$300 million reverse auction targets mobile broadband wasteland

In preparation for a $300 million reverse auction scheduled for September, the FCC released an interactive map that reveals massive gaps in U.S. mobile broadband coverage.

fcc map

Click here for the map.

The commission's new map is an interactive visual representation of the areas preliminarily identified as being potentially eligible for funding via the reverse auction because they lack access to 3G mobile service or better. The map shows that huge swaths of the Western United States are bereft of mobile broadband service, which is understandable given the low population densities and geographic challenges presented by the region. Other areas that notably lack coverage include the Appalachian regions of West Virginia and Eastern Kentucky and New York's Adirondack Mountains.

The return on investment for operators that might build mobile broadband networks in areas of low POPs and challenging terrain is simply unacceptable, which is why the government intends to fork over cash so network deployments in these areas might become more attractive.

Earlier this month, the FCC released a public notice seeking comments on its plan to use reverse competitive bidding to award a total of $300 million to companies willing to build 3G or better networks in unserved wireless markets. The one-time Mobility Fund Phase I funding that will released via Auction 901, slated to start Sept. 27, 2012, is part of the Connect America Fund that the FCC approved in November 2011 to overhaul its outdated universal service and intercarrier compensation systems in an effort to connect everyone in the United States to broadband. The Mobility Fund is specifically aimed at providing current-generation or better mobile voice and broadband services in unserved areas.

Phase II of the mobility fund is supposed to provide $500 million annually for ongoing support of mobile services.

The FCC said that it will select winners of the reverse auction based on bids that maximize the road miles covered by new mobile broadband services without exceeding the budget of $300 million. The rules state that winning bidders will be required to establish 3G service within two years, or 4G service within three years, of receiving funding. Comments on the plan are due Feb. 24, with replies due March 9.

JSI Capital Advisers noted on its blog that the FCC has not addressed a number of issues, including what it will do if the auction does not garner enough bids to use up the full $300 million. "It appears as though Auction 901 is a free-for-all ... at least for anyone who has the courage, shrewdness and resources to play at this high-stakes table," said the investment bank.

The FCC has made expanding wireless broadband a priority and pledged in March 2010 that it would identify 500 MHz of additional broadband spectrum over the next 10 years, with 300 MHz to be identified within the first five years of the plan. Progress has been slow, however, given the existing allocations of spectrum that would have to be cleared. Much of the spectrum that could be readily refarmed is currently licensed to television broadcasters and mobile satellite providers.

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Sprint, T-Mobile urge Congress to preserve FCC's spectrum auction authority
Seybold's Take: Spectrum auctions locked in Congress
AT&T, FCC spar over incentive spectrum auction rules
FCC's broadband plan goes under the microscope

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