FCC Establishes $9 Billion Fund to Bring 5G to Rural America

November 6, 2020 | by Andrew Regitsky

FCC Establishes $9 Billion Fund to Bring 5G to Rural America

On October 29, 2020, the FCC released a Report and Order (Order) in Docket 20-32, establishing a massive $9 billion fund to bring 5G networks to high-cost rural areas. The 5G Fund for Rural America will use multi-round reverse auctions to distribute up to $9 billion, in two phases, in areas where it is not economical to build such networks without high-cost support.  Carriers will be funded for 10-years for each phase and will have both performance and reporting milestones during the years funded. 

The most significant aspect of the Order is that the Commission is using the lessons it learned from the earlier high-cost Mobility Fund for wireless carriers to determine which areas will be eligible for 5G Fund support through improved mobile broadband coverage data gathered through its Digital Opportunity Data Collection proceeding, instead of the near useless broadband maps it used previously.  Here is how the new fund will work.

Phase I of the 5G Fund will target up to $8 billion of support nationwide to areas lacking unsubsidized 4G LTE or 5G mobile broadband, with $680 million specifically set aside for bidders offering to serve Tribal lands.

Phase II will provide at least an additional $1 billion, along with any unawarded funds from Phase I, to specifically target the deployment of technologically innovative 5G networks that facilitate precision agriculture.

The Commission adopts several requirements that are unique to the new 5G Fund.

We will require both legacy high-cost support recipients and 5G Fund auction support recipients to meet public interest obligations to provide voice and 5G broadband service, and to satisfy distinct, measured performance requirements as a condition of receiving support.  Recipients of both legacy high-cost support and 5G Fund auction support must meet minimum baseline performance requirements for data speed, latency, and data allowance, including: (1) deploying 5G networks that meet at least the 5G-NR (New Radio) technology standards developed by the 3rd Generation Partnership Project with Release 15 (or any successor release that may be adopted by the Office and Bureau after appropriate notice and comment) with median download and upload speeds of at least 35 Mbps and 3 Mbps with minimum cell edge download and upload speeds of 7 Mbps and 1 Mbps; (2) meeting end-to-end round trip data latency measurements of 100 milliseconds or below; and (3) offering at least one service plan that includes a minimum monthly data allowance that is equivalent to the average United States subscriber data usage. Order, Docket 20-32, at para. 20.

There are several other interesting aspects of the Order:

The auction will account for T-Mobile’s enforceable commitment in its deal with Sprint to cover 90 percent of rural Americans with its 5G network within six years in order to avoid spending limited federal resources on wasteful overbuilding. 

It will also employ an adjustment factor to ensure that the hardest-to-serve areas, such as those with rugged terrain or sparse populations, can compete in the auctions.

The Order requires 5G Fund winning bidders to deploy networks providing 5G mobile broadband at speeds of a least 35 Mbps download 3 Mbps upload and meet interim deployment milestones beginning at the three-year mark and a final deployment milestone at the end of the sixth year. 

Starting in 2021, carriers receiving legacy mobile high-cost support must begin spending an increasing portion of their $382 million in support to bring 5G to rural, high-cost areas.

While the two FCC Commissioners that are Democrats complimented the Commission for using actual broadband data for the new 5G fund, they mocked their Republican colleagues for continuing to use flawed Form 477 map data for wireline high-cost disbursements.  Moreover, as Commissioner Jessica Rosenworcel notes, even this fund makes decisions before the new data is completely submitted.

But here’s the not-so-positive. We’re building this auction without grounding it in any real-world data. That’s because we are still slow-rolling efforts to fix our maps and in fact, we just missed a key deadline under the Broadband DATA Act. We can’t afford to wait longer, we need to find some way to make at least some progress now. Because we need that data to help inform the choices we make about how this auction operates, what speeds it requires, and what build-out it compels. We need that data to know what communities lack wireless service and how much reaching them will truly cost. But instead, we’re building the ship and setting sail while the compass is still on backorder. (Docket 20-32, Order, Statement of Commissioner Jessica Rosenworcel Approving in Part and Dissenting in Part).