In an age of 5G technological prowess, the so-called rural digital divide remains a vexing thorn in the side of policymakers. So much so, in fact, that it unites both sides of the aisle that more needs to be done to get all Americans online no matter where they live.
The most recent and prominent of these efforts is the FCC’s Rural Digital Opportunities Fund (RDOF) proposal. Later this month the FCC will vote on the ten-year, $20 billion RDOF plan to get more broadband out to rural Americans. Its central feature employs a competitive reverse auction process, which in the past has brought many large and small companies with innovative networks and business models to the table to compete and deliver broadband to unserved Americans. In fact, in the previous highly successful CAF Phase II auction, the FCC used this auction design format to provide support to over 710,000 locations in 45 states, proving that competition by diverse companies throughout the auction is the most efficient way to provide faster broadband networks across the Nation.
Will the RDOF auction bring a broad pool of bidders together to best ensure the plan’s success?
It can if it closely adheres to its successful CAF II model.
The CAF II model more inclusively enables an important group of small rural innovators – namely, Wireless Internet Service Providers (WISPs) – to meaningfully participate in all of the bidding rounds, thereby maximizing limited taxpayer dollars, and providing a larger palette of nimble solutions, which can flexibly and cost-consciously scale to rural communities.
During the CAF Phase II auction, WISPs bid in all phases of the auction, from round one, beyond the clearing round 12, and through to the last round 18. WISPs’ active participation in the auction helped reduce the level of federal support needed to provide faster broadband to 45 states from $1.98 billion to $1.49 billion. As a result, many of America’s hardest to serve communities are now receiving robust and evolving broadband solutions where none existed before.
WISPs use “fixed wireless” architecture, which employs spectrum instead of wires, to deliver high-speed broadband service to more than 6 million, mainly rural Americans. They can bring broadband to customers at 15% of the cost of a fiber provider virtually overnight, even in the most challenging of geographies.
By the end of 2020, WISPs will have pumped approximately $4.4 billion directly into the economy, creating nearly a $10 billion indirect effect on the U.S. GDP. This output will keep growing. The WISP marketplace expands at about a 15% per-year clip – several times faster than the rest of the fixed broadband industry. It confirms WISPs are adept at quickly, cost-effectively and currently – not at some distant time in the future – meeting both the demands of rural consumers and the vital national policy objective of bringing faster broadband networks to all Americans no matter where they live.
The Commission, Congress and the Administration must be commended for their efforts to bridge the rural digital divide. RDOF shows a tremendous commitment to inject much needed vigor into the battle to eradicate the problem. That aside, the FCC could better guarantee success in this fight if it remained faithful to its proven CAF Phase II model and allowed WISPs and other entities to participate beyond the clearing round. This ensures that market forces enabled by a more inclusive pool of bidders determine RDOF’s auction outcome. Unfortunately, the RDOF draft order would only allow the fastest broadband speeds to continue past the clearing round.
Returning to a CAF Phase II-like auction promotes participation by small rural innovators such as WISPs, and helps the hardest to serve rural areas get the evolving and affordable solutions they need to thrive.
WISPs are a key part of achieving this, showing 6 million times over that they can bring new communities online and connected to our digital economy. They should be allowed meaningful access throughout the RDOF auction process, uniting rural America to the rest of the country via innovative yet taxpayer-friendly solutions, which meet the broadband needs of their local communities.