The FCC has announced that over $640 million of funding will be made available through the Rural Digital Opportunity Fund. The investment will be used for new broadband deployments in 26 states and will cover nearly 250,000 locations.
The Rural Digital Opportunity Fund has already provided over $4.7B in Broadband funding for nearly 300 carriers in 47 states serving over 2.6M U.S. locations.
On January 30, 2020, the Commission adopted the Rural Digital Opportunity Fund Report and Order, which establishes the framework for the Rural Digital Opportunity Fund, building on the success of the CAF Phase II auction by using reverse auctions in two phases. The Phase I auction, which began on October 29, 2020, and ended on November 25, 2020, awarded support to bring broadband to over five million homes and businesses in census blocks that were entirely unserved by voice and broadband with download speeds of at least 25 Mbps. Phase II will cover locations in census blocks that are partially served, as well as locations not funded in Phase I. The Rural Digital Opportunity Fund will ensure that networks stand the test of time by prioritizing higher network speeds and lower latency, so that those benefitting from these networks will be able to use tomorrow’s Internet applications as well as today’s.
- Sending letters to 197 applicants concerning areas where there was evidence of existing service or questions of waste. Bidders have already chosen not to pursue support in approximately 5,000 census blocks in response to the Commission’s letters.
- Denying waivers for winning bidders that have not made appropriate efforts to secure state approvals or prosecute their applications. These bidders would have otherwise received approximately $350 million.
- Conducting an exhaustive technical, financial, and legal review of all winning bidders.
- A list of the eligible census blocks covered by the winning bids announced today is available under the “Results” tab.
- For a list of RDOF providers and funding amounts by state is at: https://www.fcc.gov/auction/904.
March 25th Update:
The FCC has authorized more than $313 million through the Rural Digital Opportunity Fund to finance new broadband deployments in 19 states bringing service to over 130,000 locations. This is the eighth round of funding in the program, which to date has provided over $5 billion in funding for new deployments in 47 states to bring broadband to over 2.8 million locations.
“The funding announced today will help hundreds of thousands of Americans get access to high-speed, reliable broadband service,” said Chairwoman Jessica Rosenworcel. “We continue our expanded oversight of this program through the Rural Broadband Accountability Plan to make sure that applicants deliver services as promised to areas that truly need help.”
The Rural Digital Opportunity Fund aims to fund new broadband deployments in areas across the U.S. with limited or no connectivity.
The winning bidders from the latest round are:
- Carolina Telephone and Telegraph
- Central Telephone Company of Virginia
- Central Virginia Services
- CenturyLink of Louisiana
- CenturyTel of Alabama
- CenturyTel of Michigan
- CenturyTel of Montana
- CenturyTel of Northwest Arkansas
- CenturyTel of the Midwest – Wisconsin
- CenturyTel of Washington
- Co-Mo Comm
- Columbia Fiber
- Embarq Florida
- Jasper County Rural Electric Membership Corporation
- LigTel Communications
- Qwest Corporation
- South Central ConnectSpectra Communications Group
- Tri-County Electric Cooperative
The Federal Communications Commission (FCC) has announced over $1.2 billion in funding through the Rural Digital Opportunity Fund [1.] to expand broadband service across 32 U.S. states. The FCC calls this “the largest funding round to date,” and notes 23 broadband companies will provide service to more than one million new areas.
Note 1. A total of $20.4 billion to be awarded by the FCC over 10 years. Up to $16 billion will be made available for Phase I of the Rural Digital Opportunity Fund auction, and the remaining Phase I budget, along with $4.4 billion, will be awarded for Phase II of the auction.
In addition, the FCC also introduced the Rural Broadband Accountability Plan, which will double the number of audits and verifications performed this year in comparison to 2021. It will also require the FCC to make the results of verifications, audits as well as speed and latency tests public on the Universal Service Administration Company’s (USAC) website.
