Rule2024-23404
Establishing a 5G Fund for Rural America
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
December 13, 2024
Effective
January 13, 2025
Issuing agencies
Federal Communications Commission
Abstract
In this document, the Federal Communications Commission (Commission or FCC) takes important and necessary steps to implement the 5G Fund for Rural America (5G Fund) to support the build out of advanced, 5G mobile wireless broadband networks for those who live, work, and travel in rural areas. The Commission also in this document resolves the issues raised in the five pending petitions for reconsideration of its 2020 5G Fund Report and Order.
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[Federal Register Volume 89, Number 240 (Friday, December 13, 2024)]
[Rules and Regulations]
[Pages 101358-101400]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-23404]
[[Page 101357]]
Vol. 89
Friday,
No. 240
December 13, 2024
Part VI
Federal Communications Commission
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47 CFR Part 54
Establishing a 5G Fund for Rural America; Final Rule
Federal Register / Vol. 89, No. 240 / Friday, December 13, 2024 /
Rules and Regulations
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 54
[GN Docket No. 20-32; FCC 24-89; FRS 247283]
Establishing a 5G Fund for Rural America
AGENCY: Federal Communications Commission.
ACTION: Final rule.
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SUMMARY: In this document, the Federal Communications Commission
(Commission or FCC) takes important and necessary steps to implement
the 5G Fund for Rural America (5G Fund) to support the build out of
advanced, 5G mobile wireless broadband networks for those who live,
work, and travel in rural areas. The Commission also in this document
resolves the issues raised in the five pending petitions for
reconsideration of its 2020 5G Fund Report and Order.
DATES: Effective January 13, 2025. Compliance with Sec. Sec.
54.322(b), 54.322(g), 54.322(h), 54.322(i), 54.322(j), 54.1014(a),
54.1014(b)(2), 54.1018(a), 54.1018(b), 54.1018(c), 54.1018(d),
54.1019(a)(1), 54.1019(a)(2), 54.1019(a)(3), 54.1019(b), 54.1022(b),
and 54.1022(f) is not required until the Commission publishes a
document in the Federal Register announcing the compliance date. As of
December 13, 2024, instruction 10.b., amending Sec. 54.313, and
published November 25, 2020, at 85 FR 75770, is withdrawn.
ADDRESSES: Federal Communications Commission, 45 L Street NE,
Washington, DC 20554.
FOR FURTHER INFORMATION CONTACT: For additional information on this
proceeding, contact Kelly Quinn, Office of Economics and Analytics,
Auctions Division, (202) 418-0660 or <a href="/cdn-cgi/l/email-protection#f0bb959c9c89dea185999e9eb0969393de979f86"><span class="__cf_email__" data-cfemail="e2a9878e8e9bccb3978b8c8ca2848181cc858d94">[email protected]</span></a>, Valerie M.
Barrish, Office of Economics and Analytics, Auctions Division, (202)
418-0660 or <a href="/cdn-cgi/l/email-protection#4e182f222b3c272b600c2f3c3c273d260e282d2d60292138"><span class="__cf_email__" data-cfemail="1046717c756279753e52716262796378507673733e777f66">[email protected]</span></a>. For information regarding the
Paperwork Reduction Act of 1995 (PRA) information collection
requirements contained in this PRA, contact Cathy Williams, Office of
Managing Director, at (202) 418-2918 or <a href="/cdn-cgi/l/email-protection#327153465a4b1c655b5e5e5b535f41725451511c555d44"><span class="__cf_email__" data-cfemail="723113061a0b5c251b1e1e1b131f01321411115c151d04">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's 5G
Fund Second Report and Order and Order on Reconsideration in GN Docket
No. 20-32, FCC 24-89, adopted on August 14, 2024 and released on August
29, 2024. The full text of this document is available on the
Commission's website at <a href="https://www.fcc.gov/document/fcc-reignite-5g-fund-target-investments-rural-communities">https://www.fcc.gov/document/fcc-reignite-5g-fund-target-investments-rural-communities</a>. To request materials in
accessible formats for people with disabilities, send an email to
<a href="/cdn-cgi/l/email-protection#1a5c59592f2a2e5a7c7979347d756c"><span class="__cf_email__" data-cfemail="6c2a2f2f595c582c0a0f0f420b031a">[email protected]</span></a> or call the Consumer & Governmental Affairs Bureau at
202-418-0530 (voice).
Synopsis
I. Introduction
1. The Commission takes important and necessary steps in the 5G
Fund Second Report and
Order and Order on Reconsideration to implement the framework for
the 5G Fund for Rural America (5G Fund) to support the build out of
advanced, 5G mobile wireless broadband networks for those who live,
work, and travel in rural areas. After over a decade of hard work to
reach this pivotal moment, the 5G Fund reflects the Commission's
persistent efforts to reform and redirect universal service funds for
mobile broadband to areas of the country that need them the most. As it
finalizes the details for the 5G Fund, the Commission is confident that
its conclusions are solidly grounded in the improved mobile coverage
data obtained in the Broadband Data Collection (BDC), which is
reflected on its new National Broadband Map and provides the Commission
with the most comprehensive picture to date about where mobile
broadband service is and is not across the entire country.
Unquestionably, the Commission's decision to wait to proceed with the
5G Fund Phase I auction until the Commission had these data to rely on
has dramatically improved its understanding of where high-speed mobile
broadband service is being provided and has significantly enhanced its
ability to hold a successful 5G Fund auction. The Commission is now far
better informed regarding which communities lack mobile broadband
service.
2. As the Commission noted when it adopted the 5G Fund Further
Notice of Proposed Rulemaking (5G Fund FNPRM), 88 FR 66781 (Sept. 28,
2023), the National Broadband Map reflects the stark reality that over
14 million homes and businesses nationwide continue to lack access to
5G mobile wireless broadband service. The Commission therefore
undertook a tailored effort to refresh the record and reignite the 5G
Fund's plan to expand the deployment of 5G service to those rural
communities that remain trapped on the wrong side of the digital
divide. After careful consideration of the record gathered in this
proceeding, the Commission concludes that the determinations it reaches
herein will best incentivize the deployment of networks providing
advanced, 5G mobile wireless broadband in areas of the country where,
absent subsidies, such service will continue to be lacking.
3. Specifically, in this 5G Fund Second Report and Order and Order
on Reconsideration, the Commission: (1) modifies the definition of the
areas that will be eligible for support in the 5G Fund Phase I auction
and include areas in Puerto Rico and the U.S. Virgin Islands that meet
this eligible area definition in the 5G Fund Phase I auction; (2)
increases the budget for Phase I of the 5G Fund and the Tribal reserve
budget; (3) modifies the metric for accepting and identifying winning
bids and adopt a service-based weighting factor for bidding in the 5G
Fund Phase I auction; (4) explains how it will aggregate areas eligible
for 5G Fund support to minimum geographic areas for bidding; (5)
explains its approach to generally align the methodologies for
demonstrating compliance with the 5G Fund public interest obligations
and performance requirements with those used in the BDC; (6) modifies
the schedule for transitioning from mobile legacy high-cost support to
5G Fund support consistent with recent legislative amendments; (7)
requires each 5G Fund Phase I auction applicant to certify, under
penalty of perjury, that it has read the public notice adopting
procedures for the auction, and that it has familiarized itself with
those procedures and any requirements related to the support made
available for bidding in the auction; (8) requires 5G Fund support
recipients to implement cybersecurity and supply chain risk management
plans as a condition of receiving support; and (9) encourages 5G Fund
support recipients to incorporate Open Radio Access Network (Open RAN)
technologies in networks funded through the 5G Fund through the use of
incentive funding and an opportunity to seek additional time to meet
their 5G Fund public interest obligations and performance requirements
by the established service deployment milestones.
4. The Commission also resolves the issues raised in the pending
petitions for reconsideration of the 5G Fund Report and Order filed by
The Rural Wireless Association, Inc. (RWA) and NTCA--The Rural
Broadband Association (NTCA), The Coalition of Rural Wireless Carriers
(CRWC), CTIA, Smith Bagley, Inc. (SBI), and 5G Fund Supporters. See 86
FR 6611 (Jan. 22, 2021). With the decisions the
[[Page 101359]]
Commission reaches herein, the Commission advances its extensive
efforts that began with the USF/ICC Transformation Order, 76 FR 73830
(Nov. 29, 2011), to modernize high-cost support for mobile broadband
services and proceeds with confidence that it is stretching its limited
universal service fund dollars to support advanced, 5G mobile wireless
broadband service to as many areas where Americans live, work and
travel as possible.
II. Background
5. In its October 2020 5G Fund Report and Order, 85 FR 75770 (Nov.
25, 2020), the Commission established the 5G Fund and determined that
it would use multi-round reverse auctions to distribute up to $9
billion, in two phases, to retarget mobile universal service in the
high-cost program to bring voice and 5G mobile broadband service to
rural areas of the country unlikely to otherwise see unsubsidized
deployment of 5G-capable networks. In adopting a budget of up to $9
billion for the 5G Fund, the Commission explained that support would be
awarded in two phases, with up to $8 billion for Phase I, of which it
would reserve $680 million of support for service to Tribal lands, and
at least $1 billion in Phase II, as well as any unawarded funds from
Phase I. The Commission decided that it would use new, more precise,
verified mobile coverage data gathered through the BDC to determine the
areas eligible for support in a 5G Fund auction. The Commission defined
the areas eligible for support in the 5G Fund Phase I auction as those
that lack unsubsidized 4G LTE and 5G broadband service by at least one
service provider based on BDC data. The Commission also decided that it
would accept bids and identify winning bids in a 5G Fund auction using
a support price per adjusted square kilometer. Under this approach,
each eligible area would have an associated number of square kilometers
that would be subject to an adjustment factor that would assign a
weight to each geographic area and apply that adjustment factor to
bidding for support amounts, and support amounts for an area would be
determined by multiplying an area's associated adjusted square
kilometers by the relevant price per square kilometer.
6. The Commission also concluded in the 5G Fund Report and Order
that ``[r]ural Americans deserve timely deployment of service by legacy
recipients of high-cost support that is comparable to what is being
offered in urban areas, and [that its] stewardship of the Universal
Service Fund demands that [it] specify and clarify the obligations of
legacy support recipients.'' Consistent with this conclusion, the
Commission adopted additional 5G public interest obligations and
performance requirements, as well as associated reporting requirements,
for competitive eligible telecommunications carriers (ETCs) to continue
to receive mobile legacy high-cost support. The Commission also adopted
a requirement that competitive ETCs receiving mobile legacy high-cost
support use an increasing percentage of their support toward the
deployment, maintenance, and operation of voice and broadband networks
that support 5G service in their subsidized areas. Furthermore, the
Commission noted that it would terminate support payments to
competitive ETCs receiving mobile legacy high-cost support that fail to
comply with their public interest obligations and performance
requirements. The Commission explained that such rules would help to
ensure that the areas served by legacy support providers enjoyed the
benefits that 5G promises.
7. Pursuant to the rules adopted in the 5G Fund Report and Order,
both recipients of mobile legacy high-cost support and recipients of 5G
Fund auction support are required to meet minimum baseline performance
requirements for data speed, latency, and data allowance, including:
(1) deploying 5G networks that meet at least the 5G-NR (New Radio)
technology standards developed by the 3rd Generation Partnership
Project with Release 15 (or any successor release that may be adopted
by the Office of Economics and Analytics (OEA) and Wireline Competition
Bureau (WCB) after appropriate notice and comment) with median download
and upload speeds of at least 35 Mbps and 3 Mbps and with minimum cell
edge download and upload speeds of 7 Mbps and 1 Mbps; (2) meeting end-
to-end round trip data latency measurements of 100 milliseconds or
below; and (3) offering at least one service plan that includes a
minimum monthly data allowance that is equivalent to the average United
States subscriber data usage. The Commission explained that these
performance requirements, along with public interest obligations for
reasonably comparable rates, collocation, and voice and data roaming,
will ensure that rural areas receive service reasonably comparable to
high-speed mobile broadband service available in urban areas from both
mobile legacy support recipients and 5G Fund support recipients.
8. To ensure that 5G Fund support recipients meet their public
interest obligations and performance requirements in areas where they
receive support, the Commission adopted interim and final service
deployment milestones along with reporting requirements to monitor
their progress. Specifically, the Commission adopted milestones
requiring a 5G Fund support recipient to offer 5G service meeting
established performance requirements to at least 40% of the total
square kilometers associated with the eligible areas for which it is
authorized to receive 5G Fund support in a state by the end of the
third full calendar year following authorization of support, to at
least 60% of the total square kilometers by the end of the fourth full
calendar year, and to at least 80% of the total square kilometers by
the end of the fifth full calendar year. Moreover, the Commission
adopted a final service deployment milestone that would require a 5G
Fund support recipient to offer 5G service that meets the established
5G Fund performance requirements to at least 85% of the total square
kilometers associated with the eligible areas for which it is
authorized to receive 5G Fund support in a state by the end of the
sixth full calendar year following authorization of support.
Additionally, a 5G Fund support recipient is required to demonstrate by
the end of the sixth full calendar year following authorization of
support that it provides service that meets the established 5G
performance requirements to at least 75% of the total square kilometers
within each of its individual biddable areas.
9. Figure 1 in the 5G Fund Second Report and Order and Order on
Reconsideration, titled ``USAC Mobile CETC Service Area Boundaries
Map,'' depicts USAC's online map delineating the boundaries of the
subsidized service areas of each competitive ETC receiving mobile
legacy high-cost support used in determining which areas are subsidized
for this purpose. The Commission stated in the 5G Fund Report and Order
that it will use Geographic Information Systems (GIS) data from the
Universal Service Administrative Company (USAC) delineating the
boundaries of the subsidized service areas of each competitive ETC
receiving mobile legacy high-cost support in determining which areas
are subsidized for this purpose. The 5G Fund Second Report and Order
and Order on Reconsideration notes that California, Connecticut,
Delaware, Florida, Hawaii, Indiana, Maryland, Massachusetts, Minnesota,
New Jersey, Ohio, Pennsylvania, Rhode Island, Vermont, and Washington,
DC do not have any
[[Page 101360]]
mobile legacy high-cost support service areas. The charts in Figure 2
in the 5G Fund Second Report and Order and Order on Reconsideration,
titled ``Percent of a State's Total Area Within a Subsidized CETC Area
and the Percent of Total High-Cost Subsidy Directed to That State,''
and Figure 3 in the 5G Fund Second Report and Order and Order on
Reconsideration, titled ``Percent of a State's Total Area Within the
Subsidized Area of 1, 2, 3, or 4 CETCs,'' provide more detail about the
distribution of mobile legacy high-cost support by state.
10. The Commission decided in the 5G Fund Report and Order that it
would wait to hold an auction to award 5G Fund support until it had
new, more precise, verified mobile coverage data obtained through the
BDC, and explained that waiting for the development of a National
Broadband Map was critical to the 5G Fund's success. The Commission's
National Broadband Map, which reflects the most recently available data
submitted in the BDC concerning mobile broadband service availability,
provides us with a substantially improved understanding about where
such service is--and is not--available. Moreover, in areas where mobile
broadband service is available, this map provides an improved picture
of the type(s) of service available, the speeds at which service is
available, and the environment(s) in which service is available.
11. Armed with this data, the Commission adopted the 5G Fund FNPRM
on September 21, 2023, to refresh the record and help inform the
decisions the Commission makes below about how Phase I of the 5G Fund
should operate. The 5G Fund FNPRM therefore sought comment on a limited
set of issues that are critical to the 5G Fund's success, namely: (1)
defining the areas that will be eligible for 5G Fund support; (2)
reassessing the budget for the 5G Fund; (3) potentially reconsidering
the use of adjusted square kilometers as the metric for accepting bids
and identifying winning bids in a 5G Fund auction; (4) aggregating
areas eligible for 5G Fund support to minimum geographic areas for
bidding; (5) measuring a 5G Fund support recipient's compliance with
its public interest obligations and performance requirements based on
any modified metric for accepting bids and identifying winning bids;
(6) modifying the schedule for transitioning from mobile legacy high-
cost support to 5G Fund support, consistent with recent legislative
amendments; (7) requiring each 5G Fund Phase I auction applicant to
certify, under penalty of perjury, that it has read the public notice
adopting procedures for the auction, and that it has familiarized
itself with those procedures and any requirements, terms, and
conditions related to the support made available for bidding in the
auction; (8) requiring 5G Fund support recipients to implement
cybersecurity and supply chain risk management plans; (9) determining
whether and how this proceeding might create an opportunity to support
further deployment of Open Radio Access Network (Open RAN)
technologies; and (10) asking how its proposals may promote or inhibit
advances in diversity, equity, inclusion, and accessibility, as well
the scope of the Commission's relevant legal authority to address any
such issues.
III. Identifying Areas Eligible for 5G Fund Support
A. Defining the Areas Eligible for 5G Fund Support
12. The Commission modifies the definition of areas eligible for
support in the 5G Fund Phase I auction to be those areas that: (1) show
a lack of unsubsidized 5G mobile wireless broadband service at speeds
of at least \7/1\ Mbps in an outdoor stationary environment by at least
one service provider based on mobile coverage data submitted in the
BDC, (2) are not in urban areas, as defined by the U.S. Census Bureau,
and (3) contain at least one location or at least some portion of a
road. In the 5G Fund Second Report and Order and Order on
Reconsideration, the Commission noted that data submitted in the BDC
does not include the subsidy status of a reported service or provider,
and that to determine whether an area lacks unsubsidized service, it
evaluates the subsidy status of a service provider by using information
provided from USAC regarding the distribution of mobile legacy high-
cost support from the universal service fund and competitive eligible
telecommunications carrier (CETC) study boundaries. The Commission also
noted that, consistent with the Commission's decision in the 5G Fund
Report and Order prohibiting any provider with enforceable 5G
deployment obligations to use 5G Fund support to fund such deployments,
it expects to give providers with enforceable 5G deployment obligations
an opportunity to make pre-auction, binding commitments to deploy 5G in
certain areas, thereby removing those areas from the inventory of areas
eligible for the auction.
13. As the Commission noted in the 5G Fund FNPRM, throughout this
proceeding, several parties have taken issue with the previously
adopted eligible areas definition--i.e., areas where mobile coverage
data submitted in the BDC show a lack of both unsubsidized 4G LTE and
unsubsidized 5G broadband service by at least one service provider--and
have advocated that the Commission more broadly define as eligible for
5G Fund support any areas that lack unsubsidized 5G mobile broadband
service. The Commission also received two petitions seeking
reconsideration of the eligible areas definition adopted in the 5G Fund
Report and Order, both of which ask the Commission to define as
eligible for 5G Fund support any area that lacks unsubsidized 5G
broadband service. See 86 FR 6611 (Jan. 22, 2021). The Commission is
persuaded by the comments filed in response to the 5G Fund FNPRM that,
for a variety of reasons, unsubsidized providers of 4G LTE service may
lack motivation to upgrade their networks to 5G technology in rural
areas and thus may be unlikely to do so without incentives. To provide
such incentives, the Commission therefore modifies the definition of
eligible areas adopted in the 5G Fund Report and Order. However, the
Commission is also mindful that there are rural areas that lack
unsubsidized 4G LTE service and thus lack access to any type of
advanced high-speed mobile broadband service. Accordingly, as more
fully explained in the 5G Fund Second Report and Order, the Commission
will apply a service-based weighting factor in 5G Fund Phase I auction
bidding to incentivize the deployment of 5G mobile broadband service in
areas that lack unsubsidized 4G LTE service. The Commission will use a
speed threshold of 5/1 Mbps for purposes of determining the areas that
lack unsubsidized 4G LTE in connection with this weighting approach. As
noted in the 5G Fund Second Report and Order and Order on
Reconsideration, for 4G LTE, the BDC requires mobile broadband service
providers to submit propagation maps and propagation model details that
demonstrate where mobile wireless users should expect to receive
minimum user speeds of 5/1 Mbps at the cell edge, with a cell edge
probability of not less than 90% and a cell loading of not less than
50%, in accordance with the Broadband Deployment Accuracy and
Technological Availability (Broadband DATA) Act. See 47 U.S.C.
