The FCC has adopted a Report and Order that provides $100 million for rural broadband experiments. In addition to expanding broadband service into unserved areas and providing data on current technology transitions, the rural broadband experiments are expected to inform the FCC on how it should structure Phase II of the Connect America Fund (CAF), including how it should shape the Phase II competitive bidding process that will be used to distribute funding in areas where price-cap carriers decline support. The FCC will use a reverse auction to distribute funding for rural broadband experiments. Applicants will compete for funds on a nation-wide basis, with support going to projects that are the most cost effective. To ensure diverse experiments, project sizes will be capped, while entities serving Tribal lands will be eligible for a 25 percent bidding credit. According to the FCC’s News Release, up to $100 million will be available for the experiments, which will be divided into three groups as follows:
- $75 million to test construction of networks offering service plans providing 25 Mbps downloads and 5 Mbps uploads – far in excess of the current Connect America Fund standard of 4/1 – for the same or lower amounts of support than will be offered to carriers in Phase II of the CAF.
- $15 million to test interest in delivering service at 10/1 speeds in high cost areas.
- $10 million for 10/1 service in areas that are extremely costly to serve.
Final applications for rural broadband experiments are due 90 days after release of the FCC’s Report and Order. The FCC expects that the selection process will occur before the end of 2014.
