Voglio sapere a riguardo di…

khammond on DSKJM1Z7X2PROD with RULES

Federal Register / Vol. 86, No. 35 / Wednesday, February 24, 2021 / Rules and Regulations the Auction Bidding Model should not be used to determine the adjustment factor values because 1 bidding data from the Mobility Fund Phase I auction is distorted, 2 the Mobility Fund Phase I auction is not an appropriate analogue because it provided one-time funding for capital expenditures versus longterm support for capital expenditures and operational expenses, 3 bidding decisions were based on 2012 pricing that is not comparable to todays pricing, and 4 at the time of the Mobility Fund Phase I auction, carriers could still use network equipment from low-cost equipment suppliers that have since been designated by the Commission as national security threats.
12. We acknowledge the contextual differences between the Mobility Fund Phase I auction and the upcoming 5G
Fund auctions, but do not find that such differences unduly undermine the analysis. While the timing and one-time funding nature of the Mobility Fund Phase I auction and the presence of Huawei and ZTE as low-cost equipment options for Mobility Fund Phase I
support recipients may have influenced the absolute bid amounts, the commenters fail to explain why the relative bid amounts would differ significantly compared with a more recent long-term funding auction where bidders could not use Huawei and ZTE
equipment. The absolute level of the bids does not necessarily affect the relative differences across areas. For example, if all bids were 20% lower in absolute level due to factors related to the auctions context, the ratio of bids across areas would be unaffected. We find it more likely that the calculated adjustment factor should be largely invariant to differences in funding type and radio equipment costs. There are two cases to consider. In the case where the costs to build and operate towers are the same across terrain types and more towers are needed to cover rougher terrain, the cost of radio equipment would have no effect on the calculated adjustment factors. In the case where towers cost more to build and operate in rougher terrain, the absolute cost of radio equipment could affect the adjustment factor. However, given that radio equipment costs are a very low percentage of the overall costs to build and operate a network, the change in the calculated adjustment factor would be negligible.
13. Similarly, arguments that the Mobility Fund Phase I auction is not an appropriate point of comparison because it did not provide funding for both capital and operational expenditures likewise do not undermine our analysis here because the
VerDate Sep<11>2014

16:14 Feb 23, 2021

Jkt 253001

adjustment factor values we adopt are meant to capture the relative differences in cost and business case for different areas. That is, reliance upon bid amounts in an auction that did not award operational expenses should not affect the relative differences in costs because bidders in the 5G Fund auctions will be able to consider the entirety of costs including both capital and operational expenditures. Thus, any additional operational expenses will be reflected in higher bidding values in the auction but the relative differences between areas is likely to remain the same. Moreover, our conclusions about the appropriateness of using Mobility Fund Phase I auction data are also consistent with all three models producing comparable adjustment factor estimates. We find that the information regarding the relative bidding incentives across areas produced by the Auction Bidding Model outweighs any concerns with the absolute levels of the bidding data.
14. Use of an Adjustment Factor for Disaggregation of Legacy High-Cost Support. In the 5G Fund Adjustment Factor Public Notice, the Office and Bureau sought comment on the appropriate adjustment factor values for the disaggregation of legacy high-cost support to account for differences in costs across areas and the underlying methodologies that could be used to develop the values. In cases where the transition of legacy support occurs across areas of different types, such as eligible areas and ineligible areas, the adjustment factor would be used to scale the actual square kilometers associated with each disaggregated area.
In the 5G Fund Report and Order, the Commission concluded that the adjustment factor values that are adopted by the Office and Bureau for a 5G Fund auction also would be used for the disaggregation of legacy high-cost support. Accordingly, we adopt the adjustment factor values proposed in the 5G Fund Adjustment Factor Public Notice, as set forth in Fig. 1 herein, for use in the process of disaggregating legacy support.
15. We note that some commenters oppose using the adjustment factor in the disaggregation process. They generally argue that, because the adjustment factor does not capture all of the characteristics of the particular service areas for which legacy support is provided e.g., foliage and the terrain categories are too broad, thereby disadvantaging the areas near the margins, it is not appropriate to apply the factor when disaggregating legacy support. They propose instead that the Commission rely on service providers
PO 00000

Frm 00061

Fmt 4700

Sfmt 4700

11151

knowledge of their subsidized areas to estimate the costs of deploying in those areas.
16. In the 5G Fund Report and Order, the Commission rejected the argument that the adjustment factor should not be applied to the disaggregation of legacy support, finding that using an adjustment factor is appropriate because it will alleviate potential concerns over a carrier losing a disproportionate amount of its legacy support resulting from a disaggregation methodology in which more costly areas would be treated the same as less costly areas with respect to subsidies received. As the Commission indicated, this approach will help ensure that legacy high-cost support is available for harderto-serve areas.
17. We also note that there are other reasons to apply the adjustment factor to the disaggregation of legacy high-cost support. Using an adjustment factor to disaggregate legacy support is preferable to the administrative burdens that would arise from requiring service providers to disaggregate their costs, and furthermore, it avoids the potential incentive issues associated with service providers self-reporting their own costs.
For example, where part of a legacy support recipients service area would be served by a 5G Fund winner while its remaining area would continue to receive legacy support, the legacy support recipient would have the incentive to overestimate the amount of high-cost support flowing to the area that would continue to receive legacy support, thus maximizing the funds it would receive through preservation of service support. In addition, while we acknowledge that the adjustment factor does not account for all factors that affect network costs, the Commission indicated that the adjustment factor is meant to give an estimate of how a carrier may allocate legacy high-cost support within the area for which it receives such support. It is not meant to reflect the actual cost of deployment in that area. We maintain that applying an adjustment factor in the disaggregation process will lead to a more equitable distribution of legacy funding. Applying the adjustment factor will better reflect the distribution of high-cost support by accounting for cost differences arising from terrain elevation variation and business case differences arising from income disparities within a service area.
Thus, we will use the adjustment factor values in Fig. 1 for the disaggregation of legacy high-cost support.

E:FRFM24FER1.SGM

24FER1