Chairman Pai Readies $20.4 billion Rural Digital Opportunity Fund for Vote at FCC’S January Meeting

WASHINGTON — Federal Communications Commission Chairman Ajit Pai presented his colleagues with final rules to launch the new $20.4 billion Rural Digital Opportunity Fund. The rules, which will be voted on by the Commission at its Open Meeting on January 30, would establish a two-phased process to provide funding for the deployment of high-speed broadband in areas of the United States where there is currently not fixed broadband service that meets the Commission’s minimum speed standard (25/3 Mbps). 

“While we’ve made substantial progress in expanding broadband deployment over the last three years, the Rural Digital Opportunity Fund would be the biggest step the FCC has taken to date to close the digital divide,” said Chairman Pai.  “This new fund would target rural areas across the country where residents currently lack access to adequate broadband and would deploy high-speed broadband to millions of rural Americans in an efficient and effective manner.  In particular, as suggested by many Members of Congress, to encourage support for broadband networks that will stand the test of time, we are taking new steps to prioritize the deployment of faster-speed service, including gigabit connections.”

Building on the success of the Commission’s 2018 Connect America Fund Phase II auction, the Rural Digital Opportunity Fund would allocate $20.4 billion through a reverse-auction format to connect millions of rural homes and small businesses to high-speed broadband networks.  The Fund would target areas that lack access to 25/3 Mbps broadband services in two stages.  For Phase I, the FCC would target $16 billion to areas that are wholly unserved by such broadband (where there is no 25/3 Mbps service at all).  For Phase II, the FCC would use its new granular broadband mapping approach, called the Digital Opportunity Data Collection, to target unserved households in areas that are partially served by such broadband (areas where some households have access to such service but others do not).  Phase II would also include areas that do not receive winning bids in Phase I.

Commission staff’s initial estimate is that approximately six million model-determined locations would be eligible for bidding in Phase I of the Rural Digital Opportunity Fund. This figure is subject to change for a variety of reasons, including updated data regarding broadband deployment and construction as well as any modifications made to Chairman Pai’s draft rules.

About the $20.4 Billion Rural Digital Opportunity Fund

Overview

Bringing digital opportunity to Americans living on the wrong side of the digital divide continues to be Chairman Pai’s top priority.  Over the last three years, the Commission under his leadership has taken many significant steps to expand the deployment of high-speed broadband networks in rural America.  But more work remains to be done.

So, on January 8, 2020, Chairman Pai circulated a draft Order to his colleagues that would adopt the framework for the Rural Digital Opportunity Fund.  It builds on the successful model from the 2018 Connect America Fund Phase II auction, which allocated $1.488 billion to deploy broadband networks to more than 700,000 unserved rural homes and businesses across 45 states.

The Rural Digital Opportunity Fund would represent the Commission’s single biggest step to close the digital divide by providing up to $20.4 billion over ten years to connect millions more rural homes and small businesses to high-speed broadband networks.  The Commission will vote on the rules for the Rural Digital Opportunity Fund at its January 30 Open Meeting.

Reverse Auction

The Rural Digital Opportunity Fund would allocate funding through a multi-round reverse-auction format to encourage competition and ensure that Americans are connected in an efficient and cost-effective manner.

Deploying High-Speed Networks

Under Chairman Pai’s draft Order, the Rural Digital Opportunity Fund would encourage the deployment of networks that will stand the test of time, including those providing gigabit connections, in a number of ways.

• Auction weights would prioritize support for services providing faster speeds and low latency.

• Once the reverse auction hits the clearing price, where there is more than one bid to serve the same area, the bidder in the faster-speed tier would be declared the winner.

• The minimum speed would increase from the 10/1 Mbps that was used in Connect America Fund Phase II to 25/3 Mbps.

Eligible Areas for Funding

The Rural Digital Opportunity Fund would target funding to areas that lack adequate broadband access in two stages:

• In Phase I, the FCC would target census blocks that are wholly unserved with fixed broadband at speeds of 25/3 Mbps (census blocks where existing data tells us there is no such service at all).  $16 billion would be made available under Phase I.  And according to the Commission staff’s initial estimates, approximately 6 million homes and businesses would be eligible for Phase I.

• In Phase II, the FCC would use its new granular broadband mapping approach, called the Digital Opportunity Data Collection, to target unserved households in partially served census blocks (census blocks where some locations have access to fixed broadband at speeds of 25/3 Mbps but others do not).  Phase II would also include any areas not awarded during the Phase I reverse auction.

This two-phase structure would allow the FCC to expedite funding to areas that we know are unserved rather than waiting for the completion of the agency’s ongoing, comprehensive effort to improve mapping.  The FCC’s existing Form 477 data has been criticized for identifying partially served blocks as “served,” not for identifying as “unserved” a census block that is in fact served.  Waiting for the availability of more granular data before moving forward with any part of the Rural Digital Opportunity Fund would only further disadvantage the millions of Americans that we know do not have access to digital opportunity.

Prioritizing Areas That Need Support 

The Rural Digital Opportunity Fund would prioritize funding for areas most in need:  those lacking even 10/1 Mbps broadband service as well as rural Tribal lands.  The Fund would target additional funding to areas that currently lack even 10/1 Mbps service and would include a Tribal Broadband Factor to encourage bidders to seek support to deploy broadband networks on Tribal Lands.