O’Rielly Notes Mobility Fund Phase II Likely for 2016, Suggests Reforms in Advance

After dismissing the need for and likelihood of Mobility Fund Phase II (MF2) , FCC Commissioner Michael O’Rielly in his latest blog post concedes that “proponents of a separate, new wireless fund seem to be carrying the day” and indicates that the Commission intends to issue final MF2 rules by the end of 2016.  In light of this momentum, O’Rielly advances six “principles for reform” that he believes should be applied to MF2.

1. Prohibit MF2 subsidies to carriers that overlap an unsubsidized competitor, and exclude areas that are not actually high cost. O’Rielly cites FCC data on mobile wireless competition, indicating that 99.6% of Americans and 90.7% of the country’s geography have “at least one provider of LTE.” However, he does not address how current LTE networks are not universally accessible due to lingering GSM-CDMA incompatibilities with legacy 2G/3G networks.
2. Subsidize only one carrier per funded area. Although, as O’Rielly admits, the currently-proposed reverse auction mechanism would already achieve this goal.
3. Phase out current legacy support. O’Rielly suggests a phase-out period of two years.
4. Measure coverage by population rather than road miles. O’Rielly acknowledges that this approach could mean that “not every single square inch of America receives wireless signals,” but says nothing of the mobile wireless needs of non-population applications such as agriculture (e.g., croplands), energy (e.g., oil wells, wind farms) or M2M.
5. Providers must offer broadband. Though a broadband requirement is already part of the proposed MF2 rules, O’Rielly observes here that “wireless carriers receiving existing support under the old program have few real service obligations.”
6. Finish the Remote Areas Fund. To avoid having multiple providers subsidized to serve in the same area, O’Rielly suggests the Commission consider the RAF and MF2 in conjunction with each other.

Proposed rules for MF2 have been pending since the FCC’s Connect America Fund Omnibus Order and Further Notice of Proposed Rulemaking was released in Summer 2014.