Establishing a 5G Fund for Rural America, 101358-101400 [2024-23404]

Agencies

• FEDERAL COMMUNICATIONS COMMISSION

[Federal Register Volume 89, Number 240 (Friday, December 13, 2024)]
[Rules and Regulations]
[Pages 101358-101400]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-23404]



[[Page 101357]]

Vol. 89

Friday,

No. 240

December 13, 2024

Part VI





 Federal Communications Commission





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47 CFR Part 54





Establishing a 5G Fund for Rural America; Final Rule

Federal Register / Vol. 89, No. 240 / Friday, December 13, 2024 / 
Rules and Regulations

[[Page 101358]]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 54

[GN Docket No. 20-32; FCC 24-89; FRS 247283]


Establishing a 5G Fund for Rural America

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: In this document, the Federal Communications Commission 
(Commission or FCC) takes important and necessary steps to implement 
the 5G Fund for Rural America (5G Fund) to support the build out of 
advanced, 5G mobile wireless broadband networks for those who live, 
work, and travel in rural areas. The Commission also in this document 
resolves the issues raised in the five pending petitions for 
reconsideration of its 2020 5G Fund Report and Order.

DATES: Effective January 13, 2025. Compliance with Sec. Sec.  
54.322(b), 54.322(g), 54.322(h), 54.322(i), 54.322(j), 54.1014(a), 
54.1014(b)(2), 54.1018(a), 54.1018(b), 54.1018(c), 54.1018(d), 
54.1019(a)(1), 54.1019(a)(2), 54.1019(a)(3), 54.1019(b), 54.1022(b), 
and 54.1022(f) is not required until the Commission publishes a 
document in the Federal Register announcing the compliance date. As of 
December 13, 2024, instruction 10.b., amending Sec.  54.313, and 
published November 25, 2020, at 85 FR 75770, is withdrawn.

ADDRESSES: Federal Communications Commission, 45 L Street NE, 
Washington, DC 20554.

FOR FURTHER INFORMATION CONTACT: For additional information on this 
proceeding, contact Kelly Quinn, Office of Economics and Analytics, 
Auctions Division, (202) 418-0660 or [email protected], Valerie M. 
Barrish, Office of Economics and Analytics, Auctions Division, (202) 
418-0660 or [email protected]. For information regarding the 
Paperwork Reduction Act of 1995 (PRA) information collection 
requirements contained in this PRA, contact Cathy Williams, Office of 
Managing Director, at (202) 418-2918 or [email protected].

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's 5G 
Fund Second Report and Order and Order on Reconsideration in GN Docket 
No. 20-32, FCC 24-89, adopted on August 14, 2024 and released on August 
29, 2024. The full text of this document is available on the 
Commission's website at https://www.fcc.gov/document/fcc-reignite-5g-fund-target-investments-rural-communities. To request materials in 
accessible formats for people with disabilities, send an email to 
[email protected] or call the Consumer & Governmental Affairs Bureau at 
202-418-0530 (voice).

Synopsis

I. Introduction

    1. The Commission takes important and necessary steps in the 5G 
Fund Second Report and
    Order and Order on Reconsideration to implement the framework for 
the 5G Fund for Rural America (5G Fund) to support the build out of 
advanced, 5G mobile wireless broadband networks for those who live, 
work, and travel in rural areas. After over a decade of hard work to 
reach this pivotal moment, the 5G Fund reflects the Commission's 
persistent efforts to reform and redirect universal service funds for 
mobile broadband to areas of the country that need them the most. As it 
finalizes the details for the 5G Fund, the Commission is confident that 
its conclusions are solidly grounded in the improved mobile coverage 
data obtained in the Broadband Data Collection (BDC), which is 
reflected on its new National Broadband Map and provides the Commission 
with the most comprehensive picture to date about where mobile 
broadband service is and is not across the entire country. 
Unquestionably, the Commission's decision to wait to proceed with the 
5G Fund Phase I auction until the Commission had these data to rely on 
has dramatically improved its understanding of where high-speed mobile 
broadband service is being provided and has significantly enhanced its 
ability to hold a successful 5G Fund auction. The Commission is now far 
better informed regarding which communities lack mobile broadband 
service.
    2. As the Commission noted when it adopted the 5G Fund Further 
Notice of Proposed Rulemaking (5G Fund FNPRM), 88 FR 66781 (Sept. 28, 
2023), the National Broadband Map reflects the stark reality that over 
14 million homes and businesses nationwide continue to lack access to 
5G mobile wireless broadband service. The Commission therefore 
undertook a tailored effort to refresh the record and reignite the 5G 
Fund's plan to expand the deployment of 5G service to those rural 
communities that remain trapped on the wrong side of the digital 
divide. After careful consideration of the record gathered in this 
proceeding, the Commission concludes that the determinations it reaches 
herein will best incentivize the deployment of networks providing 
advanced, 5G mobile wireless broadband in areas of the country where, 
absent subsidies, such service will continue to be lacking.
    3. Specifically, in this 5G Fund Second Report and Order and Order 
on Reconsideration, the Commission: (1) modifies the definition of the 
areas that will be eligible for support in the 5G Fund Phase I auction 
and include areas in Puerto Rico and the U.S. Virgin Islands that meet 
this eligible area definition in the 5G Fund Phase I auction; (2) 
increases the budget for Phase I of the 5G Fund and the Tribal reserve 
budget; (3) modifies the metric for accepting and identifying winning 
bids and adopt a service-based weighting factor for bidding in the 5G 
Fund Phase I auction; (4) explains how it will aggregate areas eligible 
for 5G Fund support to minimum geographic areas for bidding; (5) 
explains its approach to generally align the methodologies for 
demonstrating compliance with the 5G Fund public interest obligations 
and performance requirements with those used in the BDC; (6) modifies 
the schedule for transitioning from mobile legacy high-cost support to 
5G Fund support consistent with recent legislative amendments; (7) 
requires each 5G Fund Phase I auction applicant to certify, under 
penalty of perjury, that it has read the public notice adopting 
procedures for the auction, and that it has familiarized itself with 
those procedures and any requirements related to the support made 
available for bidding in the auction; (8) requires 5G Fund support 
recipients to implement cybersecurity and supply chain risk management 
plans as a condition of receiving support; and (9) encourages 5G Fund 
support recipients to incorporate Open Radio Access Network (Open RAN) 
technologies in networks funded through the 5G Fund through the use of 
incentive funding and an opportunity to seek additional time to meet 
their 5G Fund public interest obligations and performance requirements 
by the established service deployment milestones.
    4. The Commission also resolves the issues raised in the pending 
petitions for reconsideration of the 5G Fund Report and Order filed by 
The Rural Wireless Association, Inc. (RWA) and NTCA--The Rural 
Broadband Association (NTCA), The Coalition of Rural Wireless Carriers 
(CRWC), CTIA, Smith Bagley, Inc. (SBI), and 5G Fund Supporters. See 86 
FR 6611 (Jan. 22, 2021). With the decisions the

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Commission reaches herein, the Commission advances its extensive 
efforts that began with the USF/ICC Transformation Order, 76 FR 73830 
(Nov. 29, 2011), to modernize high-cost support for mobile broadband 
services and proceeds with confidence that it is stretching its limited 
universal service fund dollars to support advanced, 5G mobile wireless 
broadband service to as many areas where Americans live, work and 
travel as possible.

II. Background

    5. In its October 2020 5G Fund Report and Order, 85 FR 75770 (Nov. 
25, 2020), the Commission established the 5G Fund and determined that 
it would use multi-round reverse auctions to distribute up to $9 
billion, in two phases, to retarget mobile universal service in the 
high-cost program to bring voice and 5G mobile broadband service to 
rural areas of the country unlikely to otherwise see unsubsidized 
deployment of 5G-capable networks. In adopting a budget of up to $9 
billion for the 5G Fund, the Commission explained that support would be 
awarded in two phases, with up to $8 billion for Phase I, of which it 
would reserve $680 million of support for service to Tribal lands, and 
at least $1 billion in Phase II, as well as any unawarded funds from 
Phase I. The Commission decided that it would use new, more precise, 
verified mobile coverage data gathered through the BDC to determine the 
areas eligible for support in a 5G Fund auction. The Commission defined 
the areas eligible for support in the 5G Fund Phase I auction as those 
that lack unsubsidized 4G LTE and 5G broadband service by at least one 
service provider based on BDC data. The Commission also decided that it 
would accept bids and identify winning bids in a 5G Fund auction using 
a support price per adjusted square kilometer. Under this approach, 
each eligible area would have an associated number of square kilometers 
that would be subject to an adjustment factor that would assign a 
weight to each geographic area and apply that adjustment factor to 
bidding for support amounts, and support amounts for an area would be 
determined by multiplying an area's associated adjusted square 
kilometers by the relevant price per square kilometer.
    6. The Commission also concluded in the 5G Fund Report and Order 
that ``[r]ural Americans deserve timely deployment of service by legacy 
recipients of high-cost support that is comparable to what is being 
offered in urban areas, and [that its] stewardship of the Universal 
Service Fund demands that [it] specify and clarify the obligations of 
legacy support recipients.'' Consistent with this conclusion, the 
Commission adopted additional 5G public interest obligations and 
performance requirements, as well as associated reporting requirements, 
for competitive eligible telecommunications carriers (ETCs) to continue 
to receive mobile legacy high-cost support. The Commission also adopted 
a requirement that competitive ETCs receiving mobile legacy high-cost 
support use an increasing percentage of their support toward the 
deployment, maintenance, and operation of voice and broadband networks 
that support 5G service in their subsidized areas. Furthermore, the 
Commission noted that it would terminate support payments to 
competitive ETCs receiving mobile legacy high-cost support that fail to 
comply with their public interest obligations and performance 
requirements. The Commission explained that such rules would help to 
ensure that the areas served by legacy support providers enjoyed the 
benefits that 5G promises.
    7. Pursuant to the rules adopted in the 5G Fund Report and Order, 
both recipients of mobile legacy high-cost support and recipients of 5G 
Fund auction support are required to meet minimum baseline performance 
requirements for data speed, latency, and data allowance, including: 
(1) deploying 5G networks that meet at least the 5G-NR (New Radio) 
technology standards developed by the 3rd Generation Partnership 
Project with Release 15 (or any successor release that may be adopted 
by the Office of Economics and Analytics (OEA) and Wireline Competition 
Bureau (WCB) after appropriate notice and comment) with median download 
and upload speeds of at least 35 Mbps and 3 Mbps and with minimum cell 
edge download and upload speeds of 7 Mbps and 1 Mbps; (2) meeting end-
to-end round trip data latency measurements of 100 milliseconds or 
below; and (3) offering at least one service plan that includes a 
minimum monthly data allowance that is equivalent to the average United 
States subscriber data usage. The Commission explained that these 
performance requirements, along with public interest obligations for 
reasonably comparable rates, collocation, and voice and data roaming, 
will ensure that rural areas receive service reasonably comparable to 
high-speed mobile broadband service available in urban areas from both 
mobile legacy support recipients and 5G Fund support recipients.
    8. To ensure that 5G Fund support recipients meet their public 
interest obligations and performance requirements in areas where they 
receive support, the Commission adopted interim and final service 
deployment milestones along with reporting requirements to monitor 
their progress. Specifically, the Commission adopted milestones 
requiring a 5G Fund support recipient to offer 5G service meeting 
established performance requirements to at least 40% 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% of the total square kilometers by the end of the fourth full 
calendar year, and to at least 80% of the total square kilometers by 
the end of the fifth full calendar year. Moreover, the Commission 
adopted a final service deployment milestone that would require a 5G 
Fund support recipient to offer 5G service that meets the established 
5G Fund performance requirements to at least 85% 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 
sixth full calendar year following authorization of support. 
Additionally, a 5G Fund support recipient is required to demonstrate by 
the end of the sixth full calendar year following authorization of 
support that it provides service that meets the established 5G 
performance requirements to at least 75% of the total square kilometers 
within each of its individual biddable areas.
    9. Figure 1 in the 5G Fund Second Report and Order and Order on 
Reconsideration, titled ``USAC Mobile CETC Service Area Boundaries 
Map,'' depicts USAC's online map delineating the boundaries of the 
subsidized service areas of each competitive ETC receiving mobile 
legacy high-cost support used in determining which areas are subsidized 
for this purpose. The Commission stated in the 5G Fund Report and Order 
that it will use Geographic Information Systems (GIS) data from the 
Universal Service Administrative Company (USAC) delineating the 
boundaries of the subsidized service areas of each competitive ETC 
receiving mobile legacy high-cost support in determining which areas 
are subsidized for this purpose. The 5G Fund Second Report and Order 
and Order on Reconsideration notes that California, Connecticut, 
Delaware, Florida, Hawaii, Indiana, Maryland, Massachusetts, Minnesota, 
New Jersey, Ohio, Pennsylvania, Rhode Island, Vermont, and Washington, 
DC do not have any

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mobile legacy high-cost support service areas. The charts in Figure 2 
in the 5G Fund Second Report and Order and Order on Reconsideration, 
titled ``Percent of a State's Total Area Within a Subsidized CETC Area 
and the Percent of Total High-Cost Subsidy Directed to That State,'' 
and Figure 3 in the 5G Fund Second Report and Order and Order on 
Reconsideration, titled ``Percent of a State's Total Area Within the 
Subsidized Area of 1, 2, 3, or 4 CETCs,'' provide more detail about the 
distribution of mobile legacy high-cost support by state.
    10. The Commission decided in the 5G Fund Report and Order that it 
would wait to hold an auction to award 5G Fund support until it had 
new, more precise, verified mobile coverage data obtained through the 
BDC, and explained that waiting for the development of a National 
Broadband Map was critical to the 5G Fund's success. The Commission's 
National Broadband Map, which reflects the most recently available data 
submitted in the BDC concerning mobile broadband service availability, 
provides us with a substantially improved understanding about where 
such service is--and is not--available. Moreover, in areas where mobile 
broadband service is available, this map provides an improved picture 
of the type(s) of service available, the speeds at which service is 
available, and the environment(s) in which service is available.
    11. Armed with this data, the Commission adopted the 5G Fund FNPRM 
on September 21, 2023, to refresh the record and help inform the 
decisions the Commission makes below about how Phase I of the 5G Fund 
should operate. The 5G Fund FNPRM therefore sought comment on a limited 
set of issues that are critical to the 5G Fund's success, namely: (1) 
defining the areas that will be eligible for 5G Fund support; (2) 
reassessing the budget for the 5G Fund; (3) potentially reconsidering 
the use of adjusted square kilometers as the metric for accepting bids 
and identifying winning bids in a 5G Fund auction; (4) aggregating 
areas eligible for 5G Fund support to minimum geographic areas for 
bidding; (5) measuring a 5G Fund support recipient's compliance with 
its public interest obligations and performance requirements based on 
any modified metric for accepting bids and identifying winning bids; 
(6) modifying the schedule for transitioning from mobile legacy high-
cost support to 5G Fund support, consistent with recent legislative 
amendments; (7) requiring each 5G Fund Phase I auction applicant to 
certify, under penalty of perjury, that it has read the public notice 
adopting procedures for the auction, and that it has familiarized 
itself with those procedures and any requirements, terms, and 
conditions related to the support made available for bidding in the 
auction; (8) requiring 5G Fund support recipients to implement 
cybersecurity and supply chain risk management plans; (9) determining 
whether and how this proceeding might create an opportunity to support 
further deployment of Open Radio Access Network (Open RAN) 
technologies; and (10) asking how its proposals may promote or inhibit 
advances in diversity, equity, inclusion, and accessibility, as well 
the scope of the Commission's relevant legal authority to address any 
such issues.

III. Identifying Areas Eligible for 5G Fund Support

A. Defining the Areas Eligible for 5G Fund Support

    12. The Commission modifies the definition of areas eligible for 
support in the 5G Fund Phase I auction to be those areas that: (1) show 
a lack of unsubsidized 5G mobile wireless broadband service at speeds 
of at least \7/1\ Mbps in an outdoor stationary environment by at least 
one service provider based on mobile coverage data submitted in the 
BDC, (2) are not in urban areas, as defined by the U.S. Census Bureau, 
and (3) contain at least one location or at least some portion of a 
road. In the 5G Fund Second Report and Order and Order on 
Reconsideration, the Commission noted that data submitted in the BDC 
does not include the subsidy status of a reported service or provider, 
and that to determine whether an area lacks unsubsidized service, it 
evaluates the subsidy status of a service provider by using information 
provided from USAC regarding the distribution of mobile legacy high-
cost support from the universal service fund and competitive eligible 
telecommunications carrier (CETC) study boundaries. The Commission also 
noted that, consistent with the Commission's decision in the 5G Fund 
Report and Order prohibiting any provider with enforceable 5G 
deployment obligations to use 5G Fund support to fund such deployments, 
it expects to give providers with enforceable 5G deployment obligations 
an opportunity to make pre-auction, binding commitments to deploy 5G in 
certain areas, thereby removing those areas from the inventory of areas 
eligible for the auction.
    13. As the Commission noted in the 5G Fund FNPRM, throughout this 
proceeding, several parties have taken issue with the previously 
adopted eligible areas definition--i.e., areas where mobile coverage 
data submitted in the BDC show a lack of both unsubsidized 4G LTE and 
unsubsidized 5G broadband service by at least one service provider--and 
have advocated that the Commission more broadly define as eligible for 
5G Fund support any areas that lack unsubsidized 5G mobile broadband 
service. The Commission also received two petitions seeking 
reconsideration of the eligible areas definition adopted in the 5G Fund 
Report and Order, both of which ask the Commission to define as 
eligible for 5G Fund support any area that lacks unsubsidized 5G 
broadband service. See 86 FR 6611 (Jan. 22, 2021). The Commission is 
persuaded by the comments filed in response to the 5G Fund FNPRM that, 
for a variety of reasons, unsubsidized providers of 4G LTE service may 
lack motivation to upgrade their networks to 5G technology in rural 
areas and thus may be unlikely to do so without incentives. To provide 
such incentives, the Commission therefore modifies the definition of 
eligible areas adopted in the 5G Fund Report and Order. However, the 
Commission is also mindful that there are rural areas that lack 
unsubsidized 4G LTE service and thus lack access to any type of 
advanced high-speed mobile broadband service. Accordingly, as more 
fully explained in the 5G Fund Second Report and Order, the Commission 
will apply a service-based weighting factor in 5G Fund Phase I auction 
bidding to incentivize the deployment of 5G mobile broadband service in 
areas that lack unsubsidized 4G LTE service. The Commission will use a 
speed threshold of 5/1 Mbps for purposes of determining the areas that 
lack unsubsidized 4G LTE in connection with this weighting approach. As 
noted in the 5G Fund Second Report and Order and Order on 
Reconsideration, for 4G LTE, the BDC requires mobile broadband service 
providers to submit propagation maps and propagation model details that 
demonstrate where mobile wireless users should expect to receive 
minimum user speeds of 5/1 Mbps at the cell edge, with a cell edge 
probability of not less than 90% and a cell loading of not less than 
50%, in accordance with the Broadband Deployment Accuracy and 
Technological Availability (Broadband DATA) Act. See 47 U.S.C. 
642(b)(2)(B)(ii).

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    14. Consistent with the Commission's decision to modify the 
definition of areas eligible for support in the 5G Fund Phase I auction 
to be those areas where mobile coverage data submitted in the BDC show 
a lack of unsubsidized 5G mobile broadband service at speeds of at 
least 7/1 Mbps in an outdoor stationary environment by at least one 
service provider, the Commission also grants the Petitions for 
Reconsideration filed by CRWC, NTCA, and RWA to the extent they request 
that the Commission define the areas eligible for the 5G Fund Phase I 
auction as those where BDC data show a lack of unsubsidized 5G mobile 
broadband service.
1. Technology for Determining Eligible Areas
    15. The record overwhelmingly supports modifying the definition of 
areas eligible for support in the 5G Fund Phase I auction to be those 
areas where BDC mobile coverage data show a lack of unsubsidized 5G 
mobile broadband service by at least one service provider, even if 
those areas are served by 4G LTE service. As the Competitive Carriers 
Association (CCA) emphasizes, ``the 5G Fund should be truly focused on 
5G,'' and ``[t]he relevant question for 5G Fund eligibility is the 
presence or absence of currently-available 5G service in that area.'' 
CCA maintains that defining eligibility for 5G Fund support based on 
this baseline question will extend 5G service to both areas currently 
receiving only 4G service and those that do not receive 4G service. CCA 
notes that expanding eligibility to areas in which 4G LTE service is 
available but 5G service is not ``appropriately focuses the 5G Fund on 
expanding access to 5G service . . . [and] also avoids the potentially 
harmful consequences of stranding 4G-served areas without the potential 
for 5G service for an extended period of time.''
    16. AT&T, Inc. (AT&T) and T-Mobile USA, Inc. (T-Mobile) are the 
only commenters that support continuing to define eligible areas as 
those that lack unsubsidized 4G LTE and 5G mobile broadband service. 
AT&T ``supports prioritizing 5G Fund support for areas without 4G LTE 
or 5G service'' and submits that ``[t]his could be accomplished by 
conducting a more targeted 5G Fund Phase I auction based on areas 
without 4G LTE and 5G service . . . [and] then expand[ing] the eligible 
areas [for the 5G Fund Phase II auction] to also include those that 
have 4G LTE service if the BDC maps at the time support [such an 
expansion].'' AT&T argues that ``[5G Fund support] should only be 
expended for areas that will not receive 5G service without private 
investment'' and asserts that ``the Commission . . . should first 
direct [its limited funds] to [areas] most in need--[those] that do not 
have 4G LTE or 5G service[,] . . . [which] will allow more time for 
private investment to upgrade 4G LTE coverage areas to 5G without [5G 
Fund] support but will also eventually allow support in the event it is 
not economical for a 4G LTE area[ ] to be [upgraded] without government 
support.'' T-Mobile argues that ``[t]argeting unserved areas is 
consistent with the framework of previous universal service auctions . 
. . [and] will avoid waste and inefficient use of resources due to 
overbuilding.'' T-Mobile submits that retaining the existing eligible 
areas definition ``will also help target funding to areas that lack 
mobile broadband service, as there are many places throughout the 
United States that lack even 4G LTE service,'' and maintains that 
``[p]rioritizing areas that lack 4G LTE or 5G will ensure that funding 
is targeted to areas that lack any service.''
    17. Several commenters address the questions posed by the 
Commission about what motivations there are for unsubsidized providers 
of 4G LTE service to upgrade their networks to 5G technology in rural 
areas. AST&Science LLC (AST&Science), CCA, CRWC, RWA, and Smith Bagley, 
Inc. (SBI) each submit that there is no reasonable basis to conclude 
that the provision of unsubsidized 4G LTE service in rural areas serves 
as an indicator that 5G mobile broadband service will be deployed in 
those areas absent subsidies. They argue that unsubsidized 4G LTE 
providers lack incentives and thus have limited motivation to upgrade 
their networks to support 5G service in rural areas, with AST&Science 
and CCA specifically noting the financial challenges of such rural 
upgrades as one of the main reasons. CCA contends that the record in 
this proceeding clearly demonstrates that the Commission's assumption 
in the 5G Fund Report and Order that areas with unsubsidized 4G service 
tend to show a likelihood of unsubsidized 5G deployments such that they 
should be excluded from 5G Fund eligibility is incorrect and risks 
widening the digital divide instead of closing it. CRWC, US Cellular, 
and SBI each cite CRWC's claim in its Petition for Reconsideration of 
the 5G Fund Report and Order that ``it would be[ ] premature in the 
extreme for the Commission to assume [in 2020] that, within the next 
several years, all rural areas that currently have 4G service will see 
[deployment of] 5G service [at levels meeting Commission's adopted 
performance requirements]'' and each notes ``that the facts appear to 
bear out [CRWC's earlier assertion]'' because ``[t]he BDC map [in 
Figure 1 of the 5G Fund FNPRM ] continues to show vast swaths of rural 
America lacking unsubsidized 4G LTE service at 5/1 Mbps as well as 
unsubsidized 5G service at 7/1 Mbps or better.'' CRWC, US Cellular, and 
SBI submit that notwithstanding record low interest rates in effect at 
the time of, and following, the adoption of the 5G Fund Report and 
Order and recent Commission auctions of spectrum suitable for 5G 
deployments, ``unsubsidized carriers have not rushed in over the past 
three years to close the mobile service gap in rural America . . . 
[and] it appears there is a great deal of work to do'' to upgrade areas 
that lack 4G LTE service, let alone upgrading to 5G service. According 
to US Cellular, another disincentive for providers to upgrade from 4G 
to 5G is that while upgrades from 3G to 4G LTE service have in the past 
served to deliver access to new services, such as internet access and 
streaming, that increased usage and in turn carrier revenues, ``almost 
every American already has a mobile device of some sort, even if they 
live in an area without high-quality coverage and service [and] [a]s a 
result, investing to upgrade to 5G-level service does not deliver 
substantial new revenues to a carrier from non-business customers, at 
least not yet.''
    18. Verizon notes that ``[w]hile many areas that have unsubsidized 
4G LTE coverage will soon obtain 5G coverage through the operation of 
the competitive market, some areas with 4G LTE coverage will require 
universal service support to upgrade to 5G.'' Verizon submits that the 
risk of preempting near-term 5G deployments by subsidizing them in 
areas where unsubsidized 4G LTE networks have been deployed--which the 
Commission previously sought to avoid--has already been reduced by the 
extensive unsubsidized 5G deployment that has occurred during the 
three-year pause in implementation of the 5G Fund, and ``will be 
further reduced by the time the Commission holds the [5G Fund] Phase I 
auction . . . as those unsubsidized deployments continue to expand. 
Verizon contends that as a result, ``[b]y the time [the Commission] 
holds the [5G Fund] Phase I auction, it will be more reasonable for the 
Commission to assume that any remaining 4G LTE-only areas shown on the 
BDC maps require universal service support to upgrade to 5G.'' NTCA 
maintains that ``in sparse

[[Page 101362]]

rural areas where the distance between buildings is significant, the 
population small, and often there is not a major highway passing 
through the area, there is little to justify or even absorb the cost of 
delivering 5G [mobile] broadband service'' and thus ``predicting that 
entities currently offering unsubsidized 4G LTE coverage in these areas 
might someday increase that coverage to 5G would miss the mark.'' NTCA 
further submits that ``[s]uch a baseless predictive judgment would 
instead result in the very areas the Commission intends to support 
through the 5G Fund remaining on the wrong side of the digital 
divide.''
    19. T-Mobile is the only commenter that argues that the 
Commission's earlier assumption was correct because, ``[a]s in 2020, 5G 
deployments are likely in areas where unsubsidized 4G LTE networks have 
already been deployed . . . [and] [t]he market forces that brought 
unsubsidized 4G LTE to an area are likely to result in a provider's 
decision to upgrade their service to 5G.'' T-Mobile submits that the 
Commission's approach in the 5G Fund Report and Order for defining 
eligible areas ``will help to mitigate overbuilding as providers 
continue to deploy 5G service to meet market demands.'' However, RWA 
disagrees, arguing that ``T-Mobile provide[s] no evidence to support 
the [Commission's] assumption [in the 5G Fund Report and Order] that 5G 
deployments are likely in areas where unsubsidized 4G LTE networks have 
already been deployed . . . [and is] only able to point to `market 
forces' that it argues will drive 5G deployment in areas where there is 
unsubsidized 4G LTE deployment and a general concern [regarding] 
overbuilding.'' RWA notes that, to the contrary, BDC filing data show 
that ``unsubsidized carriers have not [in fact] rushed to deploy 5G 
mobile service in rural America [during] the . . . three years since 
the 5G Fund [Report and] Order was adopted.'' \1\ RWA contends that 
``the record clearly shows that rural areas served only by 4G LTE 
should be funded by the 5G Fund due to the high risk of being left 
behind in 5G rural deployments.''
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    \1\ Id. at 2-3 (citing CRWC Comments at 9-14).
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    20. The Commission agrees with commenters that defining eligible 
areas based on a lack of unsubsidized 5G mobile service is more 
consistent with the 5G-centered approach envisioned for the 5G Fund. 
While the Commission is mindful of the need to avoid overbuilding, it 
concludes that retaining the eligible areas definition adopted in the 
5G Fund Report and Order could exclude some areas where unsubsidized 4G 
LTE service is being provided that will not be upgraded to 5G service 
without 5G Fund support. Moreover, the Commission finds the risk of 
overbuilding such areas is outweighed by the benefit of ensuring that 
it does not inadvertently strand areas to lesser mobile broadband 
technology and speeds. The Commission recognized in 2020 in the 5G Fund 
Report and Order that at least two providers--T-Mobile and DISH--would 
be deploying 5G mobile broadband service in rural areas in the then-
near term pursuant to their enforceable merger commitments. For this 
reason, the Commission decided in the 5G Fund Report and Order that it 
would first afford T-Mobile, and potentially others, an opportunity to 
make pre-auction, binding commitments to deploy 5G service in certain 
areas to allow the Commission to remove such areas from the inventory 
of areas eligible for the auction, and thereby avoid overbuilding in 
rural areas where it is known that a provider plans to deploy 
unsubsidized 5G mobile broadband service.
    21. The Commission declines to adopt the approach proposed by AT&T 
that would stagger the implementation of the 5G Fund by first awarding 
support to ``areas that do not have 4G LTE or 5G service [in order to] 
allow more time for private investment to upgrade 4G LTE coverage areas 
to 5G service without support from the 5G Fund.'' AT&T's proposal 
essentially asks the Commission to retain the definition of eligible 
areas that it adopted in 2020 for an indeterminate period of time while 
the Commission continues to evaluate if the market will bring advanced, 
5G mobile broadband service to those areas absent subsidies. T-Mobile 
similarly suggests in support of retaining that definition that the 
Commission wait to ``hold[ ] the 5G Fund Phase I Auction [until] 
pending wireless industry developments have been resolved'' in order to 
``maximize the impact of the 5G Fund and minimize inefficient 
overbuilding.'' In support of waiting to move forward toward the 5G 
Fund Phase I auction until unsubsidized 5G mobile broadband service 
deployments play out, T-Mobile notes the Commission's decision to wait 
to decide ``'how and/or whether future planned processes, such as 
[Phase II of the Rural Digital Opportunity Fund], remain necessary 
after the Commission's creation of the Fabric and deployment 
commitments under BEAD and/or other Infrastructure Act programs are 
made.''' However, unlike the timing for the creation of the Broadband 
Serviceable Location Fabric (Fabric) created for the BDC and the 
deployment commitments under BEAD and/or other Infrastructure Act 
programs, which have more structured parameters and are largely within 
the control of the government, decisions about where unsubsidized 5G 
mobile broadband service will be deployed and on what timeline rest 
solely with the carriers deploying such service. Moreover, one of the 
underlying policy principles of the 5G Fund is to direct high-cost 
universal service support to areas of the country where, absent 
subsidies, they are unlikely to experience advanced, 5G mobile 
broadband service. The Commission therefore finds both AT&T's and T-
Mobile's approaches are wholly inconsistent with its decision herein to 
target 5G Fund support to the greatest number of rural areas as 
possible where people live, work, and travel within the available 
budget. Although the Commission is not persuaded that it should delay 
the 5G Fund Phase I auction until after BEAD support has been awarded, 
as more fully explained in the 5G Fund Second Report and Order, the 
Commission will nonetheless assess eligible area determinations to 
ensure that 5G Fund support does not duplicate BEAD funding efforts.
2. Speed Thresholds for Determining Eligible Areas
    22. Although virtually all commenters support basing the 
determination of eligible areas on where BDC mobile coverage data show 
a lack of unsubsidized 5G broadband service by at least one service 
provider, their positions about which speed thresholds to use in 
connection with applying this definition to determine eligible areas 
differ. Brian Dang (Dang), T-Mobile, and Verizon each express support 
for using 7/1 Mbps as the speed threshold for 5G service. Dang asserts 
that ``setting the benchmark for 5/1 Mbps for 4G and 7/1 Mbps for 5G 
seems to strike a reasonable balance for considering the mobile user 
experience.'' T-Mobile notes that the Commission has expressed that 
``[a] speed threshold [of 7/1 Mbps] is likely to be attainable by 
mobile broadband service providers deploying 5G-NR service over smaller 
channel blocks of low-band spectrum.'' T-Mobile submits that defining 
eligible areas as those that lack 35/3 Mbps 5G coverage ``would 
certainly result in overbuilding areas that have 5G from unsubsidized 
providers and would divert resources away from the areas that need it 
most--namely, areas that still lack any 5G or 4G LTE coverage at all.'' 
T-Mobile maintains ``[t]he Commission can carry out its obligation to 
be `a fiscally responsible steward of

[[Page 101363]]

