Historic $2 Billion CAF II Auction Will Provide Broadband Expansion Funding

The FCC is in the middle of planning a historic broadband funding opportunity. This initiative will provide as much as $2 billion in funding for broadband carriers who elect to bring broadband services to unserved and underserved areas of the country. Hailing myself from rural Kentucky, I am especially eager to see the benefits realized from these communities being broadband-enabled, just like those hailing from other densely populated communities. "Closing the digital divide is my number one priority, and through this innovative Connect America Fund auction, we are poised to take the next big step in reaching that goal," said FCC Chairman Ajit Pai in a press release announcing the auction. "In rural America, broadband opens the doors of opportunity by connecting remote communities to global markets, jobs, education, health care and information."

Operators selected from these auctions will be required to deliver 10/1 Mbps broadband to thousands of census blocks https://www.fcc.gov/maps/caf2-auction-final-areas/ across the country. These are high-cost areas, and winning broadband providers agree to build broadband facilities at the lowest cost, among all the bidders. Winning bidders must also offer at least one voice and one broadband service. Service fees must be reasonably comparable to similar offerings in urban areas.

There are timeline requirements as well. Service must be offered to:

  • 40 percent of the required number of locations in a state by the end of the third year of support
  • An additional 20 percent in each subsequent year
  • 100 percent by the end of the sixth year of support

The exact deployment schedule is determined by the carriers themselves, not the FCC. Winning operators will receive support over a 10-year period, payable monthly. There is a $146.10 per-location-per-month support cap.

Recipients will be required to file annual reports and build-out milestone certifications, and submit the locations where they offer qualifying service on a rolling basis.

Broadband carriers of all types and sizes are encouraged to participate. The FCC expects to see participation from customary providers like RLECs, but also from electric cooperatives, wireless ISPs, and other non-traditional broadband carriers.

Final auction rules and locations were voted on by the FCC in late January. Interested parties can visit this CAF II Auction website for more details https://www.fcc.gov/connect-america-fund-phase-ii-auction.