Before the FEDERAL COMMUNICATIONS COMMISSION Washington, DC ) ) ) ) ) ) VERIZON OPPOSITION TO PETITIONS FOR RECONSIDERATION 1

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1 Before the FEDERAL COMMUNICATIONS COMMISSION Washington, DC In the Matter of Connect America Fund Universal Service Reform Mobility Fund WC Docket No WT Docket No VERIZON OPPOSITION TO PETITIONS FOR RECONSIDERATION 1 The Commission should reject petitions for reconsideration of the Mobility Fund Order 2 that seek to expand the areas eligible for Mobility Fund Phase II (MF-II support by increasing the eligibility benchmark speed. If granted, these petitions would divert limited Mobility Fund support to areas that are already well-served by unsubsidized 4G LTE service and away from truly unserved rural areas. In the Mobility Fund Order, the Commission established two different speed standards. First, for recipients of MF-II support, the Commission decided that the median data speed of the network in the supported area must be 10 Mbps download speed or greater and 1 Mbps upload speed or greater, with at least 90 percent of the required download speed measurements being not less than a still-to-be-determined threshold speed. 3 Because the 10/1 Mbps buildout requirement is defined as a median speed, MF-II recipients can provide speeds below 10 Mbps and still meet the 1 The Verizon companies participating in this filing are the regulated, wholly owned subsidiaries of Verizon Communications Inc. 2 Universal Service Reform Mobility Fund, WT Docket No , Report and Order and Further Notice of Proposed Rulemaking, 32 FCC Rcd 2152 (2017 ( Mobility Fund Order. 3 Id., 87.

2 buildout requirement (provided that more than 90 percent of the required measurements exceed the minimum threshold speed. Second, the Mobility Fund Order adopted a different speed standard 5 Mbps download speed as the speed benchmark to identify areas eligible for MF-II. 4 Areas that are not covered by unsubsidized 4G LTE at 5 Mbps will be eligible for MF-II support. 5 The Mobility Fund Order does not directly address how the Commission will apply the 5 Mbps eligibility benchmark. One possible interpretation is that the 5 Mbps eligibility benchmark will be treated as a median speed, like the 10/1 Mbps buildout requirement. Under that interpretation of the rule, an area would be eligible for MF-II if unsubsidized carriers median download speed in the area is less than 5 Mbps. Another possible interpretation is that the 5 Mbps eligibility benchmark will be treated as a minimum threshold speed. Under that interpretation of the rule, an area would be eligible for MF- II anywhere that unsubsidized carriers download speed is less than 5 Mbps. The proposals filed in the challenge process proceeding appear to assume that the 5 Mbps eligibility benchmark is a minimum speed. 6 When it adopts the challenge process rules, the Commission will need to clarify whether the eligibility threshold is a minimum speed, median speed, or some other measure. In their petitions for reconsideration, Rural Wireless Association (RWA, Blooston, and others argue that the Commission should adopt an eligibility benchmark that is identical to the 4 Id Id For example, in the first stage of CTIA s challenge process proposal, mobile providers would submit shapefiles that depict the coverage boundaries where providers expect users to obtain downlink speeds of 5 Mbps at a 90 percent cell edge probability. Then, in the challenge process stage of the CTIA proposal, an area is considered eligible for MF-II anywhere that the measured download speed is less than 5 Mbps. See CTIA Challenge Process Comments, at 4, 12, 21 (Apr. 26,

3 buildout requirement, i.e., 10 Mbps downstream / 1 Mbps upstream. 7 The petitioners suggest that the principle of reasonable comparability in Section 254(b(3 requires the Commission to adopt the same speeds for the eligibility benchmark and the buildout requirement. RWA, for example, asserts that the existing unsubsidized coverage must be provided at speeds that the Commission will ultimately require of MF-II, i.e., 4G LTE service at 10/1 Mbps speed. 8 Contrary to RWA s claim, the Commission has previously found that a universal service eligibility benchmark can differ from the corresponding buildout requirement. In the Connect America Fund (CAF proceeding, for example, the Commission required recipients of CAF support to offer 10 Mbps downstream/1 Mbps upstream broadband but set the eligibility benchmark at only 3 Mbps /768 kbps. 9 It is not clear from the petitions how the proponents of a 10/1 Mbps eligibility benchmark would apply that benchmark to determine eligible areas. It appears that the petitioners want the Commission to treat their proposed 10/1 eligibility benchmark as a minimum threshold speed, i.e., treat areas as eligible for MF-II whenever the measured speed is less than 10/1 Mbps. 10 Given that the 10/1 buildout requirement is defined as a median speed, however, treating the proposed 10/1 eligibility benchmark as a minimum speed would mean that the eligibility benchmark would 7 See Rural Wireless Carriers Petition for Reconsideration and Clarification, at 1-9 (Apr. 27, 2017; RWA Petition for Reconsideration and/or Clarification, at 1-10 (Apr. 12, 2017; Panhandle Petition for Reconsideration, at 7-10 (Apr. 27, 2017; Blooston Petition for Reconsideration and/or Clarification, at 1-4 (Apr. 27, RWA Petition at 3 (citing 47 U.S.C. 254(b(3 (emphasis in original. 9 By setting a lower eligibility threshold, the Commission was able to target CAF funds to the areas lacking the most basic Internet access. Connect America Fund, WC Docket No , Report and Order, 29 FCC Rcd 15644, 76 ( See, e.g., Rural Wireless Carriers Petition at 8. 3

