FCC Creates 5G Fund For Rural America

October 29, 2020 – The Federal Communications Commission (FCC) has formally approved a Report And Order creating a 5G Fund for Rural America which will provide universal service fund support for the deployment of 5G wireless networks.[1] The 5G Fund will distribute up to $9 billion in two phases. However, before allocating the money, the FCC will determine which areas of the country are eligible for support. Here are the steps the FCC will use to implement the new 5G Fund:

Determination of Eligible Areas – The FCC will use mobile broadband coverage information assembled from the upcoming Digital Opportunity Data Collection proceeding to determine areas eligible for 5G support (sometime in 2021 or 2022). The FCC will exclude from eligibility any area where: (1) an unsubsidized 4G LTE network has been deployed, or (2) an unsubsidized 5G network has been deployed.

Phase I – A multi-round reverse auction will distribute support to eligible rural areas that lack unsubsidized 4G LTE and 5G service by at least one provider. Phase I will distribute up to $8 billion, of which $680 million will be reserved for service to Tribal lands.

Phase II – A multi-round reverse auction will distribute support to specifically target the deployment of technologically innovative 5G networks that facilitate precision agriculture. Phase II of the 5G Fund will distribute at least $1 billion, and any unawarded funds from Phase I.

Entities seeking to participate in the 5G Fund auction must satisfy eligibility requirements that are similar to those used for the FCC’s Mobility Fund Phase I, CAF Phase II, and Rural Digital Opportunity Fund. The minimum geographic area for bidding in the 5G Fund auction will be no larger than a census tract and no smaller than a census block group.

The 5G auction will incorporate an adjustment factor that will assign a weight to each geographic area and will apply to bidding for support amounts. This adjustment factor also will apply to the methodology for disaggregating legacy high-cost support still being distributed to rural wireless providers.

Each phase of the 5G Fund will provide support for a 10-year term, with disbursements made on a monthly basis. Wireless providers that receive mobile 5G funding will be required to meet interim and final 5G deployment obligations and performance requirements for data speed, latency, and data allowance. Recipients of 5G support also will be subject to annual reporting requirements.

Those are the basic parameters of the 5G Fund. The timing is broadly in line with what was proposed in the 5G Fund NPRM as Option B: Collecting New Data Before Funding 5G in Rural America in 2023 or Later. This will allow the FCC to collect “new, more precise, verified mobile coverage data” before allocating support. It also means support won’t flow for at least another year or two or three. Option A would have had the FCC distribute support much sooner, but based on current, not-as-precise data. The timing is a big deal. Going the Option B route will result in less areas being eligible for support in comparison to the areas that would probably be eligible now or next year under Option A.  

I’ll break down various sections of the 5G Fund Order in a few future blog posts.

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[1] Establishing a 5G Fund for Rural America, GN Docket No. 20-32, Report And Order, FCC 20-150 (Oct. 29, 2020), https://docs.fcc.gov/public/attachments/FCC-20-150A1.pdf.