Senate Bill Would Divert Auction Revenues to Rural Broadband

Senate Communications Subcommittee Chairman John Thune (R-SD) yesterday introduced the “Rural Connectivity Advancement Program Act’’ (RCAP), a bill that would take 10 percent of net proceeds from FCC spectrum auctions and apply them toward building broadband service in unserved rural areas. Through Sept. 30, 2022, the act would divert auction revenue to a new Rural Broadband Assessment and Deployment (RBAD) Fund.

“The coronavirus pandemic has highlighted the need to ensure that we provide rural areas, not just in South Dakota, but throughout the entire United States, with reliable broadband connectivity,” Thune (pictured} said in a statement. “My bill would take an important step toward the goal of closing the digital divide and does so in a responsible manner.”

The bill tasks the FCC with distributing RBAD funds in a “technology-neutral manner” and through a “competitive process” such as a future reverse auction. The bill calls for “weighting preferences for performance quality” during the auction, similar to the gigabit and latencies preferences the FCC has written into the current Rural Digital Opportunities Fund (RDOF) rules.

Thune, during a confirmation hearing for the re-nomination of FCC Commissioner Michael O’Rielly earlier this week, raised the idea of using spectrum auction revenues to fund rural broadband. O’Rielly responded that the timing and expected revenue from spectrum auctions “can be a little bit unpredictable.” However, he favored the bill’s goal of “additional funding for building out broadband services to millions of Americans. Absolutely.”

The FCC has scheduled July 23 as the start date for the Citizens Broadband Radio Service (CBRS) auction for priority access to frequencies in the 3.5 GHz band. It is not clear whether revenues from that auction would apply to RBAD should the Thune bill pass. An auction for 3.7 GHz “C-band” spectrum is set for Dec. 8. Both CBRS and C-band auctions are likely to attract a large amount of attention from those building 5G wireless networks, fixed broadband and internet of things technologies.

The RCAP proposal has attracted positive industry reaction. “NTCA wholeheartedly endorses this legislation and thanks Senator Thune for his leadership on this bill. For years, he has been one of the strongest proponents in Washington for ensuring that every American has access to the communications services necessary for online commerce, remote education, telehealth, and civic engagement in today’s world,” said NTCA CEO Shirley Bloomfield following Thune’s announcement.

CTIA, represents wireless companies likely to participate in future spectrum auctions. Kelly Cole, its senior VP, Government Affairs. said the bill “recognizes the importance of ensuring all Americans have access to broadband, especially those in rural areas, and seeks to provide the necessary resources to close the digital divide.”