Will the FCC’s $9 Billion Rural 5G Fund Survive?

The future of a $9 billion fund approved by the FCC in late August to bring 5G to rural areas appears uncertain with a new and conservative agency chairman, president, and Congress. Dubbed the Rural 5G Fund upon its creation in 2020, has not yet been distributed to service providers.

With former FCC Chairman Brendan Carr – who cast the only no vote against the fund in August - back at the helm – it's expected other priorities will be focused on. Asked about the future of the rural broadband fund, an FCC spokesman declined to comment but added that the agency is still working on it.

Rural 5G Fund: A Look Back and to the Future

The Rural 5G Fund promises to bring voice and mobile broadband services to residences and businesses in rural America. After several years in the making, the FCC voted to approve a $9 billion initiative – the 5G Fund – a plan designed to bring voice and 5G services to residences and businesses in rural America.

The FCC will announce the expected start of the multi-stage reverse auction at its core through a Public Notice, at a yet to be disclosed date.

The controversial Project 2025 backs ways of handling the way broadband evolves and is managed. The FCC section was written by Brendan Carr, the new FCC Chief, who wrote that the agency adopts a national coordinating strategy. "Hundreds of billions of infrastructure dollars have been appropriated by Congress or budgeted by agencies over the past couple of years that can be used to end the digital divide."

Citing the U.S. Government Accountability Office, "U.S. broadband efforts are not guided by a national strategy;" instead, "federal broadband efforts are fragmented and overlapping, with more than 100 programs administered by 15 agencies," risking overbuilding as well as wasteful duplication. "Many of these programs remain plagued by inefficiency, further contributing to the waste of limited taxpayer dollars.

Moreover, Carr writes that the federal government is failing to put appropriate guardrails in place to govern the expenditure of billions in broadband funds. This is the regulatory equivalent of turning the spigot on full blast and then walking away from the hose. There is a worrisome lack of adequate tracking, measurement, and accountability standards governing all of this broadband spending.

A new Administration needs to bring fresh oversight to this spending and put a national strategy in place to ensure that the federal government adopts a coordinated approach to its various broadband initiatives, he wrote. Similarly, "the next Administration should ask the FCC to launch a review of its existing broadband programs, including the different components of the USF, with the goal of avoiding duplication, improving the efficiency of existing programs, and saving taxpayer money."

A Quicker Rollout for 5G Mobile Wireless?

The creators of the spending program believe it will roll out quicker than the historic $42.5 Billion Broadband Equity, Access, and Deployment (BEAD) program that is tasked with bringing fixed broadband Internet to all, thus closing the digital divide in America.

It is hoped that this undertaking, by using a reverse auction and more detailed maps created by special task forces to identify those locations needing broadband, will be more effective and less time-consuming than BEAD.

The funding auction will rely on the mobile coverage data obtained in the Broadband Data Collection – including through the FCC’s Mobile Speed Test app – and reflected on the FCC’s National Broadband Map.

"We are doing this now because, for the first time, we have comprehensive data about the state of wireless service across the country. To put a finer point on it, we now know exactly where there are mobile dead zones, commented Rosenworcel.

Incentives for Open Radio Access Networks

The FCC 5G Fund now includes millions in incentives to promote the deployment of Open Radio Access Network technology (Open RAN) in 5G Fund-supported networks. The agency cites its benefits for competition, national security, and supply chain reliability.

The growing deployment of 5G brings an industry initiative called "Open RAN" (O-RAN). O-RAN is a broad movement that seeks to virtualize RAN functions with standardized interfaces with the goal of maximizing the use of common off-the-shelf hardware and allowing vendor diversity.

The program rules also require that recipients of the 5G Fund support implementing cybersecurity and supply chain risk management plans.

The 5G Small Carrier Fund

The FCC also established a 5G Small Carrier Fund that would offer up to $2 billion over a 10-year period to current legacy support recipients that had 500,000 or fewer subscribers.

The FCC established rules for the Rural 5G Fund back in 2020. Since then, several other federal programs have come into existence to close the digital divide and set new standards for speed. So, it is little surprise that Congress is driving legislation that calls for the creation of a national broadband strategy for the U.S.

"We are doing this now because, for the first time, we have comprehensive data about the state of wireless service across the country. To put a finer point on it, we now know exactly where there are mobile dead zones," said Rosenworcel in prepared comments.

Some – including FCC Commissioner Brendan Carr – claim that failure to align the timeline of BEAD and the 5G initiative could create problems such as inefficiencies, overbuilds, and imprecise funding. Carr was the only no vote in the recent 5G Fund.