Steve and policy committee, There is one item in the NPRM that is a change from the CAF2 letter of credit rules and should be lobbied hard against as this adds increased costs for our small WISPS.
In item #84 "We also propose that the letter of credit remain in place until USAC and the Commission verify that a Rural Digital Opportunity Fund winning bidder has met its minimum coverage and service requirements at the end of the six-year milestone." As noted under item 82 "A CAF Phase II auction support recipient must only maintain an open letter of credit until the recipient has certified it has met the final service milestone and the certification has been verified.155" Given that WISP technology allows faster build out then fiber, many Wisps may be able to meet their build-out completions in the first year. Requiring them to carry a letter of credit for 6 years could add 30% to a winning bidders cost (at 5%/yr for the LOC) these are funds that reduce the actual amount available to be spent on true broadband build out. Hopefully we can make one last push to the FCC on why that is a bad idea before the August meeting. Garth ----- Original Message ----- From: Coran, Steve Sent: 7/22/2019 7:55:27 AM To: kj...@ethoplex.com;policycommit...@wispa.org;ebow...@aristotle.net Cc: memb...@wispa.org;firstname.lastname@example.org Subject: Re: [WISPA Members] [PolicyCommittee] [WISPA] Draft Itemsfor August 1 FCC Meeting > Some good ideas here, which need to be measured against the FCCâs objectives. In countless meetings with the FCC on CAF II rules and, more recently, speed/latency testing, it is ever-apparent that the FCC wants as much of this process to be a âcheck the boxâ exercise so they do not have to rely on their own resources and lack of expertise to decide eligibility and compliance. For example, when we approached the FCC about expanding the list of banks eligible to issue letters of credit, the concern was not expanding the list but an ability of the FCC to look at some independent list which would make the judgment for them. So we went from less than 100 banks on the S&P list to more than 3,600 banks on the Weiss list. Requiring audited financials provides a measure of independent verification from the FCC. I donât even know if the FCC looks at the audited financials â and I donât think anyone has been disqualified based on the content of the financials â they just want to know that someone independent and with expertise has conducted an audit (and recall that WISPA was influential in removing this requirement from the front end of the auction so that only winners have to spend the money for the audit). When it comes to assessing financial wherewithal, the FCC would have no ability to look at tax returns and decide who is financially viable and who is not. Same with speed/latency testing â the FCC wants to look at a list and determine the testing route, not rely on every CAF recipient to provide traffic routing maps. While we can quibble with the standards the FCC adopted, I think having standards is a better solution than having the FCC make independent â and by definition arbitrary â judgements for each applicant. > > Also, each CAF recipient is required to make annual certifications that it has enough money for the next year to meet its obligations. So, taken together, the FCC prescribes gating criteria on the front end that enables them to determine eligibility without doing any application-by-application analysis and drawing lines in gray areas, and follows that up with annual certifications and threat of USAC audits. I do not see that structure changing over time. > > I do think it is worth asking the FCC to allow an RDOF applicant to post a performance bond as an alternative to obtaining a letter of credit. WISPA pushed for this before, and the FCC rejected it. The FCC is considering a performance bond in the Uniendo a Puerto Rico and Connect USVI Fund programs, so we will see if there is movement there. We can also ask the FCC to reduce the value of the letter of credit over time (the carrying costs can exceed 5% per month), but it would be great if we had a history of CAF buildout compliance on which to rely. We may not have that at the outset of RDOF. I also like the idea about approved underwriting from other governmental agencies. > > As for a member survey, that might be more appropriate once the rules are established. The FCC has included a proposal that would make CAF-supported broadband