The Rural Connectivity Advancement Program (RCAP) Act, introduced by Senator John Thune (R-South Dakota) would direct 10% of proceeds from upcoming wireless spectrum auctions to rural broadband. Auctions involved would be those occurring through September 30, 2022.
Funding would go to a Rural Broadband Assessment and Deployment Fund and the FCC would disburse money from the fund to network operators to use toward some of the costs of providing broadband service in high-cost rural areas.
Exactly how many auctions and which ones would be included is unclear but undoubtedly plans would involve multiple auctions, each likely to raise billions of dollars. The upcoming C-band auction, if included, is expected to raise a particularly large amount of funding. Ten percent of two year’s worth of auction proceeds most likely would yield billions of dollars for rural broadband.
According to the 13-page act, the funding raised through the auctions and directed to the FCC would be used “to establish one or more programs that are separate from, but are coordinated with and complement” FCC high-cost loop support, the Rural Digital Opportunity Fund, the Mobility Fund, the Rural Broadband Experiments program and other high-cost Universal Service Fund (USF) programs.
Rural Broadband Assessment and Deployment Fund money would be used to address:
- Gaps that remain in broadband internet access service coverage in high-cost rural areas despite the operations of the high-cost programs
- Shortfalls in sufficient funding of the high-cost programs that could adversely affect the sustainability of services or reasonable comparability of rates that are supported by those programs
“My bill would take an important step toward the goal of closing the digital divide and does so in a responsible manner,” said Thune in a press release about the RCAP Act.
Heightened Interest in Rural Broadband
The RCAP Act is introduced at a time when COVID-19 and resultant stay-at-home orders have drawn public attention to the ongoing lack of high-speed broadband in some rural areas. And while existing FCC programs aim to close that gap, some stakeholders have questioned whether existing funding is sufficient and whether the current funding methodology is sustainable. Currently, the high-cost program and other USF programs are funding as a percentage of long-distance voice revenues, even though all USF programs are now primarily focused on broadband.
Directing a percentage of spectrum auction revenues toward rural broadband, as proposed in the RCAP Act, is one alternative USF funding approach that has been proposed. A separate Universal Broadband Act introduced in the House of Representatives last month would fund the USF as a percentage of broadband and voice revenues. And it’s worth noting that the two approaches are not mutually exclusive. Potentially both pieces of legislation could pass and could be implemented.
The RCAP Act has the support of a range of broadband provider organizations, including NTCA – The Rural Broadband Association, CTIA, and USTelecom.