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Gordon Smith: Can a 5G Fund Connect Rural America at 21st Century Speeds?

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Photo of Gordon Smith, CEO of Sagent, provided by the author

Last month, Federal Communications Chairman Ajit Pai announced a new plan to allocate $9 billion toward deploying 5G wireless in America’s rural areas. From these funds, $1 billion would be earmarked for precision agriculture.

The 10-figure sum is impressive, but it’s not all new money. Pai would repurpose $4.5 billion already allocated for a rural 4G build-out. The actual investment boost amounts to about $450 million per year.

The funding targets and the program details are, however, subject to change, especially as public comments roll in. Nonetheless, telecommunications companies, resellers, and consumers are eager to move forward.

The question is whether this plan can overcome the problems of previous rural connectivity initiatives. The failings of the Mobility Fund for 4G was the topic of an FCC report unveiled alongside Pai’s 5G announcement. This study confirmed what many rural leaders and residents have been saying—that they haven’t received as much improvement in mobile access as they’d been told.

The problem and promise of rural connectivity

Rural telecommunications access is an enduring issue. After almost a century of investment in universal service, the U.S. has not managed to bring telephone, let alone data, to all households. As late as 2018, 8 million adults and 2.4 million children lived where no telephone service—landline or mobile—was available.

This represents a severe impairment in today’s increasingly digital economy, as do the limited, dial-up speeds provided to approximately 35 percent of rural Americans. Against this backdrop, cell service offers great hope. Just like developing countries expect to “leapfrog” landlines to deploy advanced wireless technologies in their stead, rural America desperately wants to put its faith in 5G.

The promise here is difficult to overstate. Precision agriculture alone—leveraging remote sensors, GPS, self-driving farm equipment, and so on—could radically reduce wasted seed, fertilizer, and fuel while increasing yields.  This is how the breadbasket of the world will help feed a burgeoning population.

Equally important would be gains in education. Digital technologies can bring advanced courses and targeted services, from interactive computer programming classes to special needs counseling, to remote schools that struggle to support the specialized staff.

Better connectivity would also accelerate small towns’ economic development and reduce the need for domestic migration to large cities, as businesses take advantage of the often-underutilized labor pool and lower costs when bringing jobs to these “forgotten” areas. And the benefits would extend to aging local populations, with telehealth to complement traditional medicine and online interactions to combat social isolation.

Unfortunately, the leap to 5G is not as simple as it may sound. The Mobility Fund to implement 4G was plagued by problems. An FCC report found rampant overstatement of access improvements and connectivity speeds delivered under Phase I. Even as the U.S. looks to replace Mobility Fund Phase II with a 5G Fund, there are technical and policy challenges that could, if not properly accounted for, exacerbate issues with federal broadband investment.

Questions about the FCC’s new direction

There are any number of details to be finalized, but the following represent four critical questions, which can help determine if the FCC plan comprises a viable solution for our rural areas.

#1 Will leapfrogging work?

First off, is it feasible to skip 4G and LTE? Some say not. Various state-level leaders consider the abandonment of 4G plans a “slap in the face” to their communities. They bemoan the likely delay of implementing even basic mobile connectivity in severely underserved communities. Furthermore, focusing on 5G could undermine the ultimate goal of connecting rural areas if the technology and implementation are not up to the specific challenges in these geographies.

In reality, 5G adds new technical issues. Its extreme line-of-sight limitations will be felt in urban areas and cannot be avoided in the hollers of Appalachia or well-forested parts of Idaho. Also important is range. 4G carries about 10 miles, 5G about 1,000 feet, at least at the frequency band the three largest US carriers are building. The requisite stations for 5G are not as large or as power hungry, but they would still need to be deployed across nearly three-quarters of the nation’s landmass representing our rural areas—about 1.75 billion acres. That makes a $9 billion investment look awfully inadequate.

One might argue that a complement of technologies would do a better job of rapidly meeting rural residents’ needs. This might mean using 4G and LTE for remote residential coverage and initially concentrating 5G in small towns where businesses and people congregate. Such alternatives to an “all 5G” approach deserve to be explored.

