Establishing a 5G Fund for Rural America

FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 1 and 54

[GN Docket No. 20-32; FCC 20-52; FRS 16709]

Establishing a 5G Fund for Rural America

AGENCY:

Federal Communications Commission.

ACTION:

Proposed rule.

SUMMARY:

In this document, the Federal Communications Commission (Commission or FCC) proposes to retarget universal service funding for mobile broadband and voice in the high-cost program to support the deployment of 5G services by establishing the 5G Fund for rural America and seeks comment on the appropriate framework for implementing the 5G Fund.

DATES:

Comments are due on or before June 25, 2020; reply comments are due on or before July 27, 2020.

ADDRESSES:

Pursuant to §§ 1.415 and 1.419 of the Commission's rules, 47 CFR 1.415, 1.419, interested parties may file comments and reply comments identified by GN Docket No. 20-32 on or before the dates indicated on the first page of this document. Comments may be filed using the Commission's Electronic Comment Filing System (ECFS).

See Electronic Filing of Documents in Rulemaking Proceedings,

63 FR 24121 (1998).

•

Electronic Filers:

Comments may be filed electronically using the internet by accessing the Commission's Electronic Comment Filing System (ECFS)

https://www.fcc.gov/ecfs/.

Except when the filer requests that materials be withheld from public inspection, any document may be submitted electronically through the Commission's ECFS. Persons that need to submit confidential filings to the Commission should follow the instructions provided in the Commission's March 31, 2020 public notice, DA 20-361, regarding the procedures for submission of confidential materials.

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Paper Filers:

Parties who choose to file by paper must file an original and one copy of each filing. Filings can be sent by commercial overnight courier, or by first-class or overnight U.S. Postal Service mail. All filings must be addressed to the Commission's Secretary, Office of the Secretary, Federal Communications Commission.

• Commercial overnight mail (other than U.S. Postal Service Express Mail and Priority Mail) must be sent to 9050 Junction Dr., Annapolis Junction, MD 20701.

• U.S. Postal Service first-class, Express, and Priority mail must be addressed to 445 12th St. SW, Washington, DC 20554.

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Effective March 19, 2020, and until further notice, the Commission no longer accepts any hand or messenger delivered filings. This is a temporary measure taken to help protect the health and safety of individuals, and to mitigate the transmission of COVID-19.

See FCC Announces Closure of FCC Headquarters Open Window and Change in Hand-Delivery Policy,

Public Notice, DA 20-304 (March 19, 2020).

https://www.fcc.gov/document/fcc-closes-headquarters-open-window-and-changes-hand-delivery-policy.

• During the time the Commission's building is closed to the general public and until further notice, if more than one docket or rulemaking number appears in the caption of a proceeding, paper filers need not submit two additional copies for each additional docket or rulemaking number; an original and one copy are sufficient.

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People With Disabilities:

To request materials in accessible formats for people with disabilities (braille, large print, electronic files, audio format) send an email to

fcc504@fcc.gov

or call the Consumer & Governmental Affairs Bureau at (202) 418-0530 (voice), (202) 418-0432 (tty).

FOR FURTHER INFORMATION CONTACT:

Kelly A. Quinn, Office of Economics and Analytics, (202) 418-0660.

SUPPLEMENTARY INFORMATION:

This is a summary of the Commission's Notice of Proposed Rulemaking (NPRM) in GN Docket No. 20-32, FCC 20-52, adopted on April 23, 2020 and released on April 24, 2020. The full text of this document is available for public inspection during regular business hours in the FCC Reference Information Center, Room CY-A257, 445 12th Street SW, Washington, DC 20554, except when Commission Headquarters is otherwise closed to visitors.

See

Public Notice,

Restrictions on Visitors to FCC Facilities,

that appeared on the Commission website March 12, 2020, or by using the search function on the Commission's ECFS web page at

https://www.fcc.gov/ecfs/.

It is also available on the Commission's website at

https://www.fcc.gov/document/fcc-proposes-5g-fund-rural-america-0.

The Order that was adopted concurrently with this NPRM will be published elsewhere in the

Federal Register

.

Synopsis

I. Introduction

1. 5G mobile wireless networks promise to be the next leap in broadband technology, offering significantly increased speeds, reduced latency, and better security than 4G LTE networks can offer. 5G mobile wireless broadband service is expected to create as many as three million new jobs, generate $275 billion in private investment, and add $500 billion in new economic growth. The Commission anticipates that the progression to 5G service will be swift. Since late 2018, major U.S. mobile wireless carriers have lit up 5G networks covering more than 200 million Americans in aggregate. And, as part of its recently approved transaction, T-Mobile has committed to deploying 5G service to 99 percent of Americans within six years, including covering 90 percent of those living in rural America within that timeframe. The Commission is concerned, however, that even with these significant deployment commitments, some rural areas will remain where there is insufficient financial incentive for mobile wireless carriers to invest in 5G-capable networks, and those communities could be excluded from the technological and economic benefits of 5G for years to come. During this transition to 5G service, the Commission therefore reaffirms its commitment to using Universal Service Fund support to close the digital divide and to make sure that parts of rural America are not left behind.

2. Given the concerns many stakeholders raised about the accuracy of Mobility Fund Phase II 4G LTE coverage data, many of which were validated during Commission staff's investigation into carriers' maps, and in light of the changes taking place in the marketplace, it no longer makes sense to use limited universal service support to deploy 4G LTE networks. Rather, to ensure that all Americans enjoy the benefits of the most modern, advanced communications technologies offered in the marketplace no matter where they live, and to maintain American leadership in 5G, the Commission proposes to establish a 5G Fund for Rural America, which would use multi-round reverse auctions to distribute up to $9 billion, in two phases, over the next decade and beyond to bring voice and 5G broadband service to rural areas of the country that are unlikely to see unsubsidized deployment of 5G-capable networks. Phase I of the 5G Fund would target at least $8 billion of support to rural areas of the country that would be unlikely to see timely deployment of voice and 5G broadband service absent high-cost support or as part of T-Mobile's transaction-related commitments. To balance the

Commission's policy goal of efficiently redirecting high-cost support to the areas where it is most needed with the Commission's obligation to ensure that it has an accurate understanding of the extent of nationwide mobile wireless broadband deployment, the Commission seeks comment on two options for identifying areas that would be eligible for 5G Fund support.

3. One approach for Phase I could take immediate action to define eligible areas based on current data sources that identify areas as particularly rural, and thus in the greatest need of universal service support. In recognition of the particular challenges of ensuring that voice and 5G broadband service are deployed to areas that lack any mobile broadband service, the Commission would prioritize areas that have historically lacked 4G LTE, or even 3G, service. This would ensure that the Commission could move quickly to target universal service support to those areas least likely to receive service without support, such as those with sparse populations, rugged terrain, or other factors. Under this approach, the Commission anticipates commencing the 5G Fund Phase I auction in 2021.

4. Alternatively, the Commission could delay the 5G Fund Phase I auction until after it collects and processes improved mobile broadband coverage data through the Commission's Digital Opportunity Data Collection proceeding. Collecting these data would allow the Commission to identify with greater precision those areas of the country that remain unserved by 4G LTE service. While this option would likely result in a less expansive and a more targeted list of eligible areas and help ensure prioritization of areas that currently lack service, it would potentially delay the start of the 5G Fund Phase I auction and deployment of 5G-capable networks in those areas.

5. Phase II of the 5G Fund would follow the completion of Phase I and would target universal service support to bring wireless connectivity to harder to serve and higher cost areas, such as farms and ranches, and make at least $1 billion available specifically aimed at deployments that would facilitate precision agriculture. By proposing to rely on a two-phased approach, as the Commission did with the Connect America Fund and adopted in the

Rural Digital Opportunity Fund Report and Order,

85 FR 13773 (Mar. 10, 2020), for the Rural Digital Opportunity Fund, the Commission can commence a 5G Fund Phase I auction while also ensuring that Phase II would cover harder-to-serve areas so that such areas are not left behind. Moreover, the proposal to implement this two-phased approach would allow the Commission to build upon future recommendations from the its Task Force for Reviewing the Connectivity and Technology Needs of Precision Agriculture in the United States (Precision Agriculture Task Force) to more accurately target Phase II support towards services that will meet the growing needs of America's farms and ranches.

6. Full participation in today's society requires that all American consumers, not just those living in urban areas, have access to the most current and advanced technologies and services available in the marketplace. By supporting the build out of 5G mobile broadband networks in areas that likely would otherwise go unserved, the Commission can help Americans living, working, and travelling in rural communities gain access to communication options on par with those offered in urban areas.

7. The Commission's universal service obligations demand that it keep pace with changes in the communications marketplace. Similarly, the Commission's policy goal must be to use its limited Universal Service Fund dollars in rural America to support the deployment of service using the most current and advanced technology available consistent with what is being offered to urban consumers. The Commission's proposals for the 5G Fund recognize that market realities have changed since the Commission adopted Mobility Fund Phase II, and that supporting the provision of 4G LTE service in unserved and underserved areas will not allow the Commission to accomplish this goal. By proposing to replace the planned Mobility Fund II with the 5G Fund, the Commission seeks to direct universal service funds to support networks that are more responsive, more secure, and up to 100 times faster than today's 4G LTE networks. The Commission reaffirms its commitment to fiscal responsibility and propose concrete performance requirements and public interest obligations to ensure that rural consumers would be adequately served by the mobile wireless carriers receiving universal service support from the 5G Fund. We also propose to amend our generally applicable competitive bidding rules for universal service support and to codify recent guidance regarding letters of credit for universal service competitive bidding mechanisms.

II. Background

8. In 2011, as part of its comprehensive reform of the universal service and intercarrier compensation programs, the Commission froze high-cost support and established the Mobility Fund to ensure that universal service support for mobile services would be targeted in a cost effective manner. The Mobility Fund included two phases. Phase I allocated one-time support for mobile carriers to provide 3G or better service to eligible areas, including on Tribal lands. To minimize shocks to carriers that might result in service disruptions for consumers, the

USF/ICC Transformation Order and Further Notice,

76 FR 73830, Nov. 29, 2011, 76 FR 78384, Dec. 16, 2011, provided for a five-year transition period during which mobile wireless competitive eligible telecommunications carriers receiving frozen high-cost support would continue to receive support subject to a phase down reduction of 20 percent per year beginning July 1, 2012. The Commission noted that, during the transition period, mobile wireless carriers, including those receiving legacy support, would have the opportunity to seek one-time support under Mobility Fund Phase I to expand 3G or better service to areas where such service was unavailable while also receiving phase-down legacy support.

9. The Commission also provided that if Mobility Fund Phase II were not operational by July 1, 2014, the phase down of frozen high-cost support for legacy support recipients would pause at the 60 percent level in effect on that date. The Commission concluded that the phase-down of legacy support for legacy support recipients serving Tribal lands would also pause at that time. The Commission also indicated that any pause in the support phase-down would be accompanied by additional mobile broadband public interest obligations.

10. For Mobility Fund Phase I, the Commission provided up to $300 million, along with an additional $50 million for Tribal Mobility Fund Phase I, in one-time support payments awarded through two reverse auctions. For Mobility Fund Phase II, the Commission proposed to provide ongoing support—including support for Tribal lands—for a period of 10 years and sought comment in the

USF/ICC Transformation Order and Further Notice

on the structure and operation of that fund. Subsequently, the Wireline Competition Bureau and the Wireless Telecommunications Bureau issued a Public Notice seeking additional public input on certain issues relating to Mobility Fund Phase II. The Wireline Competition Bureau and the Wireless Telecommunications Bureau sought to build upon their experience in implementing reverse auctions to

distribute universal service support and the experiences of mobile wireless carriers that participated in Mobility Fund Phase I, and sought comment for Mobility Fund Phase II on issues pertaining to the method for identifying areas eligible for support and establishing the geographic unit for bidding and measuring coverage, performance obligations, and the term of support. Given that mobile wireless carriers had already begun commercial deployment of 4G LTE in many parts of the country, the Commission proposed in April 2014 to refocus Mobility Fund Phase II to target those areas of the country where it was unlikely that 4G LTE service would be made available absent support, and those areas where existing mobile voice and broadband service would not be preserved without support.

11. In September 2016, the Wireless Telecommunications Bureau released its analysis of mobile wireless carriers' December 2015 FCC Form 477 submissions to identify the areas in the country that might require support on an ongoing basis in order to ensure adequate 4G LTE coverage. In addition to identifying the specific areas of the country that were lacking 4G LTE coverage, staff examined the distribution of high-cost support to assess the efficacy of that support to determine where existing mobile voice and broadband service would require continued support. That analysis revealed that as much as 75 percent of legacy high-cost support was being distributed to carriers in areas where it may not be needed because 4G LTE service was already being provided by an unsubsidized carrier. Furthermore, according to the data staff reviewed, only approximately 20 percent of the area of the United States (excluding Alaska) either lacked 4G LTE service entirely or had 4G LTE service provided only by a subsidized carrier. In other words, mobile wireless carriers were receiving approximately $300 million or more each year in subsidies to provide service even though those subsidies were unnecessary to ensure the availability of 4G LTE service in those areas.

12. In its 2017

Mobility Fund Phase II Report and Order,

82 FR 15422, Mar. 28, 2017, the Commission adopted rules to move forward with the Mobility Fund Phase II auction to allocate up to $4.53 billion over 10 years to support the deployment of 4G LTE service to areas that were too costly for the private sector to serve without support and to preserve such service where it might not otherwise exist absent subsidies. In the subsequent

Mobility Fund Phase II Challenge Process Order,

82 FR 42473, Sept. 8, 2017, the Commission established the framework for a challenge process aimed at resolving disputes about areas found to be presumptively ineligible for Mobility Fund Phase II support. Mobile wireless carriers were required to submit 4G LTE coverage maps by January 4, 2018, to be followed by a process in which parties could challenge the submitted coverage maps.

13. Based on evidence submitted into the record that called into question the accuracy of the submitted coverage map of at least one nationwide provider, shortly after the close of the Mobility Fund Phase II challenge process submission window, Commission staff conducted a preliminary review of the speed test data that had been submitted to the Commission. The staff review of challenger data, in combination with the record evidence focusing on specific areas in which coverage appeared to be overstated, suggested among other things that some carriers' coverage data reported to the Commission did not accurately reflect consumer experience in those areas. Based upon this review and the carriers' responses to staff inquiries, in December of 2018 the Commission launched a formal investigation of the Mobility Fund Phase II 4G LTE coverage data submitted by certain carriers. In announcing the start of the investigation into potential violations of the data collection rules, the Commission suspended the response phase of the Mobility Fund Phase II challenge process pending conclusion of the investigation. The staff investigation involved collecting additional information from certain carriers regarding their generation of coverage data, conducting independent drive test data to verify the challenger data, and analyzing specific allegations made in the record to evaluate the accuracy of the submitted coverage maps.