642(b)(2)(B)(ii).
[[Page 101361]]
14. Consistent with the Commission's decision to modify the
definition of areas eligible for support in the 5G Fund Phase I auction
to be those areas where mobile coverage data submitted in the BDC show
a lack of unsubsidized 5G mobile broadband service at speeds of at
least 7/1 Mbps in an outdoor stationary environment by at least one
service provider, the Commission also grants the Petitions for
Reconsideration filed by CRWC, NTCA, and RWA to the extent they request
that the Commission define the areas eligible for the 5G Fund Phase I
auction as those where BDC data show a lack of unsubsidized 5G mobile
broadband service.
1. Technology for Determining Eligible Areas
15. The record overwhelmingly supports modifying the definition of
areas eligible for support in the 5G Fund Phase I auction to be those
areas where BDC mobile coverage data show a lack of unsubsidized 5G
mobile broadband service by at least one service provider, even if
those areas are served by 4G LTE service. As the Competitive Carriers
Association (CCA) emphasizes, ``the 5G Fund should be truly focused on
5G,'' and ``[t]he relevant question for 5G Fund eligibility is the
presence or absence of currently-available 5G service in that area.''
CCA maintains that defining eligibility for 5G Fund support based on
this baseline question will extend 5G service to both areas currently
receiving only 4G service and those that do not receive 4G service. CCA
notes that expanding eligibility to areas in which 4G LTE service is
available but 5G service is not ``appropriately focuses the 5G Fund on
expanding access to 5G service . . . [and] also avoids the potentially
harmful consequences of stranding 4G-served areas without the potential
for 5G service for an extended period of time.''
16. AT&T, Inc. (AT&T) and T-Mobile USA, Inc. (T-Mobile) are the
only commenters that support continuing to define eligible areas as
those that lack unsubsidized 4G LTE and 5G mobile broadband service.
AT&T ``supports prioritizing 5G Fund support for areas without 4G LTE
or 5G service'' and submits that ``[t]his could be accomplished by
conducting a more targeted 5G Fund Phase I auction based on areas
without 4G LTE and 5G service . . . [and] then expand[ing] the eligible
areas [for the 5G Fund Phase II auction] to also include those that
have 4G LTE service if the BDC maps at the time support [such an
expansion].'' AT&T argues that ``[5G Fund support] should only be
expended for areas that will not receive 5G service without private
investment'' and asserts that ``the Commission . . . should first
direct [its limited funds] to [areas] most in need--[those] that do not
have 4G LTE or 5G service[,] . . . [which] will allow more time for
private investment to upgrade 4G LTE coverage areas to 5G without [5G
Fund] support but will also eventually allow support in the event it is
not economical for a 4G LTE area[ ] to be [upgraded] without government
support.'' T-Mobile argues that ``[t]argeting unserved areas is
consistent with the framework of previous universal service auctions .
. . [and] will avoid waste and inefficient use of resources due to
overbuilding.'' T-Mobile submits that retaining the existing eligible
areas definition ``will also help target funding to areas that lack
mobile broadband service, as there are many places throughout the
United States that lack even 4G LTE service,'' and maintains that
``[p]rioritizing areas that lack 4G LTE or 5G will ensure that funding
is targeted to areas that lack any service.''
17. Several commenters address the questions posed by the
Commission about what motivations there are for unsubsidized providers
of 4G LTE service to upgrade their networks to 5G technology in rural
areas. AST&Science LLC (AST&Science), CCA, CRWC, RWA, and Smith Bagley,
Inc. (SBI) each submit that there is no reasonable basis to conclude
that the provision of unsubsidized 4G LTE service in rural areas serves
as an indicator that 5G mobile broadband service will be deployed in
those areas absent subsidies. They argue that unsubsidized 4G LTE
providers lack incentives and thus have limited motivation to upgrade
their networks to support 5G service in rural areas, with AST&Science
and CCA specifically noting the financial challenges of such rural
upgrades as one of the main reasons. CCA contends that the record in
this proceeding clearly demonstrates that the Commission's assumption
in the 5G Fund Report and Order that areas with unsubsidized 4G service
tend to show a likelihood of unsubsidized 5G deployments such that they
should be excluded from 5G Fund eligibility is incorrect and risks
widening the digital divide instead of closing it. CRWC, US Cellular,
and SBI each cite CRWC's claim in its Petition for Reconsideration of
the 5G Fund Report and Order that ``it would be[ ] premature in the
extreme for the Commission to assume [in 2020] that, within the next
several years, all rural areas that currently have 4G service will see
[deployment of] 5G service [at levels meeting Commission's adopted
performance requirements]'' and each notes ``that the facts appear to
bear out [CRWC's earlier assertion]'' because ``[t]he BDC map [in
Figure 1 of the 5G Fund FNPRM ] continues to show vast swaths of rural
America lacking unsubsidized 4G LTE service at 5/1 Mbps as well as
unsubsidized 5G service at 7/1 Mbps or better.'' CRWC, US Cellular, and
SBI submit that notwithstanding record low interest rates in effect at
the time of, and following, the adoption of the 5G Fund Report and
Order and recent Commission auctions of spectrum suitable for 5G
deployments, ``unsubsidized carriers have not rushed in over the past
three years to close the mobile service gap in rural America . . .
[and] it appears there is a great deal of work to do'' to upgrade areas
that lack 4G LTE service, let alone upgrading to 5G service. According
to US Cellular, another disincentive for providers to upgrade from 4G
to 5G is that while upgrades from 3G to 4G LTE service have in the past
served to deliver access to new services, such as internet access and
streaming, that increased usage and in turn carrier revenues, ``almost
every American already has a mobile device of some sort, even if they
live in an area without high-quality coverage and service [and] [a]s a
result, investing to upgrade to 5G-level service does not deliver
substantial new revenues to a carrier from non-business customers, at
least not yet.''
18. Verizon notes that ``[w]hile many areas that have unsubsidized
4G LTE coverage will soon obtain 5G coverage through the operation of
the competitive market, some areas with 4G LTE coverage will require
universal service support to upgrade to 5G.'' Verizon submits that the
risk of preempting near-term 5G deployments by subsidizing them in
areas where unsubsidized 4G LTE networks have been deployed--which the
Commission previously sought to avoid--has already been reduced by the
extensive unsubsidized 5G deployment that has occurred during the
three-year pause in implementation of the 5G Fund, and ``will be
further reduced by the time the Commission holds the [5G Fund] Phase I
auction . . . as those unsubsidized deployments continue to expand.
Verizon contends that as a result, ``[b]y the time [the Commission]
holds the [5G Fund] Phase I auction, it will be more reasonable for the
Commission to assume that any remaining 4G LTE-only areas shown on the
BDC maps require universal service support to upgrade to 5G.'' NTCA
maintains that ``in sparse
[[Page 101362]]
rural areas where the distance between buildings is significant, the
population small, and often there is not a major highway passing
through the area, there is little to justify or even absorb the cost of
delivering 5G [mobile] broadband service'' and thus ``predicting that
entities currently offering unsubsidized 4G LTE coverage in these areas
might someday increase that coverage to 5G would miss the mark.'' NTCA
further submits that ``[s]uch a baseless predictive judgment would
instead result in the very areas the Commission intends to support
through the 5G Fund remaining on the wrong side of the digital
divide.''
19. T-Mobile is the only commenter that argues that the
Commission's earlier assumption was correct because, ``[a]s in 2020, 5G
deployments are likely in areas where unsubsidized 4G LTE networks have
already been deployed . . . [and] [t]he market forces that brought
unsubsidized 4G LTE to an area are likely to result in a provider's
decision to upgrade their service to 5G.'' T-Mobile submits that the
Commission's approach in the 5G Fund Report and Order for defining
eligible areas ``will help to mitigate overbuilding as providers
continue to deploy 5G service to meet market demands.'' However, RWA
disagrees, arguing that ``T-Mobile provide[s] no evidence to support
the [Commission's] assumption [in the 5G Fund Report and Order] that 5G
deployments are likely in areas where unsubsidized 4G LTE networks have
already been deployed . . . [and is] only able to point to `market
forces' that it argues will drive 5G deployment in areas where there is
unsubsidized 4G LTE deployment and a general concern [regarding]
overbuilding.'' RWA notes that, to the contrary, BDC filing data show
that ``unsubsidized carriers have not [in fact] rushed to deploy 5G
mobile service in rural America [during] the . . . three years since
the 5G Fund [Report and] Order was adopted.'' \1\ RWA contends that
``the record clearly shows that rural areas served only by 4G LTE
should be funded by the 5G Fund due to the high risk of being left
behind in 5G rural deployments.''
---------------------------------------------------------------------------
\1\ Id. at 2-3 (citing CRWC Comments at 9-14).
---------------------------------------------------------------------------
20. The Commission agrees with commenters that defining eligible
areas based on a lack of unsubsidized 5G mobile service is more
consistent with the 5G-centered approach envisioned for the 5G Fund.
While the Commission is mindful of the need to avoid overbuilding, it
concludes that retaining the eligible areas definition adopted in the
5G Fund Report and Order could exclude some areas where unsubsidized 4G
LTE service is being provided that will not be upgraded to 5G service
without 5G Fund support. Moreover, the Commission finds the risk of
overbuilding such areas is outweighed by the benefit of ensuring that
it does not inadvertently strand areas to lesser mobile broadband
technology and speeds. The Commission recognized in 2020 in the 5G Fund
Report and Order that at least two providers--T-Mobile and DISH--would
be deploying 5G mobile broadband service in rural areas in the then-
near term pursuant to their enforceable merger commitments. For this
reason, the Commission decided in the 5G Fund Report and Order that it
would first afford T-Mobile, and potentially others, an opportunity to
make pre-auction, binding commitments to deploy 5G service in certain
areas to allow the Commission to remove such areas from the inventory
of areas eligible for the auction, and thereby avoid overbuilding in
rural areas where it is known that a provider plans to deploy
unsubsidized 5G mobile broadband service.
21. The Commission declines to adopt the approach proposed by AT&T
that would stagger the implementation of the 5G Fund by first awarding
support to ``areas that do not have 4G LTE or 5G service [in order to]
allow more time for private investment to upgrade 4G LTE coverage areas
to 5G service without support from the 5G Fund.'' AT&T's proposal
essentially asks the Commission to retain the definition of eligible
areas that it adopted in 2020 for an indeterminate period of time while
the Commission continues to evaluate if the market will bring advanced,
5G mobile broadband service to those areas absent subsidies. T-Mobile
similarly suggests in support of retaining that definition that the
Commission wait to ``hold[ ] the 5G Fund Phase I Auction [until]
pending wireless industry developments have been resolved'' in order to
``maximize the impact of the 5G Fund and minimize inefficient
overbuilding.'' In support of waiting to move forward toward the 5G
Fund Phase I auction until unsubsidized 5G mobile broadband service
deployments play out, T-Mobile notes the Commission's decision to wait
to decide ``'how and/or whether future planned processes, such as
[Phase II of the Rural Digital Opportunity Fund], remain necessary
after the Commission's creation of the Fabric and deployment
commitments under BEAD and/or other Infrastructure Act programs are
made.''' However, unlike the timing for the creation of the Broadband
Serviceable Location Fabric (Fabric) created for the BDC and the
deployment commitments under BEAD and/or other Infrastructure Act
programs, which have more structured parameters and are largely within
the control of the government, decisions about where unsubsidized 5G
mobile broadband service will be deployed and on what timeline rest
solely with the carriers deploying such service. Moreover, one of the
underlying policy principles of the 5G Fund is to direct high-cost
universal service support to areas of the country where, absent
subsidies, they are unlikely to experience advanced, 5G mobile
broadband service. The Commission therefore finds both AT&T's and T-
Mobile's approaches are wholly inconsistent with its decision herein to
target 5G Fund support to the greatest number of rural areas as
possible where people live, work, and travel within the available
budget. Although the Commission is not persuaded that it should delay
the 5G Fund Phase I auction until after BEAD support has been awarded,
as more fully explained in the 5G Fund Second Report and Order, the
Commission will nonetheless assess eligible area determinations to
ensure that 5G Fund support does not duplicate BEAD funding efforts.
2. Speed Thresholds for Determining Eligible Areas
22. Although virtually all commenters support basing the
determination of eligible areas on where BDC mobile coverage data show
a lack of unsubsidized 5G broadband service by at least one service
provider, their positions about which speed thresholds to use in
connection with applying this definition to determine eligible areas
differ. Brian Dang (Dang), T-Mobile, and Verizon each express support
for using 7/1 Mbps as the speed threshold for 5G service. Dang asserts
that ``setting the benchmark for 5/1 Mbps for 4G and 7/1 Mbps for 5G
seems to strike a reasonable balance for considering the mobile user
experience.'' T-Mobile notes that the Commission has expressed that
``[a] speed threshold [of 7/1 Mbps] is likely to be attainable by
mobile broadband service providers deploying 5G-NR service over smaller
channel blocks of low-band spectrum.'' T-Mobile submits that defining
eligible areas as those that lack 35/3 Mbps 5G coverage ``would
certainly result in overbuilding areas that have 5G from unsubsidized
providers and would divert resources away from the areas that need it
most--namely, areas that still lack any 5G or 4G LTE coverage at all.''
T-Mobile maintains ``[t]he Commission can carry out its obligation to
be `a fiscally responsible steward of
[[Page 101363]]
[the] limited universal service funds' and fulfill its `commitment to
preventing overbuilding' by reaffirming its decision to use speed
thresholds that mirror the mapping parameters adopted for the BDC.'' T-
Mobile notes that ``[t]he BDC uses 5/1 Mbps as the speed threshold for
4G LTE coverage and 7/1 Mbps as the speed threshold for 5G coverage,''
and contends that ``those same thresholds should be used for
identifying eligible areas for the 5G Fund.''
23. Michael Ravnitzky recommends ``us[ing] a minimum speed
threshold of 25 Mbps/3 Mbps to define unsubsidized 5G service [for
funding 5G service for Native American, Native Alaskan Native Hawaiian,
Puerto Rican, and U.S. Virgin Island communities]'' because it ``is
consistent with the Commission's current definition of fixed broadband
service and reflects the minimum level of service quality that these
communities deserve and need.''
24. AST&Science, CCA, CRWC, RWA, SBI, and US Cellular each express
support for using 35/3 Mbps as the speed threshold for 5G service. CRWC
reiterates the request made in its pending Petition for Reconsideration
that the Commission ```define as eligible any area that lacks
unsubsidized 5G service meeting the performance requirements set forth
for 5G Fund auction winners' . . . [i.e.,] [a]ny area lacking mobile
broadband at a median speed of [35/3 Mbps], with 90% cell edge
reliability, with no more than 100 milliseconds . . . of latency.''
CCA, CRWC, and US Cellular acknowledge that making every area lacking
5G service at a speed threshold of 35/3 Mbps eligible for the 5G Fund
Phase I auction could mean areas with median speeds that are close to
35/3 Mbps might receive support, but they each submit that this could
be addressed by ``giv[ing] a preference to areas that are unserved or
underserved, weighting the 5G Fund auction so that these areas would be
funded before any support is distributed in areas having median speeds
close to 35/3 Mbps,'' or by ``tak[ing] steps to coordinate or time
[the] 5G Fund [Phase I] auction to more completely consider the impacts
of a robust mobile BDC challenge process and/or the impacts of BEAD-
funded projects on the mobility landscape.'' CRWC and US Cellular
contend that using a speed threshold of 7/1 Mbps for 5G service does
not go far enough to fulfill the statutory goal of ``provid[ing]
consumers in rural areas with access to service quality that is
reasonably comparable to that which is available in urban areas,'' but
submit that if the Commission does not adopt the eligible areas
definition CRWC advocates for in its Petition for Reconsideration,
``making eligible for 5G Fund support any area lacking 5G technology at
a speed of 7/1 Mbps or better'' represents ``a significant and
commendable improvement over the eligibility provisions [adopted] in
the 5G Fund [Report and] Order.'' SBI likewise believes a speed
threshold of 7/1 Mbps for 5G service does not go far enough, and
supports adopting the eligible areas definition CRWC advocates in it
Petition, but submits that if the Commission does not use a speed
threshold of 35/3 Mbps for purposes of determining eligible areas, it
should alternatively provide for a middle ground data collection by
replacing the 7/1 Mbps collection in the BDC with 20/2 Mbps, so that
all rural Americans receiving service at less than 20/2 Mbps can access
5G Fund support investments.
25. CCA compares the mobile speeds to fixed service speeds and
argues that ``[defining the speed threshold for] 5G connectivity as
merely 7/1 Mbps is inconsistent with the Commission's role as a global
leader in technological innovation and connectivity . . . [and] also
falls short of the speed threshold expectations the Administration and
the Commission have expressed in other programs--for example,
[Broadband Equity Access and Deployment (BEAD)] Program connectivity
requires a speed threshold of 100/20 Mbps, and Alternative-Connect
America[ ] Cost Model II (`A-CAM II') connectivity requires 25/3
Mbps.'' CCA also ``disagrees with the [Commission's] assumption [in the
5G Fund FNPRM] that download and upload speeds of at least 7/1 Mbps are
the typical minimum desired mobile experience for 5G service,''
asserting that ``[this speed threshold] myopically focuses on mobile
phone 5G connectivity'' even though 5G encompasses much more than that.
CCA also argues that ``us[ing] a 5/1 Mbps speed threshold for 4G
connectivity and a 7/1 Mbps speed threshold for 5G connectivity
minimizes the significant differences between 4G and 5G technology and
user experience.'' CCA advocates using a speed threshold of 35/3 Mbps
to define 5G service, contending that the 7/1 Mbps speed threshold the
Commission proposes to set for 5G is ``a fraction of the median
nationwide speed'' of over 83/8 Mbps and the speeds exceeding 4 Gbps
that are enjoyed by Americans living in urban areas.
26. The Commission notes that for mobile services, it standardized
the speed parameters that providers use in generating their BDC
coverage areas, and for 5G mobile broadband service, those speed
parameters are standardized at 7/1 Mbps and 35/5 Mbps. See BDC Second
Report and Order, 85 FR 50886 (Aug. 18, 2020). The BDC therefore
collects 5G coverage data based only on speed thresholds of 7/1 Mbps
and 35/3 Mbps. As a result, the Commission does not have data on 5G
mobile broadband coverage at speed thresholds of 25/3 Mbps, 83/8 Mbps,
100/20 Mbps--which are all associated with performance requirements
through which fixed service is funded (e.g., the BEAD Program, A-CAM
II)--or any other speed threshold combinations, and therefore can use
only the speed threshold of 7/1 Mbps or 35/3 Mbps for which mobile
coverage data is available in the BDC for purposes of determining
eligible areas.
27. The Commission concludes that using a speed threshold of 7/1
Mbps for 5G for purposes of determining eligible areas will promote the
expansion of 5G mobile broadband coverage at a speed threshold of at
least 35/3 Mbps while avoiding the potential for overbuilding in areas
where a provider already offers some level of unsubsidized 5G service
(i.e., at 7/1 Mbps) and could upgrade to higher speeds in the future.