[the] limited universal service funds' and fulfill its `commitment to 
preventing overbuilding' by reaffirming its decision to use speed 
thresholds that mirror the mapping parameters adopted for the BDC.'' T-
Mobile notes that ``[t]he BDC uses 5/1 Mbps as the speed threshold for 
4G LTE coverage and 7/1 Mbps as the speed threshold for 5G coverage,'' 
and contends that ``those same thresholds should be used for 
identifying eligible areas for the 5G Fund.''
    23. Michael Ravnitzky recommends ``us[ing] a minimum speed 
threshold of 25 Mbps/3 Mbps to define unsubsidized 5G service [for 
funding 5G service for Native American, Native Alaskan Native Hawaiian, 
Puerto Rican, and U.S. Virgin Island communities]'' because it ``is 
consistent with the Commission's current definition of fixed broadband 
service and reflects the minimum level of service quality that these 
communities deserve and need.''
    24. AST&Science, CCA, CRWC, RWA, SBI, and US Cellular each express 
support for using 35/3 Mbps as the speed threshold for 5G service. CRWC 
reiterates the request made in its pending Petition for Reconsideration 
that the Commission ```define as eligible any area that lacks 
unsubsidized 5G service meeting the performance requirements set forth 
for 5G Fund auction winners' . . . [i.e.,] [a]ny area lacking mobile 
broadband at a median speed of [35/3 Mbps], with 90% cell edge 
reliability, with no more than 100 milliseconds . . . of latency.'' 
CCA, CRWC, and US Cellular acknowledge that making every area lacking 
5G service at a speed threshold of 35/3 Mbps eligible for the 5G Fund 
Phase I auction could mean areas with median speeds that are close to 
35/3 Mbps might receive support, but they each submit that this could 
be addressed by ``giv[ing] a preference to areas that are unserved or 
underserved, weighting the 5G Fund auction so that these areas would be 
funded before any support is distributed in areas having median speeds 
close to 35/3 Mbps,'' or by ``tak[ing] steps to coordinate or time 
[the] 5G Fund [Phase I] auction to more completely consider the impacts 
of a robust mobile BDC challenge process and/or the impacts of BEAD-
funded projects on the mobility landscape.'' CRWC and US Cellular 
contend that using a speed threshold of 7/1 Mbps for 5G service does 
not go far enough to fulfill the statutory goal of ``provid[ing] 
consumers in rural areas with access to service quality that is 
reasonably comparable to that which is available in urban areas,'' but 
submit that if the Commission does not adopt the eligible areas 
definition CRWC advocates for in its Petition for Reconsideration, 
``making eligible for 5G Fund support any area lacking 5G technology at 
a speed of 7/1 Mbps or better'' represents ``a significant and 
commendable improvement over the eligibility provisions [adopted] in 
the 5G Fund [Report and] Order.'' SBI likewise believes a speed 
threshold of 7/1 Mbps for 5G service does not go far enough, and 
supports adopting the eligible areas definition CRWC advocates in it 
Petition, but submits that if the Commission does not use a speed 
threshold of 35/3 Mbps for purposes of determining eligible areas, it 
should alternatively provide for a middle ground data collection by 
replacing the 7/1 Mbps collection in the BDC with 20/2 Mbps, so that 
all rural Americans receiving service at less than 20/2 Mbps can access 
5G Fund support investments.
    25. CCA compares the mobile speeds to fixed service speeds and 
argues that ``[defining the speed threshold for] 5G connectivity as 
merely 7/1 Mbps is inconsistent with the Commission's role as a global 
leader in technological innovation and connectivity . . . [and] also 
falls short of the speed threshold expectations the Administration and 
the Commission have expressed in other programs--for example, 
[Broadband Equity Access and Deployment (BEAD)] Program connectivity 
requires a speed threshold of 100/20 Mbps, and Alternative-Connect 
America[ ] Cost Model II (`A-CAM II') connectivity requires 25/3 
Mbps.'' CCA also ``disagrees with the [Commission's] assumption [in the 
5G Fund FNPRM] that download and upload speeds of at least 7/1 Mbps are 
the typical minimum desired mobile experience for 5G service,'' 
asserting that ``[this speed threshold] myopically focuses on mobile 
phone 5G connectivity'' even though 5G encompasses much more than that. 
CCA also argues that ``us[ing] a 5/1 Mbps speed threshold for 4G 
connectivity and a 7/1 Mbps speed threshold for 5G connectivity 
minimizes the significant differences between 4G and 5G technology and 
user experience.'' CCA advocates using a speed threshold of 35/3 Mbps 
to define 5G service, contending that the 7/1 Mbps speed threshold the 
Commission proposes to set for 5G is ``a fraction of the median 
nationwide speed'' of over 83/8 Mbps and the speeds exceeding 4 Gbps 
that are enjoyed by Americans living in urban areas.
    26. The Commission notes that for mobile services, it standardized 
the speed parameters that providers use in generating their BDC 
coverage areas, and for 5G mobile broadband service, those speed 
parameters are standardized at 7/1 Mbps and 35/5 Mbps. See BDC Second 
Report and Order, 85 FR 50886 (Aug. 18, 2020). The BDC therefore 
collects 5G coverage data based only on speed thresholds of 7/1 Mbps 
and 35/3 Mbps. As a result, the Commission does not have data on 5G 
mobile broadband coverage at speed thresholds of 25/3 Mbps, 83/8 Mbps, 
100/20 Mbps--which are all associated with performance requirements 
through which fixed service is funded (e.g., the BEAD Program, A-CAM 
II)--or any other speed threshold combinations, and therefore can use 
only the speed threshold of 7/1 Mbps or 35/3 Mbps for which mobile 
coverage data is available in the BDC for purposes of determining 
eligible areas.
    27. The Commission concludes that using a speed threshold of 7/1 
Mbps for 5G for purposes of determining eligible areas will promote the 
expansion of 5G mobile broadband coverage at a speed threshold of at 
least 35/3 Mbps while avoiding the potential for overbuilding in areas 
where a provider already offers some level of unsubsidized 5G service 
(i.e., at 7/1 Mbps) and could upgrade to higher speeds in the future. 
Conversely, using a speed threshold of 35/3 Mbps to determine eligible 
areas would result in many more areas being eligible for support, which 
would unnecessarily tax the 5G Fund Phase I budget. Further, using a 
speed threshold of 35/3 Mbps would result in overbuilding in areas 
where providers will upgrade their 7/1 Mbps service to 35/3 Mbps 
service absent a subsidy. Moreover, the Commission expects that a speed 
threshold of 7/1 Mbps reflects the minimum desired typical mobile user 
experience across broad 5G coverage areas. The Commission continues to 
believe that it should not use the same 35/3 Mbps speed threshold for 
purposes of determining areas eligible for 5G Fund support that support 
recipients are required to achieve in meeting their 5G Fund performance 
requirements. The Commission notes that CCA's assertion that the 
Commission is ``[defining] 5G connectivity as merely 7/1 Mbps'' is 
incorrect and conflates its decision to use 7/1 Mbps as the speed 
threshold for purposes of determining eligible areas with the minimum 
speed threshold of 35/3 Mbps that a support recipient must achieve in 
order to meet its 5G Fund performance requirements. This performance 
requirement will ensure that areas currently lacking unsubsidized 7/1 
Mbps will not be left behind in experiencing the higher speeds that 
areas with 7/1 Mbps service

[[Page 101364]]

are likely to experience as the result of provider network upgrades. 
For these reasons, the Commission also denies the Petitions for 
Reconsideration filed by CRWC, NTCA, and RWA to the extent they request 
that the Commission define areas eligible for the 5G Fund Phase I 
auctions as those that lack unsubsidized 5G mobile broadband service at 
speeds of at least 35/3 Mbps.
    28. The Commission disagrees with commenters' assertion that, if a 
35/3 Mbps threshold is used to determine an area's eligibility for 5G 
Fund support, issues with support funds being diverted from unserved or 
underserved areas to fund areas with service ``close to 35/3 Mbps'' can 
be addressed by distributing support first to areas with service speeds 
not ``close to 35/3 Mbps.'' Such a process would be inconsistent with 
the mechanism the Commission adopted to assign support under the 5G 
Fund, namely a reverse auction that considers in a single auction all 
eligible areas and that aims to assign the full budget to those 
eligible areas. A second reverse auction for the ``close to 35/3 Mbps'' 
areas would be required, with a corresponding rulemaking and pre-
auction process to determine the areas that would be held back from the 
initial auction, the portion of the budget that would be withheld for 
later assignment, the timing of the later assignment mechanism, and any 
of a number of additional details that would need to be resolved for 
such a process to be carried out. Therefore, for this reason and for 
the reasons the Commission adopts the 7/1 threshold more generally, the 
Commission declines to accept the commenters' proposal and, as 
explained herein, the Commission excludes from eligibility areas that 
already have some level of 5G service (at speeds faster than 7/1 Mbps). 
Instead, the Commission targets its limited universal service support 
funds to areas that do not already enjoy a provision of service that 
far exceeds areas that have service offerings no better than 4G LTE.
    29. As noted herein, the Commission will use a speed threshold of 
5/1 Mbps with respect to 4G LTE service in connection with identifying 
any areas within the universe of areas eligible for the 5G Fund Phase I 
auction that lack unsubsidized 4G LTE, for purposes of incentivizing 
the deployment of 5G service in areas that lack unsubsidized 4G LTE 
service. The Commission notes that the BDC collects 4G LTE coverage 
areas based on speed thresholds of 5/1 Mbps in accordance with the 
Broadband DATA Act, and concludes that using this speed threshold for 
this purpose is appropriate.
3. Environment for Determining Eligible Areas
    30. The record is split on whether the Commission should use 
outdoor stationary or in-vehicle BDC coverage maps to determine 
eligible areas. AT&T, CTIA, T-Mobile, and Verizon each express support 
for using outdoor stationary BDC coverage maps to identify areas that 
are eligible for 5G Fund support. AT&T argues that the lack of 
standardized parameters for in-vehicle coverage maps ``compromises the 
value of such maps and would only further complicate the distribution 
of 5G Fund support'' and that ``utilizing in-vehicle coverage maps 
instead of outdoor stationary maps will increase the eligible areas and 
allow support in areas that already have some amount of 5G coverage.'' 
CTIA asserts that ``[w]hile the idea of using in-vehicle mobile 
coverage maps might have some facial appeal, [it] remains concerned 
that such maps fail to account for significant variables . . . [such 
as] the location of the device within the vehicle, the type of vehicle, 
whether the windows are up or down, and the vehicle speed.'' T-Mobile 
also notes that, because ``[t]he Commission did not standardize any of 
the key parameters that affect the results of in-vehicle coverage, such 
as vehicle speed, the position of the phone inside the car, and the 
type of car, . . . in-vehicle data [will be] much more variable and 
therefore [provide a] less reliable basis for determining the actual 
coverage of an area.'' ``Given the potential for inconsistency among 
in-vehicle mobile coverage maps, CTIA urges the Commission to use 
coverage maps produced to show outdoor stationary coverage . . . [in 
order to] use a more stable and reliable coverage dataset as the basis 
for the 5G Fund . . . [and] target 5G Fund subsidies to the areas most 
in need of support as the outdoor stationary maps provide a more 
targeted list of eligible areas.''
    31. T-Mobile submits that ``outdoor stationary data is a far more 
reliable and realistic basis for determining where wireless coverage is 
available than in-vehicle coverage data for several reasons.'' T-Mobile 
argues that ``[g]iven the number of variables, providers will 
inevitably use different parameters to model their in-vehicle coverage, 
making it practically impossible to make meaningful [apples-to-apples] 
comparisons between mobile providers' in-vehicle coverage maps.'' T-
Mobile notes that ``[t]he variability of in-vehicle mobile speed 
testing also introduces unnecessary complications in the challenge 
process . . . [because], for purposes of the BDC, speed tests taken on 
bicycles, motorcycles, snowmobiles, and all-terrain vehicles are all 
considered tests from in-vehicle mobile environments, as are tests 
conducted in soft-top convertibles, hard-top sedans, SUVs, pickup 
trucks, and any type of recreational vehicle, [which] entails a wide 
range of `in-vehicle testing scenarios.' '' Verizon supports ``using 
the outdoor stationary 7/1 Mbps 5G coverage map . . . [to] ensure that 
the entire budget is used to expand high-speed 5G coverage in areas 
that have little or no 5G coverage at the time of the auction, i.e., 
[those] that do not even meet the 7/1 Mbps outdoor stationary 
standard.'' Verizon opposes ``identifying eligible areas using the in-
vehicle maps [because it] would allow part or all of the budget to be 
used to upgrade existing networks in those areas that meet the outdoor 
stationary 7/1 Mbps standard but fall short of the in-vehicle 
standard.''
    32. CCA, RWA, and US Cellular express support for using in-vehicle 
BDC coverage maps to identify areas that are eligible for 5G Fund 
support. CCA argues that coverage maps based on in-vehicle mobile 
environments ``better reflects the purposes of the 5G Fund--achieving 
ubiquitous connectivity--by accounting for the mobile nature of 5G 
usage. RWA similarly asserts that ``[g]iven the inherent mobility 
aspect of in-vehicle data, [using] such data will best represent where 
5G Fund support is needed to provide 5G mobility coverage. RWA submits 
that ``[w]hile there may be multiple variables related to in-vehicle 
mobile data collection, such data provides a more accurate picture of 
actual mobile coverage that consumers will experience in the relevant 
areas.'' RWA maintains that if the Commission's goal is ``expand[ing] 
5G to rural areas where consumers live, work, and travel, ensuring that 
such consumers have 5G connectivity on rural roads is critical to that 
goal'' and that ``[o]utdoor stationary mobile data does not depict 
actual mobile coverage and [thus] should not be used as a methodology 
for determining eligible areas for consumers traveling through rural 
areas on rural roads.'' RWA further notes that ``using in-vehicle 
mobile data would ease the costs of the challenge process as drive 
testing is a much more cost-efficient and effective way to measure 
mobile coverage as opposed to conducting measurements in off-road 
areas, which are expensive and difficult to access in rural and remote 
areas.'' US Cellular likewise contends that ``[a]n in-vehicle 
measurement standard aligns more closely with how mobile handsets

[[Page 101365]]

interact with cell towers and will result in improved service quality 
for voice calls and data sessions conducted in a mobile environment.''
    33. The Commission is concerned that the use of in-vehicle mobile 
coverage maps could result in significant overbuilding, as claimed by 
commenters that oppose using such coverage maps. The Commission 
concludes that relying on outdoor stationary coverage data will avoid 
potentially overbuilding in areas where a provider already offers some 
level of unsubsidized 5G service and could upgrade to better service in 
the future. The Commission notes that outdoor stationary coverage 
estimates as reflected on the its National Broadband Map are generally 
larger than those generated for in-vehicle mobile coverage, and 
therefore relying on them will reduce the likelihood of overbuilding. 
Looking at data from June 30, 2023, as updated on February 7, 2024, 
about 34% of the U.S. is covered by 5G service at 7/1 according to in-
vehicle mobile coverage data, whereas the analogous outdoor stationary 
data show that about 46% of the U.S. is covered. Additionally, unlike 
in-vehicle mobile coverage data, outdoor stationary coverage data are 
unperturbed by the lack of standard assumptions about characteristics 
such as vehicle type and speed. In balancing the Commission's 
obligation to exercise fiscal responsibility to avoid excessive 
subsidization and the goal of deploying 5G services to where people 
live, work, and travel, the Commission finds the best approach is to 
use outdoor stationary BDC coverage maps in determining eligible areas.
4. Limiting Eligibility to Areas With Locations or Roads
    34. Because the Commission intends to direct 5G Fund Phase I 
support to areas where people live, work, and travel, it will limit the 
areas eligible for the 5G Fund Phase I auction to areas that contain at 
least one location or at least some portion of a road. The Commission 
will determine the areas that contain locations using the BDC Fabric. 
The Fabric is a dataset of every location (building or structure) in 
the United States and its Territories identified as a single point or 
record defined by a set of geographic coordinates that fall within the 
footprint of a structure, with each point assigned a unique Commission-
issued Location ID. Within the location records included in the Fabric 
are a subset of business, residential, or mixed-use locations at which 
mass-market fixed broadband internet access service are or could be 
installed, referred to as Broadband Serviceable Locations (BSLs). The 
Commission will use all locations included in the Fabric dataset, not 
just those that are identified as BSLs. This broader set of locations 
includes structures--such as community anchor institutions and large 
enterprises--that subscribe to, or would be expected to subscribe to, 
non-mass market broadband service. Including these locations, as well 
as BSLs, ensures that the Commission will capture more of the areas 
where people live, work, and travel.
    35. The Commission will determine the areas that contain roads 
using road data from OpenStreetMap. OpenStreetMap is a free, editable 
map of the world that is updated and maintained by a community of 
volunteers via open collaboration. OpenStreetMap is published and 
freely licensed under an Open Database License, which allows anyone to 
access, use, and share the data. Contributors collect data from 
surveys, trace from permitted aerial photography and satellite imagery, 
and import other geographical data in the public domain (such as U.S. 
TIGER) and from freely licensed geodata sources. These contributions 
are immediately ingested by OpenStreetMap, resulting in a map made by 
local experts with data that can be as current as the time of access/
download. The Commission will define ``roads'' for purposes of 
determining areas eligible for the 5G Fund Phase I auction as those 
that include the following categories of roads: primary roads; 
secondary roads; local neighborhood roads, rural roads, and city 
streets; vehicular trails; ramps; private roads; parking lot roads; and 
winter trails. These categories of roads are encompassed in the 
OpenStreetMap ``highways'' category, which includes motorways, trunks, 
primary roads, secondary roads, tertiary roads, residential roads, 
service roads, and tracks, and the associated links. Defining roads in 
this manner is consistent with how the Commission has defined roads for 
purpose of other mobile universal service auctions. Further, because 
this definition includes many different types of roads, it helps ensure 
that areas where people live, work, and travel will be eligible for 5G 
Fund Phase I support.
    36. Given that the Commission is limiting the areas eligible for 
support in the 5G Fund Phase I auction to those that contain locations 
or roads, it does not believe it is necessary to also exclude water-
only areas from eligibility. Further, excluding water-only areas from 
eligibility as part of the process of generating eligible areas could 
exclude portions of roads, such as bridges and causeways, that are 
located in water-only areas but which the Commission believes should be 
eligible for support.
    37. Urban areas, as defined by the U.S. Census Bureau, will not be 
eligible for support in the 5G Fund Phase I auction, because the 
Commission concludes that making these areas eligible for support would 
be inconsistent with the objective of the 5G Fund program to fund the 
deployment of 5G service in rural areas. The limited comment the 
Commission received on this issue supports excluding urban areas from 
eligibility for support in support in the 5G Fund Phase I auction.
    38. Commenters generally support the Commission's approach to 
limiting eligible areas to those areas that contain locations or roads 
in furtherance of its goal of directing 5G Fund Phase I support to 
areas where people live, work, and travel. AT&T ``supports limiting 
eligible areas to those resolution 9 hexagons [(hex-9s)] that contain 
locations and/or certain roads,'' noting that if eligible areas were 
defined as ``those areas where both locations and roads exist, it would 
overly limit the areas eligible for 5G Fund support, contrary to the 
Commission's goal of reaching all areas where people live, work, and 
travel.'' CCA ``agrees with AT&T that defining eligible areas as those 
where `locations and roads exist'' would be overly limiting and 
contrary to the Commission's goal of reaching all areas where people 
live, work, and travel, and advocates for ``a definition of eligibility 
that includes both unserved roads and unserved locations'' because it 
would ``appropriately reflect the mobile nature of 5G service.'' 
Michael Ravnitzky submits that limiting eligible areas to those that 
contain BSLs and/or roads will help ``direct 5G Fund support [in Native 
American, Native Alaskan Native Hawaiian, Puerto Rican, and U.S. Virgin 
Island communities] to areas where people live, work, and travel and 
avoid wasting resources on areas that are uninhabited or 
inaccessible.''
    39. In its initial comments, RWA advocates ``limit[ing] eligible 
areas to roadways, rather than locations,'' and expresses concern that 
relying solely on locations would ``disregard[ ] the inherent mobility 
of 5G mobile services and could potentially be duplicating efforts made 
by the BEAD Program and other federal broadband programs which provide 
funding for both fiber and wireless projects, which focus on 
locations.'' RWA maintains in its reply comments that the Commission 
should limit eligible areas to roadways if the 5G Fund budget is 
limited to $9 billion, but

[[Page 101366]]

submits that ``if additional funding is available, locations should 
also be included.'' While acknowledging that serving both roads and 
locations is important, RWA expresses concern that ``[if] locations 
[are included] in eligible areas, the funding may not go as far and the 
[Commission] could duplicate efforts of the [BEAD] Program and other 
federal broadband funding programs that [fund] . . . projects to serve 
locations.''
    40. Other commenters ask the Commission to expand the eligibility 
criteria to specifically include agricultural lands. Verizon supports 
expanding the eligibility criteria to include ``rural hex-9s with 
roads, BSLs, or agricultural lands,'' and urges the Commission to 
``focus[ ] support on unserved areas that would have the most 
significant demand for mobile broadband service and require relatively 
smaller subsidies, rather than on areas that would have little demand 
for mobile broadband service and require larger subsidies.'' Verizon 
submits that ``including agricultural lands in the definition of 
eligible areas . . . will ensure that more of the nation's farmland 
gains the benefits of precision agriculture,'' which it notes is one of 
the goals articulated in the 5G Fund Report and Order. WIA similarly 
advocates for including agricultural areas within the geographic areas 
determined to be eligible for 5G Fund support, and asks the Commission 
to specifically include such areas as eligible for 5G Fund support. WIA 
acknowledges the importance of mobile service on roadways, but submits 
that there are areas that extend well beyond the reach of roads that 
need mobile connectivity as well (e.g., agricultural communities 
cultivating land). WIA argues that support areas must include those 
that are crucial to economic activity, tourism, and public safety in 
which competitive solutions do not exist, noting that farmers now use a 
host of precision technologies to manage their operations that cannot 
be used without mobile connectivity. John Deere Corporation (Deere) 
agrees with WIA, and urges the Commission to both include agricultural 
areas and farmlands within the areas that are eligible to receive 5G 
Fund support and make them the focus of the $1 billion in 5G Fund 
support that was set aside for precision agriculture in the 5G Fund 
Report and Order.
    41. The Commission declines either to narrow or expand the 
eligibility-limiting criteria used to determine areas eligible for the 
5G Fund Phase I auction in response to these comments. Although BEAD 
and other programs fund the deployment of fixed broadband services to 
fixed locations, these locations also indicate where people use mobile 
devices and where they live, work, and travel. Thus, the Commission 
disagrees with RWA that it should limit the eligibility criteria for 
determining eligible areas to those areas with roads only. With respect 
to expanding the eligibility criteria to specifically include 
agricultural areas, as requested by Verizon, WIA, and Deere, the 
Commission notes that the Commission explained in the 5G Fund Report 
and Order that ``Phase II [of the 5G Fund] . . . will focus support to 
specifically target the deployment of technologically innovative 5G 
networks that facilitate precision agriculture.'' Specifically, 
including agricultural areas would therefore be outside the scope of 
the 5G Fund Phase I auction. The Commission further notes that any 
agricultural areas located within an area determined to be eligible for 
the 5G Fund Phase I auction will indeed be eligible for support in that 
auction; the criteria the Commission adopts today for determining the 
eligible areas will not categorically remove agricultural lands. 
Additionally, the Commission believes the broad definition of ``roads'' 
it will use for purposes of determining the areas eligible for support 
in the 5G Fund Phase I auction may result in coverage reaching 
agricultural areas and farmlands because providers, when engineering 
their networks to cover the roads, are likely to cover such areas if 
they are in close proximity. Accordingly, the Commission does not take 
any additional steps here to ensure that support under Phase I of the 
5G Fund reaches agricultural lands specifically.
    42. Several commenters address both the categories of roads and the 
data source(s) that the Commission should use for purposes of 
determining the eligible areas that contain roads. RWA and CCA advocate 
using the following roadways, as defined by the U.S. Census Bureau: 
primary roads; secondary roads; local neighborhood roads, rural roads, 
and city streets; vehicular trails; ramps; private roads; parking lot 
roads; and winter trails. CCA asks the Commission to consider including 
other types of unserved roadways in determining an area eligible for 
support, ``even if they are not captured in U.S. Census Bureau [road] 
data or are located close to a served roadway.'' CCA submits that ``the 
Commission cannot and should not assume a local road, alleyway, or 
agricultural road in a rural area receives or will receive unsubsidized 
5G service simply because a highway in that same area receives 5G 
service,'' and urges the Commission to ``consider data at a granular 
level to avoid leaving behind unserved roadways in areas where another 
roadway in that area is receiving 5G service.'' CCA also expresses 
support for looking beyond roadways and including other unserved 
areas--such as waterways, agricultural lands, farmland and other 
cultivable land, parks, and trails--for purposes of determining an 
area's eligibility for support. NYPSC asks the Commission to consider 
including waterways and other frequented areas, such as state parks, as 
well as remote areas, in making eligible area determinations, noting 
that ``wired services may be unreliable or unavailable [in these rural 
and remote areas].'' SBI advocates making all active roads used on 
remote Tribal lands eligible for support if the Commission decides to 
limit eligible areas to those that contain locations or roads because 
``[t]housands of Tribal locations in SBI's service area are beyond the 
reach of the U.S. Postal Service as they receive no home delivery and 
they have no Postal Service address.'' SBI notes that ``[t]hese remote 
locations often are connected to primary roads by very small unpaved 
dirt roads through the high desert,'' many of which SBI states ``are 
considered to be service and private roads[ ] categorized as S.1740'' 
under the U.S. Census Bureau's feature class codes. SBI submits that 
``[t]hese roads, which likely fall into the 1.6, 1.7, or 1.8 category 
in the OpenStreetMap hierarchy, must be included as eligible areas'' if 
the Commission chooses to use OpenStreetMap. SBI notes that that 
``there are substantial road areas in between homes and major roads 
that could be excluded if the Commission limits eligibility to only 
[hex-9s] with developed roads or locations.'' SBI states that unlike 
much of the rest of the nation, this undeveloped network of roads 
comprise a substantial area within which Tribal residents will travel, 
and notes that the health and safety benefits of access to mobile 
services (especially 911 service) compel the Commission to ensure that 
all of these minor roads are considered when making eligible area 
determinations.
    43. CCA, Deere, RWA, and WIA each support using U.S. Census Bureau 
TIGER data when making road-based eligible area determinations. WIA and 
Deere note that agricultural communities may fall outside of the maps 
for roads, and therefore caution against using a single data source, 
such as OpenStreetMap, to determine eligible areas that contain roads. 
WIA and Deere therefore urge the Commission to

[[Page 101367]]

instead rely on multiple sources, including the TIGER road miles 
database, the U.S. Department of Agriculture's cultivated land layer, 
and other sources, to provide redundancy and help ensure that all 
agricultural communities are included within the areas eligible to 
receive 5G Fund support.
    44. The Commission concludes that the definition of roads, and the 
source of road data, it adopts here is broadly consistent with the 
categories of roads commenters ask us to consider when identifying the 
eligible areas that contain roads. In addition, including areas with 
Fabric locations will ensure that the roads leading to those locations 
generally will receive 5G coverage even if such roads do not fall 
within the categories of roads the Commission adopts today. While the 
Commission appreciates commenters' interest in using more than one road 
data source for redundancy and completeness, the Commission believes 
that using multiple road data sources would be unwieldly and could 
cause confusion, and thus decline to do so. The Commission concludes 
that using OpenStreetMap as the single road data source is beneficial 
because it includes all the road categories in the definition the 
Commission adopts, it is updated more frequently than TIGER data, and 
it reflects input from the public.
5. Generating Areas Eligible for 5G Fund Support at the Hex-9 Level
    45. In the 5G Fund FNPRM, the Commission noted that in order to 
limit the areas eligible for support in the 5G Fund Phase I auction to 
those that contain locations or roads, the Commission would need to 
designate the geographic areas that contain locations and/or roads. The 
Commission sought comment in the 5G Fund FNPRM on its approach to 
identifying specific geographic areas eligible for 5G Fund support, and 
the idea of expressing those eligible areas as hex-9s. The Commission 
explained in the 5G Fund FNPRM that under this approach, ``areas 
eligible for 5G Fund support [would be converted] to, and [made] 
available in the form of, [hex-9s],'' noting that ``unlike `raw' 
coverage footprints based on propagation model output, which do not 
conform to any defined boundary, hex-9s are standardized and can be 
clearly identified and referenced.'' The Commission noted that 
``because hex-9s are relatively small, with an average area of 
approximately 0.1 square kilometer, any reduction in map resolution 
when converting from raw propagation model output (as filed by 
providers) to hex-9s is minimal,'' and that ``the use of hex-9s can 
strike the appropriate balance between the benefits of their use and 
this loss in granularity, particularly given that the data as filed are 
based on models of coverage.''
    46. The H3 hexagonal geospatial indexing system (H3 system) is an 
open-source GIS dataset developed by Uber Technologies, Inc., that 
overlays the globe with hexagonal cells of different sizes at various 
resolutions, from zero to 15. The smallest hexagonal cells are at 
resolution 15, in which the average hexagonal cell has an area of 
approximately 0.9 square meters, and the largest are at resolution 0, 
in which the average hexagonal cell has an area of approximately 4.25 
million square kilometers. The H3 system is designed with a nested 
structure wherein a lower resolution cell (the ``parent'' hexagon) 
contains approximately seven hexagonal cells at the next higher 
resolution (its ``children'' where each ``child'' is a smaller, nested 
hexagon), which fit approximately within the ``parent'' hexagon. The H3 
system supports sixteen resolutions. Each finer resolution has cells 
with one seventh the area of the coarser resolution. Hexagons cannot be 
perfectly subdivided into seven hexagons, so the finer cells--i.e., the 
``children''--are approximately contained within a parent cell. The 
identifiers for these ``child'' cells can be easily truncated to find 
their ancestor cell at a coarser resolution, enabling efficient 
indexing.
    47. In the 5G Fund Second Report and Order and Order on 
Reconsideration, the Commission adopts its proposal to express the 
specific geographic areas eligible for 5G Fund as hex-9s, with certain 
modifications, because it is persuaded that a more granular analysis of 
coverage is needed to address concerns raised by commenters. The 
Commission will therefore analyze mobile broadband coverage by first 
translating ``raw'' mobile coverage polygons to resolution 11 hexagons 
(hex-11s) and then evaluating the coverage of the hex-11s that compose 
a hex-9, using the process described herein, and directs OEA, WCB, and 
the Wireless Telecommunications Bureau (WTB) to make additional details 
regarding the methodology used to generate eligible areas available 
with the publication of the list of eligible areas.
    48. A hex-9 will be eligible for 5G Fund support if it includes 
roads or locations and if a certain share of its component hex-11s lack 
unsubsidized 5G coverage and are in non-urban areas. Here, 5G coverage 
is based on the ``raw'' polygon coverage areas submitted by providers 
in their biannual BDC submission for 5G outdoor-stationary service at 
7/1 Mbps. The Commission will determine whether coverage is subsidized 
or unsubsidized using information from USAC on legacy support and CETC 
study area boundaries. Hex-11s are two levels more granular than hex-9s 
in the H3 system hierarchy and are therefore the ``grandchildren'' 
hexagons of hex-9s. Hex-11s have an average area of 2,150 square meters 
(about half an acre), which is smaller than the maximum area of the bin 
sizes used by providers when generating raw coverage areas submitted in 
the BDC. The maximum resolution allowed when generating mobile 
broadband coverage areas under the BDC requirements is 100 meters. See 
47 CFR 1.7004(c)(3)(iii). This resolution would result in a bin or 
pixel, the individual square generated by a propagation model to 
represent predicted coverage, with an area of 10,000 square meters.
    49. To understand how the Commission will determine which hex-9s 
are eligible for support, it may be helpful to examine the inverse, 
i.e., how a hex-9 is defined as served. For each hex-9, the Commission 
will determine the number of served grandchild hex-11s relative to the 
total number of grandchild hex-11s. For both the numerator and the 
denominator, the centroid--i.e., the geographic center point--of the 
hex-11 must fall within the boundary of United States or its 
territories to be counted. To find the number of served hex-11s, the 
Commission will overlay hex-11 areas on a provider's unsubsidized 5G 
coverage polygon and urban areas. If any of those boundaries overlap 
the centroid, the geographic center point, of the hex-11, then the 
Commission will treat the entire hex-11 as being covered by that 
boundary. Any hex-11 covered by unsubsidized 5G coverage or in an urban 
area will be considered served and counted in the number of served hex-
11s. The total number of grandchild hex-11s of a hex-9 is typically 
7x7, or 49. However, it would not be 49 when a hex-9 straddles an 
international boundary or coastline, for instance, and some its 
component hex-11s fall outside the United States or in coastal waters. 
If a substantial majority of the grandchild hex-11s are served, then 
the grandparent hex-9 will be considered served. For hex-9s with both 
land and water grandchild hex-11s, only the land hex-11s are considered 
in this calculation. For purposes of making this determination, the 
Commission considers a ``substantial majority'' to be 70% or more. Any 
hex-9 that is not

