FCC greenlights $20 billion rural broadband subsidy auction

The agency also adopted a plan to improve its broadband maps with more accurate data.

Marguerite Reardon Former senior reporter
Marguerite Reardon started as a CNET News reporter in 2004, covering cellphone services, broadband, citywide Wi-Fi, the Net neutrality debate and the consolidation of the phone companies.
Marguerite Reardon
5 min read

FCC Chairman Ajit Pai has traveled throughout the US talking to people about the digital divide in rural communities. On one of those trips, he met with farmers in Idaho.


The Republican-led Federal Communications Commission voted Thursday to adopt a new mechanism for distributing subsidies to rural broadband providers. But Democrats want to see better data from a new broadband mapping effort first.

At the agency's August meeting, the FCC voted on two related items that commissioners say will help close the digital divide. First, the five-member commission unanimously voted to distribute more than $20 billion of Universal Service Fund subsidies over the next decade as part of the Rural Digital Opportunity Fund. It also adopted a long-awaited proposal to get more detailed information from broadband providers about where they offer service in order to improve the agency's coverage maps. 

While the two items largely had bipartisan support, the two Democrat. They want more accurate mapping data before allocating any new funds to rural broadband providers. 

"The decisions we make now will direct funds for broadband for the next decade," said Rosenworcel. "So choosing where those funds go for the next ten years without having accurate data is a real problem. ... We need maps before money. We need data before deployment."

Watch this: How to solve the rural broadband problem? Fix the maps

FCC Chairman Ajit Pai, a Republican, said that it's important to get the funds allocated as soon as possible and that the agency couldn't afford to wait for the new mapping plan to take effect. 

The new Rural Digital Opportunity Fund will essentially replace the Connect America Fund II auction for distributing USF money to rural carriers. The new fund will establish a two-phase reverse auction starting next year that will allow carriers to bid on the rights to use the funds to provide broadband and voice service in underserved high-cost areas, such as rural communities. The lowest bid wins the auction. 

Unlike the FCC's Connect America Fund II auction, in which incumbent carriers got first dibs on deciding whether to serve a given area, the new fund will be available to any company, including cable providers or public utilities,  that propose building a broadband network. 

Fixing broadband maps

Even though the FCC is moving forward with the Rural Digital Opportunity Fund using existing broadband mapping criteria, the agency acknowledged its data collection program is flawed. And it voted to approve a long-awaited plan to improve the data it collects. 

Under the new proposal, broadband providers will be required to offer more detailed information on where they provide coverage and where they do not. The idea is to create a new map that will offer more "precise broadband service availability maps," Pai said.

The FCC's current broadband maps have been widely criticized as inaccurate, showing broadband service in places where there isn't and in other instances saying a location has no broadband when in fact it does, sometimes from multiple providers.

These faulty maps have infuriated lawmakers who have been flooded with complaints from constituents, but the lack of visibility has also hampered the FCC's efforts to distribute limited funds to help bring broadband to the 19 million people in this country, who still lack access even as the service is considered as important as water or electricity.

Under the new plan, broadband providers will have to report broadband access using "shapefiles," which will provide a more precise and detailed measurement. The current data collection includes information reported at the census block level, which counts an entire area as served even if only one household reports having broadband access. 

"We will no longer count everyone in the census block as served if just one person is served," Pai said.

The FCC will also collect feedback from the public and other agencies to ensure that the information provided by service providers is accurate. 

The three Republican commissioners supported the plan, but the two Democrats partially dissented. Rosenworcel said that the new proposal was a first step and that the agency still has a long way to go to gain public trust in its broadband data accuracy. 

She noted concerns over how the agency will push broadband providers to report accurate data. 

The trade group USTelecom, which represents many of the providers offering broadband in rural communities, applauded the FCC's new mechanism for allocating USF funds for rural broadband, and the agency's efforts to get more accurate broadband mapping information. The organization worked with several other groups to launch a two-state pilot in Virginia and Missouri in March to demonstrate how the FCC can identify where broadband can be offered and to determine which areas still lack broadband access. The group said that initial results of this study confirm the FCC's assessment that its current process shows "serious discrepancies" in coverage. 

"Logically, in order for us (and the FCC) to declare mission accomplished [in closing the digital divide], we need to know which consumers do, and do not, have access to broadband," Patrick Halley, senior vice president of advocacy and regulatory affairs for USTelecom, said in a blog post on Wednesday. "As the Commission's draft data collection item acknowledges, the agency's existing broadband availability data is 'not sufficient to understanding where universal service support should be targeted and supporting the imperative of our broadband-deployment policy goals.'"

Microsoft's chief data analytics officer, John Kahan, wrote in a blog post on Wednesday that he is encouraged that many of the suggestions the FCC has considered mirrors those proposed by the company. Microsoft is working with USTelecom on its pilot program, too. But he acknowledged more work is needed to close the digital divide.  

"Based on our data, about half of all Americans are not using the internet at broadband speeds at home," he said. "This digital divide should be seen for the national crisis it is -- without equal access to connectivity, we cannot provide equal opportunities to all Americans."

Other FCC matters

The FCC also voted on several other items at the August meeting. One big one was the approval of new rules to go after illegal robocallers based overseas. The rules extend the Truth in Caller ID Act to text messages or international calls as intended under the passage of Ray Baum's Act last year.

According to the FCC, that act gives it the authority to broaden bans on illegal spoofing to text messages, calls originating outside the US and calls using voice over IP. The Truth in Caller ID Act, passed in 2009, already prohibits misleading or inaccurate caller ID "spoofing" with the intent to defraud for domestic callers, the agency said. But it doesn't apply to text messages or international calls.

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