Conversely, using a speed threshold of 35/3 Mbps to determine eligible
areas would result in many more areas being eligible for support, which
would unnecessarily tax the 5G Fund Phase I budget. Further, using a
speed threshold of 35/3 Mbps would result in overbuilding in areas
where providers will upgrade their 7/1 Mbps service to 35/3 Mbps
service absent a subsidy. Moreover, the Commission expects that a speed
threshold of 7/1 Mbps reflects the minimum desired typical mobile user
experience across broad 5G coverage areas. The Commission continues to
believe that it should not use the same 35/3 Mbps speed threshold for
purposes of determining areas eligible for 5G Fund support that support
recipients are required to achieve in meeting their 5G Fund performance
requirements. The Commission notes that CCA's assertion that the
Commission is ``[defining] 5G connectivity as merely 7/1 Mbps'' is
incorrect and conflates its decision to use 7/1 Mbps as the speed
threshold for purposes of determining eligible areas with the minimum
speed threshold of 35/3 Mbps that a support recipient must achieve in
order to meet its 5G Fund performance requirements. This performance
requirement will ensure that areas currently lacking unsubsidized 7/1
Mbps will not be left behind in experiencing the higher speeds that
areas with 7/1 Mbps service
[[Page 101364]]
are likely to experience as the result of provider network upgrades.
For these reasons, the Commission also denies the Petitions for
Reconsideration filed by CRWC, NTCA, and RWA to the extent they request
that the Commission define areas eligible for the 5G Fund Phase I
auctions as those that lack unsubsidized 5G mobile broadband service at
speeds of at least 35/3 Mbps.
28. The Commission disagrees with commenters' assertion that, if a
35/3 Mbps threshold is used to determine an area's eligibility for 5G
Fund support, issues with support funds being diverted from unserved or
underserved areas to fund areas with service ``close to 35/3 Mbps'' can
be addressed by distributing support first to areas with service speeds
not ``close to 35/3 Mbps.'' Such a process would be inconsistent with
the mechanism the Commission adopted to assign support under the 5G
Fund, namely a reverse auction that considers in a single auction all
eligible areas and that aims to assign the full budget to those
eligible areas. A second reverse auction for the ``close to 35/3 Mbps''
areas would be required, with a corresponding rulemaking and pre-
auction process to determine the areas that would be held back from the
initial auction, the portion of the budget that would be withheld for
later assignment, the timing of the later assignment mechanism, and any
of a number of additional details that would need to be resolved for
such a process to be carried out. Therefore, for this reason and for
the reasons the Commission adopts the 7/1 threshold more generally, the
Commission declines to accept the commenters' proposal and, as
explained herein, the Commission excludes from eligibility areas that
already have some level of 5G service (at speeds faster than 7/1 Mbps).
Instead, the Commission targets its limited universal service support
funds to areas that do not already enjoy a provision of service that
far exceeds areas that have service offerings no better than 4G LTE.
29. As noted herein, the Commission will use a speed threshold of
5/1 Mbps with respect to 4G LTE service in connection with identifying
any areas within the universe of areas eligible for the 5G Fund Phase I
auction that lack unsubsidized 4G LTE, for purposes of incentivizing
the deployment of 5G service in areas that lack unsubsidized 4G LTE
service. The Commission notes that the BDC collects 4G LTE coverage
areas based on speed thresholds of 5/1 Mbps in accordance with the
Broadband DATA Act, and concludes that using this speed threshold for
this purpose is appropriate.
3. Environment for Determining Eligible Areas
30. The record is split on whether the Commission should use
outdoor stationary or in-vehicle BDC coverage maps to determine
eligible areas. AT&T, CTIA, T-Mobile, and Verizon each express support
for using outdoor stationary BDC coverage maps to identify areas that
are eligible for 5G Fund support. AT&T argues that the lack of
standardized parameters for in-vehicle coverage maps ``compromises the
value of such maps and would only further complicate the distribution
of 5G Fund support'' and that ``utilizing in-vehicle coverage maps
instead of outdoor stationary maps will increase the eligible areas and
allow support in areas that already have some amount of 5G coverage.''
CTIA asserts that ``[w]hile the idea of using in-vehicle mobile
coverage maps might have some facial appeal, [it] remains concerned
that such maps fail to account for significant variables . . . [such
as] the location of the device within the vehicle, the type of vehicle,
whether the windows are up or down, and the vehicle speed.'' T-Mobile
also notes that, because ``[t]he Commission did not standardize any of
the key parameters that affect the results of in-vehicle coverage, such
as vehicle speed, the position of the phone inside the car, and the
type of car, . . . in-vehicle data [will be] much more variable and
therefore [provide a] less reliable basis for determining the actual
coverage of an area.'' ``Given the potential for inconsistency among
in-vehicle mobile coverage maps, CTIA urges the Commission to use
coverage maps produced to show outdoor stationary coverage . . . [in
order to] use a more stable and reliable coverage dataset as the basis
for the 5G Fund . . . [and] target 5G Fund subsidies to the areas most
in need of support as the outdoor stationary maps provide a more
targeted list of eligible areas.''
31. T-Mobile submits that ``outdoor stationary data is a far more
reliable and realistic basis for determining where wireless coverage is
available than in-vehicle coverage data for several reasons.'' T-Mobile
argues that ``[g]iven the number of variables, providers will
inevitably use different parameters to model their in-vehicle coverage,
making it practically impossible to make meaningful [apples-to-apples]
comparisons between mobile providers' in-vehicle coverage maps.'' T-
Mobile notes that ``[t]he variability of in-vehicle mobile speed
testing also introduces unnecessary complications in the challenge
process . . . [because], for purposes of the BDC, speed tests taken on
bicycles, motorcycles, snowmobiles, and all-terrain vehicles are all
considered tests from in-vehicle mobile environments, as are tests
conducted in soft-top convertibles, hard-top sedans, SUVs, pickup
trucks, and any type of recreational vehicle, [which] entails a wide
range of `in-vehicle testing scenarios.' '' Verizon supports ``using
the outdoor stationary 7/1 Mbps 5G coverage map . . . [to] ensure that
the entire budget is used to expand high-speed 5G coverage in areas
that have little or no 5G coverage at the time of the auction, i.e.,
[those] that do not even meet the 7/1 Mbps outdoor stationary
standard.'' Verizon opposes ``identifying eligible areas using the in-
vehicle maps [because it] would allow part or all of the budget to be
used to upgrade existing networks in those areas that meet the outdoor
stationary 7/1 Mbps standard but fall short of the in-vehicle
standard.''
32. CCA, RWA, and US Cellular express support for using in-vehicle
BDC coverage maps to identify areas that are eligible for 5G Fund
support. CCA argues that coverage maps based on in-vehicle mobile
environments ``better reflects the purposes of the 5G Fund--achieving
ubiquitous connectivity--by accounting for the mobile nature of 5G
usage. RWA similarly asserts that ``[g]iven the inherent mobility
aspect of in-vehicle data, [using] such data will best represent where
5G Fund support is needed to provide 5G mobility coverage. RWA submits
that ``[w]hile there may be multiple variables related to in-vehicle
mobile data collection, such data provides a more accurate picture of
actual mobile coverage that consumers will experience in the relevant
areas.'' RWA maintains that if the Commission's goal is ``expand[ing]
5G to rural areas where consumers live, work, and travel, ensuring that
such consumers have 5G connectivity on rural roads is critical to that
goal'' and that ``[o]utdoor stationary mobile data does not depict
actual mobile coverage and [thus] should not be used as a methodology
for determining eligible areas for consumers traveling through rural
areas on rural roads.'' RWA further notes that ``using in-vehicle
mobile data would ease the costs of the challenge process as drive
testing is a much more cost-efficient and effective way to measure
mobile coverage as opposed to conducting measurements in off-road
areas, which are expensive and difficult to access in rural and remote
areas.'' US Cellular likewise contends that ``[a]n in-vehicle
measurement standard aligns more closely with how mobile handsets
[[Page 101365]]
interact with cell towers and will result in improved service quality
for voice calls and data sessions conducted in a mobile environment.''
33. The Commission is concerned that the use of in-vehicle mobile
coverage maps could result in significant overbuilding, as claimed by
commenters that oppose using such coverage maps. The Commission
concludes that relying on outdoor stationary coverage data will avoid
potentially overbuilding in areas where a provider already offers some
level of unsubsidized 5G service and could upgrade to better service in
the future. The Commission notes that outdoor stationary coverage
estimates as reflected on the its National Broadband Map are generally
larger than those generated for in-vehicle mobile coverage, and
therefore relying on them will reduce the likelihood of overbuilding.
Looking at data from June 30, 2023, as updated on February 7, 2024,
about 34% of the U.S. is covered by 5G service at 7/1 according to in-
vehicle mobile coverage data, whereas the analogous outdoor stationary
data show that about 46% of the U.S. is covered. Additionally, unlike
in-vehicle mobile coverage data, outdoor stationary coverage data are
unperturbed by the lack of standard assumptions about characteristics
such as vehicle type and speed. In balancing the Commission's
obligation to exercise fiscal responsibility to avoid excessive
subsidization and the goal of deploying 5G services to where people
live, work, and travel, the Commission finds the best approach is to
use outdoor stationary BDC coverage maps in determining eligible areas.
4. Limiting Eligibility to Areas With Locations or Roads
34. Because the Commission intends to direct 5G Fund Phase I
support to areas where people live, work, and travel, it will limit the
areas eligible for the 5G Fund Phase I auction to areas that contain at
least one location or at least some portion of a road. The Commission
will determine the areas that contain locations using the BDC Fabric.
The Fabric is a dataset of every location (building or structure) in
the United States and its Territories identified as a single point or
record defined by a set of geographic coordinates that fall within the
footprint of a structure, with each point assigned a unique Commission-
issued Location ID. Within the location records included in the Fabric
are a subset of business, residential, or mixed-use locations at which
mass-market fixed broadband internet access service are or could be
installed, referred to as Broadband Serviceable Locations (BSLs). The
Commission will use all locations included in the Fabric dataset, not
just those that are identified as BSLs. This broader set of locations
includes structures--such as community anchor institutions and large
enterprises--that subscribe to, or would be expected to subscribe to,
non-mass market broadband service. Including these locations, as well
as BSLs, ensures that the Commission will capture more of the areas
where people live, work, and travel.
35. The Commission will determine the areas that contain roads
using road data from OpenStreetMap. OpenStreetMap is a free, editable
map of the world that is updated and maintained by a community of
volunteers via open collaboration. OpenStreetMap is published and
freely licensed under an Open Database License, which allows anyone to
access, use, and share the data. Contributors collect data from
surveys, trace from permitted aerial photography and satellite imagery,
and import other geographical data in the public domain (such as U.S.
TIGER) and from freely licensed geodata sources. These contributions
are immediately ingested by OpenStreetMap, resulting in a map made by
local experts with data that can be as current as the time of access/
download. The Commission will define ``roads'' for purposes of
determining areas eligible for the 5G Fund Phase I auction as those
that include the following categories of roads: primary roads;
secondary roads; local neighborhood roads, rural roads, and city
streets; vehicular trails; ramps; private roads; parking lot roads; and
winter trails. These categories of roads are encompassed in the
OpenStreetMap ``highways'' category, which includes motorways, trunks,
primary roads, secondary roads, tertiary roads, residential roads,
service roads, and tracks, and the associated links. Defining roads in
this manner is consistent with how the Commission has defined roads for
purpose of other mobile universal service auctions. Further, because
this definition includes many different types of roads, it helps ensure
that areas where people live, work, and travel will be eligible for 5G
Fund Phase I support.
36. Given that the Commission is limiting the areas eligible for
support in the 5G Fund Phase I auction to those that contain locations
or roads, it does not believe it is necessary to also exclude water-
only areas from eligibility. Further, excluding water-only areas from
eligibility as part of the process of generating eligible areas could
exclude portions of roads, such as bridges and causeways, that are
located in water-only areas but which the Commission believes should be
eligible for support.
37. Urban areas, as defined by the U.S. Census Bureau, will not be
eligible for support in the 5G Fund Phase I auction, because the
Commission concludes that making these areas eligible for support would
be inconsistent with the objective of the 5G Fund program to fund the
deployment of 5G service in rural areas. The limited comment the
Commission received on this issue supports excluding urban areas from
eligibility for support in support in the 5G Fund Phase I auction.
38. Commenters generally support the Commission's approach to
limiting eligible areas to those areas that contain locations or roads
in furtherance of its goal of directing 5G Fund Phase I support to
areas where people live, work, and travel. AT&T ``supports limiting
eligible areas to those resolution 9 hexagons [(hex-9s)] that contain
locations and/or certain roads,'' noting that if eligible areas were
defined as ``those areas where both locations and roads exist, it would
overly limit the areas eligible for 5G Fund support, contrary to the
Commission's goal of reaching all areas where people live, work, and
travel.'' CCA ``agrees with AT&T that defining eligible areas as those
where `locations and roads exist'' would be overly limiting and
contrary to the Commission's goal of reaching all areas where people
live, work, and travel, and advocates for ``a definition of eligibility
that includes both unserved roads and unserved locations'' because it
would ``appropriately reflect the mobile nature of 5G service.''
Michael Ravnitzky submits that limiting eligible areas to those that
contain BSLs and/or roads will help ``direct 5G Fund support [in Native
American, Native Alaskan Native Hawaiian, Puerto Rican, and U.S. Virgin
Island communities] to areas where people live, work, and travel and
avoid wasting resources on areas that are uninhabited or
inaccessible.''
39. In its initial comments, RWA advocates ``limit[ing] eligible
areas to roadways, rather than locations,'' and expresses concern that
relying solely on locations would ``disregard[ ] the inherent mobility
of 5G mobile services and could potentially be duplicating efforts made
by the BEAD Program and other federal broadband programs which provide
funding for both fiber and wireless projects, which focus on
locations.'' RWA maintains in its reply comments that the Commission
should limit eligible areas to roadways if the 5G Fund budget is
limited to $9 billion, but
[[Page 101366]]
submits that ``if additional funding is available, locations should
also be included.'' While acknowledging that serving both roads and
locations is important, RWA expresses concern that ``[if] locations
[are included] in eligible areas, the funding may not go as far and the
[Commission] could duplicate efforts of the [BEAD] Program and other
federal broadband funding programs that [fund] . . . projects to serve
locations.''
40. Other commenters ask the Commission to expand the eligibility
criteria to specifically include agricultural lands. Verizon supports
expanding the eligibility criteria to include ``rural hex-9s with
roads, BSLs, or agricultural lands,'' and urges the Commission to
``focus[ ] support on unserved areas that would have the most
significant demand for mobile broadband service and require relatively
smaller subsidies, rather than on areas that would have little demand
for mobile broadband service and require larger subsidies.'' Verizon
submits that ``including agricultural lands in the definition of
eligible areas . . . will ensure that more of the nation's farmland
gains the benefits of precision agriculture,'' which it notes is one of
the goals articulated in the 5G Fund Report and Order. WIA similarly
advocates for including agricultural areas within the geographic areas
determined to be eligible for 5G Fund support, and asks the Commission
to specifically include such areas as eligible for 5G Fund support. WIA
acknowledges the importance of mobile service on roadways, but submits
that there are areas that extend well beyond the reach of roads that
need mobile connectivity as well (e.g., agricultural communities
cultivating land). WIA argues that support areas must include those
that are crucial to economic activity, tourism, and public safety in
which competitive solutions do not exist, noting that farmers now use a
host of precision technologies to manage their operations that cannot
be used without mobile connectivity. John Deere Corporation (Deere)
agrees with WIA, and urges the Commission to both include agricultural
areas and farmlands within the areas that are eligible to receive 5G
Fund support and make them the focus of the $1 billion in 5G Fund
support that was set aside for precision agriculture in the 5G Fund
Report and Order.
41. The Commission declines either to narrow or expand the
eligibility-limiting criteria used to determine areas eligible for the
5G Fund Phase I auction in response to these comments. Although BEAD
and other programs fund the deployment of fixed broadband services to
fixed locations, these locations also indicate where people use mobile
devices and where they live, work, and travel. Thus, the Commission
disagrees with RWA that it should limit the eligibility criteria for
determining eligible areas to those areas with roads only. With respect
to expanding the eligibility criteria to specifically include
agricultural areas, as requested by Verizon, WIA, and Deere, the
Commission notes that the Commission explained in the 5G Fund Report
and Order that ``Phase II [of the 5G Fund] . . . will focus support to
specifically target the deployment of technologically innovative 5G
networks that facilitate precision agriculture.'' Specifically,
including agricultural areas would therefore be outside the scope of
the 5G Fund Phase I auction. The Commission further notes that any
agricultural areas located within an area determined to be eligible for
the 5G Fund Phase I auction will indeed be eligible for support in that
auction; the criteria the Commission adopts today for determining the
eligible areas will not categorically remove agricultural lands.
Additionally, the Commission believes the broad definition of ``roads''
it will use for purposes of determining the areas eligible for support
in the 5G Fund Phase I auction may result in coverage reaching
agricultural areas and farmlands because providers, when engineering
their networks to cover the roads, are likely to cover such areas if
they are in close proximity. Accordingly, the Commission does not take
any additional steps here to ensure that support under Phase I of the
5G Fund reaches agricultural lands specifically.
42. Several commenters address both the categories of roads and the
data source(s) that the Commission should use for purposes of
determining the eligible areas that contain roads. RWA and CCA advocate
using the following roadways, as defined by the U.S. Census Bureau:
primary roads; secondary roads; local neighborhood roads, rural roads,
and city streets; vehicular trails; ramps; private roads; parking lot
roads; and winter trails. CCA asks the Commission to consider including
other types of unserved roadways in determining an area eligible for
support, ``even if they are not captured in U.S. Census Bureau [road]
data or are located close to a served roadway.'' CCA submits that ``the
Commission cannot and should not assume a local road, alleyway, or
agricultural road in a rural area receives or will receive unsubsidized
5G service simply because a highway in that same area receives 5G
service,'' and urges the Commission to ``consider data at a granular
level to avoid leaving behind unserved roadways in areas where another
roadway in that area is receiving 5G service.'' CCA also expresses
support for looking beyond roadways and including other unserved
areas--such as waterways, agricultural lands, farmland and other
cultivable land, parks, and trails--for purposes of determining an
area's eligibility for support. NYPSC asks the Commission to consider
including waterways and other frequented areas, such as state parks, as
well as remote areas, in making eligible area determinations, noting
that ``wired services may be unreliable or unavailable [in these rural
and remote areas].'' SBI advocates making all active roads used on
remote Tribal lands eligible for support if the Commission decides to
limit eligible areas to those that contain locations or roads because
``[t]housands of Tribal locations in SBI's service area are beyond the
reach of the U.S. Postal Service as they receive no home delivery and
they have no Postal Service address.'' SBI notes that ``[t]hese remote
locations often are connected to primary roads by very small unpaved
dirt roads through the high desert,'' many of which SBI states ``are
considered to be service and private roads[ ] categorized as S.1740''
under the U.S. Census Bureau's feature class codes. SBI submits that
``[t]hese roads, which likely fall into the 1.6, 1.7, or 1.8 category
in the OpenStreetMap hierarchy, must be included as eligible areas'' if
the Commission chooses to use OpenStreetMap. SBI notes that that
``there are substantial road areas in between homes and major roads
that could be excluded if the Commission limits eligibility to only
[hex-9s] with developed roads or locations.'' SBI states that unlike
much of the rest of the nation, this undeveloped network of roads
comprise a substantial area within which Tribal residents will travel,
and notes that the health and safety benefits of access to mobile
services (especially 911 service) compel the Commission to ensure that
all of these minor roads are considered when making eligible area
determinations.
43. CCA, Deere, RWA, and WIA each support using U.S. Census Bureau
TIGER data when making road-based eligible area determinations. WIA and
Deere note that agricultural communities may fall outside of the maps
for roads, and therefore caution against using a single data source,
such as OpenStreetMap, to determine eligible areas that contain roads.
WIA and Deere therefore urge the Commission to
[[Page 101367]]
instead rely on multiple sources, including the TIGER road miles
database, the U.S. Department of Agriculture's cultivated land layer,
and other sources, to provide redundancy and help ensure that all
agricultural communities are included within the areas eligible to
receive 5G Fund support.
