The FCC has adopted the rules for its next major round of rural broadband subsidies. Phase I of the Rural Digital Opportunity Fund will award up to USD 16 billion over 10 years for the deployment of fixed broadband networks to millions of unserved homes and businesses across rural America.
The money will be distributed in an auction that will prioritize bids for higher speeds up to 1 Gbps and lower latency networks. It more than doubles the minimum speed from the FCC’s 2018 Connect America Phase II auction to 25/3 Mbps.
Bidding is expected to start 29 October, and interested participants can apply from 01 July. The latest FCC decision sets minimum business experience and financial means to deploy broadband networks for any companies that benefit from the subsidies. "Commission staff will closely scrutinize applications to ensure that all applicants are proposing to use technologies with demonstrated success in providing mass market retail broadband to consumers to ensure taxpayer funding is not wasted," the regulator said.
LEO satellite hopefuls
The comment comes as new players look to enter the market, such as SpaceX's Starlink, which is developing a fleet of low-earth orbit satellites to provide broadband service. The question is whether their technology is able to deliver the latency required in the auction terms, and if SpaceX has the experience to deliver a mass-market service.
FCC chairman Ajit Pai said the rules look to ensure technological neutrality and maximize competition. New types of technologies can apply for different tiers in the auction. For example, fixed wireless and DSL providers can apply to bid in the gigabit tier for the first time.
At the request of one commissioner, the FCC also left the door open for low-earth orbit satellite providers to bid in the low-latency tier, Pai said. However, the rules make clear that applicants must demonstrate a proven track record of providing a mass-market retail broadband service to consumers in order to qualify, he added. "And given the timing of the application window, I have every reason to believe that this hurdle will be insurmountable. And for good reason: The purpose of the Rural Digital Opportunity Fund is to ensure that Americans have access to broadband, no matter where they live. It is not a technology incubator to fund untested technologies."
Despite controversy over the data supplied by operators on their broadband coverage, the FCC said it will use its existing data to determine areas eligible for phase 1 of the auction. The second phase of the fund, with another USD 4.4 billion in finding, will use new broadband mapping data being developed in the FCC’s Digital Opportunity Data Collection, started last August.
