Financial Statements – demonstration of experience and financial qualifications, including certification of service as of June 30, 2018 FCC Form 477 Data submission and unaudited or audited financial statements from the prior fiscal year.
- Access to Spectrum – applicants intending to use wireless technologies must: (i) identify the spectrum band(s) it will use for the last mile, backhaul, and any other parts of the network; (ii) describe the total amount of uplink and downlink bandwidth (in megahertz) that it has access to in each spectrum band for the last mile; (iii) describe the authorizations (including leases) it has obtained to operate in the spectrum, if applicable; and, (iv) list the call signs and/or application file numbers associated with its spectrum authorizations, if applicable.
- Network Plan, Description of Technology and System Design – sufficiently detailed information supporting how the applicant will provide each performance tier (speed and usage) and latency combination included in its application. This includes an initial overview and detailed technology and system design description that shows a network diagram certified by a professional engineer.
- Letter of Credit Commitment Letter – a letter from a bank acceptable to the Commission, as set forth in section 54.1508, committing to issue an irrevocable stand-by letter of credit, in the required form, to the applicant.
- Due Diligence Certification – demonstrating the applicant investigated and evaluated all technical and marketplace factors that may have a bearing on the amount of Stage 2 support it will seek in its application; and, certifying that, if it becomes a winning applicant and is ultimately authorized to receive Stage 2 support, it will be able to build and operate facilities in accordance with the Stage 2 obligations and the Commission’s rules generally.
- Eligible Telecommunications Carrier Certification – acknowledgment or demonstration the applicant will obtain or already is designated as an ETC for the areas it will receive support.
- Disaster Preparation and Response Plan (DPRP) – address in detail how an applicant intends to prepare for and respond to disasters in Puerto Rico and/or the USVI according to five criteria: (1) Strengthening Infrastructure; (2) Ensuring Network Diversity; (3) Ensuring Backup Power; (4) Network Monitoring; and (5) Emergency Preparedness.
[Top] Frequently Asked Questions
The Bureau encourages all potential applicants review all applicable program requirements and procedures as set forth in the Commission’s Stage 2 Order (FCC 19-95) and the Bureau’s subsequent Public Notices (including DA 20-133) for compliance with the program’s requirements. The following frequently asked questions (FAQs) are intended only to illustrate Bureau staff responses to common questions and do not supersede the Commission’s decisions in the controlling orders. To fulfill its obligation of evaluating Form 5634 from applicants, the Bureau reserves its authority to review and evaluate for completeness and accuracy the specific application information submitted as part of the Stage 2 competitive process.
Competitive Application Process
- Determination of “Network Miles.” Should an applicant represent the total cable length when listing the applicable network miles or list the total length of fiber stands contained within the overall cable length?
Applicant should represent network miles based on the fiber cable length between each network point, not individual strands that comprise the fiber cable. The Bureau will review information provided in applications for completeness and accuracy.
- Representing Redundant Miles Generally. How should redundant miles be represented in the application? For example, if there are 1,000 miles of total plant in Municipio #1, and 200 miles for redundancy in #1?
The “total miles” column contained within FCC Form 5634 Schedule B should be filled in with 1000 miles, and the “network miles for redundancy or diversity” column should be filled in with 200 miles. The information should be provided in the format requested for Schedule B.
- Representing Redundant Miles to a Specific Location. If the applicant has a 200-mile redundant ring physically located in Municipio #1, but that ring serves as the backup to Municipios #2, 3, and 4, how should that ring be represented on Schedule B? Should the applicant fill in 200 miles in each of the redundant columns for Municipios #2-4, or only in Municipio #1? If the latter, and the bidder isn’t otherwise bidding on Municipio #1, how should the ring be reflected on the form?
If the applicant submits proposals for Municipios #1, 2, 3, and 4, the 200 mile redundant ring may be included in the redundant column for each of the municipios #1, 2, 3, and 4. Even if the applicant does not propose to serve Municipio #1, but does submit proposals for Municipios #2, 3, and 4, the 200 mile redundant ring may be included in the redundant column for these specific municipios if it actually serves as the backup to those geographic areas but not physically located in those specific muncipios.
- Change in Technology. Is it possible for a winning bidder to later introduce a different/new technology? For example, if a winning bidder specified an all buried fiber in its proposal, but later, would like to introduce elements of fixed wireless, is that possible?
Applicants submit and certify to the accuracy of their network proposals and the Bureau will hold winning applicants to their application commitments. It would constitute a material change if an applicant switched technologies from a commitment of an all buried fiber network, particularly if the applicant proposed buried fiber network that resulted in a winning score, to a fixed wireless network, which would have presumably received a higher proposal score, regardless of network performance. While we acknowledge that winning applicants may modify some network designs during deployment, the Bureau would reserve the right to review the particular facts and circumstances of the network modifications.
- Network Demarcation for “Network Miles.” Should networks that connect to the PSTN and Public Internet using undersea cable links owned or controlled by the applicant include undersea cable and microwave links outside of the geographic area contain in FCC Form 5634 Schedule B? For example, should a network include undersea cable that connects St. Thomas, USVI to Miami, Florida in the applicant’s network miles total for St. John & St. Thomas Island?
Applicants should not include, and the Bureau will not consider scoring, undersea cable and microwave links outside of the geographic area contained in Schedule B. For example, undersea cable connecting the network serving St. Thomas, USVI to Miami, Florida would not be considered. However, undersea cable and/or microwave links between St. Thomas, USVI and St. John, USVI should be included in the application and would be considered.
- Representing Undersea Cable in “Network Miles.” How should applicants denote undersea cable contained within a geographic area contained in Schedule B? For example, if an applicant using undersea cable to connect customers within St. Croix Island, USVI, should the applicant list this undersea cable as “buried fiber.”
Applicants using undersea cable deployments within a specified geographic area in Schedule B should include the total cable length within the boundaries of the geographic area as “buried fiber” within “network miles” section of Schedule B.
Redundancy and Network Resiliency
- Wireless Redundancy. Would multiple wireless access points (i.e., two wireless antennas or directional antennas at the same customer premises) satisfy the redundancy requirement?
Multiple wireless access points at the customer premises would not be considered redundant as the connections would be subject to a single point of failure.
Performance Tier and Latency Demonstration
- Evaluating an Applicants Ability to Serve “All of the Locations” in a Geographic Area.
Does an application have to demonstrate the ability to provide the proposed speed, capacity, and latency performance to “all of the locations” in the proposed geographic area and the applicable network load assumption should include all locations?
Per paragraphs 61-62 of the Stage 2 Application Procedures Public Notice, the Bureau does not require a demonstration of network performance capabilities to 100% of all locations. The Bureau will consider loading assumptions in its evaluations. For instance, as part of an application, an applicant must provide a detailed network description that, among other items, must describe the network’s scalability and provide technical “rules of thumb” and assumptions used to size the network’s capacity, particularly during periods of peak usage.
[Top] Related Links
- PR-USVI Stage 2 Order – FCC 19-95
- Stage 2 Reserve Prices and Locations Public Notice – DA 19-1300
- Stage 2 Application Procedures Public Notice – DA 20-133
- Stage 2 Application Form Public Notice – DA 20-323
- Stage 2 Application Reconsideration Order – DA 20-838
- Stage 2 Reserve Prices and Locations Reconsideration Public Notice – DA 20-839
- Stage 2 Application Window Announcement Public Notice – DA 20-844
- Order Denying Blackburn Technologies, II Request For Waiver – DA 20-929
- Order Denying Request to Extend Stage 2 Application Deadline – DA 20-1016
- Stage 2 Competition Applicants Announced – DA 20-1090