ruralThe budget for FCC rural broadband trials announced in January has been set at $100 million and the commission expects to award funding by year-end, officials said at today’s FCC meeting, where selection criteria for the rural broadband trials also were adopted.

The commission also proposed a plan for reverse auctions for the Connect America Fund program that would encourage states to pay part of broadband deployments. And the commission adopted new guidelines for the Universal Service E-rate program that shift funding away from voice and other legacy services to instead emphasize broadband and Wi-Fi.

Rural Broadband Trial Plans
The aim of the upcoming rural broadband trials is to provide information that will help the FCC structure the competitive bidding process that will occur in price cap territories as part of the CAF program. Competitive bidding will occur when incumbent local carriers decline to bring broadband to unserved areas of a state at the level of funding offered by the FCC.

The rural trials will target unserved areas in price cap territories, FCC officials said today. The $100 million budget will be awarded in three different categories:

  • $75 million for deployments that will support speeds of 25 Mbps downstream and 5 Mbps upstream to each location
  • $15 million for deployments that will support speeds of 10 Mbps downstream and 1 Mbps upstream to each location
  • $10 million for extremely high cost areas to support data rates of 10 Mbps downstream and 1 Mbps upstream to each location

Parties wishing to participate in the trial will have 90 days from the time the FCC order about the trial is released to submit an application and will be required to detail the amount of funding requested and the number of people that will be served. The FCC plans to award funding to the most cost-effective projects, officials said. Applicants that offer to serve eligible tribal areas will receive a 25% billing credit.

Various types of network operators are eligible to participate in the trials – including incumbent and competitive carriers, electric utilities, wireless Internet service providers and others. Those winning funding will have to meet specific build-out deadlines.

The FCC received more than 1,000 expressions of interest from companies wanting to participate in the trials, who requested a wide range of funding levels.

It will be interesting to see how funding levels requested in the formal applications compare to the funding levels calculated using the FCC’s CAF cost model – a comparison the FCC said it plans to make and which should help gauge whether the program has the budget needed to meet broadband deployment goals.

At today’s meeting the commission also said it would request comment on a proposal that could help budgeted dollars go further. The proposal is to offer a bidding credit for bids that leverage non-federal support – a move aimed at encouraging states to make funding available for broadband deployments.

E-Rate Changes
Details about the E-rate schools and libraries program changes, which have generated some controversy, will not be known until the order adopted today is released. But according to FCC officials and an FCC press release, the order phases out support for voice and other legacy services and increases funding for Wi-Fi through better financial management of the E-rate program. Officials also said broadband will have priority over Wi-Fi. Both Republican commissioners voted against the order and expressed disapproval for various aspects Commissioner Ajit Pai said the order didn’t direct enough funding to rural areas and Commissioner Michael O’Rielly questioned whether there was sufficient funding available to meet the order’s goals.

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