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Six big questions about the FCC's $9B 5G fundSix big questions about the FCC's $9B 5G fund

The FCC's 5G fund is supposed to bring advanced wireless services to rural areas. But there are big questions that need to be addressed before carriers take their place at the government trough.

Mike Dano

July 29, 2020

6 Min Read
Six big questions about the FCC's $9B 5G fund

The FCC wants to dole out $9 billion to finance the construction of 5G networks in rural areas of the US. Naturally, the devil is in the details.

Should the agency require participants in the program to build speedy 5G networks, or are slower networks OK too? Should satellite providers be allowed to receive money from the fund? And should 4G be considered a 5G technology?

These are just some of the topics that companies across the industry are debating as the FCC considers exactly how to allocate a fund that's roughly the same size as the state of New Jersey's budget shortfall.

Here are the top 5G Fund issues under discussion:

1. How fast should the networks be?
"The Commission should set the speed target for the 5G Fund well above 35/3Mbit/s," wrote Verizon to the FCC, pointing to the agency's proposed 35Mbit/s download requirement. "The proposed 35/3Mbit/s speed target, which is within the range of current 4G LTE speeds, will have fallen far behind 5G network capabilities by the end of the support term."

Others disagreed.

"Such a requirement is not feasible in rural areas," wrote the Rural Wireless Association (RWA), a trade group that represents some of the nation's smallest wireless network operators. "As speeds increase, coverage diminishes. In order to feasibly cover rural areas, support recipients will need to be able to rely on propagation that minimizes the number of sites deployed."

Verizon's position on the topic doesn't come as much of a surprise given that it currently offers an average 5G download speed of almost 500Mbit/s, according to network-monitoring company OpenSignal. However, as the firm points out, Verizon's blazing-fast 5G network is only available in parts of a handful of cities due to the millimeter wave (mmWave) spectrum it's using. A broad buildout of 5G in mmWave spectrum in rural areas would cost far, far more than $9 billion.

Indeed, a Google study indicated it would take $400 billion to deliver 100Mbit/s to 72% of the US population using 5G in mmWave spectrum.

2. Can satellite providers get money from the 5G Fund?
"The Commission should not stifle 5G deployment by barring mobile service providers from using satellite technologies that can support latency-sensitive mobile services, such as SES's Medium Earth Orbit (MEO) satellite network," the satellite provider argued to the FCC.

Interestingly, the RWA said it would support that proposal "under certain circumstances." And the Coalition of Rural Wireless Carriers, a separate group, also entertained the notion.

But the Coalition of Rural Wireless Carriers wrote that satellite operators that want to provide 5G services with a latency threshold of 200ms would be providing services worse than 3G, considering "3G networks commonly operate at levels well below 200ms."

3. Can T-Mobile use the 5G Fund to meet its Sprint merger commitments?
Perhaps not surprisingly, virtually every company that is not T-Mobile offered a firm "no" on that question.

"The Commission should prohibit T-Mobile from using 5G Fund support to satisfy its merger commitments," AT&T wrote.

For its part, T-Mobile argued it should not be required to disclose its 5G buildout plans, and that arguments around the topic were simply efforts to "re-litigate the Sprint/T-Mobile commitments."

4. Is 4G the same as 5G?
Incredibly, this is essentially the argument that the Competitive Carriers Association (CCA) floated. "CCA continues to urge the Commission to make room in the 5G Fund for deployments like 4G LTE-A that are upgradeable to 5G," wrote the trade association, which represents some midsize wireless network operators in the US. "4G LTE-Advanced (4G LTE-A) is IP-based, as is 5G, and winning bidders should be able to deploy upgradeable radios and 4G-LTE service that can be transitioned to 5G, essentially with a software update."

In reading between the lines, some of CCA's members are likely hoping to avoid the expense of a 5G network upgrade while still getting access to the FCC's cash.

"4G LTE service (a.k.a. "5G Lite") is not true 5G, which is defined as 3GPP Release 15 or higher," stated the RWA, echoing a number of players that pushed back on the CCA's proposal.

5. Should the FCC create better broadband maps to guide the 5G Fund?
This topic probably received the most ink among the FCC's 5G Fund filings. That's no real surprise considering the agency has long faced criticism over its use of operators' service maps – widely considered inaccurate – for some of its rural broadband efforts.

Congress finally stepped into the issue with the passage of the Broadband Data Act, which essentially requires the FCC to develop new, more accurate broadband maps. The only hitch is that the legislation doesn't include the $65 million the FCC said the effort will require.

As a result, some companies urged the FCC to move ahead with parts of the 5G Fund without more accurate maps, while others argued the agency should wait until it develops better maps.

"Given that the Broadband DATA Act sets a September 2020 deadline for the Commission to adopt implementing rules, the Commission should be able to collect carriers' map data and produce the national 4G LTE coverage map in 2021, leaving more than enough time," Verizon wrote. "The benefits of accurately targeting support where it is needed far outweigh any harm from a one-year delay."

Others disagree, with one company pulling the increasingly worn COVID-19 card in its arguments.

"Accelerating the 5G Fund auction is particularly important because the COVID-19 pandemic has highlighted the critical importance of reliable broadband services to mitigate the economic toll exacted by stay at home orders," wrote satellite startup AST&Science (AST). "The goal of universal service will not be fulfilled if rural and other hard-to-serve areas are left behind in these challenging times in which the entire country is adjusting to the aftermath of this national crisis."

Of course, it comes as no surprise that AST's position on the topic directly aligns with its SpaceMobile plans for 5G from satellites.

6. Should really small carriers get special treatment?
The RWA proposed that $1.5 billion of the fund be quickly allocated to carriers with 500,000 or fewer subscribers.

Not surprisingly, that proposal was met with derision from just about every company that counts more than 500,000 subscribers.

"Doing so would not only constitute poor public policy, but would also be inefficient and run counter to the Commission's goal of maximizing the value of each dollar of universal service support," wrote T-Mobile, which has around 100 million customers.

"The Commission has consistently rebuffed proposals that would confer a competitive advantage to smaller wireless carriers and it should do so again here," added AT&T, which counts around 150 million customers.

Mike Dano, Editorial Director, 5G & Mobile Strategies, Light Reading | @mikeddano

About the Author(s)

Mike Dano

Editorial Director, 5G & Mobile Strategies, Light Reading

Mike Dano is Light Reading's Editorial Director, 5G & Mobile Strategies. Mike can be reached at [email protected], @mikeddano or on LinkedIn.

Based in Denver, Mike has covered the wireless industry as a journalist for almost two decades, first at RCR Wireless News and then at FierceWireless and recalls once writing a story about the transition from black and white to color screens on cell phones.

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