Pai Anticipates Vote on $20B Rural Broadband Fund This Month

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Wednesday, FCC Chairman Ajit Pai circulated to his colleagues for a vote, a draft order, that if passed, would establish the Rural Digital Opportunity Fund to help close the digital divide. Pai plans to schedule a vote on the plan at the agency’s January 30 meeting. 

The new fund would provide up to $20.4 billion over the next decade to support the deployment of high-speed broadband networks in rural areas that lack fixed broadband service that meets the Commission’s baseline speed standards. 

To maximize the impact of these investments, the agency would use a multi-round, descending-clock reverse auction. The Commission used this same approach in 2018 for Phase II of the Connect America Fund. That helped fund the deployment of high-speed broadband to 713,000 unserved rural homes and businesses for 30 percent of the projected cost, according to the Commission. 

To get money for broadband to participants faster, Pai proposes to divide the Rural Digital Opportunity Fund into two phases. Phase I would provide up to $16 billion to fund the deployment of high-speed broadband in census blocks where the agency knows there’s no service that meets the Commission’s baseline speed standards. Based on initial estimates, the FCC believes almost six million homes and businesses would be eligible for Phase I.

The FCC’s broadband maps have been criticized for inaccuracies. Once it fixes them to more precisely identify connectivity gaps, it will move forward with Phase II. Phase II will cover unserved households in census blocks where some households are served, as well as areas that don’t receive funding in Phase I.

In cases of a deadlock between two bidders for the same area, the one providing faster speeds would win, agency staffers told reporters. They anticipate, in addition to carriers, bidders could include Wireless Internet Service Providers and electric utilities.

In reaction to the news, the National Association of Tower Erectors Executive Director Todd Schlekeway stated: “NATE member companies are on the front lines on a daily basis deploying the broadband and related-infrastructure to rural and underserved areas of the United States, and the Rural Digital Opportunity Fund will ultimately facilitate closing the digital divide by expanding access to the broadband networks these rural homes and businesses need at the high-speeds they deserve.” 

January 9, 2020   

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