Chairman Proposes Procedures for $16 Billion Phase I Rural Digital Opportunity Fund Auction

Federal Communications Commission Chairman Ajit Pai shared draft procedures for the upcoming $16 billion Phase I Rural Digital Opportunity Fund auction (Auction 904). With financial support from the auction, service providers will expand broadband service to millions of unserved homes and businesses in rural areas. At the FCC’s June 9 open meeting, the FCC will vote on finalizing these draft procedures. Auction 904 is the first phase of the FCC’s $20.4 billion Rural Digital Opportunity Fund initiative, which is modeled on the FCC’s successful Connect America Fund Phase II auction in 2018. Bidding in Auction 904 is scheduled to begin on October 29, 2020.

The draft auction procedures attempt to strike a balance between building sustainable networks that will meet the needs of the future while maximizing the number of locations that receive service. The auction targets census blocks that current data show are wholly unserved. Funds will be allocated through a multi-round reverse auction format similar to that used in the Connect America Fund Phase II auction. The Rural Digital Opportunity Fund Phase I auction more than doubles the minimum speeds that providers must deliver to 25/3 Mbps. It also prioritizes bids offering to provide even faster speeds (up to a gigabit) and lower latency by giving those bids greater weight in the auction and awarding support to the bidder offering the best combination of speed and latency in each area once the aggregate price of all bids drops below the auction’s budget. These bidding procedures will enable providers to start planning for the start of the auction in October by determining the amount of support they will need to provide a specified level of service to a specified set of eligible areas.

The draft timetable for availability of materials and deadlines for the auction:

• Online auction application tutorial would be available by June 15
• Short-form application (FCC Form 183) filing window would open July 1
• Short-form application (FCC Form 183) filing window would close July 15
• Auction bidding tutorial would be available online by October 14
• Mock auction would begin October 26
• Auction would begin October 29