ACA, WISPA Offer Alternative Bank Criteria for CAF II Auction Letters of Credit

The American Cable Association and Wireless Internet Service Provider Association proposed alternative criteria the FCC could use to identify banks that could issue acceptable letters of credit (LoC) for "smaller experience service providers" (SESPs) seeking to participate in a planned reverse auction of Connect America Fund Phase II broadband/voice subsidies for rural areas traditionally served by price-cap carriers. "The bank should be [Federal Deposit Insurance Corp.] or [Federal Credit System Insurance Corp.]-insured and should meet the 'Well-Capitalized' Prompt Corrective Action threshold under Base III Capital Adequacy Standards," ACA and WISPA said in a filing Tuesday in docket 10-90. The groups said the alternative criteria would expand the base of potential banks issuing acceptable LoC from 63 under the FCC proposals to 6,195 "and provide more reliable and verifiable indicators of bank viability." The groups said they are concerned the FCC financial requirements for bidding "will deter, if not preclude" SESPs from participating in the auction.