44. The Commission concludes that the definition of roads, and the
source of road data, it adopts here is broadly consistent with the
categories of roads commenters ask us to consider when identifying the
eligible areas that contain roads. In addition, including areas with
Fabric locations will ensure that the roads leading to those locations
generally will receive 5G coverage even if such roads do not fall
within the categories of roads the Commission adopts today. While the
Commission appreciates commenters' interest in using more than one road
data source for redundancy and completeness, the Commission believes
that using multiple road data sources would be unwieldly and could
cause confusion, and thus decline to do so. The Commission concludes
that using OpenStreetMap as the single road data source is beneficial
because it includes all the road categories in the definition the
Commission adopts, it is updated more frequently than TIGER data, and
it reflects input from the public.
5. Generating Areas Eligible for 5G Fund Support at the Hex-9 Level
45. In the 5G Fund FNPRM, the Commission noted that in order to
limit the areas eligible for support in the 5G Fund Phase I auction to
those that contain locations or roads, the Commission would need to
designate the geographic areas that contain locations and/or roads. The
Commission sought comment in the 5G Fund FNPRM on its approach to
identifying specific geographic areas eligible for 5G Fund support, and
the idea of expressing those eligible areas as hex-9s. The Commission
explained in the 5G Fund FNPRM that under this approach, ``areas
eligible for 5G Fund support [would be converted] to, and [made]
available in the form of, [hex-9s],'' noting that ``unlike `raw'
coverage footprints based on propagation model output, which do not
conform to any defined boundary, hex-9s are standardized and can be
clearly identified and referenced.'' The Commission noted that
``because hex-9s are relatively small, with an average area of
approximately 0.1 square kilometer, any reduction in map resolution
when converting from raw propagation model output (as filed by
providers) to hex-9s is minimal,'' and that ``the use of hex-9s can
strike the appropriate balance between the benefits of their use and
this loss in granularity, particularly given that the data as filed are
based on models of coverage.''
46. The H3 hexagonal geospatial indexing system (H3 system) is an
open-source GIS dataset developed by Uber Technologies, Inc., that
overlays the globe with hexagonal cells of different sizes at various
resolutions, from zero to 15. The smallest hexagonal cells are at
resolution 15, in which the average hexagonal cell has an area of
approximately 0.9 square meters, and the largest are at resolution 0,
in which the average hexagonal cell has an area of approximately 4.25
million square kilometers. The H3 system is designed with a nested
structure wherein a lower resolution cell (the ``parent'' hexagon)
contains approximately seven hexagonal cells at the next higher
resolution (its ``children'' where each ``child'' is a smaller, nested
hexagon), which fit approximately within the ``parent'' hexagon. The H3
system supports sixteen resolutions. Each finer resolution has cells
with one seventh the area of the coarser resolution. Hexagons cannot be
perfectly subdivided into seven hexagons, so the finer cells--i.e., the
``children''--are approximately contained within a parent cell. The
identifiers for these ``child'' cells can be easily truncated to find
their ancestor cell at a coarser resolution, enabling efficient
indexing.
47. In the 5G Fund Second Report and Order and Order on
Reconsideration, the Commission adopts its proposal to express the
specific geographic areas eligible for 5G Fund as hex-9s, with certain
modifications, because it is persuaded that a more granular analysis of
coverage is needed to address concerns raised by commenters. The
Commission will therefore analyze mobile broadband coverage by first
translating ``raw'' mobile coverage polygons to resolution 11 hexagons
(hex-11s) and then evaluating the coverage of the hex-11s that compose
a hex-9, using the process described herein, and directs OEA, WCB, and
the Wireless Telecommunications Bureau (WTB) to make additional details
regarding the methodology used to generate eligible areas available
with the publication of the list of eligible areas.
48. A hex-9 will be eligible for 5G Fund support if it includes
roads or locations and if a certain share of its component hex-11s lack
unsubsidized 5G coverage and are in non-urban areas. Here, 5G coverage
is based on the ``raw'' polygon coverage areas submitted by providers
in their biannual BDC submission for 5G outdoor-stationary service at
7/1 Mbps. The Commission will determine whether coverage is subsidized
or unsubsidized using information from USAC on legacy support and CETC
study area boundaries. Hex-11s are two levels more granular than hex-9s
in the H3 system hierarchy and are therefore the ``grandchildren''
hexagons of hex-9s. Hex-11s have an average area of 2,150 square meters
(about half an acre), which is smaller than the maximum area of the bin
sizes used by providers when generating raw coverage areas submitted in
the BDC. The maximum resolution allowed when generating mobile
broadband coverage areas under the BDC requirements is 100 meters. See
47 CFR 1.7004(c)(3)(iii). This resolution would result in a bin or
pixel, the individual square generated by a propagation model to
represent predicted coverage, with an area of 10,000 square meters.
49. To understand how the Commission will determine which hex-9s
are eligible for support, it may be helpful to examine the inverse,
i.e., how a hex-9 is defined as served. For each hex-9, the Commission
will determine the number of served grandchild hex-11s relative to the
total number of grandchild hex-11s. For both the numerator and the
denominator, the centroid--i.e., the geographic center point--of the
hex-11 must fall within the boundary of United States or its
territories to be counted. To find the number of served hex-11s, the
Commission will overlay hex-11 areas on a provider's unsubsidized 5G
coverage polygon and urban areas. If any of those boundaries overlap
the centroid, the geographic center point, of the hex-11, then the
Commission will treat the entire hex-11 as being covered by that
boundary. Any hex-11 covered by unsubsidized 5G coverage or in an urban
area will be considered served and counted in the number of served hex-
11s. The total number of grandchild hex-11s of a hex-9 is typically
7x7, or 49. However, it would not be 49 when a hex-9 straddles an
international boundary or coastline, for instance, and some its
component hex-11s fall outside the United States or in coastal waters.
If a substantial majority of the grandchild hex-11s are served, then
the grandparent hex-9 will be considered served. For hex-9s with both
land and water grandchild hex-11s, only the land hex-11s are considered
in this calculation. For purposes of making this determination, the
Commission considers a ``substantial majority'' to be 70% or more. Any
hex-9 that is not
[[Page 101368]]
served in this way is therefore considered unserved and will be
eligible for 5G support, as long as it also contains at least one
location or at least some portion of a road.
50. The Commission notes that although it has not formally defined
what constitutes a ``substantial majority,'' it has concluded that it
is more than a simple majority. In the context of the Lifeline program,
the Commission decided in its Lifeline Third Report and Order, 81 FR
33026 (May 24, 2016), to ``establish minimum service standards for all
Lifeline supported services based on services to which a `substantial
majority' of consumers have already subscribed'' and ``conclude[d] that
70 percent of consumers constitutes a `substantial majority' as it
relates to fixed broadband speeds.'' The Commission also concluded in
its Lifeline Third Report and Order in the context of Lifeline program
mobile services that ``after the phase-in of mobile data usage
allowance standards, [it would] update mobile broadband standards for
data usage allowance in line with the principle of supporting services
that a ``substantial majority'' of American consumers subscribe to,''
and that ``given the types of data that are [publicly] and regularly
available, the minimum service standard for mobile broadband data usage
allowance will be 70 percent of the calculated average mobile data
usage per household.''
51. CCA supports converting the areas eligible for 5G Fund support
into hex-9 standardized units and excluding from 5G Fund eligibility
any hex-9 unit that overlaps with a relevant mobile coverage area, such
that the entire hex-9 area is considered covered or served. Verizon
also supports converting the areas eligible for 5G Fund support into
hex-9s and notes that the Commission's BDC challenge and verification
processes also use hex-9s. Verizon also advocates making bidding units
with only a handful of eligible hex-9s ineligible for support,
consistent with the Commission's decision in the 5G Fund Report and
Order to exclude geographic areas with de minimis eligible areas. ARA
PAWR submits that using the H3 system can be an efficient way to
identify specific geographic areas but notes that one challenge with
that approach is the need to have multiple resolution implementations
based on the geographical location. AT&T expresses support for limiting
the areas eligible for 5G Fund support to hex-9s in rural areas that
are not 100% served.
52. While not opposing converting eligible areas to hex-9s, T-
Mobile notes that there are some issues with doing so. T-Mobile submits
that ``translating providers' submitted BDC coverage data into hex-9
cell maps does not result in a perfect match.'' T-Mobile notes that
``[t]he BDC rules require mobile wireless providers to report coverage
using 100 meter by 100 meter square pixels, but [because] hex-9 cells
are larger than these pixels[,] . . . providers' coverage data is more
granular than the hex-9 cells used in the Commission's maps,'' and as a
result, ``translating providers' coverage data into hex-9 maps
inevitably introduces some degree of inaccuracy and imprecision.'' In
an ex parte presentation, T-Mobile submits that ``[u]sing more granular
hexagonal areas for the 5G Fund, such as hex-10 or hex-11 cells, may
help mitigate [the hex-9 translation issue].'' The Commission agrees.
Overlaying hex-11 cells onto the raw coverage data submitted by mobile
service providers and generating eligible hex-9s based on the
percentage of unserved hex-11s will allow for a more granular
assessment of coverage data in the geographic areas than the coverage
data as rendered on the National Broadband Map. This approach also is
more accurate and granular than the approach the Commission outlined in
the 5G Fund FNPRM and will alleviate certain concerns raised by
commenters about converting coverage to hex-9s. The Commission's
approach in the 5G Fund Second Report and Order and Order on
Reconsideration is also more granular than the methodology used to
report and depict mobile broadband coverage on the National Broadband
Map, which considers a hex-9 covered if its centroid is overlapped by a
provider's raw mobile broadband coverage area. Because hex-11s are so
small, there is little to no loss in granularity when converting from
raw coverage areas to hex-11s, even when using the centroid method.
53. T-Mobile also argues that ``smaller hexagonal cell[s] would
require higher resolution terrain and clutter maps that are not readily
available,'' ``would require changes to the BDC submission processes,''
and ``would . . . dramatically increase the size of the data files and
computer processing requirements in a way that is unachievable.'' The
Commission disagrees with these arguments because the approach it
adopts would not require mobile service providers to submit coverage
data into the system based upon hex-11s, thus obviating the potential
computer processing requirements and other logistical hurdles to
gathering the data based on hex-11s.
54. T-Mobile notes that ``[i]n the 5G Fund FNPRM, the Commission
propose[d] to treat an entire hex-9 cell as served--and thus ineligible
for 5G Fund support--if a provider's coverage data overlaps any portion
of that hex-9 cell.'' ``[T]o ensure complete, robust rural coverage,''
T-Mobile argues that ``hex-9 cells that are only partially covered
(e.g., cells where BDC shows only 25%, 50%, or 75% coverage) should be
included in the 5G Fund Phase I Auction to avoid denying support to
unserved locations.'' T-Mobile submits that this will ``ensure[ ] that
locations are not excluded because they are within a hex-9 cell [with
less than 100% coverage] . . . [and] is consistent with the goal[ ] of
the BDC . . . to produce more granular results.'' In its reply
comments, AT&T agrees with T-Mobile that eligible areas should include
hex-9s that are not 100% served. CTIA likewise supports excluding
hexagons that are 100% covered and including those that are partially
covered, and submits that this approach will mitigate the risk
highlighted by T-Mobile of skewing support away from areas where
unsubsidized service is actually unavailable.
55. The Commission will exclude from eligibility any hex-9s that
are 100% covered by unsubsidized 5G service. However, the Commission
disagrees with CCA that a hex-9 with any 5G coverage should be excluded
from 5G Fund eligibility, because doing so would leave behind too many
areas from gaining 5G coverage. The Commission will therefore also make
some hex-9s that are partially covered eligible for 5G Fund support,
depending on the percentage of the hex-9 that is covered. To address
commenters' concerns about excluding from eligibility hex-9s with only
a small percentage of their area covered by unsubsidized 5G service,
the Commission will determine the eligibility of a hex-9 based on
whether the percentage of its nested, non-urban ``grandchild'' hex-11s
with unsubsidized 5G mobile coverage represents a ``substantial
majority'' of the hex-11s in that hex-9. As noted herein, the
Commission concludes that unsubsidized 5G mobile coverage of 70% or
more represents a substantial majority. Under this approach, a hex-9
will be ineligible if 70% or more of its nested, non-urban
``grandchild'' hex-11s show unsubsidized 5G coverage. The Commission
believes that its methodology strikes the appropriate balance between
not leaving too many areas and locations ineligible for
[[Page 101369]]
support and avoiding supporting areas that are largely covered by 5G
service without a subsidy.
6. Source and Timing for Determining Final List of Eligible Areas
56. As the basis for determining the final list of areas eligible
for support in the 5G Fund Phase I auction, the Commission will use the
most recent vintage of BDC mobile availability data published on the
National Broadband Map that the public have had the opportunity to
challenge. The methodologies, processes, and timelines applicable to
mobile challenges submitted under the BDC rules will apply. For
example, a speed test conducted using a 5G-capable device in an area
where a provider claims 4G LTE and 5G-NR service but the results show
less than 5/1 Mbps would count as a negative test for both the 4G LTE
and 5G-NR coverage. Alternatively, such a test would count as a
positive test for 5G-NR if the test result is higher than 7/1 Mbps,
even if the test is taken over a 4G LTE connection. The Commission
directs OEA, WCB, and WTB to implement this approach and to release the
final list of eligible areas for that auction at least 30 days prior to
the start of bidding in the auction. The Commission intends to publish
a ``preview'' map of the eligible areas based on the vintage (the ``as-
of date'') of the BDC mobile availability data that the Commission
plans to use as the basis for the final eligible areas. The Commission
also anticipates publishing an updated preview of the eligible areas
before the short-form application filing window for the auction opens.
This updated preview would be based on the same vintage of BDC mobile
availability data and reflect any mobile challenges to that vintage
resolved at the time of release. The Commission concludes that
providing both an initial and an updated preview of the eligible areas
during the pre-auction process will afford potential auction applicants
sufficient time to determine whether additional challenges to the data
are needed, and to submit those challenges so that they can be
processed and adjudicated sufficiently in advance of when the
Commission expects to generate the final list of eligible areas. It
will also enable them to make a more informed decision applying for,
and bidding in, the auction.
57. The Commission recognizes that, depending on the timing for the
5G Fund Phase I auction, this approach means that it would not use the
most recent vintage of published BDC mobile availability data as the
basis for the eligible areas. If the Commission were to commit to using
the most recent vintage of published BDC mobile availability data,
there might be little or no time for the public to submit, and for the
Commission to resolve, challenges to such coverage data; as a result,
some areas that should be eligible for the auction might be excluded.
The Commission therefore concludes that, on balance, using a prior
vintage of BDC mobile availability data to determine the final list of
eligible areas is preferable because it will afford greater opportunity
for public review, challenge submissions, Commission adjudications, and
for provider updates on the National Broadband Map to be considered.
58. Michael Ravnitzky supports the proposal to make the map of
eligible areas available no later than 30 days in advance of bidding,
submitting that ``this approach will ensure that the eligible areas are
based on the most recent and accurate data available.'' CCA expresses
concern about the Commission's proposal ``to use mobile availability
data published no later than 30 days prior to the start of bidding as
the basis for [determining] final eligible areas,'' arguing that
``[p]articipating carriers will need to engage in considerable
preparation for bidding and [that] 30 days is insufficient for small
carriers with limited resources to review the data, make decisions
regarding participating in the auction, and take the steps necessary to
prepare for the auction.'' CCA asserts that ``[t]he Commission should
ensure that there is sufficient time between when the final [eligible
areas] data is made available and the start of bidding, so that
adequate preparation can occur.'' CCA also urges the Commission to
``permit a robust mobility mapping challenge to run its course[ ] to
detect and resolve any significant concerns regarding the accuracy of
the current coverage maps.''
59. CTIA submits that ``[the 5G Fund] program timelines should be
aligned with the BDC timeline to enable the use of the most recent
version of the [National Broadband Map] that has been verified by the
challenge process.'' While CTIA does not specifically oppose the
Commission's specific proposed timing, it asserts that ``[d]epending on
the timing of when the map is published, 30 days may not be sufficient
to ensure that the map can be validated through the challenge
process.'' ``Since challenges are ordinarily accepted on a rolling
basis, CTIA recommends that the Commission provide a target date for
eligible parties to submit challenges for consideration in the map that
will be used to determine eligible areas for the 5G Fund . . . [that
is] sufficiently far in advance of the start of bidding to ensure that
potential bidders in the auction have an adequate opportunity to
evaluate the updated coverage data and its impact on their
participation.'' While not specifically addressing the Commission's
specific proposed timing, RWA asserts that the Commission should set a
deadline for determining the final areas eligible for the 5G Fund Phase
I auction prior to making this determination, in order to enable
providers to determine the most opportune time to file challenges to
the BDC maps that the Commission will rely on to determine the areas
eligible for the auction, noting that ``[i]f a provider files a
challenge too early, such challenge may be moot by the time a later
version of the BDC map is released due to continued 5G build out by
nationwide carriers.'' RWA further notes that ``[f]iling such
challenges is also extremely costly for rural providers, making the
timing of filing challenges even more difficult . . . [because] filing
challenges to overstated coverage in perpetuity is economically
infeasible for rural carriers.'' RWA submits that ``[p]roviding a date
when the final eligible areas will be determined will provide needed
clarity and avoid wasteful spending by carriers filing premature
challenges . . . [and ensure] that industry and the Commission are in a
better position to understand the impact of the BEAD Program, [as
contemplated by the Commission in the 5G Fund FNPRM].''
60. The iterative nature of the National Broadband Map, which is
published twice a year and updated on a bi-weekly basis to reflect
provider updates and the results of challenges, addresses commenters
concerns about the Map showing the most up-to-date coverage data. The
Commission therefore strongly encourages the public to review and, to
the extent appropriate, challenge these data as soon as possible so
that any challenges can be resolved by Commission staff prior to its
announcement of the final eligible areas. Challenges may take as long
as 180 days to be reflected in corrections to the National Broadband
Map. As outlined in the Commission's rules, speed tests submitted as
part of the BDC mobile challenge process are valid for up to one year
and are combined with other tests conducted in nearby geographic areas
to create a cognizable challenge to the mobile data once the
geographic, testing, and temporal thresholds outlined in the BDC mobile
challenge process have been met. If a challenge is upheld, the
challenged area will be
[[Page 101370]]
removed from the National Broadband Map, and the results of upheld
challenges will continue to be reflected in future versions of the
National Broadband Map, including future data vintages. The challenge
outcome will remain until a mobile challenge restoration process has
been implemented and a provider has successfully followed that process
to demonstrate that coverage in the challenged area is available in a
subsequent vintage after the loss or concession of a challenge. Once an
area is successfully challenged and the challenge is upheld, the
provider will not simply be able to add the area back to their
availability filing in the next biannual filing period. Instead, to
show that a provider can serve a previously challenged area in a future
BDC filing, it will need to separately submit the same type of detailed
infrastructure data for the successfully challenged area that the
Commission can require in an audit or verification (i.e., the type of
data that would be sufficient to invalidate challenge speed tests
through the challenge process).
B. Puerto Rico and the U.S. Virgin Islands
61. Consistent with the underlying policy objectives of the
Commission's decisions in the Bringing Puerto Rico Together Fund and
the Connect USVI Fund, the Commission concludes that areas in Puerto
Rico and the U.S. Virgin Islands that meet the eligible areas
definition for the 5G Fund will be included in the 5G Fund Phase I
auction. The Commission considers this conclusion to be a natural
progression from the Commission's decision to provide support to mobile
carriers in Puerto Rico and the U.S. Virgin Islands to restore and
harden their networks after the devastation caused by Hurricanes Irma
and Maria to the Commission's gradual transition to allow carriers in
these areas to use a portion of the support they receive toward
deploying high-speed 5G mobile services. As the Commission anticipated
in both the PR-USVI Stage 2 Order, 84 FR 59937 (Nov. 7, 2019), and more
recently in the Transitional Support Report and Order, 88 FR 28993 (May
5, 2023), the time has come to establish a competitive funding
mechanism for the long-term expansion of advanced telecommunications
access and next generation wireless services for Puerto Rico and the
U.S. Virgin Islands, and the Commission concludes that it is now
appropriate to view the funding needs for support for mobile broadband
services in Puerto Rico and the U.S. Virgin Islands through the same
lens as other areas eligible for support under the 5G Fund.
