Over the partial dissents of Democratic Commissioners Jessica Rosenworcel and Geoffrey Starks, the FCC today proposed a two-phase 5G Fund framework for distributing $9 billion in support for deploying wireless broadband services to rural America.
Among other things, the notice of proposed rulemaking (NPRM) adopted in GN docket 20-32 and WT docket 10-208 at today’s FCC meeting, which was held by teleconference due to the social distancing policies aimed at stemming the spread of COVID-19, seeks input on two possible options for the $8 billion first phase. Under the first option, the FCC proceed to a reverse auction next year to distribute funding to areas that the FCC believes are unlikely to see 5G deployment absent such support, based on the best information it currently has available, such as the “rurality” of the area, which the agency views as a good proxy for lack of 5G deployment.
The second option calls for delaying the auction until 2023 while the FCC collects better, more granular data through its planned Digital Opportunity Data Collection initiative. The agency’s Democratic Commissioners said the two options present a false choice.
Phase I would set aside $680 million in support for 5G services on tribal lands.
Phase II would distribute $1 billion targeted for 5G services that enable precision agriculture.
An accompanying order directs the Office of Economics and Analytics to propose and seek comment on methodologies for an adjustment factor for bids to serve areas with rugged terrain, sparse populations, or other characteristics that increase deployment costs, given that the basic approach of the multi-round, descending clock auction would be to award support to bidders that seek the least amount of support per square kilometer.
In her separate statement, Commissioner Rosenworcel said that in 2018, “more than 20 million speed tests were submitted to the FCC in a nationwide effort to demonstrate serious flaws in the FCC’s wireless maps” that were expected to be used to determine areas eligible for Mobility Fund Phase II support.
Now, the FCC has “scrapped” those efforts to improve its wireless maps, canceled the Mobility Fund II initiative, and moved onto the 5G Fund, with the “risk of making the same mistakes again,” she said.
The notice of proposed rulemaking adopted today “presents a false choice. It suggests we can either provide funds for more wireless service fast or we can do it accurately. That’s crazy. We need to do both. If we’re going to spend billions in public funds on improving wireless service in rural America it’s not too much to ask that we do it with speed and get it right,” Commissioner Rosenworcel said.
“Under what my colleagues call Option A, the FCC would commit $8 billion over the next ten years without any new maps. This would lock up the bulk of our universal service funds for improving wireless service for a decade, without an honest accounting of where service is and is not. This is a mistake. Under Option B, the FCC says it will roll up its sleeves and do the work to make improvements to our maps and then distribute funds accordingly. But it says it can’t possibly do this for at least three years. This too is a mistake. In fact, the entire framing here is wrong. We can do two things at once. We can work fast and base our efforts on facts,” she added.
She also cited the instructions of Congress in the Broadband Deployment Accuracy and Technological Availability Act (S 1822) enacted earlier this year (TR Daily, March 24). That law “sets forth very specific requirements designed to improve the FCC’s broadband maps for wired and wireless service. Then this data was supposed to inform the agency’s distribution of universal service funds to expand the reach of service in rural America. But the proposed 5G Fund ignores this fact and twists our legal obligations,” she said, citing a recent letter from Sen. Joe Manchin (D., W.Va.) and others urging the FCC to update its broadband coverage maps before distributing billions of dollars in mobile broadband support through the reverse auction contemplated for Phase I of its 5G Fund (TR Daily, April 22).
Finally, she criticized the item for terminating the Mobility Fund Phase II proceeding (WT docket 10-208). “Why? What are we hiding? Is the agency covering up its past mistakes? For the record, these include having carriers file maps that bore too little relation to reality,” “running a costly challenge process,” and “failing to hold anyone accountable after our staff found some of our largest carriers filed inaccurate mapping data with this agency,” she said.
“So while I approve the idea behind this fund, I dissent in all other respects,” she concluded.
Commissioner Starks said, “To promote those economic and social benefits, I strongly support the Notice of Proposed Rulemaking’s goal of bringing state-of-the-art wireless service to all Americans, especially rural communities. I look forward to robust public feedback on the many important questions raised in the NPRM. I cannot, however, endorse the false choice between speed and accuracy it sets forth. Because I believe we can and should target this funding using the new coverage maps Congress has ordered us to develop, I must dissent in part.”
He noted that the NPRM proposes “to prioritize areas historically lacking mobile service. But how will we do that? The only option the NPRM considers is using Form 477 data that, as the NPRM acknowledges, does ‘not really reflect actual on-the-ground coverage in many instances.’ Relying again on bad coverage data would be an insult to the many state and local governments, organizations, and individuals who invested time and money in the failed Mobile Fund Phase II challenge process.”
