Broadband in rural areas

The Rural Connectivity Advancement Program (RCAP) Act of 2021 introduced in the Senate yesterday would direct 10% of revenues raised in FCC spectrum auctions toward rural broadband.

If adopted, the bill would create a Rural Broadband Assessment and Deployment Fund that would complement existing high-cost broadband programs, including the Rural Digital Opportunity Fund, the Rural Broadband Experiments program and Universal Service Fund high-cost, interstate common line, high-cost loop, mobility fund, and Puerto Rico and Virgin Islands programs.

All those programs cover some of the costs of providing broadband to rural areas where the costs of providing service are higher than in more densely populated urban areas. The RCAP funding would “address shortfalls” in the other programs, according to a press release.

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The bill is nearly identical to the RCAP Act introduced last year with one important difference: While last year’s act would have directed 10% of auction proceeds collected during a two-year period toward rural broadband, the new act doesn’t have an expiration date for the RCAP program but instead would be ongoing.

The RCAP Act of 2021 has bi-partisan backing from Senators John Thune (R-S.D.), Maggie Hassan (D-N.H.), Jerry Moran (R-Kan.) and Catherine Cortez Masto (D-Nev.)

It also has the support of a range of broadband industry associations, including NTCA—The Rural Broadband Association, USTelecom, CTIA, the Wireless Internet Service Providers Association and the Fiber Broadband Association.

The new RCAP Act is introduced at a time when the COVID-19 pandemic has made the populace and policymakers more supportive of the idea of providing support to make broadband available to all Americans.
Policymakers also have begun to recognize that existing rural broadband support programs do not have sufficient funding to reach that goal quickly and to recognize that the current funding approach, which relies heavily on voice revenues, is becoming increasingly unsustainable.

As a result, how to best fund rural broadband is an area that is getting a lot of attention.

A Hot Topic

The RCAP Act of 2021 was introduced the same week that FCC Commissioner Brendan Carr proposed having “Big Tech” companies such as Facebook, Apple, and Google contribute a portion of their revenues toward universal service.

Others argue that rural broadband funding should come from a direct appropriation. The Biden administration has recommended that $100 billion be made available for broadband. And a range of legislation has been introduced along those lines, some with loftier speed goals and funding targets than others.

It’s worth noting that if the RCAP Act of 2020 had been adopted in time for the record-setting C-band auction, the funding directed toward rural broadband also would have been unprecedented. That auction raised over $80 billion, and while a portion of that would have gone toward relocation fees for incumbent users of the spectrum, 10% of the remainder would still have amounted to billions of dollars. To put that in perspective, the USF high-cost program’s entire annual budget, including RDOF and traditional programs, is about $4 billion.

The main concern about using auction proceeds to fund rural broadband is that funding would be unpredictable and would fluctuate from year to year. No one knows for sure how much an auction will raise until it’s over. And how many auctions will occur each year is known only a year or two in advance.

Additional information about the RCAP Act of 2021 can be found in this press release. A full text of the act is available here.

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