4 exceed the buildout requirement. This makes little sense and conflicts with petitioners argument that the eligibility benchmark should be the same as the buildout requirement. There is no basis for the Commission to set a minimum threshold speed for eligibility determinations above 5 Mbps, much less at 10 Mbps. Petitioners argument that the Commission must increase the download speed benchmark to 10 Mbps in order to ensure that rural LTE speeds are reasonably comparable to urban LTE speeds lacks merit. 11 By defining the buildout requirement as a median speed of 10 Mbps, the Commission recognized that urban consumers receive a range of LTE speeds often including speeds well below 10 Mbps. Thus, rural LTE speeds below 10 Mbps are reasonably comparable to urban speeds. Given that carriers are generally reporting minimum advertised download speeds of 5 Mbps, 12 it is reasonable to conclude that 5 Mbps is within the range of urban LTE speeds. If anything, the 5 Mbps benchmark adopted in the Mobility Fund Order is too high. It will permit MF-II funds to flow to areas are already well-served by LTE, i.e., areas in which an unsubsidized provider has already deployed towers and backhaul and is offering LTE service. Areas that already have LTE coverage but at speeds slightly below 5 Mbps will be eligible for MF- II support. The details of the challenge process may further expand MF-II eligibility to areas that already have robust LTE coverage. For example, the mapping stage of the CTIA challenge process proposal assumes a 50 percent loading factor, which would allow MF-II support to flow to rural areas that have unsubsidized 5 Mbps LTE coverage under real-world loading conditions See, e.g., Rural Wireless Carriers Petition at 8; Blooston Petition at Mobility Fund Order Loading in rural areas is often below the 50 percent cell loading parameter specified in the CTIA proposal. 4

5 Raising the download speed benchmark to 10 Mbps would dramatically expand MF-II eligibility for areas that already have towers, backhaul, and LTE service, a result that is not in the public interest. As the Commission explained in the Mobility Fund Order, the eligibility benchmark should be set to target [the] finite budget to where it is most needed. 14 Form 477 coverage data shows that there are large contiguous areas that clearly lack LTE, mainly in the western states and in parts of other states, such as West Virginia, Maine, and Minnesota. 15 The public interest is better served by directing as much MF-II support as possible to the areas that lack LTE altogether rather than by spending limited MF-II funds on marginal upgrades in areas that already have LTE. Finally, the Commission should not grant RWA s request that the Commission clarify that the eligibility standard includes a minimum 1 Mbps upload threshold. 16 RWA is in fact seeking reconsideration, not clarification, of the Mobility Fund Order. The Order did not adopt an upload threshold, and the Commission should not adopt one now. An upload threshold would add to the complexity of the challenge process, and is unnecessary for identifying areas that need MF- II support. 17 It would certainly make no sense for the Commission to adopt a minimum 1 Mbps upload threshold, as RWA advocates. Given that the Mobility Fund Order defines the upload buildout requirement as a median 1 Mbps speed, a minimum 1 Mbps eligibility threshold would exceed the buildout requirement. 14 Mobility Fund Order 51 n See Nationwide LTE Coverage - YE 2015, 16 See RWA Petition at If an area is served by an unsubsidized carrier that meets the 5 Mbps download speed standard, it is clear that the area has sufficient tower and backhaul infrastructure that MF-II support is unnecessary. 5

6 In order to ensure that the finite Mobility Fund budget is targeted to areas where it is most needed, the Commission should reject proposals to raise the eligibility benchmark download speed or to add an upload speed threshold. Respectfully submitted, By: /s/ Tamara L. Preiss William H. Johnson Of Counsel Tamara L. Preiss 1300 I Street NW Suite 500-East Washington, DC ( May 16,