Pai Proposes Rules to Allocate $950M From USF to Puerto Rico, US Virgin Islands for Broadband
FCC Chairman Ajit Pai circulated a draft order on the eighth floor Wednesday to direct $950 million in a second round of USF funding to strengthen broadband networks in Puerto Rico and the U.S. Virgin Islands, after Hurricanes Maria and Irma in 2017 (see 1805290028). The commissioners will vote on the draft order at the agency's Sept. 26 public meeting, the FCC said Wednesday (see 1909040073). The agency has collected public input for over a year on the Uniendo a Puerto Rico and Connect USVI funds in docket 18-143 (see 1805180075).
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"Now that most carriers have largely restored service, it is time to authorize long-term funding to ensure that everyone in Puerto Rico and the U.S. Virgin Islands has access to the same high-speed fixed and mobile broadband networks as other Americans," Pai wrote in a blog on the tentative agenda for the September meeting. "We must storm-harden those communications networks" so residents will have access to telecom services when they "need them the most," Pai said.
In a press call Wednesday, FCC officials said they will release the draft order Thursday. Officials said there would be similarities with the Connect America Fund phase 2 auctions. In this case, bidders would be scored on three categories: price, or the cost to the USF to build or improve the broadband infrastructure; network performance, including speed; and network resilience. Fiber buried underground would score higher than fiber deployed on overhead wires, officials told reporters, who were directed not to quote individuals on the call. Almost one-third of the score would be determined by network resilience, the officials said. Bidders would compete for each of 78 municipalities in Puerto Rico and commit to providing access to all residents within the ones they win. In the U.S. Virgin Islands, bidders would compete in two geographic areas, one covering St. Croix, the other St. Thomas and St. John.
The proposal would allocate up to $504 million in USF funding over 10 years to fixed-voice and broadband providers in Puerto Rico and nearly $187 million over 10 years for fixed services within the Virgin Islands. The money would come from the same USF high-cost program that supports broadband deployment in unserved and underserved rural America. For the fixed broadband auctions, any providers who served the areas in question in June 2018 would be eligible to participate.
On the mobile telecom side, the FCC proposes $254 million in funding to Puerto Rico and $4 million to the Virgin Islands, both over three years and divided among mobile providers based, by percentage, on the number of mobile subscribers they had in June 2017. The FCC proposes to direct 75 percent of that funding to hardening and restoring existing 4G networks and the other 25 percent to 5G networks.
Auction winners who don't build out their networks according to the proposed construction schedule would face serious monetary consequences. And all funding recipients would have to maintain disaster preparation and response plans and commit to mandatory reporting to the FCC in the event of a disaster, officials said. Fixed broadband providers would be required to offer minimum speeds of 25 Mbps down/3 Mbps up; tiers offering 100 Mbps or gigabit service would receive priority scoring.
This second round of USF funding would be done in a single auction, likely in 2020, officials said. They said the FCC plans a third round of funding later, allocated on a competitive basis.
Puerto Rico Utility Commissioner Alexandra Fernandez on Wednesday tweeted her gratitude for the proposal.