October 21, 2019
The FCC proposes to use the same multi-round reverse auction design that it used for the CAF II auction for the Rural Digital Opportunities Fund (RDOF) phase I auction. The CAF II auction was, in many ways, a success, assigning $1.49B in support over ten years to provide fixed broadband and voice services to over 700,000 eligible locations. However, CAF II was only the first application of this auction design for the assignment of funds to provide service to under-served or unserved areas in the United States, and it would be wrong to think that the design is already as good as it can be. After all, the FCC’s forward auction designs have evolved to the point of barely resembling the original designs first used over two decades ago. Each point in that evolution took advantage of the data and experience of prior auctions to make efficiency-enhancing refinements. Similarly, the CAF II auction data and experience are available to help consider and examine potential refinements to this reverse auction design.
In this paper, we analyze the CAF II auction to better understand its outcomes and why they occurred. The result of this analysis is a set of proposals that are likely to improve the fairness and efficiency of the RDOF auction.