In April, Federal Communications Commission Chairman Ajit Pai put forward a proposal for a $9 billion Rural 5G Fund that aims to “help ensure that rural Americans enjoy the same benefits from our increasingly digital economy as their urban counterparts—more than 200 million of whom already have access to major providers’ 5G networks—and would include a special focus on deployments that support precision agriculture,” as the program was described by the FCC.
So what exactly is the Rural 5G Fund, how will it work, and what do industry players think of it? Here are some of the most important things to know about the Rural 5F Fund and how the plan is being received by the telecom industry. (Read Part 1 of our coverage here.)
The proposed Rural 5G Fund represents a significant shift of USF investment away from LTE. The Rural 5G Fund would repurpose money from the failed Mobility Fund II program, which was supposed to help expand LTE to areas of the U.S. that do not yet have it, and fund 5G deployments instead. “The rapid pace of deployment of 5G networks in many parts of the country, combined with T-Mobile’s commitment to cover 90% of rural Americans with its 5G network, suggests that it is no longer time to begin a 10-year support program to deploy 4G LTE networks,” the FCC said in its proposed rulemaking.
“I realize that some have questioned whether this is a wise use of the Universal Service Fund at all. Why, they ask, should we spend money to deploy 5G to rural America when some parts of our country still lack 3G or 4G?” said Pai in a statement on the fund. While he said that this argument “might have appeal as a soundbite … it doesn’t make any sense. We’re at the dawn of the 5G era. We shouldn’t spend our universal service funds to deliver networks using predecessor technologies because they’ll be outdated by the time they’re operational. Indeed, embarking now on a ten-year funding program to support the deployment of 4G would be like beginning a multi-year program to provide Americans with analog televisions during the digital television transition, distributing DVDs in the midst of the video streaming surge [or]handing out flip phones at the start of the smartphone era.”
While the FCC specifies that it will consider “5G” to be mobile technology based on 3GPP Release 15 or later, the Rural 5G Fund as proposed does not make a distinction between Standalone 5G — which even the large national carriers have not yet deployed commercially — and NonStandalone 5G, which is most widely deployed at this point but relies on LTE as an anchor in order to function.
FCC Commissioner Michael O’Rielly brought up that potential sticking point in a statement on the Rural 5G Fund, saying, “I am concerned that the item’s entire premise—that it no longer makes sense for the Universal Service Fund to subsidize 4G LTE at all—may not be the best course of action if our goal is to target the unserved. … 4G LTE is not going away and will work in tandem with 5G. You can’t slap together 5G networks just anywhere if the apparatus and fiber backbone to support 4G LTE don’t exist somewhere nearby. Moreover,” he added, “I do worry that a decision to advance such an auction could favor less expensive to serve areas that already have 4G LTE and leave the most expensive to serve areas behind.”
Because 5G deployments are limited, a larger area of the country would be eligible for funding. The FCC said that while Mobility Fund II would have been targeted at the areas of the U.S. not yet served by LTE — a land area estimated at 19% of the U.S. — the Rural 5G Fund could end up supporting deployment to as much as 67% of the land area of the U.S. if it proceeds based on current data sources to allocate funds. (Hence the much larger budget for the Rural 5G Fund.) The FCC also added that if it waits for better mobile broadband coverage maps, it anticipates that, given the amount of overstatement of current coverage maps in MFII, “the areas unserved by 4G LTE could be substantially larger than originally estimated once we collect more accurate mobile broadband coverage data.”
However, the FCC does propose to exclude areas in Alaska that are provided high-cost deployment support through the Alaska Plan, and areas in Puerto Rico and the U.S. Virgin Islands where there is existing support for high-cost deployments, including 5G.
There is debate between the value of deploying rapidly vs. waiting for better mobile coverage data. In the two options presented by the FCC — move forward with the first phase of funding in 2021, based on currently available data; or wait until 2023, when it anticipates being able to incorporate improved mobile coverage data through its Digital Opportunity Data Collection — the agency acknowledges the competing interests. “These two options reflect a fundamental challenge in balancing competing concerns,” the FCC said. “On the one hand, we recognize the pressing need for universal service support in rural areas that are sparsely populated, costly to serve, and have historically lacked adequate mobile service, and we seek to ensure that those areas do not fall further behind. … On the other hand, the accuracy of the mobile broadband coverage data that carriers submit to us has been called into question, and we acknowledge the pressing need to reform our mobile coverage data collection to understand more precisely where mobile coverage is truly lacking. Addressing the problems with mobile coverage data would allow us to better target areas in need of support but would delay the disbursement of support to man of those same areas.”
The Competitive Carriers Association disagrees, saying in filings on the Rural 5G Fund that it believes the two options presented by the agency are not the only ways to proceed, and that part of the problem with the MFII process was the type of data that the FCC asked for from MNOs, on which coverage maps were based. CAA “believes that wireless carriers can create new maps in relatively short order” that are more accurate and that more precise propagation maps would mean a “substantially more efficient” challenge process. “CCA believes that it is feasible to immediately move to implement … a new data collection, while keeping a 2021 auction on the table.”
Looking for more insights on rural broadband deployments and related policy programs? Check out RCR’s editorial special report on the topic.