[[Page 101368]]

served in this way is therefore considered unserved and will be 
eligible for 5G support, as long as it also contains at least one 
location or at least some portion of a road.
    50. The Commission notes that although it has not formally defined 
what constitutes a ``substantial majority,'' it has concluded that it 
is more than a simple majority. In the context of the Lifeline program, 
the Commission decided in its Lifeline Third Report and Order, 81 FR 
33026 (May 24, 2016), to ``establish minimum service standards for all 
Lifeline supported services based on services to which a `substantial 
majority' of consumers have already subscribed'' and ``conclude[d] that 
70 percent of consumers constitutes a `substantial majority' as it 
relates to fixed broadband speeds.'' The Commission also concluded in 
its Lifeline Third Report and Order in the context of Lifeline program 
mobile services that ``after the phase-in of mobile data usage 
allowance standards, [it would] update mobile broadband standards for 
data usage allowance in line with the principle of supporting services 
that a ``substantial majority'' of American consumers subscribe to,'' 
and that ``given the types of data that are [publicly] and regularly 
available, the minimum service standard for mobile broadband data usage 
allowance will be 70 percent of the calculated average mobile data 
usage per household.''
    51. CCA supports converting the areas eligible for 5G Fund support 
into hex-9 standardized units and excluding from 5G Fund eligibility 
any hex-9 unit that overlaps with a relevant mobile coverage area, such 
that the entire hex-9 area is considered covered or served. Verizon 
also supports converting the areas eligible for 5G Fund support into 
hex-9s and notes that the Commission's BDC challenge and verification 
processes also use hex-9s. Verizon also advocates making bidding units 
with only a handful of eligible hex-9s ineligible for support, 
consistent with the Commission's decision in the 5G Fund Report and 
Order to exclude geographic areas with de minimis eligible areas. ARA 
PAWR submits that using the H3 system can be an efficient way to 
identify specific geographic areas but notes that one challenge with 
that approach is the need to have multiple resolution implementations 
based on the geographical location. AT&T expresses support for limiting 
the areas eligible for 5G Fund support to hex-9s in rural areas that 
are not 100% served.
    52. While not opposing converting eligible areas to hex-9s, T-
Mobile notes that there are some issues with doing so. T-Mobile submits 
that ``translating providers' submitted BDC coverage data into hex-9 
cell maps does not result in a perfect match.'' T-Mobile notes that 
``[t]he BDC rules require mobile wireless providers to report coverage 
using 100 meter by 100 meter square pixels, but [because] hex-9 cells 
are larger than these pixels[,] . . . providers' coverage data is more 
granular than the hex-9 cells used in the Commission's maps,'' and as a 
result, ``translating providers' coverage data into hex-9 maps 
inevitably introduces some degree of inaccuracy and imprecision.'' In 
an ex parte presentation, T-Mobile submits that ``[u]sing more granular 
hexagonal areas for the 5G Fund, such as hex-10 or hex-11 cells, may 
help mitigate [the hex-9 translation issue].'' The Commission agrees. 
Overlaying hex-11 cells onto the raw coverage data submitted by mobile 
service providers and generating eligible hex-9s based on the 
percentage of unserved hex-11s will allow for a more granular 
assessment of coverage data in the geographic areas than the coverage 
data as rendered on the National Broadband Map. This approach also is 
more accurate and granular than the approach the Commission outlined in 
the 5G Fund FNPRM and will alleviate certain concerns raised by 
commenters about converting coverage to hex-9s. The Commission's 
approach in the 5G Fund Second Report and Order and Order on 
Reconsideration is also more granular than the methodology used to 
report and depict mobile broadband coverage on the National Broadband 
Map, which considers a hex-9 covered if its centroid is overlapped by a 
provider's raw mobile broadband coverage area. Because hex-11s are so 
small, there is little to no loss in granularity when converting from 
raw coverage areas to hex-11s, even when using the centroid method.
    53. T-Mobile also argues that ``smaller hexagonal cell[s] would 
require higher resolution terrain and clutter maps that are not readily 
available,'' ``would require changes to the BDC submission processes,'' 
and ``would . . . dramatically increase the size of the data files and 
computer processing requirements in a way that is unachievable.'' The 
Commission disagrees with these arguments because the approach it 
adopts would not require mobile service providers to submit coverage 
data into the system based upon hex-11s, thus obviating the potential 
computer processing requirements and other logistical hurdles to 
gathering the data based on hex-11s.
    54. T-Mobile notes that ``[i]n the 5G Fund FNPRM, the Commission 
propose[d] to treat an entire hex-9 cell as served--and thus ineligible 
for 5G Fund support--if a provider's coverage data overlaps any portion 
of that hex-9 cell.'' ``[T]o ensure complete, robust rural coverage,'' 
T-Mobile argues that ``hex-9 cells that are only partially covered 
(e.g., cells where BDC shows only 25%, 50%, or 75% coverage) should be 
included in the 5G Fund Phase I Auction to avoid denying support to 
unserved locations.'' T-Mobile submits that this will ``ensure[ ] that 
locations are not excluded because they are within a hex-9 cell [with 
less than 100% coverage] . . . [and] is consistent with the goal[ ] of 
the BDC . . . to produce more granular results.'' In its reply 
comments, AT&T agrees with T-Mobile that eligible areas should include 
hex-9s that are not 100% served. CTIA likewise supports excluding 
hexagons that are 100% covered and including those that are partially 
covered, and submits that this approach will mitigate the risk 
highlighted by T-Mobile of skewing support away from areas where 
unsubsidized service is actually unavailable.
    55. The Commission will exclude from eligibility any hex-9s that 
are 100% covered by unsubsidized 5G service. However, the Commission 
disagrees with CCA that a hex-9 with any 5G coverage should be excluded 
from 5G Fund eligibility, because doing so would leave behind too many 
areas from gaining 5G coverage. The Commission will therefore also make 
some hex-9s that are partially covered eligible for 5G Fund support, 
depending on the percentage of the hex-9 that is covered. To address 
commenters' concerns about excluding from eligibility hex-9s with only 
a small percentage of their area covered by unsubsidized 5G service, 
the Commission will determine the eligibility of a hex-9 based on 
whether the percentage of its nested, non-urban ``grandchild'' hex-11s 
with unsubsidized 5G mobile coverage represents a ``substantial 
majority'' of the hex-11s in that hex-9. As noted herein, the 
Commission concludes that unsubsidized 5G mobile coverage of 70% or 
more represents a substantial majority. Under this approach, a hex-9 
will be ineligible if 70% or more of its nested, non-urban 
``grandchild'' hex-11s show unsubsidized 5G coverage. The Commission 
believes that its methodology strikes the appropriate balance between 
not leaving too many areas and locations ineligible for

[[Page 101369]]

support and avoiding supporting areas that are largely covered by 5G 
service without a subsidy.
6. Source and Timing for Determining Final List of Eligible Areas
    56. As the basis for determining the final list of areas eligible 
for support in the 5G Fund Phase I auction, the Commission will use the 
most recent vintage of BDC mobile availability data published on the 
National Broadband Map that the public have had the opportunity to 
challenge. The methodologies, processes, and timelines applicable to 
mobile challenges submitted under the BDC rules will apply. For 
example, a speed test conducted using a 5G-capable device in an area 
where a provider claims 4G LTE and 5G-NR service but the results show 
less than 5/1 Mbps would count as a negative test for both the 4G LTE 
and 5G-NR coverage. Alternatively, such a test would count as a 
positive test for 5G-NR if the test result is higher than 7/1 Mbps, 
even if the test is taken over a 4G LTE connection. The Commission 
directs OEA, WCB, and WTB to implement this approach and to release the 
final list of eligible areas for that auction at least 30 days prior to 
the start of bidding in the auction. The Commission intends to publish 
a ``preview'' map of the eligible areas based on the vintage (the ``as-
of date'') of the BDC mobile availability data that the Commission 
plans to use as the basis for the final eligible areas. The Commission 
also anticipates publishing an updated preview of the eligible areas 
before the short-form application filing window for the auction opens. 
This updated preview would be based on the same vintage of BDC mobile 
availability data and reflect any mobile challenges to that vintage 
resolved at the time of release. The Commission concludes that 
providing both an initial and an updated preview of the eligible areas 
during the pre-auction process will afford potential auction applicants 
sufficient time to determine whether additional challenges to the data 
are needed, and to submit those challenges so that they can be 
processed and adjudicated sufficiently in advance of when the 
Commission expects to generate the final list of eligible areas. It 
will also enable them to make a more informed decision applying for, 
and bidding in, the auction.
    57. The Commission recognizes that, depending on the timing for the 
5G Fund Phase I auction, this approach means that it would not use the 
most recent vintage of published BDC mobile availability data as the 
basis for the eligible areas. If the Commission were to commit to using 
the most recent vintage of published BDC mobile availability data, 
there might be little or no time for the public to submit, and for the 
Commission to resolve, challenges to such coverage data; as a result, 
some areas that should be eligible for the auction might be excluded. 
The Commission therefore concludes that, on balance, using a prior 
vintage of BDC mobile availability data to determine the final list of 
eligible areas is preferable because it will afford greater opportunity 
for public review, challenge submissions, Commission adjudications, and 
for provider updates on the National Broadband Map to be considered.
    58. Michael Ravnitzky supports the proposal to make the map of 
eligible areas available no later than 30 days in advance of bidding, 
submitting that ``this approach will ensure that the eligible areas are 
based on the most recent and accurate data available.'' CCA expresses 
concern about the Commission's proposal ``to use mobile availability 
data published no later than 30 days prior to the start of bidding as 
the basis for [determining] final eligible areas,'' arguing that 
``[p]articipating carriers will need to engage in considerable 
preparation for bidding and [that] 30 days is insufficient for small 
carriers with limited resources to review the data, make decisions 
regarding participating in the auction, and take the steps necessary to 
prepare for the auction.'' CCA asserts that ``[t]he Commission should 
ensure that there is sufficient time between when the final [eligible 
areas] data is made available and the start of bidding, so that 
adequate preparation can occur.'' CCA also urges the Commission to 
``permit a robust mobility mapping challenge to run its course[ ] to 
detect and resolve any significant concerns regarding the accuracy of 
the current coverage maps.''
    59. CTIA submits that ``[the 5G Fund] program timelines should be 
aligned with the BDC timeline to enable the use of the most recent 
version of the [National Broadband Map] that has been verified by the 
challenge process.'' While CTIA does not specifically oppose the 
Commission's specific proposed timing, it asserts that ``[d]epending on 
the timing of when the map is published, 30 days may not be sufficient 
to ensure that the map can be validated through the challenge 
process.'' ``Since challenges are ordinarily accepted on a rolling 
basis, CTIA recommends that the Commission provide a target date for 
eligible parties to submit challenges for consideration in the map that 
will be used to determine eligible areas for the 5G Fund . . . [that 
is] sufficiently far in advance of the start of bidding to ensure that 
potential bidders in the auction have an adequate opportunity to 
evaluate the updated coverage data and its impact on their 
participation.'' While not specifically addressing the Commission's 
specific proposed timing, RWA asserts that the Commission should set a 
deadline for determining the final areas eligible for the 5G Fund Phase 
I auction prior to making this determination, in order to enable 
providers to determine the most opportune time to file challenges to 
the BDC maps that the Commission will rely on to determine the areas 
eligible for the auction, noting that ``[i]f a provider files a 
challenge too early, such challenge may be moot by the time a later 
version of the BDC map is released due to continued 5G build out by 
nationwide carriers.'' RWA further notes that ``[f]iling such 
challenges is also extremely costly for rural providers, making the 
timing of filing challenges even more difficult . . . [because] filing 
challenges to overstated coverage in perpetuity is economically 
infeasible for rural carriers.'' RWA submits that ``[p]roviding a date 
when the final eligible areas will be determined will provide needed 
clarity and avoid wasteful spending by carriers filing premature 
challenges . . . [and ensure] that industry and the Commission are in a 
better position to understand the impact of the BEAD Program, [as 
contemplated by the Commission in the 5G Fund FNPRM].''
    60. The iterative nature of the National Broadband Map, which is 
published twice a year and updated on a bi-weekly basis to reflect 
provider updates and the results of challenges, addresses commenters 
concerns about the Map showing the most up-to-date coverage data. The 
Commission therefore strongly encourages the public to review and, to 
the extent appropriate, challenge these data as soon as possible so 
that any challenges can be resolved by Commission staff prior to its 
announcement of the final eligible areas. Challenges may take as long 
as 180 days to be reflected in corrections to the National Broadband 
Map. As outlined in the Commission's rules, speed tests submitted as 
part of the BDC mobile challenge process are valid for up to one year 
and are combined with other tests conducted in nearby geographic areas 
to create a cognizable challenge to the mobile data once the 
geographic, testing, and temporal thresholds outlined in the BDC mobile 
challenge process have been met. If a challenge is upheld, the 
challenged area will be

[[Page 101370]]

removed from the National Broadband Map, and the results of upheld 
challenges will continue to be reflected in future versions of the 
National Broadband Map, including future data vintages. The challenge 
outcome will remain until a mobile challenge restoration process has 
been implemented and a provider has successfully followed that process 
to demonstrate that coverage in the challenged area is available in a 
subsequent vintage after the loss or concession of a challenge. Once an 
area is successfully challenged and the challenge is upheld, the 
provider will not simply be able to add the area back to their 
availability filing in the next biannual filing period. Instead, to 
show that a provider can serve a previously challenged area in a future 
BDC filing, it will need to separately submit the same type of detailed 
infrastructure data for the successfully challenged area that the 
Commission can require in an audit or verification (i.e., the type of 
data that would be sufficient to invalidate challenge speed tests 
through the challenge process).

B. Puerto Rico and the U.S. Virgin Islands

    61. Consistent with the underlying policy objectives of the 
Commission's decisions in the Bringing Puerto Rico Together Fund and 
the Connect USVI Fund, the Commission concludes that areas in Puerto 
Rico and the U.S. Virgin Islands that meet the eligible areas 
definition for the 5G Fund will be included in the 5G Fund Phase I 
auction. The Commission considers this conclusion to be a natural 
progression from the Commission's decision to provide support to mobile 
carriers in Puerto Rico and the U.S. Virgin Islands to restore and 
harden their networks after the devastation caused by Hurricanes Irma 
and Maria to the Commission's gradual transition to allow carriers in 
these areas to use a portion of the support they receive toward 
deploying high-speed 5G mobile services. As the Commission anticipated 
in both the PR-USVI Stage 2 Order, 84 FR 59937 (Nov. 7, 2019), and more 
recently in the Transitional Support Report and Order, 88 FR 28993 (May 
5, 2023), the time has come to establish a competitive funding 
mechanism for the long-term expansion of advanced telecommunications 
access and next generation wireless services for Puerto Rico and the 
U.S. Virgin Islands, and the Commission concludes that it is now 
appropriate to view the funding needs for support for mobile broadband 
services in Puerto Rico and the U.S. Virgin Islands through the same 
lens as other areas eligible for support under the 5G Fund. 
Accordingly, eligible areas in Puerto Rico and the U.S. Virgin Islands 
will be included in the 5G Fund Phase I auction, and winning bidders 
that are authorized to receive 5G Fund Phase I support in those areas 
will be subject to the same terms and conditions as winning bidders 
authorized to receive support in other eligible areas.
    62. Over the past six years, the Commission has dedicated 
significant effort and financial support to accomplish the restoration 
of mobile communication networks in Puerto Rico and the U.S. Virgin 
Islands. In recognition of the advancements that have been made to 
achieve this goal, in its 2019 PR-USVI Stage 2 Order, the Commission 
began the process of transitioning from offering restorative support to 
a plan that would begin to offer support to mobile carriers to deploy 
high-speed 5G mobile services in areas that that would otherwise not 
see such services absent subsidies. Thus, in Stage 2 of the Bringing 
Puerto Rico Together Fund and the Connect USVI Fund, the Commission 
adopted a three-year funding period and budget pursuant to which 
carriers could elect to receive up to 75% of the support for which they 
are eligible to restore, harden, and expand their networks using 4G LTE 
or better technology capable of providing service at speeds of at least 
10/1 Mbps, and up to 25% of the support for which they are eligible to 
deploy 5G mobile networks capable of providing service at speeds of at 
least 35/3 Mbps. In so doing, the Commission stated that it expected to 
establish a competitive funding mechanism for the long-term expansion 
of advanced telecommunications access and next-generation wireless 
services for Puerto Rico and the U.S. Virgin Islands by the conclusion 
of Stage 2. However, in June 2023, when Stage 2 mobile support under 
the Bringing Puerto Rico Together Fund and the Connect USVI Fund was 
scheduled to conclude, this next stage of the implementation of the 5G 
Fund had not yet begun. Without another option on the immediate 
horizon, and not wanting to lose the momentum that had been achieved in 
Puerto Rico and the U.S. Virgin Islands, the Commission adopted an 
additional transitional support period of up to 24 months to allow 
eligible mobile carriers currently receiving Stage 2 mobile support to 
continue receiving support at levels lower than in Stage 2 that is 
intended to harden and improve the resiliency and redundancy of 
facilities for 4G LTE or better technologies during natural disasters, 
but may be used for both 4G LTE and 5G-NR-capable networks in order to 
encourage the deployment of 5G-NR service while also ensuring resilient 
networks until the Commission could develop a long-term funding 
mechanism. The Commission nonetheless stated in the Transitional 
Support Report and Order that transitional support would end sooner 
than 24 months if a long-term funding mechanism were established before 
the transition period ends.
    63. The Commission recognizes that its decision to use the 5G Fund 
as the long-term competitive funding mechanism to advance high-speed, 
mobile broadband for eligible areas in Puerto Rico and the U.S. Virgin 
Islands may raise concerns for certain commenters. Although some 
parties support the inclusion of eligible areas in Puerto Rico and the 
U.S. Virgin Islands in the 5G Fund because they maintain that the award 
of 5G Fund support has the potential to bring new services and service 
providers to these areas, other commenters contend there should be a 
separate, specific funding mechanism for Puerto Rico and the U.S. 
Virgin Islands that addresses the unique challenges that service 
providers face there. One commenter even argues that the Commission 
should continue offering support to providers through the Bringing 
Puerto Rico Together Fund and the Connect USVI Fund, and also include 
eligible areas in Puerto Rico in the 5G Fund.
    64. In reaching today's decision, the Commission is mindful that, 
had it not been for the catastrophic damage caused by Hurricanes Irma 
and Maria, eligible areas in Puerto Rico and the U.S. Virgin Islands 
would have remained in Mobility Fund Phase II, which was later replaced 
by the 5G Fund. Moreover, after carefully reviewing the record on this 
issue, the Commission has determined that there is no reasonable basis 
for Puerto Rico and the U.S. Virgin Islands to continue to be treated 
differently than other U.S. islands and territories, which also face 
the same factors that challenge the deployment of mobile service as 
those cited by commenters, including the economy, the costs of shipping 
materials from the mainland, and the limited availability of trained 
workers. While the Commission acknowledges and are not unsympathetic to 
these obstacles, it concludes that Puerto Rico and the U.S. Virgin 
Islands no longer warrant continued separate, dedicated, mobile funding 
mechanisms. As stewards of universal service support, the Commission 
has an obligation to be fiscally responsible and to ensure that

[[Page 101371]]

its limited resources are used efficiently. Although the Commission 
stated in the Transitional Support Report and Order that transitional 
support would end sooner than 24 months if a long-term funding 
mechanism were established, the Commission finds that providing 
carriers in Puerto Rico and the U.S. Virgin Islands that are not 
winning bidders in the 5G Fund Phase I auction with a two-year phase 
down of the transitional support being provided under the Bringing 
Puerto Rico Together Fund, on the same terms and conditions as those 
being adopted for mobile legacy high-cost support recipients, will 
provide the continuity of support necessary to preserve the 
Commission's investment in restoring and hardening networks impacted by 
the hurricanes in these Territories. The Commission concludes that its 
decision today serves the public interest and reduces the 
administrative burdens of continuing to manage separate funding 
mechanisms. Accordingly, areas in Puerto Rico and the U.S. Virgin 
Islands that meet the eligible areas definition for the 5G Fund will be 
included in the 5G Fund Phase I auction, subject to the same terms and 
conditions as other eligible areas, and the transition from the 
transitional support being provided under the Bringing Puerto Rico 
Together Fund and the Connect USVI Fund to 5G Fund support in Puerto 
Rico and the U.S. Virgin Islands, or to a two-year phase down of 
transitional support, will occur on the same terms and schedule adopted 
below. For areas in Puerto Rico and the U.S. Virgin Islands, the 
transitional support being provided under the Transitional Support 
Order is the ``mobile legacy high-cost support'' that will transition 
to 5G Fund support or be subject to phase down (whichever is 
applicable).

IV. 5G Fund Budget

    65. The Commission increases the budget for Phase I of the 5G Fund 
from up to $8 billion to up to $9 billion by including the $1 billion 
that previously had been allocated by the Commission in the 5G Fund 
Report and Order for Phase II, as suggested in the record. In so doing, 
the Commission affirms its prior commitment to reassess the appropriate 
amount needed for the 5G Fund Phase II budget, including support that 
will be necessary for carriers to commit to the deployment of 
technologically innovative 5G networks that facilitate precision 
agriculture, following Phase I. From this 5G Fund Phase I budget of up 
to $9 billion, the Commission also proportionately increases the amount 
it reserves for service to Tribal lands from up to $680 million to up 
to $765 million, and here too reaffirm the Commission's commitment to 
revisit the amount of this reserve after the conclusion of the 5G Fund 
Phase I auction.
    66. The Commission's budget determinations today remain grounded in 
its effort to balance the policy objectives of the 5G Fund with its 
obligation to exercise fiscal responsibility to avoid excessive 
subsidization, recognizing that the cost of subsidies distributed 
through the 5G Fund will ultimately be borne by consumers and 
businesses. The Commission also heeds the concerns of many commenters 
that caution the Commission against raising the 5G Fund budget to the 
detriment of the Universal Service Fund (USF) contribution factor.
    67. The Commission nonetheless recognizes the apprehension 
expressed by commenters that, particularly due to inflationary factors, 
an $8 billion budget for 5G Fund Phase I auction may be insufficient to 
achieve its policy goals. The Commission has long acknowledged that 
extending deployment of 5G networks in rural areas will require 
significant expenditures. The Commission is mindful that the magnitude 
of such expenditures may only continue to increase. While many 
commenters favor raising the 5G Fund Phase I auction budget, most did 
not propose any alternative budget amount other than suggesting that 
the Commission should employ a cost model approach. In reaching its 
decision today, the Commission is persuaded, however, by the argument 
suggested in the record to increase the Phase I auction budget to 
include up to the full $1 billion previously allocated to the Phase II 
budget, holding open a decision on the budget that will be necessary 
for Phase II of the 5G Fund. The Commission recognizes that Phase II 
will focus support on precision agriculture, and its decision to 
reallocate the budget does not diminish that intention. Furthermore, 
precision agriculture connectivity relies upon a wide variety of 
broadband deployment technologies, and the landscape of broadband 
infrastructure in rural areas continues to evolve. The Commission 
concludes that repurposing the budget amount previously allocated to 
Phase II of the 5G Fund strikes an appropriate balance in responding to 
commenters that advocate an increase in the Phase I budget, while also 
being conscious of its fiscal obligations to be good stewards of the 
Universal Service Fund.
    68. According to the U.S. Bureau of Labor Statistics, the price of 
broadcast and wireless communications equipment manufacturing increased 
by 6.18% from May 2020 to August 2023, and the total compensation for 
private industry workers in the information industry increased by 
13.32% from Q2 2020 to Q3 2023. Assuming the wireless 
telecommunications industry uses equipment and labor in approximately 
equal shares, costs in the industry have gone up by approximately 10% 
since May 2020. The Commission finds that a 12.5% increase in the 5G 
Fund Phase I auction budget will help compensate for the inflationary 
pressures cited by commenters that might otherwise reduce the potential 
for the deployment of 5G service relative to when the budget was 
adopted in 2020. Likewise, the Commission increases the amount of the 
budget it reserves for service to Tribal lands proportionally by that 
same 12.5%. The Commission nonetheless balances its decision to 
increase the 5G Fund Phase I auction budget with its obligation to 
ensure that the budget it establishes provides sufficient, but not 
excessive support. The Commission concludes that by distributing up to 
$9 billion in the 5G Fund Phase I auction, the Commission can make a 
significant impact on the provision of advanced, high-speed 5G mobile 
broadband in areas where Americans live, work, and travel, and the 
Commission will continue to monitor its progress as the Commission 
reviews information collected through the BDC, annually.
    69. The Commission emphasizes that it is aware that this budget, 
even as modified, will not cover the costs of serving every eligible 
area that will be offered in the 5G Fund Phase I auction, and the 
Commission states again that it is not intended to do so. Commenters 
that continue to argue in favor of using a cost model to determine the 
5G Fund budget disregard the Commission's repeated explanation that 
relying on cost studies would wholly conflict with its intent to award 
support in eligible areas in amounts that are competitive, but still 
acceptable to the providers, as a reverse auction does. In other 
situations in which the Commission has used a cost model to provide 
universal service support, the cost model generally served to establish 
the amount of support that would be offered to eligible legacy 
providers, and expenditures for those programs are determined by the 
total of the providers' acceptances of the modelled support offers. The 
5G Fund auction operates in a fundamentally different way; a budget is 
established in advance and the competitive bidding process, not the 
Commission, determines which providers will receive support and the

[[Page 101372]]

amount of support they will be eligible to receive. Multiple entities--
not only the legacy provider--may qualify to compete for support to an 
area and the auction will assign support to at most one entity in a 
fair and transparent process. Support amounts for a particular area 
will not be lower than an amount that the winning bidder (which knows 
its situation best) indicates that it is willing to accept in exchange 
for meeting the program requirements. A cost model may provide a 
generalized estimate of costs, but modelled costs will be overstated in 
many cases. Accordingly, the Commission does not base the budget that 
it adopts for Phase I of the 5G Fund on an estimate of total costs 
(however estimated, according to a model such as that submitted in the 
record or any other method), but on a careful balancing of its 
priorities to expand the deployment of 5G mobile broadband service to 
rural areas where Americans live, work, and travel with the 
Commission's obligation to be fiscally responsible as the steward of 
limited universal service funds.
    70. Additionally, consistent with the Commission's conclusion in 
both the 5G Fund Report and Order and the Mobility Fund Phase II Report 
and Order, 82 FR 15422 (Mar. 28, 2017), the Commission declines to 
adopt any alternative mechanisms to distribute its limited budget, such 
as the plan requested by SBI in its Petition for Reconsideration filed 
in 2020, or as it recently revised and tailored in its reply comments 
concerning the 5G Fund FNPRM (collectively SBI's request for a ``Remote 
Tribal Areas Fund''). Likewise, the Commission also declines to adopt 
the suggestion of NTCA to implement a Small Carrier Fund as part of its 
5G Fund budget. NTCA renews a similar argument raised in 2020, 
proposing that the Commission should retain $1.5 billion of the 5G Fund 
budget and, in lieu of having small carriers participate in an auction, 
should instead distribute this reserved budget over a ten-year period 
to current recipients of frozen support that have 500,000 or fewer 
subscribers in the aggregate in the U.S. Department of Agriculture's 
Rural-Urban Commuting Area (RUCA) Codes 5-10.
    71. The Commission emphasizes that it remains committed to 
reserving support for service to Tribal lands in the 5G Fund, and as 
the Commission has stated previously, it recognizes that ``Tribal lands 
will be more expensive to serve than non-Tribal lands due to their 
lower population density, and income levels, as well as the lack of 
power or roads in some parts of Indian country and the need for federal 
approval (such as from the Bureau of Indian Affairs) before broadband 
can be deployed there.'' However, as the Commission explained in the 5G 
Fund Report and Order, and as the Commission affirms herein, it is not 
persuaded that adopting SBI's request for a Remote Tribal Areas Fund 
would result in an improved outcome for such areas over its decision to 
utilize a reverse auction to award a reserved portion of the budget for 
service to Tribal lands. The Commission therefore denies SBI's Petition 
for Reconsideration to the extent that it requests that the Commission 
adopt a special Remote Tribal Area Fund to distribute support rather 
than using an auction mechanism to distribute 5G Fund support reserved 
for Tribal areas.
    72. The Commission also declines to adopt SBI's most recent version 
of its proposal to adopt a special case mechanism in lieu of making 
eligible areas on Tribal lands available in the 5G Fund Phase I auction 
or its suggestion that the Commission should provide special case 
treatment for mobile legacy high-cost support in remote Tribal lands 
not won at auction. While pointing to the rare decisions in which the 
Commission has awarded universal service support without the use of 
competitive bidding, SBI is unconvincing in arguing that the Commission 
should create another exception in this instance. The Commission has 
previously distinguished areas in Alaska from Tribal lands in the lower 
48 states, and SBI has provided no new evidence that the Commission 
erred in its judgment, simply rearguing the same positions it has 
offered and the Commission has rejected twice before. As the Commission 
explained the first time it declined to adopt SBI's request to adopt a 
funding plan for Tribal areas that was similar to the Alaska plan, 
``the unique basis for the adoption of the Alaska plan was not the 
existence of Tribal lands in Alaska'' but rather was based on the 
challenges facing the entire state. The Commission also disagrees with 
SBI that the amount it has reserved for Tribal support is inadequate. 
As explained herein, the Commission has proportionately increased the 
amount it reserves for service to Tribal lands in the 5G Fund Phase I 
auction to up to $765 million, which should lessen concerns that the 
budget reserved for providing support to Tribal lands is underfunded. 
The 5G Fund has insufficient resources to fund every area of the 
country that lacks unsubsidized 5G mobile service, and to do so at the 
level of support estimated to be needed by cost studies or other means, 
whether those areas are located in remote Tribal areas or otherwise. As 
stewards of the Universal Service Fund, the Commission has the 
obligation to adopt policies and procedures for the 5G Fund that 
benefit the public as a whole and that serve the public interest 
generally, within its abilities to do so.
    73. Similarly, based on the Commission's decisions in the 5G Fund 
Report and Order, the current record, and its experience with 
competitive bidding mechanisms, the Commission is not convinced that 
NTCA's proposed approach for small carriers would be a more efficient 
or effective means of awarding support than through an auction. The 
Commission remains unpersuaded that reserving a portion of the budget 
to distribute through a Small Carrier Fund improves its ability to 
better target support or to significantly accelerate 5G deployment in 
rural areas; thus, the Commission affirms the Commission's decision in 
the 5G Fund Report and Order to distribute its entire budget through a 
reverse auction. Moreover, the Commission affirms its prior 
determination that such a proposal is inconsistent ``with [its] decade-
long efforts to reform universal service high-cost support.'' As the 
Commission previously explained, to the extent NTCA is correct that 
carriers receiving legacy high-cost support can deploy 5G networks in 
their service areas more efficiently, the Commission continues to 
anticipate they will have an advantage against bidders in the 5G Fund 
Phase I auction that do not already serve those eligible areas in the 
auction. In sum, the Commission continues to conclude that using a 
reverse auction to award 5G Fund support best achieves its policy goals 
and ``that setting aside funds for a limited subset of providers would 
be an inefficient use of [its] scarce resources, and could limit [the 
Commission's] ability to expand 5G coverage to as many unserved areas 
as possible.'' As the Commission explained in the 5G Fund Report and 
Order, if the Commission were to implement a plan such as this, it 
``would risk overpaying for 5G networks in some areas that another 
provider (or even the same legacy support recipient) would be willing 
to serve for less support through an auction.''
    74. In contrast to reserving support and awarding it through a 
specialized fund of any sort, a reverse auction uses competition across 
areas and within areas to determine which areas will receive support, 
in what amounts, and which entities will receive that support, all 
within the available budget. This means the Commission will be able to 
distribute support across as many