adoption a criterion â meaning that RDOF recipients would give back support if subscribership in supported areas did not meet certain benchmarks up to 70%. Industry stakeholders will strongly oppose this â how can you dictate adoption? â and Iâm optimistic the FCC will not move forward with this proposal, which would have a significant deterrent effect on RDOF auction participation. On the positive side, the FCC is considering reducing some of the gating criteria for established broadband providers and existing CAF winners. > > Stephen E. Coran > Lerman Senter PLLC<http://www.lermansenter.com/> |2001 L Street, NW, Suite 400 | Washington, DC 20036 > 202-416-6744 (o) | 202-669-3288 (m) | sco...@lermansenter.com<mailto:sco...@lermansenter.com> |@stevecoran â twitter > > From: policycommittee-boun...@wispa.org <policycommittee-boun...@wispa.org> On Behalf Of Keefe John via PolicyCommittee > Sent: Friday, July 12, 2019 7:38 PM > To: L. Elizabeth Bowles <ebow...@aristotle.net> > Cc: Ken Hohhof via Members <memb...@wispa.org>; WISPA General List <email@example.com>; policycommit...@wispa.org > Subject: Re: [PolicyCommittee] [WISPA Members] [WISPA] Draft Items for August 1 FCC Meeting > > Agreed on the bond issue. > > If we fail to see movement on the Letter of Credit we could approach the SBA about offering a solution. They already have an export Letter of Credit program. Could something be modified or created for broadband purposes? > > A coalition of WISPs who'd like to participate in this funding program is essential. Can WISPA send out a survey so we can get accurate numbers on how many WISPs would participate in this funding program? It might be powerful to say "We have 500 members interested in participating in FCC funding programs, however, only 20 were able to participate in CAF II due to X, Y, and Z." > > It is worth at least making it known in our filings that requiring audited financials makes these programs inaccessible to many of our members. What's their rationale in requiring audited financials instead of tax returns and transcripts. Tax returns are good enough for lending from other agencies, such as the SBA. How does the FCC determine what constitutes a financially sound company anyways? Are there guidelines or is it arbitrary? > > How about an exemption to the audited financials for companies who've recently gone through the underwriting process to obtain financing via another government agency like the USDA or SBA. Surely these are creditworthy companies in the eyes of the Federal government. > > Best, > > Keefe John > CEO > Ethoplex > Direct: 262.345.5200 > -------------------- > Ethoplex Business Internet > http://www.ethoplex.com/ > Signal Residential Internet > http://www.signalisp.com/ > > https://www.linkedin.com/in/keefejohn/ > > > On Fri, Jul 12, 2019 at 9:45 AM L. Elizabeth Bowles <ebow...@aristotle.net<mailto:ebow...@aristotle.net>> wrote: > From my perspective, taking another run at eliminating the letter of credit requirement should be a priority. It is a huge barrier to smaller companies seeking this funding, and the policy the FCC is trying to accomplish can be met with a bond. > > I agree we need a coalition of small WISPs to advocate for this, but we also should leverage the experience of the WISPs who have already received CAF funding - that first-hand perspective will be helpful in showing that the LOC is burdensome in reality, not just hypothetically. > > As for the audited financials, I donât think any energy should be spent on trying to eliminate that requirement because we are likely to fail. USDA also requires audited financials for many of its grants and loans, and worse, they require the last two years. It is hella expensive, but I donât think we will win this argument, and any energy spent would be better spent elsewhere. > > Best, > Elizabeth > Sent from my iPhone > > On Jul 12, 2019, at 9:23 AM, Claude Aiken <cai...@wispa.org<mailto:cai...@wispa.org>> wrote: > We pushed for reducing these burdens (audited financials and LoC) last time. Before WISPA's advocacy, LoC must have been procured from a Top 100 bank, and audited financials had to be submitted before bidding began. We were able to get both of those changed to allow more financial entities to provide thr LoC (FCC said no on the performance bond), and get audited financials submitted only by winners. > We will try again this time, and will likely get a coalition of smaller providers associations together to try to push this. > For my edification, are you suggesting we de-prioritize spectrum advocacy in favor of this? > Claude Aiken > President & CEO > WISPA > > ________________________________ > From: wireless-boun...