The last time the FCC held a reverse auction to distribute critical universal service funds for rural broadband deployment, satellite provider Viasat was among the auction winners. And won big. The company won about $122 million over 10 years in the Connect America Fund Phase II auction to deploy broadband service to unserved portions in 20 states. The jury is still out on how they actually accomplished these goals.
The FCC proposes to allow satellite companies to participate in these auctions again as they prepare for the Rural Digital Opportunity Fund (RDOF) Phase I auction later this fall. This time, along with Viasat, the auction could include some of the new crew of (NGSO) satellite technologies, such as SpaceX who have yet to be tested in a commercial space for the standards they are saying they can meet while touting their potential economic advantage in a large bidding area.
Even if one wants to assume that these low earth orbiting satellites can actually improve their latency game, which to date has been pretty dismal – there are other key considerations including:
- There currently is no real commercial offering in the marketplace for this technology so it is unclear what the service can actually do.
- There is no showing that they can offer this service on a widespread basis across rural America and
- There is certainly no showing that they can offer higher speed tiers with reasonable usage limits in delivering services to all of the customers in these areas.
- So at the end of the day, this is a $1.6 billion bet on a true “moon shot” without any basis to believe that this will actually solve rural customers access to broadband anytime soon. Nor does it have any verification that it will provide a sustainable foundation for broadband in the future. There is actually no basis to allow them to bid in the Gig tiers at all.
Originally, FCC had proposed to bar all satellites from bidding in the highest performance tier where those bidding to provide fiber service are. They just changed that in the proposal they are now seeking comment on in the 12th hour.
Guess it sometimes pays to be the last one in the door when promoting a song and a prayer. Seems like a big bet for the government to make and I certainly hope that rural consumers aren’t the ones paying the price.