T-Mobile, U.S. Cellular and about two dozen smaller wireless carriers will receive a total of approximately $300 million to cover some of the costs of building out 3G or 4G networks in areas that do not currently have 3G service, the FCC announced today.
The funding was awarded through a reverse auction process in which carrier bids indicated the amount of funding the carrier needed to make a business case for service deployment in a specific territory, with funding going to the carrier that asked for the lowest level of support.The auction marks the first test of the reverse auction process, which the FCC hopes to use more extensively in the future.
The $300 million was freed up through reforms to the Universal Service program and was made available on a one-shot basis to help spur the deployment of 3G or 4G along roadways and was not intended to address all areas that cannot get 3G service today.
In a statement, FCC Chairman Julius Genachowski emphasized how the new deployments will help people who travel through rural areas, as well as those who live in those areas. “For too many, dead zones in mobile Internet coverage are too common – and today’s wins will help the U.S. close those gaps,” he said. “But today’s real winners are the American people, millions of whom will soon have greater access to the job, education and healthcare opportunities of America’s world-leading mobile economy.”
The biggest winners in the auction were Allied Wireless Communications, which won $45 .8 million to deploy service along 4,417 road miles, and NE Colorado Cellular, which won $40.2 million to deploy service along 12,078 road miles.
Four different units of T-Mobile bid in the auction, with two of those units winning a total of $23 million to deploy service along 10,500 road miles.
Five different units of U.S. Cellular participated in the auction, and two of those units won a total of $34.5 million to cover 1,974 road miles.
Moving forward, wireless carriers will vie for $500 million annually in ongoing support through the Connect America Fund program – a new broadband program created to replace today’s voice-focused Universal Service program.
A full list of winning bidders in the mobility fund auction, including many names that will be familiar to Telecompetitor readers, is available on the FCC site.