[[Page 101373]]

square kilometers as possible within the available budget at amounts 
the winning bidders have agreed to accept, consistent with its fiscal 
responsibilities. Doing so serves the Commission's policy goals to 
reform and modernize the distribution of mobile high-cost support, a 
goal that it has repeatedly articulated since 2011. The Commission 
explained in the 5G Fund Report and Order that in contrast to the use 
of competitive bidding, in the existing mobile legacy high-cost support 
program, neither the areas for which legacy support is disbursed nor 
the amount of support carriers receive have a direct nexus to the areas 
most in need of support or the amount needed to provide service 
therein. Moreover, and as explained previously, the funds available to 
subsidize 5G mobile broadband service are not unlimited, and, as 
commenters warn, raising the budget does not come without an impact to 
the universal service contribution factor.
    75. For similar reasons, the Commission also declines to increase 
the 5G Fund Phase I budget further to account for the inclusion of 
eligible areas in Puerto Rico and the U.S. Virgin Islands in the 5G 
Fund Phase I auction. The Commission disagrees with commenters that 
suggest that the inclusion of eligible areas from Puerto Rico and the 
U.S. Virgin Islands will further strain the budget. While increasing 
the budget might result in areas that have higher costs to serve 
receiving a winning bid, it is also possible that any additional 
increase in the budget could be split between supporting new areas and 
providing greater support to bidders that would have agreed to provide 
service at lower support amounts. Moreover, increasing the budget to 
account for the inclusion of additional eligible areas, regardless of 
where those areas are located, will not ensure any particular eligible 
area will ultimately receive support through the auction.
    76. Lastly, many commenters also advocate that the Commission 
should continue to consider how other federal and state funding to 
deploy broadband will impact the provision of 5G mobile broadband 
service before establishing the budget for the 5G Fund Phase I auction. 
The majority of such comments focus on the funding stemming from the 
Infrastructure Investment and Jobs Act (Infrastructure Act), Public Law 
117-58, 135 Stat. 429 (2021), which includes the largest-ever federal 
broadband investment. Section 60102 of the Infrastructure Act directs 
the National Telecommunications and Information Administration (NTIA) 
to establish the BEAD Program, through which NTIA will allocate $42.45 
billion to states for grants ``to bridge the digital divide.''
    77. On May 13, 2022, NTIA released the Notice of Funding 
Opportunity for the BEAD Program (BEAD Program NOFO), detailing the 
process for requesting BEAD Program funding for reliable broadband 
service. In it, BEAD defines ``Reliable Broadband Service'' as service 
that the Broadband DATA Maps show is accessible to a location via: (i) 
fiber-optic technology; (ii) Cable Modem/Hybrid fiber-coaxial 
technology; (iii) digital subscriber line (DSL) technology; or (iv) 
terrestrial fixed wireless technology utilizing entirely licensed 
spectrum or using a hybrid of licensed and unlicensed spectrum. 
Broadband networks funded by the BEAD Program must provide download 
speeds of at least 100 Mbps and upload speeds of at least 20 Mbps and 
``latency that is sufficiently low to allow reasonably foreseeable, 
real-time, interactive applications.''
    78. The BEAD Program NOFO set a July 18, 2022 deadline for NTIA to 
receive letters of intent from states and territories, as well as an 
August 15, 2022 deadline for any supplemental information. The BEAD 
Program NOFO also specifies a number of program requirements, including 
principles that states and territories must observe in their subgrantee 
selection, prioritization, and scoring processes. In particular, the 
BEAD Program NOFO prohibits states and territories from ``treat[ing] as 
`unserved' or `underserved' any location that is already subject to an 
enforceable federal, state, or local commitment to deploy qualifying 
broadband'' at the conclusion of the state's or territory's challenge 
process. States and territories must also ensure that subgrantees 
comply with obligations spelled out in the BEAD Program NOFO regarding 
network capabilities (i.e., speed, latency, and uptime), deployment 
requirements, and service obligations. Finally, the BEAD Program NOFO 
requires states and territories to ensure that prospective subgrantees 
have the managerial and financial capacity to meet the commitments of 
the subgrant and any BEAD program requirements.
    79. In recognition of the Infrastructure Act and the BEAD Program, 
in August 2022, the Commission released its Future of USF Report (FCC 
22-67)--a report to Congress outlining the future of the Universal 
Service Fund. In that report, the Commission explained that ``[f]unding 
for deployment under the Infrastructure Act focuses on fixed services, 
not mobile services. The Commission also noted that it ``has a unique 
role to play in supporting the deployment of mobile broadband to 
maintain connectivity wherever people live, work, or travel.'' The 
Future of USF Report recommended that the Commission include, as part 
of its long-term plans, an evaluation of the impact of the BEAD Program 
and other federal and state broadband infrastructure investments 
discussed in this report on future mobile deployments.
    80. The 5G Fund will support the deployment of advanced mobile 
broadband by requiring that support recipients deploy 5G-NR service at 
speeds of at least 35/3 Mbps. As the Commission explained in 2020, 
``the Commission believes support is best directed to modern 5G 
deployments rather than further deployments of 4G LTE technology.'' The 
5G Fund therefore requires support recipients to meet public interest 
obligations to provide voice and 5G broadband service, and to satisfy 
distinct, measured performance requirements as a condition of receiving 
support. The 5G Fund and the BEAD Program therefore clearly serve very 
different purposes.
    81. Moreover, most recently, in the 2024 Section 706 Report (FCC 
24-27), the Commission concluded that ``[b]ased on the separate use 
cases for fixed and mobile broadband as well as evidence that consumers 
tend to subscribe to both services when they can . . . fixed and mobile 
broadband services are not full substitutes.'' As the Commission 
explained in that report, ``[b]oth services are necessary to ensure 
that all Americans have access to advanced telecommunications 
capability.''
    82. Similarly, in evaluating the impact of the BEAD Program on the 
Commission's implementation of the 5G Fund, the Commission finds that 
both programs are necessary to ensuring that all Americans have access 
to advanced telecommunications capability. The 5G Fund supports mobile 
broadband, BEAD supports fixed broadband, although some states may 
incorporate a provision among their prioritization selection criteria 
for subgrantees that favors a fixed broadband deployment that also 
supports mobile broadband. To date, however, the record does not 
indicate that any state has incorporated a mobile broadband service 
performance requirement on par with the 5G Fund's requirement for 
providing 5G-NR service at speeds of at least 35/3 Mbps. Likewise, 
although the Commission has seen at least one state (Louisiana) 
incorporate a commitment for a subgrantee to advance mobile broadband 
in order to receive BEAD funding, that commitment is to provide

[[Page 101374]]

only 4G LTE service. For this reason, the Commission is not persuaded 
by commenters that urge it to delay the 5G Fund Phase I auction until 
after BEAD support has been awarded because BEAD funding could be used 
to support mobile services as part of the BEAD recipients' broader 
deployment commitments. The Commission finds that moving ahead 
expeditiously with support for robust mobile broadband will best 
advance its shared goal of ensuring that all Americans have access to 
advanced telecommunications services.
    83. The Commission is nonetheless mindful of its obligation to 
share information regarding its efforts to implement the 5G Fund with 
the U.S. Department of Agriculture (USDA) and NTIA, consistent with the 
Broadband Interagency Coordination Act (BICA), Public Law 116-260, 134 
Stat. 3214, Div. FF, tit. IX, section 904 (2020) (codified at 47 U.S.C. 
1308 et seq.). On June 25, 2021, the Commission, USDA, and NTIA 
announced they had entered into an agreement to share information about 
existing or planned projects that have received, or will receive, 
funding through the Commission's high-cost programs and programs 
administered by NTIA and the USDA, as required by BICA. Representatives 
of the agencies have been meeting regularly pursuant to the agreement. 
On February 17, 2023, the Commission released a report on the 
effectiveness of BICA, detailing the steps that the agencies were 
taking to ensure the most effective allocation of broadband funding. In 
addition, the Commission, the U.S. Department of Agriculture, the 
National Telecommunications and Information Administration of the U.S. 
Department of Commerce, and the U.S. Department of Treasury entered 
into a memorandum of understanding regarding information sharing in May 
2022, which was renewed in May 2024.
    84. Given the Commission's decision to make areas that lack 
unsubsidized 5G mobile broadband service at speeds of at least 7/1 Mbps 
eligible for support in the 5G Fund Phase I auction, areas that are 
being offered ``unsubsidized'' 4G LTE service, or even low levels of 5G 
service, will still be included in the auction. After carefully 
considering the issue of whether duplicative support for advanced, 5G 
mobile wireless service might result from BEAD funding being awarded in 
substantially the same geographic area as support being offered in the 
5G Fund Phase I auction, the Commission concludes that, in the event 
that a BEAD subgrantee has made an enforceable commitment to a state, 
prior to the Commission's release of the final list of eligible areas, 
to deploy 5G-NR service at a speed of at least 35/3 Mbps in an in-
vehicle environment, the Commission will consider that area to be 
ineligible for 5G Fund support, and it will not include such an area in 
the 5G Fund Phase I auction. In order for an area subject to an 
enforceable commitment to be considered ineligible for support in the 
5G Fund Phase I auction, the commitment must require deployment of 5G-
NR service at speeds of at least 35/3 Mbps to the entire area that 
would have otherwise been eligible for support in the 5G Fund Phase I 
auction. To the extent any provider has an enforceable commitment to a 
state or locality or instrumentality thereof outside of the BEAD 
Program, the Commission will treat such enforceable commitments the 
same as set forth herein. The Commission adopts this speed 
determination of at least 35/3 Mbps here for the purposes of evaluating 
whether an enforceable commitment to a state for the award of BEAD 
funding duplicates the policy goals and deployment requirements the 
Commission establishes for the 5G Fund such that the area should be 
considered to be ineligible for such support. The Commission directs 
OEA and WCB to determine during the pre-auction process, and after 
notice and comment, the procedures for removing areas from the final 
list of eligible areas for the 5G Fund Phase I auction.
    85. Because any BEAD-related enforceable commitments to deploy 
advanced, 5G mobile networks would be new network deployments--just 
like those deployed with support from the 5G Fund--the Commission does 
not want to remove BEAD-funded areas summarily from the 5G Fund and 
risk the possibility that consumers in those areas might be left to 
accept a reduced level of service for an indeterminate period of time. 
For similar reasons, the Commission concludes that an enforceable 
commitment to a state must also require that the BEAD subgrantee deploy 
5G-NR service at speeds of at least 35/3 Mbps in an in-vehicle 
environment within the same milestone deadlines that apply to 5G Fund 
support recipients, thereby meeting the Commission's performance 
requirements for the 5G Fund. To ensure that an enforceable commitment 
made with BEAD funding complies with the 5G Fund's 5G-NR service and at 
least 35/3 Mbps speed requirements for the purposes of determining 
whether to remove such an area from eligibility from the 5G Fund, the 
enforceable state commitment must also include verification processes 
that involve the submission of infrastructure data or on-the-ground 
test data to verify that the BEAD subgrantee has met these service and 
speed requirements. The Commission directs OEA and WCB to determine 
during the pre-auction process, and after notice and comment, a 
verification process that would demonstrate that a BEAD subgrantee has 
made an enforceable commitment to meet these service and speed 
requirements, prior to removing an area from the final list of eligible 
areas for the 5G Fund Phase I auction.
    86. The Commission has previously taken aggressive measures post-
auction to not award universal service support to areas where it has 
determined that there is an existing provision of service in an area or 
a significant concern regarding wasteful spending. Accordingly, the 
Commission directs OEA and WCB to seek comment in the pre-auction 
process on whether and how to establish a post-auction, pre-
authorization procedure wherein an interested party could submit proof 
to the Commission prior to the award of 5G Fund support that 
demonstrates that there is a BEAD award that includes an enforceable 
state commitment for the deployment of verifiable mobile 5G-NR service 
at speeds of at least 35/3 Mbps that conflicts with a winning bid for 
an area offered in the 5G Fund Phase I auction. In the event such a 
process is implemented, consistent with its past practice, the 
Commission anticipates that it would take similar action here, up to 
and including declining to authorize support for that area. Thus, 
applicants in the 5G Fund Phase I auction are encouraged to perform due 
diligence, research, and analysis and factor into their bids and 
bidding strategies any state BEAD requirements that include a 
commitment from a subgrantee to deploy 5G-NR service at speeds of at 
least 35/3 Mbps as a condition to receiving BEAD funds.
    87. The Commissions recognizes that offering support for advanced, 
5G mobile broadband service that duplicates BEAD funding efforts would 
defeat the policy goals established for the 5G Fund. To that end, as 
explained above, the Commission is carefully coordinating its 5G Fund 
plans with other government agencies, including NTIA, as required by 
BICA. Moreover, the Commission agrees with commenters that advocate 
that BEAD funding can be leveraged to amplify the reach of 5G Fund 
support. The Commission further agrees that there are many benefits 
that can be derived from a 5G Fund support recipient's ability to 
capitalize on any advancements in fixed broadband service being offered 
in rural

[[Page 101375]]

America, particularly so that new BEAD-funded fiber can be used to 
connect towers built with 5G Fund support, and can increase capacity at 
existing towers currently using microwave backhaul. Insofar as it may 
cost a 5G support recipient less to provide 5G mobile broadband service 
in a rural area where a fixed broadband network has been, or will be, 
deployed with BEAD funding, the Commission expects that a bidder in the 
5G Fund Phase I auction for such an area would be willing to bid to 
accept less support than if the area did not have a fixed service 
offering. Additionally, the Commission anticipates that even if the 5G 
Fund Phase I auction were to be held prior to all BEAD program support 
being awarded, applicants seeking to participate in a 5G Fund auction 
will have sufficient information about their own and others' current or 
future service offerings, including reasonably certain BEAD 
deployments, through basic due diligence to factor into their bids and 
bidding strategies the potential impact that BEAD funding may have on 
the market. The Commission notes that on June 28, 2023, NTIA issued the 
BEAD Challenge Process Policy Notice, providing guidance on several 
BEAD Program processes, such as the identification of existing 
broadband funding and the required challenge processes that states must 
conduct, that aim to avoid broadband funding overlaps.
    88. For these reasons, the Commission disagrees with commenters 
that advocate that it should delay the implementation of the 5G Fund 
while the Commission determines the potential impact of BEAD funding on 
the deployment of mobile broadband services. Waiting to implement the 
5G Fund until all BEAD funding is assigned and the success of that 
program is analyzed would do a disservice to Americans who live, work, 
and travel in rural areas, who should not be denied access to mobile 
services that are reasonably comparable to those provided in urban 
areas. As the Commission previously explained in its Future of USF 
Report, insofar as the BEAD Program serves to fund fixed wireless 
broadband deployment, the Commission has stated that pausing the 
process of preparing for a 5G Fund auction ``would have detrimental 
impacts on consumers' access to advanced mobile wireless service.'' 
Delaying the 5G Fund would also require us to continue the current 
inefficient practice of providing legacy high-cost support in areas of 
the country where there is already unsubsidized mobile service and 
would thus be contrary to the policy initiatives the Commission has 
advocated since the adoption of the USF/ICC Transformation Order. Not 
only does the legacy high-cost support often reach areas where 
unsubsidized service exists, but also it is often duplicative--i.e., 
given to more than one mobile provider serving the same area. Continued 
delay of the transition away from legacy support is antithetical to the 
Commission's efforts in this proceeding to avoid providing support to 
the same area where another mobile service provider is receiving or 
will receive support to deploy 5G service. It would also undermine the 
underlying policy goal of the Commission's BICA obligations, which is 
to avoid duplicating government subsidies for the same service in the 
same area. Having undertaken a tailored effort to refresh the record 
and reignite the 5G Fund, the Commission is now well-positioned to make 
these determinations and ultimately begin the process to incentivize 
the deployment of networks providing advanced, 5G mobile broadband in 
areas where, absent subsidies, such service will continue to be 
lacking. Accordingly, the Commission concludes that the 5G Fund can 
enhance achievements of the BEAD program rather than conflict with 
them.
    89. By adopting a budget of up to $9 billion for the 5G Fund Phase 
I auction, using a reverse auction to distribute support, and 
committing to reassess the amount that will be needed for Phase II of 
the 5G Fund in the future, the Commission will support the advancement 
of high-speed 5G mobile broadband in areas where Americans live, work, 
and travel. Moreover, the Commission continues to anticipate, as the 
Commission did in 2020 that many providers will use private capital in 
conjunction with 5G Fund support to build their 5G networks. The 
Commission therefore adopts a 5G Fund Phase I budget herein that again 
``seeks to balance the various competing objectives in section 254 of 
the Communications Act of 1934, as amended (the Act), including the 
objective of providing support that is sufficient, but not so excessive 
so as to impose an undue burden on consumers and businesses.'' The 
courts have held that the Commission enjoys broad discretion when 
conducting exactly this type of balancing. Accordingly, the Commission 
concludes that setting the 5G Fund Phase I budget at up to $9 billion 
establishes a significant start to support the build out of advanced, 
5G mobile wireless broadband networks in unserved and underserved rural 
areas.

V. Accepting Bids and Identifying Winning Bids

A. Metric for Accepting Winning Bids and Identifying Winning Bids

    90. The Commission adopts a bidding and support price metric based 
on dollars per square kilometer that, as described below, includes a 
weighting factor that weights bids and support prices based upon 
service availability within an eligible area. In the 5G Fund FNPRM, the 
Commission sought comment on using a bidding and support price metric 
based on dollars per square kilometer in the event that it decides to 
limit eligible areas to hex-9s that have locations and/or roads. The 
Commission also sought comment on whether to adjust the square 
kilometers associated with an eligible area using either the adjustment 
factor that was adopted in 2020 or another approach. Based on its 
policy goal to use the available budget most efficiently to provide 5G 
coverage to places where people live, work, and travel, the Commission 
declines to employ the adjustment factor that it adopted in the 5G Fund 
Report and Order as part of the metric for accepting and identifying 
winning bids in a 5G Fund auction, because doing so would prioritize 
sparsely populated areas over areas where people live, work and travel 
as indicated by available data. However, consistent with alternatives 
proposed in the current record, the Commission adopts an alternative 
adjustment approach to differentiate between eligible areas that lack 
4G-LTE service by an unsubsidized provider and those that have such 
service, as addressed below.
1. Bidding and Support Metric
    91. In the 5G Fund Report and Order, the Commission decided that it 
would accept bids and identify winning bids in the 5G Fund Phase I 
auction using a support price per adjusted square kilometer. Under this 
metric, each eligible area would be associated with a number of units 
equal to the square kilometers of the area multiplied by an adjustment 
factor that was also adopted in the 2020 proceeding. The corresponding 
support amount for an area would be the number of adjusted square 
kilometers multiplied by the price. The Commission retains a bidding 
and support metric based on dollars per adjusted square kilometer, but 
as explained further herein, modifies the factors upon which it will 
base the adjustment.

[[Page 101376]]

    92. In the 5G Fund FNPRM, the Commission asked whether there were 
alternative bidding and support metrics that might target unserved 
locations and/or unserved road miles more specifically, if eligible 
areas were limited to those census tracts that include unserved 
locations and/or roads. The Commission further asked whether a single 
targeted metric would appropriately balance unserved road miles and 
unserved locations--for example, by using a weighted sum of unserved 
locations and unserved road miles--and how the balancing weights should 
be determined.
    93. There are no objections in the record to basing the bidding and 
support metric on square kilometers. Verizon affirms the Commission's 
choice of square kilometers, noting that ``[b]ecause hex-9s are small--
with an area of just 0.1 square kilometers--a per-square kilometer 
bidding and support metric is likely sufficient to ensure that CCA 
urges us not to use a metric based on the number of locations in an 
eligible area, since ``[s]uch an approach would inappropriately adopt a 
fixed-centric basis for support price calculation.'' The Commission 
agrees that an appropriate metric should target support for mobile 
service more broadly than solely based on locations. Accordingly, 
consistent with the goals of this proceeding to expand 5G coverage to 
areas where people live, work, and travel, the Commission will use a 
bidding and support metric based on dollars per square kilometer. roads 
or locations in the supported hex-9s have access to 5G service.''
    94. CCA urges us not to use a metric based on the number of 
locations in an eligible area, since ``[s]uch an approach would 
inappropriately adopt a fixed-centric basis for support price 
calculation.'' The Commission agrees that an appropriate metric should 
target support for mobile service more broadly than solely based on 
locations. Accordingly, consistent with the goals of this proceeding to 
expand 5G coverage to areas where people live, work, and travel, the 
Commission will use a bidding and support metric based on dollars per 
square kilometer.
2. The Adjustment Factor as Adopted in 2020
    95. The Commission will not use the adjustment factor that was 
adopted in the 5G Fund Report and Order for bidding in the 5G Fund 
Phase I auction. The Commission will, however, retain the adjustment 
factor for purposes of disaggregating legacy support. The Commission 
bases its decision not to use the adjustment factor in bidding on the 
inconsistency between its goal of ensuring that the available budget is 
used to benefit as many people as possible and the purpose of the 
adjustment factor, as adopted in the 5G Fund Report and Order. The 
Commission's goal in 2020 was to allow the more costly eligible areas 
(defined, in part, by low population density and difficult terrain) to 
compete on a more equal basis with the eligible areas that were less 
costly to serve. By applying such an adjustment factor, sparsely 
populated, particularly costly areas that would have a high adjustment 
factor and areas that could be served at lower cost per square 
kilometer, would have had approximately equal chances of winning 
support in the auction. Applying such an adjustment factor would have 
shifted funds away from more populated and traveled eligible areas, 
which is in conflict with the Commission's goal of targeting unserved 
and underserved residents, workers, and travelers. The Commission 
therefore sought comment on whether to use this adjustment factor, to 
adopt an alternative adjustment factor that would provide some 
advantage to particularly costly areas that nonetheless are areas with 
a considerable number of homes, businesses, and other locations and/or 
roads that are frequently traveled, or to abandon the use of any 
adjustment factor altogether. With respect to its decision to retain 
the adjustment factor adopted in the 5G Fund Report and Order for 
purposes of disaggregating legacy support, the Commission's rationale 
in 2020 for adopting the adjustment factor remains unchanged.
    96. Relatively few parties commented on the continued use of the 
adjustment factor for bidding as adopted in the 5G Fund Report and 
Order. Of those that submitted comments or reply comments on the issue, 
four parties--CRWC, RWA, SBI, and US Cellular--indicate that the 
Commission should eliminate the adjustment factor only if it adopts a 
larger budget, with CRWC noting that ``[i]f the budget comes up short, 
funds will exhaust before the higher-cost areas, which are the areas 
most in need of support, receive any support.'' T-Mobile recommends 
that the Commission ``reaffirm [the Commission's] approach of using an 
adjustment factor to prioritize areas that are the most costly and 
least profitable to serve.''
    97. Verizon, on the other hand, urges us to eliminate the 
adjustment factor for bidding. It asserts that ``[t]he Commission 
should maximize the impact of the limited 5G Fund budget by focusing 
support on those unserved areas that would have the most significant 
demand for mobile broadband service and require relatively smaller 
subsidies, rather than on areas that would have little demand for 
mobile broadband service and require larger subsidies.'' \2\ The 
Commission agrees with Verizon that it should discontinue use of the 
adjustment factor for bidding as adopted in the 5G Fund Report and 
Order, and with Verizon's reasoning that 5G Fund support dollars should 
instead be targeted to those currently unserved and underserved areas 
where more people are likely to live, work, and travel.
---------------------------------------------------------------------------

    \2\ Verizon Comments at 9.
---------------------------------------------------------------------------

    98. With respect to commenters' arguments that the bidding 
adjustment factor should be eliminated only if the Commission 
significantly increases the budget, the Commission is not persuaded 
that it would be a cost-effective use of 5G Fund support to increase 
the budget for the purpose of extending support to areas that would 
have been given an advantage with the current adjustment factor. As a 
threshold matter, and as addressed above, the adjustment factor would 
shift funds away from more populated and travelled areas to more remote 
areas, which is in conflict with the Commission's goal of covering as 
many areas where people live, work, and travel as possible. Therefore, 
the Commission does not support the adjustment factor as originally 
designed, as suggested here. Second, under this reverse auction 
mechanism, a large increase in the budget would not translate into a 
similarly large increase in the total area that can be assigned 5G Fund 
support. Instead, the additional funds would be divided between support 
to some higher-cost areas that would not have been assigned support 
otherwise and support at unnecessarily high prices to the same areas 
that would win support under a lower budget. Under the descending price 
clock reverse auction mechanism, the budget clears and support 
assignment begins when total requested support at the current clock 
price is equal to or less than the budget. If the budget is increased 
significantly without a proportional increase in the number and cost 
distribution of eligible areas, the clearing round support price will 
be higher. Some of the more costly areas will likely be assigned at the 
higher support level, but the most costly areas will not receive 
support. Lower cost areas--those that would have won support under the 
original budget--will be funded, but at prices well above those they 
would have been willing to accept. Thus, the Commission believes

[[Page 101377]]

it would be an inefficient use of federal resources to increase the 
budget for the purpose of extending support to the most remote areas. 
Finally, even if the Commission were persuaded that that the original 
adjustment factor should be retained (which it is not) or that 
increasing the budget significantly would be an acceptable alternative 
to the adjustment factor (which it also is not), fiscal responsibility 
precludes us from increasing the 5G Fund budget by more than the $1 
billion increase set forth above. Although $1 billion is a substantial 
increase, it is likely less of an increase than is envisioned by the 
commenters. Therefore, for all of these reasons, the Commission is 
unpersuaded that increasing the budget by significantly more than $1 
billion for the purpose of reaching the hardest-to-serve areas is a 
fiscally responsible approach to spending its limited universal service 
funds.
    99. Given the Commission's decision today to eliminate the use of 
the adjustment factor adopted in the 5G Fund Report and Order for 
bidding in the 5G Fund Phase I auction, the Commission also dismisses 
as moot the Petition for Reconsideration filed by the 5G Fund 
Supporters to the extent that it requests relief concerning the use of 
the adjustment factor adopted in the 5G Fund Report and Order for 
bidding in that auction.
3. An Adjustment That Weights Bids and Support Prices Based on Service 
Availability
    100. In its discussion in the 5G Fund FNPRM of the bidding and 
support metric and the adjustment factor adopted in the 5G Fund Report 
and Order, the Commission asked ``whether [it] should adopt an 
alternative approach that would provide some advantage to particularly 
costly areas that nonetheless are areas with a considerable number of 
homes, business[es], and other locations, and/or roads that are 
frequently travelled.'' Several commenters suggest prioritizing areas 
based upon the level of service that is available. To address these 
concerns, the Commission will implement a service-based weighting 
factor for those areas that lack 4G LTE service. To eliminate confusion 
with the adjustment factor adopted in the 5G Fund Report and Order, 
which the Commission will retain for purposes of disaggregating legacy 
support, the Commission refers to the service-based factor it adopts 
herein as a ``weighting factor.'' While eligible areas will include 
both those that lack unsubsidized 5G broadband service but have access 
to unsubsidized 4G LTE and areas that lack both unsubsidized 5G service 
and any 4G LTE service, the Commission finds there are greater public 
benefits of providing 5G service to areas that lack 4G LTE than the 
benefits of 5G accruing to other eligible areas. As such, a weighting 
factor based on this distinction is warranted. The Commission is 
mindful, however, of its primary responsibility to use the budget cost-
effectively to provide support to people where they live, work, and 
travel. Accordingly, unlike the adjustment factor that was calculated 
to allow a bid to compete on an equal basis with bids to provide 
service to a geographic area with several times the number of square 
kilometers for the same support amount, the weighting factor is 
intended to give bids for unserved areas an advantage, but not so great 
an advantage as to result in a significant reduction in the number of 
square kilometers that can be covered with 5G Fund support.
    101. Therefore, the Commission adopts a service-based weighting 
factor. Consistent with their existing authority concerning the 
distribution of universal service support, the Commission directs OEA, 
WCB, and WTB to establish during the pre-auction process, after notice 
and comment, the size of this service-based weighting factor. The 
Commission directs OEA, WTB, and WCB to take into account the need to 
balance the Commission's fiscal responsibility to award 5G Fund support 
cost-effectively with a recognition that there may be additional 
challenges to and public benefits from providing service to areas that 
lack 4G LTE service.

B. Minimum Geographic Area for Bidding

    102. The Commission will use census tracts as the minimum 
geographic unit for bidding in the 5G Fund Phase I auction and will 
aggregate all of the eligible hex-9s into a census tract for purposes 
of bidding. The Commission's goal in adopting census tracts rather than 
hexes as the minimum geographic area for bidding is to ensure that a 
wide variety of interested bidders, including small entities, have the 
flexibility to design a network that matches their business model and 
technical capabilities and that allows them to efficiently achieve 
their public interest obligations and performance requirements. After 
considering the record on this issue, we conclude that, on balance, 
using census geographies is preferable to using hex areas. Census 
geographies provide a more efficient and appropriate way to group areas 
eligible for the 5G Fund into larger geographic areas for purposes of 
bidding for areas along state boundaries, particularly in view of the 
Commission's decision herein to convert those areas to hex-9s.
    103. Commenters are equally split on whether the Commission should 
use census geographies or the H3 hexagonal geospatial indexing system 
(H3 system) to group eligible hex-9s for bidding. CCA and Verizon each 
support aggregating eligible hex-9s into census geographies. Verizon 
advocates grouping eligible hex-9s into census tracts or larger for 
ease of auction administration, and contends that using hexes--whether 
at the resolution 5 hexagon (hex-5) or resolution 6 hexagon (hex-6) 
level--``would introduce unnecessary complexity into the auction, 
require considerable software development by potential bidders, and 
could reduce auction participation.''
    104. AT&T and Michael Ravnitzky, on the other hand, support using 
the H3 system to aggregate areas eligible for support to minimum 
geographic areas for bidding because, they assert, it is a logical 
approach and aligns areas eligible for 5G Fund support with the BDC 
mobile mapping and challenge processes, would be more efficient than 
trying to aggregate eligible hex-9s into census block groups (CBGs) or 
census tracts, and provides a consistent and flexible framework for 
defining and mapping eligible areas. AT&T contends that ``[a]ggregation 
of [eligible] hex-9s at the hex-6 level, which covers on average 36 
square kilometers, best reflects the design of wireless infrastructure 
in rural areas with various terrain and foliage that has not already 
attracted private investment . . . [and] is more manageable [for 
providers than] committing to cover locations or certain roads in a 
hex-5 area, [which cover] 252 square kilometers.'' Ravnitzky suggests 
``[u]s[ing] resolution 8 hexagons or higher for aggregating eligible 
areas . . . [to] provide sufficient granularity and accuracy for 
capturing the variations in cost and value of providing 5G service in 
different areas,'' and ``group[ing] adjacent hexagons into larger 
geographic units based on their proximity, similarity, and contiguity . 
. . [to] create more coherent and efficient geographic units for 
bidding and support purposes.''
    105. The Commission concludes that, on balance, aggregating 
eligible hex-9s to census geographies is preferable, irrespective of 
the resolution of hexagon level used. Census geographies aggregate to 
the state level, and eligible telecommunications carriers (ETC) 
designations--which all winning bidders are required to obtain prior to

[[Page 101378]]

being authorized for support--are issued by state. In contrast, hex 
boundaries are not coterminous with state, county, and international 
boundaries. Additionally, due to the nature of the H3 system, in which 
not all higher resolution hexagons (e.g., hex-9) are contained within 
the boundaries of their ancestor lower resolution hexagons (e.g., hex-6 
or hex-5), use of a lower resolution hexagon, such as hex-5 or hex-6, 
as the minimum geographic unit for bidding runs the risk that entire 
portions of the eligible areas, which will be converted to and 
expressed at the hex-9 level, may fall outside of the hex-5 or hex-6 
boundary to which they are aggregated. Moreover, we note that the 
average hex-5 has an average area that is larger than the average areas 
of either of the two census geographies considered, and thus may not 
provide the best opportunity for bidders to target their bids to win 
support for the areas they are interested in serving. Because the 
Commission would have to use fairly large hex areas for bidding units, 
it would have to account for many hexagons covering multiple state and 
international boundaries, which would complicate an applicant's 
inventory selections and state ETC designations. For these reasons, the 
Commission does not agree that aggregating eligible hex-9s into larger 
hexagons would be more efficient than aggregating them to census 
tracts.
    106. The Commission further concludes that aggregating to census 
tracts, as opposed to census block groups (CBGs), is preferable for 
several reasons. First, because the boundaries of a CBG are often 
defined by roads, using CBGs could have the unintentional effect of 
leaving the road that bounds a CBG not served by the bidder that wins 
support for the CBG. Using census tracts minimizes that problem. 
Second, wireless networks are often built to cover areas that are 
larger than a CBG with a single cell site. Third, because census tracts 
are larger than CBGs, using census tracts will also help mitigate the 
risk of funding duplicative, overlapping networks if two different 
bidders were to win support for adjacent CBGs. Finally, using census 
tracts, as opposed to CBGs, will result in a smaller number of biddable 
items, which will make bidding in the auction more manageable.

