Consumers in urban areas generally have far more choices for broadband internet than their more rural counterparts. A new proposed Federal Communications Commission (FCC) rule could change that, to the detriment of rural broadband consumers. This is a make or break moment for rural America, providing a key opportunity take advantage of an under-utilized spectrum to great benefit rural broadband consumers.
But the largest national mobile carriers have other interests and other ideas, and would like to take over this spectrum, with the federal government’s help, to offer more services to the more highly profitable urban areas. The current rule gives urban and rural areas access to broadband internet services. The large national mobile carriers favor rules that will drive out Internet Service Providers (ISPs) that offer vital and innovative services to rural consumers, leaving those areas with fewer choices for broadband internet services.
The proposed rule, a classic example of crony capitalism involving large corporations and government working together at the detriment of consumers, clearly benefits the large mobile providers who will create a 5G-only band that only benefits urban areas. There are 23 million rural Americans who lack basic fixed broadband service in their homes, who have been frustrated by the FCC’s delaying of deployment of broadband in rural areas while they have prioritized the needs of the mobile industry, which seeks to use the new rule for their competitive advantage.
While 1G service is sufficient in rural America and 5G is great but it is used primarily in urban areas. The proposed rule will strand investments, for rural areas, made based on the current fair rules and foreclose access to providers other than the large carriers who operate over large geographic areas. The large carriers avoid serving rural consumer because it is not profitable enough for them to serve those areas. ISPs and other providers serving the under-served rural areas will remain more viable under the current rules, rather than the proposed rules that will clearly favor large mobile carriers.
The current rules were the results of FCC rulemaking in 2012 and 2015. Following a report from the President’s Council of Advisors on Science and Technology (PCAST), the FCC identified the band as a candidate for sharing. In 2015, the FCC adopted a rule covering the 3550-3650 MHz band immediately, and the 3650-3700 MHz band in 2020, a Three-tier Spectrum Access System. One of the tiers, the Priority Access (PALs) were auctioned in 10-megahertz pieces dynamically assigned. These were also Census a tract auction – 74,000 census tracts. Finally, there were three-year license terms, with one initial three-year renewal. The new FCC proposal will change the rule in a way that harms rural consumers.
The FCC began proceedings earlier this year that have led to the new proposed rule. The Republican majority and one commissioner, Michael O’Reilly, on record as opposing the licensing rules, the large mobile carriers have filed petitions for rulemaking that would clearly favor their interests over the service providers serving rural areas. They pushed for increasing the length of Priority Access Licenses (PALs) from three to ten years, and increasing the size of PAL auction areas from census tracts (74,000) to Partial Economic Areas (416). The FCC adopted the new proposed rulemaking on October 24.
Two years ago, the FCC adopted rules designed to increase investment in rural broadband networks by revising the rules for the 3.5 GHz “Citizens Broadband Radio Service (CBRS)” spectrum band. The changes sought by the large mobile carriers, including expanding the geographic size of licenses from census tracts to much larger areas and extending license terms to ten years and adding an undefined “renewal expectancy, will heavily benefit only the largest mobile wireless carriers and preclude entrepreneurial ISPs from using this spectrum to provide the very needed fixed broadband to under-served rural areas. Commissioners Ajit Pai (Chairman), Mignon Clyburn, Michael O’Reilly, Brendan Carr, and Jessica Rosenworcel all need to make sure the rule balances the needs of rural consumers with those of the large mobile carriers.
Using census tracts for PAL sizes allows all interested bidders to compete and lets the market determine the best use of this unique public resource. Using larger geographic areas will create an artificial restriction which benefits big mobile carriers at the disadvantage of rural consumers. Rural providers are expanding services available to rural America, which is a jeopardy if the proposed rule changes are made. Balanced rulemaking is needed to continue expanding broadband internet access to rural areas.