Commissioner Starks continued, “It would also knowingly avoid Congress’s directive that we make funding decisions based on better data by stalling the critical effort to fix our maps. The NPRM asserts that Option A complies with the Broadband DATA Act because the Commission does not have to base funding decisions on new maps until there are new maps. Even if that satisfies the letter of the law, Option A boldly ignores the spirit of the Broadband DATA Act. It looks to me like the Commission is sidestepping the statute by deprioritizing and dragging out the mapping process. When it comes to maps, we’re only waiting on ourselves.”
He added, “The Broadband DATA Act requires the Commission to adopt final new mapping rules by September 2020 at the latest. The premise of Option A is that we cannot expect new maps to be complete even a year after that. And if that is true, it is because the Commission has not fully prioritized this work. Chairman Pai announced the creation of the 5G Fund on December 4, 2019, nearly five months ago. Imagine how much closer to a well-targeted 5G Fund we would be if we had committed the necessary resources—on that very day—to producing and finalizing accurate maps, full speed ahead. If you need a longer time horizon, consider where we would be if we had fully committed to the effort in December 2018, when Chairman Pai announced the investigation into carriers that had submitted inaccurate coverage data.”
Commissioner Mike O’Rielly spoke briefly in support of the item at the meeting, while indicating that he has concerns he hopes to see addressed before an order is adopted in the wake of the NPRM.
In his longer written statement, he said, “The item is very well-intended, and I applaud steps to reform our current mobile legacy high-cost support program. It should go without saying that as a huge proponent of 5G and the benefits it will bring to Americans and our economy, I appreciate the Commission’s focus on ways to facilitate its deployment nationwide, especially in the harder to reach parts of America. Nonetheless, I do have certain questions and concerns with respect to some of the proposals and conclusions in the item that will have to be worked out before the proceeding ever goes to final order. Overall, it is certainly worthy of support at the NPRM stage, and I approve its adoption today.”
Among his specific concerns are the agency’s “legal authority to move forward with Option A, if we were to do so, and establish a new funding mechanism before we fulfill our obligations to produce mobile coverage maps pursuant to the Broadband DATA Act. While there is possibly an argument that Option A complies with the strict letter of the statute, I wonder if proceeding in such a manner would be contrary to the spirit of the law.”
He said that in “conversations with leading Congressional sponsors of the law prior to and following enactment, …. the point has been made that the law was never meant to give the FCC license to introduce new funding mechanisms as long as we had not yet fulfilled our obligations to produce new coverage maps. Indeed, unlike the Rural Digital Opportunity Fund (RDOF) proceeding, which was already in motion prior to the passage of the Broadband DATA Act, the Rural 5G Fund mechanism appears to be within the ambit of a ‘new award of funding’ for which the FCC would need to use the statutorily-required maps. I look forward to examining the record on this point.”
He also questioned whether “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. The deployment of 5G is going to be very different from past leaps to the next generation of technology. Specifically, 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.”
Commissioner O’Rielly added, “From what I have heard across the wireless industry, the deployment of 5G networks involves vastly greater costs as compared to 4G LTE. This, combined with scant details regarding the source of the $9 billion figure and sufficiency of the proposed budget, raises significant concerns; at this decision point, we should at least have some idea of what this level of funding would buy. I do appreciate that the item proposes to adopt a version of the prioritization mechanism that I formulated for the RDOF auction framework, but I wonder if this may not be enough to ensure that the most challenging to serve areas will be left in the dust.”
“Apart from these issues, I have policy concerns over the proposal in Option A to use new datasets with which we have little familiarity and that are based on census data from ten years ago in order to determine eligible areas. Likewise, I also worry that the item’s proposal to use Phase II of the fund to facilitate precision agriculture may not fit within the FCC’s expertise, or be properly targeted to those with the greatest need for 5G service or USF subsidies. I’m all for precision agriculture but my first priority must be to reach unserved people and businesses, no matter which industries define their communities,” he said.
“Finally, certain language and assumptions in the item that relate to T-Mobile’s recently consummated merger with Sprint seem inappropriate. While T-Mobile’s deployment commitments in that transaction are population-based and not geography-based, the item seems to rely on inducing T-Mobile to produce geographical maps of where it plans to build in order to avoid subsidized competition. The item therefore seems to impose additional requirements that T-Mobile never consented to in the completely separate proceeding related to its transaction. Further, to the extent that the absence of planned deployment data from T-Mobile leads to the perverse consequence of subsidized overbuilding, that is yet another reason why we shouldn’t subvert market forces by over-extracting merger conditions in the first place,” he added.
“Despite these points, I will keep an open mind in reviewing the record in this proceeding and vote to approve,” he concluded.
