$2 Billion FCC Auction to Expand Rural Broadband

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The Federal Communications Commission announced that it will begin an auction in 2018 that will provide nearly $2 billion over 10 years to expand high-speed Internet access in rural areas that are currently underserved by fixed broadband.

The IT team at the FCC re-prioritized its projects in March to align with the goals of the agency’s new leadership. David Bray, the former chief information officer at the FCC, and his team presented the projects that they are working on to Chairman Ajit Pai to get his opinion on where the team should focus its efforts. Pai wanted the IT team to focus on the development and back-end technology for the FCC’s auctions including Mobility Fund Phase II and Connect America Fund Phase II, which serve to bring broadband to underserved areas.

“Chairman Pai is interested in reaching the people who can’t be reached,” Christine Calvosa, acting CIO at the FCC, said in March.

This auction, which is part of the Connect America Fund Phase II, is the FCC’s project to close the digital divide in a fiscally responsible way, according to Pai.

“We are working hard to build an auction interface that is easy for all bidders to use,” Pai said. “We expect that this auction will attract companies that have never before received universal service funding.”

At the Appalachian Ohio-West Virginia Connectivity Summit, FCC Commissioner Mignon Clyburn learned that 80 percent of Roane County, W.Va., didn’t have access to the Internet. Clyburn said that the auction could help bring affordable broadband access to rural residents.

“We initially sketched out the structure of this auction in 2011, but now we are on the cusp of quickly moving forward, so that more rural Americans will reap the benefits of broadband in the foreseeable future,” Clyburn said.

Brad Smith, president and chief legal officer at Microsoft, presented the company’s plans to bridge the digital divide in July. Thirty-four million Americans lack broadband Internet access, and 23.4 million live in rural areas.

“High costs, the absence of new and alternative technologies, and market and regulatory conditions have all hampered efforts to expand coverage,” Smith said. “But this is changing, thanks to recent advancements in technology, newly adopted standards, business model innovations and a growing demand for broadened cloud services.”

Microsoft laid out a plan to eliminate the digital divide by July 4, 2022. Microsoft proposed using “TV White Spaces,” unused spectrum in the UHF television bands to reach the 80 percent of this underserved rural population that live in communities with a population density between two and 200 people per square mile. Satellite coverage could be used for areas with a population density of less than two people per square mile, and fixed wireless and limited fiber to the home should be used for communities with a density greater than 200 people per square mile, according to Smith.

Smith estimated that this will cost $8 billion to $12 billion, which is roughly 80 percent less than the cost of using fiber cables alone, and it’s more than 50 percent cheaper than the cost of current fixed wireless technology like 4G.

Smith said that the FCC should ensure the continued use of the spectrum needed for Microsoft’s mixed technology model, and improve data collection regarding rural broadband coverage. The FCC announced on Aug. 3 that it will begin using new methods to collect broadband data.

“In urban America, we’ve thankfully become accustomed to ongoing capital investments to expand broadband capacity in areas that already have broadband coverage,” Smith said. “But the time has come to extend this coverage to the rural areas that lack it entirely.”

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