FCC Announces Auctions and Programs to Support 5G Wireless Telecommunications Systems and the USDA Funds Support for Rural Broadband Service

Bryan Cave Leighton Paisner

On April 12, the Federal Communications Commission (FCC) announced that on December 10, 2019, it will begin the auction of millimeter wave spectrum in the 37 GHz, 39 GHz, and 47 GHz bands to promote the development of 5G wireless networks, the next generation broadband wireless service. The FCC also announced the creation of Rural Digital Opportunity Fund (RDOF), a $20.4 billion investment in the expansion of broadband access service to rural areas. The RDOF is distinct from the Department of Agriculture’s (USDA) ReConnect Loan and Grant Program, an initiative designed to dispense $600 million in grants and loans to companies deploying broadband access technologies in underserved rural areas.

Beginning on December 10, 2019, the FCC will conduct what its Chairman has called the largest spectrum auction ever held in the United States. Specifically, the auction will include 2,400 megahertz of spectrum located in the 37 GHz band, 2,400 megahertz of spectrum located in the 39 GHz band, and 1,000 megahertz of spectrum located in the 45 GHz band. According to the FCC, the availability of this spectrum for wireless telecommunications will help “promote the development of 5G, the Internet of Things, and other advanced spectrum-based services.”[1] The FCC’s Chairman emphasized that the spectrum to be auctioned will “secure American leadership in 5G, the next generation of wireless connectivity.”[2]

The FCC issued a Public Notice of the auction’s proposed general bidding procedures. The Notice proposes the auction of 100-megahertz blocks of spectrum, licensed by Partial Economic Area (PEA) service area. The FCC also proposed “bidding procedures for the clock and assignment phases of the auction. The clock phase would allow bidding on generic blocks in two categories—one for 37 GHz and 39 GHz, and one for 47 GHz—in each PEA. The clock phase would serve both to determine winners of generic spectrum blocks and to determine the amount of incentive payments due to those incumbent licensees in the 39 GHz band that opt to relinquish their spectrum usage rights. The assignment phase would allow bidding for frequency-specific license assignments, while ensuring contiguous block assignments.”

Although 5G wireless service could facilitate the expansion of broadband service to rural areas, other forms of broadband service are already available.  USDA is implementing the ReConnect Loan and Grant Program (the ReConnect Program) to finance expansion of broadband service to rural areas. For purposes of the ReConnect Program, basic “broadband” service is defined as 10 megabits per second (Mbps) downstream and 1 Mbps upstream service, while underserved rural areas are defined as areas where 90 percent of the households do not have sufficient access to broadband.

According to USDA, “[t]elecommunications companies, rural electric cooperatives and utilities, internet service providers and municipalities may apply for funding through USDA’s ReConnect Program to connect rural areas that currently have insufficient broadband service. Funds will be awarded to projects that have financially sustainable business models that will bring high-speed broadband to rural homes, businesses, farms, ranches and community facilities such as first responders, health care sites and schools.”[3]

Under the ReConnect Program, “[a]pplicants must propose to build a network that is capable of providing service to every premises in the proposed funded service area at a speed of 25 Mbps downstream and 3 Mbps upstream,” a level of bandwidth that is higher than the basic definition of “broadband” discussed above. A series of eligibility requirements is also outlined in the Federal Register.[4]

The deadline to apply for loan/grant combinations is June 21, 2019, and the deadline to apply for low-interest loans is July 12, 2019.

FCC Seeks Comment on Bidding Procedures for Third 5G Spectrum Auction https://docs.fcc.gov/public/attachments/DOC-356984A1.pdf

[2] Statement of Chairman Ajit Pai, https://docs.fcc.gov/public/attachments/DOC-356984A2.pdf

[3] USDA Announces Opening Date for Rural e-Connectivity Pilot Program Applications, https://www.rd.usda.gov/files/USDARD-SAReConnectPortalLaunch-032919.pdf

[4] Rural Utilities Service Broadband Pilot Program, 80 Fed. Reg. 240 (December 14, 2018). Federal Register: The Daily Journal of the United States.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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