VI. Compliance WitH 5G Fund Public Interest Obligations and Performance 
Requirements

A. Metric for Measuring Compliance With 5G Fund Public Interest 
Obligations and Performance Requirements

    107. In the 5G Fund FNPRM, the Commission sought comment on its 
approach to making any necessary corresponding modifications concerning 
the metric used to measure a 5G Fund support recipient's compliance 
with its public interest obligations and performance requirements if 
the Commission were to modify the bidding and support price metric that 
was adopted in the 5G Fund Report and Order. All commenters that 
address this issue support the Commission's approach for doing so, and 
no commenter opposes it. As discussed above, the Commission intends to 
use a bidding and support price metric for the 5G Fund Phase I auction 
that is based on dollars per adjusted square kilometer. Because the 
metric for measuring compliance with the 5G Fund public interest 
obligations and performance requirements adopted in the 5G Fund Report 
and Order is already based on square kilometers, no modifications to 
the previously adopted compliance metric are necessary as a result of 
the Commission's decision today regarding the bidding and support price 
metric that will be used for the 5G Fund Phase I auction.
    108. A few commenters suggest other changes concerning the public 
interest obligations and performance requirements adopted in the 5G 
Fund Report and Order. RWA asks the Commission to update the 3GPP 
performance standard for eligible 5G services to at least 3GPP Release 
17, given that the 3GPP Release 15 standard adopted in the 5G Fund 
Report and Order is now outdated. RWA notes that 3GPP Release 18 (5G-
Advanced) is expected to be rolled out in the fourth quarter of 2023, 
and that development of 3GPP Release 19 is set to begin in December 
2023. ARA PAWR suggests that the Commission consider bidder capability 
in setting deployment milestones by, for example, giving a rural 
carrier trying to cover a very remote area more time to meet deployment 
milestones, while SBI states that a better alternative to using 
adjustment factors is ``changing the performance criteria for remote 
areas . . . [to] reduce the performance requirements commensurate with 
microwave backhaul capabilities.'' According to SBI, carriers serving 
very remote areas (as defined by the Commission) ``could be much more 
competitive in an auction if they are required to deliver mobile 4G LTE 
service at a median speed of \7/1\ Mbps, rather than a median speed of 
35/3 with 5G.'' T-Mobile expresses support for the 5G Fund milestones, 
but suggests that the Commission create incentives to encourage 5G Fund 
support recipients to deploy service to more than 85% of an area by the 
final deployment milestone by reducing support proportionally to the 
percent of uncovered area between 85% and 100% and requiring recipients 
who deploy service to at least 85% but less than 100% of their winning 
geographic areas to return that support on a prorated basis. T-Mobile 
also notes that ``[t]he Commission could consider giving [support 
recipients] an extra year to meet the higher [deployment] thresholds.''
    109. The Commission notes that when the Commission adopted the 5G 
Fund Report and Order, it stated that 5G Fund support recipients would 
be required to comply with ``at least the 5G-NR . . . technology 
standards developed by [3GPP] with Release 15 or any successor release 
that may be adopted by [OEA and WCB] after notice and comment.'' The 
``Releases'' page on 3GPP's website shows that work on 3GPP Releases 16 
and 17 has been completed and they are now available, and that work on 
3GPP Release 18 is expected to be completed later this year. Given that 
two successor releases have been completed since the 3GPP Release 15 
standard was adopted for 5G Fund support recipients in the 5G Fund 
Report and Order, the Commission directs OEA and WCB to initiate a 
notice-and-comment rulemaking to determine whether and how to update 
the 3GPP standard. We also note that, in making its determination in 
the 5G Fund Report and Order that entities seeking to receive support 
from the 5G Fund must have access to spectrum and sufficient bandwidth 
(at a minimum, 10 megahertz x 10 megahertz using frequency division 
duplex (FDD) or 20 megahertz using time division duplex (TDD)) capable 
of supporting 5G services in the particular area(s) for which they 
intend to bid, the Commission observed that 3GPP Release 16 had 
finalized a list of various frequency bands for North America that 
appeared at that time to be capable of supporting 5G. Given the passage 
of time and 3GPP's ongoing work since the 5G Fund Report and Order was 
adopted, the Commission directs OEA, WCB, and WTB to determine in the 
pre-auction process, and after notice and comment,

[[Page 101379]]

whether there are 5G-capable spectrum bands other than those identified 
in 3GPP Release 16 that entities seeking to receive support from the 5G 
Fund could use to meet the 5G Fund public interest obligations and 
performance requirements.
    110. The Commission declines to make any of the other changes 
suggested by commenters concerning the previously adopted performance 
requirements. The Commission finds that the suggestions offered by ARA 
PAWR and SBI that it adopt differing compliance deadlines and 
performance standards for support recipients serving remote areas to be 
inconsistent with the 5G Fund's policy goals of ensuring the rapid 
deployment of 5G mobile wireless broadband networks. T-Mobile's 
suggestions are similar to suggestions offered earlier in the 5G Fund 
proceeding, which the Commission declined to adopt as both unworkable 
and unrealistic. As the Commission observed in the 5G Fund Report and 
Order, ``[t]here may be isolated areas that are particularly 
challenging to serve even in terrain that is otherwise not difficult to 
serve, and adopting a 100% coverage requirement could drastically 
increase costs in a 5G Fund auction if bidders reasonably conclude that 
certain areas they would otherwise be interested in serving are cost 
prohibitive due to an especially challenging terrain feature like a 
ravine or mountaintop,'' which ``would [] potentially distort the 5G 
Fund auction with little gain.'' We note that the Commission also 
previously declined to adopt a 100% final deployment milestone 
percentage for Mobility Fund II based on commenters' arguments in that 
proceeding that a 100% buildout requirement is unrealistic in remote 
areas as well as most rural areas, and could discourage bids. The 
Commission concludes that the Commission struck an appropriate balance 
in adopting an 85% final coverage requirement in the 5G Fund Report and 
Order, and find that T-Mobile has not offered anything in its comments 
that persuades us to depart from the Commission's earlier conclusions.

B. Methodologies for Demonstrating Compliance With 5G Fund Performance 
Requirements

    111. Consistent with the recommendations of many commenters, the 
Commission modifies the methodologies for demonstrating compliance with 
5G Fund performance requirements adopted in the 5G Fund Report and 
Order to align largely with those adopted for the BDC verification 
process. In the 5G Fund Report and Order, the Commission decided it 
would generally align with the BDC the methodologies used by 5G Fund 
support recipients to demonstrate compliance with their interim and 
final performance requirement milestones. The Commission concluded that 
standardizing the data required for compliance reporting was likely to 
ease the burden on support recipients, while collecting sufficient data 
to confirm that the 5G Fund's requirements have been met. In the 5G 
Fund FNPRM, the Commission proposed and sought comment on requiring 5G 
Fund support recipients to use the methodologies adopted for the BDC 
mobile verification process--which allow mobile providers to choose to 
submit either on-the-ground test data or infrastructure data to verify 
coverage in response to a mobile verification request from the 
Commission--as the basis for substantiating coverage and demonstrating 
compliance with the 5G Fund interim and final deployment milestones. In 
addition, the Commission sought comment on whether 5G Fund support 
recipients should be required to submit on-the-ground test data for 
areas that are accessible and infrastructure data for areas that are 
inaccessible. The Commission also sought comment on whether 5G Fund 
support recipients should submit infrastructure data sufficient to 
generate a ``core coverage area,'' as defined in the BDC mobile 
verification process, and on-the-ground test data for areas outside of 
that core coverage area, or should instead be allowed to submit either 
type of data regardless of the type of area in which they are deploying 
service. The Commission also described and sought comment on the 
specific on-the-ground test data and infrastructure data 5G Fund 
support recipients would need to submit.
    112. In response to the 5G Fund FNPRM, many commenters express 
support generally for harmonizing the 5G Fund's compliance processes 
with the BDC's verification processes, and no commenters oppose this 
approach. The Commission agrees with commenters and adopts its proposal 
to largely align the methodologies for demonstrating compliance with 
the 5G Fund interim and final deployment milestones with those adopted 
for the BDC mobile verification process. The Commission finds this 
approach will give 5G Fund support recipients the same flexibilities 
afforded under the BDC rules to choose which type of verification data 
to submit. This approach also affords Commission staff the right to 
collect additional data as necessary. The Commission therefore amends 
the Commission's rules as necessary to accommodate such alignment, 
consistent with the specific needs of the 5G Fund. Based on supportive 
comments in the record, the Commission requires that, in its interim 
and final milestone reports, each 5G Fund support recipient (1) certify 
that the 5G mobile broadband coverage data filed in its BDC biannual 
submissions demonstrate that its deployments in the area(s) for which 
it receives 5G Fund support meet the 5G Fund coverage, speed, and 
latency requirements, and (2) substantiate its reported 5G mobile 
coverage data by submitting either on-the-ground test data or 
infrastructure information. A support recipient can submit either type 
of information (either on-the-ground test data or infrastructure data), 
regardless of whether it is deploying service in an accessible or 
inaccessible area, but it must submit at least one type of data for a 
whole state. A support recipient may submit different types of data for 
different states and may voluntarily submit the additional data type 
for part or all of a state. For example, a 5G Fund support recipient 
may submit only infrastructure information reflecting coverage their 
supported area in State A, and only on-the-ground data for the sampled 
area(s) in State B, but it may not submit only infrastructure 
information in a census tract in State A and only on-the-ground data in 
a different census tract in State A. This does not preclude a 5G Fund 
support recipient from submitting both infrastructure information and 
on-the-ground data, so long as it submits one type of data for all of 
its supported areas in a state. A 5G Fund support recipient shall 
submit its interim service and final service milestone reports, 
including on-the-ground measurement tests or infrastructure 
information, in the Broadband Data Collection portal. As discussed 
below, 5G Fund support recipients submitting on-the-ground data will do 
so for a sample of hex-9s within its supported area, whereas support 
recipients submitting infrastructure information are required to submit 
data for all cell sites and antennas that serve a 5G Fund recipient's 
supported area. This approach is consistent with the BDC verification 
process, in which providers submitting on-the-ground data do so for a 
statistically valid sample of areas within a targeted area, whereas 
providers submitting infrastructure information do so for the entire 
targeted area. The Commission directs 5G Fund support recipients to 
indicate which type of data they will submit for each

[[Page 101380]]

state. To ensure the accuracy of the data being submitted, the 
Commission requires 5G Fund support recipients to have their on-the-
ground or infrastructure data certified by an engineer with the same 
qualifications as required for submitting the BDC biannual filings that 
apply under section 1.7004 of the Commission's rules.
    113. On-the-Ground Test Data. In the 5G Fund Report and Order, the 
Commission required 5G Fund support recipients to conduct on-the-ground 
speed tests to substantiate 5G broadband coverage, and adopted specific 
methodologies for on-the-ground speed tests to substantiate 5G 
broadband data. Additionally, the Commission determined it would defer 
the adoption of additional requirements and parameters for such on-the-
ground measurement tests until the pre-auction process. As discussed 
above, 5G Fund support recipients have the option of submitting either 
on-the-ground test data or infrastructure information, on a state-by-
state basis. The Commission requires 5G Fund support recipients 
submitting on-the-ground data to do so in accordance with the 
parameters and specifications established in the BDC mobile 
verification process and the BDC Data Specifications for Mobile Speed 
Test Data. The Commission further requires that all such tests be taken 
in an in-vehicle mobile environment only because, as more fully 
explained herein, unlike for the BDC, 5G Fund support recipients must 
demonstrate their compliance with the 5G Fund performance requirements 
by submitting tests that are taken in an in-vehicle mobile environment 
only. A 5G Fund support recipient must submit on-the-ground test data 
for a sample of hex-9s within its supported area within a state. The 
sample will be statistically appropriate and selected by Commission 
staff. The use of hex-9s is a variation from the mobile verification 
process, which uses a sample of hex-8s. Because eligible and supported 
areas in the 5G Fund Phase I will be based on hex-9s, the Commission 
adopts a methodology that relies on hex-9s instead of hex-8s. If the 
number of supported hex-9s in a state is too small to sample a subset 
of them, all hexagons may be selected in that area, or the small area 
will be combined with other nearby area(s) where support has been 
awarded, to the extent they exist for the support recipient, to create 
a larger area that can be sampled.
    114. The Commission also requires a 5G Fund support recipient's 
cumulative on-the-ground test data within a sampled area to show that 
at least 90% of its speed test measurements report 5G-NR service at 
minimum download and upload speeds of at least 35/3 Mbps in an in-
vehicle environment, and that at least 90% of tests record latency of 
100 milliseconds or less for each of the support recipient's interim 
and final deployment milestones. The Commission notes this is a change 
from the performance requirements adopted in the 5G Fund Report and 
Order, which require 5G Fund support recipients to meet baseline 
performance speed requirements of a median of 35 Mbps download and 3 
Mbps upload, and with at least 90 percent of measurements recording 
data transmission rates of not less than 7 Mbps download and 1 Mbps 
upload. However, requiring 5G Fund support recipients to submit 
cumulative test data showing that at least 90% of its speed test 
measurements report 5G-NR service at minimum download and upload speeds 
of at least 35/3 Mbps in an in-vehicle environment more closely aligns 
with the requirements adopted for BDC reporting. The Commission 
therefore amends section 54.1015(c)(1) of its rules, 47 CFR 
54.1015(c)(1), in connection with aligning the methodologies for 
demonstrating compliance with the 5G Fund interim and final deployment 
milestones with those adopted for the BDC mobile verification process 
to specify that 5G Fund support recipients must meet a minimum baseline 
performance speed requirement of 35 Mbps download and 3 Mbps upload in 
an in-vehicle environment, with at least 90 percent of measurements 
recording these data transmission speeds. When conducting tests to 
demonstrate compliance with its 5G Fund performance milestones, a 5G 
Fund support recipient must record and submit at least two tests within 
each of the selected hexagons where the time of the tests are at least 
four hours apart, irrespective of date. However, if the 5G Fund support 
recipient has, and submits with its speed tests, actual cell loading 
data for the cell(s) covering the sampled hexagon showing that the 
median loading, measured in 15-minute intervals, did not exceed the 
BDC-modeled loading factor for the one-week period prior to the speed 
test submission, then the 5G Fund support recipient must submit two 
speed tests for the sampled hexagon, but without the restriction of 
testing four hours apart. Further, the target of at least 35/3 Mbps 
speed must be taken in an in-vehicle mobile environment. The Commission 
emphasizes that 5G Fund support recipients must submit tests taken in 
an in-vehicle mobile environment only, and recognizes that this 
requirement differs from the BDC verification process, in which 
providers must conduct on-the-ground speed tests for the technology (4G 
and/or 5G) and environment (outdoor stationary or in-vehicle mobile) 
listed within hexagons that require verification. Given that the 
Commission is providing universal service support through the 5G Fund 
for the deployment of 5G-NR service in rural areas, the Commission 
concludes that requiring 5G Fund support recipients to submit tests 
taken in an in-vehicle mobile environment only is appropriate, because 
measuring 5G-NR service at speeds of at least 35/3 Mbps in an in-
vehicle environment reflects the most stringent and robust measurement 
we are collecting from providers in the BDC and will help ensure that 
rural areas receive service that is reasonably comparable to the 
service offered in urban areas. For in-vehicle tests, 5G Fund support 
recipients must conduct tests with the antenna located inside the 
vehicle to replicate typical consumer behavior and ensure more 
equivalent comparisons between the on-the-ground test data submitted by 
support recipients and the typical consumer experience.
    115. Identifying Areas for On-the-Ground Testing. In the 5G Fund 
FNPRM, the Commission proposed to use a methodology for demonstrating 
compliance with 5G Fund performance milestones that is similar to that 
adopted for the BDC mobile verification process, except that 5G Fund 
support recipients would be required to submit speed test data for all 
supported areas, rather than a sample of areas, and the area would be 
hex-9, rather than the hex-8 area used in BDC mobile verification 
process. As discussed herein, if a support recipient chooses to submit 
on-the-ground test data, it must do so for a sample of hex-9s. The 
Commission received limited feedback in response to its proposal to 
require on-the-ground testing in all supported areas. However, T-Mobile 
argued that mandatory on-the-ground testing for all supported areas 
could become ``prohibitively expensive and time consuming.'' The 
Commission agrees and therefore require that tests conducted and 
submitted for a sample of hex-9s within the supported area of a state. 
However, the sampling methodology used in the BDC mobile verification 
process may not translate well to demonstrating compliance with 5G Fund 
performance milestones. In the BDC mobile verification process, a 
verification inquiry can be conducted only when there is a ``credible 
basis'' for believing the provider's coverage may

[[Page 101381]]

be inaccurate, while the basis for verifying coverage is different in 
the 5G Fund context. Therefore, the Commission declines to adopt a 
specific sampling methodology at this time and directs OEA, WTB, and 
WCB to both establish the methodology that will be used by all 5G Fund 
support recipients to demonstrate compliance with their 5G Fund 
performance requirements and generate the sample of hex-9s for which 
each 5G Fund recipient must submit on-the-ground data at the time of 
its interim and final deployment milestones.
    116. Infrastructure Data. In the 5G Fund FNPRM, the Commission 
proposed to require 5G Fund support recipients to submit the same 
infrastructure data required in the BDC mobile verification process to 
substantiate coverage in the areas for which they receive 5G Fund 
support. In the context of BDC mobile verifications, a provider must 
submit additional information beyond what is submitted as part of its 
biannual BDC availability data (propagation modeling details, as well 
as link budget and clutter data), including cell-site and antenna data 
for the targeted area. The Commission adopts this proposal, and require 
5G Fund support recipients electing to substantiate their 5G Fund 
milestones with infrastructure data to submit all of the infrastructure 
data that providers submit as part of the BDC mobile verification 
process for all cell sites and antennas that serve a 5G Fund 
recipient's supported area. In its comments, Verizon asks the 
Commission to specify how it will use infrastructure data to verify 
compliance with the deployment obligations. Similar to BDC mobile 
verifications, staff will use the infrastructure data to estimate a 
``core coverage area,'' in which coverage at the modeled throughput is 
highly likely to exist at or above the minimum values reported in the 
provider's submitted coverage data. For any areas that are outside of 
the ''core coverage area'' but within the required coverage area, 
Commission staff will consider additional information submitted by the 
5G Fund support recipient, such as on-the-ground test data, and may 
request such data from the provider if not already submitted. If any 
areas outside the core coverage area but within the required coverage 
area are inaccessible, the Commission will consider whether 
alternatives to on-the-ground drive testing data are appropriate to 
validate coverage in such areas. To facilitate the process of 
Commission staff review of a 5G Fund support recipient's data, the 
Commission directs staff to notify the support recipient of any 
additional requests for information, and the Commission amends section 
54.1019 of its rules, 54 CFR 1019, to account for such case-by-case 
information requests.

VII. Schedule for Transitioning From Mobile Legacy High-Cost Support to 
5G Fund Support

    117. Consistent with the strong consensus among commenters, the 
Commission concludes that the phase down of mobile legacy high-cost 
support will commence upon the release of a public notice announcing 
the authorization of 5G Fund support, as more fully explained below. In 
view of the provision in the Consolidated Appropriations Act of 2023, 
Public Law 117-328, Div. E, Title VI section 624, 136 Stat. 4459, 4702, 
requiring that any support mechanism that serves as an alternative to 
Mobility Fund Phase II ``shall maintain existing high-cost support to 
competitive eligible telecommunications carriers until support under 
such mechanism commences,'' the Commission sought comment in the 5G 
Fund FNPRM on a proposal to treat the release of the public notice 
announcing the close of the 5G Fund Phase I auction to be the point at 
which support under the 5G Fund ``commences.''
    118. Many commenters maintain that the proposal suggested by the 
Commission in the 5G Fund FNPRM is inconsistent with the language in 
the Consolidated Appropriations Act of 2023. The Commission is 
therefore persuaded that it should follow the recommendations of 
commenters to commence the phase down of mobile legacy high-cost 
support upon the release of a public notice announcing the 
authorization of 5G Fund support.
    119. Under this approach, the Commission will commence the two-year 
phase down of mobile legacy high-cost support in all areas that are 
ineligible for inclusion in the 5G Fund Phase I auction upon the 
release of the first public notice announcing the authorization of 
support in any eligible area. Similarly, the five-year phase down of 
mobile legacy high-cost support for eligible areas that are not won in 
the 5G Fund Phase I auction, where the carrier is a legacy support 
recipient and receives the minimum level of sustainable support for the 
area for which it receives support, will also commence upon the release 
of the first public notice announcing the authorization of the award of 
support in any eligible area. For eligible areas won in the 5G Fund 
Phase I auction in which the winning bidder is also the legacy support 
recipient for the area won, legacy support will cease and 5G Fund 
support will commence after the release of the public notice announcing 
the authorization of the award of support for that area. The Commission 
recognizes that this may create an incentive for winning bidders to 
delay prosecuting their long-form applications to the extent that the 
legacy support they currently receive is greater than 5G Fund support. 
Nonetheless, the Commission expects long-form applicants to 
expeditiously complete their applications and respond in a timely 
manner to staff requests for additional or missing information. For 
eligible areas that are won in the 5G Fund Phase I auction in which the 
legacy support carrier is not the winning bidder in the area, a two-
year phase down of mobile high-cost legacy support will ``commence'' 
after the release of the public notice announcing the authorization of 
the award of support for that eligible area. Likewise, for eligible 
areas not won in the 5G Fund Phase I auction where the carrier is a 
legacy support recipient but does not receive the minimum level of 
sustainable support for the area for which it receives support, a two-
year phase down of mobile high-cost legacy support will ``commence'' 
after the release of the first public notice announcing the 
authorization of the award of support for any eligible area. As 
explained above, areas in Puerto Rico and the U.S. Virgin Islands will 
proceed on the same transition schedule to either 5G Fund support or a 
two-year phase down of transitional support from the Bringing Puerto 
Rico Together Fund and the Connect USVI Fund, whichever is applicable. 
The Commission concludes that this approach complies with the text of 
the Consolidated Appropriations Act of 2023. The following chart 
summarizes the schedule the Commission adopts for transitioning from 
mobile legacy high-cost support to 5G Fund support:

[[Page 101382]]



                       Transition Schedule for Legacy High-Cost Support to 5G Fund Support
----------------------------------------------------------------------------------------------------------------
                                                                 Bidder or recipient
       Area eligibility                Auction result                  status            Support type and timing
----------------------------------------------------------------------------------------------------------------
Ineligible...................  .............................  ........................  Two-year phase down of
                                                                                         legacy support for all
                                                                                         ineligible areas
                                                                                         commences on the first
                                                                                         day of the month after
                                                                                         the release of the
                                                                                         first public notice
                                                                                         announcing the
                                                                                         authorization of 5G
                                                                                         Fund support in any
                                                                                         eligible area.
Eligible.....................  Won in auction...............  Carrier is the winning    Legacy support ceases
                                                               bidder and is the         and 5G Fund support
                                                               legacy support            commences in an area on
                                                               recipient for the area    the first day of the
                                                               it won.                   month after the release
                                                                                         of the public notice
                                                                                         announcing the
                                                                                         authorization of 5G
                                                                                         Fund support for that
                                                                                         area.
Eligible.....................  Won in auction...............  Carrier is a legacy       Two-year phase down
                                                               support recipient but     commences in an area on
                                                               is not the winning        the first day of the
                                                               bidder in the area for    month after the release
                                                               which it receives         of the public notice
                                                               support.                  announcing the
                                                                                         authorization of 5G
                                                                                         Fund support in that
                                                                                         area.
Eligible.....................  Not won in auction...........  Carrier is a legacy       Two-year phase down of
                                                               support recipient but     legacy support
                                                               does not receive the      commences on the first
                                                               minimum level of          day of the month after
                                                               sustainable support for   the release of the
                                                               the area for which it     first public notice
                                                               receives support.         announcing the
                                                                                         authorization of 5G
                                                                                         Fund support in any
                                                                                         eligible area won in
                                                                                         the auction.
Eligible.....................  Not won in auction...........  Carrier is a legacy       Legacy support continues
                                                               support recipient and     for no more than five
                                                               receives the minimum      years and the phase
                                                               level of sustainable      down of such support
                                                               support for the area      commences on the first
                                                               for which it receives     day of the month after
                                                               support.                  the release of the
                                                                                         first public notice
                                                                                         announcing the
                                                                                         authorization of 5G
                                                                                         Fund support in any
                                                                                         eligible area won in
                                                                                         the auction.
----------------------------------------------------------------------------------------------------------------

    120. Consistent with the Commission's decision to include areas in 
Puerto Rico and the U.S. Virgin Islands that meet the eligible areas 
definition in the 5G Fund, these Territories will be subject to this 
transition schedule. For areas in Puerto Rico and the U.S. Virgin 
Islands, the transitional support being provided under the Transitional 
Support Order is the ``mobile legacy high-cost support'' that will 
transition to 5G Fund support or be subject to a two-year phase down 
(whichever is applicable). Notwithstanding the schedule adopted in the 
Transitional Support Order, the Commission will extend transitional 
support beyond the 24-month period as needed to facilitate the phase 
down schedule adopted herein and comply with the Consolidated 
Appropriations Act of 2023. As noted herein, mobile wireless carriers 
receiving transitional support in areas in Puerto Rico and the U.S. 
Virgin Islands that are subject to phase down will receive support 
amounts as specified in section 54.307(e)(5)-(7) of the Commission's 
rules, 47 CFR 54.307(e)(5)-(7), and will be subject to the same public 
interest obligations, performance requirements, reporting requirements, 
and non-compliance mechanisms adopted for mobile legacy high-cost 
support recipients specified in section 54.322 of the Commission's 
rules, 47 CFR 54.322.
    121. Other than the changes necessary to make its legacy support 
transition schedule consistent with the language in the Consolidated 
Appropriations Act of 2023, the Commission makes no other modifications 
to the decisions adopted in the 5G Fund Report and Order regarding the 
transition from mobile legacy high-cost support to 5G Fund support. The 
Commission was clear in the 5G Fund Report and Order that ``the 
continuation of legacy support is an interim measure'' as it 
implemented its plans for the 5G Fund. The Commission therefore 
declines to accept any of the alternatives to the Commission's long-
standing plan to phase down mobile legacy high-cost support suggested 
by commenters. Those alternative approaches are contrary to the 
Commission's more than decade-old goal of reforming high-cost support 
and closing the digital divide, as well as the steps the Commission has 
taken to ensure the efficiency and good stewardship of its limited 
universal service fund dollars. As the Commission previously determined 
in the 5G Fund Report and Order, in an area where the legacy support 
provider becomes the winning bidder for 5G Fund support, if it 
``defaults on its bid prior to authorization, or otherwise fails to be 
authorized, [the Commission] will not award 5G Fund support for that 
area. However, to avoid perverse incentives, consistent with [the 
Commission's] decision to maintain support to preserve service only in 
areas that lack a winning bid, a carrier receiving legacy support in 
the area of its winning bid will not receive preservation-of-service 
support and will instead be subject to phase down if not authorized to 
receive 5G Fund support.'' As explained by the Commission in 2020, and 
as addressed herein in the Commission's discussion of the 5G Fund 
budget, ``the Commission's experience awarding support via competitive 
bidding has shown it to be an effective use of ratepayer funds and none 
of these commenters has convinced us that departing from that approach 
is warranted.''
    122. Consistent with the Commission's decision that the phase down 
of mobile legacy high-cost support will commence upon the release of a 
public notice announcing the authorization of 5G Fund support, as well 
as Congress's language in the Consolidated Appropriations Act of 2023, 
the Commission dismisses CRWC's Petition for Reconsideration as moot to 
the extent that its arguments concern the transition schedule for 
mobile legacy high-cost support. Additionally, for the same reasons 
expressed herein, the Commission denies the Petition for 
Reconsideration filed by SBI to the extent that it requests that the 
Commission reconsider the five-year phase down of mobile legacy high 
cost support for a carrier receiving the minimum sustainable level of 
support in an area that is eligible for 5G Fund support, but is not the 
winning bidder for that area. This request for reconsideration 
conflicts with the Commission's plan to reform high-cost support and 
Congress's intention for the Commission to transition to a more modern 
support mechanism.

VIII. Certification of Notice of 5G Fund Phase I Auction Requirements 
and Procedures

    123. Consistent with the approach taken in its recent spectrum 
auctions, the Commission requires any applicant seeking to participate 
in the 5G Fund Phase I auction to certify, under penalty of perjury, in 
its short-form application that the applicant has read the public 
notice adopting procedures for the auction and that it has familiarized 
itself both with the auction procedures and with the requirements, 
terms, and conditions associated with the receipt of 5G Fund support. 
This certification helps ensure that an applicant educates itself about 
the procedures for auction participation and that, prior to submitting 
a short-form application, the applicant understands its obligation to 
stay abreast of relevant, forthcoming information. While this 
certification

[[Page 101383]]

refers to information regarding auction procedures and the 
requirements, terms, and conditions associated with the receipt of 5G 
Fund support that is available at the time of certification, potential 
auction applicants are on notice from the time the auction procedures 
are adopted that their educational efforts must continue even after 
their short-form applications are filed. As with other certifications 
required in the short-form application, an applicant's failure to make 
this required certification in its short-form application by the 
applicable filing deadline will render its application unacceptable for 
filing, and its application will be dismissed with prejudice.
    124. As noted in the 5G Fund FNPRM, the Commission has a 
longstanding policy that expressly places a burden upon each auction 
applicant to be thoroughly familiar with the procedures, terms, and 
conditions contained in the relevant auction procedures public notice 
and any future public notices that may be released in the auction 
proceeding. Both the Commission and OEA, in conjunction with WTB and 
the Media Bureau, have reinforced this policy in recent spectrum 
auctions by adopting a requirement that each auction participant 
certify, under penalty of perjury, that it has read the Procedures 
Public Notice for the applicable auction, and that it has familiarized 
itself with the auction procedures and with the requirements related to 
the licenses made available for bidding. In adopting this certification 
requirement for prior auctions, the Commission noted that it was 
intended to bolster applicants' efforts to educate themselves to the 
greatest extent possible about the procedures for auction participation 
and to ensure that, prior to submitting their short-form applications, 
applicants understood their obligation to stay abreast of relevant, 
forthcoming information. The Commission and OEA reasoned in the context 
of spectrum auctions that familiarity with the Commission's rules and 
procedures governing the auctions would help bidders avoid the 
consequences to them associated with defaults, which also cause harm to 
other applicants and the public by reducing the efficiency of the 
auction process and reducing the likelihood that the license or 
construction permit will be assigned to the bidder that values it the 
most. Moreover, the Commission has also previously expressed in the 
context of spectrum auctions that the certification requirement will 
help ensure that an ``auction applicant . . . has investigated and 
evaluated those technical and marketplace factors that may have a 
bearing on its potential use of any licenses won at auction.''
    125. All commenters that address this certification requirement 
support it. The Commission concludes that applicants for universal 
service support in the 5G Fund Phase I auction will benefit from this 
certification because, as with spectrum auctions, familiarity with the 
rules and procedures governing the 5G Fund Phase I auction could help 
bidders avoid the consequences to them associated with defaults, which 
in turn harms other applicants and the public by reducing the 
efficiency of the auction process and potentially stranding areas 
without 5G mobile service. The Commission further concludes that such a 
certification will promote the integrity of, and public confidence in, 
the Commission's auction processes, as well as help ensure that 
recipients of 5G Fund Phase I support are aware of and better prepared 
to comply with their public interest obligations and performance 
requirements. For these reasons, the Commission will require each 5G 
Fund Phase I auction applicant to make the following certification, 
under penalty of perjury, in its short-form application:

that the applicant has read the public notice adopting procedures for 
the 5G Fund Phase I auction, and that it has familiarized itself with 
those procedures and any requirements, terms, and conditions associated 
with receipt of 5G Fund support.