14. On December 4, 2019, the Rural Broadband Auctions Task Force released a report on the results of that investigation. Over the course of the investigation, Commission field agents drove nearly 10,000 miles and conducted more than 24,000 speed tests on the mobile networks of Verizon, U.S. Cellular, and T-Mobile across six test routes in 12 states where evidence in the record indicated coverage maps were overstated. Staff discovered that the Mobility Fund Phase II coverage maps submitted by these carriers likely overstated actual coverage and did not reflect on-the-ground performance in many instances, with only 62 percent of the field agent drive tests achieving the 5 Mbps minimum download speed predicted by the maps. In addition to making specific recommendations to improve the accuracy of coverage maps in the future, the staff report recommended that the Commission terminate the challenge process, concluding that the coverage maps were not a sufficiently reliable or accurate basis upon which to complete the challenge process as designed.

15. On October 16, 2019, the Commission approved a transaction between T-Mobile and Sprint, wherein the parties made certain binding commitments as a condition of approval, including substantial nationwide and rural deployment of 5G service within six years of the merger closing date. Specifically, T-Mobile committed to deploying 5G service covering 85 percent of the population in rural areas and 97 percent of all Americans within three years after closing, with coverage rising to 90 percent of the population in rural areas and 99 percent nationwide within six years. Moreover, the parties committed that their deployed 5G service will meet minimum download speed performance benchmarks of at least 50 Mbps available to 90 percent of the rural population, with two-thirds of rural Americans able to receive download speeds of at least 100 Mbps. T-Mobile announced in December 2019 that it had switched on its 5G network across the nation using low-band spectrum. The other nationwide carriers similarly have begun to deploy 5G service in select cities, with widely-available 5G service expected in the near future.

III. Discussion

16. The Commission proposes to retarget universal service funding for mobile broadband and voice in the high-cost program to support the deployment of 5G services by establishing the 5G Fund for Rural America. The Commission believes that supporting the deployment of 5G networks is necessary to ensure that rural America can secure the economic and technological benefits that come from wireless innovation. That is, the Commission's commitment to closing the digital divide compels it to ensure that the same services are available in rural America as in urban areas. The rapid pace of deployment of 5G networks in many parts of the country, combined with T-Mobile's commitment to cover 90 percent of rural Americans with its 5G network, suggests that it is no longer the time to begin a 10-year support program to deploy 4G LTE networks. Consequently, the 5G Fund would replace Mobility Fund Phase II,

which would have provided federal support for 4G LTE service in unserved areas, as the means by which the Commission completes the reform of mobile legacy high-cost support. The Commission seeks comment on this proposal.

17. 5G networks are expected to greatly enhance mobile broadband performance by increasing wireless speeds and reducing latency, as well as enabling transformative new services such as smart grids, Internet of Things, Virtual/Augmented Reality, and a host of other applications with the potential to reshape many facets of American life, that will all need robust wireless connectivity. Specifically, through 5G deployment, applications that are particularly useful in rural areas, such as connectivity for remote education and telemedicine, will help the Commission to close the digital divide. Rural farmland in particular has unique connectivity needs, including the proliferation of devices with high data needs, and 5G networks are crucial to unlocking the potential of precision agriculture for the American farmers and ranchers that feed the world by improving productivity and reducing costs. Thus far, the deployment of 5G service has been primarily concentrated in more urban areas with larger population bases.

18. Nor does the Commission believe that supporting the deployment of 4G LTE service would be adequate for rural communities to fully participate in the modern connected economy, given the increased data speeds, security, and responsiveness of 5G services. While there remain areas of the country that lack even 4G LTE service, the need for 5G networks will only increase in the future: By one estimate, 5G connections in North America will exceed 4G LTE connections by 2025. Further, consumers are using more and more data, on average, and this is expected to continue to grow significantly. Targeting support to those areas that would otherwise be unlikely to see deployment of 5G service would therefore help ensure that the Commission is using its limited universal service funds to narrow the digital divide.

19. More specifically, the Commission proposes that the universal service support offered through the 5G Fund should be used to support rural-area mobile high-speed 5G networks that meet at least the 5G-NR (New Radio) technology standards developed by the 3rd Generation Partnership Project (3GPP) with Release 15 (or any successor release that may be adopted by the Office of Economics and Analytics and the Wireline Competition Bureau after notice and comment). Since 5G networks and the associated handset ecosystem have developed at a greater pace than many had predicted, if the Commission were to continue supporting older technologies, it would risk providing subsidies to support outmoded network technologies that may be limited in their ability to provide the same level of connectivity, and the associated economic benefits, that 5G would likely provide. It is crucial that the whole of America experiences the benefits of 5G, and not just those living in the more urban areas of the country. The Commission seeks comment on this proposal. Should any commenter propose an alternative release, the Commission seeks comment on the costs and benefits of the 5G Fund supporting such an alternative.

A. Two Approaches to a 5G Fund for Rural America

20. The Commission's policy goals for the 5G Fund are premised on its conclusion that universal service funding for the advancement of high-speed robust mobile services to support 5G technology in rural areas is an appropriate and necessary use of universal service funds. The Commission bases its proposal to implement the 5G Fund on a determination that it should target universal service funding to support the deployment of the highest level of mobile service widely available today—5G. In proposing the implementation of the 5G Fund, the Commission reiterates its commitment to minimizing the overall burden of universal service contributions on consumers and businesses by expending the finite funds available in the most efficient and cost effective manner.

21. The Commission therefore seeks comment on two proposed options for the 5G Fund in order to achieve its policy goals and ensure that reform of mobile high-cost support helps to close the digital divide. On the one hand, the Commission could proceed most quickly to the 5G Fund Phase I auction by identifying those areas that would be eligible for support based primarily on the degree of rurality of each area, and then prioritize support in areas that have historically lacked 3G and 4G LTE services in order to ensure that all Americans are served by 5G networks quickly. The Commission anticipates commencing the Phase I auction as early as next year if it pursues this course. On the other hand, the Commission could take an alternative tack in which it would wait to identify areas eligible for support until it develops improved mobile coverage data through the Digital Opportunity Data Collection proceeding, but potentially at the cost of delaying the 5G Fund Phase I auction and the Commission's reform of the legacy high-cost support program.

22. These two options reflect a fundamental challenge in balancing competing concerns. On the one hand, the Commission recognizes the pressing need for universal service support in rural areas that are sparsely populated, costly to serve, and have historically lacked adequate mobile service, and seeks to ensure that those areas do not fall further behind. The Commission notes that under the legacy high-cost support program, in 12 states and territories—including Indiana, Ohio, Pennsylvania, and Vermont—mobile carriers receive no high-cost support despite such states having extensive rural and/or mountainous areas that are likely to lack adequate mobile service. In an additional seven states and territories—California, Georgia, New Hampshire, South Dakota, Tennessee, Utah, and the Commonwealth of Northern Mariana Islands—mobile carriers statewide received less that $1 million per year, or less than one-quarter of 1 percent of legacy high-cost support disbursements, despite all having extensive rural, mountainous, or otherwise hard-to-serve areas. On the other hand, the accuracy of the mobile broadband coverage data that carriers submit to the Commission has been called into question, and the Commission acknowledges the pressing need to reform its mobile coverage data collection to understand more precisely where mobile coverage is truly lacking. Addressing the problems with mobile coverage data would allow the Commission to better target areas in need of support but would delay the disbursement of support to many of those same areas.

23. Binding commitments made by T-Mobile to deploy 5G service to 90 percent of rural Americans (and 99 percent of the population nationwide) within six years will result in extensive 5G coverage across many rural and hard-to-serve areas of the nation, and will inform the Commission's analysis in several respects.

First,

these commitments are measured by population covered rather than a defined geographic area. While the Commission expects that these commitments will result in deployment of 5G service to many areas including areas that may lack 4G LTE service today, based on staff analysis, they could still leave up to approximately 81 percent of the rural land area of the United States uncovered.

Second,

the Commission believes it would be

inappropriate to allow the use of high-cost support to fulfill merger conditions, and therefore expect that the support awarded via the 5G Fund would be used to deploy 5G service to areas other than where T-Mobile will deploy.

Third,

if the Commission does not adequately account for T-Mobile's commitments, the Commission risks using finite universal service 5G Fund support to overbuild areas where T-Mobile already has an enforceable obligation to deploy. The Commission seeks comment on these proposals and assumptions, including the costs and benefits of either option.

1. Option A: Funding 5G in Rural America in 2021

24. To implement the Commission's goal of redirecting high-cost support to those areas where voice and 5G broadband service would not otherwise be deployed absent support, the Commission's proposal under Option A would be to determine eligibility for 5G Fund Phase I support based on existing data sources. This would enable the Commission to move quickly to authorize funding to areas not likely to receive voice and 5G broadband services. As the deployment of 5G service has primarily been focused on urban environments to date, the Commission expects the degree of rurality of an area can provide a reasonable estimate of the areas where 5G is unlikely to be deployed absent federal support. This approach would obviate the need to collect and process new mobile broadband coverage data from carriers and allow for a more rapid disbursement of support to unserved rural areas. The Commission anticipates that under Option A, it would commence the 5G Fund Phase I auction in 2021.

25.

Eligible Areas.

Under this approach, the Commission proposes to make all areas of the country meeting a certain definition of “rural” eligible for 5G Fund support. To identify such areas, the Commission proposes to include any census tract that is part of U.S. Department of Agriculture's Rural-Urban Commuting Area Codes (RUCA) 5-10, except any census blocks within those areas that are urban or water-only. Under this definition, approximately 67 percent of the country's land area would be eligible for support.

26. More specifically, the Commission proposes to distinguish between rural and urban areas based on the most recent decennial U.S. Census Bureau definition of such areas, and proposes to exclude all urban geographic areas. This definition of rural is how such areas were defined for purposes of the T-Mobile-Sprint transaction. The Commission seeks comment on this proposal. In the U.S. Census Bureau data, Urbanized Areas are defined as areas that contain 50,000 or more people, while Urban Clusters are defined as areas that have a population of at least 2,500 people and less than 50,000 people. The Urban-Rural Classification identifies 486 Urbanized Areas and 3,087 Urban Clusters nationwide. Collectively, these urban areas include approximately 81 percent of the population and approximately 3 percent of the land area. The Commission believes both of these areas are likely to receive robust 5G service absent a subsidy. The Commission seeks comment on this view and on other ways of ensuring that urban or other areas already receiving or poised to receive robust 5G service without subsidy are excluded from eligibility. Urban Areas and Urban Clusters are defined at the census block level, and the Commission proposes to consider as rural any census block that is not classified within an Urban Area or Urban Cluster to help inform the Commission's determination of eligible areas. Water-only blocks are excluded from the Commission's analysis, and the Commission has proposed to exclude Alaska, Puerto Rico and the U.S. Virgin Islands from 5G Fund support. The Commission will include, however, the entirety of American Samoa, Guam, and the Northern Mariana Islands as eligible. The Commission also seeks comment on whether it would be appropriate to exclude from eligibility urban areas that fall within Tribal lands.

27. This definition of rural, while useful as a starting point, is overly broad for determining eligibility for 5G Fund support in and of itself. If the Commission were to rely solely on this classification, approximately 97 percent of the land area of the U.S. would be eligible for 5G Fund support. The Commission therefore proposes to refine this set of eligible areas through a “degree of rurality” to better target funding to where it is needed most.

28. The Commission proposes basing the degree of rurality of any given area on the U.S. Department of Agriculture's Rural-Urban Commuting Area (RUCA) Codes that employ the most recent decennial census data (2010) and the 2006-10 American Community Survey, and to categorize census tracts based on population density, urbanization, and daily commuting patterns. The primary RUCA codes (1-10) “delineate metropolitan, micropolitan, small town, and rural commuting areas based on the size and direction of the primary (largest) commuting flows.” In addition, the secondary RUCA codes identify other connections among rural and urban places based on the size and direction of the secondary, or second largest, commuting flow.

29. The Commission expects that the RUCA codes would be able to distinguish those areas of the country that are less likely to receive 5G service absent subsidies, and note that RUCAs are census-tract based, consistent with the geographic areas the Commission proposes to use below as the minimum geographic area for bidding in the auction. The Commission seeks comment on the costs and benefits associated with the use of RUCAs to help determine eligibility. Does the fact that RUCAs are based on decennial census data affect their usefulness in determining eligibility for support? Which codes should the Commission use to classify areas as rural for the purposes of the 5G Fund and why? Given the urban-rural delineation described above, the Commission proposes to make eligible for support only those areas contained within RUCA codes 5 through 10, where code 5 is defined as micropolitan high commuting: primary flow 30 percent or more to a large Urban Cluster, and code 10 is defined as rural areas: primary flow to a tract outside an Urban Area or Urban Cluster. If the Commission were to use RUCA codes 5 through 10 to identify eligible areas, approximately 67 percent of the land area of the United States (excluding Alaska, Puerto Rico and the U.S. Virgin Islands) would be eligible for 5G Fund support. Alternatively, should the Commission be more or less expansive in its approach, and if so, how?

30. Are there alternative available datasets, such as the Office of Management and Budget's county-based Core-Based Statistical Areas, the U.S. Department of Agriculture's Rural-Urban Continuum Codes, the U.S. Department of Agriculture-Economic Research Service's Frontier and Remote Area Codes, the U.S. Department of Agriculture-Economic Research Service's land use dataset, or others, that the Commission should consider in determining eligible areas? Commenters supporting alternative datasets should address why the supported dataset would be preferable and whether it should be used on its own or in conjunction with other data.

31. In addition, the Commission seeks comment on whether using U.S. Census Bureau population density data, either on its own or in conjunction with the Rural-Urban Commuting Area Codes or alternative datasets as set out above, is an appropriate way to proceed. The

Commission requests that commenters provide information on which population density threshold might be the most appropriate and why. For example, the Commission could use a 10 or 20 person per square mile threshold or higher. The Commission also seeks comment on whether it should consider population density at the census block, census block group, or census tract level, and why.

32. Finally, the Commission seeks comment on any other alternative methodologies or existing data the Commission could use to help identify areas eligible for 5G Fund support that would balance the need to ensure the timely deployment of 5G to rural areas with the need to allocate funding using the best data currently available to the Commission. Apart from determining whether an area is urban or rural for purposes of allocating 5G Fund support, are there any other factors that could help identify where mobile carriers would have an insufficient incentive to build out a 5G network?

33.

Prioritizing Areas that Historically Lack Mobile Service.