The pandemic only amplified the gaps in connectivity affecting rural America, as employees transitioned to working from home and kids attended class virtually. To help remedy the issue, President Joe Biden signed off on a $1 trillion infrastructure package in November that allocates $65 billion to providing broadband to every American household. The FCC also launched a program that provides cheaper internet to low-income households late last year.
In December 2020, the FCC awarded companies a total of $9.2 billion under the Rural Digital Opportunity fund, and that included an $886 million subsidy for SpaceX. The Elon Musk-owned company was supposed to deploy its satellite internet network in rural areas, but last year, the FCC warned SpaceX and other providers to stop misusing these funds to provide service to well-connected areas.
The results of the FCC’s 3.45 GHz auction were announced today. On January 4, 2022, bidding in Auction 110—the auction of new flexible-use licenses in the 3.45–3.55 GHz band—concluded following the close of bidding in the assignment phase.1 Auction 110 raised a total of $22,418,284,236 in net bids and $22,513,601,811 in gross bids, with 23 bidders winning a total of 4,041 licenses.
With $22.5 billion in gross proceeds, Auction 110 was the third highest grossing auction in the FCC’s history.
The 3.45 GHz action makes available 100 megahertz of mid-band spectrum for commercial use across the contiguous United States. Licensees can use it for fixed or mobile uses.
Here are the big winners:
- AT&T: $9.1B
- Dish: $7.3B
- T-Mobile: $2.9B
AT&T won 1,624 licenses in the 3.45 GHz auction, and Dish, bidding under the name Weminuche LLC, won 1,232 licenses. US Cellular acquired 380 licenses, followed by Cherry Wireless LCC with 319. T-Mobile acquired 199 licenses. Meanwhile, Verizon bid =ZERO.
The remainder went to a relatively familiar list of private equity investors, including Grain Capital, Columbia Capital, and Charlie Townsend’s Bluewater Wireless. Here’s the complete list of bidders:
|Bidder||Bidding entity||Winning bids||Licenses won|
|AT&T||AT&T Auction Holdings, LLC||$9 billion||1,624|
|Dish Network||Weminuche L.L.C.||$7.3 billion||1,232|
|T-Mobile||T-Mobile License LLC||$2.9 billion||199|
|Columbia Capital||Three Forty-Five Spectrum, LLC||$1.4 billion||18|
|Uscellular||United States Cellular Corporation||$580 million||380|
|Whitewater Wireless II, L.P.||$428 million||14|
|Grain Management||NewLevel III, L.P. 0||$376 million||8|
|Moise Advisory||Cherry Wireless, LLC||$211 million||319|
|N Squared Wireless, LLC||$101.8 million||55|
|Skylake Wireless II, LLC||$39 million||57|
|Blue Ridge Wireless LLC||$8.9 million||39|
|Agri-Valley Communications||Agri-Valley Communications||$8 million||7|
|LICT||LICT Wireless Broadband Company, LLC||$7.7 million||24|
|Viaero||NE Colorado Cellular, Inc.||$6.7 million||18|
|Nsight||Nsight Spectrum, LLC||$4.7 million||6|
|East Kentucky Network||East Kentucky Network, LLC||$4.4 million||2|
|Carolina West Wireless||Carolina West Wireless, Inc.||$3.8 million||11|
|PVT||PVT Networks, Inc.||$2 million||6|
|Chat Mobility||RSA 1 Limited Partnership||$1.7 million||1|
|Raptor Wireless LLC||$845,700||6|
|Horry Telephone||Horry Telephone||$88,060||12|
|Jones, Anthony L||$1,575||2|
|Bidder identity included where available. Source: FCC|
The results were pretty much as expected- Dish spent more than expected, and AT&T a bit less, but in rank order and in magnitude, the numbers were relatively close to expectations.
Credit: Getty Images
The “mid-band spectrum” that was auctioned off is considered crucial for mobile operators’ deployment of next generation of wireless service such as 5G, which promises to deliver much faster wireless service and a more responsive network. Mid-band spectrum provides more-balanced coverage and capacity due to its ability to cover a several-mile radius with 5G, despite needing more cell sites than lower-tiered spectrum bands. Its ability to connect more devices and offer real-time feedback is expected to spark a sea change in how we live and work, ushering in new advances like self-driving cars and advanced augmented reality experiences.