@wispa.org<mailto:wireless-boun...@wispa.org> <wireless-boun...@wispa.org<mailto:wireless-boun...@wispa.org>> on behalf of Keefe John via Wireless <firstname.lastname@example.org<mailto:email@example.com>> > Sent: Friday, July 12, 2019 9:03:18 AM > To: Mark Radabaugh; WISPA General List; policycommit...@wispa.org<mailto:policycommit...@wispa.org> > Cc: Ken Hohhof via Members > Subject: Re: [WISPA] Draft Items for August 1 FCC Meeting > > More funding is always welcome! > > What can be done to ensure access to this funding by all WISPs? The CAF II rules were so onerous that only a tiny percentage of WISPA members were able to participate. This needs to change. WISPA's #1 priority should be crafting rules that allow ALL WISPs to have a chance to participate. > > The two biggest barriers to entry are: > > Letter of Credit - These are very difficult to obtain, especially for the majority of our members. Can we propose a bond as an alternative? > > Audited Financial Statements - Audited financial statements cost $10,000 - $50,000 per year or more. This is a huge hurdle for the majority of WISPs. Can we propose CPA-prepared financial statements and/or IRS tax return transcripts for small entities? > > Keefe John > CEO > Ethoplex > Direct: 262.345.5200 > -------------------- > Ethoplex Business Internet > http://www.ethoplex.com/ > Signal Residential Internet > http://www.signalisp.com/ > > https://www.linkedin.com/in/keefejohn/ > > > On Fri, Jul 12, 2019 at 7:52 AM Mark Radabaugh via Wireless <firstname.lastname@example.org<mailto:email@example.com>> wrote: > There are two upcoming items on the FCCâs August 1st meeting on items that will effect all WISPâs. Please review the documents below. > > Short summary: > > 477 Order - will revamp the 477 data collection process and information. Personally this is a good thing. > > RDOF - This is the next $20,400,000,000 (20.4 Billion Dollars) that will be spend to overbuild your network if you are not currently providing 25/3 service & phone. > > WISPA has time to meet with the commissioners and discuss up to the 25th. A lot of effort has already gone into making sure that both of these are fair and open to all providers, not just the Telcoâs. There is no way to stop the feds from spending this money - itâs coming regardless of what we do. Both political parties, the administration, and the FCC all want to spend money on rural broadband. > > YOU HAVE TO DO YOUR PART to either position yourself to receive this funding, or prevent your competitors from getting it and overbuilding you. > > Mark > > Mark Radabaugh > WISPA Policy Committee Chair > 419-261-5996 > > > Begin forwarded message: > > From: "Coran, Steve via PolicyCommittee" <policycommit...@wispa.org<mailto:policycommit...@wispa.org>> > Subject: [PolicyCommittee] Draft Items for August 1 FCC Meeting > Date: July 11, 2019 at 5:48:29 PM EDT > To: "'policycommit...@wispa.org<mailto:policycommit...@wispa.org>'" <policycommit...@wispa.org<mailto:policycommit...@wispa.org>> > Reply-To: "Coran, Steve" <sco...@lermansenter.com<mailto:sco...@lermansenter.com>>, <policycommit...@wispa.org<mailto:policycommit...@wispa.org>> > > Just released, below are links to draft items of interest for the FCCâs August 1 open meeting. We have the opportunity to meet with the Commissioners until the afternoon of July 25. Would appreciate the Committeeâs input on these soon. Just released, and I have not had a chance to review these yet. > > DRAFT Form 477 Order + FNPRM: https://docs.fcc.gov/public/attachments/DOC- 358433A1.pdf > DRAFT RDOF NPRM: https://docs.fcc.gov/public/attachments/DOC-358432A1.pdf > > Stephen E. Coran > Lerman Senter PLLC<http://www.lermansenter.com/> |2001 L Street, NW, Suite 400 | Washington, DC 20036 > 202-416-6744 (o) | 202-669-3288 (m) | sco...@lermansenter.com<mailto:sco...@lermansenter.com> |@stevecoran â twitter > > > _______________________________________________ > Wireless mailing list > Wireless@wispa.org<mailto:Wireless@wispa.org> > http://lists.wispa.org/mailman/listinfo/wireless > _______________________________________________ > Members mailing list > memb...@wispa.org<mailto:memb...@wispa.org> > http://lists.wispa.org/mailman/listinfo/members >
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