Parts of FCC's 5G Fund Order Emerging, but Questions Remain

The 5G Fund order that FCC Chairwoman Jessica Rosenworcel circulated last week (see 2403200071) is expected to have several gaps that will need addressing with a Further NPRM on a tribal reserve but also through auction public notices, industry officials said. One question that needs answering is how to define open radio access networks, slated to get up to 10% of the $9 billion to be awarded.

An auction likely won’t occur for months with PNs needed to settle the details, officials said. Much depends on the mapping that the FCC will use. In a win for rural advocates, this is just Phase 1 so total spending will exceed the $9 billion. As this is a reverse auction, it doesn’t fall under the FCC’s auction authority, which lapsed a year ago. That means an auction can occur regardless of whether Congress restores auction authority, officials said.

A few additional details are starting to emerge as FCC officials update industry on the order. But the draft is not expected to be made public because the FCC doesn’t release text on non-meeting items until they’re approved, unlike orders and notices voted at open meetings.

“There’s still going to be a lot of devil in the details” including on timing, Rural Wireless Association General Counsel Carri Bennet told us. RWA doesn’t want a 5G auction until broadband access, equity and deployment program funding is released because BEAD money is likely to be used to build fiber-supported towers, she said. The “interplay” between BEAD and the 5G Fund is “really critical,” she said. CTIA has raised similar concerns.

“There’s still a lot to do,” Bennet said. “They want us to challenge areas’ overstated coverage -- that’s a very expensive task to undertake,” she said: “We know that all the challenges and the data will have to be done 30 days before the auction starts, minimum. For us to go out and challenge today” is difficult “if this auction isn’t going to take place for a year or more -- everything can change.”

“It is always tricky to time an auction, but you have to think about it in terms of whether the bidders know what will be critical information,” emailed New Street’s Blair Levin. “Certainly, there is a need for a mobility fund, just as there was when the National Broadband Plan proposed it,” he said. Levin led FCC efforts to write that plan 15 years ago.

The FCC’s news release makes the point that broadband maps were “drastically” improved because of the challenge process, said Public Knowledge Senior Vice President Harold Feld. “This is true, but we still have challenges and there are still concerns about carriers inflating their coverage,” Feld said: The previous mobility fund “was famously plagued with fraudulent coverage maps, but no one suffered any consequences, other than the people who remained unserved.”

Feld said he’s watching to see how the order addresses the maps' accuracy. Will it assume that maps “are sufficiently accurate thanks to the challenge processes already used, or will there be additional safeguards to prevent inflated coverage areas?” he asked. Another question is whether the rules will include “clear punishments for carriers that deliberately or recklessly inflate their numbers,” he said.

As is the case with all rural subsidy programs, “the main concern is finding the point at which the potentially extreme cost of the marginal 5G build out exceeds the benefits it delivers,” said Joe Kane, Information Technology and Innovation Foundation director-broadband and spectrum policy. The 5G penetration rate in the U.S. is already very high -- more than 93% as of 2021, he said. “We shouldn't simply spend more and more until we hit 100%,” Kane added.

"At the end of the day, the FCC has to set a date for the cutoff of the auction and provide certainty,” said Cooley’s Robert McDowell, a former commissioner. The agency “can't please everyone. But the door should be left open a little to allow for unexpected and compelling circumstances."