RECOMMENDATION .gov
?State of CaliforniaPublic Utilities CommissionSan FranciscoM E M O R A N D U MDate:June 18, 2020 To:The Commission(Meeting of June 25, 2020)From:Kimberly LippiPublic Utilities Counsel IV, Legal DivisionMichael Morris, Owen Rochte, Alexander Abramson, Ravneet KaurCommunications Division Subject:Filing of Comments in FCC WC Docket Nos. 20-32, 10-208: Establishing a 5G Fund for Rural America, Universal Service Reform – Mobility FundRECOMMENDATIONThe California Public Utilities Commission (CPUC) should file comments in response to the Federal Communications Commission’s (FCC) Notice of Proposed Rulemaking (NPRM), which proposes to establish the $9 billion 5G Fund to subsidize deployment of 5G-capable networks in Rural America.The CPUC should support the creation of the 5G Fund and focus recommendations on program implementation, rural area identification and prioritization, implementation of the 5G Fund final service milestone, and accounting for the T-Mobile/Sprint merger commitments.FACTSOn April 24, 2020, the FCC released the NPRM proposing the following: A 5G Fund for Rural America that would support 5G-capable mobile broadband networks in areas that will not be covered by TMobile’s deployment commitments to the FCC and where there is not a business case for deployment. Implementation of the 5G Fund through a two-phase competitive process. Each phase will use a multi-round auction to award funding to providers requiring the least amount of support to serve areas at required performance levels. For Phase I, the NPRM proposes two implementation options: Option A) FCC should conduct the 5G Fund Phase I auction in 2021 using current data to target particularly rural areas and focus greater support on those areas historically lacking 4G LTE and 3G services; or,Option B) in the alternative, delay the Phase I auction until at least 2023 while the FCC develops more granular mobile broadband data. Up to a $9 billion budget for the 5G Fund, disbursed over ten-year support terms, with up to $8 billion available in Phase I, including $680 million reserved to support 5G networks serving Tribal lands, and at least $1 billion in Phase II to support networks that will facilitate precision agriculture.DISCUSSION AND RECOMMENDATIONS5G Fund Phase I ImplementationThe 5G Fund would distribute up to $9 billion in two phases, using a reverse auction mechanism to award the funding. Phase I would distribute up to $8 billion to eligible rural area, including $680 million reserved to support 5G networks serving Tribal lands.The FCC’s conundrum is that it cannot accurately identify all rural areas lacking mobile service because mobile provider’s broadband availability data submitted to the FCC is inaccurate. To address this issue, the NPRM proposes two options for Phase I implementation. Under Option A, the FCC would hold an auction in 2021 and distribute to rural areas it believes are least likely to receive mobile service without support, such as those with sparse populations, rugged terrain, or other factors. Under Option B, the FCC would delay the 5G Fund Phase I auction until 2023, after implementing the Digital Opportunity Data Collection (DODC), an improved broadband data collection process. Option B would better target subsidies to unserved rural areas but delay rural 5G deployment. Further, Phase II of the 5G Fund would follow the completion of Phase I and would target universal service support to bring wireless connectivity to harder to serve and higher cost areas, such as farms and ranches, and make at least $1 billion available specifically aimed at deployments that would facilitate precision agriculture. Staff Recommendation: The CPUC filed comments in the FCC’s Rural Digital Opportunity Fund (RDOF) proceeding opposing the disbursement of public funds until the FCC improves the broadband availability data collection process and develops better broadband coverage maps. The CPUC should take the same position in response to this NPRM - oppose Option A and recommend the FCC delay Phase I auctions until the FCC collects more accurate mobile broadband availability data. However, the FCC should not delay Phase I until 2023, as Option B proposes, but could hold auctions earlier for states able to submit accurate coverage data to the FCC. California could conduct its own state-wide drive tests using its CalSPEED technology and provide accurate mobile broadband coverage maps to the FCC no later than 2021, and other states could also choose to invest in drive tests and submit their results. Under such an approach, the FCC could better target subsidies to rural areas unlikely to see unsubsidized 5G service and shorten the delay inherent with the FCC’s Option B proposal. This approach would call for state-federal coordination and partnership, consistent with the CPUC’s proposed approach on RDOF. Prioritizing Rural Areas in Phase IThe NPRM proposes to prioritize eligible rural areas by using a “degree of rurality” approach to better target funding to where it is needed most. The FCC proposes to base the degree of rurality of any given area on the U.S. Department of Agriculture’s RuralUrban Commuting Area (RUCA) Codes that employ the most recent decennial census data (2010) and the 2006-10 American Community Survey, and to categorize census tracts based on population density, urbanization, and daily commuting patterns.Within those areas the FCC considers the most rural, the FCC proposes to prioritize areas that have historically lacked 3G or 4G LTE service and seeks comment on how to identify them. The NPRM also proposes prioritizing 5G deployment by applying an adjustment factor to increase the reserve amount per square kilometer that it would make available and seeks comment on the mechanics of how to prioritize areas that have historically lacked service.Staff Recommendation: To identify areas historically lacking 3G and 4G LTE service, the FCC should collect data from states, including local and Tribal governments, on mobile service deployment. Further, the FCC should seek input from states regarding which rural areas to prioritize for 5G Fund subsidization. Criteria on critical need of 5G service may vary state-by-state. In California, areas that should be prioritized may include, but not be limited to, high fire threat zones, areas at high risk of other disasters such as earthquakes and areas prone to Public Safety Power Shutoff events, digital equity, telehealth and homework gap issues, and Tribal areas. The relative importance of these criteria is unique to California and may be quite different from factors that impact priorities in other states or the