In addition to identifying areas eligible for 5G Fund support on the basis of their rurality, the Commission proposes to prioritize among those areas those places that have historically lacked 3G or 4G LTE service, and seek comment on how to identify them. Using high-cost support to deploy voice and 5G broadband service presents different policy challenges than a fund designed to fill in gaps in otherwise expansive coverage. The Commission recognizes, however, that its proposal to define the areas eligible for support without relying on carrier-reported coverage data may capture both areas where 4G LTE service has already been deployed, as well as areas currently lacking any mobile broadband service at all. Closing the digital divide requires a concerted effort to ensure universal service funds support new deployments in previously unserved areas, as well as supporting upgrades of existing networks to new technologies. Areas that have historically lacked 3G or 4G LTE service may therefore require additional focus and higher levels of support in order to ensure that 5G-capable networks are deployed in a timely manner. The Commission seeks comment on this approach.

34. The Commission seeks comment on currently available sources of data that would allow it to best target 5G Fund support to areas that have historically lacked mobile service. The Commission does not believe it should identify areas eligible for support based on existing mobile broadband coverage data because staff has found that these coverage data, submitted both as part of FCC Form 477 and in the one-time Mobility Fund Phase II data collection, do not really reflect actual on-the-ground coverage in many instances. However, because FCC Form 477 coverage data is filed twice per year, the Commission believes it could provide a useful window into which areas were deployed most slowly. The Commission seeks comment on this view, and on the best way to use FCC Form 477 or other mobile coverage data to identify these areas. For example, should the Commission prioritize funding based on coverage at a single point in time, or are there better methodologies the Commission could consider? The Commission also notes that while parties have raised concerns that these data tend to overstate the extent of coverage and therefore should not be used to render areas ineligible, no parties have asserted the data understate the extent of coverage. Are concerns over the accuracy of available coverage data lessened when these data are used for purposes of prioritization? The Commission seeks comment on these issues and on other potential mobile coverage data sources that would help inform which areas should be prioritized due to a historic lack of service.

35. The Commission also seeks comment on how best to prioritize such areas in the 5G Fund auction. For the Rural Digital Opportunity Fund Phase I auction, the Commission effectively increased the reserve price in census blocks lacking even 10/1Mbps service by $10 per location over census blocks that lack 25/3 Mbps broadband but already have access to 10/1 Mbps service. While the mechanism by which the Commission proposes to calculate prices on a per square kilometer basis in the 5G Fund Phase I auction differs from the Rural Digital Opportunity Fund, the Commission notes that any prioritization could be incorporated into the adjustment factor process the Commission proposes herein. The Commission seeks comment generally on the mechanics of how to prioritize areas that have historically lacked service, as well as on what the appropriate level of prioritization would be. Should such areas receive an upward adjustment of 25 percent, similar to that preference adopted for the Rural Digital Opportunity Fund? Should the Commission also consider multiple levels of prioritization depending on other factors? The Commission seeks comment on these issues.

36. The Commission believes that its proposed approach under Option A is consistent with the requirements of the recently enacted the Broadband Deployment Accuracy and Technological Availability Act (Broadband DATA Act), Pub. L. 116-130, 134 Stat. 228 (2020), which among other things requires the Commission to collect mobile coverage data and release mobile broadband deployment maps based upon collected data. The statute requires the Commission to use these maps when awarding new funding to deploy broadband service after the maps have been created. Given the anticipated timeline of the Commission's proposal to define eligibility based upon degree of rurality, the Commission expects that the 5G Fund Phase I auction would close before the creation of the maps required by the statute, obviating the need to use those maps when determining the areas eligible for Phase I. The Commission seeks comment on this view. To the extent that the maps are created prior to Phase II of the 5G Fund, the Commission seeks comment on how to use those maps for any 5G Fund Phase II funding awards.

2. Option B: Collecting New Data Before Funding 5G Rural America in 2023 or Later

37. The Commission also seeks comment on an alternative proposal under which it would delay the Phase I auction, and any support for rural 5G, until the Commission completes work to develop more granular mobile broadband coverage maps in the Digital Opportunity Data Collection proceeding. Under the Commission's Option B approach, the Commission would determine areas eligible for 5G Fund Phase I support only after collecting and processing new mobile broadband coverage data from carriers. The Commission sought comment on ways to improve the accuracy of mobile coverage data submitted by carriers in the

Digital Opportunity Data Collection Order and Further Notice,

84 FR43705, 43764, Aug. 22, 2019. Additionally, in light of issues raised about the accuracy of the mobile broadband coverage data submitted by carriers for the one-time collection of 4G LTE coverage data in the Mobility Fund Phase II proceeding, staff made specific recommendations on how to improve the collection of mobile coverage data, including by standardizing many of the parameters carriers use to generate propagation maps. While these issues remain part of an open rulemaking, the Commission anticipates that proceeding will allow it to collect more accurate mobile broadband coverage data in the future.

Subsequently, Congress enacted the Broadband DATA Act, largely affirming the Commission's approach to broadband mapping in the Digital Opportunity Data Collection proceeding, including collecting uniform, granular coverage maps from service providers, collecting feedback on the maps from members of the public and from state, local, and Tribal governments, and developing a database of broadband-addressable locations. However, the Commission currently lacks an appropriation from Congress to fulfill its obligations under the Broadband DATA Act and complete mobile broadband coverage maps. Under this approach, the Commission would first collect data and create new mobile broadband coverage maps, before using those maps to identify as eligible those areas that remain unserved on an unsubsidized basis. This would likely result in less expansive and more targeted eligible areas than under the Commission's Option A proposal. However, due to the current lack of appropriated funding, the expected length of time that would be needed to collect, verify, and analyze these data, and to collect and adjudicate objections from members of the public and state, local, and Tribal governments, this approach would also be likely to significantly delay the Phase I auction and disbursement of high-cost support to rural areas, including to those areas that do not currently receive support.

38. The Commission anticipates that the earliest it could conduct the 5G Fund Phase I auction after collecting new coverage data under the Option B approach would be sometime in 2023. Specifically, based on the Commission's experience in deploying new, industrywide map-based data collections, staff has estimated that completing the new statutorily-required rulemaking; developing the IT systems and resources necessary to collect and verify submitted mobile coverage data and allow for a public-facing challenge process (whether done in-house or via contract); collecting, verifying, and analyzing the coverage data; and collecting and adjudicating any challenges to these data would add at least 18-24 months to the auction process, even if Congress were to appropriate sufficient funds to implement the Broadband DATA Act. The Commission seeks comment on this view and on whether there are additional things it should consider that could shorten that process.

39.

Areas Eligible for 5G Fund Support.

Under this approach, the Commission would propose to make eligible for 5G Fund support all areas of the country where mobile 5G service would be unlikely to be offered in the absence of high-cost support using new carrier-reported mobile broadband coverage data. To identify such areas, the Commission proposes that any area that updated coverage data show lacks 4G LTE service by an unsubsidized carrier would be eligible for 5G Fund support. As part of this proposal, the Commission would use legacy high-cost support subsidy data from the Universal Service Administrative Company (USAC) that define each recipient's subsidized service areas to determine whether an area would have service by an unsubsidized carrier. The Commission notes that current 5G deployments in rural areas are a relatively greenfield state and seeks comment on whether it should use 5G deployment data to identify eligible areas under this approach. Would basing eligibility on where 4G LTE has yet to be deployed without support, nearly 10 years after the technology was first deployed, serve as a better indicator of where 5G service would similarly not be deployed absent support? The Commission seeks comment on this proposal and its assumptions. Should the Commission adopt a broader definition to identify areas that should be eligible for 5G Fund support, such as areas where coverage data show lack 5G service? Or should the Commission also consider historical 4G LTE coverage data to include as eligible areas that did not see 4G LTE deployment within a shorter duration, such as within five years? If so, how would the Commission mitigate issues with the accuracy of historical coverage data?

40. In light of the Commission's proposed definition of eligibility for 5G Fund support under this approach, the Commission expects it would not be necessary to further prioritize areas that have historically lacked 3G or 4G LTE service as these areas would be identified in the new carrier-reported mobile coverage data. The Commission seeks comment on this conclusion or whether there are other metrics by which the Commission should prioritize certain areas under Option B, similar to Option A, if the Commission has more expansive eligible areas than proposed herein. If so, how should the Commission identify such areas? The Commission seeks comment on these issues.

B. Framework for the 5G Fund

41. The general framework that the Commission proposes for the 5G Fund would remain largely the same under either eligibility and auction timing proposal. However, where the Commission's two eligibility framework proposals differ materially, the Commission discusses the implications of each on the proposed auction structure.

1. Term of Support

42. The Commission proposes a term of support of 10 years for each phase of the 5G Fund, with monthly support disbursements. As the Commission recently explained in adopting a 10-year support term for the Rural Digital Opportunity Fund, a 10-year term of support encourages long term investment and was partially responsible for the robust participation that occurred in the successful Connect America Fund Phase II (CAF Phase II) auction. The Commission expects that the same incentives would apply here. The Commission seeks comment on this proposal. Does a 10-year term of support for each phase of the 5G Fund help encourage more bidders—particularly smaller wireless carriers—to participate in a 5G Fund auction? Commenters should specifically address whether a 10-year term of support is appropriate for the 5G Fund in light of the significant capital and effort needed to deploy and upgrade high-speed, mobile broadband networks in rural areas, and whether a 10-year term of support is consistent with the timeframe used by rural carriers to plan and schedule network buildout. Alternatively, commenters should discuss whether a different term of support is appropriate and explain the specifics of their proposal.

2. Budget

43. The Commission proposes a total budget of up to $9 billion for the 5G Fund, which would be awarded in two separate phases, with the first phase targeting support to eligible rural areas and the second phase focusing on harder to serve and higher cost areas, such as farms and ranches, specifically targeting deployments that would facilitate precision agriculture. Of this budget, the Commission proposes that Phase I of the 5G Fund would include up to $8 billion, of which the Commission proposes to reserve $680 million for service to Tribal lands. The Commission proposes to exclude areas in Alaska, for which high-cost support is provided via the Alaska Mobile Plan adopted in the

Alaska Plan Order,

81 FR 69772, Dec. 7, 2016, as well as areas in Puerto Rico and the U.S. Virgin Islands territories, for which high-cost mobile support is provided as described in

PR-USVI Fund Report and Order,

84 FR 59937, Nov. 7, 2019, where the Commission is already making available

high-cost support, including for 5G mobile broadband, from the areas that would be eligible to receive support from the 5G Fund. The Commission seeks comment on these proposals and on alternatives to them. To establish how much support would be available in the 5G Fund Phase I auction, the Commission also seeks comment on whether it should reduce the total budget of Phase I of the 5G Fund by an amount equivalent to the amount of funds that would be necessary to cover the overall phase down of legacy support. Current legacy high-cost support received by mobile carriers is approximately $382 million per year, excluding Alaska, Puerto Rico, and the U.S. Virgin Islands. Should the Commission deduct the funds necessary to cover the phase down of this support from the total amount of support it offers for eligible areas in the Phase I 5G Fund auction?

44. The up to $8 billion budget the Commission proposes for Phase I of the 5G Fund is premised, in part, on repurposing the $4.53 billion budget adopted for Mobility Fund Phase II, which intended to redistribute the amount of legacy support mobile carriers would receive over the next decade, outside of Alaska, Puerto Rico, and the U.S. Virgin Islands, combined with a recognition that significant additional financial resources will be needed to accomplish an undertaking of this kind. Although the current level of legacy support of approximately $382 million per year has decreased from when the Mobility Fund Phase II budget was adopted, the Commission nonetheless proposes to repurpose the entire $4.53 billion Mobility Fund Phase II budget, and seeks comment regarding how much additional funding may be needed to best achieve the Commission's policy objectives. The Commission notes that unlike the Mobility Fund Phase II budget, which was designed to fund the remaining areas of the country that were not served by 4G LTE (estimated at that time to be approximately 19 percent of the land area of the U.S.), under Option A, the Commission is proposing to support 5G deployment to potentially a significantly larger part of the country (approximately 67 percent of the land area of the U.S.) and, consequently, budget needs would be higher. While it remains unclear how much of the country would be eligible for 5G Fund support under the Commission's alternative Option B proposal, given the apparent overstatement of existing coverage data, the Commission anticipates that the areas unserved by 4G LTE could be substantially larger than originally estimated once it collects more accurate mobile broadband coverage data.

45. The Commission notes that its proposals for the 5G Fund budget are meant to ensure auction competition and efficient distribution of limited universal service support. Considering T-Mobile's extensive commitments to deploy 5G services and the proposals, discussed below, to remove T-Mobile's planned deployment areas from the auction, the Commission seeks comment on whether budgeting $8 billion for Phase I of the 5G Fund may reduce the efficiency of the auction and whether a smaller budget for Phase I of the 5G Fund would be more appropriate. Considering the scope of the areas that would be eligible to compete for support, does the budget the Commission proposes for Phase I of the 5G Fund cost-effectively incentivize carriers to participate in the auction in order to deploy 5G consistent with the public interest obligations it proposes for the fund?

46. The Commission's proposal would make at least an additional $1 billion, as well as any unawarded funds from Phase I of the 5G Fund, available for the budget of Phase II of the 5G Fund. Phase II of the 5G Fund specifically would seek to target funds support toward the deployment of technologically innovative networks that provide 5G service and would facilitate precision agriculture. The Commission proposes a budget of at least $1 billion for Phase II of the 5G Fund because it recognizes that significant resources may be necessary for carriers to commit to network buildout in the hardest to serve rural areas, like farms and ranches. The Commission anticipates that dedicating at least $1 billion to this second phase of funding would allow the Commission not only to close the remaining digital divide but also direct funds to innovative agricultural solutions, increasing the nation's economic efficiency and encouraging economic growth in rural areas. Reliable, advanced mobile broadband network deployment capable of providing 5G service is crucial to the adoption of smart farm and precision agriculture technologies because vast areas of croplands in rural areas currently remain unserved. The Commission also anticipates that Phase II of the 5G Fund would build off of what is learned from the Commission's Precision Agriculture Task Force, a cross-agency federal advisory committee comprised of public and private stakeholders in the agriculture and technology fields.

47. The Commission recognizes that achieving its universal service objectives is an ongoing process. As technologies and service levels evolve, fulfilling the Commission's objective of supporting 5G service that is reasonably comparable to service available in urban areas means continually assessing the need to support services that compare to the ever-improving standard of 5G service provided in urban areas. The Commission anticipates reassessing the budget for the 5G Fund Phase II auction following the 5G Fund Phase I auction. We seek comment on these budget proposals as well as any alternatives, including associated methodologies, for how to appropriately size the 5G Fund Phase I and Phase II budgets. Commenters offering alternatives to the Commission's budget proposals should support their proposals and should address if they have accounted for the phase down of legacy support as well as how their proposed budget(s) would ensure that the Commission remains a responsible steward of finite universal service fund resources.

3. Support for Tribal Lands

48.

Tribal Lands Preference.

The Commission recognizes the distinct challenges of ensuring that Tribal lands are provided with 5G service. To address these difficulties, the Commission seeks comment on a proposed approach to incorporating a Tribal lands preference into the 5G Fund auctions.

