July 31, 2023
5G Fund for Rural America: Current Status and Issues
On October 27, 2020, the Federal Communications
The Telecommunications Act of 1996 expanded universal
Commission (FCC) created the 5G Fund for Rural America
service beyond telephone service to ensure access to high-
(5G Fund). The FCC directed that $9 billion over the next
speed internet services (e.g., broadband). Section 254
10 years from the Universal Service Fund (USF) be used
provides that consumers across the nation, including in
for the new 5G Fund to expand fifth-generation wireless
rural areas, should have access to telecommunications and
broadband connectivity. This included $8 billion to bring
information services at rates that are “reasonably
voice and high-speed mobile broadband services to rural
comparable” to those in urban areas.
areas unlikely to see 5G cellular deployments without
subsidies and $1 billion for networks that can support
Universal Service Fund (USF) Programs
precision agriculture.
To advance the universal service mandate, the FCC directs
USF funding through four major programs—High-Cost,
When the FCC created the 5G Fund, it decided to wait to
Lifeline, Rural Health Care, and Schools and Libraries. The
initiate activity until it could collect more granular mobile
FCC sets program rules and the USAC disburses USF funds
coverage and service data and develop more accurate maps
through each program. USAC Annual Reports indicate that
showing mobile broadband service availability in the
about $8 billion is made available from the USF annually.
United States. The FCC acknowledged that waiting for data
“will not be the fastest possible path” to award funds, but
The FCC has changed USF programs to fulfill its universal
would allow it to “identify with greater precision those
service mandate. In 2011, the FCC reformed the High-Cost
areas of the country where support is most needed.”
program to create the Connect America Fund (CAF), which
provides about $4.5 billion annually to eligible providers to
In August 2021, the FCC released a map showing mobile
deploy high-speed internet in rural areas. The FCC also
(e.g., cellular) coverage in the United States by the four
created the Mobility Fund, a program under the CAF that
largest providers. In November 2022, the FCC released the
provided $300 million in one-time funding for mobile
National Broadband Map showing fixed (e.g., fiber) and
broadband and voice services in unserved and underserved
mobile coverage based on provider input, and allowed for
areas, and the Mobility Fund Phase II program, to provide
public challenges to the data. In May 2023, the FCC
recurring funding to areas unlikely to receive unsubsidized
released a second, updated map (Ver. 2), and announced
4G Long Term Evolution (LTE) services.
Ver. 3 is to be released in November 2023; however, it has
not announced plans to proceed with 5G Fund awards.
In April 2020, the FCC proposed to replace the Mobility
Fund Phase II with the 5G Fund to spur deployment of 5G
During the 118th Congress, some Members have questioned
networks, close the digital divide among areas with varying
whether 5G Fund amounts allocated by the FCC will be
internet access, and enhance economic opportunities in
sufficient to meet rural mobile service coverage needs.
rural regions. Under the final rules for the 5G Fund, the
Others have raised questions concerning the FCC’s
FCC would identify areas not served by a subsidized 4G
management of USF funds—a fund that collects and
LTE or 5G provider. The FCC would then hold a reverse
redistributes fees from service providers to fulfill universal
auction, a process in which companies submit proposals to
service goals. Others have proposed new programs to
provide 5G services in those areas and the FCC awards
expand fixed and wireless service in rural areas (S. 2542).
funds to the lowest bidder for each area.
Universal Service as a Concept
Identifying Areas Eligible for 5G Funds
The concept of universal service—that all Americans
To determine eligibility for 5G Fund support, the FCC
should have access to telecommunications services—was
considered using existing data sources, such as broadband,
established as national policy in the Communications Act of
telephone, and mobile service data collected from providers
1934. A fund and programs to promote universal service
(e.g., Form 477 mobile coverage data submitted for the
were established in the Telecommunications Act of 1996.
Mobility Fund). In its October 2020 Report and Order, the
The act granted the FCC authority to establish the USF to
FCC stated the existing data was inaccurate, and decided to
promote universal service, and to establish the Universal
use data from the Digital Opportunity Data Collection—a
Service Administrative Company (USAC), an independent
2019 FCC initiative to collect data on coverage from
not-for-profit corporation to serve as the USF administrator.
providers, allow public challenges to the data, and map
Telecommunications providers are required to contribute a
mobile service availability nationwide. In the 2020 Report
percentage (currently about 30%) of their interstate and
and Order, the FCC acknowledged that waiting for this data
international end-user revenue to the USF—a cost they
collection to be complete could add 18-24 months to the
typically pass along to consumers. The USAC collects and
program’s timeline. It reasoned that the extended time
manages these contributions.
would enable it to distribute funds using accurate coverage
data and take into account new 5G deployments, including
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5G Fund for Rural America: Current Status and Issues
deployments from T-Mobile, which committed as a
expressed concern that $9 billion for the 5G Fund is not
condition of its 2020 merger with Sprint to cover 90% of
sufficient to support nationwide 5G services. It would direct
households in U.S. rural areas within six years.
the FCC to allocate sufficient resources from the USF to
expand 5G services. The FCC set 5G Fund amounts before
Congress Mandates Data Collection and Mapping
collecting coverage data, and the CCA’s estimate was
The FCC established the Digital Opportunity Data
calculated before the first FCC National Broadband Map
Collection in August 2019; the effort was not authorized or
was complete. Thus, the specific amount of additional funds
funded by Congress. In March 2020, the Broadband
needed, if any, could be informed by the data collected by
Deployment Accuracy and Technological Availability Act
the FCC and the version of the map it decides to use.
