FCC floats options for proposed $9B 5G rural fund

rural america
The FCC is seeking public comment on whether to hold the auction next year, or wait until at least 2023 when more accurate data might be available. (Getty Images)

The FCC is moving ahead with efforts to establish a new fund to help ensure 5G services are deployed in rural areas of the country that might otherwise be left out and is considering two options for determining what locations are eligible.  

FCC Chairman Ajit Pai circulated a Notice of Proposed Rulemaking Wednesday for the 5G Fund for Rural America that would dole out up to $9 billion in Universal Service Fund (USF) support in two phases, to be distributed through multi-round reverse auctions.

Phase 1 would make up to $8 billion available for rural 5G deployments over 10 years.

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Specifically, the fund would target rural areas where there’s not enough financial incentive for wireless operators to deploy 5G on their own, as well as locations that aren’t likely to be covered by rural coverage commitments from T-Mobile.

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T-Mobile officially closed its merger with Sprint on Wednesday. As part of securing regulatory approval, T-Mobile pledged that within six years of closing, the combined company (which goes by T-Mobile) would deploy 5G service to 99% of the U.S. population, including 90% of those living in rural America at speeds of at least 50 Mbps.  

In terms of finding what parts of America need help getting 5G service the most, accurate reporting of mobile coverage has proved to be an issue for the FCC before.

The new rural 5G fund was first proposed in December 2019 when the FCC scrapped its flawed Mobility Fund Phase II proceeding due to the unreliability and often overstated 4G LTE coverage maps submitted by carriers including T-Mobile, Verizon, and U.S. Cellular. Those maps were meant to help the FCC determine which areas of the country were underserved and therefore eligible for service providers looking to tap federal support for 4G LTE deployments.  

RELATED: FCC to ditch flawed Mobility Fund II over unreliable 4G LTE coverage maps

The proposed rural 5G fund includes roughly $4.5 billion originally set aside for 4G LTE under the defunct MF-II program.

To that end, the FCC is asking for public input on the best way to determine where coverage is needed.

“To balance our policy goal of efficiently and quickly redirecting high-cost support to areas where it is most needed with our obligation to ensure that we have an accurate understanding of the extent of nationwide mobile wireless broadband deployment, we seek public input on two options for identifying areas that would be eligible for 5G Fund support,” Pai wrote in his blog.

The two options are as follows:

Option 1: Hold an auction in 2021 and define eligible areas busing current data sources that identify areas as particularly rural. The proposal would prioritize areas that have historically lacked 4G LTE or 3G services.

Option 2: Delay an auction until at least 2023, at which point the agency hopes to have improved mobile broadband coverage data from its Digital Opportunity Data Collection initiative.

“5G promises to be the next leap in broadband technology, offering significantly increased speeds and reduced latency,” said Pai in a statement. “The 5G Fund for Rural America focuses on building out 5G networks in areas that likely would otherwise go unserved. It’s critical that Americans living in rural communities have the same opportunities as everybody else.”

Staying connected is also top of mind these days as many Americans are working, learning, and spending more time at home due to the ongoing coronavirus crisis. 

For the 5G Fund, phase 2  would target areas that are even more difficult and costly to serve, including farms and ranches, while allocating at least $1 billion for wireless deployments that help precision agriculture.

The commission will vote at its April 23 meeting.

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