Commissioners Spar as FCC Votes on Rural Broadband Subsidies

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The FCC Thursday voted on final rules to create the $20.4 billion Rural Digital Opportunity Fund, subsidies that Chairman Ajit Pai announced last year at the White House. Through a two-phase reverse auction mechanism, the agency will direct up to $20.4 billion over 10 years to finance up to gigabit speed broadband networks in unserved rural areas. The vote was contentious, with Democrats opposing parts of the plan, saying it leaves out at least one state and relies on bad broadband maps. 

Commissioner Brendan Carr praised the item’s attention on those who need broadband most. “I proposed we focused first on communities that have either dial-up or nothing.”

Carr praised changes to Letters of Credit carriers need from lending institutions to qualify for the money. Before the change, the letters represented “over $600 million more than necessary” to be spent on fees, “which would have decreased [the] chances of building out. So, rather than tying up scarce dollars, we have more capital to go directly into the ground, building internet infrastructure,” Carr explained. 

Commissioner Jessica Rosenworcel blasted the reliance on the FCC’s outdated broadband maps to determine which areas are eligible for the funding. She referenced a woman in upstate New York who led residents to survey broadband availability in their town to, “prove to local, state and federal authorities that they do not have the infrastructure they need to succeed in the digital age. Let’s salute them for their grit, savvy and persistence. But it shouldn’t have to be this way.”  

Rosenworcel said stridently: “The FCC should know where service truly is and is not. We need maps before money and accurate data before deployment.” She said major changes were made to the order the night before the vote, “without understanding” the ramifications. The item, Rosenworcel said, “was guided by the desire to rush” the order “out the door, claim credit and declare our broadband problems solved.”

Rosenworcel also took issue with the FCC’s recent decision to leave New York out of Phase 1 of the fund, because of previously established programs to fund rural broadband in that state. Before the vote, Sen. Chuck Schumer (D-NY) wrote to Chairman Pai in protest, Inside Towers reported. Commissioner Michael O’Rielly said: “I applaud the Chairman for refusing to cave to demands of certain self-serving politicians to use our funds to overbuild. To claim that New York is being short-changed is ludicrous.”

Chairman Pai said during the vote the need is urgent: “I cannot condone spending funds on areas that already have broadband.” As for the agency’s maps, he said: “Last August, the FCC adopted the digital opportunity data collection, a new look at brand mapping to collect granular price and crowd source data so we can target support to those in partially served areas in Phase II of the fund.”

The Commission recognizes that based on new broadband availability information, changes may need to be made for Phase II of the fund, Pai explained. “But none of these questions [of] who is in Phase Two, or how much it will cost to serve them, undercuts our obligation to ensure millions we know are unserved have something. I do not stand for delaying digital opportunity for millions of Americans any longer. I can’t wait to see the auction begin later this year.”

Pai read aloud the names of several organizations that support the fund, including the National Association of Tower Erectors. (Read more about that and reaction from other telecom associations here.)

The first phase of the Rural Digital Opportunity Fund will begin later this year and target census blocks that are wholly unserved with fixed broadband at speeds of at least 25/3 Mbps. Phase 1 would make available up to $16 billion to census blocks where existing data shows there is no such service. The Rural Digital Opportunity Fund auction will prioritize networks with higher speeds, greater usage allowances, and lower latency. To support the deployment of sustainable networks in this auction, the auction will prioritize bidders committing to provide fast service with low latency. 

By Leslie Stimson, Inside Towers Washington Bureau Chief

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