FCC Approves $9 Billion 5G Fund
The Federal Communications Commission (“FCC” or “Commission”) has established a $9 billion 5G Fund to bring additional mobile wireless broadband and voice service to rural America. The 5G Fund Report and Order (“Order”) provides for two phases of support, each with ten-year terms. Phase I will make $8 billion available to rural areas that lack unsubsidized 4G LTE and 5G broadband service, including $680 million reserved for Tribal lands. Phase II will provide $1 billion plus any unawarded Phase I funds for technologically innovated 5G networks that facilitate precision agriculture. The Commission adopted a multi-round descending clock auction, similar to CAF II and RDOF, to award support. The Commission also adopted a schedule for phasing down legacy high-cot support and imposed new obligations on recipients of legacy support to use an increasing percentage of their support to deploy 5G
service. Below is a brief summary of the Order and the obligations adopted regarding 5G Fund eligibility, support, and requirements.
Eligibility Requirements: Before being authorized to receive support, a winning bidder in the 5G Fund auction must be designated an eligible telecommunications carrier (“ETC”). This designation may be obtained within 180 days after release of the public notice announcing winning bidders. An applicant for the auction must have exclusive access to licensed spectrum with sufficient bandwidth to satisfy the 5G performance requirements (as explained in more detail below), and an applicant must certify that it will retain access to such spectrum for at least ten years. Additionally, an applicant must certify its financial and technical qualifications in both the short-form and long-form applications, as well as meet the public interest obligations and performance requirements. The Commission will permit all qualified applicants, including recipients of high-cost universal service support, to participate in the 5G Fund auction, and will not categorically preclude satellite providers from
Eligible Areas for Support: The FCC will use mobile broadband coverage data from its pending Digital Opportunity Data Collection mapping proceeding to determine eligible areas. The FCC will exclude from eligibility areas in Alaska where high-cost
support is provided via the mobile portion of the Alaska Plan and areas in Puerto Rico
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support is provided via the mobile portion of the Alaska Plan and areas in Puerto Rico and the U.S. Virgin Islands where high-cost support is already provided.
Support for Tribal Lands: As mentioned above, Phase I includes $680 million set- aside for bidders offering to serve Tribal lands. Only eligible areas on Tribal lands will be authorized to receive support from the $680 million reserve and the Commission has amended the definition of “Tribal lands” to encompass certain non-Tribal areas and communities that have the same characteristics as existing Tribal lands. Bidding under the Tribal reserve budget will take place concurrently with the unreserved portion of the budget as part of the single 5G Fund Phase I auction.
Geographic Areas for Bidding: The geographic areas eligible for bidding will be determined at a later date, but the FCC determined that these areas will be no larger than a census tract and no smaller than a census block group. Notably, the auction will use an adjustment factor for bidding and assign a weight for each geographic area, taking into consideration serving areas with difficult terrain and less profitable areas, which will receive more weight and, thus, more support.
5G Fund Performance Requirements and Public Interest Obligations: 5G Fund recipients must provide mobile, terrestrial voice, and data services that comply, at minimum, with 5G-NR (New Radio) technology as defined by 3GPP. They will be required to meet the following minimum performance standards: (i) data speeds of at least 35/3 Mbps with minimum cell edge speeds of 7/1 Mbps; (ii) latency of 100 milliseconds or less per round trip; and (iii) must offer at least one service plan that includes a minimum monthly data allowance that is equivalent to the average US subscriber data usage. Interim service milestones require recipients to offer 5G service to at least 40% of the total square kilometers associated with eligible areas by the end of the third year; 60% by the end of four years; and 80% by the end of five years. For the final service milestone, recipients must offer 5G service to at least 85% of the total square kilometers by the end of the sixth year. Finally, by the end of the sixth year, recipients must provide service to at least 75% of the total square kilometers within each of their individual biddable areas. 5G Fund recipients must deploy 5G services at rates that are reasonably comparable to rates they offer in urban areas and must also allow collocation and voice and data roaming.
5G Public Interest Obligations for Legacy High-Cost Support
Recipients: Competitive ETCs (“CETCs”) receiving legacy high-cost support for mobile wireless service must begin to use an increasing percentage of their support toward 5G service, specifically at least one-third of the legacy support received in 2021, at least two-thirds of the legacy support received in 2022, and all legacy support received in 2023 and any subsequent year. Because the Commission recognizes that CETCs may have already finalized their budget and deployment plans for 2021, a CETC may opt to use less than one-third of its legacy support in 2021 for 5G so long as it makes up for the shortfall by proportionally increasing the use of its legacy support for 5G (above the two-thirds requirement) in 2022. To take advantage of this flexibility, CETCs must notify the Bureau of such by March 31, 2021 (or 30 days after the Commission received Paperwork Reduction Act approval, whichever is later). CETCs will also be required to meet specific coverage requirements (to be decided by the Bureau later) until the legacy support starts to phase down or culminates.