Connect America Fund to extend broadband to 5 million rural homes

The FCC announced proposed rules to implement Phase II of its Connect America Fund, a move that will “... expand broadband access to an additional 5 million Americans who are currently unable to benefit from the opportunities of 21st century communications.”

Phase II is more ambitious than the previous phase, which “saw over $438 million to deploy broadband service to 1.6 million previously unserved Americans.”

Instead, “Over five years, Phase II of the Connect America Fund will provide nearly $9 billion to expand broadband in rural areas.”

In Phase II, incumbent large traditional providers, known as "price cap" carriers, will have the option to accept subsidies to build broadband in high-cost unserved areas. If they decline, the subsidies will be awarded to other providers through a competitive bidding process. The FCC is seeking comment on whether to increase the download speed required for subsidized broadband networks from 4 Mbps to 10 Mbps.

Connect America is funded by fees on phone service. The rules were reformed several years ago when the FCC began to phase out subsidies “that allowed some rural companies to charge rates vastly lower than those paid by the average consumer.”

The FCC is also modifying rules for smaller rural carriers. “Today’s action,” says the release, “also takes several steps to improve the climate for broadband investment in areas served by smaller incumbent carriers known as ‘rate-of-return’ carriers.”

Speed Matters supports the Connect America Fund buildout, and broadband service for all Americans, urban and rural.

FCC Takes Major Strides Toward Further Expansion of Rural Broadband (FCC news release, Apr. 23, 2014)