FCC unveils $100M ‘experiment’ to expand broadband reach

The Federal Communications Commission has announced plans for an “experiment” designed to expand broadband services into rural communities.
The program is set to tie in with the FCC’s Connect America Fund, with up to $100 million being set aside to fund the experiment. That funding will be separated into three groups, with $75 million set aside to test construction of networks offering download speeds of 25 megabits per second and uplink speeds of 5 Mbps; $15 million used to “test interest in delivering service” in high-cost areas at speeds of 10 Mbps on the downlink and 1 Mbps on the uplink; and $10 million earmarked for those same network speeds “in areas that are extremely costly to serve.”
Those looking to tap into the funding will compete nationwide in a competitive bidding process, with the money doled out to “projects that are most cost effective.” Eligible technologies will include fiber and wireless, with bidding open to “non-traditional providers, including electric utilities, wireless Internet service providers and others.” The FCC added that project sizes will be capped in order to provide enough funding for various projects and that entities serving Tribal lands would be eligible for a 25% bidding credit.
The FCC earlier this year gained a court victory in support of its Universal Service Fund reform efforts, with a federal appeals court upholding the agency’s Connect America program that is designed to subsidize rural broadband services. Under former FCC Chairman Julius Genachowski, the FCC in 2011 announced plans for the Connect America program that would stop paying companies to fund telephone service in hard-to-reach or expensive-to-deploy areas and instead fund broadband connections. Initially, the agency said it planned to tackle intercarrier compensation and a high-cost fund program. At the time, Genachowski noted that high-speed broadband access had replaced telephone service and that 25% of U.S. households relied only on wireless service.
The Connect America Fund was to be funded out of savings from existing USF funding that is being used inefficiently and without accountability, Genachowski said. The agency said it would modernize the programs to support broadband networks; ensure fiscal responsibility; demand accountability and enact market-driven and incentive-based policies. Companies receiving USF funding would not be cut off immediately, but at the end of the transition any subsidies would be for broadband, not phone service.
This proposal drew a strong response from entrenched rural telecommunications providers that relied on the legacy system to fund their operations, and led to a court challenge.
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