#2 Is the fiber foundation adequate?

More so even than 4G LTE, 5G demands fiber. South Korea has a lot of it, and the country was able to reach 2 million 5G users within four months. In the U.S., on the other hand, those 5G-enabled football stadiums we keep hearing about still aren’t performing reliably.

A 2017 Deloitte study estimated that building a robust fiber network across the U.S. would cost about $80 billion. Private investment is unlikely to address the needs in rural areas, at least in the near-term, without more government support but will it be forthcoming? Due to this issue, various organizations, such as the Electronic Frontier Foundation, may continue to argue for last-mile fiber to the home as the more important step forward.

#3 How will maintenance be handled—and funded?

Another consideration, it is not only more difficult and expensive to build telecommunications capabilities in frontier regions, maintaining and repairing these networks is also very costly. When a single truck roll might comprise a hundred-mile journey or more, the combination of transportation costs and field technician time rapidly add up—frequently to more than the served population supports with their monthly bills.

It will be relatively useless to deploy 5G across rural America without plans for maintaining the networks over the long-term. This will likely require public investment along with industry innovations in the areas of monitoring and maintenance optimization. Powerful tools that tap business intelligence and data analytics, machine learning, and eventually AI will be critical in spreading available dollars further while maximizing uptime in rural cell service.

#4 Can oversight be improved?

Oversight is another important question, especially after revelations about the Mobility Fund Phase I’s shortcomings. Resellers, consumers, and taxpayers have every reason to demand increased transparency and accountability.

Telecommunications companies will, of course, want to see flexibility in the metrics targets for which they will be held accountable, their reporting responsibilities, and the government’s enforcement mechanisms. The FCC will most certainly be receiving comments about carriers’ needs to respond to actualities on the ground and ensure administrative concerns do not drain funds from actual 5G deployment. Telecoms will also be highlighting the many failures in reporting protocols that contributed to inaccuracies in Mobility Fund assessments.

Next Steps

The public comment period doesn’t close until April 30, so there is little choice but to take a wait-and-see attitude for now. But America’s global competiveness is on the line, so it would behoove industry experts and consumers alike to weigh in on the 5G Fund. Only with diverse insights from across the country can the FCC shape smart policy to cost-efficiently build what our rural communities need to survive and thrive—world-class broadband.

About the author:

Gordon Smith is the President and CEO of Sagent, where he has developed customer programs, built industry partnerships and expanded service offerings for telecom carrier and cable MSO networks. Prior to joining Sagent, Smith was vice president of services at Tempest Telecom Solutions. He is a licensed professional engineer and holds a master’s degree in business administration from Goizueta Business School at Emory University, as well as a bachelor’s degree in civil engineering from the University of Waterloo in Canada. 

BroadbandBreakfast.com accepts commentary from informed observers of the broadband scene. Please send pieces to commentary@broadbandcensus.com. The views reflected in Expert Opinion pieces do not necessarily reflect the views of BroadbandBreakfast.com and Breakfast Media LLC.

Broadband Breakfast is a decade-old news organization based in Washington that is building a community of interest around broadband policy and internet technology, with a particular focus on better broadband infrastructure, the politics of privacy and the regulation of social media. Learn more about Broadband Breakfast.

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Industry Praises FCC Proposal to Revamp the 5G Rural Fund

The FCC proposed adjusting the $9-billion budget allocated for the fund using updated maps

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Photo of FCC Commissioner Nathan Simington by Bonnie Cash from the Hill

WASHINGTON, September 26, 2023 – Industry associations are praising a proposal from the Federal Communications Commission Thursday to review coverage areas based on updated commission maps so that the 5G Fund can reach more communities without the wireless technology.

Thursday’s vote proposes to help dictate the eligibility requirements for areas in need of support of the 5G Rural Fund for America.

