FCC Approves $20 Billion Rural Broadband Funding Plan

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While proponents heralded the fund as a major step to close the "rural digital divide," Democrats on the commission warned that many areas that need internet won't get help.

The Federal Communications Commission voted Thursday to approve a $20.4 billion plan to subsidize the construction of high-speed broadband networks in rural America.

FCC Chairman Ajit Pai called the vote the “biggest step the FCC has ever taken to close the rural digital divide.”

The Rural Digital Opportunity Fund will help internet service providers deploy broadband over 10 years to areas currently lacking service of at least 25 megabits per second download and 3 Mbps upload speeds. The federal agency estimates about six million rural homes and businesses are located in areas that could benefit from the initiative. Internet service providers, including telecoms and government utilities, would bid to provide broadband and voice services to the locations.

The FCC’s three Republican members voted for the rules, while the two Democratic members supported the plan but dissented in part. Democrats said they were concerned that not enough has been done to fix the FCC’s maps that show where broadband is and isn’t available. Without correcting what many say are flawed maps, it is impossible to say what areas of the country most need help with access, they said.

FCC Commissioner Jessica Rosenworcel cited the example of Duanesburg, New York, where a survey of residents found that about half of the FCC’s broadband maps were incorrect in their indication of which residents had access to broadband.

“There are a whole lot of communities just like Duanesburg all across the country,” she said. “The FCC should know where service truly is and is not. It should be that we figure this out before sending federal funds who knows where to build who knows what.”

Pai said the areas that will be targeted in phase one of the plan are known to not have broadband access. He said the FCC should not make those Americans wait for a time-consuming analysis to be completed in order to receive better service. An analysis to determine what other areas also need assistance will be completed in phase two of the project, he said.

The FCC released an analysis earlier this month indicating which states had the most locations eligible for the $16 billion in funding available through the first phase of the plan. California, Texas, Michigan and Wisconsin topped the list. 

Through that same analysis, the FCC decided that Alaska and New York would be ineligible for funding through the program because of “previously established programs to fund rural broadband in these states.”

During the meeting, Commissioner Geoffrey Starks, a Democrat, raised concerns that an updated version of the order might undermine efforts to leverage multiple resources to improve broadband access. 

He said the order includes a provision that would exclude any areas from getting funding if the location was “awarded  funding through the U.S. Department of Agriculture’s ReConnect Program or other similar federal or state broadband subsidy programs, or those subject to enforceable broadband deployment obligations.” Starks said he believes that could  potentially disqualify nearly 30 states from eligibility of Rural Digital Opportunity Fund money.  

“These provisions discourage badly needed state-federal partnerships, risk unequal application of the rules between states, and create an unnecessary risk of litigation,” he said. 

Harold Feld, the senior vice president at Public Knowledge, a consumer advocacy non-profit, said the group is waiting to see what the final wording of the order says, but cautioned that limiting access to the fund would harm millions of rural Americans who do not have broadband access.

“We should encourage states to take initiative and reward those that rise to the challenge,” he said. “At least, we should not punish states by making them depend exclusively on underfunded federal programs doled out from Washington, D.C.”

Angelina Panettieri, the legislative manager for information technology and communications at the National League of Cities, said local telecommunications projects often have to rely on multiple funding streams because one single funding source is not enough to cover the total cost of a project. The decision could potentially preclude state and local governments from weaving together funding from a variety of sources to meet their infrastructure needs, she said. 

For example, members of New York’s Congressional delegation told the FCC this month that despite the state’s own broadband initiative, there are still areas of the state in need of federal investment. In a letter, they asked the FCC to change its decision to leave the state out of the first phase of its plan because of past investments, saying they were "deeply disappointed.”

Pai said Thursday that the FCC would welcome any information the states would like to provide to demonstrate need. But he said money should not be spent on efforts where companies are already under obligation through other agreements to deploy broadband. 

“We must target our limited funds to bring broadband to those who will otherwise not be served,” Pai said. “That means limiting efforts to areas that do not have broadband and where there are no current federal and state programs that will ensure broadband is deployed in the near future.”