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FCC chairman, Trump announce plan for rural broadband fund


According to Market Intelligence, December 2022


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FCC chairman, Trump announce plan for rural broadband fund

President Donald Trump and the head of the U.S. Federal Communications Commission announced their new plan to boost U.S. efforts to win the race to 5G, though some Democrats remain skeptical as to how much impact the plan will have.

Speaking at the White House on April 12, Republican FCC Chairman Ajit Pai said he plans to create a $20.4 billion "Rural Digital Opportunity Fund" headed by the agency.

"This money will extend high-speed broadband to up to 4 million homes and small businesses in rural America," said Pai. "These next-generation networks will bring greater economic opportunity to America's heartland, including some of the great jobs building infrastructure, and they will help support future 5G technologies."

When asked during a call with reporters how the fund will be paid for, Pai said the money will come from repurposing the Universal Service Fund, which typically offers subsidies to connect unserved and rural areas with telecommunications services.

Pai said the $20.4 billion fund will come in approximately $2 billion increments each year over the next decade. However, Pai said more specific details of the fund will have to be decided after the FCC goes through its traditional notice and comment process.

Additionally, Pai said he would like to see core principles reflected in the program, such as funding allocated on the basis of a reverse auction. He would like to ensure the funds target unserved parts of the country and that high-quality broadband is provided.

Democratic FCC Commissioner Jessica Rosenworcel reacted to news of the announcement with skepticism.

"It looks to me like they are dressing up an old program in new Trump-era clothes," she said at an April 12 news conference ahead of the White House event. "It doesn't look like any new funding. But instead, same old, same old — an extension of the Connect America II fund with a press release to accompany it."

The Connect America Fund is a program within the Universal Service Fund that has distributed funds through an auction-based support mechanism. In August 2018, the commission finished its Connect America Fund Phase II auction, where over 100 bidders were awarded nearly $1.5 billion over 10 years to provide broadband and voice services in underserved and unserved areas.

Beyond the opportunity fund, Pai also shared plans for a third 5G spectrum auction, set to begin Dec. 10. The auction will include the upper 37 GHz, 39 GHz and 47 GHz bands.

"This will be the largest spectrum auction in American history," Pai said. "We will be selling 3,400 MHz in three different bands."

The planned auction will follow two other millimeter-wave spectrum auctions from 2019. The agency is currently selling spectrum licenses in the 24 GHz band, and it recently concluded the 28 GHz auction, which generated a gross $702.6 million.

Pai noted during his April 12 call with reporters that this spectrum is crucial to opening the airwaves necessary for carriers to deploy next-generation 5G wireless networks.

Trump emphasized the role the private sector will play in winning the race to 5G.

"In the United States our approach is private sector-driven and private sector-led," said Trump. "To accelerate and incentivize these [private sector] investments, my administration is focused on freeing up as much wireless spectrum as needed."

Trump's reelection team, however, has reportedly backed a plan that would have the federal government managing 5G networks. In February, Newsweek published an opinion piece from reelection campaign adviser Newt Gingrich in which he laid out his vision for "a public-private partnership" where shared spectrum is available "for a carrier-neutral, wholesale-only, nationwide 5G network."