Accordingly, eligible areas in Puerto Rico and the U.S. Virgin Islands
will be included in the 5G Fund Phase I auction, and winning bidders
that are authorized to receive 5G Fund Phase I support in those areas
will be subject to the same terms and conditions as winning bidders
authorized to receive support in other eligible areas.
62. Over the past six years, the Commission has dedicated
significant effort and financial support to accomplish the restoration
of mobile communication networks in Puerto Rico and the U.S. Virgin
Islands. In recognition of the advancements that have been made to
achieve this goal, in its 2019 PR-USVI Stage 2 Order, the Commission
began the process of transitioning from offering restorative support to
a plan that would begin to offer support to mobile carriers to deploy
high-speed 5G mobile services in areas that that would otherwise not
see such services absent subsidies. Thus, in Stage 2 of the Bringing
Puerto Rico Together Fund and the Connect USVI Fund, the Commission
adopted a three-year funding period and budget pursuant to which
carriers could elect to receive up to 75% of the support for which they
are eligible to restore, harden, and expand their networks using 4G LTE
or better technology capable of providing service at speeds of at least
10/1 Mbps, and up to 25% of the support for which they are eligible to
deploy 5G mobile networks capable of providing service at speeds of at
least 35/3 Mbps. In so doing, the Commission stated that it expected to
establish a competitive funding mechanism for the long-term expansion
of advanced telecommunications access and next-generation wireless
services for Puerto Rico and the U.S. Virgin Islands by the conclusion
of Stage 2. However, in June 2023, when Stage 2 mobile support under
the Bringing Puerto Rico Together Fund and the Connect USVI Fund was
scheduled to conclude, this next stage of the implementation of the 5G
Fund had not yet begun. Without another option on the immediate
horizon, and not wanting to lose the momentum that had been achieved in
Puerto Rico and the U.S. Virgin Islands, the Commission adopted an
additional transitional support period of up to 24 months to allow
eligible mobile carriers currently receiving Stage 2 mobile support to
continue receiving support at levels lower than in Stage 2 that is
intended to harden and improve the resiliency and redundancy of
facilities for 4G LTE or better technologies during natural disasters,
but may be used for both 4G LTE and 5G-NR-capable networks in order to
encourage the deployment of 5G-NR service while also ensuring resilient
networks until the Commission could develop a long-term funding
mechanism. The Commission nonetheless stated in the Transitional
Support Report and Order that transitional support would end sooner
than 24 months if a long-term funding mechanism were established before
the transition period ends.
63. The Commission recognizes that its decision to use the 5G Fund
as the long-term competitive funding mechanism to advance high-speed,
mobile broadband for eligible areas in Puerto Rico and the U.S. Virgin
Islands may raise concerns for certain commenters. Although some
parties support the inclusion of eligible areas in Puerto Rico and the
U.S. Virgin Islands in the 5G Fund because they maintain that the award
of 5G Fund support has the potential to bring new services and service
providers to these areas, other commenters contend there should be a
separate, specific funding mechanism for Puerto Rico and the U.S.
Virgin Islands that addresses the unique challenges that service
providers face there. One commenter even argues that the Commission
should continue offering support to providers through the Bringing
Puerto Rico Together Fund and the Connect USVI Fund, and also include
eligible areas in Puerto Rico in the 5G Fund.
64. In reaching today's decision, the Commission is mindful that,
had it not been for the catastrophic damage caused by Hurricanes Irma
and Maria, eligible areas in Puerto Rico and the U.S. Virgin Islands
would have remained in Mobility Fund Phase II, which was later replaced
by the 5G Fund. Moreover, after carefully reviewing the record on this
issue, the Commission has determined that there is no reasonable basis
for Puerto Rico and the U.S. Virgin Islands to continue to be treated
differently than other U.S. islands and territories, which also face
the same factors that challenge the deployment of mobile service as
those cited by commenters, including the economy, the costs of shipping
materials from the mainland, and the limited availability of trained
workers. While the Commission acknowledges and are not unsympathetic to
these obstacles, it concludes that Puerto Rico and the U.S. Virgin
Islands no longer warrant continued separate, dedicated, mobile funding
mechanisms. As stewards of universal service support, the Commission
has an obligation to be fiscally responsible and to ensure that
[[Page 101371]]
its limited resources are used efficiently. Although the Commission
stated in the Transitional Support Report and Order that transitional
support would end sooner than 24 months if a long-term funding
mechanism were established, the Commission finds that providing
carriers in Puerto Rico and the U.S. Virgin Islands that are not
winning bidders in the 5G Fund Phase I auction with a two-year phase
down of the transitional support being provided under the Bringing
Puerto Rico Together Fund, on the same terms and conditions as those
being adopted for mobile legacy high-cost support recipients, will
provide the continuity of support necessary to preserve the
Commission's investment in restoring and hardening networks impacted by
the hurricanes in these Territories. The Commission concludes that its
decision today serves the public interest and reduces the
administrative burdens of continuing to manage separate funding
mechanisms. Accordingly, areas in Puerto Rico and the U.S. Virgin
Islands that meet the eligible areas definition for the 5G Fund will be
included in the 5G Fund Phase I auction, subject to the same terms and
conditions as other eligible areas, and the transition from the
transitional support being provided under the Bringing Puerto Rico
Together Fund and the Connect USVI Fund to 5G Fund support in Puerto
Rico and the U.S. Virgin Islands, or to a two-year phase down of
transitional support, will occur on the same terms and schedule adopted
below. For areas in Puerto Rico and the U.S. Virgin Islands, the
transitional support being provided under the Transitional Support
Order is the ``mobile legacy high-cost support'' that will transition
to 5G Fund support or be subject to phase down (whichever is
applicable).
IV. 5G Fund Budget
65. The Commission increases the budget for Phase I of the 5G Fund
from up to $8 billion to up to $9 billion by including the $1 billion
that previously had been allocated by the Commission in the 5G Fund
Report and Order for Phase II, as suggested in the record. In so doing,
the Commission affirms its prior commitment to reassess the appropriate
amount needed for the 5G Fund Phase II budget, including support that
will be necessary for carriers to commit to the deployment of
technologically innovative 5G networks that facilitate precision
agriculture, following Phase I. From this 5G Fund Phase I budget of up
to $9 billion, the Commission also proportionately increases the amount
it reserves for service to Tribal lands from up to $680 million to up
to $765 million, and here too reaffirm the Commission's commitment to
revisit the amount of this reserve after the conclusion of the 5G Fund
Phase I auction.
66. The Commission's budget determinations today remain grounded in
its effort to balance the policy objectives of the 5G Fund with its
obligation to exercise fiscal responsibility to avoid excessive
subsidization, recognizing that the cost of subsidies distributed
through the 5G Fund will ultimately be borne by consumers and
businesses. The Commission also heeds the concerns of many commenters
that caution the Commission against raising the 5G Fund budget to the
detriment of the Universal Service Fund (USF) contribution factor.
67. The Commission nonetheless recognizes the apprehension
expressed by commenters that, particularly due to inflationary factors,
an $8 billion budget for 5G Fund Phase I auction may be insufficient to
achieve its policy goals. The Commission has long acknowledged that
extending deployment of 5G networks in rural areas will require
significant expenditures. The Commission is mindful that the magnitude
of such expenditures may only continue to increase. While many
commenters favor raising the 5G Fund Phase I auction budget, most did
not propose any alternative budget amount other than suggesting that
the Commission should employ a cost model approach. In reaching its
decision today, the Commission is persuaded, however, by the argument
suggested in the record to increase the Phase I auction budget to
include up to the full $1 billion previously allocated to the Phase II
budget, holding open a decision on the budget that will be necessary
for Phase II of the 5G Fund. The Commission recognizes that Phase II
will focus support on precision agriculture, and its decision to
reallocate the budget does not diminish that intention. Furthermore,
precision agriculture connectivity relies upon a wide variety of
broadband deployment technologies, and the landscape of broadband
infrastructure in rural areas continues to evolve. The Commission
concludes that repurposing the budget amount previously allocated to
Phase II of the 5G Fund strikes an appropriate balance in responding to
commenters that advocate an increase in the Phase I budget, while also
being conscious of its fiscal obligations to be good stewards of the
Universal Service Fund.
68. According to the U.S. Bureau of Labor Statistics, the price of
broadcast and wireless communications equipment manufacturing increased
by 6.18% from May 2020 to August 2023, and the total compensation for
private industry workers in the information industry increased by
13.32% from Q2 2020 to Q3 2023. Assuming the wireless
telecommunications industry uses equipment and labor in approximately
equal shares, costs in the industry have gone up by approximately 10%
since May 2020. The Commission finds that a 12.5% increase in the 5G
Fund Phase I auction budget will help compensate for the inflationary
pressures cited by commenters that might otherwise reduce the potential
for the deployment of 5G service relative to when the budget was
adopted in 2020. Likewise, the Commission increases the amount of the
budget it reserves for service to Tribal lands proportionally by that
same 12.5%. The Commission nonetheless balances its decision to
increase the 5G Fund Phase I auction budget with its obligation to
ensure that the budget it establishes provides sufficient, but not
excessive support. The Commission concludes that by distributing up to
$9 billion in the 5G Fund Phase I auction, the Commission can make a
significant impact on the provision of advanced, high-speed 5G mobile
broadband in areas where Americans live, work, and travel, and the
Commission will continue to monitor its progress as the Commission
reviews information collected through the BDC, annually.
69. The Commission emphasizes that it is aware that this budget,
even as modified, will not cover the costs of serving every eligible
area that will be offered in the 5G Fund Phase I auction, and the
Commission states again that it is not intended to do so. Commenters
that continue to argue in favor of using a cost model to determine the
5G Fund budget disregard the Commission's repeated explanation that
relying on cost studies would wholly conflict with its intent to award
support in eligible areas in amounts that are competitive, but still
acceptable to the providers, as a reverse auction does. In other
situations in which the Commission has used a cost model to provide
universal service support, the cost model generally served to establish
the amount of support that would be offered to eligible legacy
providers, and expenditures for those programs are determined by the
total of the providers' acceptances of the modelled support offers. The
5G Fund auction operates in a fundamentally different way; a budget is
established in advance and the competitive bidding process, not the
Commission, determines which providers will receive support and the
[[Page 101372]]
amount of support they will be eligible to receive. Multiple entities--
not only the legacy provider--may qualify to compete for support to an
area and the auction will assign support to at most one entity in a
fair and transparent process. Support amounts for a particular area
will not be lower than an amount that the winning bidder (which knows
its situation best) indicates that it is willing to accept in exchange
for meeting the program requirements. A cost model may provide a
generalized estimate of costs, but modelled costs will be overstated in
many cases. Accordingly, the Commission does not base the budget that
it adopts for Phase I of the 5G Fund on an estimate of total costs
(however estimated, according to a model such as that submitted in the
record or any other method), but on a careful balancing of its
priorities to expand the deployment of 5G mobile broadband service to
rural areas where Americans live, work, and travel with the
Commission's obligation to be fiscally responsible as the steward of
limited universal service funds.
70. Additionally, consistent with the Commission's conclusion in
both the 5G Fund Report and Order and the Mobility Fund Phase II Report
and Order, 82 FR 15422 (Mar. 28, 2017), the Commission declines to
adopt any alternative mechanisms to distribute its limited budget, such
as the plan requested by SBI in its Petition for Reconsideration filed
in 2020, or as it recently revised and tailored in its reply comments
concerning the 5G Fund FNPRM (collectively SBI's request for a ``Remote
Tribal Areas Fund''). Likewise, the Commission also declines to adopt
the suggestion of NTCA to implement a Small Carrier Fund as part of its
5G Fund budget. NTCA renews a similar argument raised in 2020,
proposing that the Commission should retain $1.5 billion of the 5G Fund
budget and, in lieu of having small carriers participate in an auction,
should instead distribute this reserved budget over a ten-year period
to current recipients of frozen support that have 500,000 or fewer
subscribers in the aggregate in the U.S. Department of Agriculture's
Rural-Urban Commuting Area (RUCA) Codes 5-10.
71. The Commission emphasizes that it remains committed to
reserving support for service to Tribal lands in the 5G Fund, and as
the Commission has stated previously, it recognizes that ``Tribal lands
will be more expensive to serve than non-Tribal lands due to their
lower population density, and income levels, as well as the lack of
power or roads in some parts of Indian country and the need for federal
approval (such as from the Bureau of Indian Affairs) before broadband
can be deployed there.'' However, as the Commission explained in the 5G
Fund Report and Order, and as the Commission affirms herein, it is not
persuaded that adopting SBI's request for a Remote Tribal Areas Fund
would result in an improved outcome for such areas over its decision to
utilize a reverse auction to award a reserved portion of the budget for
service to Tribal lands. The Commission therefore denies SBI's Petition
for Reconsideration to the extent that it requests that the Commission
adopt a special Remote Tribal Area Fund to distribute support rather
than using an auction mechanism to distribute 5G Fund support reserved
for Tribal areas.
72. The Commission also declines to adopt SBI's most recent version
of its proposal to adopt a special case mechanism in lieu of making
eligible areas on Tribal lands available in the 5G Fund Phase I auction
or its suggestion that the Commission should provide special case
treatment for mobile legacy high-cost support in remote Tribal lands
not won at auction. While pointing to the rare decisions in which the
Commission has awarded universal service support without the use of
competitive bidding, SBI is unconvincing in arguing that the Commission
should create another exception in this instance. The Commission has
previously distinguished areas in Alaska from Tribal lands in the lower
48 states, and SBI has provided no new evidence that the Commission
erred in its judgment, simply rearguing the same positions it has
offered and the Commission has rejected twice before. As the Commission
explained the first time it declined to adopt SBI's request to adopt a
funding plan for Tribal areas that was similar to the Alaska plan,
``the unique basis for the adoption of the Alaska plan was not the
existence of Tribal lands in Alaska'' but rather was based on the
challenges facing the entire state. The Commission also disagrees with
SBI that the amount it has reserved for Tribal support is inadequate.
As explained herein, the Commission has proportionately increased the
amount it reserves for service to Tribal lands in the 5G Fund Phase I
auction to up to $765 million, which should lessen concerns that the
budget reserved for providing support to Tribal lands is underfunded.
The 5G Fund has insufficient resources to fund every area of the
country that lacks unsubsidized 5G mobile service, and to do so at the
level of support estimated to be needed by cost studies or other means,
whether those areas are located in remote Tribal areas or otherwise. As
stewards of the Universal Service Fund, the Commission has the
obligation to adopt policies and procedures for the 5G Fund that
benefit the public as a whole and that serve the public interest
generally, within its abilities to do so.
73. Similarly, based on the Commission's decisions in the 5G Fund
Report and Order, the current record, and its experience with
competitive bidding mechanisms, the Commission is not convinced that
NTCA's proposed approach for small carriers would be a more efficient
or effective means of awarding support than through an auction. The
Commission remains unpersuaded that reserving a portion of the budget
to distribute through a Small Carrier Fund improves its ability to
better target support or to significantly accelerate 5G deployment in
rural areas; thus, the Commission affirms the Commission's decision in
the 5G Fund Report and Order to distribute its entire budget through a
reverse auction. Moreover, the Commission affirms its prior
determination that such a proposal is inconsistent ``with [its] decade-
long efforts to reform universal service high-cost support.'' As the
Commission previously explained, to the extent NTCA is correct that
carriers receiving legacy high-cost support can deploy 5G networks in
their service areas more efficiently, the Commission continues to
anticipate they will have an advantage against bidders in the 5G Fund
Phase I auction that do not already serve those eligible areas in the
auction. In sum, the Commission continues to conclude that using a
reverse auction to award 5G Fund support best achieves its policy goals
and ``that setting aside funds for a limited subset of providers would
be an inefficient use of [its] scarce resources, and could limit [the
Commission's] ability to expand 5G coverage to as many unserved areas
as possible.'' As the Commission explained in the 5G Fund Report and
Order, if the Commission were to implement a plan such as this, it
``would risk overpaying for 5G networks in some areas that another
provider (or even the same legacy support recipient) would be willing
to serve for less support through an auction.''
74. In contrast to reserving support and awarding it through a
specialized fund of any sort, a reverse auction uses competition across
areas and within areas to determine which areas will receive support,
in what amounts, and which entities will receive that support, all
within the available budget. This means the Commission will be able to
distribute support across as many
[[Page 101373]]
square kilometers as possible within the available budget at amounts
the winning bidders have agreed to accept, consistent with its fiscal
responsibilities. Doing so serves the Commission's policy goals to
reform and modernize the distribution of mobile high-cost support, a
goal that it has repeatedly articulated since 2011. The Commission
explained in the 5G Fund Report and Order that in contrast to the use
of competitive bidding, in the existing mobile legacy high-cost support
program, neither the areas for which legacy support is disbursed nor
the amount of support carriers receive have a direct nexus to the areas
most in need of support or the amount needed to provide service
therein. Moreover, and as explained previously, the funds available to
subsidize 5G mobile broadband service are not unlimited, and, as
commenters warn, raising the budget does not come without an impact to
the universal service contribution factor.
75. For similar reasons, the Commission also declines to increase
the 5G Fund Phase I budget further to account for the inclusion of
eligible areas in Puerto Rico and the U.S. Virgin Islands in the 5G
Fund Phase I auction. The Commission disagrees with commenters that
suggest that the inclusion of eligible areas from Puerto Rico and the
U.S. Virgin Islands will further strain the budget. While increasing
the budget might result in areas that have higher costs to serve
receiving a winning bid, it is also possible that any additional
increase in the budget could be split between supporting new areas and
providing greater support to bidders that would have agreed to provide
service at lower support amounts. Moreover, increasing the budget to
account for the inclusion of additional eligible areas, regardless of
where those areas are located, will not ensure any particular eligible
area will ultimately receive support through the auction.
76. Lastly, many commenters also advocate that the Commission
should continue to consider how other federal and state funding to
deploy broadband will impact the provision of 5G mobile broadband
service before establishing the budget for the 5G Fund Phase I auction.
The majority of such comments focus on the funding stemming from the
Infrastructure Investment and Jobs Act (Infrastructure Act), Public Law
117-58, 135 Stat. 429 (2021), which includes the largest-ever federal
broadband investment. Section 60102 of the Infrastructure Act directs
the National Telecommunications and Information Administration (NTIA)
to establish the BEAD Program, through which NTIA will allocate $42.45
billion to states for grants ``to bridge the digital divide.''
77. On May 13, 2022, NTIA released the Notice of Funding
Opportunity for the BEAD Program (BEAD Program NOFO), detailing the
process for requesting BEAD Program funding for reliable broadband
service. In it, BEAD defines ``Reliable Broadband Service'' as service
that the Broadband DATA Maps show is accessible to a location via: (i)
fiber-optic technology; (ii) Cable Modem/Hybrid fiber-coaxial
technology; (iii) digital subscriber line (DSL) technology; or (iv)
terrestrial fixed wireless technology utilizing entirely licensed
spectrum or using a hybrid of licensed and unlicensed spectrum.
Broadband networks funded by the BEAD Program must provide download
speeds of at least 100 Mbps and upload speeds of at least 20 Mbps and
``latency that is sufficiently low to allow reasonably foreseeable,
real-time, interactive applications.''
