ISPs awarded CAF II funding in the recent auction need to be aware that they will be subject to compliance testing for both latency and speeds on their new broadband networks. There are financial penalties for those failing to successfully meet these tests. The FCC revised the testing standards in July in Docket DA 18-710. These new testing standards become effective with testing starting in the third quarter of 2019. There new standards will replace the standards already in place for ISPs that receive funding from earlier rounds of the CAF program as well as ISPs getting A-CAM or other rate-of-return USF funding.
ISPs can choose between three methods for testing. First, they may elect what the FCC calls the MBA program, which uses an external vendor, approved by the FCC, to perform the testing. This firm has been testing speeds for the network built by large telcos for many years. ISPs can also use existing network tools if they are built into the customer CPE that allow test pinging and other testing methodologies. Finally, an ISP can install ‘white boxes’ that provide the ability to perform the tests.
The households to be tested are chosen at random by the ISP every two years. The FCC doesn’t describe a specific method for ensuring that the selections are truly random, but the ISP must describe to the FCC how this is done. It wouldn’t be hard for an ISP to fudge the results of the testing if they make sure that customers from slow parts of their network are not in the testing sample.
The number of tests to be conducted varies by the number of customers for which a recipient is getting CAF support; if the number is CAF households is 50 or fewer they must test 5 customers; if there are 51-500 CAF households they must test 10% of households. For 500 or greater CAF households they must test 50. ISPs that declare a high latency must test more locations with the maximum being 370.
ISPs must conduct the tests for a solid week, including weekends in every quarter to eliminate seasonality. Tests must be conducted in the evenings between 6:00 PM and 12:00 PM. Latency tests must be done every minute during the six-hour testing window. Speed tests – run separately for upload speeds and download speeds – must be done once per hour during the 6-hour testing window.
The FCC has set expected standards for the speed tests. These standards are based upon the required speeds of a specific program – such as the first CAF II program that required speeds of at least 10/1 Mbps. In the latest CAF program the testing will be based upon the speeds that the ISP declared they could meet when entering the action – speeds that can be as fast as 1 Gbps.
ISPs are expected to meet latency standards 95% of the time. Speed tests must achieve 80% of the expected upland and download speed 80% of the time. This might surprise people living in the original CAF II areas, because the big telcos only need to achieve download speeds of 8 Mbps for 80% of customers to meet the CAF standard. The 10/1 Mbps standard was low enough, but this lets the ISPs off the hook for underperforming even for that incredibly slow speed. This requirement means that an ISP guaranteeing gigabit download speeds needs to achieve 800 Mbps 80% of the time. ISPs that meet the speeds and latencies for 100% of customers are excused from quarterly testing and only have to test once per year.
There are financial penalties for ISPs that don’t meet these tests.
- ISPs that have between 85% and 100% of households that meet the test standards lose 5% of their FCC support.
- ISPs that have between 70% and 85% of households that meet the test standards lose 10% of their FCC support.
- ISPs that have between 55% and 75% of households that meet the test standards lose 15% of their FCC support.
- ISPs with less than 55% of compliant households lose 25% of their support.
For CAF II auction winners these reductions in funding would only be applied to the remaining time periods after they fail the tests. This particular auction covers a 10-year period of time and the testing would start once the new networks are operational, which is required to be completed between years 3 and 6 after funding.
This will have the biggest impact on ISPs that overstated their network capability. For instance, there were numerous ISPs that claimed the ability in the CAF auction to deliver 100 Mbps and they are going to lose 25% of the funding if they deliver speeds slower than 80 Mbps.