IX. Cybersecurity and Supply Chain Risk Management

    126. The Commission requires 5G Fund support recipients to 
implement both an operational cybersecurity risk management plan and a 
supply chain risk management plan as a condition of receiving 5G Fund 
support, as discussed in the 5G Fund FNPRM.
    127. Cybersecurity Risk Management. Consistent with the Enhanced 
Alternative-Connect America Cost Model (Enhanced A-CAM) and BEAD 
programs, 5G Fund support recipients' cybersecurity risk management 
plans must reflect at least the National Institute of Standards and 
Technology's (NIST) Framework for Improving Critical Infrastructure 
Cybersecurity v.1.1 (2018) (NIST Framework), or any successor version 
of the NIST Framework, and must reflect established cybersecurity best 
practices that address each of the Core Functions described in the NIST 
Framework, such as the standards and controls set forth in the 
Cybersecurity & Infrastructure Security Agency (CISA) Cybersecurity 
Cross-sector Performance Goals and Objectives (CISA CPGs) or the Center 
for internet Security Critical Security Controls (CIS Controls). The 
Commission notes that the BEAD program specifically requires that a 
recipient's cybersecurity risk management plan reflect the standards 
and controls set forth in Executive Order 14028. However, the 
development of standards and controls pursuant to Executive Order 14028 
are still ongoing. While the Commission recognizes these continuing 
efforts elsewhere in the federal government, it will not expressly 
require that a 5G Fund recipient implement the standards and controls 
developed pursuant to Executive Order 14028. Once those standards and 
controls are finalized, however, the Commission will consider them to 
be established cybersecurity best practices for purposes of the 5G Fund 
cybersecurity requirements that it adopts herein. The Commission 
delegates to the Public Safety and Homeland Security Bureau the 
authority to update these requirements, after notice and comment, to 
require that 5G Fund recipients' cybersecurity risk management plans 
reflect NIST Framework v.2.0 (2024) or any other successor versions 
that may be released.
    128. Supply Chain Risk Management. Support recipients' supply chain 
risk management plans must incorporate the key practices discussed in 
NISTIR 8276, Key Practices in Cyber Supply Chain Risk Management: 
Observations from Industry, and related supply chain risk management 
guidance from NIST 800-161, Cybersecurity Supply Chain Risk Management 
Practices for Systems and Organizations (2022).
    129. The Commission requires winning bidders to submit their 
cybersecurity risk management and supply chain risk management plans to 
USAC, and to certify that they have done so, by a date to be announced 
by Public Notice or within 30 days after approval under the Paperwork 
Reduction Act (PRA), whichever is later. Consistent with the penalties 
adopted for the Enhanced A-CAM program, failure to submit such plans 
and make the required certification will result in 25% of monthly 
support being withheld until the recipient comes into compliance. A 5G 
Fund support recipient may consider its ``plans'' for addressing 
cybersecurity and supply chain risks to be separate because they entail 
different kinds of actions, but they may satisfy this requirement by 
submitting to USAC a single document that contains both their 
cybersecurity risk management and supply chain risk management plans. 
Once the 5G Fund

[[Page 101384]]

support recipient comes into compliance, the Administrator will stop 
withholding support, and the support recipient will receive all of the 
support that had been withheld as a result of the recipient's failure 
to comply with the cybersecurity and supply chain risk management 
requirements the Commission adopts herein. These requirements will 
improve the cybersecurity and supply chain risk management of the 
nation's mobile broadband networks and protect consumers from online 
risks, such as fraud, theft, and ransomware, that can be mitigated or 
eliminated through the implementation of widely-accepted security 
measures.
    130. Commenters generally support the requirement that 5G Fund 
support recipients implement cybersecurity and supply chain risk 
management plans. Only one commenter, US Cellular, opposes such a 
requirement on the grounds that it ``may place undue burdens and costs 
on 5G Fund support recipients.'' Similarly, while generally supporting 
the requirements, the CCA urges us to ``ensure that any such standards, 
while achieving cybersecurity and risk management goals, avoid imposing 
onerous or piecemeal burdens on carriers.''
    131. However, the cybersecurity and supply chain risk management 
requirements the Commission adopts for 5G Fund support recipients are 
designed to mitigate concerns that development and implementation of 
cybersecurity plans are expensive and time consuming. As US Cellular 
itself explains, the NIST Framework is not a one-size-fits-all approach 
to cybersecurity and represents a flexible approach that ``promotes 
customization and prioritization, allowing organizations to tailor 
their approach according to specific needs.'' Other commenters agree 
that the NIST Framework provides an appropriate foundation for the 
required cybersecurity plans. The Commission therefore affords carriers 
the flexibility to develop plans that fit within their budgetary 
constraints, so long as they meet the baseline requirements. Moreover, 
the Commission declines to require 5G Fund support recipients to 
certify that they have implemented the NIST Framework at a particular 
implementation tier, as suggested by Verizon, as doing so would reduce 
flexibility and potentially impose unnecessary costs on providers. For 
the same reasons, the Commission also declines to adopt the additional 
requirements recommended by the Puerto Rico Telecommunications 
Regulatory Bureau.
    132. The Commission's approach will also likely reduce compliance 
costs by allowing 5G Fund support recipients that have already 
implemented the NIST Framework to comply with this requirement without 
redoing their plans so long as such plans include already implemented 
established cybersecurity best practices. To further mitigate costs for 
small providers, as suggested by commenter Michael Ravnitzky, the 
Commission encourages 5G Fund support recipients to take advantage of 
existing federal government resources designed to share supply chain 
security risk information with trusted communications providers and 
suppliers and facilitate the creation of cybersecurity and supply-chain 
risk management plans.
    133. In the 5G FNPRM, the Commission proposed to require a 5G Fund 
recipient's cybersecurity risk management plan to reflect ``an 
established set of best practices, such as the [CISA CPGs] or the [CIS 
Controls]. Some commenters took issue with this proposal, expressing 
concerns about a prescriptive mandate that would require the use of 
either the CISA CPGs or the CISA Controls, without regard to the wider 
universe of established best practices that are currently available and 
that may be a better fit for their particular circumstances. The 
Commission emphasizes that the approach it adopts herein does not 
require the use of either of these best practices, and is instead 
intended to afford 5G Fund support recipients the flexibility to 
implement any established best practices, including those identified in 
the relevant NIST Framework v. 2.0 Informative References Spreadsheet, 
so long as they address each of the Core Functions of the NIST 
Framework, as the CISA CPGs and the CIS Controls do. To that end, the 
rule that the Commission adopts amends the language proposed in the 5G 
Fund FNPRM to make clear that, rather than requiring the use of a 
complete set of best practices compiled by a third party, a 5G Fund 
recipient may use best practices selected from a variety of sources, so 
long as they are established and, in aggregate, they address each of 
the NIST Framework's Core Functions.
    134. AT&T is the only commenter that takes issue with the 
requirement that 5G Fund support recipients' supply chain risk 
management plans incorporate guidance from NIST 800-161. AT&T notes 
that NIST 800-161 itself states that it ``is not one-size-fits-all'' 
and that ``the guidance . . . should be adopted and tailored to the 
unique size, [resources], and risk circumstances of each enterprise.'' 
As with the NIST Framework, the Commission believes that the 
flexibility provided within NIST 800-161 will benefit 5G Fund support 
recipients for the very reasons stated by AT&T. The Commission does not 
view the use of NIST 800-161 as imposing rigid requirements. Instead, 
it serves as a baseline for ensuring that each 5G Fund support 
recipient has implemented an effective supply chain risk management 
plan that is appropriately tailored to its individual needs.
    135. Updating Cybersecurity and Supply Chain Risk Management Plans. 
Consistent with the requirements adopted for both the Enhanced A-CAM 
and BEAD Programs, the Commission also requires that a 5G Fund support 
recipient submit an updated plan to USAC within 30 days after making 
any substantive modification to its cybersecurity or supply chain risk 
management plan. A modification to a cybersecurity or supply chain risk 
management plan will be considered as substantive if at least one of 
the following conditions apply:
     There is a change in the plan's scope, including any 
addition, removal, or significant alteration to the types of risks 
covered by the plan (e.g., expanding a plan to cover new areas, such as 
supply chain risks to Internet of Things devices or cloud security, 
could be a substantive change);
     There is a change in the plan's risk mitigation strategies 
(e.g., implementing a new encryption protocol or deploying a different 
firewall architecture);
     There is a shift in organizational structure (e.g., 
creating a new information technology department or hiring a Chief 
Information Security Officer);
     There is a shift in the threat landscape prompting the 
organization to recognize the emergence of new threats or 
vulnerabilities that weren't previously accounted for in the plan;
     Updates are made to comply with new cybersecurity 
regulations, standards, or laws;
     Significant changes are made in the supply chain, 
including offboarding major suppliers or vendors, or shifts in 
procurement strategies that may impact the security of the supply 
chain; or
    A large-scale technological change is made, including the adoption 
of new systems or technologies, migrating to a new information 
technology infrastructure, or significantly changing the information 
technology architecture.
    136. US Cellular opposes the requirement that a 5G Fund support 
recipient submit an updated plan to USAC within 30 days after making 
any substantive modification to its

[[Page 101385]]

cybersecurity or supply chain risk management plan, stating that 
requiring the submission of an updated plan within 30 days ``may pose 
challenges in responding swiftly to emerging threats or adopting 
cutting-edge cybersecurity solutions.'' The Commission disagrees. To 
the extent that a 5G Fund support recipient makes a substantive change 
to its cybersecurity or supply chain risk management plan in response 
to a specific threat or the adoption of a new cybersecurity solution, 
the provider is not required to submit its updated plan until well 
after that change is made. The Commission sees no reason why the need 
to submit an updated plan after the fact would impact an organization's 
ability to modify its plan as needed at any given time, particularly 
given its enumeration herein of the types of modifications that will be 
considered substantive.
    137. NTCA expresses concern that 5G Fund support recipients may be 
required to submit updated cybersecurity and supply chain risk 
management plans within 30 days after any substantive modifications to 
the best practices or standards reflected in those plans (e.g., within 
30 days after any changes are made to the CISA CPGs or the CIS 
Controls). This is a misreading of the requirement. While the 
Commission fully expects that 5G Fund support recipients will regularly 
update their cybersecurity and supply chain risk management plans as 
best practices evolve, the Commission does not impose a specific 
timeframe by which those plans must be updated after a best practices 
publication has been modified.
    138. NTCA and RWA both suggest that, rather than requiring the 
submission of updated plans within 30 days after any substantive 
modification, 5G Fund support recipients should be required to file 
updated plans on an annual basis with their annual report. The 
Commission does not believe that the requirement it adopts will impose 
substantial burdens on 5G Fund support recipients. To the contrary, 
because this requirement aligns with the requirements adopted for the 
Enhanced A-CAM and BEAD programs, the Commission believes that 5G Fund 
support recipients that also participate in those programs will benefit 
from having a single deadline by which they must submit their reports 
for each program. Consistent with requirements for other high-cost 
support recipients, such as Enhanced A-CAM program participants, 5G 
Fund support recipients must submit an annual report no later than July 
1 of each year after the year in which it was authorized to receive 
support. Moreover, there is nothing in the record that explains how 5G 
Fund support recipients differ from Enhanced A-CAM and BEAD program 
participants with respect to this requirement such that they merit 
different treatment.
    139. Annual Certification. Consistent with the requirements adopted 
for the Enhanced A-CAM program, the Commission also requires that 5G 
Fund support recipients certify in their annual report following each 
support year that they have maintained their plans, whether they have 
submitted modifications in the prior year, and the date any 
modifications were submitted. If at any point during the support term a 
5G Fund support recipient does not have in place operational 
cybersecurity and supply chain risk management plans meeting the 
Commission's requirements, the Commission directs WCB to instruct USAC 
to withhold 25% of the 5G Fund recipient's support until the recipient 
comes into compliance. As noted above, once the 5G Fund support 
recipient comes into compliance, support will no longer be withheld and 
the support recipient will receive all of the support that had been 
withheld as a result of its non-compliance with the cybersecurity and 
supply chain risk management requirements.
    140. While the Commission declines to adopt NTCA's proposal to 
treat 5G Fund support recipients' submitted cybersecurity and supply 
chain risk management plans as presumptively confidential under section 
0.457 of the Commission's rules, 47 CFR 0.457, the Commission 
recognizes that such plans can contain sensitive information regarding 
providers' operations and networks. As a result, the Commission will 
provide an abbreviated means by which 5G Fund support recipients may 
request confidential treatment of their cybersecurity and supply chain 
risk management plans pursuant to section 0.459 of its rules, 47 CFR 
0.459(a)(4).
    141. The Commission concludes that these requirements will serve to 
facilitate the nation's cybersecurity and supply chain risk management 
goals while minimizing the burden on 5G Fund support recipients in 
complying with such requirements. The Commission's actions emphasize 
the critical importance of cybersecurity and supply chain risk 
management in modern broadband networks, consistent with broader 
initiatives across the federal government. The enforcement mechanism 
carefully balances compliance with this important requirement with 
avoiding a disproportionate disruption to providers' support. Adopting 
these risk management requirements is necessary to ensure that the 5G 
Fund program does not deprive rural consumers in high-cost areas of 
receiving 5G mobile service that is equally as secure as the high-speed 
broadband service deployed pursuant to other federal funding 
initiatives, including through Enhanced A-CAM and BEAD programs.

X. Use of Open Radio Access Network Technologies in 5G Fund Supported 
Networks

    142. The Commission concludes that there are significant public 
interest benefits to incentivize and to promote the voluntary inclusion 
of Open Radio Access Network technologies (Open RAN) in networks that 
are deployed with 5G Fund support by allocating additional funds for 
this specific purpose. The Commission further concludes that providing 
a 5G Fund support recipient with a process whereby it can seek 
additional time to meet the 5G Fund deployment milestones may also 
further incentivize the inclusion of Open RAN in networks supported 
through the 5G Fund. As expressed in the 5G Fund FNPRM, the Commission 
recognizes that this proceeding presents an opportunity for the 
Commission to assist providers that elect to incorporate Open RAN in 
their network deployment plans. By providing these additional 
incentives, the Commission seeks to encourage early adoption of Open 
RAN that will strengthen and secure the advanced, 5G mobile broadband 
networks that the 5G Fund is subsidizing.
    143. As explained more fully in the Commission's recent Open RAN 
NOI, rather than relying on proprietary specifications, ``Open RAN 
modularizes the hardware and software components of the traditional RAN 
to promote virtualization, to enable [artificial intelligence/machine 
learning] solutions to optimize performance, and to enable 
interoperability across multiple vendors.'' The Commission has also 
noted that networks deploying Open RAN ``have the potential to address 
national security and other concerns that the Commission and other 
federal stakeholders have raised in recent years about network 
integrity and supply chain reliability.'' Commenters in the instant 
proceeding also have noted that the incorporation of Open RAN 
technologies within networks serves many public interest benefits 
including improving security, lessening provider costs, strengthening 
the domestic supply chain, and promoting competition.
    144. Consistent with record support, the Commission concludes that 
using

[[Page 101386]]

the 5G Fund to incentivize the voluntary inclusion of Open RAN in 
networks deployed with 5G Fund support serves its national priorities. 
Thus, to incentivize deployment of Open RAN, as detailed herein, the 
Commission offers a process whereby a 5G Fund support recipient can 
seek a limited extension of its 5G Fund interim and final deployment 
milestones as set forth in section 54.1015(b) in order to afford it 
additional time to deploy Open RAN. Additionally, as explained fully 
herein, the Commission will allocate up to an additional $900 million 
of support in conjunction with implementation of the 5G Fund solely for 
the purpose of incentivizing providers to deploy Open RAN. This $900 
million will allow us to award a 5G Fund support recipient that deploys 
Open RAN with additional funding in the amount of one-tenth of the 
support that it is being allocated through the 5G Fund Phase I auction. 
To receive this additional funding, support recipients must deploy Open 
RAN technology through their network(s) for which they are authorized 
to receive 5G Fund support. The Commission finds that offering these 
incentives is consistent with the requirement in section 254(b)(1) of 
the Act, 47 U.S.C. 254(b)(1), that the Commission base its universal 
service policies on the principles of providing ``[q]uality services,'' 
and the Commission believes that providing this additional funding will 
hasten the deployment of fast, secure, flexible, resilient, advanced, 
5G mobile broadband networks throughout rural America. The Commission 
directs OEA and WTB to develop a post-auction process to evaluate 
applications for the award of this funding in accordance with the 
parameters that the Commission adopts herein. Additionally, the 
Commission directs OEA and WTB to adopt provisions to allow a 5G Fund 
support recipient to seek and receive, if approved by OEA and WTB, an 
extension of time for its interim and final deployment milestones so 
that it may include Open RAN in its supported network.
    145. As a general policy matter, the federal government has begun 
to undertake funding efforts that accelerate the development, 
deployment, and adoption of Open RAN in advanced mobile services. 
Likewise, the government, together with nine other countries, has 
recently released a joint statement endorsing principles for secure 6G 
technology ``that recognize the importance of international cooperation 
in promoting open, secure, resilient, inclusive, interoperable 
networks, such as Open Radio Access Networks, and safe, resilient, 
inclusive, and sustainable 6G ecosystem.'' Incentivizing the inclusion 
of Open RAN technology in networks subsidized with universal service 
fund support is therefore consistent with global accord that 
interoperable networks are of significant importance both currently and 
in the future.
    146. The Commission offers these incentives to 5G Fund support 
recipients because it anticipates that extending 5G deployment in 
unserved and underserved areas using Open RAN will be especially 
beneficial in promoting its 5G Fund goal of ensuring that Americans 
have access to advanced, 5G mobile broadband services where they live, 
work, and travel, now and in the long run. Accordingly, currently 
unserved and underserved areas where 5G Fund support will be used for 
an Open RAN deployment should be better positioned in the future not to 
be left behind.
    147. In the 5G Fund FNPRM, the Commission sought comment on whether 
the 5G Fund could be an appropriate vehicle to further the goals 
outlined in Executive Order 14036, which encouraged the Commission to 
``consider providing support for the continued development and adoption 
of 5G Open [RAN] . . . protocols and software,'' and if so, what the 
best mechanism(s) for doing so might be. The Commission asked whether 
deploying Open RAN networks requires more time such that it would be 
appropriate to provide an extension of the interim and/or final service 
milestone deadlines to 5G Fund support recipients that use Open RAN in 
their network deployments. The Commission also asked how a support 
recipient could demonstrate that it is using Open RAN and how the 
Commission could monitor compliance.
    148. A number of commenters commend the Commission's consideration 
of using the 5G Fund to incentivize Open RAN and claim that doing so 
has the potential to increase competition among vendors, decrease 
reliance on foreign vendors, increase network security, increase 
innovation, and lower long-term costs. Many commenters agree with the 
Commission's observation in its Enhanced Competition Incentive Program 
Further Notice of Proposed Rulemaking that ``Open RAN has the potential 
to allow carriers to promote the security of their networks while 
driving innovation, in particular in next-generation technologies like 
5G, lowering costs, increasing vendor diversity, and enabling more 
flexible network architecture.'' Some commenters assert that smaller 
vendors and rural carriers will need support in order to deploy Open 
RAN. Mavenir, an equipment manufacturer, suggests that 5G Fund 
incentives to deploy Open RAN may lessen the barriers to market entry 
that Open RAN vendors currently face and may encourage closed RAN 
incumbents to ``open'' their equipment without additional costs to 
providers.
    149. The Open RAN Policy Coalition suggests that in exchange for 
``demonstrable commitments'' to use 5G Fund support to deploy Open RAN 
5G, the Commission offer post-auction incentives for winning bidders, 
such as additional funding for various phases of the buildout, 
flexibility in timing for meeting build-out requirements, and also 
technical assistance, to encourage the deployment of Open RAN in areas 
receiving 5G Fund support. CTIA agrees with the Open RAN Policy 
Coalition that voluntary, post-auction incentives such as additional 
funding may help spur Open RAN deployment.
    150. By contrast, other commenters raise practical concerns about 
using the 5G Fund to support the deployment of Open RAN, contending 
that Open RAN has not been proven capable of providing 5G service at 
scale and that more suitable efforts are occurring elsewhere in the 
government and industry to support its development. And some commenters 
raise concerns that certain specifications and protocols of Open RAN 
are still too early in development for a deployment scenario of Open 
RAN with advanced capabilities (e.g., Massive multiple-input multiple-
output (Massive MIMO)), and that Open RAN may need additional time for 
interoperability testing and network integration to be completed. The 
Commission does not persuaded, however, that these concerns should 
preclude us from using universal service support and the 5G Fund 
proceeding to encourage the use of Open RAN. To the contrary, the 
Commission believes that the public interest benefits of incentivizing 
the use of Open RAN in 5G networks outweigh the concerns and, 
importantly, will hasten its use more widely in areas of the country 
where it might not otherwise be deployed.
    151. Recognizing the practical challenges associated with deploying 
Open RAN raised by commenters, the Commission has given careful 
consideration to the suggestion of the Open RAN Policy Coalition that 
it provide post-auction incentives to winning bidders to promote 
opportunities for Open RAN deployment. The Commission finds that 
offering additional financial support

[[Page 101387]]

from the 5G Fund to those support recipients that voluntarily 
incorporate Open RAN into their networks deployed using 5G Fund support 
in tandem with offering a process to obtain a potential extension of up 
to one year of the build-out milestone deadlines will best further the 
Commission's interests in incentivizing the development and deployment 
of Open RAN and accommodate the various needs of industry in doing so.
    152. Additional Funding for Deployment of Open RAN. The Commission 
will make available this additional high-cost funding exclusively to 
those 5G Fund support recipients that deploy networks using Open RAN 
through their network(s) for which they are awarded 5G Fund support. 
The Commission will award an additional amount of one-tenth of the 
total support a 5G Fund support recipient is authorized to receive. The 
inclusion of Open RAN in a network deployed using 5G Fund support will 
be entirely voluntary, as this additional support is being offered in 
recognition of the challenges that these service providers may face. 
Consistent with its goal, as stewards of the Universal Service Fund, of 
distributing funds in a responsible, and administratively efficient, 
manner, the Commission requires that this additional funding be used to 
deploy Open RAN and that 5G Fund support recipients that accept this 
additional funding certify to that effect.
    153. To avoid a significant increase to the contribution factor 
from any single Open RAN incentive payment, the Commission has 
determined to disburse support at specified intervals. Likewise, the 
Commission seeks to ensure that it is able to protect universal service 
funds in the event that support recipients do not timely deploy Open 
RAN. Based on its review of the information supporting a request for 
the additional funding, the Commission will award each authorized 
support recipient funding related to its Open RAN deployment in three 
tranches, with the timing of the disbursements to be based on whether a 
support recipient seeks only the additional funding or both the 
additional funding and an extension of time to meet the deployment 
milestones. For 5G Fund support recipients seeking only the additional 
funding, the Commission will award the support based on the following 
schedule: (1) one-third of the support upon meeting the Year Three 
Interim Service Milestone Deadline; (2) one-third upon meeting the Year 
Four Interim Service Milestone Deadline; and (3) one-third upon meeting 
the Year Six Final Service Milestone Deadline, at completion of 
buildout. For support recipients seeking both additional funding and an 
extension of time of one year, the Commission will award the additional 
support funding based on the following schedule: (1) one-third upon 
meeting the Year Four Interim Service Milestone Deadline; (2) one-third 
upon meeting the Year Five Interim Service Milestone Deadline; and (3) 
one-third upon completion of buildout at Year Seven. Accordingly, the 
Commission directs OEA and WTB to establish a process by which this 
funding may be elected and awarded post-auction.
    154. Extension of Deployment Milestones. As noted herein, to ensure 
that 5G Fund support recipients meet their obligation to provide 
advanced, 5G mobile broadband service in areas where they receive 
support, the Commission adopted interim and final service deployment 
milestones in the 5G Fund Report and Order to monitor progress in 
timely meeting the 5G Fund public interest obligations and performance 
requirements. Rather than adopt an Open RAN exception to section 
54.1015(b) of the Commission's rules, which requires a support 
recipient to meet all of its interim and final 5G Fund deployment 
milestones and deadlines, the Commission will instead grant a one-year 
extension of the deployment milestones for a 5G Fund support recipient 
that demonstrates that it will incorporate Open RAN into its network. 
The Commission finds that providing flexibility to a 5G Fund support 
recipient by allowing more time to meet its public interest obligations 
and performance requirements is warranted here to incentivize the 
development and deployment of Open RAN networks.
    155. Those commenters supporting use of the 5G Fund as a vehicle to 
promote the development of Open RAN also generally support the idea 
described in the 5G Fund FNPRM of extending the milestone deadlines for 
a support recipient to meet its public interest obligations and 
performance requirements for those providers who deploy networks using 
Open RAN. The Commission believes that this approach addresses the 
concerns raised by some commenters that aspects of Open RAN make it so 
that deployment requires additional time. In particular, the Commission 
agrees with DISH's argument in response to the Commission's 5G FNPRM 
that ``. . . extending buildout requirements for Open RAN deployments 
[will help] to prevent would-be Open RAN providers from choosing an 
outdated, closed technology merely to deploy faster.'' This approach 
also addresses concerns that incorporating Open RAN in a network 
deployment could take longer to implement, and that each provider may 
have different constraints on its ability to deploy Open RAN. The 
Commission is creating separate processes for seeking additional Open 
RAN funding and for seeking an extension to accommodate the needs and 
goals of individual support recipients. Accordingly, the Commission 
directs OEA and WTB to establish a process for a 5G Fund support 
recipient that needs additional time to obtain an extension of up to 
one year of the interim and final milestones as set forth in section 
54.1015(b) if it can demonstrate that it will incorporate Open RAN into 
its network(s).
    156. With one exception, all commenters oppose making the 
deployment of Open RAN mandatory. Given commenters' concerns that the 
specifications, testing, and standards for using Open RAN advanced 
technologies are still under development, and given that some of the 
major carriers are still assessing Open RAN's benefits, the Commission 
does not believe Open RAN should be mandatory for 5G Fund support 
recipients. The Commission also recognizes, as AT&T notes, that some 
providers that have deployed or are currently deploying a greenfield 
Open RAN network have to consider different capital investment issues 
than incumbents that are currently integrating 5G networks with 4G LTE 
networks.
    157. Some commenters propose that auction participants that commit 
to deploying Open RAN should be given an advantage in bidding. DISH 
advocates for a 40% bidding credit to auction participants that commit 
to certain Open RAN deployments, and an additional 10% bidding credit 
to providers that commit to deploying Open RAN on a faster timeline 
than the Commission otherwise requires. While the Commission finds that 
offering a combination of financial and extended milestone buildout 
deadline incentives will promote its interest in furthering the 
adoption of Open RAN solutions in networks for advanced, 5G mobile 
broadband services, given its goal of fiscal responsibility, the 
Commission finds it inappropriate to adopt a financial incentive as 
large as the 50% bidding credit that was proposed by DISH. Rather, the 
Commission concludes that offering a 5G Fund support recipient 
additional funding in the amount of one-tenth of the total support it 
is authorized to receive through the 5G Fund Phase I auction, spread 
over three payments, will sufficiently encourage the deployment

[[Page 101388]]

of Open RAN. This is especially true in light of some commenters 
assertions that Open RAN may be more cost-effective because it is 
easier to administer and will discourage bidders from claiming a credit 
without sufficient due diligence about their ability to deploy Open 
RAN. In particular, the Commission agrees with DISH `s advocacy that 
``[d]espite the viability of Open RAN, there are still challenges in 
the ecosystem--often imposed by RAN incumbents--that can be alleviated 
by federal funding.'' The Commission therefore finds that providing up 
to $900 million in funding to incentivize the deployment of Open RAN 
technology in networks supported through the 5G Fund, which amounts to 
an addition of 10% in funding beyond the up to $9 billion that will be 
allocated through the 5G Fund Phase I auction, strikes the proper 
balance to financially incentivize 5G Fund support recipients to 
consider deploying this innovative technology.
    158. The Commission directs OEA and WTB to establish, after notice 
and comment, the minimum specifications for Open RAN that a 5G Fund 
support recipient must implement in the 5G networks it deploys with 5G 
Fund support to qualify for additional funds and extended milestone 
deadlines; the mechanism by which such a recipient must demonstrate 
compliance (both initial and continued) with such specifications; and 
other requirements, if any, sufficient to justify additional post-
auction funding and/or an extension of up to one year to meet the 
public interest obligations and/or performance requirements consistent 
with its goals described herein. Providing further details regarding 
the showing a 5G Fund support recipient must make in order to be 
granted additional funding and/or an extension will help ensure that 
the incentives discussed here are used appropriately to support the 
Commission's policy objectives. The Commission further directs OEA and 
WTB to review each request for additional funding and extension to 
determine, as appropriate, whether such a request should be granted. 
OEA and WTB shall grant requests for funding only if the recipient's 
use of Open RAN technology in networks deployed with 5G support meets 
the Open RAN specifications that will be adopted by OEA and WTB and the 
recipient certifies its conformance with those specifications. 
Likewise, OEA and WTB shall grant an extension of up to one year only 
if they determine that the 5G Fund support recipient's proposal to 
deploy Open RAN is reasonably capable of meeting the prescribed minimum 
specifications. Reasonably capable means meeting the Commission staff's 
reasonable expectation that the applicant would be able to meet the 
relevant Open RAN specifications in the areas where the applicant won 
support. To be clear, these determinations will be made on a case-by-
case basis, measured against standards developed by OEA and WTB, taking 
each recipient's circumstances into account. The Commission further 
directs OEA and WTB to adopt, after notice and comment, measures to 
ensure that it can appropriately address an Open RAN support 
recipient's non-compliance with its commitment to timely deploy a 
network consistent with the established Open RAN specifications. In 
particular, OEA and WTB shall address whether recipients should be 
required to increase the amount of the letter of credit required by 
section 54.1016 of the Commission's rules, 47 CFR 54.1016, by the 
amount of the Open RAN support, be subject to a modified timeline 
before it can begin to decrease the amount of its letter of credit, and 
be subject to recovery of all distributed support for non-compliance 
with 5G Fund Open RAN obligations.
    159. The Commission's approach factors in the time that it 
anticipates is needed for the finalization of Open RAN specifications 
and also allows more time for industry to better address the challenges 
associated with interoperability and the RAN integration testing. The 
decision to deploy Open RAN in a network deployed with 5G Fund Phase I 
support is and will remain entirely optional. Potential bidders need 
not decide whether to deploy Open RAN or whether to seek the additional 
funding for Open RAN and/or an extension until after they know where 
they have been awarded 5G Fund support as well as the showing that will 
be required to receive the additional funding and/or extension of time.

XI. Promoting Digital Equity and Inclusion

    160. The Commission sought comment on how the proposals and issues 
discussed in the 5G Fund FNPRM may promote or inhibit advances in 
diversity, equity, inclusion, and accessibility, as well the scope of 
the Commission's relevant legal authority to address any such issues. 
Although the Commission received a few generalized comments regarding 
how the Commission's decisions could impact such issues, no commenter 
offered any proposals for specific program requirements that the 
Commission should adopt for the 5G Fund or any comments regarding its 
legal authority to address diversity, equity, inclusion, and 
accessibility in this proceeding. The Commission therefore lacks a 
record to adopt any specific requirements for the 5G Fund.
    161. For similar reasons, the Commission also denies the Petition 
for Reconsideration filed by the 5G Fund Supporters to the extent it 
seeks reconsideration of the Commission's decision declining to extend 
the cable procurement rule requirements to 5G Fund support recipients, 
which the 5G Fund Supporters contend will ensure that qualified 
minority and women entrepreneurs receive information about upcoming 
infrastructure buildout contracts. As the Commission has previously 
noted, ``the cable procurement requirement and [the Commission rule 
implementing it] flow directly from the statutory mandate pertaining 
explicitly to the cable industry contained in the 1992 Cable Act.'' 
Moreover, although the Commission has sought comment on whether this 
type of procurement requirement could be applied to the broadcast or 
other FCC-regulated industries, it has not to date extended the cable 
procurement rule to any other FCC-regulated industries. Notably, no 
commenter offered support for adopting this type of procurement 
requirement for the 5G Fund in response to the Commission's public 
notice seeking comment on the 5G Fund Supporters' Petition for 
Reconsideration. Nor did any commenter, including the 5G Fund 
Supporters, provide any additional information to support adopting this 
type of procurement requirement for the 5G Fund in response to the 5G 
Fund FNPRM. Accordingly, the Commission declines to extend the cable 
procurement rule requirements to 5G Fund support recipients.
    162. As the Commission implements and administers the 5G Fund, 
however, it remains mindful of the importance of considering how the 
Commission can promote diversity, equity, inclusion, and accessibility 
and the impact its rules have on these issues. The Commission 
emphasizes that one of the general principles of the Universal Service 
Fund is to create equal access for every American to high-speed 
broadband in underserved and unserved areas. To that end, the 
Commission has long used its Universal Service high-cost funding 
programs to further consumer access to broadband and bridge the digital 
divide. Most recently, in its Future of USF Report, the Commission 
adopted universal service goals for broadband--universal deployment, 
affordability, adoption,

[[Page 101389]]

availability, and equitable access to broadband throughout the United 
States. Accordingly, the Commission is committed to ensuring that the 
policies and rules the Commission has adopted for the 5G Fund remain in 
accord with the Commission's general efforts to advance digital equity 
for all.

XII. CTIA Petition for Partial Reconsideration of the 5G Fund Report 
and Order

    163. The Commission agrees with CTIA that resolving its pending 
Petition for Partial Reconsideration of the Commission's 5G Fund Report 
and Order serves the public interest, and is consistent with the 
Commission's intention to finalize the framework of the 5G Fund. To 
that end, the Commission grants in part and denies in part CTIA's 
petition to update the enforcement provisions associated with the award 
of mobile legacy high-cost support.
    164. In the 5G Fund Report and Order, the Commission adopted non-
compliance measures for mobile legacy high-cost support recipients that 
fail to comply with any of the public interest obligations and/or 
performance requirements. See 47 CFR 54.322(k). These public interest 
obligations include, among other things, a requirement that a mobile 
legacy high-cost support recipient use an increasing percentage of its 
support for the deployment, maintenance, and operation of mobile 
networks that provide 5G service. See 47 CFR 54.322(c). In particular, 
the Commission concluded in the 5G Fund Report and Order that a non-
compliant mobile legacy high-cost support recipient (1) ``will receive 
no further support disbursements''; (2) ``may be subject to recovery of 
up to the amount of support received since the effective date of the 
Report and Order, FCC 20-150, that was not used for the deployment, 
maintenance, and operation of mobile networks that provide 5G 
service''; and (3) ``may be subject to further action, including the 
Commission's existing enforcement procedures and penalties, potential 
revocation of ETC designation, and suspension or debarment pursuant to 
[section] 54.8.'' To address concerns about the possibility of 
disproportionate recovery, the Commission limited the amount of mobile 
legacy high-cost support that would be subject to recovery by 
indicating that it would not seek to recover any support that a 
recipient actually spent on the deployment, operation, and/or 
maintenance of voice and broadband networks that support 5G service, 
that it would retain the discretion to determine whether to seek up to 
full recovery of all support that was not spent on the deployment, 
operation, and/or maintenance of 5G services, and that it would seek to 
recover only support received since the effective date of the public 
interest obligations and performance requirements. The Commission also 
noted that it may apply this recovery measure in cases of voluntary 
relinquishment of legacy support.
    165. CTIA takes issue with these non-compliance measures, 
contending that the Commission adopted an unreasonable and 
unprecedented penalty for those mobile legacy support recipients that 
do not meet the public interest obligations and performance 
requirements adopted in the 5G Fund Report and Order. Specifically, 
CTIA seeks to limit the recovery of support for non-compliance or 
voluntary relinquishment of support to the difference between the 
amount spent on 5G and the amount that the Commission's rules require 
mobile legacy high-cost support recipients to spend on 5G. CTIA argues 
that it is inequitable for the Commission to recover all previous 
legacy support that a mobile legacy support recipient did not spend 
directly on 5G services during the transition to the 5G Fund, even 
though the Commission allowed mobile legacy support recipients to spend 
less than 100% of their support on 5G services in the first two years 
of the transition. Moreover, CTIA asserts that the new rules 
unreasonably treat the voluntary relinquishment of future support as a 
``default'' and subject to recovery all previous support that was not 
spent on 5G, even if the prior non-5G spending complied with the 
requirements adopted by the Commission. CTIA contends that the 
Commission should revise its rules to make clear that a mobile legacy 
support recipient that fails to meet the new 5G-related obligations 
will be subject to recovery only for the portion of past support that 
the Commission required the ETC to spend on 5G. In addition, CTIA 
advocates that in no event should the rules allow recovery of 
previously spent support where the mobile legacy support recipient's 
only ``default'' is electing voluntarily to relinquish prospective 
support.
    166. The Commission responds to CTIA's concerns, in part, by 
amending section 54.322(k)(2) of its rules, 47 CFR 54.322(k)(2), 
governing the recovery of mobile legacy high-cost support from non-
compliant recipients. In particular, the Commission clarifies that a 
non-compliant mobile legacy high-cost support recipient will--not may--
be subject to the recovery of the difference between the amount the 
recipient spent on 5G service and the amount that section 54.322(c) of 
its rules, 47 CFR 54.322(c), required the recipient to spend on 5G 
service. This clarification grants CTIA's request that the Commission 
``makes clear that mobile wireless ETCs who fail to meet the new 5G-
related obligations will be subject to recovery . . . for the portion 
of past support that the Commission required the ETC to spend on 5G.'' 
The Commission's rules conditioned the continued distribution of mobile 
legacy high-cost support on the satisfaction of public interest 
obligations, including the use of an increasing percentage of its 
support for the deployment, maintenance, and operation of mobile 
networks that provide 5G service, and required the recovery of funds 
where the percentage scheme envisioned by the rule is not satisfied. 
CTIA's argument that the rule operates as an arbitrary penalty is 
unavailing in the context of the 5G Fund, which created a complex 
regulatory framework with specific conditions governing receipt of USF 
support. The Commission's action herein is wholly consistent with its 
obligation to recover federal funds where the associated regulatory 
requirements are not satisfied. Furthermore, this clarification is 
generally consistent with other universal service high-cost rules, 
which require a recipient to repay support for locations where it 
failed to meet its build-out milestones.
    167. The Commission's authority to recover such support remains 
essential and relevant as the Commission moves forward with the 
implementation of the 5G Fund. In adopting the rule that allows the 
Commission to cease making legacy support payments and pursue the 
recovery of support that has been awarded but not used for 5G service, 
the Commission reasoned that ``the continuation of legacy support is an 
interim mechanism in place as [the Commission] implement[s] the 5G 
Fund, and therefore, unlike the Commission's other modernized support 
mechanisms, the non-compliance measures here do not benefit from 
allowing legacy support recipients to come back into compliance prior 
to the end of the support term.'' In sum, by providing authority to 
recover up to all legacy support a carrier received that was not spent 
toward the deployment, operation, and/or maintenance of 5G service, the 
Commission reasoned that it ``better incentivize[d] 5G deployment.'' 
The Commission agrees with this reasoning.