78. The BEAD Program NOFO set a July 18, 2022 deadline for NTIA to
receive letters of intent from states and territories, as well as an
August 15, 2022 deadline for any supplemental information. The BEAD
Program NOFO also specifies a number of program requirements, including
principles that states and territories must observe in their subgrantee
selection, prioritization, and scoring processes. In particular, the
BEAD Program NOFO prohibits states and territories from ``treat[ing] as
`unserved' or `underserved' any location that is already subject to an
enforceable federal, state, or local commitment to deploy qualifying
broadband'' at the conclusion of the state's or territory's challenge
process. States and territories must also ensure that subgrantees
comply with obligations spelled out in the BEAD Program NOFO regarding
network capabilities (i.e., speed, latency, and uptime), deployment
requirements, and service obligations. Finally, the BEAD Program NOFO
requires states and territories to ensure that prospective subgrantees
have the managerial and financial capacity to meet the commitments of
the subgrant and any BEAD program requirements.
79. In recognition of the Infrastructure Act and the BEAD Program,
in August 2022, the Commission released its Future of USF Report (FCC
22-67)--a report to Congress outlining the future of the Universal
Service Fund. In that report, the Commission explained that ``[f]unding
for deployment under the Infrastructure Act focuses on fixed services,
not mobile services. The Commission also noted that it ``has a unique
role to play in supporting the deployment of mobile broadband to
maintain connectivity wherever people live, work, or travel.'' The
Future of USF Report recommended that the Commission include, as part
of its long-term plans, an evaluation of the impact of the BEAD Program
and other federal and state broadband infrastructure investments
discussed in this report on future mobile deployments.
80. The 5G Fund will support the deployment of advanced mobile
broadband by requiring that support recipients deploy 5G-NR service at
speeds of at least 35/3 Mbps. As the Commission explained in 2020,
``the Commission believes support is best directed to modern 5G
deployments rather than further deployments of 4G LTE technology.'' The
5G Fund therefore requires support recipients to meet public interest
obligations to provide voice and 5G broadband service, and to satisfy
distinct, measured performance requirements as a condition of receiving
support. The 5G Fund and the BEAD Program therefore clearly serve very
different purposes.
81. Moreover, most recently, in the 2024 Section 706 Report (FCC
24-27), the Commission concluded that ``[b]ased on the separate use
cases for fixed and mobile broadband as well as evidence that consumers
tend to subscribe to both services when they can . . . fixed and mobile
broadband services are not full substitutes.'' As the Commission
explained in that report, ``[b]oth services are necessary to ensure
that all Americans have access to advanced telecommunications
capability.''
82. Similarly, in evaluating the impact of the BEAD Program on the
Commission's implementation of the 5G Fund, the Commission finds that
both programs are necessary to ensuring that all Americans have access
to advanced telecommunications capability. The 5G Fund supports mobile
broadband, BEAD supports fixed broadband, although some states may
incorporate a provision among their prioritization selection criteria
for subgrantees that favors a fixed broadband deployment that also
supports mobile broadband. To date, however, the record does not
indicate that any state has incorporated a mobile broadband service
performance requirement on par with the 5G Fund's requirement for
providing 5G-NR service at speeds of at least 35/3 Mbps. Likewise,
although the Commission has seen at least one state (Louisiana)
incorporate a commitment for a subgrantee to advance mobile broadband
in order to receive BEAD funding, that commitment is to provide
[[Page 101374]]
only 4G LTE service. For this reason, the Commission is not persuaded
by commenters that urge it to delay the 5G Fund Phase I auction until
after BEAD support has been awarded because BEAD funding could be used
to support mobile services as part of the BEAD recipients' broader
deployment commitments. The Commission finds that moving ahead
expeditiously with support for robust mobile broadband will best
advance its shared goal of ensuring that all Americans have access to
advanced telecommunications services.
83. The Commission is nonetheless mindful of its obligation to
share information regarding its efforts to implement the 5G Fund with
the U.S. Department of Agriculture (USDA) and NTIA, consistent with the
Broadband Interagency Coordination Act (BICA), Public Law 116-260, 134
Stat. 3214, Div. FF, tit. IX, section 904 (2020) (codified at 47 U.S.C.
1308 et seq.). On June 25, 2021, the Commission, USDA, and NTIA
announced they had entered into an agreement to share information about
existing or planned projects that have received, or will receive,
funding through the Commission's high-cost programs and programs
administered by NTIA and the USDA, as required by BICA. Representatives
of the agencies have been meeting regularly pursuant to the agreement.
On February 17, 2023, the Commission released a report on the
effectiveness of BICA, detailing the steps that the agencies were
taking to ensure the most effective allocation of broadband funding. In
addition, the Commission, the U.S. Department of Agriculture, the
National Telecommunications and Information Administration of the U.S.
Department of Commerce, and the U.S. Department of Treasury entered
into a memorandum of understanding regarding information sharing in May
2022, which was renewed in May 2024.
84. Given the Commission's decision to make areas that lack
unsubsidized 5G mobile broadband service at speeds of at least 7/1 Mbps
eligible for support in the 5G Fund Phase I auction, areas that are
being offered ``unsubsidized'' 4G LTE service, or even low levels of 5G
service, will still be included in the auction. After carefully
considering the issue of whether duplicative support for advanced, 5G
mobile wireless service might result from BEAD funding being awarded in
substantially the same geographic area as support being offered in the
5G Fund Phase I auction, the Commission concludes that, in the event
that a BEAD subgrantee has made an enforceable commitment to a state,
prior to the Commission's release of the final list of eligible areas,
to deploy 5G-NR service at a speed of at least 35/3 Mbps in an in-
vehicle environment, the Commission will consider that area to be
ineligible for 5G Fund support, and it will not include such an area in
the 5G Fund Phase I auction. In order for an area subject to an
enforceable commitment to be considered ineligible for support in the
5G Fund Phase I auction, the commitment must require deployment of 5G-
NR service at speeds of at least 35/3 Mbps to the entire area that
would have otherwise been eligible for support in the 5G Fund Phase I
auction. To the extent any provider has an enforceable commitment to a
state or locality or instrumentality thereof outside of the BEAD
Program, the Commission will treat such enforceable commitments the
same as set forth herein. The Commission adopts this speed
determination of at least 35/3 Mbps here for the purposes of evaluating
whether an enforceable commitment to a state for the award of BEAD
funding duplicates the policy goals and deployment requirements the
Commission establishes for the 5G Fund such that the area should be
considered to be ineligible for such support. The Commission directs
OEA and WCB to determine during the pre-auction process, and after
notice and comment, the procedures for removing areas from the final
list of eligible areas for the 5G Fund Phase I auction.
85. Because any BEAD-related enforceable commitments to deploy
advanced, 5G mobile networks would be new network deployments--just
like those deployed with support from the 5G Fund--the Commission does
not want to remove BEAD-funded areas summarily from the 5G Fund and
risk the possibility that consumers in those areas might be left to
accept a reduced level of service for an indeterminate period of time.
For similar reasons, the Commission concludes that an enforceable
commitment to a state must also require that the BEAD subgrantee deploy
5G-NR service at speeds of at least 35/3 Mbps in an in-vehicle
environment within the same milestone deadlines that apply to 5G Fund
support recipients, thereby meeting the Commission's performance
requirements for the 5G Fund. To ensure that an enforceable commitment
made with BEAD funding complies with the 5G Fund's 5G-NR service and at
least 35/3 Mbps speed requirements for the purposes of determining
whether to remove such an area from eligibility from the 5G Fund, the
enforceable state commitment must also include verification processes
that involve the submission of infrastructure data or on-the-ground
test data to verify that the BEAD subgrantee has met these service and
speed requirements. The Commission directs OEA and WCB to determine
during the pre-auction process, and after notice and comment, a
verification process that would demonstrate that a BEAD subgrantee has
made an enforceable commitment to meet these service and speed
requirements, prior to removing an area from the final list of eligible
areas for the 5G Fund Phase I auction.
86. The Commission has previously taken aggressive measures post-
auction to not award universal service support to areas where it has
determined that there is an existing provision of service in an area or
a significant concern regarding wasteful spending. Accordingly, the
Commission directs OEA and WCB to seek comment in the pre-auction
process on whether and how to establish a post-auction, pre-
authorization procedure wherein an interested party could submit proof
to the Commission prior to the award of 5G Fund support that
demonstrates that there is a BEAD award that includes an enforceable
state commitment for the deployment of verifiable mobile 5G-NR service
at speeds of at least 35/3 Mbps that conflicts with a winning bid for
an area offered in the 5G Fund Phase I auction. In the event such a
process is implemented, consistent with its past practice, the
Commission anticipates that it would take similar action here, up to
and including declining to authorize support for that area. Thus,
applicants in the 5G Fund Phase I auction are encouraged to perform due
diligence, research, and analysis and factor into their bids and
bidding strategies any state BEAD requirements that include a
commitment from a subgrantee to deploy 5G-NR service at speeds of at
least 35/3 Mbps as a condition to receiving BEAD funds.
87. The Commissions recognizes that offering support for advanced,
5G mobile broadband service that duplicates BEAD funding efforts would
defeat the policy goals established for the 5G Fund. To that end, as
explained above, the Commission is carefully coordinating its 5G Fund
plans with other government agencies, including NTIA, as required by
BICA. Moreover, the Commission agrees with commenters that advocate
that BEAD funding can be leveraged to amplify the reach of 5G Fund
support. The Commission further agrees that there are many benefits
that can be derived from a 5G Fund support recipient's ability to
capitalize on any advancements in fixed broadband service being offered
in rural
[[Page 101375]]
America, particularly so that new BEAD-funded fiber can be used to
connect towers built with 5G Fund support, and can increase capacity at
existing towers currently using microwave backhaul. Insofar as it may
cost a 5G support recipient less to provide 5G mobile broadband service
in a rural area where a fixed broadband network has been, or will be,
deployed with BEAD funding, the Commission expects that a bidder in the
5G Fund Phase I auction for such an area would be willing to bid to
accept less support than if the area did not have a fixed service
offering. Additionally, the Commission anticipates that even if the 5G
Fund Phase I auction were to be held prior to all BEAD program support
being awarded, applicants seeking to participate in a 5G Fund auction
will have sufficient information about their own and others' current or
future service offerings, including reasonably certain BEAD
deployments, through basic due diligence to factor into their bids and
bidding strategies the potential impact that BEAD funding may have on
the market. The Commission notes that on June 28, 2023, NTIA issued the
BEAD Challenge Process Policy Notice, providing guidance on several
BEAD Program processes, such as the identification of existing
broadband funding and the required challenge processes that states must
conduct, that aim to avoid broadband funding overlaps.
88. For these reasons, the Commission disagrees with commenters
that advocate that it should delay the implementation of the 5G Fund
while the Commission determines the potential impact of BEAD funding on
the deployment of mobile broadband services. Waiting to implement the
5G Fund until all BEAD funding is assigned and the success of that
program is analyzed would do a disservice to Americans who live, work,
and travel in rural areas, who should not be denied access to mobile
services that are reasonably comparable to those provided in urban
areas. As the Commission previously explained in its Future of USF
Report, insofar as the BEAD Program serves to fund fixed wireless
broadband deployment, the Commission has stated that pausing the
process of preparing for a 5G Fund auction ``would have detrimental
impacts on consumers' access to advanced mobile wireless service.''
Delaying the 5G Fund would also require us to continue the current
inefficient practice of providing legacy high-cost support in areas of
the country where there is already unsubsidized mobile service and
would thus be contrary to the policy initiatives the Commission has
advocated since the adoption of the USF/ICC Transformation Order. Not
only does the legacy high-cost support often reach areas where
unsubsidized service exists, but also it is often duplicative--i.e.,
given to more than one mobile provider serving the same area. Continued
delay of the transition away from legacy support is antithetical to the
Commission's efforts in this proceeding to avoid providing support to
the same area where another mobile service provider is receiving or
will receive support to deploy 5G service. It would also undermine the
underlying policy goal of the Commission's BICA obligations, which is
to avoid duplicating government subsidies for the same service in the
same area. Having undertaken a tailored effort to refresh the record
and reignite the 5G Fund, the Commission is now well-positioned to make
these determinations and ultimately begin the process to incentivize
the deployment of networks providing advanced, 5G mobile broadband in
areas where, absent subsidies, such service will continue to be
lacking. Accordingly, the Commission concludes that the 5G Fund can
enhance achievements of the BEAD program rather than conflict with
them.
89. By adopting a budget of up to $9 billion for the 5G Fund Phase
I auction, using a reverse auction to distribute support, and
committing to reassess the amount that will be needed for Phase II of
the 5G Fund in the future, the Commission will support the advancement
of high-speed 5G mobile broadband in areas where Americans live, work,
and travel. Moreover, the Commission continues to anticipate, as the
Commission did in 2020 that many providers will use private capital in
conjunction with 5G Fund support to build their 5G networks. The
Commission therefore adopts a 5G Fund Phase I budget herein that again
``seeks to balance the various competing objectives in section 254 of
the Communications Act of 1934, as amended (the Act), including the
objective of providing support that is sufficient, but not so excessive
so as to impose an undue burden on consumers and businesses.'' The
courts have held that the Commission enjoys broad discretion when
conducting exactly this type of balancing. Accordingly, the Commission
concludes that setting the 5G Fund Phase I budget at up to $9 billion
establishes a significant start to support the build out of advanced,
5G mobile wireless broadband networks in unserved and underserved rural
areas.
V. Accepting Bids and Identifying Winning Bids
A. Metric for Accepting Winning Bids and Identifying Winning Bids
90. The Commission adopts a bidding and support price metric based
on dollars per square kilometer that, as described below, includes a
weighting factor that weights bids and support prices based upon
service availability within an eligible area. In the 5G Fund FNPRM, the
Commission sought comment on using a bidding and support price metric
based on dollars per square kilometer in the event that it decides to
limit eligible areas to hex-9s that have locations and/or roads. The
Commission also sought comment on whether to adjust the square
kilometers associated with an eligible area using either the adjustment
factor that was adopted in 2020 or another approach. Based on its
policy goal to use the available budget most efficiently to provide 5G
coverage to places where people live, work, and travel, the Commission
declines to employ the adjustment factor that it adopted in the 5G Fund
Report and Order as part of the metric for accepting and identifying
winning bids in a 5G Fund auction, because doing so would prioritize
sparsely populated areas over areas where people live, work and travel
as indicated by available data. However, consistent with alternatives
proposed in the current record, the Commission adopts an alternative
adjustment approach to differentiate between eligible areas that lack
4G-LTE service by an unsubsidized provider and those that have such
service, as addressed below.
1. Bidding and Support Metric
91. In the 5G Fund Report and Order, the Commission decided that it
would accept bids and identify winning bids in the 5G Fund Phase I
auction using a support price per adjusted square kilometer. Under this
metric, each eligible area would be associated with a number of units
equal to the square kilometers of the area multiplied by an adjustment
factor that was also adopted in the 2020 proceeding. The corresponding
support amount for an area would be the number of adjusted square
kilometers multiplied by the price. The Commission retains a bidding
and support metric based on dollars per adjusted square kilometer, but
as explained further herein, modifies the factors upon which it will
base the adjustment.
[[Page 101376]]
92. In the 5G Fund FNPRM, the Commission asked whether there were
alternative bidding and support metrics that might target unserved
locations and/or unserved road miles more specifically, if eligible
areas were limited to those census tracts that include unserved
locations and/or roads. The Commission further asked whether a single
targeted metric would appropriately balance unserved road miles and
unserved locations--for example, by using a weighted sum of unserved
locations and unserved road miles--and how the balancing weights should
be determined.
93. There are no objections in the record to basing the bidding and
support metric on square kilometers. Verizon affirms the Commission's
choice of square kilometers, noting that ``[b]ecause hex-9s are small--
with an area of just 0.1 square kilometers--a per-square kilometer
bidding and support metric is likely sufficient to ensure that CCA
urges us not to use a metric based on the number of locations in an
eligible area, since ``[s]uch an approach would inappropriately adopt a
fixed-centric basis for support price calculation.'' The Commission
agrees that an appropriate metric should target support for mobile
service more broadly than solely based on locations. Accordingly,
consistent with the goals of this proceeding to expand 5G coverage to
areas where people live, work, and travel, the Commission will use a
bidding and support metric based on dollars per square kilometer. roads
or locations in the supported hex-9s have access to 5G service.''
94. CCA urges us not to use a metric based on the number of
locations in an eligible area, since ``[s]uch an approach would
inappropriately adopt a fixed-centric basis for support price
calculation.'' The Commission agrees that an appropriate metric should
target support for mobile service more broadly than solely based on
locations. Accordingly, consistent with the goals of this proceeding to
expand 5G coverage to areas where people live, work, and travel, the
Commission will use a bidding and support metric based on dollars per
square kilometer.
2. The Adjustment Factor as Adopted in 2020
95. The Commission will not use the adjustment factor that was
adopted in the 5G Fund Report and Order for bidding in the 5G Fund
Phase I auction. The Commission will, however, retain the adjustment
factor for purposes of disaggregating legacy support. The Commission
bases its decision not to use the adjustment factor in bidding on the
inconsistency between its goal of ensuring that the available budget is
used to benefit as many people as possible and the purpose of the
adjustment factor, as adopted in the 5G Fund Report and Order. The
Commission's goal in 2020 was to allow the more costly eligible areas
(defined, in part, by low population density and difficult terrain) to
compete on a more equal basis with the eligible areas that were less
costly to serve. By applying such an adjustment factor, sparsely
populated, particularly costly areas that would have a high adjustment
factor and areas that could be served at lower cost per square
kilometer, would have had approximately equal chances of winning
support in the auction. Applying such an adjustment factor would have
shifted funds away from more populated and traveled eligible areas,
which is in conflict with the Commission's goal of targeting unserved
and underserved residents, workers, and travelers. The Commission
therefore sought comment on whether to use this adjustment factor, to
adopt an alternative adjustment factor that would provide some
advantage to particularly costly areas that nonetheless are areas with
a considerable number of homes, businesses, and other locations and/or
roads that are frequently traveled, or to abandon the use of any
adjustment factor altogether. With respect to its decision to retain
the adjustment factor adopted in the 5G Fund Report and Order for
purposes of disaggregating legacy support, the Commission's rationale
in 2020 for adopting the adjustment factor remains unchanged.
96. Relatively few parties commented on the continued use of the
adjustment factor for bidding as adopted in the 5G Fund Report and
Order. Of those that submitted comments or reply comments on the issue,
four parties--CRWC, RWA, SBI, and US Cellular--indicate that the
Commission should eliminate the adjustment factor only if it adopts a
larger budget, with CRWC noting that ``[i]f the budget comes up short,
funds will exhaust before the higher-cost areas, which are the areas
most in need of support, receive any support.'' T-Mobile recommends
that the Commission ``reaffirm [the Commission's] approach of using an
adjustment factor to prioritize areas that are the most costly and
least profitable to serve.''
97. Verizon, on the other hand, urges us to eliminate the
adjustment factor for bidding. It asserts that ``[t]he Commission
should maximize the impact of the limited 5G Fund budget by focusing
support on those unserved areas that would have the most significant
demand for mobile broadband service and require relatively smaller
subsidies, rather than on areas that would have little demand for
mobile broadband service and require larger subsidies.'' \2\ The
Commission agrees with Verizon that it should discontinue use of the
adjustment factor for bidding as adopted in the 5G Fund Report and
Order, and with Verizon's reasoning that 5G Fund support dollars should
instead be targeted to those currently unserved and underserved areas
where more people are likely to live, work, and travel.
---------------------------------------------------------------------------
\2\ Verizon Comments at 9.