49. Under the Commission's proposed approach for Phase I, up to $680 million of the proposed $8 billion Phase I budget would be made available to support networks serving eligible areas in Tribal lands. This amount would double the amount that the Commission had estimated it would reserve to support Tribal lands from the Mobility Fund Phase II budget and is in accord with the proposed 5G Fund budget of up to $9 billion, which is approximately double the total Mobility Fund Phase II budget. Only eligible areas on Tribal lands would be assigned support under the reserved Tribal lands budget. Bidding for funding under the Tribal reserve budget and bidding for support under the unreserved portion of the budget would take place simultaneously as part of a single auction. Bids would be considered separately for support under the Tribal budget and the unreserved budget until the point at which total requested support for eligible Tribal lands could be accommodated under the Tribal budget, thus determining the areas that would win support under the Tribal reserve. Bidding would continue in order to

determine winners under the unreserved budget. Any unused funds from the Tribal reserve would be added to the unreserved budget, and any new bids for Tribal areas would then compete with bids for non-Tribal areas under the combined overall budget.

50. The Commission seeks comment on the benefits and potential drawbacks of this approach to establishing a separate Tribal reserve that would be made available first to Tribal lands, to the extent there are successful bidders willing to use these funds to serve Tribal lands. Under this proposal, the price at which support to areas assigned under the Tribal reserve would likely be higher than the price at which support would be assigned under the unreserved budget. The extent of the differential price effect would depend on the relative levels of competition in Tribal and non-Tribal areas.

51. The Commission asks commenters to consider whether the proposed separate Tribal reserve budget would significantly advance the Commission's goal of promoting 5G service to Tribal lands. If a commenter believes that another approach would better balance the Commission's interest in assigning funds under the 5G Fund in a cost effective manner with the Commission's interest in overcoming the distinct challenges of expanding 5G service to Tribal lands, the Commission asks that the commenter explain in detail the suggested alternative and reasons for preferring that approach.

52.

Identifying Tribal Lands.

The Commission proposes to identify those areas considered to be Tribal lands for high-cost purposes broadly in line with the Tribal areas identified in the Lifeline program. The high-cost program rules define Tribal lands as “any federally recognized Indian tribe's reservation, pueblo or colony, including former reservations in Oklahoma, Alaska Native regions . . . as well as Hawaiian Home Lands . . . .” For the Lifeline program, the Commission interpreted these same terms to correspond with geographic boundaries of the map of Hawaiian Home Lands maintained by the Department of Hawaiian Home Lands, the U.S. Census Bureau's American Indians and Alaska Natives Map, the Oklahoma Historical Map (1870-1890), as amended by the Commission to include the Cherokee Outlet, and the Alaska Native regions established pursuant to the Alaska Native Claims Settlement Act. The Commission proposes to use these same mapping resources in the 5G Fund, to the extent applicable, as it has used in the context of the high-cost program.

53. More specifically, the Commission proposes to use the most recent boundary data available for this purpose published by the U.S. Census Bureau as the primary source for identifying the boundaries of Tribal lands for the 5G Fund. The American Indian, Alaska Native, Native Hawaiian (AIANNH) data associate a particular Tribal area with a unique Tribe using a four-digit census code identification number and also include a flag indicating whether each area is recognized by a State or the Federal Government. For purposes of defining Tribal boundaries in the 5G Fund, the Commission proposes to only include areas that the AIANNH data indicate are federally recognized. In addition to using the Census Bureau's AIANNH boundaries, the Commission proposes to include the boundaries of all census blocks wholly contained within areas identified as Tribal for the enhanced Lifeline support areas in Oklahoma (based upon the Oklahoma Historical Map (1870-1890)), using the most recent census block boundary data available for this purpose. While support to carriers in Alaska is proposed to be outside the scope of the 5G Fund, the Commission's proposal would define Tribal lands more generally throughout the high-cost program. The Commission also proposes to include the Census Bureau's Alaska Native Regional Corporation boundaries so as to define as Tribal land those areas in Alaska that are not part of the AIANNH boundaries.

54. The Commission proposes to modify the definition of Tribal lands for the high-cost program to allow for the designation of certain non-Tribal lands as Tribal, similar to the rules for the Lifeline program. Using this designation process, and consistent with waivers previously granted by the Commission to expand the definition of Tribal land in the Commission's rules to also include certain areas of a tribe that do not otherwise meet the definition, the Commission proposes to designate as Tribal land those areas within the study area boundaries of the Eastern Navajo Agency and Sacred Wind Communications in New Mexico. This approach would allow so-called “checkerboard” Tribal and non-Tribal land areas in this section of New Mexico to be aggregated as Tribal lands for purposes of the high-cost program and the 5G Fund, consistent with past Commission waivers. The Commission seeks comment on this proposal.

55. Under the Commission's proposal, all Tribal land with the same four-digit census code within the minimum geographic area for bidding would be grouped together to allow bidders to bid on Tribal areas grouped by Tribe. For Tribal land that is not part of the Census Bureau's federally-recognized AIANNH boundaries, the Commission proposes to assign such land the census code for the appropriate tribe. Specifically, the Commission proposes to identify as part of the Navajo Nation the portions of the study area boundaries of the Eastern Navajo Agency and Sacred Wind Communications in New Mexico that fall outside of any Tribal boundary from the Census Bureau's data. The Commission also proposes to identify the portions of census blocks wholly contained within the enhanced Lifeline support areas in Oklahoma that fall outside of any Tribal boundary identified by the Census Bureau with the Cherokee, Iowa, Kickapoo, and Pawnee tribes as appropriate based upon the “former reservations in Oklahoma” identified in the Oklahoma Historical Map (1870-1890). Because there is no individual Alaska Native village associated with areas in Alaska that are not part of the AIANNH boundary data, the Commission proposes to identify these areas with the appropriate Alaska Native Regional Corporation identifier. The Commission seeks comment on these proposals and whether this process is sufficient to identify Tribal lands for the 5G Fund and the high-cost program generally.

4. A Multi-Round, Descending Clock Auction

56. The Commission proposes to rely on its existing general rules regarding competitive bidding for universal service support, with specific procedures to be developed through its standard Public Notice process. The Commission seeks comment on whether it should consider any modifications to this approach for the purposes of a 5G Fund auction.

57. For Phase I of the 5G Fund, the Commission proposes to use a multi-round, descending clock auction to identify which carriers would receive support in which areas and the amount of support that each winning bidder would be eligible to receive. The Commission proposes that this descending clock auction would consist of sequential bidding rounds according to an announced schedule providing the start time and closing time of each bidding round. The Commission proposes to use bidding procedures similar to those used in the auction framework adopted for the Rural Digital Opportunity Fund, and adopted in the

CAF Phase II Auction Order,

81 FR 44413 (Jul. 7, 2016) and used in the CAF Phase II auction. The Commission proposes a multi-round auction to

enable bidders to adjust their bidding strategies over the course of the auction so as to create viable aggregations of geographic areas in which to construct networks.

58. The Commission proposes that bids for 5G Fund support would be accepted and winning bids would be determined based on a support price per adjusted square kilometer. That is, each eligible area would have an associated number of adjusted square kilometers reflecting particular factors such as difficult terrain and other relevant factors affecting the cost of providing service to the area. Support amounts for an area would be determined by multiplying an area's associated adjusted square kilometers by the relevant price per square kilometer. For example, an area with 100 square kilometers and an adjustment factor of x would have 100*x adjusted square kilometers. This approach would ensure that carriers bidding to serve the hardest-to-serve parts of the country can compete efficiently and fairly in the auction.

59. As is the Commission's usual practice, during the pre-auction process, if the Commission adopts its proposal regarding the auction objective and design, the Commission would seek comment on and adopt an opening price per adjusted square kilometer that is high enough that even carriers requiring a very high level of support will be able to compete in the auction. The opening clock price, multiplied by an area's adjusted square kilometers, would represent the highest support amount that a winning bidder could receive in the auction. The same opening price, in dollars per adjusted square kilometer, would apply to all the eligible areas in the auction. The clock price would be decremented in subsequent rounds of the auction, implying lower support amounts for each area. Since the opening clock price is intended to serve as a starting point for bidding and not an estimate of final prices, the Commission anticipates that the opening price that it proposes would be based on rough estimates of the cost of providing service to hard-to serve areas, taking into account any adjustments that are adopted. The Commission invites comment here on the best approach to estimating a reasonable starting point for bidding in the 5G Fund Phase I auction.

60. If the Commission adopts its proposal to establish a separate budget reserved for Tribal lands, it proposes to use an integrated bidding process to assign support from both the Tribal lands reserved budget and the unreserved 5G Fund Phase I budget, using a single price clock that would apply to bids for support under both budgets. Bid processing procedures would ensure that the Tribal reserve budget would clear at a price per adjusted square kilometer that is not less than the price at which the unreserved budget would clear, and as a result, winning bids under the Tribal reserve budget would begin to be assigned at support prices that were no less, and potentially greater than, the prices at which bids under the unreserved budget could be assigned. Absent a decision to establish a separate budget for Tribal lands, the bidding system would consider all bids on a dollars per adjusted square kilometer basis for assignment under the overall budget. As the Commission did for CAF Phase II, and as adopted for the Rural Digital Opportunity Fund, the Commission proposes to leave the detailed clock auction bidding and bid processing procedures to be established in an auction procedures public notice after notice and an opportunity for comment during the pre-auction process.

61. The Commission also proposes to include all eligible areas nationwide in the 5G Fund Phase I auction, so that bidders compete for support across all areas at the same time.

62. For the 5G Fund Phase II auction, the Commission proposes using a similar multi-round, descending clock auction format to identify the areas that would be served, the winning bidders, and the support amounts they would receive with bids being compared based on a price per square kilometer. The Commission further proposes that any bidding preferences would be implemented using the approach it addresses here: By setting aside a portion of the budget to be assigned based on competition across areas qualifying for the preference, as considered here for Tribal lands in Phase I of the 5G Fund, or through an adjustment to the number of square kilometers (or other units) associated with the geographic area.

63. The Commission seeks comment on all these proposals for the 5G Fund Phase I and Phase II auctions. The Commission also seeks comment on whether there are any rule changes that it should consider for a 5G Fund auction that would lead to greater efficiency or better outcomes for the 5G Fund and rural consumers.

5. Minimum Geographic Area for Bidding

64. The Commission proposes generally to use census tracts containing areas eligible for 5G Fund support as the minimum geographic area for bidding in an auction. That is, the Commission proposes to overlay the eligible areas with U.S. Census Bureau census tracts boundaries, and have bidders in a 5G Fund auction bid for support to serve the eligible areas within each census tract. The Commission seeks comment on this proposal. The Commission also seeks comment on whether areas larger than census tracts, such as counties, may be more suitable as biddable items for 5G Fund support. Alternatively, would use of a different geographic unit, which could provide for more targeted bidding, be more appropriate, especially for smaller wireless carriers?

65. Further, the Commission proposes removing from any 5G Fund auction any tracts that have

de minimis

eligible areas, defined as an area of one square kilometer or less within the tract, because the Commission believes there would be little or no demand for these areas and that the amount of the winning bid associated with such areas would likely be too small to pay out. The Commission seeks comment on this proposal. Commenters should discuss the costs and benefits associated with each approach.

66. Because the Commission proposes to allocate funds reserved for support to Tribal lands from a separate Tribal lands budget, if it adopts that approach, the Commission would also need to identify the tracts or partial tracts containing eligible areas that coincide with the area of a specific Tribal entity. To do this, the Commission proposes to overlay the boundaries of Tribal lands for each federally-recognized Tribal entity, as set forth below, on the eligible areas within each census tract if the Commission ultimately adopts a separate Tribal lands budget. Thus, under this proposal, the minimum geographic area for bidding would be census tracts, split by Tribal land, containing areas eligible for 5G Fund support. The Commission seeks comment on this proposal.

6. Adjustment Factor

67. The Commission proposes to incorporate an adjustment factor into the 5G Fund auction design and the methodology for disaggregation of legacy support that would assign a weight to certain geographic areas. Such weighting would reflect, among other things, the relative cost of serving areas with differing terrain characteristics as well as the potential business case for each area. Given the Commission's wide discretion to distribute universal service funding in a way that serves the public interest, it proposes to use an adjustment factor to help distribute 5G Fund and legacy support to a range of

areas across the country that are geographically and economically diverse.

68. The Commission does not intend to have an adjustment factor capture the full differences between the costs and benefits of providing service to different types of geographic areas. The Commission proposes to cap the adjustment factor if needed to ensure the funding allocation determined by the auction is both equitable and efficient. The Commission seeks commenters' views on its proposal to adopt an adjustment factor.

69. In the Order adopted concurrently with this NPRM, the Commission directs the Office of Economics and Analytics and the Wireline Competition Bureau to propose and seek comment on adjustment factor values and the underlying methodologies that could be used to develop them. To inform their proposals, the Commission recommends that the Office of Economics and Analytics and the Wireline Competition Bureau use data from several sources including the U.S. Geological Survey, historical coverage and infrastructure deployment data received by the Commission, data from the U.S. Census Bureau, spectrum holdings information, Mobility Fund Phase I auction data, and other data as necessary.

7. Transitioning From Legacy Support to 5G Fund Support

70. The Commission proposes a general framework for transitioning from legacy high-cost support to 5G Fund support that would reform mobile high-cost support while minimizing the disruption to carriers currently receiving legacy support.

71. As an initial matter, the Commission tentatively concludes that the 5G Fund would constitute a comprehensive mechanism for mobile high-cost support that serves as an alternative to Mobility Fund Phase II. Similar to the Commission's conclusions in the

PR-USVI Fund Report and Order

for the Uniendo a Puerto Rico Fund and the Connect USVI Fund, the Commission likewise tentatively concludes that the 5G Fund is consistent with statutory restrictions on the Commission's authority to modify the rules for legacy high-cost support. We seek comment on these tentative conclusions.

72.

Geographic Flexibility for Legacy Support.

The Commission seeks comment on allowing a mobile competitive eligible telecommunications carrier (ETC) receiving legacy high-cost support for a particular subsidized service area the flexibility to use such support for the provision, maintenance, and upgrading of facilities and services within any of the designated service areas for which it receives legacy high-cost support, regardless of whether those areas span more than one state, only during the limited period of time until the Commission transitions away from legacy support. While the Commission generally limits the scope of where high-cost support received for a particular service area can be used, the Commission believes that, in these special circumstances, continuing to restrict legacy support recipients to using the legacy high-cost support received for a particular service area only within that service area may not be in the public interest in all cases. More specifically, since the freeze in legacy high-cost support in 2012, the amount of legacy support a carrier receives for a particular service area no longer has any nexus to the cost of providing service in that area. Unlike mobile competitive ETCs receiving legacy high-cost support, recipients of the Commission's modernized funding mechanisms receive specific, predictable, and sufficient support amounts determined either by competitive bidding, a cost model, or the carrier's own reported costs to meet the recipients' obligation to deploy, provision, and maintain voice and broadband services across their designated service areas. Allowing a mobile competitive ETC the flexibility to reallocate its use of legacy high-cost support amongst its subsidized service areas could allow a carrier to make more efficient decisions about its use of support considering the current costs of providing service in high-cost areas, while still satisfying the statutory obligation to use such support for its intended purposes. The Commission seeks comment on providing this flexibility and on whether it is consistent with the Commission's overall universal service goals.