The commission proposed adjusting the $9-billion budget allocated for the 5G Fund, the optimal methodology for consolidating eligible areas into smaller geographic regions for bidding, the feasibility to extend 5G Fund support to qualifying regions in Puerto Rico and the U.S. Virgin Islands, possibly mandating cybersecurity and supply chain risk management plans for 5G Fund recipients, and the possibility of whether the 5G Fund should be utilized to encourage the deployment of Open Radio Access Networks.

“What this means is that as we develop the 5G Fund and build the successor to our existing universal service program supporting wireless networks in rural America, known as the Mobility Fund, we will be able to incorporate this detailed picture of where service is and is not,” FCC Chairwoman Jessica Rosenworcel said. “We will be able to see gaps in coverage and ensure support actually reaches the communities that need it most.”

Meredith Attwell Baker, president and CEO of industry association CTIA, praised the commission’s decision “for recognizing the crucial role that mobile wireless services play in keeping Americans connected.”

“Implementing the 5G Fund and using the FCC’s new maps will help extend the benefits of advanced 5G services to more communities and consumers,” she said.

Tim Donovan, president and CEO of the Competitive Carriers Association, also praised the decision, saying the 5G Fund “has been a top priority for CCA, and we will continue to work with the Commission and our members to ensure the final rules preserve and expand mobile broadband access to every American.”

The commission also adopted Thursday new regulations to expedite space applications, the availability of spectrum resources for space launches, old rules to combat robocallers, and handed down over $100 million in fines.

FCC space and spectrum allocations

The FCC unanimously ratified the Expediting Initial Processing of Satellite and Earth State Applications Space Innovation, which is the adoption of new rules to expedite its processing of space and earth station applications.

It also unanimously ratified new rules ensuring that commercial space launches have the necessary spectrum resources for reliable communication. These adoptions will “promote safety, competition, innovation, and continued American leadership in the new Space Age,” the agency said. The new rules will also provide an allocation within the 2025 to 2110 MHz band for ground-to-launch vehicle telecommand which is needed for space launch operations, and make “the entire 2200 to 2290 MHz band available for launch telemetry.”

“I believe that the most important part of streamlining the FCC’s application processing procedures is ensuring swift and efficient FCC action—which will maintain U.S. leadership in the satellite communications service industry. It will also nurture the growth of the broader space sector, which includes new and innovative manufacturing processes, robotics, earth surveillance and exploration and other future innovations,” Commissioner Nathan Simington said.

Robocallers losing access to phone numbers

The FCC also voted in favor of adopting rules that would modernize the commission’s requirements on how Voice over Internet Protocol providers get direct access to telephone numbers.

The adoption sets in motion parameters to limit access to “phone numbers by perpetrators of illegal robocalls, protect national security and law enforcement, safeguard the nation’s finite numbering resources, reduce the opportunity for regulatory arbitrage, and further promote public safety.”

In line with the Telephone Robocall Abuse Criminal Enforcement and Deterrence (TRACED) Act, the new rules will require applicants to submit additional disclosures and certifications in regard to their “ownership structures and compliance with the Commission’s rules and state law and takes targeted steps to address the concerns” that were raised in the rulemaking.

These rules consist of making robocall-related certifications that will help ensure compliance with the commission’s rules targeting illegal robocalls; to keep and disclose current information about ownership, including foreign ownership, that will alleviate the risk of providing violators abroad with access to U.S. numbering resources; guarantee their compliance with other commission rules that are applicable to interconnected VoIP providers including particular public safety and access stimulation rules, and requirements to submit timely FCC Forms 477 and 499 filings; and compliance with state laws and registration requirements that apply to businesses in each state where numbers are requested.

FCC fines Dorsher Enterprise $116 million

The FCC additionally adopted a $116,156,250 fine against the Dorsher Enterprise, a group consisting of Thomas Dorsher, ChariTel, OnTel, and ScammerBlaster.

The Commission’s investigation revealed that the group promoted themselves as a crusade fighting against scam robocalls at the same “illegally robocalling toll free numbers” and used credits from their scam “to fund telephony denial of service (TDoS) attacks on other entities.”

The parties in the group, which allegedly made nearly 10 million robocalls to generate toll free dialing fees, are jointly liable for the fine.