---------------------------------------------------------------------------
98. With respect to commenters' arguments that the bidding
adjustment factor should be eliminated only if the Commission
significantly increases the budget, the Commission is not persuaded
that it would be a cost-effective use of 5G Fund support to increase
the budget for the purpose of extending support to areas that would
have been given an advantage with the current adjustment factor. As a
threshold matter, and as addressed above, the adjustment factor would
shift funds away from more populated and travelled areas to more remote
areas, which is in conflict with the Commission's goal of covering as
many areas where people live, work, and travel as possible. Therefore,
the Commission does not support the adjustment factor as originally
designed, as suggested here. Second, under this reverse auction
mechanism, a large increase in the budget would not translate into a
similarly large increase in the total area that can be assigned 5G Fund
support. Instead, the additional funds would be divided between support
to some higher-cost areas that would not have been assigned support
otherwise and support at unnecessarily high prices to the same areas
that would win support under a lower budget. Under the descending price
clock reverse auction mechanism, the budget clears and support
assignment begins when total requested support at the current clock
price is equal to or less than the budget. If the budget is increased
significantly without a proportional increase in the number and cost
distribution of eligible areas, the clearing round support price will
be higher. Some of the more costly areas will likely be assigned at the
higher support level, but the most costly areas will not receive
support. Lower cost areas--those that would have won support under the
original budget--will be funded, but at prices well above those they
would have been willing to accept. Thus, the Commission believes
[[Page 101377]]
it would be an inefficient use of federal resources to increase the
budget for the purpose of extending support to the most remote areas.
Finally, even if the Commission were persuaded that that the original
adjustment factor should be retained (which it is not) or that
increasing the budget significantly would be an acceptable alternative
to the adjustment factor (which it also is not), fiscal responsibility
precludes us from increasing the 5G Fund budget by more than the $1
billion increase set forth above. Although $1 billion is a substantial
increase, it is likely less of an increase than is envisioned by the
commenters. Therefore, for all of these reasons, the Commission is
unpersuaded that increasing the budget by significantly more than $1
billion for the purpose of reaching the hardest-to-serve areas is a
fiscally responsible approach to spending its limited universal service
funds.
99. Given the Commission's decision today to eliminate the use of
the adjustment factor adopted in the 5G Fund Report and Order for
bidding in the 5G Fund Phase I auction, the Commission also dismisses
as moot the Petition for Reconsideration filed by the 5G Fund
Supporters to the extent that it requests relief concerning the use of
the adjustment factor adopted in the 5G Fund Report and Order for
bidding in that auction.
3. An Adjustment That Weights Bids and Support Prices Based on Service
Availability
100. In its discussion in the 5G Fund FNPRM of the bidding and
support metric and the adjustment factor adopted in the 5G Fund Report
and Order, the Commission asked ``whether [it] should adopt an
alternative approach that would provide some advantage to particularly
costly areas that nonetheless are areas with a considerable number of
homes, business[es], and other locations, and/or roads that are
frequently travelled.'' Several commenters suggest prioritizing areas
based upon the level of service that is available. To address these
concerns, the Commission will implement a service-based weighting
factor for those areas that lack 4G LTE service. To eliminate confusion
with the adjustment factor adopted in the 5G Fund Report and Order,
which the Commission will retain for purposes of disaggregating legacy
support, the Commission refers to the service-based factor it adopts
herein as a ``weighting factor.'' While eligible areas will include
both those that lack unsubsidized 5G broadband service but have access
to unsubsidized 4G LTE and areas that lack both unsubsidized 5G service
and any 4G LTE service, the Commission finds there are greater public
benefits of providing 5G service to areas that lack 4G LTE than the
benefits of 5G accruing to other eligible areas. As such, a weighting
factor based on this distinction is warranted. The Commission is
mindful, however, of its primary responsibility to use the budget cost-
effectively to provide support to people where they live, work, and
travel. Accordingly, unlike the adjustment factor that was calculated
to allow a bid to compete on an equal basis with bids to provide
service to a geographic area with several times the number of square
kilometers for the same support amount, the weighting factor is
intended to give bids for unserved areas an advantage, but not so great
an advantage as to result in a significant reduction in the number of
square kilometers that can be covered with 5G Fund support.
101. Therefore, the Commission adopts a service-based weighting
factor. Consistent with their existing authority concerning the
distribution of universal service support, the Commission directs OEA,
WCB, and WTB to establish during the pre-auction process, after notice
and comment, the size of this service-based weighting factor. The
Commission directs OEA, WTB, and WCB to take into account the need to
balance the Commission's fiscal responsibility to award 5G Fund support
cost-effectively with a recognition that there may be additional
challenges to and public benefits from providing service to areas that
lack 4G LTE service.
B. Minimum Geographic Area for Bidding
102. The Commission will use census tracts as the minimum
geographic unit for bidding in the 5G Fund Phase I auction and will
aggregate all of the eligible hex-9s into a census tract for purposes
of bidding. The Commission's goal in adopting census tracts rather than
hexes as the minimum geographic area for bidding is to ensure that a
wide variety of interested bidders, including small entities, have the
flexibility to design a network that matches their business model and
technical capabilities and that allows them to efficiently achieve
their public interest obligations and performance requirements. After
considering the record on this issue, we conclude that, on balance,
using census geographies is preferable to using hex areas. Census
geographies provide a more efficient and appropriate way to group areas
eligible for the 5G Fund into larger geographic areas for purposes of
bidding for areas along state boundaries, particularly in view of the
Commission's decision herein to convert those areas to hex-9s.
103. Commenters are equally split on whether the Commission should
use census geographies or the H3 hexagonal geospatial indexing system
(H3 system) to group eligible hex-9s for bidding. CCA and Verizon each
support aggregating eligible hex-9s into census geographies. Verizon
advocates grouping eligible hex-9s into census tracts or larger for
ease of auction administration, and contends that using hexes--whether
at the resolution 5 hexagon (hex-5) or resolution 6 hexagon (hex-6)
level--``would introduce unnecessary complexity into the auction,
require considerable software development by potential bidders, and
could reduce auction participation.''
104. AT&T and Michael Ravnitzky, on the other hand, support using
the H3 system to aggregate areas eligible for support to minimum
geographic areas for bidding because, they assert, it is a logical
approach and aligns areas eligible for 5G Fund support with the BDC
mobile mapping and challenge processes, would be more efficient than
trying to aggregate eligible hex-9s into census block groups (CBGs) or
census tracts, and provides a consistent and flexible framework for
defining and mapping eligible areas. AT&T contends that ``[a]ggregation
of [eligible] hex-9s at the hex-6 level, which covers on average 36
square kilometers, best reflects the design of wireless infrastructure
in rural areas with various terrain and foliage that has not already
attracted private investment . . . [and] is more manageable [for
providers than] committing to cover locations or certain roads in a
hex-5 area, [which cover] 252 square kilometers.'' Ravnitzky suggests
``[u]s[ing] resolution 8 hexagons or higher for aggregating eligible
areas . . . [to] provide sufficient granularity and accuracy for
capturing the variations in cost and value of providing 5G service in
different areas,'' and ``group[ing] adjacent hexagons into larger
geographic units based on their proximity, similarity, and contiguity .
. . [to] create more coherent and efficient geographic units for
bidding and support purposes.''
105. The Commission concludes that, on balance, aggregating
eligible hex-9s to census geographies is preferable, irrespective of
the resolution of hexagon level used. Census geographies aggregate to
the state level, and eligible telecommunications carriers (ETC)
designations--which all winning bidders are required to obtain prior to
[[Page 101378]]
being authorized for support--are issued by state. In contrast, hex
boundaries are not coterminous with state, county, and international
boundaries. Additionally, due to the nature of the H3 system, in which
not all higher resolution hexagons (e.g., hex-9) are contained within
the boundaries of their ancestor lower resolution hexagons (e.g., hex-6
or hex-5), use of a lower resolution hexagon, such as hex-5 or hex-6,
as the minimum geographic unit for bidding runs the risk that entire
portions of the eligible areas, which will be converted to and
expressed at the hex-9 level, may fall outside of the hex-5 or hex-6
boundary to which they are aggregated. Moreover, we note that the
average hex-5 has an average area that is larger than the average areas
of either of the two census geographies considered, and thus may not
provide the best opportunity for bidders to target their bids to win
support for the areas they are interested in serving. Because the
Commission would have to use fairly large hex areas for bidding units,
it would have to account for many hexagons covering multiple state and
international boundaries, which would complicate an applicant's
inventory selections and state ETC designations. For these reasons, the
Commission does not agree that aggregating eligible hex-9s into larger
hexagons would be more efficient than aggregating them to census
tracts.
106. The Commission further concludes that aggregating to census
tracts, as opposed to census block groups (CBGs), is preferable for
several reasons. First, because the boundaries of a CBG are often
defined by roads, using CBGs could have the unintentional effect of
leaving the road that bounds a CBG not served by the bidder that wins
support for the CBG. Using census tracts minimizes that problem.
Second, wireless networks are often built to cover areas that are
larger than a CBG with a single cell site. Third, because census tracts
are larger than CBGs, using census tracts will also help mitigate the
risk of funding duplicative, overlapping networks if two different
bidders were to win support for adjacent CBGs. Finally, using census
tracts, as opposed to CBGs, will result in a smaller number of biddable
items, which will make bidding in the auction more manageable.
VI. Compliance WitH 5G Fund Public Interest Obligations and Performance
Requirements
A. Metric for Measuring Compliance With 5G Fund Public Interest
Obligations and Performance Requirements
107. In the 5G Fund FNPRM, the Commission sought comment on its
approach to making any necessary corresponding modifications concerning
the metric used to measure a 5G Fund support recipient's compliance
with its public interest obligations and performance requirements if
the Commission were to modify the bidding and support price metric that
was adopted in the 5G Fund Report and Order. All commenters that
address this issue support the Commission's approach for doing so, and
no commenter opposes it. As discussed above, the Commission intends to
use a bidding and support price metric for the 5G Fund Phase I auction
that is based on dollars per adjusted square kilometer. Because the
metric for measuring compliance with the 5G Fund public interest
obligations and performance requirements adopted in the 5G Fund Report
and Order is already based on square kilometers, no modifications to
the previously adopted compliance metric are necessary as a result of
the Commission's decision today regarding the bidding and support price
metric that will be used for the 5G Fund Phase I auction.
108. A few commenters suggest other changes concerning the public
interest obligations and performance requirements adopted in the 5G
Fund Report and Order. RWA asks the Commission to update the 3GPP
performance standard for eligible 5G services to at least 3GPP Release
17, given that the 3GPP Release 15 standard adopted in the 5G Fund
Report and Order is now outdated. RWA notes that 3GPP Release 18 (5G-
Advanced) is expected to be rolled out in the fourth quarter of 2023,
and that development of 3GPP Release 19 is set to begin in December
2023. ARA PAWR suggests that the Commission consider bidder capability
in setting deployment milestones by, for example, giving a rural
carrier trying to cover a very remote area more time to meet deployment
milestones, while SBI states that a better alternative to using
adjustment factors is ``changing the performance criteria for remote
areas . . . [to] reduce the performance requirements commensurate with
microwave backhaul capabilities.'' According to SBI, carriers serving
very remote areas (as defined by the Commission) ``could be much more
competitive in an auction if they are required to deliver mobile 4G LTE
service at a median speed of \7/1\ Mbps, rather than a median speed of
35/3 with 5G.'' T-Mobile expresses support for the 5G Fund milestones,
but suggests that the Commission create incentives to encourage 5G Fund
support recipients to deploy service to more than 85% of an area by the
final deployment milestone by reducing support proportionally to the
percent of uncovered area between 85% and 100% and requiring recipients
who deploy service to at least 85% but less than 100% of their winning
geographic areas to return that support on a prorated basis. T-Mobile
also notes that ``[t]he Commission could consider giving [support
recipients] an extra year to meet the higher [deployment] thresholds.''
109. The Commission notes that when the Commission adopted the 5G
Fund Report and Order, it stated that 5G Fund support recipients would
be required to comply with ``at least the 5G-NR . . . technology
standards developed by [3GPP] with Release 15 or any successor release
that may be adopted by [OEA and WCB] after notice and comment.'' The
``Releases'' page on 3GPP's website shows that work on 3GPP Releases 16
and 17 has been completed and they are now available, and that work on
3GPP Release 18 is expected to be completed later this year. Given that
two successor releases have been completed since the 3GPP Release 15
standard was adopted for 5G Fund support recipients in the 5G Fund
Report and Order, the Commission directs OEA and WCB to initiate a
notice-and-comment rulemaking to determine whether and how to update
the 3GPP standard. We also note that, in making its determination in
the 5G Fund Report and Order that entities seeking to receive support
from the 5G Fund must have access to spectrum and sufficient bandwidth
(at a minimum, 10 megahertz x 10 megahertz using frequency division
duplex (FDD) or 20 megahertz using time division duplex (TDD)) capable
of supporting 5G services in the particular area(s) for which they
intend to bid, the Commission observed that 3GPP Release 16 had
finalized a list of various frequency bands for North America that
appeared at that time to be capable of supporting 5G. Given the passage
of time and 3GPP's ongoing work since the 5G Fund Report and Order was
adopted, the Commission directs OEA, WCB, and WTB to determine in the
pre-auction process, and after notice and comment,
[[Page 101379]]
whether there are 5G-capable spectrum bands other than those identified
in 3GPP Release 16 that entities seeking to receive support from the 5G
Fund could use to meet the 5G Fund public interest obligations and
performance requirements.
110. The Commission declines to make any of the other changes
suggested by commenters concerning the previously adopted performance
requirements. The Commission finds that the suggestions offered by ARA
PAWR and SBI that it adopt differing compliance deadlines and
performance standards for support recipients serving remote areas to be
inconsistent with the 5G Fund's policy goals of ensuring the rapid
deployment of 5G mobile wireless broadband networks. T-Mobile's
suggestions are similar to suggestions offered earlier in the 5G Fund
proceeding, which the Commission declined to adopt as both unworkable
and unrealistic. As the Commission observed in the 5G Fund Report and
Order, ``[t]here may be isolated areas that are particularly
challenging to serve even in terrain that is otherwise not difficult to
serve, and adopting a 100% coverage requirement could drastically
increase costs in a 5G Fund auction if bidders reasonably conclude that
certain areas they would otherwise be interested in serving are cost
prohibitive due to an especially challenging terrain feature like a
ravine or mountaintop,'' which ``would [] potentially distort the 5G
Fund auction with little gain.'' We note that the Commission also
previously declined to adopt a 100% final deployment milestone
percentage for Mobility Fund II based on commenters' arguments in that
proceeding that a 100% buildout requirement is unrealistic in remote
areas as well as most rural areas, and could discourage bids. The
Commission concludes that the Commission struck an appropriate balance
in adopting an 85% final coverage requirement in the 5G Fund Report and
Order, and find that T-Mobile has not offered anything in its comments
that persuades us to depart from the Commission's earlier conclusions.
B. Methodologies for Demonstrating Compliance With 5G Fund Performance
Requirements
111. Consistent with the recommendations of many commenters, the
Commission modifies the methodologies for demonstrating compliance with
5G Fund performance requirements adopted in the 5G Fund Report and
Order to align largely with those adopted for the BDC verification
process. In the 5G Fund Report and Order, the Commission decided it
would generally align with the BDC the methodologies used by 5G Fund
support recipients to demonstrate compliance with their interim and
final performance requirement milestones. The Commission concluded that
standardizing the data required for compliance reporting was likely to
ease the burden on support recipients, while collecting sufficient data
to confirm that the 5G Fund's requirements have been met. In the 5G
Fund FNPRM, the Commission proposed and sought comment on requiring 5G
Fund support recipients to use the methodologies adopted for the BDC
mobile verification process--which allow mobile providers to choose to
submit either on-the-ground test data or infrastructure data to verify
coverage in response to a mobile verification request from the
Commission--as the basis for substantiating coverage and demonstrating
compliance with the 5G Fund interim and final deployment milestones. In
addition, the Commission sought comment on whether 5G Fund support
recipients should be required to submit on-the-ground test data for
areas that are accessible and infrastructure data for areas that are
inaccessible. The Commission also sought comment on whether 5G Fund
support recipients should submit infrastructure data sufficient to
generate a ``core coverage area,'' as defined in the BDC mobile
verification process, and on-the-ground test data for areas outside of
that core coverage area, or should instead be allowed to submit either
type of data regardless of the type of area in which they are deploying
service. The Commission also described and sought comment on the
specific on-the-ground test data and infrastructure data 5G Fund
support recipients would need to submit.
112. In response to the 5G Fund FNPRM, many commenters express
support generally for harmonizing the 5G Fund's compliance processes
with the BDC's verification processes, and no commenters oppose this
approach. The Commission agrees with commenters and adopts its proposal
to largely align the methodologies for demonstrating compliance with
the 5G Fund interim and final deployment milestones with those adopted
for the BDC mobile verification process. The Commission finds this
approach will give 5G Fund support recipients the same flexibilities
afforded under the BDC rules to choose which type of verification data
to submit. This approach also affords Commission staff the right to
collect additional data as necessary. The Commission therefore amends
the Commission's rules as necessary to accommodate such alignment,
consistent with the specific needs of the 5G Fund. Based on supportive
comments in the record, the Commission requires that, in its interim
and final milestone reports, each 5G Fund support recipient (1) certify
that the 5G mobile broadband coverage data filed in its BDC biannual
submissions demonstrate that its deployments in the area(s) for which
it receives 5G Fund support meet the 5G Fund coverage, speed, and
latency requirements, and (2) substantiate its reported 5G mobile
coverage data by submitting either on-the-ground test data or
infrastructure information. A support recipient can submit either type
of information (either on-the-ground test data or infrastructure data),
regardless of whether it is deploying service in an accessible or
inaccessible area, but it must submit at least one type of data for a
whole state. A support recipient may submit different types of data for
different states and may voluntarily submit the additional data type
for part or all of a state. For example, a 5G Fund support recipient
may submit only infrastructure information reflecting coverage their
supported area in State A, and only on-the-ground data for the sampled
area(s) in State B, but it may not submit only infrastructure
information in a census tract in State A and only on-the-ground data in
a different census tract in State A. This does not preclude a 5G Fund
support recipient from submitting both infrastructure information and
on-the-ground data, so long as it submits one type of data for all of
its supported areas in a state. A 5G Fund support recipient shall
submit its interim service and final service milestone reports,
including on-the-ground measurement tests or infrastructure
information, in the Broadband Data Collection portal. As discussed
below, 5G Fund support recipients submitting on-the-ground data will do
so for a sample of hex-9s within its supported area, whereas support
recipients submitting infrastructure information are required to submit
data for all cell sites and antennas that serve a 5G Fund recipient's
supported area. This approach is consistent with the BDC verification
process, in which providers submitting on-the-ground data do so for a
statistically valid sample of areas within a targeted area, whereas
providers submitting infrastructure information do so for the entire
targeted area. The Commission directs 5G Fund support recipients to
indicate which type of data they will submit for each
[[Page 101380]]
state. To ensure the accuracy of the data being submitted, the
Commission requires 5G Fund support recipients to have their on-the-
ground or infrastructure data certified by an engineer with the same
qualifications as required for submitting the BDC biannual filings that
apply under section 1.7004 of the Commission's rules.
