The competitive-bidding procedures for Phase I of the Mobility Fund, characterized by the Federal Communication Commission as “the first-ever reverse auction for Universal Service support,” have been released by the agency.

As part of last year’s reform and modernization of USF, the FCC made universal mobile service “an express universal service goal,” creating the Mobility Fund to make mobile connectivity ubiquitous in the United States. As such, the Mobility Fund will award as much as $300 million that had been carved out of savings from the commission’s Universal Service Fund (USF) reforms. Winning bidders either must deploy 3G service within two years or 4G service within three years of the award.

Here’s how it works: In this reverse auction (dubbed Auction 901), bidders will indicate the amount of one-time support they need to deploy service in unserved areas within the required timeframe. Bidders will compete not only against other carriers that may be seeking support in the same areas, but also against carriers bidding for support in other areas nationwide. Support will be awarded based on the lowest bid amounts submitted, but will not be awarded to more than one provider per area.  Successful bidders will be awarded support for an area at the price they bid.

According to FCC Chairman Julius Genachowski, “For too many, dead zones in mobile coverage are too common, and today’s action will help close those gaps. Through the launch of this Mobility Fund, the commission has recognized mobility as a universal service priority for the first time. And by using market-based mechanisms, we’ll ensure more gaps in mobile coverage are closed, and that every dollar is spent wisely and efficiently.”

 ?A newly released Public Notice details the procedures for the Mobility Fund Phase I auction, including pre-auction and post-auction requirements, determining the census blocks eligible for support, and establishing the window for parties to file applications to participate. The Notice also:?

>> Establishes a window for the filing of short form applications that opens June 27 and closes at 6 p.m., July 11;
>> Identifies the final list of census blocks eligible for Mobility Fund Phase I support;
>> Makes support possible for 98 percent or more of the total road miles in eligible census blocks in every state and territory;
>> Provides that Auction 901 will be a single round, sealed bid auction;
 >> Provides for bidding on a census tract basis, except in Alaska, where bidding will be permitted on individual eligible census blocks; and
>> Requires that each winning bidder provide coverage, consistent with the performance requirements of the rules adopted in the USF/ICC Transformation Order, to a minimum of 75 percent of the road miles in each census tract for which it wins support, calculated as the total of the road miles in the eligible census blocks in the tract.

The commission will offer an additional $50 million in one-time support to tribal lands through a Tribal Mobility Fund Phase I.  Phase II of the Mobility Fund will provide $500 million annually for ongoing support of mobile services. ?

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