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FCC awards $9.2 billion to provide rural areas with 100Mbps broadband access

Charter Communications, LTD Broadband, Rural Electric Cooperative Consortium, and SpaceX were the biggest grant recipients from the auction.
Written by Campbell Kwan, Contributor

The US Federal Communications Commission (FCC) on Monday announced that it has allocated $9.2 billion from its Rural Digital Opportunity Fund to provide high-speed broadband internet services to 5.2 million unserved homes and businesses.

The telecommunications watchdog touted that only 0.3% of these locations would not receive broadband speeds of at least 100/20 Mbps, and that over 85% are expected to get gigabit-speed broadband.

"I'm thrilled with the incredible success of this auction, which brings welcome news to millions of unconnected rural Americans who for too long have been on the wrong side of the digital divide. They now stand to gain access to high-speed, high-quality broadband service," FCC chairman Ajit Pai said. 

The awards were distributed through a multi-round, descending clock auction format in which bidders indicated in each round whether they would commit to providing services to an area at a given performance tier and latency.   

"This auction was the single largest step ever taken to bridge the digital divide," Pai said. 

In total, 180 providers yielded an allocation of $9.2 billion out of the $16 billion that was set aside for phase one of the auction. The remaining $6.8 billion that was not allocated will be rolled over into the future phase two auction, the FCC said, which will now have an $11.2 billion kitty to build services in "partially-served areas."

Among the big winners was SpaceX, which was given $885 million to provide broadband across 643,000 locations in 35 states. 

SpaceX, after launching its 16th Starlink mission last month, currently has 955 satellites in space. The company also has its pilot broadband program, called "Better Than Nothing Beta", which is available to users in rural and remote parts of northern US and, as of last week, to southern parts of Canada. 

Meanwhile, Charter Communications was assigned the most locations, with just over 1.05 million, and was given $1.22 billion in support. Other big winners were LTD Broadband and Rural Electric Cooperative Consortium, which won $1.3 billion and $1.1 billion, respectively.

The awards will be distributed over the next 10 years in equal monthly payments under the condition that providers meet deployment milestones for bringing broadband services to these rural areas.

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