113. On-the-Ground Test Data. In the 5G Fund Report and Order, the
Commission required 5G Fund support recipients to conduct on-the-ground
speed tests to substantiate 5G broadband coverage, and adopted specific
methodologies for on-the-ground speed tests to substantiate 5G
broadband data. Additionally, the Commission determined it would defer
the adoption of additional requirements and parameters for such on-the-
ground measurement tests until the pre-auction process. As discussed
above, 5G Fund support recipients have the option of submitting either
on-the-ground test data or infrastructure information, on a state-by-
state basis. The Commission requires 5G Fund support recipients
submitting on-the-ground data to do so in accordance with the
parameters and specifications established in the BDC mobile
verification process and the BDC Data Specifications for Mobile Speed
Test Data. The Commission further requires that all such tests be taken
in an in-vehicle mobile environment only because, as more fully
explained herein, unlike for the BDC, 5G Fund support recipients must
demonstrate their compliance with the 5G Fund performance requirements
by submitting tests that are taken in an in-vehicle mobile environment
only. A 5G Fund support recipient must submit on-the-ground test data
for a sample of hex-9s within its supported area within a state. The
sample will be statistically appropriate and selected by Commission
staff. The use of hex-9s is a variation from the mobile verification
process, which uses a sample of hex-8s. Because eligible and supported
areas in the 5G Fund Phase I will be based on hex-9s, the Commission
adopts a methodology that relies on hex-9s instead of hex-8s. If the
number of supported hex-9s in a state is too small to sample a subset
of them, all hexagons may be selected in that area, or the small area
will be combined with other nearby area(s) where support has been
awarded, to the extent they exist for the support recipient, to create
a larger area that can be sampled.
114. The Commission also requires a 5G Fund support recipient's
cumulative on-the-ground test data within a sampled area to show that
at least 90% of its speed test measurements report 5G-NR service at
minimum download and upload speeds of at least 35/3 Mbps in an in-
vehicle environment, and that at least 90% of tests record latency of
100 milliseconds or less for each of the support recipient's interim
and final deployment milestones. The Commission notes this is a change
from the performance requirements adopted in the 5G Fund Report and
Order, which require 5G Fund support recipients to meet baseline
performance speed requirements of a median of 35 Mbps download and 3
Mbps upload, and with at least 90 percent of measurements recording
data transmission rates of not less than 7 Mbps download and 1 Mbps
upload. However, requiring 5G Fund support recipients to submit
cumulative test data showing that at least 90% of its speed test
measurements report 5G-NR service at minimum download and upload speeds
of at least 35/3 Mbps in an in-vehicle environment more closely aligns
with the requirements adopted for BDC reporting. The Commission
therefore amends section 54.1015(c)(1) of its rules, 47 CFR
54.1015(c)(1), in connection with aligning the methodologies for
demonstrating compliance with the 5G Fund interim and final deployment
milestones with those adopted for the BDC mobile verification process
to specify that 5G Fund support recipients must meet a minimum baseline
performance speed requirement of 35 Mbps download and 3 Mbps upload in
an in-vehicle environment, with at least 90 percent of measurements
recording these data transmission speeds. When conducting tests to
demonstrate compliance with its 5G Fund performance milestones, a 5G
Fund support recipient must record and submit at least two tests within
each of the selected hexagons where the time of the tests are at least
four hours apart, irrespective of date. However, if the 5G Fund support
recipient has, and submits with its speed tests, actual cell loading
data for the cell(s) covering the sampled hexagon showing that the
median loading, measured in 15-minute intervals, did not exceed the
BDC-modeled loading factor for the one-week period prior to the speed
test submission, then the 5G Fund support recipient must submit two
speed tests for the sampled hexagon, but without the restriction of
testing four hours apart. Further, the target of at least 35/3 Mbps
speed must be taken in an in-vehicle mobile environment. The Commission
emphasizes that 5G Fund support recipients must submit tests taken in
an in-vehicle mobile environment only, and recognizes that this
requirement differs from the BDC verification process, in which
providers must conduct on-the-ground speed tests for the technology (4G
and/or 5G) and environment (outdoor stationary or in-vehicle mobile)
listed within hexagons that require verification. Given that the
Commission is providing universal service support through the 5G Fund
for the deployment of 5G-NR service in rural areas, the Commission
concludes that requiring 5G Fund support recipients to submit tests
taken in an in-vehicle mobile environment only is appropriate, because
measuring 5G-NR service at speeds of at least 35/3 Mbps in an in-
vehicle environment reflects the most stringent and robust measurement
we are collecting from providers in the BDC and will help ensure that
rural areas receive service that is reasonably comparable to the
service offered in urban areas. For in-vehicle tests, 5G Fund support
recipients must conduct tests with the antenna located inside the
vehicle to replicate typical consumer behavior and ensure more
equivalent comparisons between the on-the-ground test data submitted by
support recipients and the typical consumer experience.
115. Identifying Areas for On-the-Ground Testing. In the 5G Fund
FNPRM, the Commission proposed to use a methodology for demonstrating
compliance with 5G Fund performance milestones that is similar to that
adopted for the BDC mobile verification process, except that 5G Fund
support recipients would be required to submit speed test data for all
supported areas, rather than a sample of areas, and the area would be
hex-9, rather than the hex-8 area used in BDC mobile verification
process. As discussed herein, if a support recipient chooses to submit
on-the-ground test data, it must do so for a sample of hex-9s. The
Commission received limited feedback in response to its proposal to
require on-the-ground testing in all supported areas. However, T-Mobile
argued that mandatory on-the-ground testing for all supported areas
could become ``prohibitively expensive and time consuming.'' The
Commission agrees and therefore require that tests conducted and
submitted for a sample of hex-9s within the supported area of a state.
However, the sampling methodology used in the BDC mobile verification
process may not translate well to demonstrating compliance with 5G Fund
performance milestones. In the BDC mobile verification process, a
verification inquiry can be conducted only when there is a ``credible
basis'' for believing the provider's coverage may
[[Page 101381]]
be inaccurate, while the basis for verifying coverage is different in
the 5G Fund context. Therefore, the Commission declines to adopt a
specific sampling methodology at this time and directs OEA, WTB, and
WCB to both establish the methodology that will be used by all 5G Fund
support recipients to demonstrate compliance with their 5G Fund
performance requirements and generate the sample of hex-9s for which
each 5G Fund recipient must submit on-the-ground data at the time of
its interim and final deployment milestones.
116. Infrastructure Data. In the 5G Fund FNPRM, the Commission
proposed to require 5G Fund support recipients to submit the same
infrastructure data required in the BDC mobile verification process to
substantiate coverage in the areas for which they receive 5G Fund
support. In the context of BDC mobile verifications, a provider must
submit additional information beyond what is submitted as part of its
biannual BDC availability data (propagation modeling details, as well
as link budget and clutter data), including cell-site and antenna data
for the targeted area. The Commission adopts this proposal, and require
5G Fund support recipients electing to substantiate their 5G Fund
milestones with infrastructure data to submit all of the infrastructure
data that providers submit as part of the BDC mobile verification
process for all cell sites and antennas that serve a 5G Fund
recipient's supported area. In its comments, Verizon asks the
Commission to specify how it will use infrastructure data to verify
compliance with the deployment obligations. Similar to BDC mobile
verifications, staff will use the infrastructure data to estimate a
``core coverage area,'' in which coverage at the modeled throughput is
highly likely to exist at or above the minimum values reported in the
provider's submitted coverage data. For any areas that are outside of
the ''core coverage area'' but within the required coverage area,
Commission staff will consider additional information submitted by the
5G Fund support recipient, such as on-the-ground test data, and may
request such data from the provider if not already submitted. If any
areas outside the core coverage area but within the required coverage
area are inaccessible, the Commission will consider whether
alternatives to on-the-ground drive testing data are appropriate to
validate coverage in such areas. To facilitate the process of
Commission staff review of a 5G Fund support recipient's data, the
Commission directs staff to notify the support recipient of any
additional requests for information, and the Commission amends section
54.1019 of its rules, 54 CFR 1019, to account for such case-by-case
information requests.
VII. Schedule for Transitioning From Mobile Legacy High-Cost Support to
5G Fund Support
117. Consistent with the strong consensus among commenters, the
Commission concludes that the phase down of mobile legacy high-cost
support will commence upon the release of a public notice announcing
the authorization of 5G Fund support, as more fully explained below. In
view of the provision in the Consolidated Appropriations Act of 2023,
Public Law 117-328, Div. E, Title VI section 624, 136 Stat. 4459, 4702,
requiring that any support mechanism that serves as an alternative to
Mobility Fund Phase II ``shall maintain existing high-cost support to
competitive eligible telecommunications carriers until support under
such mechanism commences,'' the Commission sought comment in the 5G
Fund FNPRM on a proposal to treat the release of the public notice
announcing the close of the 5G Fund Phase I auction to be the point at
which support under the 5G Fund ``commences.''
118. Many commenters maintain that the proposal suggested by the
Commission in the 5G Fund FNPRM is inconsistent with the language in
the Consolidated Appropriations Act of 2023. The Commission is
therefore persuaded that it should follow the recommendations of
commenters to commence the phase down of mobile legacy high-cost
support upon the release of a public notice announcing the
authorization of 5G Fund support.
119. Under this approach, the Commission will commence the two-year
phase down of mobile legacy high-cost support in all areas that are
ineligible for inclusion in the 5G Fund Phase I auction upon the
release of the first public notice announcing the authorization of
support in any eligible area. Similarly, the five-year phase down of
mobile legacy high-cost support for eligible areas that are not won in
the 5G Fund Phase I auction, where the carrier is a legacy support
recipient and receives the minimum level of sustainable support for the
area for which it receives support, will also commence upon the release
of the first public notice announcing the authorization of the award of
support in any eligible area. For eligible areas won in the 5G Fund
Phase I auction in which the winning bidder is also the legacy support
recipient for the area won, legacy support will cease and 5G Fund
support will commence after the release of the public notice announcing
the authorization of the award of support for that area. The Commission
recognizes that this may create an incentive for winning bidders to
delay prosecuting their long-form applications to the extent that the
legacy support they currently receive is greater than 5G Fund support.
Nonetheless, the Commission expects long-form applicants to
expeditiously complete their applications and respond in a timely
manner to staff requests for additional or missing information. For
eligible areas that are won in the 5G Fund Phase I auction in which the
legacy support carrier is not the winning bidder in the area, a two-
year phase down of mobile high-cost legacy support will ``commence''
after the release of the public notice announcing the authorization of
the award of support for that eligible area. Likewise, for eligible
areas not won in the 5G Fund Phase I auction where the carrier is a
legacy support recipient but does not receive the minimum level of
sustainable support for the area for which it receives support, a two-
year phase down of mobile high-cost legacy support will ``commence''
after the release of the first public notice announcing the
authorization of the award of support for any eligible area. As
explained above, areas in Puerto Rico and the U.S. Virgin Islands will
proceed on the same transition schedule to either 5G Fund support or a
two-year phase down of transitional support from the Bringing Puerto
Rico Together Fund and the Connect USVI Fund, whichever is applicable.
The Commission concludes that this approach complies with the text of
the Consolidated Appropriations Act of 2023. The following chart
summarizes the schedule the Commission adopts for transitioning from
mobile legacy high-cost support to 5G Fund support:
[[Page 101382]]
Transition Schedule for Legacy High-Cost Support to 5G Fund Support
----------------------------------------------------------------------------------------------------------------
Bidder or recipient
Area eligibility Auction result status Support type and timing
----------------------------------------------------------------------------------------------------------------
Ineligible................... ............................. ........................ Two-year phase down of
legacy support for all
ineligible areas
commences on the first
day of the month after
the release of the
first public notice
announcing the
authorization of 5G
Fund support in any
eligible area.
Eligible..................... Won in auction............... Carrier is the winning Legacy support ceases
bidder and is the and 5G Fund support
legacy support commences in an area on
recipient for the area the first day of the
it won. month after the release
of the public notice
announcing the
authorization of 5G
Fund support for that
area.
Eligible..................... Won in auction............... Carrier is a legacy Two-year phase down
support recipient but commences in an area on
is not the winning the first day of the
bidder in the area for month after the release
which it receives of the public notice
support. announcing the
authorization of 5G
Fund support in that
area.
Eligible..................... Not won in auction........... Carrier is a legacy Two-year phase down of
support recipient but legacy support
does not receive the commences on the first
minimum level of day of the month after
sustainable support for the release of the
the area for which it first public notice
receives support. announcing the
authorization of 5G
Fund support in any
eligible area won in
the auction.
Eligible..................... Not won in auction........... Carrier is a legacy Legacy support continues
support recipient and for no more than five
receives the minimum years and the phase
level of sustainable down of such support
support for the area commences on the first
for which it receives day of the month after
support. the release of the
first public notice
announcing the
authorization of 5G
Fund support in any
eligible area won in
the auction.
----------------------------------------------------------------------------------------------------------------
120. Consistent with the Commission's decision to include areas in
Puerto Rico and the U.S. Virgin Islands that meet the eligible areas
definition in the 5G Fund, these Territories will be subject to this
transition schedule. For areas in Puerto Rico and the U.S. Virgin
Islands, the transitional support being provided under the Transitional
Support Order is the ``mobile legacy high-cost support'' that will
transition to 5G Fund support or be subject to a two-year phase down
(whichever is applicable). Notwithstanding the schedule adopted in the
Transitional Support Order, the Commission will extend transitional
support beyond the 24-month period as needed to facilitate the phase
down schedule adopted herein and comply with the Consolidated
Appropriations Act of 2023. As noted herein, mobile wireless carriers
receiving transitional support in areas in Puerto Rico and the U.S.
Virgin Islands that are subject to phase down will receive support
amounts as specified in section 54.307(e)(5)-(7) of the Commission's
rules, 47 CFR 54.307(e)(5)-(7), and will be subject to the same public
interest obligations, performance requirements, reporting requirements,
and non-compliance mechanisms adopted for mobile legacy high-cost
support recipients specified in section 54.322 of the Commission's
rules, 47 CFR 54.322.
121. Other than the changes necessary to make its legacy support
transition schedule consistent with the language in the Consolidated
Appropriations Act of 2023, the Commission makes no other modifications
to the decisions adopted in the 5G Fund Report and Order regarding the
transition from mobile legacy high-cost support to 5G Fund support. The
Commission was clear in the 5G Fund Report and Order that ``the
continuation of legacy support is an interim measure'' as it
implemented its plans for the 5G Fund. The Commission therefore
declines to accept any of the alternatives to the Commission's long-
standing plan to phase down mobile legacy high-cost support suggested
by commenters. Those alternative approaches are contrary to the
Commission's more than decade-old goal of reforming high-cost support
and closing the digital divide, as well as the steps the Commission has
taken to ensure the efficiency and good stewardship of its limited
universal service fund dollars. As the Commission previously determined
in the 5G Fund Report and Order, in an area where the legacy support
provider becomes the winning bidder for 5G Fund support, if it
``defaults on its bid prior to authorization, or otherwise fails to be
authorized, [the Commission] will not award 5G Fund support for that
area. However, to avoid perverse incentives, consistent with [the
Commission's] decision to maintain support to preserve service only in
areas that lack a winning bid, a carrier receiving legacy support in
the area of its winning bid will not receive preservation-of-service
support and will instead be subject to phase down if not authorized to
receive 5G Fund support.'' As explained by the Commission in 2020, and
as addressed herein in the Commission's discussion of the 5G Fund
budget, ``the Commission's experience awarding support via competitive
bidding has shown it to be an effective use of ratepayer funds and none
of these commenters has convinced us that departing from that approach
is warranted.''
122. Consistent with the Commission's decision that the phase down
of mobile legacy high-cost support will commence upon the release of a
public notice announcing the authorization of 5G Fund support, as well
as Congress's language in the Consolidated Appropriations Act of 2023,
the Commission dismisses CRWC's Petition for Reconsideration as moot to
the extent that its arguments concern the transition schedule for
mobile legacy high-cost support. Additionally, for the same reasons
expressed herein, the Commission denies the Petition for
Reconsideration filed by SBI to the extent that it requests that the
Commission reconsider the five-year phase down of mobile legacy high
cost support for a carrier receiving the minimum sustainable level of
support in an area that is eligible for 5G Fund support, but is not the
winning bidder for that area. This request for reconsideration
conflicts with the Commission's plan to reform high-cost support and
Congress's intention for the Commission to transition to a more modern
support mechanism.
VIII. Certification of Notice of 5G Fund Phase I Auction Requirements
and Procedures
123. Consistent with the approach taken in its recent spectrum
auctions, the Commission requires any applicant seeking to participate
in the 5G Fund Phase I auction to certify, under penalty of perjury, in
its short-form application that the applicant has read the public
notice adopting procedures for the auction and that it has familiarized
itself both with the auction procedures and with the requirements,
terms, and conditions associated with the receipt of 5G Fund support.
This certification helps ensure that an applicant educates itself about
the procedures for auction participation and that, prior to submitting
a short-form application, the applicant understands its obligation to
stay abreast of relevant, forthcoming information. While this
certification
[[Page 101383]]
refers to information regarding auction procedures and the
requirements, terms, and conditions associated with the receipt of 5G
Fund support that is available at the time of certification, potential
auction applicants are on notice from the time the auction procedures
are adopted that their educational efforts must continue even after
their short-form applications are filed. As with other certifications
required in the short-form application, an applicant's failure to make
this required certification in its short-form application by the
applicable filing deadline will render its application unacceptable for
filing, and its application will be dismissed with prejudice.
124. As noted in the 5G Fund FNPRM, the Commission has a
longstanding policy that expressly places a burden upon each auction
applicant to be thoroughly familiar with the procedures, terms, and
conditions contained in the relevant auction procedures public notice
and any future public notices that may be released in the auction
proceeding. Both the Commission and OEA, in conjunction with WTB and
the Media Bureau, have reinforced this policy in recent spectrum
auctions by adopting a requirement that each auction participant
certify, under penalty of perjury, that it has read the Procedures
Public Notice for the applicable auction, and that it has familiarized
itself with the auction procedures and with the requirements related to
the licenses made available for bidding. In adopting this certification
requirement for prior auctions, the Commission noted that it was
intended to bolster applicants' efforts to educate themselves to the
greatest extent possible about the procedures for auction participation
and to ensure that, prior to submitting their short-form applications,
applicants understood their obligation to stay abreast of relevant,
forthcoming information. The Commission and OEA reasoned in the context
of spectrum auctions that familiarity with the Commission's rules and
procedures governing the auctions would help bidders avoid the
consequences to them associated with defaults, which also cause harm to
other applicants and the public by reducing the efficiency of the
auction process and reducing the likelihood that the license or
construction permit will be assigned to the bidder that values it the
most. Moreover, the Commission has also previously expressed in the
context of spectrum auctions that the certification requirement will
help ensure that an ``auction applicant . . . has investigated and
evaluated those technical and marketplace factors that may have a
bearing on its potential use of any licenses won at auction.''
125. All commenters that address this certification requirement
support it. The Commission concludes that applicants for universal
service support in the 5G Fund Phase I auction will benefit from this
certification because, as with spectrum auctions, familiarity with the
rules and procedures governing the 5G Fund Phase I auction could help
bidders avoid the consequences to them associated with defaults, which
in turn harms other applicants and the public by reducing the
efficiency of the auction process and potentially stranding areas
without 5G mobile service. The Commission further concludes that such a
certification will promote the integrity of, and public confidence in,
the Commission's auction processes, as well as help ensure that
recipients of 5G Fund Phase I support are aware of and better prepared
to comply with their public interest obligations and performance
requirements. For these reasons, the Commission will require each 5G
Fund Phase I auction applicant to make the following certification,
under penalty of perjury, in its short-form application:
that the applicant has read the public notice adopting procedures for
the 5G Fund Phase I auction, and that it has familiarized itself with
those procedures and any requirements, terms, and conditions associated
with receipt of 5G Fund support.
IX. Cybersecurity and Supply Chain Risk Management
126. The Commission requires 5G Fund support recipients to
implement both an operational cybersecurity risk management plan and a
supply chain risk management plan as a condition of receiving 5G Fund
support, as discussed in the 5G Fund FNPRM.
127. Cybersecurity Risk Management. Consistent with the Enhanced
Alternative-Connect America Cost Model (Enhanced A-CAM) and BEAD
programs, 5G Fund support recipients' cybersecurity risk man
[…truncated; see source link]Indexed from Federal Register on December 13, 2024.
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