Welcome
Tech & Telecom Law News

FCC Establishes $20 Billion Rural Broadband Expansion Fund (1)

Jan. 30, 2020, 4:56 PMUpdated: Jan. 30, 2020, 6:02 PM

The Federal Communications Commission is creating a $20.4 billion program to subsidize the construction of broadband networks in unserved parts of the U.S. over the next decade.

Electric cooperatives, phone companies, satellite operators, and other telecom providers will compete for funding to expand broadband to areas where the FCC estimates some 6 million homes and businesses lack internet service.

“Our goal here is pretty simple: We want every American in rural areas who for too long has been on the wrong side of the digital divide to benefit from broadband,” FCC Chairman Ajit Pai said before an agency vote to establish the Rural Digital Opportunity Fund.

AT&T Inc. and other wireless carriers are deploying lightning-fast 5G networks in metropolitan areas across the country, even as many rural areas continue to lack access to basic broadband internet services.

The FCC’s three GOP members voted to approve the program, which succeeds the agency’s recently expired Connect America Fund. The agency’s two Democratic commissioners approved in part and dissented in part.

The subsidies will be allocated from the agency’s Universal Service Fund, which is collected from fees on consumers’ monthly phone bills.

Funding Stages

The first phase of funding, $16 billion, will go to areas where FCC data shows all buildings lack broadband service. The remaining $4.4 billion will be allocated later, based on more precise location data, to connect unserved buildings near structures that may already have service.

The agency’s two Democratic members criticized the commission for allocating most of the funds without using the more precise data.

“Today’s order presses ahead with funding decisions based on mapping data that doesn’t reflect reality, plowing the same mission-critical error into a newer, much larger program,” FCC Commissioner Geoffrey Stark said before the vote.

Pai said the agency couldn’t afford to wait for the more accurate broadband data collection when so many rural Americans continue to lack broadband access.

The FCC voted Aug. 1, 2019, to require broadband providers to submit more in-depth broadband availability data. Democrats and Republicans alike have complained for years that the agency’s broadband coverage data is flawed.

Empire State Excluded

Democrats also criticized the agency for barring funds from going to states like New York that spend significant amounts of their own resources to expand rural broadband.

“We could have explored working more closely with states by having them match the federal dollars here,” FCC Commissioner Jessica Rosenworcel said before the vote.

Pai said excluding funding from such states is necessary to stretch limited subsidy dollars.

“I cannot condone handing companies additional taxpayer money to deploy broadband in areas where they are legally obligated to deploy broadband already,” Pai said before the vote.

(Updated with additional reporting )

To contact the reporter on this story: Jon Reid in Washington at jreid@bloomberglaw.com

To contact the editors responsible for this story: Melissa B. Robinson at mrobinson@bloomberglaw.com, Keith Perine at kperine@bloomberglaw.com

To read more articles log in. To learn more about a subscription click here.