10m rural Americans to receive high-speed broadband following FCC auction

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The Federal Communications Commission (FCC) has released the results of its Rural Digital Opportunity Fund Phase I auction.

The auction formed part of a broader effort by the FCC to close the digital divide in rural America and focus limited universal service funds on unserved areas that most need support. The results showed that bidders won funding to deploy high-speed broadband to more than 5.2 million unserved homes and businesses, almost 99 per cent of the locations available.  Moreover, around 85 per cent will receive gigabit-speed broadband.  

CCO Holdings, LLC (Charter Communications) was assigned the most locations, at around 1.05 million.  A total of 180 bidders won auction support, to be distributed over the next 10 years. A broad range of providers successfully competed in the Phase I auction, including cable operators, electric cooperatives, incumbent telephone companies, satellite companies, and fixed wireless providers.  

The other benefit of the auction, said the FCC, was that it unleashed robust price competition that resulted in more locations being awarded at less cost to Americans who pay into the Universal Service Fund.  The 5,220,833 locations assigned support had an initial reserve price of $26bn over the next decade; through vigorous competition among bidders, the final price tag to cover these locations is now just north of $9bn.

FCC Chairman Ajit Pai said: ‘I’m thrilled with the incredible success of this auction, which brings welcome news to millions of unconnected rural Americans who for too long have been on the wrong side of the digital divide. This auction was the single largest step ever taken to bridge the digital divide and is another key success for the commission in its ongoing commitment to universal service. I thank our staff for working so hard and so long to get this auction done on time, particularly during the pandemic.’

Providers must meet periodic buildout requirements that will require them to reach all assigned locations by the end of the sixth year. 

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