5G Fund for Rural America: Current Status and Issues

5G Fund for Rural America: Current Status and Issues

Updated November 13, 2023
5G Fund for Rural America: Current Status and Issues
On October 27, 2020, the Federal Communications
P.L. 104-104 also expanded universal service beyond
Commission (FCC) created the 5G Fund for Rural America
telephone service to include high-speed internet services
(5G Fund). The FCC directed that $9 billion over the next
(e.g., broadband). Section 254 provides that consumers
10 years from the Universal Service Fund (USF) be used
across the nation, including in rural areas, should have
for the 5G Fund to expand fifth-generation (5G) wireless
access to telecommunications and information services at
service. This included $8 billion to bring voice and high-
rates “reasonably comparable” to those in urban areas.
speed mobile broadband services to rural areas unlikely to
see 5G cellular deployments without subsidies and $1
Universal Service Fund (USF) Programs
billion for networks that can support precision agriculture.
The FCC directs USF funding through four major
programs—High-Cost, Lifeline, Rural Health Care, and
The FCC decided to wait to initiate 5G Fund activities until
Schools and Libraries. The FCC sets program rules, and the
it could collect more granular data to show mobile
USAC disburses USF funds through each program. USAC
broadband service availability in the United States. The
annual reports indicate that about $8 billion is made
FCC acknowledged that waiting for data “will not be the
available through the USF annually.
fastest possible path” to award funds, but would allow it to
“identify with greater precision those areas of the country
The FCC has changed USF programs to fulfill its universal
where support is most needed.” The FCC proceeded with its
service mandate. In 2011, the FCC reformed the High-Cost
new data collection effort in early 2021, and released a
program to create the Connect America Fund (CAF), which
mobile coverage map in August 2021 and a fixed (e.g.,
provides about $4.5 billion annually to eligible providers to
fiber) map in November 2022. The FCC accepted
deploy high-speed internet in rural areas. The FCC also
challenges to the coverage maps, refined the maps to ensure
created the Mobility Fund, a program under the CAF that
accuracy, and has continued to do so with each iteration. In
provided $300 million in one-time funding for mobile
May 2023, the FCC released a second, updated map (Ver.
services in unserved and underserved areas, and the
2), and announced another update (Ver. 3) to be released in
Mobility Fund Phase II program, to provide recurring
November 2023. The FCC adopted a Further Notice of
funding to providers in areas unlikely to receive
Proposed Rulemaking (FNPRM) on September 21, 2023,
unsubsidized 4G Long Term Evolution (LTE) services. In
stating that, with the “new, granular, and improved mobile
April 2020, the FCC proposed to replace the Mobility Fund
coverage data” reflected in the new map, it would continue
Phase II with the 5G Fund to spur deployment of 5G
implementation of the 5G Fund. In the FNPRM, the FCC
networks, expand mobile coverage, increase internet access,
sought comment on several aspects of the 5G Fund,
and enhance economic opportunities in rural areas. Eligible
including eligible areas, funding levels, and use of funds.
areas would be those not served by a subsidized 4G LTE or
5G provider. The FCC would hold a reverse auction, a
During the 118th Congress, some Members questioned
process in which companies submit proposals to provide 5G
whether 5G Fund amounts allocated by the FCC are
services in eligible areas and funds go to the lowest bidder.
sufficient to meet rural mobile coverage needs. Others
raised questions concerning the FCC’s discretion over USF
Identifying Areas Eligible for 5G Funds
funds—a fund that collects and redistributes fees from
To identify unserved areas, the FCC considered using
service providers to fulfill universal service goals. Still
existing data, such as mobile coverage data submitted to the
others proposed new (non-USF) programs to expand fixed
FCC by providers (e.g., Form 477). In its October 2020
and wireless service in rural areas (e.g., S. 2542).
Report and Order, however, the FCC stated that its existing
mobile coverage data was inaccurate and opted to use data
Universal Service as a Concept
from the Digital Opportunity Data Collection—a 2019 FCC
The concept of universal service—that all Americans
initiative to collect coverage data from providers, allow
should have access to telecommunications services—was
public challenges to the data, and map mobile service
established as national policy in the Communications Act of
nationwide. The FCC stated that waiting for this initiative
1934. The Telecommunications Act of 1996 (P.L. 104-104)
to be completed could add 18-24 months to the 5G Fund
directed the FCC to establish the USF to promote universal
timeline, but reasoned that it would result in more accurate
service, and led to the establishment of the Universal
coverage data and reflect new 5G deployments. This
Service Administrative Company (USAC), an independent
includes deployments from T-Mobile, which committed as
not-for-profit corporation, to be the USF administrator. The
a condition of its 2020 merger with Sprint to cover 90% of
act required telecommunications providers to contribute a
households in U.S. rural areas within six years.
percentage (currently about 30%) of their interstate and
international revenue to the USF—a cost they typically pass
Congress Mandates Data Collection and Mapping
along to consumers. The USAC collects and manages these
The FCC established the Digital Opportunity Data
contributions as directed by the FCC.
Collection in August 2019; however, the effort was not
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5G Fund for Rural America: Current Status and Issues
authorized or funded by Congress. In March 2020, the
adopting other mechanisms as an alternative to Mobility
Broadband Deployment Accuracy and Technological
Fund Phase II, but any alternative must maintain support to
Availability Act (Broadband DATA Act, P.L. 116-130) was
