Perhaps the one issue FCC commissioners of both political parties can agree on is that more must be done to bring broadband to all rural areas in our country. In that spirit the Commission is poised to initiate a Notice of Proposed Rulemaking (Notice) in Docket 19-126 at its August 1, 2019 meeting to establish a new source of funding for rural customers in areas served by price cap (i.e., large and medium sized) ILECs. It will be called the Rural Digital Opportunity Fund. Here are some facts about the proposed Fund:

• It would target support to areas that lack access to 25/3 Mbps broadband service; and would be implemented through a two-phase approach that would allocate support using a multi-round, descending clock auction;
• Phase I would allocate support to census blocks that have no broadband service;
• Phase II would allocate support to census blocks where some customers have service along with areas not won in the Phase I auction;
• The Fund would have a budget of $20.4 billion in high-cost universal service support over a 10-year term. $16 billion would be available for Phase I and the remainder available for Phase II;
• The Fund would use technology-neutral standards for services and would establish a minimum support broadband speed of 25/3 Mbps, with a preference for faster speeds, such as gigabit service;
• The Commission would use the Connect America Cost Model to establish the maximum per-location bid amount that it is willing to fund; and
• The agency would establish a transition framework for phasing down existing support in auctioned areas.
• The Commission noting that “more than 10 million households and small businesses in price cap areas still lack access to critical broadband services that offer speeds of at least 25 megabits per second (Mbps) downstream and 3 Mbps upstream in unserved census blocks, including more than 7 million in rural areas,” plans on moving quickly. It anticipates that the Phase I auction would occur in 2020.

The Commission has four goals for the Rural Digital Opportunity Fund:

1. Ensuring that high-speed broadband is made available to all Americans quickly, and at an affordable price;
2. Reducing waste and inefficiency in in the high-cost program and promoting the use of incentive-based mechanisms to award support;
3. Requiring accountability to ensure that public investments are used wisely to deliver intended results; and
4. Minimizing the contribution burden. (Draft Notice at para. 13.)

Recipients of Rural Digital Opportunity Fund dollars would be required to offer standalone voice service and voice and broadband services at rates that are reasonably comparable to rates offered in urban areas.

In determining which companies win the auctions, the Commission will give higher weighting to bids that exceed the minimum standards of 25/3 Mbps service. That is because the Commission intends for the new broadband networks to serve as a base for the (near) future 5G networks it anticipates we will have nationwide.

The Commission proposes that Fund recipients would be required to complete construction and offer commercially voice and broadband service to 40 percent of the required number of locations in a state by the end of the third year of funding authorization, and an additional 20 percent in subsequent years, with 100 percent by the sixth year. A Fund recipient would be deemed to be commercially offering voice and/or broadband service to a location if it provides service to the location or could provide it within 10 business days of a request.

Public comments regarding the Notice are due 30 days after it appears in the Federal Register. Other than possibly seeking some minor modifications it’s hard to imagine much opposition to it. With broadband maps shown to widely inflate broadband availability, providers are hardly positioned to protest any new initiative that would spur deployment in rural areas.