FCC gives ISPs another $563 million to build rural-broadband networks

More than 220,000 unserved rural homes and businesses in 24 states will get broadband access because of funding authorized yesterday by the Federal Communications Commission, the agency said. In all, the FCC authorized more than $563 million for distribution to ISPs over the next decade. It's the latest payout from the commission's Connect America Fund, which was created in 2011. Under program rules, ISPs that receive funding must build out to 40 percent of the required homes and businesses within three years and an additional 20 percent each year until completing the buildout at the end of the sixth year. The money is being distributed primarily to smaller ISPs in Alabama, Arkansas, California, Colorado, Delaware, Illinois, Indiana, Iowa, Kansas, Kentucky, Maryland, Michigan, Minnesota, Mississippi, Missouri, Nebraska, Nevada, New York, North Carolina, North Dakota, Ohio, Oklahoma, Texas, and Virginia. Verizon, which is getting $18.5 million to serve 7,767 homes and businesses in New York, is the biggest home Internet provider on the list. Funding in 23 states was described in one FCC announcement, and the New York funding was detailed in a separate announcement. Winning bidders were chosen in a reverse auction in which ISPs bid for funding in exchange for offering service at different speeds. The ISPs are required to "offer service at rates reasonably comparable to rates in urban areas." All the ISPs committed to provide speeds of at least 25Mbps downstream and 3Mbps upstream, but many of the funded projects are for higher speeds of 100Mbps/20Mbps or 1Gbps/500Mbps. Speeds promised by each ISP are detailed in the two announcements.

More broadband money on the way

The funding announced yesterday is just one of several distributions resulting from last year's auction. The FCC explained:

In total, the auction last fall allocated $1.488 billion in support to expand broadband to more than 700,000 unserved rural homes and small businesses over the next 10 years. The FCC has already authorized two waves of funding in May and June, and funds from those first two waves are expanding connectivity to nearly 100,000 homes and businesses that lack service. Today's action brings total authorized funding to nearly $803 million, or over half of the $1.488 billion allocated through the auction, expanding connectivity to 305,518 homes and businesses. In the coming months, the FCC will be authorizing additional funding as it approves remaining applications of the winning bidders from the auction.

The Connect America Fund is part of the FCC's Universal Service Fund, which is paid for by Americans through fees on their phone bills. Pai recently proposed a new budget cap on the Universal Service Fund, which could prevent expansion of Lifeline subsidies for low-income Americans. He's also proposing to replace the Connect America Fund with a similar program that would spend $20.4 billion to connect up to four million rural homes and small businesses over the next 10 years, but the replacement program would not affect any broadband projects that have already been approved.

Millions still lack broadband access

Pai has repeatedly claimed that his net neutrality repeal and other deregulatory policies are speeding up broadband deployment. But in reality, deployment has continued at about the same rate seen during the Obama administration and has been helped along by government funding and an AT&T fiber deployment that was required by the Obama-era FCC. The FCC's latest numbers suggest that 21.3 million Americans lack access to fixed broadband with speeds of at least 25Mbps down and 3Mbps up. But the true number without broadband access may be much higher, as a Microsoft analysis found that 162.8 million Americans do not use the Internet at broadband speeds. The discrepancy is likely due to several factors, including ISPs not delivering promised speeds, ISPs charging prices too high for poor people to afford, and problems in FCC data that exaggerate deployment levels. After many complaints about FCC data, Pai has proposed a new mapping initiative that could show a more accurate picture of US broadband deployment.