Federal budget paves way for spectrum for 5G, money for rural wireless

Provisions in the budget bill will enable the FCC to designate 255 MHz of licensed and unlicensed spectrum for wireless use by the end of 2022. (Pixabay)

President Trump signed a $1.3 trillion budget bill late last week that includes several provisions that will impact the telecom industry, including new funds for rural broadband deployment, plans that will smooth the way for future spectrum auctions, and opportunities for the FCC to allocate more spectrum for commercial use. The bill has received mostly positive responses from top telecom bodies and trade organizations.

The final version of the bill included Ray Baum’s Act, a provision that would remove the requirement for upfront auction payments from bidders to be held in interest-bearing accounts, FCC Chairman Ajit Pai said.

The rule has effectively become a barrier to the FCC in auctioning higher frequency spectrum for 5G use because regulatory rules have disincentivized financial institutions from offering these types of accounts. Speaking at Mobile World Congress last month, Pai warned that if Congress did not act to change FCC auction rules by May 13, “our efforts to realize America’s 5G future will be delayed.”

RELATED: Rosenworcel: U.S. needs to plan next spectrum auction now or risk ceding 5G leadership to other nations

Pai recently announced the FCC’s plans to hold auctions for millimeter-wave spectrum during the fourth quarter of this year, spectrum likely to be used for 5G services. Those plans include a 28 GHz spectrum auction slated for November, to be followed by a 24 GHz auction. The FCC is also considering making spectrum between 3.7 GHz and 4.2 GHz available for terrestrial commercial use. Pai heralded Trump’s signing of the bill as helping America “lead the world in 5G.”

Ray Baum’s Act would also enable the FCC to designate 255 MHz of licensed and unlicensed spectrum for wireless use by the end of 2022; initiate rulemaking procedures within the next two years on mobile or fixed service in the 42 GHz band; and see the FCC allocate funds to be used by broadcasters to cover relocations needed after the 600 MHz auction last year.

The budget bill also includes the controversial Cloud Act, which would give the U.S. Attorney General the authority to enter into reciprocal data-sharing agreements with foreign countries, in order for that data to be used by government and law enforcement agencies. While organizations such as the ACLU have raised concerns over data sharing across borders, Microsoft President Brad Smith described the Cloud Act as “a critical step forward in resolving an issue that has been the subject of litigation for over four years.”

And finally, the budget bill includes a provision to allocate $600 million to the U.S. Department of Agriculture for rural broadband grants and loans. The provision includes the creation of a new pilot program for rural broadband within the Rural Utilities Service and makes additional money available for existing rural broadband programs. NTCA CEO Shirley Bloomfield said the provision “represents a much-needed ‘shot in the arm’ for rural broadband and charts a course toward realizing the goal of promoting and sustaining effective broadband deployment in rural America.”