Chairman Pai proposes $20 billion for “up to” gigabit-speed rural broadband

Federal Communications Commission Chairman Ajit Pai is proposing a $20.4 billion rural broadband fund that could connect up to four million homes and small businesses over the next ten years. The new program will be part of the Universal Service Fund (USF), and it will be similar to an existing USF program that began during the Obama administration. In 2015, the USF's Connect America Fund (CAF) awarded $9 billion for rural broadband deployment—$1.5 billion annually for six years—in order to connect 3.6 million homes and businesses. Carriers that accepted the CAF money are required to finish the broadband deployments by the end of 2020. Chairman Pai's proposed "Rural Digital Opportunity Fund" will be the follow-on program, an FCC spokesperson said. The new fund will distribute the money in a reverse auction, a type of competitive bidding process. If the resulting broadband deployment is similar to the previous program, it would end up providing wired broadband in some areas and fixed wireless in others.

At $2 billion a year over ten years, the fund will provide more money each year over a longer period of time than the CAF program it would replace. It will also fund higher-speed services. The CAF funding only required carriers, including AT&T and CenturyLink, to deploy broadband with speeds of at least 10Mbps downstream and 1Mbps upstream. In Nov 2018, Chairman Pai said he's proposing to raise the standard for subsidized deployments from 10Mbps/1Mbps to 25Mbps/3Mbps. But the program announced April 12 will also try to go beyond the 25Mbps/3Mbps minimum. Chairman Pai's office said the Rural Digital Opportunity Fund will "provide up to gigabit-speed broadband in the parts of the country most in need of connectivity."