Small Alaska telecom warns FCC 'land rush' favors big carriers

A rural Alaska telephone cooperative warned federal regulators Tuesday that a first-to-file rule for broadband funding could trigger a land rush favoring larger carriers with more resources to quickly prepare applications, leaving small rural providers at risk of losing funding access.

OTZ Telephone Cooperative, based in Kotzebue, told the Federal Communications Commission's Wireless Telecommunications Bureau that the rule governing the Alaska Connect Fund would force carriers to race to submit performance plans the moment final eligible-areas maps are released. The cooperative argued the policy lacks clear criteria and could lead to arbitrary decisions that violate administrative law.

The funding program and first-to-file rule

The FCC issued its Alaska Connect Fund order on November 4, 2024, directing federal universal service support to expand broadband in high-cost areas. Under paragraph 117 of the order, when multiple carriers seek support for the same single-support area, the agency awards it to whichever provider has its updated performance plan accepted first.

CEO Kelly Williams and attorney Kenneth C. Johnson met with six Wireless Telecommunications Bureau officials via teleconference June 9 to discuss implementation of the fund. The meeting focused on December 24 Broadband Data Collection data for voice and 4G LTE service, which will serve as the baseline for the next version of the eligible-areas map.

OTZ told the bureau that the paragraph 117 provision awarding new, uncovered hexagonal map areas to whichever provider gets there first makes a certain amount of sense. However, the cooperative argued that awarding single-support areas based on which carrier has its updated performance plan accepted first puts the regulator in an untenable position where, absent clear criteria, any administrative decision would be construed as arbitrary and capricious. The provision would create a land rush where carriers hurriedly prepare performance plans the minute final maps are released, unfairly favoring larger carriers with the staff and outside resources to quickly analyze data and prepare applications.

OTZ introduced its own internet service in 1996 and was the first rural Alaska telecommunications company to provide high-speed internet to its customers. The cooperative now serves Northwest Alaska communities with telephone, internet, and mobile services.

Technical challenges for small carriers

OTZ also raised technical concerns about the labor-intensive process of challenging other carriers' coverage claims. The cooperative noted that 5G technology does not propagate as far as 4G, complicating verification of whether another carrier actually provides service in contested hexagonal map areas. OTZ told bureau staff it had raised the 5G-versus-4G propagation issue in past meetings.

The FCC's Broadband Data Collection framework governs how providers report coverage and allows challenges to those maps, but the process requires detailed, location-specific testing that can be resource-intensive for small rural carriers. The Governor's Task Force on Broadband documented in 2021 that prior FCC reporting practices allowed providers to mark an entire census block as served if a single household had service, potentially masking unserved locations across Alaska.

The Wireless Telecommunications Bureau has not announced changes to the first-to-file provision. The final eligible-areas maps using December 24 data have not been released.