The FCC released the results of the Rural Digital Opportunity Fund auction, which show that bidders won funding to deploy high-speed broadband to over 5.2 million unserved homes and businesses, almost 99 percent of the locations available in the auction. Moreover, 99.7 percent of these locations will be receiving broadband with speeds of at least 100/20 Mbps, with an overwhelming majority (over 85 percent) getting gigabit-speed broadband. CCO Holdings, LLC (Charter Communications) was assigned the most locations, just over 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. And the FCC’s structuring of the reverse auction yielded significant savings, as competitive bidding among over 300 providers yielded an allocation of $9.2 billion in support out of the $16 billion set aside for Phase I of the auction. Importantly, the $6.8 billion in potential Phase I support that was not allocated will be rolled over into the future Phase II auction, which now can draw upon a budget of up to $11.2 billion in targeting partially-served areas (and the few unserved areas that did not receive funding through Phase I).
FCC Chairman Ajit Pai said, “We structured this innovative and groundbreaking auction to be technologically neutral and to prioritize bids for high-speed, low-latency offerings. We aimed for maximum leverage of taxpayer dollars and for networks that would meet consumers’ increasing broadband needs, and the results show that our strategy worked. 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.”
The auction used a multi-round, descending clock auction format in which bidders indicated in each round whether they would commit to provide service to an area at a given performance tier and latency at the current round’s support amount. The auction was technologically neutral and open to new providers, and bidding procedures prioritized bids for higher speeds and lower latency.
The auction 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 in the auction had an initial reserve price of over $26 billion over the next decade; through vigorous competition among bidders, the final price tag to cover these locations is now just over $9 billion, with the vast majority of locations receiving gigabit broadband—far above the 25/3 Mbps minimum level of service that providers could bid on in the auction.
Providers must meet periodic buildout requirements that will require them to reach all assigned locations by the end of the sixth year. They are incentivized to build out to all locations as fast as possible.
The Rural Digital Opportunity Fund Phase I auction is 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. In October 2020, the Commission adopted rules creating the 5G Fund for Rural America, which will distribute up to $9 billion over the next decade to bring 5G wireless broadband connectivity to unserved areas in rural America.
More information on the Rural Digital Opportunity Fund Phase I auction is available at https://www.fcc.gov/auction/904, including complete auction results and a map of winning bids.
The United States was once a worldwide leader in telecom network hardware. Companies like Lucent and Motorola led the world in the design and manufacture of telecom equipment, from the radio antennas to the core. Unfortunately, however, American leadership in this market disappeared over time. While many factors were at work, American telecom carriers were eventually left without a reasonable domestic option.
The timing could not have been worse, because the Chinese government’s Made in China 2025 strategy decisively tilted the playing field in favor of its own telecom equipment manufacturers. Chinese government support artificially lowered Huawei and ZTE’s prices, assisted in their research and product development, and undercut international competition. This was not free-market competition, but part of a strategy to turn economic power into geopolitical dominance. Through this unfair advantage, the equipment produced by these companies has become pervasive around the world, and even reaches U.S. networks.
This isn’t just economic gamesmanship. According to our intelligence agencies, in exchange for this subsidization, Chinese corporations have siphoned data, allowed backdoor access to state agencies and enabled functionality for network disruption. As a result, the technological foundation of our communications networks has been weaponized.
Congress and the FCC have recognized the problem of untrustworthy equipment in U.S. networks and are working to ensure its removal and replacement. Open RAN networks may be part of the solution. Almost exactly a year ago today, I published an op ed advocating for the development and use of software-enabled, virtualized 5G infrastructure to replace suspect equipment. Our country has long been a technology leader in software and wireless technology — growing our capability to make secure infrastructure makes sense from both a security and an economic standpoint.
We need to invest in this technology. And we must do some deep and proactive thinking on the best policies to effectuate our goals of promoting secure telecommunications networks that benefit our shared future and get the best value for the American tax-payer where we need to rip and replace insecure, Chinese equipment. So here’s a new idea:
I recommend that we explore that each rip-and-replace carrier rebuilding its network be required to consider solutions offered by an O-RAN provider. That would achieve many of our goals, including encouraging global competition with Huawei, capitalizing on U.S. software advantages, accelerating the development of O-RAN as a product-model and a business-case, and allowing for alternative vendors to enter the market and offer specific network solutions. Although no carrier should be forced to adopt it, it would encourage carriers to consider a technology that might have been overlooked otherwise.
