Created in 2020 as the successor to Connect America Fund providing up to $20.4 billion over 10 years to connect rural homes and small businesses to broadband networks
Rural Digital Opportunity Fund
In November 2021, President Joe Biden signed into law the largest U.S. investment ever in broadband access, affordability, and adoption. With $65 billion flowing to broadband, Congress also asked the Federal Communications Commission to determine what impact the Infrastructure Investment and Jobs Act will have in achieving universal service goals for broadband. This week, the FCC launched a proceeding seeking public comment on how to best make sure everyone in the U.S. can use broadband.
As the Infrastructure Investment and Jobs Act awaits a vote in the House of Representatives later this month, a debate over the future of the Federal Communications Commission's Universal Service Fund (USF) is already starting. Provisions in the infrastructure bill call for the FCC to quickly complete an evaluation of how the legislation will impact how the FCC's achieves the goal of deploying broadband to all Americans. Congress wants to know how the FCC can be more effective in achieving this goal. One brewing USF issue is how we pay for it.
The Federal Communications Commission’s (FCC) Universal Service Fund (USF or Fund) has been one of the nation’s most important tools for connecting our nation, including rural communities, low-income families, schools, libraries, and rural health care facilities. However, the funding mechanism that supports the Fund is under significant duress. The “contribution base” – the revenues used to calculate USF contributions – has declined 63% in the last two decades, from $79.9 billion in 2001 to $29.6 billion in 2021.
FCC Announces Over $311 Million for Broadband, Acts to Clean Up Rural Digital Opportunity Fund Program
The Federal Communications Commission is ready to authorize over $311 million in broadband funding across 36 states through the Rural Digital Opportunity Fund. At the same time, the agency took steps to clean up issues with the program’s design originating from its adoption in 2020. For now, 48 broadband providers will bring 1 Gbps broadband speeds to nearly 200,000 homes and businesses over the next 10 years. But in light of complaints that the program was poised to fund broadband to parking lots and well-served urban areas, the FCC sent letters to 197 winning bidders.
It would not be a stretch to say that the Federal Communications Commission’s Rural Digital Opportunity Fund (RDOF) reverse auction has left a bad taste in a lot of mouths. While the FCC was quick to announce success immediately after the close of the auction simply because most eligible areas were assigned, many policy makers and communities see the results as highly problematic and have roundly criticized the outcome, leaving us to ask: Is the FCC’s reverse auction fatally wounded or just bloodied?
It is Day 1,421 of the Trump Administration. Federal Communications Commission Chairman Ajit Pai, from Day 1, has insisted that closing the digital divide is the Trump FCC's top priority. This week, the FCC announced the winners of over $9 billion worth of rural broadband subsidies -- the "single largest step ever taken to close the digital divide," according to Chairman Pai. But looking at the results may leave millions of rural residents apprehensive -- and disconnected.
In October 2019, the Benton Institute for Broadband & Society issued Broadband for America’s Future: A Vision for the 2020s. The agenda was comprehensive, constructed upon achievements in communities and insights from experts across the nation. The report outlined the key building blocks of broadband policy—deployment, competition, community anchor institutions, and digital equity (including affordability and adoption).
In the midst of the COVID-19 crisis, the General Assembly is considering Gov. Northam’s request to increase funding to bring better broadband to all Virginians. Such support is important, as students stay home and learn, adults stay home and work, and seniors stay home even as they visit their doctor. Funding for broadband would be an important step — and a wake-up call to the federal government. Virginia’s broadband challenges are multifaceted. In rural areas, nearly a third of households have no access to broadband.
On February 7, the Federal Communications Commission released the report and order that creates the framework for the Rural Digital Opportunity Fund, the latest effort to extend the reach of broadband networks deeper into rural America. The FCC's own research estimates that $80 billion is needed to bring broadband everywhere in the U.S., so the $20.4 billion Rural Digital Opportunity Fund is a significant -- although likely insufficient -- step in closing the digital divide over the next decade. Here we review the framework and note some controversy around the FCC decision.