FCC announces rules for $20 billion allocation of rural broadband funds

FCC announces rules for $20 billion allocation of rural broadband funds
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The Federal Communications Commission (FCC) will vote on rules later this month for the distribution of over $20 billion in rural broadband funds.

FCC chairman Ajit Pai announced the rules on Wednesday for the funds that will not only support rural broadband providers, but also companies that have previously been ineligible for subsidies including wireless firms, electric co-ops, and cable providers.

The funds will be distributed over 10 years with the intention of finally closing the digital divide when it comes to rural areas and unlocking more opportunities for local communities.

In a statement, Pai explained:

"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."

The suggested rules call for a two-phase auction.

In the first phase, $16 billion will be allocated to areas without any high-speed broadband connectivity available. The remaining funds will be allocated in the second phase to areas with partial broadband connectivity.

Rather than a typical auction in which the highest bidder wins, the lowest bidders will win in this auction. The goal is to help support the rollout of digital services in rural areas rather than to raise money.

Another rule means that the FCC will prioritise broadband providers offering higher speeds. If two providers offer the same bid, priority will be given to whoever is offering the faster speed.

The auction has relatively bipartisan support but some Democrats have called for the auction to be postponed until the FCC's coverage map, which has been disputed as overestimating coverage in many areas, has been updated. FCC officials said that the first phase of the auction focuses on areas without broadband connectivity, which is not in dispute.

"We don't want millions of rural Americans to wait longer than necessary to obtain the economic, educational, and healthcare opportunities provided by high-speed broadband," Pai said in a blog post.

Phase one of the auction is expected later this year, with the rules for it being voted on later this month.

(Image Credit: Ajit Pai by Gage Skidmore under CC BY-SA 2.0 license)

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