O-RAN holds tremendous promise. Its growth could advance American technological leadership, enhance competition, and reduce our reliance on foreign vendors, all while bringing down replacement costs. It deserves serious consideration.
Geoffrey Starks is an FCC commissioner. Edited for length and style, this article comes from his remarks at the FCC’s Forum on 5G Open Radio Access Networks on Sept. 14, 2020.
The FCC’s auction of Priority Access Licenses (PAL) in the Citizens Broadband Radio Service (CBRS), which began July 23, ended yesterday raising $4.5 billion in bids. The auction offered 22,631 licenses in the 3550-3650 MHz band, which was the largest number of spectrum licenses ever put on the block in an FCC auction. These 70 megahertz of licensed spectrum may serve a mix of uses, from mid-band capacity for the carriers’ deployment of 5G to private wireless systems used by enterprises and municipalities.
“Ericsson stands ready to support these CBRS networks with its outdoor micro radio, outdoor massive MIMO radio, indoor Radio Dot, and our domain coordinator software fully supporting the PAL frequencies.” Says Paul Challoner VP network product solutions.
Bidders won 20,625 of the 22,631 available licenses, or more than 91.1percent. The auction was a success, according FCC Chairman Ajit Pai, who said the demand for the licenses resulted from reforms made to the rules for the 3.5 GHz band, which were spearheaded by FCC Commissioner Mike O’Rielly. Dave Wright, head of the CBRS Alliance also applauded the results of the auction.
“Whether judged by traditional metrics such as total auction proceeds and price/MHz/Pop, or by non-traditional metrics such as the number and diversity of bidders, the demand for rural as well as metro licenses, and the overall number of licenses awarded – one has to conclude that Auction 105 far exceeded expectations,” Wright said. “This is further confirmation of the value of this shared band and is the last component to be put into service, enabling the full realization and potential of the 3-Tier spectrum sharing model.”
Spectrum Will Enable Smaller, Rural Operators
Although it is too early to know the winners, the auction will most likely enable new market entrants, including smaller and rural operators, to build low-cost carrier-grade networks, which will lead to hundreds of new networks, according to a new report from Colorado-based cooperative CoBank’s Knowledge Exchange, which examines how the CBRS band could change the broadband industry.
“We think that operators can build a high-quality network by acquiring a small amount of licensed spectrum,” according to the report. “Having the ability to toggle between licensed and unlicensed channels allows operators to maintain high throughput speeds. For example, when data traffic levels are high, operators can use their licensed spectrum as an overflow channel and when data traffic is light, they can use the lower-cost unlicensed channel.”
The owners of PALs in the CBRS band will mix with the users of the general authorized access (GAA) licenses to create to create new business models with new market players. Some of the possible bidders in the auction were Chevron, Occidental Petroleum, fiber supplier Corning, John Deere and universities, according to Cobank.
“For rural America, John Deere stands out for its investments in agricultural technologies,” the report said. “Deere’s interest in buying spectrum may signal its intent to become a network operator where it bundles high-speed data connectivity with farming equipment. After all, the company’s investments in precision agriculture, etc. won’t be fully realized until access to high speed data networks broadens in rural America.”
The most likely purchasers of the PALs were mobile network operators looking to supplement their other spectrum holdings, cable multiple-system operators (MSOs), existing CBRS-based wireless internet service providers (WISPs), enterprises, local governments, telcos and investors who see the opportunity to obtain CBRS spectrum and then subdivide it into smaller parcels for use by smaller enterprises and entities, according to Iain Gillott, founder and president of iGR, a market strategy consultancy, in an article published by AGL eDigest.
“It is this last group that is particularly interesting,” Gillott wrote. “Because PALs are at the county level, the chances of an enterprise being able to afford a PAL is unlikely, unless it has significant spectrum needs across the entire area. But a larger enterprise/investor could buy one or more PALs in a given area and then make the spectrum available to a single commercial building owner or single warehouse.
“For example, imagine one of the major public cloud providers obtaining PALs across the United State and then making the spectrum available to their cloud customers for internet of things (IoT) applications,” he added.
Detailed auction results, including the names of Auction 105 winning bidders, will be released in a few days. For more information, visit: www.fcc.gov/auction/105.
