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The past couple of weeks have revealed details for important federal funding programs to support rural broadband. This is welcome news, considering the construction and operation of rural broadband networks is costly. If we’re ever going to conquer the digital divide, it’s going to take funding support from a variety of sources, including the federal government.

Two recent programs take direct aim at this important national priority. The US Department of Agriculture (USDA) ReConnect program and the FCC’s upcoming Rural Digital Opportunity Fund (RDOF). Together, these programs have budgeted over $21 billion to help close the digital divide and should provide a real boost to the community broadband movement.

USDA ReConnect Program
The USDA Rural eConnectivity Pilot Program (ReConnect Program) was authorized by Congress in March 2018 and provides a variety of funding programs targeting unserved and underserved rural communities. Two phases of the program have been announced. The first phase began in 2019 and is well underway, authorizing over $600 million in funding in the form of grants and loans.

As of today, USDA has announced over $517 million in funding from the $600 million phase I budget to a variety of projects and providers. That announced funding will support 55 winning applicants with projects spanning across 28 states. Winning bidders include telcos, electric cooperatives, government entities, a tribal authority, and fixed wireless providers.

The next phase of the ReConnect program is also underway. It has a budget of $550 million and the application window opened on January 31, 2020 and will close om March 16, 2020.

Eligible entities for phase 2 include:

  • States, local governments, or any agency, subdivision, instrumentality, or political subdivision thereof;
  • A territory or possession of the United States;
  • An Indian tribe (as defined in section 4 of the Indian Self Determination and Education Assistance Act (25 U.S.C. 450b));
  • Non-profit entities;
  • For-profit corporations;
  • Limited liability companies; and
  • Cooperative or mutual organizations.

USDA has established evaluation criteria used to select winning applicants. That criterion evaluates a variety of factors and puts more weight on certain aspects. Criteria include the rurality of the service territory; the number of businesses, farms, healthcare, and other important anchor institutions; and rural broadband network performance, among others.

More information about the ReConnect Program may be found at https://www.usda.gov/reconnect.

Rural Development Opportunity Fund
Another promising rural broadband funding program was announced by the FCC in 2019. The RDOF will make $20.4 billion available, over a ten-year period, for the funding of rural networks that offer both broadband and voice services. The funding will be disbursed through a reverse auction, closely following the auction process of the Connect America Fund Phase II auction (CAF-II) of 2018.

The FCC approved RDOF rules at its January 30, 2020, open meeting. The FCC proposes a two-phased approach for RDOF. Phase I will target areas that are defined as wholly unserved with 25/3 Mbps service, offering $16 billion in funding. Phase II will target rural territories that are identified as partially served, as well as any areas not won in the first phase. Phase II will have a budget of $4.4 billion (plus any remaining funds from Phase I).

A wide range of service providers including telcos, telecom and electric cooperatives, WISPs, and competitive broadband operators, among others, can participate in the auction. The FCC will use a weighting system to favor bids to deploy service at higher speeds up to 1 Gbps downstream and with lower latency, meaning fiber broadband should be well represented.

The FCC defines these service levels as:

  • Minimum Performance Tier means 25/3 Mbps speeds with a 250 gigabytes (GB) monthly usage allowance or a monthly usage allowance that reflects the average usage of a majority of fixed broadband customers, whichever is higher
  • Baseline Performance Tier means 50/5 Mbps with the same monthly usage allowance as the minimum tier
  • Above-Baseline performance means 100/20 Mbps speeds with 2 terabytes (TB) of monthly usage
  • Gigabit performance means 1 Gbps/500 Mbps speeds with a 2 TB monthly usage allowance

The latency tiers are defined as:

  • Low latency means 95% or more of all peak period measurements of network round trip latency are at or below 100 milliseconds
  • High latency means 95% or more of all peak period measurements of network round trip latency are at or below 750 milliseconds and voice service receives a score of four or higher using the Mean Opinion Score
  • More information about the RDOF program may be found at https://www.fcc.gov/rural-digital-opportunity-fund.

These two programs are encouraging news for the rural broadband community. While much has been accomplished in the past few years, there is still much to do. These funding programs will go a long way in helping expand rural broadband access and contribute to closing the digital divide. Rural communities all across the country deserve as much, and more.

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Interested in publishing a sponsored post to Telecompetitor? Contact us or call 240-482-8130.

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