“Today’s 3.45 GHz auction results demonstrate that the Commission’s pivot to mid-band spectrum for 5G was the right move,” said FCC Chairwoman Jessica Rosenworcel. “I am pleased to see that this auction also is creating opportunities for a wider variety of competitors, including small businesses and rural service providers. This is a direct result of the Commission’s efforts to structure this auction with diversity and competition front of mind.”
Craig Moffett wrote in a note to clients shortly after the auction results were announced by the FCC:
“After the almost $100B spent on the C-Band auction [1.], these numbers might sound almost quaint. Still, AT&T’s $9B translates to nearly a quarter turn of additional leverage. And for Dish Network, it is roughly two years of EBITDA, or two full turns. As always, spending money on spectrum is only the beginning. Now starts the spending on putting the new spectrum to work. The carriers did not pay up for this spectrum to allow it to languish in a fallow state, and the Towers will be natural beneficiaries of the deployment process over the coming years. Carrier plans for the C-Band suggest that spectrum will ultimately be deployed in a fairly broad-based manner, rather than just in more densely populated areas of the country, and a similar result seems likely for this spectrum, given its broadly similar propagation attributes.”
Note 1. The C-band auction broke records with its $81.2 billion in gross proceeds.
Analysts at New Street Research thought T-Mobile was going to win more spectrum than it did. They were predicting T-Mobile to spend in the range of $6.6 billion and Dish to spend about $5 billion. The FCC is planning for even more auctions in the future.
In a report released Thursday, the U.S. Government Accountability Office (GAO) said that the FCC’s benchmark for minimum broadband internet speeds (set six years ago at “always on” access of 25 Mbps downstream and 3 Mbps upstream) is no longer fast enough. That’s especially the case for small business owners. After conducting a study on the matter, the GAO recommends the FCC analyze small business speed requirements at this time and reconsider its current definition.
“FCC officials said they are not aware of any small business requirements that have been taken into consideration in determining the minimum speed benchmark,” the GAO says. “Analyzing small business speed requirements could help inform FCC’s determination of the benchmark speed for broadband.”
The figure below illustrates the various kinds of business broadband use and the associated relative speed requirements.
Illustrative Examples of Different Kinds of U.S. Business Broadband Use:
Sources vary in terms of the specific speeds they recommend for small businesses. For example, in 2017, BroadbandUSA—a National Telecommunications and Information Administration program—published a fact sheet stating that small businesses need a minimum of 50 Mbps speeds in order to conduct tasks such as managing inventory, operating point-of-sale terminals, and coordinating shipping. A 2019 USDA report on rural broadband and agriculture stated that, as technology advances and volumes of data needed to manage agriculture production grow, speeds in excess of 25/3 Mbps with more equal download and upload speeds will likely be necessary.
Reports from small businesses show that many want a download speed of at least 100 Mbps to run their operations more effectively. According to the FCC’s data, about 67 percent of rural Americans have access to 100 Mbps down/10 Mbps up speeds, compared to about 83 percent with access to the agency’s current minimum benchmark.
To fulfill a statutory requirement to determine annually whether advanced telecommunications capability is being deployed on a reasonable and timely basis to all Americans, FCC sets a minimum broadband speed benchmark.
In its 2021 Broadband Deployment Report, FCC stated that the current benchmark, last set in 2015, continues to meet that requirement. However, FCC officials said they are not aware of any small business requirements that have been taken into consideration in determining the minimum speed benchmark. Analyzing small business speed requirements could help inform FCC’s determination of the benchmark speed for broadband.
GAO is making one recommendation to FCC to solicit stakeholder input and analyze small business broadband speed needs and incorporate the results of this analysis into the benchmark for broadband. FCC agreed with this recommendation.