July 23, 2019 by Tom Cohen

FCC Expected to Launch Rural Digital Opportunity Fund at August 1 Meeting


The FCC recently announced its agenda for the August 1 meeting, and there are many important issues it will address.

First, the FCC is proposing to launch the Rural Digital Opportunity Fund with a notice of proposed rulemaking. The following are the key components the FCC is proposing for the new program:

  • Eligible unserved areas are principally census blocks where incumbent price cap carriers are not providing broadband service at 25/3 Mbps and where the cost to serve per location per month, as determined by the FCC’s cost model, is between $52.50 and $198.60.
  • The budget for the program is $20.4 billion, and the term of support is 10 years.
  • The program will be divided into two phases. Phase I will make available at least $16 billion in support for census blocks that in general are wholly unserved or, for areas where price cap carriers are currently receiving support and are the only providers, that have unserved locations. Phase II will make available the remaining $4.4 billion in general for partially served census blocks and for census blocks not selected in the first auction.
  • Support will be awarded by a multi-round, descending clock auction. Participants will bid by performance tier – Baseline (25/3 Mbps), Above-Baseline (100/20 Mbps), and Gigabit (1 Gbps/500 Gbps) – and the bids will be weighted to favor providing support to higher performance tiers and with low latency.
  • Recipients of support will be required to deploy to 40 percent of locations by the end of the third year and 100 percent of the locations by the end of the sixth year.

The FCC will receive comments on its proposals over the next several months and may adopt rules by the end of the year or early next year. The FCC then will seek comment on the auction procedures and will develop the list of eligible areas. The FCC might hold the Phase I auction later in 2020.

Second, the FCC is proposing to update its broadband deployment data by establishing the Digital Opportunity Data Collection, which will require fixed broadband providers to submit geospatial-based polygons of areas where they either have connections or could provide service within 10 days of a customer request and without an extraordinary commitment of resources or construction costs exceeding an ordinary service fee. Each polygon is to reflect the same broadband download and upload speed and technology for residential-only service, business-only service, or both. The FCC proposes to delegate implementation of the new collection to its Bureaus and USAC. The FCC also intends to incorporate crowdsourcing into improving the accuracy of this collection.

Third, the FCC will propose to find that the Communications Act prohibits local and state authorities from using their video franchising authority to regulate non-cable services (other than I-Nets), including broadband internet access service, offered over cable systems. The FCC proposes to preempt the imposition of any fees for non-cable services by a local or state authorities on a franchised cable operator (those that exceed the 5 percent franchise fee limit) or any requirement that a franchised cable operator secure an additional franchise or other authorization to provide non-cable services over its cable system. The FCC also proposes to find, with limited exceptions, that cable-related, in-kind contributions that local and state franchising authorities charge are considered to be franchise fees, subject to the 5 percent cap.

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