73.

Disaggregation of Legacy Support.

Similar to the approach the Commission took in the

Mobility Fund Phase II Report and Order,

the Commission proposes to use high-cost disbursement data from USAC that define the subsidized service area for each legacy support recipient to determine the areas in which legacy support is currently provided. USAC tracks the amount of support disbursed for each legacy support recipient's subsidized service area (a “study area”) and the wire centers in each study area where the carrier has been designated as an ETC. The Commission expects that USAC will prepare and release maps of each legacy support recipient's subsidized service areas by combining these high-cost data with wire center boundary data. These high-cost subsidized service area boundaries would form the basis of our disaggregation process. Because high-cost support is disbursed by USAC for a carrier's entire subsidized service area, whereas the Commission's proposed 5G Fund transition framework would treat legacy support differently in different portions of a recipient's service area—for example, in eligible and ineligible portions of the area as well as in eligible areas where support is won and where there is no winner—the Commission must be able to disaggregate legacy support. For this purpose, the Commission would overlay the boundaries of eligible areas and the minimum geographic area for bidding over each legacy support recipient's service area. The Commission would subdivide the geographic boundary data for each carrier's subsidized service area into the smallest constituent piece for which support must be disaggregated and transitioned separately. More specifically, the Commission proposes to overlay on each carrier's subsidized service area boundary data: (a) The eligible area boundaries; (b) the minimum geographic area for bidding,

e.g.,

census tract boundaries; and (c) the subsidized service area boundary data for other legacy support recipients. The Commission would then calculate the percent area for each constituent piece in order to allow us to disaggregate and apportion the legacy high-cost support amount for each area. In the Order adopted concurrently with this NPRM, the Commission directs the Office of Economics and Analytics and the Wireline Competition Bureau to propose and seek comment on how to apply an adjustment factor to these disaggregation steps to account for the relative costs of providing mobile service, as well as whether and how any adjustment factor should differ between bidding and the disaggregation process.

74.

Carriers Eligible to Receive Legacy Support.

In the interim period before legacy support is fully transitioned to 5G Fund support, the Commission proposes to clarify that only terrestrial mobile wireless carriers may receive mobile high-cost support. Consequently, carriers offering non-terrestrial services, such as mobile-satellite service, would not be eligible to receive legacy support. Under the Commission's proposal, any legacy support recipient that would no longer be eligible to receive support would cease to receive legacy support after the effective date of an order adopting this requirement. This

proposal would not, however, prevent an affected carrier from bidding for, and winning, new 5G Fund support in the auction, provided that it is otherwise eligible. The Commission seeks comment on this proposal.

75.

Legacy Support Transition Schedule.

As part of the 5G Fund framework, the Commission proposes a schedule to transition each legacy support recipient's disaggregated legacy support to 5G Fund support that is broadly analogous to the schedule adopted in the

Mobility Fund Phase II Report and Order

for Mobility Fund Phase II, with some differences. Similar to Mobility Fund Phase II, legacy high-cost support would be converted to 5G Fund support, maintained for no more than five years to preserve service, or subject to phase down over two years depending upon whether the area was eligible for 5G Fund support and if eligible, whether there was a winning bidder for the area in the auction. For legacy support that is subject to two-year phase down, support would be provided at two-thirds of the level of the disaggregated legacy support for the first 12 months, and one-third of the level of the disaggregated legacy support for the next 12 months. All legacy high-cost support in areas subject to phase down would end no later than two years after announcement of the conclusion of the auction.

76. Notwithstanding the general transition schedule that the Commission proposes, however, it additionally propose that all legacy high-cost support to mobile carriers at the frozen identical support level would cease no later than five years after the effective date of an order adopting this proposal, regardless of when 5G Fund Phase I auction is conducted. Specifically, any mobile carrier that continues to receive legacy high-cost support not subject to the two-year phase down would cease to receive such support no later than the first day of the month five years after effective date of an order adopting this requirement. In making this proposal, the Commission notes that it originally anticipated that the legacy support structure would end in 2017, but for the pause in phase down and delay in awarding support through the Mobility Fund Phase II auction. By setting an absolute date on which legacy support to mobile carriers would cease, the Commission takes steps to help align the incentives of current legacy support recipients with the Commission's goal of transitioning such support to 5G Fund support using competitive bidding. The Commission seeks comment on this proposal and on whether its proposal adequately incentivizes a rapid transition away from the inefficient legacy support structure. Should the Commission commensurately push back the date on which legacy support would cease if it adopts its approach under Option B to collect new coverage data before proceeding to the 5G Fund Phase I auction?

77. Under the transition schedule that the Commission proposes, in areas determined not to be eligible for 5G Fund support, legacy support would be phased down starting the first day of the month after the effective date of an order adopting these requirements and release of the final list of areas eligible for 5G Fund support. This proposal differs from the transition schedule adopted in the

Mobility Fund Phase II Report and Order,

because, unlike in that proceeding, where the final set of eligible areas could not be known until the conclusion of the Mobility Fund Phase II challenge process, under Option A the proposed areas that would be eligible for 5G Fund support would be determined concurrent with adoption of these proposed rules, or under Option B would be determined at some point soon after collecting new mobile broadband coverage data. Since the Commission expects that carriers would not require support in order to deploy 5G service in areas ineligible for 5G Fund support, and legacy support recipients would not be able to win 5G Fund support in the auction for those areas, the Commission tentatively concludes that it would not be in the public interest to continue legacy support for ineligible areas. The Commission seeks comment on this proposal.

78. For areas that would be eligible for 5G Fund support, on the first day of the month following the release of a public notice announcing the close of the 5G Fund Phase I auction, legacy support for current recipients would either be maintained, pending authorization of the carrier to receive 5G Fund support (for the winning bidder in the Phase I auction), maintained in order to preserve service (for one legacy support recipient in areas without a winning bidder in the Phase I auction), or subject to phase down (for all other legacy support recipients). That is, for eligible areas that are not won in the 5G Fund Phase I auction, legacy support would begin to phase down over two years or be maintained in order to preserve service for no more than five years after the Phase I auction closes regardless of whether the eligible area may be won in the 5G Fund Phase II auction. In eligible areas won in the 5G Fund Phase II auction, legacy support (whether subject to phase down or preservation-of-service support) would either be maintained, pending authorization of the carrier to receive 5G Fund support (for the winning bidder in Phase II), or be subject to phase down (for all other legacy support recipients) beginning the first day of the month following release of a public notice announcing the close of the 5G Fund Phase II auction. Legacy high-cost support subject to phase down after the 5G Fund Phase I auction would continue to follow the original phase down schedule that commenced after the close of the 5G Fund Phase I auction for support recipients that were not the winning bidder in eligible areas won during the 5G Fund Phase II auction. If the carrier receiving maintenance of support in order to preserve service is not the winning bidder in the 5G Fund Phase II auction for an eligible area won during the 5G Fund Phase II auction, that carrier would begin to receive phased down support at this time. Under this proposal, legacy high-cost support maintained to preserve service after the 5G Fund Phase I auction would continue for eligible areas not won during the 5G Fund Phase II auction.

79. More specifically, for a winning bidder that is receiving legacy support in the area of its bid, the Commission proposes that legacy support would cease and 5G Fund support would commence on the first day of the month following release of a public notice authorizing the carrier to receive 5G Fund support. If the winning bidder defaults on its bid prior to the authorization of support, or is denied such authorization, the Commission would not award 5G Fund support for that area. However, to avoid adverse incentives and consistent with our proposal to maintain support to preserve service only in areas that lack a winning bid, a carrier that currently receives legacy support in the area of its winning bid would not receive preservation-of-service support and would instead be subject to phase down if the carrier defaults on its bid prior to authorization or is denied such authorization.

80. For winning bidders that do not receive legacy high-cost support in the areas of their winning bids, 5G Fund support would commence on the first day of the month following release of a public notice authorizing the winning bidder to receive 5G Fund support. For a winning bidder that is not an ETC in an area it won in a 5G Fund auction, the Commission would not authorize the winning bidder to receive 5G Fund support until it has been designated as an ETC in that area. Instead, only after it has been designated as an ETC for that

area could the winning bidder be authorized to receive 5G Fund support.

81. In eligible areas where there is no winning bidder in a 5G Fund auction, the Commission proposes that the legacy support recipient receiving the minimum level of sustainable support would continue to receive such support until further Commission action, but for no more than five years after the first day of the month following the effective date of an order adopting this requirement, in line with the Commission's proposal to cease all legacy support within five years. The Commission proposes to define the minimum level of sustainable support to be the lowest amount of legacy support among carriers that have deployed the highest level of mobile technology within the state. The Commission seeks comment on this proposal and whether these are the best metrics by which to measure deployment in order to ensure service continues in eligible areas not won during the auction.

82. The following chart summarizes the Commission's proposed schedule to transition from legacy support for areas in the 5G Fund Phase I auction. Consistent with the existing high-cost disbursement schedule, all legacy support transition schedule timing would be aligned to the first day of the month following a triggering action.

Transition Schedule for Legacy High-Cost Support to 5G Fund Support

Eligibility

Auction result

Bidder or recipient status

Support type & timing

Ineligible

2-year phase down commences after effective date of rules and release of final eligible areas.

Eligible

Won in auction

Carrier is the winning bidder but does not receive legacy support for the area it won

5G Fund support commences after auction close and bidder is authorized.

Eligible

Won in auction

Carrier is the winning bidder and is a legacy support recipient for the area it won

Legacy support ceases and 5G Fund support commences after close of the auction and bidder is authorized for area.

Eligible

Won in auction

Carrier is a legacy support recipient but is not the winning bidder in the area for which it receives support.

Legacy support ceases and 2-year phase down commences after auction close.

Eligible

Not won in auction

Carrier is a legacy support recipient but does not receive the minimum level of sustainable support for the area for which it receives support

Legacy support ceases and 2-year phase down commences after auction close.

Eligible

Not won in auction

Carrier is a legacy support recipient and receives the minimum level of sustainable support for the area for which it receives support

Legacy support continues for no more than 5 years after effective date of rules.

83. The Commission seeks comment on this framework generally and its proposed schedule to transition from legacy support to 5G Fund support. The Commission seeks comment on whether, in order for a legacy support recipient to be eligible to have its support maintained under the preservation-of-service rule for a particular area, it should require the carrier to participate in the 5G Fund Phase I auction and place a bid on that area. The Commission also tentatively concludes that legacy support recipients should be subject to additional public interest obligations and performance requirements to continue to receive legacy support in order to make sure that those primarily rural areas do not fall behind. The Commission seeks comment on this framework and proposed schedule to transition from legacy support to 5G Fund support. The Commission also seeks comment on proposed alternative frameworks and transition schedules.

8. Public Interest Obligations and Performance Requirements for Legacy High-Cost Support Recipients and 5G Fund Support Recipients

84. The Commission proposes that both legacy high-cost support recipients and 5G Fund support recipients would have a public interest obligation to provide 5G service alongside the voice service for which high-cost support is provided, and to meet measured performance requirements as a condition of receiving support. Specifically, the Commission proposes to require 5G Fund support recipients to provide mobile, terrestrial voice and data services that comply, at a minimum, with 5G-NR technology as defined by 3GPP Release 15 (or any successor release that the Office of Economics and Analytics and the Wireline Competition Bureau may require 5G Fund support recipients to comply with after notice and comment). The Commission proposes that mobile wireless carriers receiving 5G Fund support must also meet minimum baseline performance requirements for data speed, data latency, and data allowance. These proposals should ensure that rural areas receive service comparable to high-speed, mobile broadband available in urban areas. In accord with the

USF/ICC Transformation Order and Further Notice,

the Commission also proposes to require legacy support recipients to meet public interest obligations and performance requirements that would ensure the deployment of 5G network technology in each carrier's subsidized service areas. Specifically, under the Commission's proposal, legacy support recipients would be required to provide voice and data services that comply with the same 5G-NR technology required for 5G Fund support recipients.

85.

Public Interest Obligations, Performance Requirements, and Reporting Requirements for Legacy Support Recipients.

To ensure that the most advanced mobile services are available in all areas where a carrier is currently receiving legacy high-cost support, the Commission proposes to establish additional public interest obligations, performance requirements, and reporting requirements that such recipients must meet in order to continue receiving legacy support. In the

USF/ICC Transformation Order and Further Notice,

the Commission anticipated that if the phase down of high-cost support were halted at any

point during the transition to a more efficient distribution of funding, the Commission would adopt additional mobile broadband public interest obligations and performance requirements for continued receipt of such support.

86. The phase down was halted in 2014 and since that time legacy support recipients have received approximately $2 billion in high-cost support without having to meet any specific broadband deployment obligations. The absence of broadband public interest obligations and performance requirements does a disservice to rural Americans living in areas served by legacy support recipients because the Commission's rules require high-cost recipients to use support “only for the provision, maintenance, and upgrading of facilities and services for which the support is intended” and do not specify that such recipients must deploy the most current wireless technologies or expand their services to meet current standards. Indeed, because support levels were frozen at the end of 2011 based on the now-eliminated identical support rule and no service obligations are in place, legacy support recipients may be incentivized to reduce services to increase profit margins. Moreover, these current circumstances can create incentives against the reform of legacy, inefficient support and the refocusing of the Commission's limited universal service funds on unserved rural areas. Accordingly, today the Commission proposes to meet its stated intention in the

USF/ICC Transformation Order and Further Notice

and ensure that all Americans living in areas served by legacy support recipients receive the most advanced wireless services.

87.

Initial Report of Current Service Offerings.

To better understand the services current mobile recipients of legacy high-cost support are offering in their subsidized areas, the Commission tentatively concludes that each legacy support recipient should be required to file an initial report describing its current service offerings in its subsidized service areas and how the legacy support it is receiving is being used. The Commission tentatively concludes that this report would be required to be filed no later than three months after the Commission receives Paperwork Reduction Act approval for this requirement following its adoption.

88.

Adoption of Public Interest Obligations and Performance Requirements for Legacy Support Recipients.