Commissioner Brendan Carr said, “I am pleased that we seek comment today on ways we can move forward quickly, including whether we should use the best available data now or wait until improved mapping information is available. I am glad that we are targeting at least $1 billion for the support of precision agriculture applications. I have seen firsthand—from Indiana to Nebraska to South Dakota—that America’s farmers and ranchers are leveraging cutting edge technologies—from drones to connected combines—in their effort to feed the world. I am glad that they will have our support.”
Chairman Ajit Pai said, “The good news is that the digital divide is closing. For example, in 2018, according to data from Ookla, the number of Americans without access to 10/1 [megabits per second] mobile broadband fell by 54%. But there is still more work to be done. … [T]his Commission has taken decisive action to promote 5G deployment in rural America. For example, we conditioned our approval of the T-Mobile/Sprint merger on the company’s commitment to deploy 5G to 85% of rural Americans within three years and 90% of rural Americans within six years. That’s a big deal. But we also know that without government action, Americans who live in the most remote and sparsely populated rural areas of the United States are likely to be left behind as spectators of this next wireless revolution. That’s not acceptable to me, and it shouldn’t be acceptable to you, either.
“That’s why I announced my plan for a $9 billion 5G Fund for Rural America last December, and that’s why I’m pleased that the Commission is adopting this Notice of Proposed Rulemaking. Delivering digital equity for rural consumers at the outset is far better than trying to bridge a digital divide later,” he continued.
“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? I’ll admit—this argument might have appeal as a soundbite. But 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.”
Regarding the two options for data to be used to determine Phase I eligibility, Chairman Pai said, “There are advantages and disadvantages to each approach. It’s often said that governing is about making choices, and that’s the case here. We will have to decide whether enhanced precision justifies a significant delay, as much as two additional years, and I look forward to having that conversation with my fellow Commissioners and other stakeholders. What we can’t do is pretend that we live in some alternative universe where there is no tradeoff between precision and speed—that we can fiat both perfect knowledge and immediate distribution of funds. We can’t have our cake and eat it too.”
During a conference call with reporters after the meeting, Chairman Pai noted that the agency has “flagged” to Congress “for months” the need for funding to carry out the Broadband DATA Act’s mapping mandate.
“The amount would be substantial. It has to come from somewhere. … We need money before maps. We can’t do the work required under this legislation if we don’t have the money to do it,” he said, inverting the catch-phrase of opponents of distributing broadband support for ensuring accurate maps are available.
Commenting on the FCC’s action, Senate Commerce, Science, and Transportation Committee Chairman Roger Wicker (R., Miss.) said, “The 5G Fund is great news for the millions of Americans living and working in rural and underserved communities who do not have access to a reliable mobile broadband connection. However, it is important to distribute funding based on accurate data to ensure underserved areas are not misrepresented. I am working with my colleagues to make sure the Commission has the resources needed to implement the bipartisan Broadband DATA Act and appropriately award funds based on reliable coverage maps.”
Stakeholder reaction was mixed. Scott Bergmann, senior vice president–regulatory affairs at CTIA, said, “Wireless providers are ramping up investments in new services like 5G to meet growing demand. The Commission’s 5G Fund can play an important role in helping wireless providers deliver these services to all Americans. We look forward to working with the FCC to make sure that support for 5G services is being quickly and correctly targeted to the rural areas that need it the most.”
Competitive Carriers Association President and Chief Executive Officer Steve Berry said, “There is no reason why we should limit ourselves to two inadequate options; we can, and should, do both—collect reliable data and distribute much-needed funds to areas in-need. At a time when consumers and businesses are more dependent on broadband services than ever before, we should be exploring every option to accelerate deployment of mobile broadband as quickly as possible.”
He added, “Rather than limiting ourselves to two false options, the FCC should focus on updating their data collection in line with the parameters contained in the Broadband DATA Act, as directed by Congress. Every Member of Congress knows the areas of their district that do and do not have sufficient service, and this important legislation was enacted to help address this real dilemma. … The most encouraging element of the discussion today was that Commissioners O’Rielly, Rosenworcel, and Starks all expressed concerns about actions that might ignore Congressional statutory direction. We appreciate the FCC’s focus on this issue, and CCA remains committed to working with the Commission and policymakers to achieve this important goal.”
Public Knowledge Senior Policy Counsel Jenna Leventoff said that “funding 5G deployment in rural America is too important not to do right. That means using accurate data. It’s unclear why the FCC insists it can’t generate maps with accurate data by 2023, when Congress requires the FCC to update the form it uses to collect broadband deployment data from carriers no later—and preferably earlier—than March of 2021. The FCC must adhere to its Congressional mandates, which means focusing on collecting accurate data in a timely manner. If the FCC does that, it can deploy funds based on accurate data without waiting three years to do so.” —Lynn Stanton, [email protected]
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