The Federal Communications Commission will vote on rules later this month for its proposed plan to allocate $20.4 billion in funding to broadband providers serving rural areas in the U.S. The fund, which will be allocated during the next 10 years, will also be available to cable providers, wireless companies and electric co-ops, which have traditionally been excluded from such government subsidies, in an effort to finally close the rural digital divide.
FCC Chairman Ajit Pai introduced the proposed rules for the Rural Digital Opportunity Fund to FCC colleagues on Wednesday. The full FCC will vote on the rules on Jan. 30.
“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,” Pai said in a statement.
The rules call for a two-phase reverse auction to distribute the money in the fund, which means the lowest bid wins the auction. The first phase will offer $16 billion in funding for areas of the country where no high-speed broadband is available today. The second phase of the auction will go to areas that are partially served by broadband. Areas that don’t receive funding in the first phase can continue to bid on funds in the second phase of the auction.
The auction would also prioritize bids from broadband providers that promise to deliver faster speeds over providers offering services with lower speeds. The auction will also prioritize areas that currently lack internet download speeds of 10 Mbps as well as prioritizing funds for tribal lands. Phase one of the auction is expected to begin later this year, said FCC officials. The agency estimates that roughly 6 million locations would be eligible for the first phase of the auction.
Photo: FCC Chairman Pai in the field in North Dakota