[[Page 101390]]

The Commission also expands on the Commission's conclusion in the 5G 
Fund Report and Order that having strong public interest obligations 
and performance requirements for mobile legacy high-cost support 
recipients and the ability to enforce its rules in the event of a 
default, such as by recovering legacy support that was not spent on 5G 
services, is part of its obligation ``[a]s stewards of the Universal 
Service Fund,'' and that such provisions will help us ``ensure that all 
Americans living in areas served by these carriers receive the most 
advanced wireless services.''
    168. The Commission does, however, find merit in CTIA's argument 
that section 54.322(k)(2) should be revised because it includes the 
voluntary relinquishment of future support as a ``default,'' even if a 
carrier's prior spending complied with the requirements adopted by the 
Commission. The Commission agrees with CTIA that revising this limited 
aspect of the rule avoids creating an incentive for a carrier to 
continue to accept mobile legacy high-cost support if it otherwise 
wishes to voluntarily relinquish that support. Accordingly, the 
Commission grants this aspect of CTIA's Petition for Reconsideration 
and amends section 54.322(k)(3) of its rules, 47 CFR 54.322(k)(3), to 
clarify that, to the extent a carrier receiving mobile legacy high-cost 
support has been in full compliance with the Commission's rules and 
subsequently elects to voluntarily relinquish future support, the 
Commission will not deem the voluntary relinquishment of such future 
mobile legacy high-cost support alone to be a default for which the 
Commission will seek the recovery of prior support. However, for the 
reason discussed herein, the Commission denies CTIA's Petition to the 
extent that it seeks to amend section 54.322(k)(2) to preclude the 
recovery of legacy support that a mobile legacy high-cost support 
recipient received--other than the amount specified in section 
54.322(c)--that was not spent toward the deployment, operation, and/or 
maintenance of mobile networks that support 5G service.

XIII. Non-Substantive Rule Clarifications

    169. The Commission also takes this opportunity to make non-
substantive editorial changes to the rules adopted by the Commission in 
the 5G Fund Report and Order governing the annual reporting requirement 
for mobile legacy high-cost support recipients. While the majority of 
the elements of this annual reporting requirement are contained in 
section 54.322(i) of the Commission's rules, 47 CFR 54.322(i), which 
relates specifically to mobile legacy high-cost support recipients, 
other elements of this requirement are separately contained in section 
54.313 of the Commission's rules, 47 CFR 54.313, which relates to 
annual reporting requirements for high-cost recipients generally. The 
Commission therefore consolidates the requirements contained in section 
54.313(n), as adopted in the 5G Fund Report and Order, into section 
54.322(i), to enhance clarity and make it easier for mobile legacy 
high-cost support recipients to locate all of the elements of their 
annual reporting requirement. The Commission notes that paragraph 
reference for this rule as adopted in the 5G Fund Report and Order was 
incorrectly listed as section 54.313(n), rather than section 54.313(p), 
in the both the final rules appendix in the 5G Fund Report and Order 
and in the Federal Register summary of that decision published at 85 FR 
75,770 on November 25, 2020. Section 54.313(n), as adopted in the 5G 
Fund Report and Order, has a delayed effective date and has not yet 
been made effective. See 47 CFR 54.313, Effective Date Notes, Note 4. 
No substantive change is intended or should result from this 
consolidation. Because these editorial changes are non-substantive, 
they have no impact on regulated parties or the public, and the 
Commission finds for good cause that notice and comment are unnecessary 
pursuant to 5 U.S.C. 553(b)(B).

XIV. Procedural Matters

    170. Paperwork Reduction Act. The 5G Fund Second Report and Order 
and Order on Reconsideration contains new or modified information 
collection requirements subject to the Paperwork Reduction Act of 1995 
(PRA), Public Law 104-13. It will be submitted to the Office of 
Management and Budget (OMB) for review under section 3507(d) of the 
PRA. OMB, the general public, and other Federal agencies will be 
invited to comment on the new or modified information collection 
requirements adopted in this proceeding. In addition, the Commission 
notes that pursuant to the Small Business Paperwork Relief Act of 2002, 
it previously sought specific comment on how the Commission might 
further reduce the information collection burden for small business 
concerns with fewer than 25 employees. The Commission describes impacts 
that might affect small businesses, which includes most businesses with 
fewer than 25 employees, in the Supplemental Final Regulatory 
Flexibility Analysis (Supplemental FRFA) herein.
    171. Congressional Review Act. The Commission has determined, and 
the Administrator of the Office of Information and Regulatory Affairs, 
Office of Management and Budget, concurs that this rule is ``non-
major'' under the Congressional Review Act, 5 U.S.C. 804(2). The 
Commission will send a copy of the 5G Fund Second Report and Order and 
Order on Reconsideration to Congress and the Government Accountability 
Office pursuant to 5 U.S.C. 801(a)(1)(A).
    172. Regulatory Flexibility Act. As required by the Regulatory 
Flexibility Act of 1980, as amended (RFA), a Supplemental Initial 
Regulatory Flexibility Analysis (Supplemental IRFA) was incorporated in 
the 5G Fund FNPRM. The Commission prepared Regulatory Flexibility 
Analyses in connection with its 2020 5G Fund NPRM, 85 FR 31616 (May 26, 
2020), and its 2020 5G Fund Report and Order. The Commission sought 
written public comment on the proposals and issues raised in the 5G 
Fund NPRM, and the 5G FNPRM, including comment on the IRFA, and 
Supplemental IRFA. No comments were filed addressing the IRFAs. This 
Supplemental FRFA supplements the Final Regulatory Flexibility Analysis 
(FRFA) in the 5G Fund Report and Order to reflect actions taken in the 
5G Fund FNPRM, and conforms to the RFA.
    173. The Commission takes important and necessary steps in the 5G 
Fund Second Report and Order and Order on Reconsideration to implement 
the framework for the 5G Fund to support the build out of advanced, 5G 
mobile wireless broadband networks for those who live, work, and travel 
in rural areas. After over a decade of hard work to reach this pivotal 
moment, the 5G Fund reflects the Commission's persistent efforts to 
reform and redirect universal service funds for mobile broadband to 
areas of the country that need them the most. As the Commission 
finalizes the details for the 5G Fund, it is confident that its 
conclusions in the 5G Fund Second Report and Order and Order on 
Reconsideration are solidly grounded in the improved mobile coverage 
data obtained in the Broadband Data Collection (BDC), which is 
reflected on its new National Broadband Map and provides the Commission 
with the most comprehensive picture to date about where mobile 
broadband service is and is not across the entire country. 
Unquestionably, the Commission's decision to wait to proceed with a 5G 
Fund Phase I auction until the Commission had these data to rely on has 
dramatically improved its understanding of where high-speed

[[Page 101391]]

mobile broadband service is being provided and has significantly 
enhanced its ability to hold a successful 5G Fund auction. The 
Commission is now far better informed regarding which communities lack 
mobile broadband service.
    174. As the Commission noted when it adopted the 5G Fund FNPRM, the 
National Broadband Map reflected the stark reality that over 14 million 
homes and businesses nationwide continued to lack access to 5G mobile 
wireless broadband service. The Commission therefore undertook a 
tailored effort to refresh the record and reignite the 5G Fund's plan 
to expand the deployment of 5G service to those rural communities that 
remain trapped on the wrong side of the digital divide. After careful 
consideration of the record gathered in this proceeding, the Commission 
concludes that the determinations it reaches in the 5G Fund Second 
Report and Order and Order on Reconsideration will best incentivize the 
deployment of networks providing advanced, 5G mobile wireless broadband 
in areas of the country where, absent subsidies, such service will 
continue to be lacking.
    175. Specifically, in the 5G Fund Second Report and Order and Order 
on Reconsideration the Commission: (1) modifies the definition of the 
areas that will be eligible for 5G Fund support and include areas in 
Puerto Rico and the U.S. Virgin Islands that meet this eligible area 
definition in the 5G Fund Phase I auction; (2) increases the budget for 
Phase I of the 5G Fund and the Tribal reserve budget; (3) modifies the 
metric for accepting and identifying winning bids and adopt a service-
based weighting factor for bidding in the 5G Fund Phase I auction; (4) 
explains how the Commission will aggregate areas eligible for 5G Fund 
support to minimum geographic areas for bidding; (5) explains its 
approach to aligning the methodologies for demonstrating compliance 
with the 5G Fund public interest obligations and performance 
requirements with those used in the BDC; (6) revises the schedule for 
transitioning from mobile legacy high-cost support for 5G Fund support 
consistent with recent legislative amendments; (7) requires each 5G 
Fund Phase I auction applicant to certify, under penalty of perjury, 
that it has read the public notice adopting procedures for the auction, 
and that it has familiarized itself with those procedures and any 
requirements related to the support made available for bidding in the 
auction; (8) requires 5G Fund support recipients to implement 
cybersecurity and supply chain risk management plans as a condition of 
receiving support; and (9) encourages 5G Fund support recipients to 
incorporate Open Radio Access Network (Open RAN) technologies in 
networks funded through the 5G Fund through the use of incentive 
funding and an opportunity to seek additional time to meet their 5G 
Fund public interest obligations and performance requirements by the 
established service deployment milestones. The Commission also resolves 
the issues raised in the pending petitions for reconsideration of the 
Commission's 2020 5G Fund Report and Order. With the decisions the 
Commissions reaches in the 5G Fund Second Report and Order and Order on 
Reconsideration, it advances its extensive efforts to modernize high-
cost support for mobile broadband services and proceeds with confidence 
that it is stretching its limited universal service fund dollars to 
support advanced, 5G mobile wireless broadband service to as many areas 
where Americans live, work and travel as possible.
    176. There were no comments filed that specifically addressed the 
rules and policies presented in the Supplemental IRFA.
    177. Pursuant to the Small Business Jobs Act of 2010, which amended 
the RFA, the Commission is required to respond to any comments filed by 
the Chief Counsel for Advocacy of the Small Business Administration 
(SBA), and to provide a detailed statement of any change made to the 
proposed rule(s) as a result of those comments. The Chief Counsel did 
not file any comments in response to the proposed rules in this 
proceeding.
    178. The RFA directs agencies to provide a description of, and 
where feasible, an estimate of the number of small entities that may be 
affected by the rules adopted herein. The RFA generally defines the 
term ``small entity'' as having the same meaning as the terms ``small 
business,'' ``small organization,'' and ``small governmental 
jurisdiction.'' In addition, the term ``small business'' has the same 
meaning as the term ``small-business concern'' under the Small Business 
Act. A ``small-business concern'' is one which: (1) is independently 
owned and operated; (2) is not dominant in its field of operation; and 
(3) satisfies any additional criteria established by the SBA. As noted 
herein, Regulatory Flexibility Analyses were incorporated into the 5G 
Fund NPRM, the 5G Fund Report and Order, and the 5G Fund FNPRM. In 
those analyses, the Commission described in detail the small entities 
that might be significantly affected. In this Supplemental FRFA, the 
Commission incorporates by reference the descriptions and estimates of 
the number of small entities from the previous Regulatory Flexibility 
Analyses in the 5G Fund NPRM, the 5G Fund Report and Order, and the 5G 
Fund FNPRM.
    179. The 5G Fund Second Report and Order and Order on 
Reconsideration modifies some of the compliance requirements adopted in 
the 5G Report and Order based on the proposals and/or the other issues 
on which the Commission sought comment in the 5G Fund FNPRM. Such 
modifications could impact the reporting, recordkeeping, and other 
compliance requirements for small and other providers that receive 5G 
Fund support.
    180. In the 5G Fund Second Report and Order and Order on 
Reconsideration, the Commission modifies the methodologies by which 5G 
Fund support recipients must demonstrate compliance with their 5G Fund 
performance requirements to largely align with those adopted for the 
BDC verification process. At present, the record contains insufficient 
information to either quantify compliance costs for small entities as a 
result of the modified methodologies for 5G Fund support recipients, or 
determine whether there will be a need for small entities to hire 
attorneys, engineers, consultants, or other professionals. However, the 
Commission notes that its approach in largely aligning the 
methodologies for 5G Fund support recipients to demonstrate and report 
compliance with the 5G Fund performance requirements is likely to ease 
the burden on small and other 5G Fund support recipients, and afford 
such support recipients the same flexibilities afforded under the BDC 
rules to choose which type of verification data to submit.
    181. The 5G Fund Second Report and Order and Order on 
Reconsideration also adopts a requirement that each 5G Fund support 
recipient implement cybersecurity and supply chain risk management 
plans as a condition of receiving 5G Fund support. Cybersecurity risk 
management plans must reflect at least the National Institute of 
Standards and Technology's Framework for Improving Critical 
Infrastructure Cybersecurity v.1.1 (2018) (NIST Framework), or any 
successor version of the NIST Framework, and must reflect established 
cybersecurity best practices that address each of the Core Functions 
described in the NIST Framework, such as the standards and controls set 
forth in the Cybersecurity & Infrastructure Security Agency (CISA) 
Cybersecurity Cross-sector Performance

[[Page 101392]]

Goals and Objectives (CISA CPGs) or the Center for internet Security 
Critical Security Controls (CIS Controls). Support recipients' supply 
chain risk management plans must incorporate the key practices 
discussed in NISTIR 8276, Key Practices in Cyber Supply Chain Risk 
Management: Observations from Industry, and related supply chain risk 
management guidance from NIST 800-161. The Commission also requires 
that a 5G Fund support recipient submit an updated plan to USAC within 
30 days after making any substantive modification to its cybersecurity 
or supply chain risk management plan. 5G Fund support recipients must 
also certify in their annual report following each subsequent support 
year that they have maintained their plans, whether they have submitted 
modifications in the prior year, and the date any modifications were 
submitted. If at any point during the support term a 5G Fund support 
recipient does not have in place operational cybersecurity and supply 
chain risk management plans meeting the Commission's requirements, 25% 
of the 5G Fund recipient's support will be withheld until the recipient 
comes into compliance. There were no comments that specifically 
addressed this modification as presented in the Supplemental IRFA. In 
addition, the record does not include a detailed cost-benefit analysis 
that would enable us to quantify compliance costs for small entities, 
including whether there will be a need for small entities to hire 
attorneys, engineers, consultants, or other professionals. The 
Commission notes, however, that the cybersecurity and supply chain risk 
management requirements adopted for 5G Fund support recipients in the 
5G Fund Second Report and Order and Order on Reconsideration are 
designed to mitigate concerns that development and implementation of 
cybersecurity plans are expensive and time consuming. The requirements 
therefore afford small and other carriers the flexibility to develop 
plans that fit within their budgetary constraints, so long as they meet 
the baseline requirements. The Commission's approach will also likely 
reduce compliance costs by allowing 5G Fund support recipients that 
have already implemented the NIST Framework to comply with this 
requirement without redoing their plans so long as they implement an 
established set of cybersecurity best practices. To further mitigate 
costs for small carriers, the Commission also encourages 5G Fund 
support recipients to take advantage of existing federal government 
resources designed to share supply chain security risk information with 
trusted communications providers and suppliers and facilitate the 
creation of cybersecurity and supply-chain risk management plans.
    182. In addition, the Commission adopts a requirement that any 
applicant seeking to participate in the 5G Fund Phase I auction to 
certify in its short-form application, under penalty of perjury, that 
the applicant has read the public notice adopting procedures for the 
auction and that it has familiarized itself both with the auction 
procedures and with the requirements, terms, and conditions associated 
with the receipt of 5G Fund support. As with other certifications 
required in the short-form application, an applicant's failure to make 
this required certification in its short-form application by the 
applicable filing deadline will render its application unacceptable for 
filing, and its application will be dismissed with prejudice. 
Typically, the auction procedures inform prospective applicants that 
they should familiarize themselves with the Commission's general 
competitive bidding rules, Commission decisions regarding competitive 
bidding procedures, application requirements, obligations of universal 
service support recipients, and the Commission's service rules support 
granted in the auction, and that they must be thoroughly familiar with 
the procedures, terms, and conditions contained in the public notice 
adopting procedures for the auction. The Commission therefore does not 
expect that the adopted certification requirement will increase the 
need for small entities to hire attorneys, engineers, consultants, or 
other professionals because it does not increase the level of education 
or due diligence beyond what was required of applicants prior to the 
adoption of the certification requirement, and thus it should not 
increase an applicant's burden in complying with the additional 
certification requirement.
    183. The RFA requires an agency to provide ``a description of the 
steps the agency has taken to minimize the significant economic impact 
on small entities . . . including a statement of the factual, policy, 
and legal reasons for selecting the alternative adopted in the final 
rule and why each one of the other significant alternatives to the rule 
considered by the agency which affect the impact on small entities was 
rejected.'' In the 5G Fund Second Report and Order and Order on 
Reconsideration, the Commission adopted rules seeking to balance its 
proposals in the 5G Fund FNPRM with proposed alternatives commenters 
submitted and weighing their benefits against the potential costs to 
small and other entities. Some key areas of focus addressed in the 
adopted rules are:
    184. Definition of Eligible Areas. The 5G Fund Second Report and 
Order and Order on Reconsideration modifies the definition of the areas 
that will be eligible for 5G Fund Phase I support to be those areas 
where BDC mobile coverage data show a lack of unsubsidized 5G mobile 
broadband service at speeds of at least 7/1 Mbps in an outdoor 
stationary environment by at least one service provider, even if those 
areas are served by 4G LTE service. The Commission will also apply a 
service-based weighting factor in 5G Fund Phase I auction bidding to 
incentivize the deployment of 5G service in areas that lack 
unsubsidized 4G LTE service. The Commission considered retaining the 
eligible areas definition adopted in the 5G Fund Report and Order, 
however, it believes that this modification to the definition of areas 
eligible for 5G Fund support ensures that a wide variety of small 
entities and other interested bidders will have greater flexibility to 
design a network that matches their business model and that allows 
service providers to achieve their performance benchmarks and public 
interest obligations efficiently.
    185. Technology for Determining Eligible Areas. The Commission 
considered, as an alternative to defining areas eligible for 5G Fund 
Phase I support as those where BDC mobile coverage data show a lack of 
unsubsidized 5G service by at least one service provider, retaining the 
definition of eligible areas as those areas that lack both unsubsidized 
4G LTE and unsubsidized 5G broadband service, as adopted in the 5G Fund 
Report and Order. As the Commission noted in the 5G Fund FNPRM, 
however, throughout this proceeding, several parties have taken issue 
with the eligible areas definition, and have advocated that the 
Commission define as eligible for 5G Fund support any areas that lack 
unsubsidized 5G mobile broadband service. The Commission expects that 
small entities and other interested parties will benefit from its 
modification of the definition of eligible areas because it is likely 
to increase the total number of areas that are available in a 5G Fund 
auction and eligible for 5G Fund support, thus creating additional 
opportunities for them to expand their businesses.
    186. Speed Thresholds for Determining Eligible Areas. Another 
alternative the Commission considered was a defining the areas eligible 
for 5G

[[Page 101393]]

Fund support as those areas that lack unsubsidized 5G service at a 
speed threshold of 35/3 Mbps. The Commission concludes that using a 
speed threshold of 7/1 Mbps for 5G for purposes of determining eligible 
areas will promote the expansion of 5G coverage to as many areas as 
possible, while also avoiding the potential for overbuilding in areas 
where a provider already offers some level of unsubsidized 5G service 
and could upgrade such service to higher speeds in the future. The 
Commission further determines that using a speed threshold of 35/3 Mbps 
to determine eligible areas will result in more areas being eligible 
for support, taxing the 5G Fund Phase I budget unnecessarily, 
especially in light of the increased number of eligible areas that the 
Commission anticipates as a result of its other modifications to the 
definition. Increasing the number of eligible areas to such a great 
extent will likely reduce the support that may be available to winning 
bidders. The Commission believes that defining areas eligible for 5G 
Fund support as those that lack unsubsidized 5G service at speeds of at 
least 7/1 Mbps strikes an appropriate balance of increasing the number 
of areas eligible for support without overly taxing the budget.
    187. Environment for Determining Eligible Areas. The Commission 
also considered defining the areas eligible for 5G Fund Phase I support 
as those areas that lack unsubsidized 5G mobile broadband service at 
speeds of at least 7/1 Mbps in an in-vehicle environment. The 
Commission concludes that using coverage maps based on an outdoor 
stationary environment for purposes of determining areas eligible for 
the 5G Fund Phase I auction is preferable to using in-vehicle BDC 
coverage maps because the key parameters for outdoor stationary 
coverage have been standardized.
    188. 5G Fund Budget. In the 5G Fund Second Report and Order and 
Order on Reconsideration, the Commission modified the budget for Phase 
I of the 5G Fund auction by increasing it to include up to the $1 
billion that previously had been allocated to Phase II by the 
Commission in the 5G Fund Report and Order and Order on 
Reconsideration. A number of commenters, some of which include small 
entities, advocated for an increase in the original budget of $8 
billion for Phase I. The Commission concludes that adopting an 
increased budget for Phase I will benefit all 5G Fund recipients, 
including those that are small entities. The Commission declines to 
adopt an alternative approach that would use a cost model to determine 
the 5G Fund budget, as such an approach would conflict with its 
interest in awarding support in eligible areas in amounts that are 
competitive, but still acceptable to providers.
    189. Bidding and Support Price Metric. In addition, the 5G Fund 
Second Report and Order and Order on Reconsideration adopts a bidding 
and support price metric of dollars per square kilometer that includes 
a service-based weighting factor that weights bids and support prices 
based on upon service availability within the area. This service-based 
weighting factor will distinguish between areas that lack unsubsidized 
5G broadband service but have access to unsubsidized 4G LTE service, 
and areas that lack both 5G and 4G LTE service. The Commission adopts 
this approach as an alternative to the adjustment factor that was 
adopted in the 5G Fund Report and Order for bidding.
    190. Certification of Notice of 5G Fund Phase I Auction 
Requirements and Procedures. With respect to the requirement that any 
applicant seeking to participate in the 5G Fund Phase I auction must 
certify in its short-form application, under penalty of perjury, that 
the applicant has read the public notice adopting procedures for the 
auction and that it has familiarized itself both with the auction 
procedures and with the requirements, terms, and conditions associated 
with the receipt of 5G Fund support, the Commission has a longstanding 
policy that expressly places a burden upon each auction applicant to be 
thoroughly familiar with the procedures, terms, and conditions 
contained in the relevant auctions procedures public notice and any 
future public notices that may be released in the auction proceeding. 
However, the Commission has taken steps to minimize any economic impact 
of the certification requirement on small entities through the many 
free resources it provides to potential auction participants. The 
public notice adopting the procedures for each auction will be posted 
to the auction's website prior to the opening of the application 
window, and other relevant orders are available through EDOCS, the 
Commission's online document database (www.fcc.gov/edocs). The 
Commission believes that reading these materials will be sufficient for 
applicants to certify that they have familiarized themselves with the 
relevant auction procedures and other requirements. The Commission also 
makes available additional educational materials to help potential 
auction participants understand the auction process, including short-
form filing instructions and a tutorial. Further, the Commission makes 
this information publicly available, easily accessible, and without 
charge to benefit all potential auction applicants, including small 
entities, thereby lowering their administrative costs to comply with 
the Commission's competitive bidding rules.
    191. Small entities participating in auctions may also seek 
clarification of, or guidance regarding, auction procedures, the 
competitive bidding rules, and any requirements related to the 
authorizations or support to be made available through the auction from 
Commission staff prior to each auction's application window. 
Additionally, an FCC Auctions Hotline provides small entities one-on-
one access to Commission staff for information about the auction 
process and procedures. The FCC Auctions Technical Support Hotline is 
another resource that provides technical assistance to applicants, 
including small entities, on issues such as access to or navigation 
within the electronic short-form application and use of the bidding 
system.
    192. Cybersecurity and Supply Chain Risk Management. The Commission 
also considered, as an alternative approach to the requirement that 5G 
Fund support recipients submit updated plans within 30 days of making 
any substantive modifications to those plans, a requirement that plans 
be updated on an annual basis. The Commission does not believe that the 
requirement it adopts will impose substantial burdens on 5G Fund 
support recipients. To the contrary, because this requirement aligns 
with the requirements adopted other support programs, the Commission 
believes that small entity 5G Fund support recipients that also 
participate in those programs will benefit from having a single 
deadline by which they must submit their reports for each program. In 
general, the cybersecurity and supply chain risk management 
requirements the Commission adopted for 5G Fund support recipients are 
designed to mitigate concerns that development and implementation of 
cybersecurity plans are expensive and time consuming. The NIST 
Framework is not a one-size-fits-all approach to cybersecurity and 
represents a flexible approach that promotes customization and 
prioritization, allowing organizations to tailor their approach 
according to specific needs. The Commission therefore affords small and 
other carriers the flexibility to develop plans that fit within their 
budgetary constraints, so long as they meet the baseline requirements.

[[Page 101394]]

    193. Use of Open Radio Access Network Technologies in 5G Fund 
Supported Networks. To promote and incentivize the voluntary inclusion 
of Open Radio Access Network (Open RAN) technology networks deployed 
using 5G Fund support, the Commission offers a process whereby a 5G 
Fund support recipient can seek a limited extension of its 5G Fund 
interim and final deployment milestones as set forth in section 
54.1015(b) of the Commission's rules in order to afford it additional 
time to deploy Open RAN. Additionally, the Commission allocates up to 
an additional $900 million of support in conjunction with 
implementation of the 5G Fund solely for the purpose of incentivizing 
providers to deploy Open RAN. Specifically, the Commission will allow a 
winning bidder that is authorized to receive 5G Fund support to apply 
for additional funding of one-tenth of the total support that the 5G 
Fund support recipient is authorized to receive to be spent on the 
deployment of Open RAN, to be awarded in a post-auction process. To 
receive this additional funding, support recipients must deploy Open 
RAN technology through their network(s) for which they are authorized 
to receive 5G Fund support. The Commission directs OEA and WTB to 
establish a process by which this additional funding may be elected and 
awarded post-auction in accordance with the parameters set forth in the 
5G Fund Second Report and Order and Order on Reconsideration. 
Additionally, the Commission directs OEA and WTB to establish a process 
for a 5G Fund support recipient that needs additional time to obtain an 
extension of up to one year of the interim and final deployment 
milestones as set forth in section 54.1015(b) of the Commission's rules 
if it can demonstrate that it will incorporate Open RAN into its 
network(s). Alternatives approaches that the Commission considered in 
determining how best to encourage the use of Open RAN technologies 
included granting bidding credits to 5G Fund Phase I applicants that 
agree to use Open RAN technologies in their deployments as well as 
mandating the use of such technologies in deployments built with 5G 
Fund support. The Commission concluded that the adopted approach will 
allow time for the Open RAN specifications to become more settled for 
the case of a deployment scenario with Open RAN advanced capabilities 
and also for industry to better address the challenges associated with 
interoperability and the RAN integration testing. This approach could 
benefit small providers, many of which have limited resources, by 
allowing them the flexibility to choose an option that may provide an 
extension of compliance deadlines.
    194. The Commission will send a copy of the 5G Fund Second Report 
and Order and Order on Reconsideration, including this Supplemental 
FRFA, in a report to Congress. In addition, the Commission will send a 
copy of the 5G Fund Second Report and Order and Order on 
Reconsideration, including this Supplemental FRFA, to the Chief Counsel 
for Advocacy of the Small Business Administration.

XVI. Ordering Clauses

    195. Accordingly, it is ordered that, pursuant to the authority 
contained in sections 4(i), 5, 214, 254, 303(r), 403, and 405 of the 
Communications Act of 1934, as amended, 47 U.S.C. 154(i), 155, 214, 
254, 303(r), 403, 405, the 5G Fund Second Report and Order and Order on 
Reconsideration is adopted.
    196. It is further ordered that the rules and requirements adopted 
in the 5G Fund Second Report and Order and Order on Reconsideration 
will become effective thirty (30) days after publication in the Federal 
Register. Sections 54.322(b), 54.322(g), 54.322(h), 54.322(i), 
54.322(j), 54.1014(a), 54.1014(b)(2), 54.1018(a), 54.1018(b), 
54.1018(c), 54.1018(d), 54.1018(f), 54.1019(a)(1), 54.1019(a)(2), 
54.1019(a)(3), 54.1019(b), 54.1022(b), and 54.1022(f), may contain new 
or modified information collection requirements that require review by 
the Office of Management and Budget (OMB) under the Paperwork Reduction 
Act. The Commission directs OEA, WCB, and WTB to announce the 
compliance date for these sections in a document published in the 
Federal Register and directs them OEA to cause sections 54.322(l), 
54.1014(c), 54.1018(h), 54.1019(e), and 54.1022(g) to be revised 
accordingly.
    197. It is further ordered that the Joint Petition for 
Reconsideration filed by The Rural Wireless Association and NTCA--The 
Rural Broadband Association in GN Docket No. 20-32 on December 28, 
2020, is granted in part and denied in part, as indicated herein.
    198. It is further ordered that the Petition for Reconsideration 
filed by The Coalition of Rural Wireless Carriers in GN Docket No. 20-
32 on December 28, 2020, is dismissed in part, granted in part, and 
denied in part, as indicated herein.
    199. It is further ordered that the Petition for Partial 
Reconsideration filed CTIA in GN Docket No. 20-32 on December 28, 2020, 
is granted in part and denied in part, as indicated herein.
    200. It is further ordered that the Petition for Reconsideration 
filed by Smith Bagley, Inc. in GN Docket No. 20-32 on December 28, 
2020, is denied, as indicated herein.
    201. It is further ordered that the Petition for Reconsideration 
filed by 5G Fund Supporters in GN Docket No. 20-32 on November 30, 
2020, is dismissed in part and denied in part, as indicated herein.
    202. It is further ordered that the Office of the Managing 
Director, Performance Program Management, shall send a copy of the 5G 
Fund Second Report and Order and Order on Reconsideration in a report 
to be sent to Congress and the Government Accountability Office 
pursuant to the Congressional Review Act, 5 U.S.C. 801(a)(1)(A).
    203. It is further ordered that the Commission's Office of the 
Secretary, shall send a copy of the 5G Fund Second Report and Order and 
Order on Reconsideration, including the Supplemental Final Regulatory 
Flexibility Analysis, to the Chief Counsel for Advocacy of the Small 
Business Administration.

List of Subjects in 47 CFR Part 54

    Communications common carriers, Internet, Reporting and 
recordkeeping requirements, Telecommunications.

Federal Communications Commission.
Marlene Dortch,
Secretary, Office of the Secretary.

Final Rules

    For the reasons discussed in the preamble, the Federal 
Communications Commission amends 47 CFR part 54 to read as follows:

PART 54--UNIVERSAL SERVICE

0
1. The authority citation for part 54 continues to read as follows:

    Authority: 47 U.S.C. 151, 154(i), 155, 201, 205, 214, 219, 220, 
229, 254, 303(r), 403, 1004, 1302, 1601-1609, and 1752, unless 
otherwise noted.