The Commission tentatively concludes that it should adopt additional, broadband-specific public interest obligations and performance requirements for all current mobile legacy high-cost support recipients and that these obligations and requirements, as an interim step before the 5G Fund auction, should largely mirror the requirements for 5G Fund support recipients. Such action will ensure that rural Americans do not get left behind simply because they are served by a mobile legacy high-cost support recipient. To ensure that recipients of legacy high-cost support meet their public interest obligation to provide 5G service in their subsidized service areas, the Commission proposes to adopt interim and final service milestones to monitor their progress in meeting the performance requirements by the established deadlines, and propose that a legacy support recipient meet the same minimum baseline performance requirements for data speed, latency, and data allowance ultimately adopted for 5G Fund support recipients. The Commission also proposes that legacy support recipients have the same public interest obligations as it proposes for 5G Fund support recipients to provide 5G service at reasonably comparable rates, an allow collocation and voice and data roaming.

89. The Commission proposes requiring that current legacy support recipients provide 5G broadband service that meets the established performance requirements for legacy support recipients to at least 85 percent of the square kilometers in their subsidized service areas in each state by a final service deployment milestone deadline at the end of the fourth full calendar year after the effective date of an order adopting this requirement. The Commission notes that the Rural Wireless Association, which represents a number of legacy support recipients, has indicated that its members have used high-cost support to upgrade their networks to 4G LTE and would be willing to deploy 5G service in their subsidized service areas if such high-cost support continues. Because the infrastructure necessary to provide high speed broadband likely exists throughout the subsidized service areas of many legacy support recipients, the Commission expects that 5G service could be deployed more quickly than for a greenfield buildout. As such, the Commission believes that legacy support recipients that continue to receive support, including under the preservation-of-service rule, should be able to reasonably deploy 5G broadband service throughout their subsidized service areas within four years. However, because it may not be feasible for a legacy support recipient to deploy 5G service in areas where legacy support is being reduced, the Commission proposes to exempt from this requirement any portion of a carrier's subsidized service area where the legacy support recipient is subject to a two-year phase down of legacy high-cost support.

90. The Commission seeks comment on these proposals. If it moves forward with our Option A approach, the Commission seeks comment on whether these public interest obligations and performance requirements should be delayed from taking effect until after release of the final list of areas eligible for support in the 5G Fund Phase I auction, in light of the Commission's proposal to exempt ineligible portions of a legacy support recipient's subsidized service area from these obligations. In contrast, the Commission does not anticipate delaying these obligations if it moves forward with its Option B approach, given that release of the final eligible areas may be delayed by two years or more. Would delaying these public interest obligations and performance requirements until the Commission has final eligible areas under either proposal be consistent with its goal of ensuring that rural areas that continue to receive legacy high-cost support do not fall behind?

91. The Commission also proposes that legacy support recipients meet interim service deployment milestones prior to the final service milestone. Specifically, a current legacy support recipient must provide 5G broadband service that meets the established performance requirements for legacy support recipients service to at least 40 percent of its subsidized service areas by the end of the second full calendar year after the effective date of an order adopting this requirement, and to at least 60 percent of their subsidized service areas by the end of the third full calendar year after the effective date of an order adopting this requirement. The Commission proposes to require that legacy support recipients certify and demonstrate that they have met their service deployment milestones by meeting certain requirements as a measurement of performance within their subsidized areas using the same process the Commission ultimately adopts for 5G Fund support recipients. The Commission tentatively concludes that legacy high-cost support will not be provided to legacy support recipients that do not meet the established performance requirements by the applicable service deployment milestone deadlines. Should the Commission instead adopt a tiered non-compliance framework for legacy

support recipients that fail to meet these proposed performance requirements similar to what the Commission proposes for 5G Fund support recipients that fail to meet their performance requirements? The Commission also seeks comment on whether these obligations should be amended or refined to specify different percentages of service to Tribal lands within a legacy support recipient's subsidized service areas to ensure customers residing on Tribal lands would receive service as the preceding obligation and milestones are met.

92.

Annual and Interim Reporting Requirements for Legacy Support Recipients.

The Commission tentatively concludes that current mobile recipients of legacy high-cost support should be required to file reports regarding their efforts to provide 5G services throughout their subsidized service areas that meet the proposed public interest obligations and performance requirements. Specifically, the Commission tentatively concludes that for as long as a legacy support recipient receives legacy support, it should be required to file an annual report by July 1 in each year that includes updated information about the legacy support recipient's current service offerings in its subsidized service areas and how legacy support is being used to provide 5G services in these areas, and a certification that the legacy support recipient is in compliance with the public interest obligations and all of the terms and conditions associated with the continued receipt of legacy support disbursements. These annual reports would be filed with USAC via a web portal, and USAC would make all such data available to the Commission and state/Tribal governmental agencies. The Commission also tentatively concludes that each legacy support recipient should be required to file interim milestone reports and a final milestone report by March 1 of the calendar year following each applicable service milestone demonstrating that it has deployed 5G service that meets the performance requirements adopted for legacy support recipients. These interim milestone reports would be filed with USAC via a web portal, and USAC personnel would be responsible for verifying submitted data to determine compliance with the established performance requirements for legacy support recipients. The Commission seeks comment on these proposed reporting requirements.

93. Should the Commission exempt legacy support recipients that receive a

de minimis

amount of support from the public interest obligations and performance requirements it adopts for legacy support recipients, and if so, what level of support would be

de minimis

? Instead of requiring certain 5G broadband service coverage requirements, should the Commission require that legacy support recipients use an increasing percentage of their support toward deployment of 5G service? If so, how should the Commission measure compliance? The Commission seeks comment on these approaches and, if adopted, would direct the Office of Economics and Analytics and the Wireline Competition Bureau to establish, through a separate notice and comment process, the procedures used to verify legacy support recipients' compliance with these public interest obligations and performance requirements.

94.

Ensuring Auction Competitiveness.

The Commission recognizes that the current legacy high-cost support levels are unrelated to the costs of deploying 5G service, and seeks comment generally on ways to stimulate robust competition in the 5G Fund auction, especially from legacy support recipients in the service areas for which they are subsidized. How can the Commission ensure that legacy support recipients are incentivized to participate in the 5G Fund auction? Should the Commission require that legacy support recipients whose subsidized service areas are eligible in the 5G Fund auction bid on these areas to be eligible to have such support preserved in case the area remains unsold in the auction? The Commission seeks comment on these matters.

95. One party has suggested that the Commission consider an alternative mechanism offering current legacy high-cost support recipients that have fewer than 500,000 subscribers the option to continue to receive such support in return for deploying 5G service. In order to properly align the incentives to ensure auction competitiveness, should the Commission adopt such an alternative, or a similar mechanism by which legacy support recipients have an opportunity to accept reduced support, in return for the Commission removing from the 5G Fund auction areas that would otherwise be eligible for support? If we were to adopt such a process, what would be an appropriate subscriber count cutoff to determine which legacy support recipients are small carriers? How much of our proposed 5G Fund budget should be set aside for this purpose, and would such a mechanism ensure that the Commission's limited universal service funds are best spent to expand 5G service? What would be the costs and benefits of either of these mechanisms? Are there better means by which the Commission can encourage a rapid transition to 5G Fund support for legacy support recipients that also ensures 5G service deployment in areas that do not receive 5G Fund support? Preliminary high-cost support data from USAC show that significant portions of the subsidized service areas of many legacy support recipients overlap each other, and continuing to disburse support to more than one carrier to cover the same area would be at odds with the Commission's proposal to award 5G Fund support to only a single carrier. Additionally, under the Commission's proposed definitions for 5G Fund eligible areas, some portion of the subsidized service area of legacy support recipients may not be eligible for 5G Fund support. If the Commission were to consider offering legacy support recipients the option to continue to receive support, it seeks comment on whether to exclude subsidized service areas where more than one carrier receives legacy support, as well as areas that are not eligible for 5G Fund support. If a legacy support recipient were to decline this offer, should that carrier be ineligible to continue to receive support under the preservation-of-service rule proposed above? The Commission seeks comment on these matters and any alternatives to ensure the alignment between its tentative conclusion to adopt additional public interest obligations and performance requirements for current recipients and ensuring a competitive auction.

96.

Public Interest Obligations and Performance Requirements for 5G Fund Support Recipients.

To ensure that 5G Fund support recipients meet their public interest obligation to provide 5G service in areas where they receive support, the Commission proposes to adopt interim and final service milestones to monitor their progress in meeting the performance requirements by the established deadlines. Specifically, the Commission proposes that a support recipient must meet minimum baseline performance requirements for data speed, latency, and data allowance by the applicable deadlines. In addition, support recipients would have a public interest obligation to provide their 5G service at reasonably comparable rates and allow collocation and voice and data roaming throughout the 10 year support term. The service milestones the Commission proposes for the 5G Fund are similar to those adopted for the Rural Digital Opportunity Fund, CAF Phase II, and in the Uniendo a Puerto Rico Fund and the Connect USVI Fund proceeding.

97. For interim service milestones, the Commission proposes that a 5G Fund support recipient must commercially offer service that meets the established 5G performance requirements to at least 40 percent of the total square kilometers associated with the eligible areas for which it is authorized to receive 5G Fund support in a state by the end of the third full calendar year following authorization of support, to at least 60 percent of the total square kilometers by the end of the fourth full calendar year, and to 80 percent of the total square kilometers by the end of the fifth full calendar year. Additionally, in accord with the Commission's decision in the

Rural Digital Opportunity Fund Report and Order

to adopt an optional early service milestone for the Rural Digital Opportunity Fund, it proposes to adopt an optional early service milestone for the 5G Fund, which would allow a support recipient to reduce the value of its letter of credit if it offers service that meets the established 5G performance requirements to at least 20 percent of the total square kilometers in its winning bid areas in a state by the end of the second full calendar year following funding authorization. The Commission also proposes to align the service milestones with those of other high-cost programs to minimize the administrative burdens on the Commission, USAC, and support recipients. Accordingly, regardless of when a 5G Fund recipient is authorized to begin receiving support, the Commission proposes that each service milestone would occur on December 31. This proposal is consistent with the Wireline Competition Bureau's recent

CAF Phase II Auction Recipients' Deployment and Reporting Deadlines Aligned Order,

35 FCC Rcd 109 (2020), that established uniform milestone deadlines for CAF Phase II auction support recipients and the Commission's decision in the

Rural Digital Opportunity Fund Report and Order

to adopt consistent milestone deadlines for the Rural Digital Opportunity Fund. The Commission acknowledges that by proposing to align the 5G Fund interim and final service milestones deadlines with those of other high-cost programs, some 5G Fund support recipients could possibly have more than three years to complete their first interim milestone. The Commission seeks comment on these proposals.

98. The Commission also proposes that a 5G Fund support recipient must provide service that meets the established 5G performance requirements to at least 85 percent of the total square kilometers associated with the eligible areas for which it is authorized to receive 5G Fund support in a state by a final service milestone by the end of the sixth full calendar year following authorization of support. This proposed final service milestone is similar to the final buildout requirement adopted in the

USF/ICC Transformation Order and Further Notice

for Mobility Fund Phase I. In addition, the Commission proposes that by the final service milestone, a 5G Fund support recipient would need to demonstrate that it provides service that meets the established 5G performance requirements to least 75 percent of the total square kilometers within each biddable area (

e.g.,

census block group or census tract) for which it is authorized to receive support. The Commission seeks comment on these proposals. The Commission also seeks comment on whether there are additional measures it could adopt that would help ensure that 5G Fund support recipients would meet their interim and final service milestones.

99.

Data Speed.

The Commission seeks comment on the minimum network speeds that 5G Fund support recipients should be required to deliver. In the

PR-USVI Fund Report and Order,

the Commission required support recipients to provide speeds of 35/3 Mbps, and the Commission seeks comment on whether it should adopt that requirement here. The Commission believes that such speeds would be achievable for carriers that only have access to low-band spectrum, as may be the case in rural areas, and seek comment on this view. Should the Commission adopt a higher performance requirement, such as 50/5 Mbps? Would higher speeds be feasible for rural areas, given the spectrum available to carriers? Do the benefits to rural consumers of requiring higher network speeds outweigh the potential costs of meeting those requirements? Should the Commission's proposed speed requirement increase over time to account for the likely pace of improvements in 5G service to well-served areas? The Commission also seeks comment on how to best quantify these speed requirements statistically,

e.g.,

if these speeds should be specified as median, mean, or another percentile of probability, and how these variations can be accounted for over the total extent of the coverage area.

100.

Minimum Cell Edge Requirements.

In addition to requiring deployment of 5G service with download and upload speeds of at least 35 Mbps and 3 Mbps, the Commission proposes to require that carriers deploy service in eligible areas with a minimum cell-edge download speed of 7 Mbps and a minimum cell edge upload speed of 1 Mbps, with a 90 percent coverage probability and a 50 percent cell loading factor. The Commission anticipates that these proposed requirements would ensure that the desired typical user experience in areas supported by the 5G Fund would be realistically attainable over the broad coverage area supported by the 5G Fund. The Commission seeks comment on this proposal, including the specific cell edge throughput, probability, and cell loading values proposed. Are these cell edge values appropriate to ensure performance across the cell area that would be adequate to meet the Commission's proposed 35 Mbps/3 Mbps data speed requirement?

101. Alternatively, should the Commission require different cell edge coverage probability and cell loading targets, such as 80 percent cell-edge coverage probability or 30 percent loading? Should the Commission require a lower cell loading value because rural environments may experience typical loading levels lower than 50 percent? Should the Commission require a different cell-edge minimum download and upload speed? Should the Commission require a minimum spectral efficiency (bps/Hz) metric, and if so, what should it be, and should it be considered in addition to, or as an alternative to, the download and upload speeds mentioned above? If the Commission adopts a minimum spectral efficiency metric, should this metric vary based upon the spectrum band used? What higher spectral efficiency (bps/Hz) improvements for 5G compared to 4G LTE are possible at the edge of (and overall for) rural cell sites? The Commission also seeks comment on whether these data speed and minimum cell edge requirements should be re-evaluated during the 5G Fund term as technologies continue to improve and speeds become faster.

102.

Latency.

The Commission proposes to require networks in eligible areas supported by the 5G Fund to have a latency of 100 milliseconds or less per round trip, a latency value referred to in the

Rural Digital Opportunity Fund Report and Order

as “low latency.” The Commission seeks comment on this metric, including comment on whether the deployment of 5G technology should alter the Commission's proposed latency requirements. The Commission proposes that measurement of latency be implemented using a standalone user device-based application which initiates and terminates round trip time measurements between the user device

and specified test servers. The Commission seeks comment on this proposal. The Commission also seeks comment on the network reference points between which the latency measurement should be conducted, and whether to specify the protocol layer, type, length, and number of packets. The Commission seeks comment on whether this latency requirement should decrease over time to account for the likely pace of improvements in 5G service to well-served areas.

103.

Data Allowance.