country generally. Final Service Milestone RequirementsAs part of the public interest obligations, the NPRM proposes to require 5G Fund recipients to provide 5G service at required performance levels to at least 85 percent of the total square kilometers’ geographic area authorized to receive 5G Fund support in a State by the end of the sixth full calendar year, the final service milestone following support authorization.Staff Recommendation: Requiring service at specified performance levels to only 85 percent of the total eligible square kilometers is inadequate and inconsistent with the public interest as not all funded areas would receive 5G service. ?The FCC should require a recipient to serve 90 percent of areas it has been awarded in a State by the end of year six, and 100 percent by end of year seven so that no areas are left behind. If a recipient is unable to meet the 100 percent requirement, the FCC can allow a 12-month grace period to enable the recipient to meet the threshold. Failure to do so should mean the recipient returns the funding for areas it has left unserved. It is problematic for a recipient to receive 100 percent of funding but not provide service to 100 percent of the area. These unserved areas could be ineligible for any subsequent funding programs in the years following the 5G Fund award.Impact of T-Mobile Merger CommitmentsThe FCC’s approval of the T-Mobile/Sprint merger was conditioned on T-Mobile deploying 5G service with download speeds of at least 50 Mbps to 90 percent and 100?Mbps to at least two-thirds of the nation’s population. Nevertheless, the FCC estimates that, even with such service, 81 percent of the rural land area could remain unserved. The CPUC has imposed more stringent requirements on T-Mobile rural 5G deployment as a condition of its approval of the merger. T-Mobile is obligated to provide service of at least 50 Mbps download to 94 percent of California’s rural population and service of at least 100 Mbps download to 85 percent of California’s rural population.The NPRM tentatively concludes that it would be inappropriate to allow T-Mobile to use 5G Fund support to fulfill its merger obligations, and because 5G funds are limited, funds should not be awarded to other providers to deploy service in areas that T-Mobile is required to serve. The FCC seeks comment on these conclusions, and on mechanisms for them to be effectuated. Complicating the situation, though, is that T-Mobile’s merger obligations are stated only in terms of a percentage of population to be served and not where service will be deployed. Thus, the areas to be carved out from eligibility cannot be identified. Accordingly, the FCC has proposed an approach for T-Mobile to identify the areas it will serve to achieve its merger obligations as part of the 5G Fund process.Staff Recommendation: The CPUC should inform the FCC of the rural deployment obligations contained in its Decision approving the T-Mobile/Sprint merger and agree that T-Mobile should not receive 5G Fund subsidies to complete those obligations, nor should the proposed 5G Fund subsidize other providers in areas T-Mobile is required to build. In any process the FCC adopts to identify these areas (or any other method the FCC adopts to assure that T-Mobile does not receive 5G subsidies to complete its obligations), such process should include identifying the areas it will deploy to comply with California’s (and any other State’s) merger conditions, in addition to the FCC’s. T-Mobile’s submission of such information should be a precondition to T-Mobile bidding for 5G Fund subsidies of eligible areas not part of the areas to be served through its merger pliance with Deployment and Performance RequirementsThe NPRM proposes that 5G Fund recipients submit supporting data and milestone coverage maps to the Universal Service Administrative Company (USAC) so it can evaluate and verify compliance with coverage performance requirements. Maps would include the output of propagation modeling, and data include the results of drive tests. The FCC seeks comments on technical aspects of such modeling and drive tests.Staff Recommendation: The CPUC should reiterate its preference for drive test data, rather than reliance on coverage maps based on propagation modeling until and unless recipients demonstrate that drive test results validate the accuracy of such maps. The CPUC should also state its preference for drive tests to consist of stationary testing, rather than testing from moving vehicles. Except for driving direction apps, the most important uses of mobile broadband service, particularly in rural areas lacking good fixed broadband service, will be stationary, such as video streaming, emergency notification, distance learning, telework and telehealth. Stationary testing will most accurately capture the user experience. The CPUC should also address technical testing issues and recommend technical approaches consistent with both the CPUC’s CalSPEED mobile testing methods, and prior comments to the FCC. Affordable Service Plans and Equipments During Declared Emergencies The NPRM does not consider public safety needs during declared emergencies and how 5G services can help address emergency situations. Staff Recommendation: The CPUC should recommend that 5G Fund recipients be required to implement an affordable class of service, devices and other equipment that each recipient shall offer as emergency relief within its service footprint for any individual displaced by a state- or federally-declared disaster, or under guidance to stay at home during a federal, state or local emergency. CONCLUSIONThe CPUC should file comments in response to the NPRM proposing a framework for the 5G Fund.? The comments should recommend that the FCC not limit Phase I implementation between two options. Instead, it should delay holding an auction until after collecting better mobile broadband coverage data from States in 2021 but not wait until 2023. The FCC should also work with States in setting a process to prioritize rural areas, require recipients to offer service to 100 percent of an awarded area in a State, remove any areas covered by T-Mobile merger commitments to the FCC and States, and implement drive tests to test compliance with deployment and performance requirements. Finally, the FCC should require 5G recipients to provide affordable services, devices, and other equipment during declared emergencies to help ensure public safety.Assigned Staff: Legal Division: Kimberly Lippi (415-703-5822)Communications Division: Michael Morris (415-703-2112) ................
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