FCC moves forward with $4.53B auction to fund wireless in rural areas at 10 Mbps minimum speeds

The FCC today moved forward with a plan to release up to $4.53 billion over the next 10 years to wireless providers in order to fund the construction of LTE wireless networks in rural areas. The action brings the so-called Mobility Fund Phase II auction closer to reality.

Importantly, the agency also said it denied T-Mobile’s request to lower the minimum speeds provided through the service.

“We are not persuaded that the minimum baseline performance requirement for median data speeds should be reduced to 5/1 Mbps, as T-Mobile urges,” the FCC wrote in a fact sheet on its action. “The Commission seeks to ensure that the performance of broadband service in rural and high-cost areas is reasonably comparable to that in urban areas, and the Commission’s own analysis at the time the MF-II Report & Order was adopted indicated that customers of nationwide carriers were receiving data at median speeds of around 10/1 Mbps or faster. Furthermore, in our more recent MF-II Order on Reconsideration, we explained that, in contrast to the 5 Mbps eligibility benchmark in the challenge process, which serves to target support where it is currently needed most, the 10 Mbps minimum baseline performance requirement ‘assure[s] that service in eligible areas is reasonably comparable to urban offerings in the future.’ This forward-looking approach is consistent with past Commission decisions in the universal service context and recognizes that consumer demand for faster mobile wireless services is growing.”

The agency also said it resolved the other remaining issues around the “Mobility Fund Phase II” effort. For example, the commission said MF-II participants should allow their towers to be opened up to equipment from other providers. And it also declined to alter the monthly disbursement schedule for MF-II funds.

The FCC in March of last year opened a proceeding on the MF-II, and today it’s moving forward with much of the final elements of the program. As noted by the Davis Wright Tremaine law firm, The MF-II is an extension of the Mobility Fund Phase I that allocated around $300 million to 33 bidders in 2012 to build out 3G networks in rural areas. But the MF-II was intended to be a longer-term effort with more money. It was supposed to begin in 2014, but was delayed in order for the agency to determine where funds ought to be allocated.

Indeed, in its recent fact sheet on the MF-II, the FCC wrote that “as of 2016, 1.4 million people in the U.S. have no LTE coverage and another 1.7 million live in areas where LTE coverage is provided only on a subsidized basis, so that 3.1 million people (or approximately 1 percent of the U.S. population) live in areas with no LTE or only subsidized LTE.”