Federal executive departments and agencies will review their spectrum usage and report to the National Telecommunications and Information Administration (NTIA), on their anticipated future bandwidth requirements, according to a memo signed by President Donald J. Trump.
While the government will need continued access to spectrum in the future, the memo called on agencies to continue expanding the opportunities for sharing spectrum with the private sector.
According to the memo, “Developing a Sustainable Spectrum Strategy for America’s Future, ”The U.S. Government will also continue to encourage investment and adoption by federal agencies of commercial, dual-use, or other advanced technologies that meet mission requirements, including 5G technologies”
Within 180 days of the memo, and then annually, the NTIA, and in coordination with the Office of Management and Budget (OMB), Office of Science and Technology Policy (OSTP) and the FCC, will submit a report on the status of existing efforts and planned spectrum repurposing initiatives.
The reason for the spectrum strategy is its relationship to the technologies that are needed for the economy and for security.
“Wireless communications and associated data applications establish a foundation for high‑wage jobs and national prosperity,” the memo said. “While American industry continues to extract greater and greater value from spectrum, each technological leap also increases demands on its usage.”
In the future, spectrum will be needed for use cases such as autonomous vehicles and precision agriculture, commercial space operations, and the Internet of Things, as well as 5G, the document said.
“Moreover, it is imperative that America be first in 5G wireless technologies — wireless technologies capable of meeting the high-capacity, low-latency, and high-speed requirements that can unleash innovation broadly across diverse sectors of the economy and the public sector,” according to the memo.
There is something for everyone in H.R 4986, the Repack Airwaves Yielding Better Access for Users of Modern Services, or RAY BAUM’S Act, which passed the House of Representatives this week. The bipartisan compromise included key provisions of the MOBILE NOW act, the House took steps to make sure more spectrum will be available for 5G technology deployment and streamlined siting of wireless infrastructure in federal lands.
“I would say that, as an infrastructure provider, we commend this effort to streamline deployments and expedite future spectrums auctions and hope to see the Senate pass this as well,” Carrie Ortolano, general counsel, CTI Towers, said. “In particular, CTI Towers applauds the effort to streamline and make uniform the process to place infrastructure on federal property and hopes to see more federal property available for infrastructure development as a result once this bill is passed.”
In particular, the bill directs the FCC to find 255 megahertz of federal and non-federal spectrum for mobile and fixed wireless broadband use, and it set a two-year deadline for the commission to authorize mobile or fixed terrestrial wireless use between 42000 MHz and 42500 MHz. Additionally, the FCC is charged with evaluating the feasibility of commercial wireless between 3100 MHz and 3550 MHz and between 3700 MHz and 4200 MHz.
“Specifically, by including both MOBILE NOW and the Spectrum Deposits Act in today’s compromise, it provides an important technical fix and lays important groundwork for the FCC to proceed with key spectrum auctions,” FCC Comm. Michael O’Reilly said in a statement. “Once this becomes law there are several large-scale spectrum auctions for mid-band and millimeter wave spectrum – especially the upper 37 GHz (37.6-38.6 GHz) – that the Commission needs to conduct in the very near future.
The bill reauthorizes the FCC for FY2019-FY2020 (the first time in 28 years) and sets new expectations for the agency in terms of transparency and more efficient processes.
Congress designated an independent inspector general to watch over the agency, elevated the role of Chief Information Officer to handling planning, and took actions concerning the fees charged by the Commission. The FCC was also directed to improve its wireless coverage maps.
The legislation combines an effort to streamline processes and increase transparency to the FCC to “maximize opportunities for public participation and efficient decision making” and establish a fund in the U.S. Treasury to pay for costs incurred by the broadcast TV repack.
FCC is also required evaluate the broadband coverage in Indian country and carry out rulemaking to address unserved tribal areas.
There is even something for the consumers in this law, helping the FCC and law enforcement protect them from fraudulent telephone calls, and to educate Americans about how to stop illegal calls. It will now go the Senate for a vote.
J. Sharpe Smith
J. Sharpe Smith joined AGL in 2007 as contributing editor to the magazine and as editor of eDigest email newsletter. He has 27 years of experience writing about industrial communications, paging, cellular, small cells, DAS and towers. Previously, he worked for the Enterprise Wireless Alliance as editor of the Enterprise Wireless Magazine. Before that, he edited the Wireless Journal for CTIA and he began his wireless journalism career with Phillips Publishing, now Access Intelligence.