eligible telecommunications carriers until other support
enacted. It required the FCC to change the way broadband
commences. In the September 2023 FNPRM, the FCC
data is collected, verified, and reported. It directed the FCC
proposed to treat the release of the public notice
to collect and disseminate granular broadband service
announcing the close of the 5G Fund Phase I auction as the
availability data from wired, fixed-wireless, satellite, and
point at which support under the 5G Fund commences (and
mobile broadband providers. In December 2020, Congress
legacy support ends).
appropriated $65 million for the effort in the Consolidated
Appropriations Act, 2021 (P.L. 116-260). In August 2021,
Funding Levels for the 5G Fund
pursuant to the Broadband DATA Act, the FCC released
The Competitive Carriers Association, citing a study it
the National Broadband Map showing mobile broadband
commissioned, stated that $36 billion in government and
coverage data. In November 2022, it released the first
private investment is needed to ensure ubiquitous 5G
version of a fixed broadband map. Consumers, states,
coverage. It urged the FCC to increase the 5G Fund to $20
localities, tribes, and others could challenge the map to
billion. In H.Rept. 118-145, accompanying a version of the
improve the data. In May 2023, the FCC released an
Financial Services and General Government Appropriations
updated version (Ver. 2) of the map to reflect this input, and
Bill, 2024, the House Appropriations Committee expressed
it accepts challenges on an ongoing basis with each version
concern that $9 billion for the 5G Fund is not sufficient to
that is released (approximately every six months).
support nationwide 5G services, and directed the FCC to
allocate sufficient USF resources to expand 5G services.
Further Notice of Proposed Rulemaking
While the FCC could increase USF funding to the program,
On September 21, 2023, the FCC adopted a FNPRM stating
such a policy could require increased USF contributions
that with improved data gathered as part of its Broadband
from providers, which could increase costs for consumers.
Data Collection effort and incorporated into the National
Broadband Map it would continue to implement the 5G
FCC Discretion over USF
Fund. In the FNPRM, the FCC sought comment on 5G
USF funds give the FCC flexibility to meet universal
Fund eligible areas, funding levels, and use of funds. In its
service goals, expand deployment of new technologies and
previous proceeding, the FCC assumed that in specific
services, and restore communications after disasters. As
areas where private providers offered 4G LTE service, there
USF is funded by contributions from telecommunication
would eventually be 5G deployment and thus excluded
providers, it is not appropriated funding; thus, the FCC
these areas from 5G Fund eligibility. Petitioners argued that
manages and maintains discretion over these funds. In the
this may be an inaccurate assumption, given the lack of a
118th Congress, some Members have addressed USF issues.
business case for 5G in some rural regions (e.g., insufficient
S. 856 would require the FCC to study and report on the
projected return on investment due to a small potential
feasibility of requiring edge providers (e.g., online content
customer base). They asked the FCC to define areas that
providers) to contribute to the USF. In a May 2023 Senate
lack unsubsidized 5G service as eligible for support.
Commerce, Science, and Transportation Committee,
Subcommittee on Communications, Media, and Broadband
The FCC asked whether the 5G Fund should promote new
hearing, some Members raised issues with the contribution
technologies, including Open Radio Access Networks
rate, consumer costs, program effectiveness, and Congress’
(ORAN)—a network deployment approach that promotes
limited input on USF operations. In May 2023, Senators
open networks with interoperable equipment and virtualized
Luján and Thune formed a Senate working group to
network operations. Proponents claim that ORAN may shift
evaluate USF reforms, which could affect the 5G Fund.
telecommunications away from single-vendor, proprietary
solutions and reduce deployment and operations costs. The
Supporting New Technologies
FCC also sought input on the adequacy of eligibility and
In H.Rept. 118-145, the House Appropriations Committee
performance requirements, as well as on funding levels—
directed the FCC to update the 5G Fund framework to
whether they are sufficient to support implementation and
reflect technology changes. In its 2020 rules, the FCC did
whether budget modifications are necessary.
not exclude technologies from 5G Fund support, so long as
they meet 5G standards and performance requirements
5G Fund Issues for Congress
(e.g., speed, latency). In its September 2023 FNPRM, the
FCC sought comment on whether the 5G Fund should be
Eligibility and Support to Legacy Providers
used to support ORAN deployments. ORAN advocates, the
Organizations representing providers that receive recurring
FCC Chair, and some policymakers say the 5G Fund could
high-cost support from the Mobility Fund II expressed
help to develop the ORAN approach, and open the network
concern about its replacement by the 5G Fund, arguing if
equipment market to more U.S. equipment makers and
legacy providers did not win the 5G Fund auction their
software developers. ORAN—a relatively new approach—
networks could be stranded, affecting service. In response,
could add complexity and time to projects, increasing the
Congress included Section 624 in the Consolidated
5G Fund support needed.
Appropriations Act, 2023 (P.L. 117-238), which states that
none of the funds appropriated by the act may be used by
Jill C. Gallagher, Analyst in Telecommunications Policy
the FCC to modify, amend, or change the rules or
regulations for universal service high-cost support. Nothing
IF12465
prohibits the FCC from considering, developing, or

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5G Fund for Rural America: Current Status and Issues

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https://crsreports.congress.gov | IF12465 · VERSION 5 · UPDATED