“Dorsher’s claim that he was actually trying to ‘shut down scammers’ is meritless in the face of these facts,” Commissioner Geoffrey Starks said. “As I have said repeatedly, there are numerous hurdles to finding these bad actors, and bringing them to account for violations of our rules. I am pleased to see another example of how, by working together, we can untangle these schemes and protect consumers.”

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Rural Mobile Providers Push FCC to Alter 5G Fund Model

If carrier receiving legacy federal funds lose at auction, they could leave areas ‘stranded,’ providers say.

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Screenshot of Carri Bennet, RWA's general counsel

WASHINGTON, September 14, 2023 – Rural mobile providers are urging the Federal Communications Commission to consider an alternative to the reverse auction funding model the agency proposed for a future 5G fund.

The fund has been in limbo since 2020 due to mapping issues. It makes $9 billion available for 5G mobile broadband infrastructure in areas unlikely to be served without subsidies.

With access to newer, granular data on mobile broadband coverage in the U.S., the FCC released on August 31 a notice proposing updates to the program’s methodologies for defining areas eligible for funding and seeking comment on potential new provisions like extending support to Puerto Rico and the Virgin Islands. The proposal is slated to be discussed at the agency’s open meeting on September 21. 

Ahead of that discussion, the Rural Wireless Association has met with FCC officials five times in the last month to reiterate the same concerns over the program’s reverse auction model. Under this procedure, providers would compete to develop the cheapest cost structure for serving an area with the minimum required speeds – at least 35 Mbps upload and 3 Mbps download in the case of the 5G Fund.

Rural providers are concerned because some areas served by carriers receiving support from legacy funding programs like the Mobility Fund will be eligible for auction. If those carriers lose at auction, the RWA says, the reduction in federal funds might make them unable to continue operating their infrastructure and leave other areas covered by their networks without service.

“There is no ‘safety valve’ put in place that would protect these networks built with federal dollars and maintained by legacy support mobile carriers,” the association wrote in an ex parte filing on Wednesday.

The RWA has proposed the commission seek comment on allowing these providers to opt out of the reverse auction if they are an area’s sole mobile carrier. In such a scenario, the group also wants the FCC to consider subsidizing 5G upgrades based on predicted costs.

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CTIA Report Says 5G Available in 54% of U.S., 35% of Korea and 27% of China

The wireless association says 5G will add $1.5 trillion in GDP and 4.5 million in new jobs over 10 years.

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Illustration from CTIA–The Wireless Association

WASHINGTON, July 14, 2023 – A report by wireless trade association CTIA showed that the United States is making strides towards 5G development, and that the wireless standard is expected to add $1.5 trillion in GDP and 4.5 million of new jobs over the next decade.

Breaking the benefit down by geography, the study showed that 5G has contributed $139 billion to GDP growth in New York City, $65 billion to the Seattle area, $43 billion to Dallas, and $20 billion to San Diego.

The United States has emerged as a frontrunner among its global counterparts in terms of 5G availability, according to CTIA, with 54% coverage. This percentage appears to position it ahead of South Korea by nearly 20 percentage points, while surpassing China’s rate of 27% and more than three times the United Kingdom’s rate of 17%.

The report draws upon a 2021 study by BCG, 5G Promises Massive Job and GDP Growth in the U.S., February 2021, and supplements additional numbers sourced to prior CTIA reports. The trade group attributed the $275 billion of investment by service providers on infrastructure buildouts and enhancement. About $35 billion was spent in  2021.

5G’s faster deployment rate, increased consumer adoption, and superior performance compared to its 4G predecessor make it a key player in bridging the digital divide and mitigating climate change and strengthening national security, CTIA said.

Despite the progress made, the report reiterated the need to obtain more licensed mid-band spectrum to enable network expansion.

“This required a coordinated effort, starting with Congress re-establishing the Federal Communications Commission’s auction authority and auction pipeline,” urged the report.

The commission’s authority to license spectrum has expired in March and has not been renewed.

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