To ensure that rural consumers have access to service plans comparable to those offered in urban areas, the Commission proposes that 5G Fund support recipients must provide at least one service plan in eligible areas that includes a data allowance that would correspond to the average United States subscriber data usage. The Commission seeks comment on this proposal. The Commission also recognizes that industry and consumer practices regarding usage levels will evolve over time, especially as consumer internet usage continues to be dominated by video consumption. The Commission seeks comment on what type of service plan would fulfill this purpose—would one equivalent to a mid-level plan offered by a nationwide provider suffice? The Commission also seeks comment on when during the support term it should set this requirement, and what data allowance proposal would be high enough to ensure that rural consumers have access to service plans comparable to those offered in urban areas. Should the data allowance the Commission adopts increase over time, for instance at the interim service milestones it establishes for deployment of service? What data, and what data sources, should the Commission use to establish the monthly data allowance? Commenters should include current industry data to support any proposed standard, and should comment on the likely availability of a data source that would continue to be updated during the proposed 10-year term of the 5G Fund program.

104. The Commission also seeks comment on whether to establish a cap on the maximum data usage allowance that would be required for the final service milestone, and, if so, what industry data should be considered and incorporated into the calculation of a cap. If commenters disagree with the possibility of an increase of the data usage allowance requirement during the 5G Fund support term, they should explain why the 5G Fund standard should remain static even if, as anticipated, significant increases in average data usage occur in the industry over the next 10 years. Commenters supporting the adoption of a specific metric for the final service milestone prior to the auction should provide details regarding why a specific metric is suitable. Finally, if a data usage allowance for the final service milestone was to be established prior to the auction, the Commission seeks comment on how that allowance metric should be determined, including which data sources should be used.

105.

Reasonably Comparable Rates.

The Commission proposes, consistent with section 254(b)(5) of the Communications Act of 1934, as amended (Act), to require that 5G Fund support recipients have a public interest obligation to offer their services in eligible rural areas at rates that are reasonably comparable to rates they offer in urban areas. In the

USF/ICC Transformation Order and Further Notice,

the Commission concluded that, as a condition of receiving federal high-cost universal service support, all recipients of such support must offer broadband service in their supported area that meets certain basic performance requirements at rates in rural areas that are reasonably comparable to rates offered in urban areas. For both voice and broadband services, the Commission considers rural rates to be “reasonably comparable” to urban rates under section 254(b)(3) of the Act if rural rates fall within a reasonable range of urban rates for reasonably comparable voice and broadband services.

106. As an initial matter, the Commission proposes to define “urban” for this purpose using the same urban/rural definition as used in the initial step for defining eligible areas for the 5G Fund auction, which is based on the 2010 U.S. Census Bureau delineation. The Commission seeks comment on how it should determine if a carrier's rates are reasonably comparable to those it offers in urban areas. For instance, should the Commission conclude that if a carrier is offering the same rates, terms, and conditions (including usage allowances, if any, for a specified rate) to both urban and rural customers, then it would fulfill the requirement that its rates are reasonably comparable? The Commission also seeks comment on whether a carrier should be able to demonstrate it provides reasonably comparable rates if one of its stand-alone voice plans and one service plan offering data are substantially similar to plans offered in urban areas. In addition, in cases where a 5G Fund recipient does not serve urban areas and therefore must compare its rates to those of a different mobile carrier, the Commission seeks comment on how the 5G Fund recipient should identify the carrier and specific rate plans upon which it is basing its compliance certification, and what it should submit as corroborating evidence of reasonably comparable rates, such as information from the urban provider's web page or other marketing materials. All ETCs must advertise the availability of their voice services through their service areas, and the Commission requires support recipients also to advertise the availability of their broadband services within their service area. The Commission seeks comment on these proposals.

107.

Collocation and Voice and Data Roaming.

To ensure that support recipients do not use public funds to achieve unfair competitive advantage, the Commission proposes to adopt a public interest obligation that would require the same general collocation and voice and data roaming obligations that the Commission adopted for Mobility Fund Phase I, with certain minor changes. The Commission proposes that during the 10-year 5G Fund term, support recipients be required to allow reasonable collocation by other carriers of services that would meet the technological requirements of the 5G Fund on all 5G network infrastructure constructed with Universal Service Fund support that it owns or manages in the area for which it receives support. In addition, during this period, the Commission proposes that the recipient may not enter into facilities access arrangements that restrict any party to the arrangement from allowing others to collocate on the 5G network infrastructure. The Commission reminds participants that during the 10-year 5G Fund term, support recipients must comply with the Commission's voice and data roaming requirements in effect as of the adoption of 5G Fund rules on networks that are built through 5G Fund support.

9. Reporting Requirements

108. Consistent with the requirements adopted for CAF Phase II and the Rural Digital Opportunity Fund, the Commission proposes that a 5G Fund support recipient must submit an annual report certifying its compliance with the public interest obligations, performance requirements, and any other terms and conditions associated with receipt of 5G Fund support. The Commission further proposes that a support recipient must also file interim and final service milestone reports demonstrating that it has met the 5G Fund performance requirements for

deployment of service. The Commission also proposes a rule that would require a support recipient authorized to receive 5G Fund support and its agents to retain any documentation prepared for, or in connection with, the award of the 5G Fund support for a period of not less than 10 years after the date on which the support recipient receives its final disbursement of 5G Fund support.

109.

Annual Reports.

The Commission proposes that a 5G Fund support recipient be required to file an annual report by July 1 of each year after each year in which it was authorized to receive 5G Fund support. The Commission proposes that a support recipient's annual report would cover the preceding calendar year and that the support recipient would be required to certify that it has complied with the public interest obligations, performance requirements, and any other terms and conditions associated with receipt of 5G Fund support in order to continue receiving 5G Fund disbursements. The annual report would be filed with USAC via a web portal, and USAC would make all such data available to the Commission and state and Tribal governmental agencies. The Commission seeks comment on this proposal, including the length of time the web portal should be open to receive annual certifications each year. The Commission retains its authority to look behind recipients' annual reports and to take action to address any violations.

110.

Interim and Final Milestone Reports.

The Commission proposes that 5G Fund support recipients must collect and submit speed test data in interim and final service milestone reports, in accordance with the guidelines outlined below, and as developed further in the Digital Opportunity Data Collection proceeding that is considering more broadly applicable standards. The service milestone reports would include data to demonstrate compliance with the interim and final service milestones and the performance requirements for the 5G Fund. The Commission proposes that these reports would be submitted to USAC, as adopted for CAF Phase II and the Rural Digital Opportunity Fund. USAC personnel would be responsible for verifying submitted data to determine compliance with 5G Fund requirements. The Commission invites comment on proposed guidelines for testing and on alternatives.

111. The Commission seeks comment on whether it should standardize the network performance testing and coverage mapping methodologies used by 5G Fund recipients to report on their compliance service milestones. As a general matter, the Commission has been taking steps to achieve standardization in testing, mapping, and reporting of mobile broadband deployment. In its decision to conditionally approve the transaction between T-Mobile and Sprint, the Commission made clear that the approval of the transaction would be conditioned on the network buildout commitments of the licensees to provide 5G service to a large portion of the U.S. population, including rural areas, and these commitments include the submission of drive test results and coverage maps to the Commission at three- and six-year milestones. Further, the staff report concerning the investigation of the Mobility Fund Phase II 4G LTE coverage data submitted by certain carriers revealed significant discrepancies between coverage maps generated by carriers whose networks were tested and the actual, on-the-ground mobile experience, as measured by staff speed tests. Commission staff therefore recommended that, for proceedings in which the Commission collects mobile broadband deployment data, it should further standardize the propagation map parameters and assumptions that carriers use to generate their coverage data and require the submission of actual on-the-ground evidence of performance alongside coverage maps. Similarly, the Commission sought comment in its

Digital Opportunity Data Collection Order and Further Notice

on what additional steps the Commission should take to obtain more accurate and reliable mobile broadband deployment data. The Commission also notes that detailed validation processes have been implemented in other recent universal service auction proceedings. Consistent with the Commission's past efforts to encourage the use of consistent methodologies to verify buildout, the Commission proposes particular methods for 5G Fund support recipients to demonstrate provision of required performance and coverage.

112. The Commission proposes that a support recipient's interim and final service milestone reports would be due by March 1 of the calendar year following each applicable December 31 milestone deadline. The Commission proposes that failing to timely submit a service milestone report that includes the required representative data and certification concerning performance and coverage requirements by the established deadline would subject support recipients to defined consequences (as specified in the non-compliance proposal herein). Consistent the requirements adopted for CAF Phase II and the Rural Digital Opportunity Fund, the Commission further proposes that if a support recipient has not met the established performance requirements by the applicable service milestone deadline, it must inform the Commission, USAC, and the relevant state, U.S. Territory, or Tribal government, if applicable, in writing within 10 business days that it has failed to meet an interim or the final service milestone.

10. Demonstrating Compliance With Performance Requirements

113. The Commission proposes to require that 5G Fund recipients certify and demonstrate that they have met service deployment milestones by meeting certain requirements as a measurement of performance within a 5G Fund support area. More specifically, the Commission proposes to require that recipients demonstrate performance using a combination of predictive propagation modeling and comprehensive on-the-ground measurement testing. The Commission notes that comprehensive on-the-ground measurement testing would likely be the most accurate measure of performance in a carrier's coverage area; however, the scale and cost of relying solely on this method, especially to measure performance in particularly difficult terrain, may be overly burdensome. Conversely, propagation modeling may offer an efficient alternative, with less expense, for predicting performance (including download and upload speeds), but such results may not accurately reflect coverage and the on-the-ground consumer experience. The Commission is mindful that rural areas, which may have few roads and difficult terrain, would likely be the most costly areas for a carrier to drive test, and such tests still may not reach large areas that have coverage but are less accessible for drive tests. The Commission's proposal therefore includes a combination of measurement testing and carefully defined propagation modeling as a balanced approach to achieve reasonable coverage performance verification accuracy with reduced costs and logistical burdens. The Commission seeks comment on this approach to verifying compliance. The Commission notes that Ofcom in the United Kingdom has taken a similar combined approach to verifying compliance with coverage performance obligations. While Ofcom's specific requirements may be different from those the Commission may ultimately adopt, the Commission seeks comment on this overall combined approach and

methodology including coverage prediction of user speeds.

114. Under the Commission's proposal, 5G Fund support recipients would be required to use predictive propagation modeling to generate and submit milestone coverage maps showing the areas where 5G service has been deployed. While recognizing that carriers' planning methodologies may differ somewhat, the Commission proposes to standardize many of the propagation model parameters across 5G Fund recipients. Specifically, the Commission would require that milestone coverage maps must be generated to show cell edge coverage with minimum download and upload speeds of 7 Mbps and 1 Mbps, respectively, with 90 percent probability and 50 percent loading. The Commission also would require that milestone maps show where 35 Mbps/3 Mbps or better service is available. As part of this proposal, the Commission would also require that 5G Fund recipients generate coverage maps that take into account terrain and clutter, and use terrain and clutter data with a resolution of 100 meters or better. The Commission seeks comment on its proposal and these technical specifications. Are there other propagation model parameters that would be necessary to standardize for 5G Fund recipients to show successful deployment or that would improve the accuracy of predictive coverage maps? While recipients may use a variety of propagation models, including proprietary and non-public models, to design and deploy their networks, should the Commission require that all support recipients submit coverage maps using a common coverage model, such as Irregular Terrain Model (ITM), to validate coverage? What are the costs and benefits of such an approach?

115. The Commission would also require comprehensive on-the-ground measurement testing as part of this proposal. Specifically, the Commission would require that 5G Fund recipients conduct and submit speed test measurement data demonstrating compliance with coverage requirements. The Commission proposes to evaluate the sufficiency of measurements by first overlaying a uniform grid of one square kilometer (1 km by 1 km) grid cells on the carrier's propagation model-based coverage maps. The Commission would then require that the measurement data include at least three measurements per square kilometer grid cell predicted to have coverage to demonstrate compliance with coverage requirements. The Commission seeks comment on this testing density, or on whether any alternative measurement approach would be better. Under the Commission's proposal, each reported speed test would be required to include, at a minimum, download speed, upload speed, signal strength, latency, and packet loss measurements. Median speeds for measured grid cells would be compared to the area for which support was awarded. The Commission would require that the median reported speed tests show measurements with download and upload speeds of at least 35 Mbps and 3 Mbps, respectively, in those areas marked as offering such service. The Commission would also require that measurements at the cell edge show minimum download and upload speeds of 7 Mbps and 1 Mbps, respectively, for 90 percent of the cell-edge tests. The Commission proposes that at least 96 percent of the speed tests in the cumulative speed test data submitted for each construction milestone have a data latency of 100 milliseconds or less roundtrip from the device to the edge of the service provider network and back. The Commission seeks comment on these proposals and the potential burden that may be imposed by requiring three measurements per grid cell. To the extent these data are burdensome to collect, the Commission seeks comment on the costs and benefits of requiring these data, and whether there are alternatives to allow the Commission to accurately verify coverage.

116. The Commission seeks comment on alternative approaches to how testing could be performed such that the Commission would have confidence that the milestone coverage speeds are met without testing every square kilometer of the 5G Fund area. Is it possible to sample sufficient drivable or accessible areas and, based on the comparison of those results to the coverage map, determine if the Commission can have confidence in the full coverage map? What ratio of 1 km by 1 km grid cell samples to coverage area would be required to have confidence in the predictions of the coverage map? Is it possible, for example, to achieve 96 percent or greater confidence in expected user speeds on coverage maps, with say 15 percent of the grid cells in a covered area with recorded speed test measurements that cover important terrain features, and imputed (calculated) median speeds in each of the other grid cells in the covered area (85 percent of the area grid cells)? The Commission seeks comment on this and alternative measurement methods that balance the desire for limiting the cost and complexity of speed test measurement campaigns, with the desire for high confidence in the resulting maps.

11. Milestone Map Supporting Data

117. The Commission also proposes to require that 5G Fund recipients submit supporting data in addition to their milestone coverage maps so that USAC can evaluate and verify compliance with coverage performance requirements. The Commission proposes the collection of system level data to validate the performance and architecture of the funded network. The Commission also proposes to require the submission of a complete link budget showing the relationship between the coverage map signal strength prediction and the required minimum download and upload speeds. Submitted link budgets would include all of the parameters necessary to verify the coverage map, including signal to noise ratio (SNR) assumptions for downlink and uplink per spectrum band. Additionally, the Commission proposes to require that 5G Fund recipients submit information on the propagation model employed to design the 5G network coverage areas. Would these submissions provide sufficient information for milestone report validation or should the Commission also require specific network information such as information on cell site deployments in the coverage areas, including location, antenna height, antenna type, antenna gain, antenna orientation, antenna downtilt, antenna multiple-input and multiple-output (MIMO) configuration, emitted isotropic radiated power, operating frequency band(s), channel bandwidth (including possible carrier aggregation), Reference Signal Received Power (RSRP) signal strength, and any other data required to verify coverage maps? If the Commission requires specific cell site deployment information, should it also require information on backhaul type, backhaul capacity, backhaul oversubscription ratio, and a functional network diagram? The Commission further proposes that 5G Fund recipients provide a narrative on both cell sites and network capacities with traffic engineering assumptions and how the overall network, as built, could meet the performance requirements and scale for future growth. The Commission seeks comment on these proposals. Are these data necessary if the Commission ultimately adopts requirements in the Digital Opportunity Data Collection for the same or similar information from mobile carriers? How should the Commission align these

requirements with any future mobile broadband coverage data collections?