(Broadband DATA Act, P.L. 116-130) was enacted, which
required the FCC to change the way broadband data is
Some providers assert that operating and maintaining rural
collected, verified, and reported. It directed the FCC to
networks is costly, that there is no business case for
collect and disseminate granular broadband service
operating in some rural regions, and sustained subsidization
availability data (maps) from wired, fixed-wireless,
of operations is needed. One option for Congress to address
satellite, and mobile broadband providers. In December
that concern could be to direct the FCC to assess ongoing
2020, Congress appropriated $65 million for the effort in
operational costs in rural areas and use USF funds to help
the Consolidated Appropriations Act, 2021 (P.L. 116-260).
providers sustain 5G networks and services. While the FCC
could increase USF funding to the program, such a policy
In August 2021, pursuant to the Broadband DATA Act, the
could require increased USF contributions from providers,
FCC released the National Broadband Map showing mobile
which could increase costs for consumers. Consumer costs
broadband coverage. In November 2022, it released the first
are a persistent issue of interest for many Members.
version of a fixed broadband map. Consumers, states,
localities, tribes, and others could challenge and offer
Supporting New Technologies
improvements to the data. In May 2023, the FCC released a
In H.Rept. 118-145, the House Appropriations Committee
second, updated version (Ver. 2) of the map to reflect this
would direct the FCC to update the 5G Fund framework to
input, and continues to accept challenges. It is expected to
reflect new technologies. In its 2020 rules, the FCC did not
release a third version (Ver. 3) in November 2023.
categorically exclude technologies from 5G Fund support,
so long as the provider complies with 5G standards and
Which Map Will the FCC Use?
meets performance requirements (e.g., speed, latency). New
With two versions of the National Broadband Map released
technologies may mean satellite-to-cellular services, which
and a third anticipated in November, it is unclear which
could help to expand rural coverage and improve service, or
map the FCC will use or how many versions may be
using an Open Radio Access Network (ORAN) approach to
released until the FCC deems the map accurate enough to
deploying 5G networks. ORAN promotes equipment
commence 5G Fund auctions. The FCC could use Ver. 2 to
interoperability and virtualized network operations. One
identify areas eligible for 5G Fund awards, as the National
option for Congress could be to direct the FCC to support
Telecommunications and Information Administration
ORAN through the 5G Fund, which could help to develop
(NTIA) did for the $42.45 billion Broadband Equity,
the ORAN approach and open the network equipment
Access, and Deployment (BEAD) program, allocating
market to U.S. vendors, but could also add complexity and
funds on June 26, 2023. Some in Congress are concerned
time to projects and increase the 5G Fund support needed.
about the accuracy of Ver. 2, and introduced legislation (S.
1162 and H.R. 3609) that would direct NTIA to recalculate
USF Effectiveness
BEAD allocations 210 days after award using the most
USF funds (about $8 billion annually) give the FCC
recent version of the map. If the FCC uses Ver. 2 for the 5G
flexibility to address advanced universal service, expand
Fund, Congress may raise the same concerns. If the FCC
deployment of new technologies and services, and restore
decides to wait for an updated map (Ver. 3 or later) to
communications after disasters. Because the USF is funded
launch the 5G Fund, it could identify with greater precision
by telecommunication providers, it does not require
those areas of the country where support is most needed;
congressional appropriations.
this would delay awards and deployment.
In the 118th Congress, Members have addressed USF
Issues for Congress
funding and reforms. S. 856 would require the FCC to study
Many in Congress support the 5G Fund while some have
and report on the feasibility of requiring edge providers
raised issues with it and the FCC’s USF management.
(e.g., online content providers) to contribute to the USF. In
a May 2023 Senate Commerce, Science, and Transportation
Funding Levels for the 5G Fund
Committee, Subcommittee on Communications, Media, and
Some rural wireless providers assert that $8 billion is not
Broadband hearing, some Members raised issues with the
enough to provide 5G service in unserved and underserved
contribution rate, consumer costs, program effectiveness,
areas. The Competitive Carriers Association (CCA), citing
and Congress’ limited input on USF operations. In May
a study it commissioned, stated $36 billion in government
2023, Senators Luján and Thune announced a Senate
and private investment is needed to ensure ubiquitous 5G
working group to evaluate USF reforms and policy. Any
coverage. It urged the FCC to allocate an additional $11
changes to the USF could affect the 5G Fund.
billion in USF funds, increasing the 5G Fund to $20 billion.
Jill C. Gallagher, Analyst in Telecommunications Policy
In H.Rept. 118-145, accompanying a version of the
Financial Services and General Government Appropriations
IF12465
Bill, 2024, the House Appropriations Committee also
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5G Fund for Rural America: Current Status and Issues
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