118. Alternatively, to avoid transmitting large quantities of commercially sensitive service provider proprietary data to USAC, should the Commission instead provide 5G Fund recipients a standard propagation model (software),

e.g.,

point-to-point Irregular Terrain Model (ITM), and user throughput calculation software, so that 5G Fund recipients could produce terrain-based coverage maps based on parameters that mirror recipients' proprietary software coverage predictions without transferring proprietary, site-specific data to USAC? The Commission seeks comment on this alternative, including the parameters of such modeling and calculation software.

119. The Commission proposes that these data and maps be submitted to USAC by the service milestone reporting deadlines to determine if the service milestone has been met. Cumulative data would be used for the service milestone determinations in years four, five, and six for 5G Fund support recipients. For legacy high-cost support recipients, cumulative data would be used for the service milestone determinations in years two, three, and four. Deployment of service that meets established performance requirements may be achieved by a 5G Fund support recipient earlier than its interim and final required milestones. An area for which successful speed test data has been presented at an earlier milestone need not be tested again to show continuing compliance with performance requirements; however, the Commission proposes that support recipients have an annual obligation to certify continuing provision of service meeting the established public interest obligations adopted for the 5G Fund. The Commission proposes that at least 96 percent of the speed tests in the cumulative speed test data submitted for each construction milestone would be required to have a download speed of 7 Mbps and 1 Mbps upload speed and a latency of no greater than 100 ms roundtrip. The Commission proposes that tests must be distributed across all drivable areas of the cell coverage area, including both cell center and cell edge where possible. The Commission seeks comment on how many measurements, or what percentage of total required measurements, must be conducted at the cell edge. The Commission proposes requiring that recipients' milestone reports include all speed test measurements collected within the calendar year ending on the relevant December 31 milestone deadline. The Commission seeks comment on these proposals.

12. Coverage Area Measurement Methodology

120. To verify compliance with milestone deployment, the Commission proposes that it would review submitted coverage and speed test data. The Commission proposes that speed tests must be conducted using a device certified by the 5G Fund recipient as compatible with its 5G network. The Commission proposes that each speed test be taken between the hours of 6:00 a.m. and 12:00 a.m. (midnight) local time and within the calendar year ending on the relevant construction milestone period. Should a network load simulator be required to provide sufficient comparison to busy hour network congestion? The Commission proposes that speed tests must be taken outdoors, and that speed tests would only be counted if they fall within the area for which 5G Fund support was awarded. While the Commission proposes to require that test data be taken outdoors, how should it consider data collected at stationary locations versus mobile in-vehicle tests? Because low speed or stationary throughput measurements are typically higher than high mobility throughput measurements, should the Commission mandate a mixture of in-vehicle and stationary measurements? How can the Commission ensure that the speed test measurements represent the typical user case for the area covered?

121. The Commission notes that, regardless of the measurement methodology employed by a 5G Fund recipient, large areas of the recipient's coverage area may not be accessible via road due to the rural nature of the target areas. In general, the number of measurements across a rural area are likely either to be sparse compared to the total area or potentially unduly burdensome to collect. Are there methods of testing non-drivable/non-accessible areas, such as technological features like minimization of drive testing or measurement campaigns conducted via drone, that the Commission should consider? What parameters, such as vehicle speed and height above ground, should be specified to ensure that the test represents the user experience?

13. Testing Measurement Application Development

122. Speed tests supporting 5G Fund recipients' coverage maps could include downlink, uplink, latency, and signal strength measurements and be performed using an end-user application that measures performance between the mobile device and specified test servers. In support of its Measuring Mobile Broadband efforts, the Commission developed and released the FCC Speed Test App. This app measures the download and upload speed of a given connection in bits-per-second-per-hertz (bps), latency, and packet loss by performing data transfer from/to a target test node selected from a specified set. The test operates for a fixed duration and reports download and upload throughputs and latency values. There are many smartphone apps which report signal strength and data speeds; however, due to the inherent fluctuations of the RF environment, an app that reports instantaneous signal strength or download speed does not necessarily represent the overall user experience. The Commission seeks comment on specifying apps and methodologies that will ensure consistent and comparable measurements. Should the Commission consider developing an app to be used to verify coverage? Should its use be required, and if so, should there be any exceptions to its use, for example if there are features within a 5G network that allow for extraction of the performance requirements? The Commission seeks comment on these issues.

C. Eligibility Requirements

123. The Commission proposes requiring parties seeking 5G Fund support to satisfy eligibility requirements that are consistent with those adopted for Mobility Fund Phase I, CAF Phase II, and the Rural Digital Opportunity Fund. The Commission seeks comment on its proposals and on any other suggested eligibility requirements. If commenters suggest other eligibility requirements, they should be specific and explain how those requirements would serve the ultimate goals of the 5G Fund. While the Commission proposes eligibility requirements, it also seek comment on ways the Commission can encourage participation in competitive bidding by the widest possible range of qualified parties.

1. ETC Designations

124. Only ETCs designated pursuant to section 214(e) of the Act are eligible to receive support from the high-cost program. However, consistent with the rules adopted for the CAF Phase II auction and the Rural Digital Opportunity Fund, the Commission proposes to permit an applicant seeking to participate in a 5G Fund auction to be designated as an ETC after it is

announced as a winning bidder for a particular area. For the CAF Phase II auction, the Commission did not limit bidding in the auction only to ETCs, however, it required all winning bidders to obtain an ETC designation that covers all of the areas in which they won support prior to being authorized to receive support. The Commission therefore proposes that entities applying to bid in a 5G Fund auction would not be required to be ETCs at the time of the short-form application filing deadline, but that winning bidders would be required, within 180 days after the release of the public notice announcing winning bidders, to obtain an ETC designation from the relevant state commission, or this Commission if the state commission lacks jurisdiction, that covers the each of the geographic areas in which they won support. The Commission expects that allowing entities that are not ETCs to apply to bid in a 5G Fund auction may improve competition in the auction by encouraging participation from entities that may be hesitant to invest resources in applying for an ETC designation without knowing if they would be likely to win 5G Fund support.

125. Similar to the approach taken in the CAF Phase II auction and adopted for the Rural Digital Opportunity Fund, the Commission also proposes that the Wireline Competition Bureau waive the deadline where it determine that a winning bidder has demonstrated good faith efforts to obtain its ETC designation(s), but the proceeding has not been completed by the deadline. The Commission proposes that good faith would be presumed if the winning bidder filed its ETC application with the relevant authority within 30 days after the release of the public notice announcing winning bidders.

126. Additionally, the Commission proposes to forbear from the statutory requirement that the ETC service area of a 5G Fund winning bidder conform to the service area of the rural telephone company serving the same area. For Mobility Fund Phase I, the Commission forbore from requiring that the service areas of an ETC conform to the service area of any rural telephone company serving the same area, pursuant to section 214(e)(5) of the Act and § 54.207(b) of the Commission's rules. The Commission approved forbearance on the same terms for CAF Phase II and the Rural Digital Opportunity Fund. Consistent with the approach taken in Mobility Fund Phase I, CAF Phase II, and the Rural Digital Opportunity Fund, the Commission proposes that for those entities that obtain ETC designations as a result of being selected as winning bidders for 5G Fund support, the Commission would forbear from applying section 214(e)(5) of the Act and § 54.207(b) of the Commission's rules. The Commission anticipates that forbearing from the service area conformance requirement would eliminate the need for redefinition of any rural telephone company service areas in the context of a 5G Fund auction.

127. The Commission seeks comment on its proposals regarding ETC designations and forbearance from the service area conformance requirement. Commenters should address the three statutory requirements for any such forbearance.

2. Spectrum Access

128. The Commission proposes requiring that an applicant seeking to participate in a 5G Fund auction have access to spectrum in an area that enables it to satisfy the applicable performance requirements in order to receive 5G Fund support for that area. As more fully explained in the Commission's proposed pre-auction short-form application requirements, the Commission would require an applicant to describe its access to spectrum, and to certify that that the description is accurate, that it has access to spectrum in the area(s) in which it intends to bid, that it has such access to spectrum at the time it applies to participate in competitive bidding and at the time it applies for support, and that it would retain its access to the spectrum through the applicable term of support adopted by the Commission for the 5G Fund. The Commission seeks comment on this proposal.

3. Financial and Technical Capability

129. As it has required in other universal service proceedings, the Commission proposes requiring an entity to certify that it is financially and technically qualified to provide the services supported by the 5G Fund within the specified timeframe in the geographic areas for which it sought support. Requiring this certification is a reasonable protection for the auction process and to safeguard the award of universal service funds. As more fully explained in its proposed application requirements, the Commission proposes requiring an applicant to certify as to its financial and technical qualifications in both its pre-auction short-form application and its post-auction long-form application. The Commission seeks comment on this proposal.

4. Encouraging Participation

130. In order to encourage participation in a 5G Fund auction by the widest possible range of entities, the Commission proposes to permit all qualified applicants to participate in a 5G Fund auction. The Commission's commitment to fiscal responsibility requires that it distribute the Commission's finite budget to the provider that submits the superior, most cost-effective bid in a 5G Fund auction. The Commission did not prohibit any particular class of parties from participating in Mobility Fund Phase I based on size or other concerns or from seeking Mobility Fund Phase I support based solely on a party's past decision to relinquish universal service support provided on another basis. In order to avoid potentially limiting the Commission's ability to close the 5G coverage gap, it proposes to follow the same approach here. The Commission expects that its general auction rules and procedures would provide the basis for an auction process that would promote the Commission's objectives for the 5G Fund and provide a fair opportunity for all serious, interested parties to participate. The Commission seeks comment on this proposal.

5. Transaction Conditions

131. With respect to the T-Mobile-Sprint transaction, the Commission notes that it required certain commitments as conditions to its approval of the transaction. In particular, certain deployment commitments were required nationwide, and also in rural areas. Specifically, T-Mobile pledged to cover 85 percent of the United States' rural population with 5G service within three years of the consummation of the transaction, and 90 percent within six years. T-Mobile further committed that, within three years, two-thirds of the rural population would have access to 5G download speeds of at least 50 Mbps, while over half (55 percent) would have access to 5G download speeds of at least 100 Mbps. Within six years of the merger closing date, T-Mobile pledged that 5G download speeds of at least 50 Mbps would be available to 90 percent of the rural population, while two-thirds of the rural population would be able to receive 5G service with download speeds of at least 100 Mbps.

132. The Commission tentatively concludes that T-Mobile should not be permitted to use any eligible areas for which it might win 5G Fund support to fulfill its transaction-specific rural commitments. The Commission seeks

comment on two approaches to implement this tentative conclusion. First, because T-Mobile has transaction commitments to cover a certain percentage of population rather than specific areas, the Commission seeks comment on allowing T-Mobile to make pre-auction binding commitments to deploy 5G services in eligible areas within the adopted deployment milestones for the 5G Fund without receiving 5G Fund support and otherwise prohibiting T-Mobile from participating in the bidding process. Would allowing T-Mobile to “win” an eligible area before the 5G Fund auction for $0 align with the Commission's goal of directing limited universal service funds to areas that would not otherwise see deployment of 5G networks? If the Commission were to allow this, are there any restrictions on where T-Mobile should be able to make such commitments?

133. Second, the Commission seeks comment on permitting T-Mobile to identify areas before the auction where it intends to deploy 5G service and removing these areas from the list of areas eligible to win support in the auction. If the Commission were to allow T-Mobile to identify such areas, the Commission seeks comment on how to ensure that T-Mobile deployed in these areas, including enforcement mechanisms. The Commission also seeks comment on whether there should be restrictions on which areas T-Mobile may identify, and, if restrictions should be adopted, the Commission seeks comment on the specifics of these restrictions.

134. The Commission seeks comment on any other alternatives to address the interaction between the T-Mobile merger conditions and the Commission's 5G Fund objectives, and asks commenters to provide specific implementation ideas to support any alternatives they propose.

135. Do other carriers have enforceable commitments to deploy 5G? If so, what tools does the Commission have to enforce such commitments and ensure that they are met? Should these carriers be allowed, similar to T-Mobile, to identify these areas to remove them from the auction? The Commission seeks comment on these questions and any alternative mechanisms to address planned 5G deployment that would ensure that the Commission's limited funds are most efficiently targeted to the areas most in need of support. Regarding potential future transactions, the Commission similarly tentatively concludes that no party may meet any 5G deployment merger conditions adopted in any other transactions with 5G Fund support. The Commission seeks comment on using similar mechanisms as discussed above for T-Mobile and any alternatives to align merger commitments in any potential future transactions with the Commission's 5G Fund objectives. The Commission seeks comment on these proposals and any alternatives to best take into account existing and future transaction conditions in its consideration of awarding 5G Fund support.

6. Inter-Relationship With Other Universal Service Mechanisms and Obligations

136. The Commission proposes to allow recipients of other high-cost universal service support to participate in a 5G Fund auction. While the Commission does not anticipate that it would prohibit applicants from participating in a 5G Fund auction merely because they have won support through other universal service mechanisms, the Commission notes that the goals of 5G Fund are to help ensure the availability of

mobile

voice and broadband services across rural areas of the country. The Commission therefore proposes to prohibit a 5G Fund support recipient from using 5G Fund support to satisfy any pre-existing high-cost deployment obligations to fixed locations, to prohibit a recipient of other high-cost support from using that support to satisfy its 5G Fund deployment obligations. The Commission seeks comment on this proposal.

D. Application Process

137. The Commission proposes to use a two-stage application filing process for the 5G Fund, consisting of a pre-auction short-form application and a post-auction long-form application. Under this proposal, the Commission would require an entity interested in participating in a 5G Fund auction to file a short-form application to establish its qualifications to participate in the auction, relying primarily on the applicant's disclosures as to identity, ownership, and agreements, as well as a description of its access to spectrum and various applicant certifications. After the short-form application deadline, Commission staff would conduct an initial review of the short-form applications to determine whether applicants have provided the necessary information required at the short-form stage to be qualified to participate in the auction. Following this initial review, applicants whose short-form applications are deemed incomplete would be given a limited opportunity to cure defects and to resubmit corrected applications. Only minor modifications to an applicant's short-form application would be permitted. Once Commission staff's final review is complete, a public notice would be released indicating which applicants are deemed qualified to bid in the auction.

138. After the close of the auction, the Commission would require a winning bidder to submit a lon

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