0
2. Amend Sec.  54.307 by revising paragraphs (e)(5) introductory text, 
(e)(5)(ii) through (iv), (e)(6), and (e)(7) to read as follows:


Sec.  54.307   Support to a competitive eligible telecommunications 
carrier.

* * * * *
    (e) * * *
    (5) Eligibility for interim support before 5G Fund Phase I auction. 
Beginning the first day of the month following December 28, 2020, a 
competitive eligible

[[Page 101395]]

telecommunications carrier that receives support pursuant to paragraph 
(a) or (e)(2) of this section shall no longer receive such support and 
shall instead receive support as described in paragraph (e)(5).
* * * * *
    (ii) Until the first day of the month following the release of the 
first public notice by the Office of Economics and Analytics and 
Wireline Competition Bureau announcing the authorization of support for 
any area eligible for support in the 5G Fund Phase I auction as 
described in paragraph (e)(6) of this section:
    (A) A mobile competitive eligible telecommunications carrier that 
receives support pursuant to paragraph (a) of this section shall 
receive ``monthly baseline support'' in an amount equal to one-twelfth 
(\1/12\) of its total support received for the preceding 12-month 
period.
    (B) A mobile competitive eligible telecommunications carrier that 
receives support pursuant to paragraph (e)(2) of this section shall 
receive support at the same level described in paragraph (e)(2)(iii) of 
this section.
    (iii) For mobile competitive eligible telecommunications carriers 
that receive support pursuant to paragraph (e)(5)(ii) of this section, 
beginning the first day of the month following the release of a public 
notice by the Office of Economics and Analytics and Wireline 
Competition Bureau announcing the final areas eligible for support in 
the 5G Fund Phase I auction, the geographic boundary for each carrier's 
subsidized service area shall be subdivided into the smallest 
constituent piece for which support must be disaggregated and 
transitioned separately by overlaying on each carrier's subsidized 
service area boundary data the eligible and ineligible area boundaries, 
the minimum geographic area for bidding (i.e., census tract 
boundaries), and the subsidized service area boundary data for other 
support recipients that receive support pursuant to paragraph 
(e)(5)(ii) of this section or that receive transitional support 
pursuant to Sec.  54.1516(c). The percent area for each constituent 
piece shall then be calculated in order to disaggregate and apportion 
the legacy high-cost support amount for each area, which shall be 
calculated by multiplying the monthly support level described in 
paragraph (e)(5)(ii) of this section by the areal percentage of the 
constituent piece of the competitive eligible telecommunications 
carrier's service area, weighted by applying the 5G Fund adjustment 
factor methodology and values adopted by the Office of Economics and 
Analytics and Wireline Competition Bureau in Public Notice, DA 20-1361. 
At the conclusion of this disaggregation process, the sum of the 
disaggregated support amounts for all constituent parts shall precisely 
equal the legacy support amount for the carrier's service area 
consistent with the amount described in paragraph (e)(5)(ii) of this 
section.
    (iv) For mobile competitive eligible telecommunications carriers 
that receive transitional support pursuant to Sec.  54.1516(c), 
beginning the first day of the month following the release of a public 
notice by the Office of Economics and Analytics and Wireline 
Competition Bureau announcing the final areas eligible for support in 
the 5G Fund Phase I auction, the geographic boundary for each carrier's 
subsidized service area shall be subdivided into the smallest 
constituent piece for which support must be disaggregated and 
transitioned separately by overlaying on each carrier's subsidized 
service area boundary data the eligible and ineligible area boundaries, 
the minimum geographic area for bidding (i.e., census tract 
boundaries), and the subsidized service area boundary data for other 
support recipients that receive support pursuant to paragraph 
(e)(5)(ii) of this section or that receive transitional support 
pursuant to Sec.  54.1516(c). The percent area for each constituent 
piece shall then be calculated in order to disaggregate and apportion 
the transitional support amount for each area, which shall be 
calculated by multiplying the monthly support level described in Sec.  
54.1516(c) by the areal percentage of the constituent piece of the 
competitive eligible telecommunications carrier's service area, 
weighted by applying the 5G Fund adjustment factor methodology and 
values adopted by the Office of Economics and Analytics and Wireline 
Competition Bureau in Public Notice, DA 20-1361. At the conclusion of 
this disaggregation process, the sum of the disaggregated support 
amounts for all constituent parts shall precisely equal the 
transitional support amount for the carrier's service area consistent 
with the amount described in Sec.  54.1516(c).
    (6) Eligibility for support after 5G Fund Phase I auction. (i) For 
all areas that are ineligible for 5G Fund support, a two-year phase 
down of legacy high-cost support will commence on the first day of the 
month following the release of the first public notice by the Office of 
Economics and Analytics and Wireline Competition Bureau announcing the 
authorization of support for any area eligible for support in the 5G 
Fund Phase I auction. At such time, a mobile competitive eligible 
telecommunications carrier that receives monthly support pursuant to 
paragraph (e)(5)(iii) or (iv) of this section shall instead receive 
monthly support amounts for such ineligible areas as follows:
    (A) For 12 months starting the first day of the month following the 
release of the public notice described in paragraph (e)(6)(i) of this 
section, each mobile competitive eligible telecommunications carrier 
shall receive a monthly support amount that is two-thirds (\2/3\) of 
the level described in paragraph (e)(5)(iii) or (iv) of this section, 
as applicable, for each constituent part of its service area that is 
ineligible for 5G Fund Phase I support.
    (B) For 12 months starting the first day of the month following the 
period described in paragraph (e)(6)(i)(A) of this section, each mobile 
competitive eligible telecommunications carrier shall receive a monthly 
support amount that is one-third (\1/3\) of the level described in 
paragraph (e)(5)(iii) or (iv) of this section, as applicable, for each 
constituent part of its service area that is ineligible for 5G Fund 
Phase I support.
    (C) Following the period described in paragraph (e)(6)(i)(B) of 
this section, no mobile competitive eligible telecommunications carrier 
shall receive monthly support for an area that is ineligible for 5G 
Fund Phase I support pursuant to this section.
    (ii) For all areas that are eligible for support in the 5G Fund 
Phase I auction, the transition from legacy high-cost support will 
commence as follows:
    (A) A mobile competitive eligible telecommunications carrier that 
receives monthly support pursuant to paragraph (e)(5)(iii) or (iv) of 
this section for an area and is the winning bidder for that area in the 
5G Fund Phase I auction shall continue to receive support at the same 
level described in paragraph (e)(5)(iii) or (iv) of this section, as 
applicable, until the first day of the month following the release of a 
public notice by the Office of Economics and Analytics and Wireline 
Competition Bureau announcing whether or not the carrier is authorized 
to receive 5G Fund Phase I support.
    (1) If the mobile competitive eligible telecommunications carrier 
is authorized to receive 5G Fund Phase I support in that area, 
beginning the first day of the month following the release of a public 
notice by the Office of Economics and Analytics and Wireline 
Competition Bureau authorizing the carrier to receive such support in 
that area, the carrier shall no longer receive support pursuant to 
paragraph (e)(5)(iii)

[[Page 101396]]

or (iv) of this section, as applicable, and shall instead receive 
monthly support in the amount determined by its 5G Fund Phase I winning 
bid pursuant to Sec.  54.1017.
    (2) If the mobile competitive eligible telecommunications carrier 
is not authorized to receive 5G Fund Phase I support in that area, the 
carrier shall no longer receive support at the level of monthly support 
described in paragraph (e)(5)(iii) or (iv) of this section, as 
applicable, for such area, and shall instead receive monthly support as 
follows:
    (i) For 12 months starting the first day of the month following 
release of a public notice announcing that the carrier is not 
authorized to receive 5G Phase I auction support, the carrier shall 
receive a monthly support amount that is two-thirds (\2/3\) of the 
level described in paragraph (e)(5)(iii) or (iv) of this section, as 
applicable, for each constituent part of the area.
    (ii) For 12 months starting the month following the period 
described in paragraph (e)(6)(ii)(A)(2)(i) of this section, the carrier 
shall receive a monthly support amount that is one-third (\1/3\) of the 
level described in paragraph (e)(5)(iii) or (iv) of this section, as 
applicable, for each constituent part of the area.
    (iii) Following the period described in paragraph 
(e)(6)(ii)(A)(2)(ii) of this section, the carrier shall not receive 
monthly support for the area pursuant to this section.
    (B) A mobile competitive eligible telecommunications carrier that 
receives monthly support pursuant to paragraph (e)(5)(iii) or (iv) of 
this section for an area and is not the winning bidder for such area in 
the 5G Fund Phase I auction shall continue to receive support at the 
same level described in paragraph (e)(5)(iii) or (iv) of this section, 
as applicable, until the first day of the month following the release 
of a public notice by the Office of Economics and Analytics and 
Wireline Competition Bureau announcing the authorization of 5G Fund 
Phase I support for that area. Thereafter, the carrier shall instead 
receive monthly support for that area as follows:
    (1) For 12 months starting the first day of the month following the 
release of the public notice described in paragraph (e)(6)(ii)(B) of 
this section, the carrier shall receive a monthly support amount that 
is two-thirds (\2/3\) of the level described in paragraph (e)(5)(iii) 
or (iv) of this section, as applicable, for each constituent part of 
the area.
    (2) For 12 months starting the month following the period described 
in paragraph (e)(6)(ii)(B)(1) of this section, the carrier shall 
receive a monthly support amount that is one-third (\1/3\) of the level 
described in paragraph (e)(5)(iii) or (iv) of this section, as 
applicable, for each constituent part of the area.
    (3) Following the period described in paragraph (e)(6)(ii)(B)(2) of 
this section, the carrier shall not receive monthly support for the 
area pursuant to this section.
    (C) A mobile competitive eligible telecommunications carrier that 
receives monthly support pursuant to paragraph (e)(5)(iii) or (iv) of 
this section for an area eligible for support in the 5G Fund Phase I 
auction, but for which support is not won, and for which the carrier is 
not receiving the minimum level of support for the area shall, 
beginning the first day of the month following the release of the first 
public notice by the Office of Economics and Analytics and Wireline 
Competition Bureau announcing the authorization of support for any 
eligible area won in the 5G Fund Phase I auction, receive monthly 
support for that area as follows:
    (1) For 12 months starting the first day of the month following the 
release of the public notice described in paragraph (e)(6)(ii)(C) of 
this section, the carrier shall receive a monthly support amount that 
is two-thirds (\2/3\) of the level described in paragraph (e)(5)(iii) 
or (iv) of this section, as applicable, for each constituent part of 
the area.
    (2) For 12 months starting the month following the period described 
in paragraph (e)(6)(ii)(C)(1) of this section, the carrier shall 
receive a monthly support amount that is one-third (\1/3\) of the level 
described in paragraph (e)(5)(iii) or (e)(5)(iv) of this section, as 
applicable, for each constituent part of the area.
    (3) Following the period described in paragraph (e)(6)(ii)(C)(2) of 
this section, the carrier shall not receive monthly support for the 
area pursuant to this section.
    (D) A mobile eligible telecommunications carrier that receives 
monthly support pursuant to paragraph (e)(5)(iii) of this section for 
an area eligible for support in the 5G Fund Phase I auction, but for 
which support is not won, and for which the carrier is receiving the 
minimum level of support for such area, shall continue to receive a 
monthly support amount for such area at the level described in 
paragraph (e)(5)(iii) of this section for each constituent part of the 
area for no more than 60 months from the first day of the month 
following the release of the first public notice by the Office of 
Economics and Analytics and Wireline Competition Bureau announcing the 
authorization of support for any eligible area won in the 5G Fund Phase 
I auction. The ``minimum level of sustainable support'' is the lowest 
monthly support received by a mobile competitive eligible 
telecommunications carrier for the area that has deployed the highest 
level of technology (e.g., 5G) within the state encompassing the area.
    (7) Eligibility for support after 5G Fund Phase II auction. For all 
areas that are eligible for support in the 5G Fund Phase II auction, 
the transition from support described in paragraph (e)(6)(ii)(B), (C), 
or (D) of this section, as applicable, will commence as follows:
    (i) A mobile competitive eligible telecommunications carrier that 
receives monthly support pursuant to paragraph (e)(6)(ii)(B), (C), or 
(D) of this section, as applicable, and is a winning bidder in the 5G 
Fund Phase II auction for the area for which it receives such support, 
shall receive support for such area at the same level described in 
paragraph (e)(6)(ii)(B), (C), or (D) of this section until the first 
day of the month following the release of a public notice by the Office 
of Economics and Analytics and Wireline Competition Bureau announcing 
whether or not the carrier is authorized to receive 5G Fund Phase II 
support.
    (A) If the mobile competitive eligible telecommunications carrier 
is authorized to receive 5G Fund Phase II support in the area, the 
carrier shall no longer receive support pursuant to paragraph 
(e)(6)(ii)(B), (C), or (D) of this section for such area, and shall 
instead receive monthly support in the amount determined by its 5G Fund 
Phase II winning bid pursuant to Sec.  54.1017.
    (B) If the mobile competitive eligible telecommunications carrier 
is not authorized to receive 5G Fund Phase II support in that area, the 
carrier shall no longer receive support at the level of monthly support 
pursuant to paragraph (e)(6)(ii)(B), (C), or (D) of this section for 
such area, as applicable, and shall instead receive monthly support as 
follows for such area:
    (1) For 12 months starting the first day of the month following 
release of a public notice announcing that the carrier is not 
authorized to receive 5G Phase II auction support, the carrier shall 
receive an amount of monthly support that is two-thirds (\2/3\) of the 
level described in paragraph (e)(6)(ii)(B), (C), or (D) of this section 
for the area, as applicable.
    (2) For 12 months starting the month following the period described 
in paragraph (e)(7)(i)(B)(1) of this section, the carrier shall receive 
an amount of monthly support that is one-third (\1/3\) of the level 
described in paragraph

[[Page 101397]]

(e)(6)(ii)(B), (C), or (D) of this section for the area, as applicable.
    (3) Following the period described in paragraph (e)(7)(i)(B)(2) of 
this section, the carrier shall not receive monthly support for the 
area pursuant to this section.
    (ii) A mobile competitive eligible telecommunications carrier that 
receives monthly support pursuant to paragraph (e)(6)(ii)(B) or (C) of 
this section for an area for which support is won in the 5G Fund Phase 
II auction and for which the carrier is not the winning bidder shall 
continue to receive support for that area as described in paragraph 
(e)(6)(ii)(B) or (C) of this section.
    (iii) A mobile competitive eligible telecommunications carrier that 
receives monthly support pursuant to paragraph (e)(6)(ii)(B), (C), or 
(D) of this section for an area, as applicable, for which support is 
not won in the 5G Fund Phase II auction, shall continue to receive 
support for that area as described in paragraph (e)(6)(ii)(B), (C), or 
(D) of this section.
    (iv) A mobile competitive eligible telecommunications carrier that 
receives monthly support pursuant to paragraph (e)(6)(ii)(D) of this 
section for an area for which support is won in the 5G Fund Phase II 
auction and for which the carrier is not the winning bidder shall 
receive the following monthly support amounts for such areas:
    (A) For 12 months starting the first day of the month following 
release of a public notice announcing the close of the 5G Fund Phase II 
auction, the mobile competitive eligible telecommunications carrier 
shall receive monthly support that is two-thirds (\2/3\) of the level 
described in paragraph (e)(6)(ii)(D) of this section for the area.
    (B) For 12 months starting the month following the period described 
in paragraph (e)(7)(iv)(A) of this section, the mobile competitive 
eligible telecommunications carrier shall receive monthly support that 
is one-third (\1/3\) of the level described in paragraph (e)(6)(ii)(D) 
of this section for the area.
    (C) Following the period described in paragraph (e)(7)(iv)(B) of 
this section, the mobile competitive eligible telecommunications 
carrier shall not receive monthly support for the area pursuant to this 
section.
* * * * *

0
3. Amend Sec.  54.322 by:
0
a. Removing ``Sec.  54.307(e)(5)(ii), (e)(5)(iii), (e)(6)(iii), or 
(e)(7)(iii)'' and adding in its place ``Sec.  54.307(e)(5)(ii) through 
(iv), (e)(6)(ii)(D), or (e)(7)(iii)'' wherever it appears in paragraphs 
(a) through (c), (d) introductory text, and (j)(1);
0
b. Revising paragraph (h)(1);
0
c. Revising paragraph (i)(1)(i);
0
d. Redesignating paragraph (i)(1)(vi) as paragraph (i)(1)(viii);
0
e. Redesignating paragraphs (i)(1)(iv) and (v) as paragraphs (i)(1)(v) 
and (vi), respectively;
0
f. Adding new paragraph (i)(1)(iv);
0
g. Revising newly redesignated paragraphs (i)(1)(v) and (vi);
0
h. Adding paragraph (i)(1)(vii);
0
i. Revising paragraphs (k)(2) and (3); and
0
j. Adding paragraph (l).
    The revisions and additions read as follows:


Sec.  54.322   Public interest obligations and performance 
requirements, reporting requirements, and non-compliance mechanisms for 
mobile legacy high-cost support recipients.

    (a) General. A mobile competitive eligible telecommunications 
carrier that receives monthly support pursuant to Sec.  
54.307(e)(5)(ii), (e)(5)(iii), (e)(5)(iv), (e)(6)(ii)(D), or 
(e)(7)(iii) shall deploy voice and broadband data services that meet at 
least the 5G-NR (New Radio) technology standards developed by the 3rd 
Generation Partnership Project 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.
    (b) Service milestones and deadlines. A mobile competitive eligible 
telecommunications carrier that receives monthly support pursuant to 
Sec.  54.307(e)(5)(ii), (e)(5)(iii), (e)(5)(iv), (e)(6)(ii)(D), or 
(e)(7)(iii) shall deploy 5G service that meets the performance 
requirements specified in paragraph (d) of this section to a percentage 
of the service areas for which the carrier receives monthly support and 
on a schedule as specified and adopted by the Office of Economics and 
Analytics and Wireline Competition Bureau after notice and comment.
    (c) Support usage. A mobile competitive eligible telecommunications 
carrier that receives monthly support pursuant to Sec.  
54.307(e)(5)(ii), (e)(5)(iii), (e)(5)(iv), (e)(6)(ii)(D), or 
(e)(7)(iii) shall use an increasing percentage of such support for the 
deployment, maintenance, and operation of mobile networks that provide 
5G service as specified in paragraph (a) of this section and that meet 
the performance requirements specified in paragraph (d) of this section 
as follows:
    (1) Year one support usage. The carrier shall use at least one-
third (\1/3\) of the total monthly support received pursuant to Sec.  
54.307(e)(5)(ii), (e)(5)(iii), (e)(5)(iv), (e)(6)(ii)(D), or 
(e)(7)(iii) in calendar year 2021 as specified in paragraph (c) of this 
section by December 31, 2021.
    (2) Year two support usage. The carrier shall use at least two-
thirds (\2/3\) of the total monthly support received pursuant to Sec.  
54.307(e)(5)(ii), (e)(5)(iii), (e)(5)(iv), (e)(6)(ii)(D), or 
(e)(7)(iii) in calendar year 2022 as specified in paragraph (c) of this 
section by December 31, 2022.
    (3) Year three and subsequent year support usage. The carrier shall 
use all monthly support received pursuant to Sec.  54.307(e)(5)(ii), 
(e)(5)(iii), (e)(5)(iv), (e)(6)(ii)(D), or (e)(7)(iii) as specified in 
paragraph (c) of this section in 2023 and thereafter.
    (4) Year one support usage flexibility. If the carrier is unable to 
meet the support usage requirement in paragraph (c)(1) of this section, 
the carrier shall have the flexibility to instead proportionally 
increase the support usage requirement in paragraph (c)(2) of this 
section such that its combined usage of monthly support received 
pursuant to Sec.  54.307(e)(5)(ii), (e)(5)(iii), (e)(5)(iv), 
(e)(6)(ii)(D), or (e)(7)(iii) in calendar years 2021 and 2022 is equal 
to the total amount of such support that the carrier receives annually, 
provided that the carrier certifies to the Wireline Competition Bureau 
this amount and that it will make up for any shortfall in a filing due 
by March 31, 2021 or 30 days after Paperwork Reduction Act approval, 
whichever is later.
    (d) Performance requirements. A mobile competitive eligible 
telecommunications carrier that receives monthly support pursuant to 
Sec.  54.307(e)(5)(ii), (e)(5)(iii), (e)(5)(iv), (e)(6)(ii)(D), 
(e)(6)(iii), or (e)(7)(iii) shall meet the following minimum baseline 
performance requirements for data speeds, data latency, and data 
allowances in areas that it has deployed 5G service as specified in 
paragraph (a) of this section and for which it receives support for at 
least one plan that it offers:
* * * * *
    (h) Initial report of current service offerings. (1) A mobile 
competitive eligible telecommunications carrier that receives monthly 
support pursuant to Sec.  54.307(e)(5), (e)(6), or (e)(7) shall submit 
an initial report describing its current service offerings in its 
subsidized service areas and how the monthly support it is receiving is 
being used in such areas no later than three months after December 28, 
2020, and Paperwork Reduction Act approval.

[[Page 101398]]

This report shall include the following information:
* * * * *
    (i) * * *
    (1) * * *
    (i) Except for areas for which the carriers receives monthly 
support pursuant to Sec.  54.307(e)(6)(ii) or (e)(7)(iv), updated 
information regarding the carrier's current service offerings in its 
subsidized service areas for the previous calendar year, including the 
highest level of technology deployed, a target date for when 5G 
broadband service meeting the performance requirements specified in 
paragraph (d) of this section will be deployed within the subsidized 
service area, and an estimate of the percentage of area covered by 5G 
deployment meeting the performance requirements specified in paragraph 
(d) of this section within the subsidized service area;
* * * * *
    (iv) Provide the information and certifications required by Sec.  
54.313(a);
    (v) Certification that the carrier has filed relevant deployment 
data (either via FCC Form 477 or the Broadband Data Collection, as 
appropriate) that reflect its current deployment covering its 
subsidized service areas;
    (vi) Certification that the carrier is in compliance with the 
public interest obligations as set forth in this section and all of the 
terms and conditions associated with the continued receipt of monthly 
support;
    (vii) Certification as to whether the carrier used any monthly 
support it receives pursuant to Sec.  54.307(e)(5), (6), or (7) 
pursuant to Sec.  54.207(f), and if so, whether the carrier used such 
support in compliance with Sec.  54.7; and
* * * * *
    (j) Service milestone reports. (1) A mobile competitive eligible 
telecommunications carrier that receives monthly support pursuant to 
Sec.  54.307(e)(5)(ii), (e)(5)(iii), (e)(5)(iv), (e)(6)(ii)(D), or 
(e)(7)(iii) shall submit a report after each of the service milestones 
described in paragraph (b) of this section by the deadlines established 
by the Office of Economics and Analytics and Wireline Competition 
Bureau demonstrating that it has deployed 5G service that meets the 
performance requirements specified in paragraph (d) of this section, 
which shall include information as required by the Office of Economics 
and Analytics and Wireline Competition Bureau in a public notice.
* * * * *
    (k) * * *
    (2) Upon notification by a carrier of its non-compliance pursuant 
to paragraph (k) of this section, or a determination by the 
Administrator or Wireline Competition Bureau of a carrier's non-
compliance with any of the public interest obligations set forth in 
paragraphs (e) through (j) of this section or the performance 
requirements set forth in paragraph (d) of this section, the carrier 
will be deemed to be in default, and for monthly support received 
pursuant to Sec.  54.307(e)(5), (e)(6), or (e)(7), will no longer be 
eligible to receive such support, will receive no further support 
disbursements, will be subject to a recovery of the amount of support 
received since December 28, 2020 that was not used for the deployment, 
maintenance, and operation of mobile networks that provide 5G service 
as specified in paragraph (c) of this section, and may be subject to 
recovery of up to the amount of support received since the December 28, 
2020, other than the amount specified in paragraph (c) of this section, 
that was not used for the deployment, maintenance, and operation of 
mobile networks that provide 5G service as specified in paragraph (a) 
of this section and that meet the performance requirements specified in 
paragraph (d) of this section. The carrier may also be subject to 
further action, including the Commission's existing enforcement 
procedures and penalties, potential revocation of ETC designation, and 
suspension or debarment pursuant to Sec.  54.8.
    (3) A mobile competitive eligible telecommunications carrier that 
voluntarily relinquishes receipt of monthly support pursuant to Sec.  
54.307(e)(5), (e)(6), or (e)(7) will no longer be required to comply 
with the public interest obligations specified in this section.
    (l) Compliance with paragraphs (b), (g), (h), (i), and (j) of this 
section will not be required until after the completion of such review 
by the Office of Management and Budget as the Office of Economics and 
Analytics and Wireline Competition Bureau deem necessary. The 
Commission will publish a document in the Federal Register announcing 
that compliance date and revising or removing this paragraph (l).

0
4. Amend Sec.  54.1011 by revising paragraphs (c), (d), and (e) to read 
as follows:


Sec.  54.1011   5G Fund.

* * * * *
    (c) Areas eligible for 5G Fund Phase I support will be those areas 
identified by the Office of Economics and Analytics and Wireline 
Competition Bureau in a public notice that:
    (1) Show a lack of unsubsidized 5G mobile wireless broadband 
coverage at a download speed of 7 Mbps and an upload speed of 1 Mbps in 
an outdoor stationary environment by at least one provider based on the 
mobile broadband coverage maps created by the Commission pursuant to 
Sec.  1.7008 of this chapter;
    (2) Do not contain urban areas, as defined by the U.S. Census 
Bureau; and
    (3) Contain at least one location or at least some portion of a 
road.
    (d) The Commission will incorporate a service-based weighting 
factor into the 5G Fund auction design that will assign a weight to 
each geographic area eligible in the 5G Fund Phase I auction using the 
weighting values adopted by the Office of Economics and Analytics and 
Wireline Competition Bureau and announced in a public notice.
    (e) The Commission will incorporate an adjustment factor into the 
methodology for disaggregation of high-cost legacy support pursuant to 
Sec.  54.307(e)(5)(iii) and (iv) that will assign a weight to each 
geographic area using the adjustment factor values adopted by the 
Office of Economics and Analytics and Wireline Competition Bureau and 
announced in the Adjustment Factor Values Public Notice, DA 20-1361.

0
5. Amend Sec.  54.1012 by adding paragraph (c) to read as follows:


Sec.  54.1012  Geographic areas eligible for support.

* * * * *
    (c) The geographic areas identified as eligible for support in the 
5G Fund Phase I auction will be converted, to, and made available in, 
the form of hexagons at the resolution 9 level (hex-9s) using the H3 
standardized geospatial indexing system defined in Sec.  1.7001(a)(20) 
of this chapter. All eligible hex-9s will then be grouped into census 
tracts for purposes of bidding in the auction.
    (1) The hex-9s that are eligible for 5G Fund support in the 5G Fund 
Phase I auction will be generated using the following process:
    (i) Overlay resolution 11 hexagons (hex-11s) on the ``raw'' mobile 
coverage polygons submitted in the Broadband Data Collection for 5G 
outdoor stationary coverage at speeds of at least 7/1 Mbps on 
unsubsidized areas, and on urban areas. If the centroid (i.e., the 
geographic center point) of the hex-11, overlaps any of those 
boundaries, then the entire hex-11 is considered covered by that 
boundary and ``served.''
    (ii) Divide the number of served grandchild hex-11s belonging to 
the grandparent hex-9 by the total number

[[Page 101399]]

of grandchild hex-11s belonging to the grandparent hex-9 to determine 
the percentage of the hex-9 that is considered served. The centroid of 
a hex-11 must fall within the boundary of United States or its 
territories to be included in this calculation. For hex-9s with both 
land and water grandchild hex-11s, only the land hex-11s are considered 
in this calculation.
    (iii) If a ``substantial majority'' of the grandchild hex-11s 
belonging to a grandparent hex-9 are served, then the entire hex-9 will 
be considered served. For purposes of this determination, a 
``substantial majority'' is 70% or more.
    (2) After completing the process described in paragraphs (c)(1)(i) 
through (iii) of this section, any hex-9 that is not considered served 
and that also contains at least one location or some portion of a road 
will be eligible for support in the 5G Fund Phase I auction.

0
6. Amend Sec.  54.1014 by redesignating paragraph (a)(6) as paragraph 
(a)(7), adding new paragraph (a)(6), and adding new paragraph (c) to 
read as follows:


Sec.  54.1014   Application process.

    (a) * * *
    (6) Certify, under penalty of perjury, that it has read the public 
notice adopting procedures for the 5G Fund Phase I auction, and that it 
has familiarized itself with those procedures and any requirements, 
terms, and conditions associated with receipt of 5G Fund support; and
* * * * *
    (c) Compliance with paragraphs (a) and (b)(2) of this section will 
not be required until after the completion of such review by the Office 
of Management and Budget as the Office of Economics and Analytics and 
Wireline Competition Bureau deem necessary. The Commission will publish 
a document in the Federal Register announcing that compliance date and 
revising or removing this paragraph (c).

0
7. Amend Sec.  54.1015 by revising paragraph (c)(1) to read as follows:


Sec.  54.1015  Public interest obligations and performance requirements 
for 5G Fund support recipients.

* * * * *
    (c) * * *
    (1) 35 Mbps download and 3 Mbps upload in an in-vehicle 
environment, with at least 90 percent of measurements recording these 
data transmission speeds; and
* * * * *

0
8. Amend Sec.  54.1018 by:
0
a. Revising paragraph (a);
0
b. Redesignating paragraphs (b), (c), (d), (e), and (f) as paragraphs 
(c), (d), (e), (f), and (g), respectively;
0
c. Adding new paragraph (b); and
0
d. Adding new paragraph (h).
    The revisions and additions read as follows:


Sec.  54.1018   Annual reports.

    (a) A 5G Fund support recipient authorized to receive 5G Fund 
support shall submit an annual report to the Administrator no later 
than July 1 of each year after the year in which it was authorized to 
receive support. Each support recipient shall certify in its annual 
report that it:
    (1) Is in compliance with the public interest obligations, 
performance requirements, and all of the terms and conditions 
associated with the receipt of 5G Fund support in order to continue 
receiving 5G Fund support disbursements; and
    (2) Has maintained its cybersecurity and supply chain risk 
management plans pursuant to Sec.  54.1022.
    (b) Each 5G Fund support recipient authorized to receive 5G Fund 
support shall report in its annual report whether it filed any 
substantive modifications pursuant to Sec.  54.1022(f) in the prior 
year, and shall report the date it filed any such substantive 
modifications.
* * * * *
    (h) Compliance with paragraphs (a) through (d) and (f) of this 
section will not be required until after the completion of such review 
by the Office of Management and Budget as the Office of Economics and 
Analytics and Wireline Competition Bureau deem necessary. The 
Commission will publish a document in the Federal Register announcing 
that compliance date and revising or removing this paragraph (h).

0
9. Amend Sec.  54.1019 by:
0
a. Revising paragraphs (a)(1) and (2);
0
b. Removing paragraph (a)(3);
0
c. Redesignating paragraph (a)(4) as paragraph (a)(3);
0
d. Revising newly redesignated paragraph (a)(3);
0
e. Revising paragraphs (b), (c), and (d); and
0
f. Adding paragraph (e).
    The revisions and additions read as follows:


Sec.  54.1019   Interim service and final service milestone reports.

    (a) * * *
    (1) Certifications to representative data submitted in the 
Broadband Data Collection demonstrating mobile transmissions to and 
from the network that establish compliance with the 5G Fund coverage, 
speed, and latency requirements;
    (2) On-the-ground test data or infrastructure data to substantiate 
5G broadband coverage data;
    (i) On-the-ground test data must:
    (A) Be collected within each selected hexagon in a sample of 
hexagons at the resolution 9 level selected by Commission staff;
    (B) Be conducted pursuant to the testing parameters and metrics for 
valid on-the-ground tests described in Sec.  1.7006(c)(1)(i) and (ii) 
of this chapter;
    (C) Show that at least 90% of the support recipient's speed test 
measurements demonstrate that it has deployed service meeting the 5G 
Fund performance requirements specified in Sec.  54.1015(c) in the 
area(s) for which the support recipient is authorized to receive 5G 
Fund support;
    (D) Include at least two tests within each of the selected hexagons 
where the time of the tests are at least four hours apart, irrespective 
of date, unless the support recipient has, and submits with its speed 
tests, actual cell loading data for the cell(s) covering the sampled 
hexagon showing that the median loading, measured in 15-minute 
intervals, did not exceed the modeled loading factor for the one-week 
period prior to the submission, in which case the support recipient 
must submit two speed tests for each hexagon and the two tests need not 
be recorded four hours apart;
    (E) Be conducted in an in-vehicle mobile environment with the 
antenna located inside the vehicle.
    (ii) Infrastructure data must include the information described in 
Sec.  1.7006(c)(2)(i) of this chapter for all cell sites and antennas 
within the area(s) for which the support recipient is authorized to 
receive 5G Fund support;
    (3) Additional information as required by Commission staff.
    (b) All data submitted and certified to in compliance with a 
recipient's public interest obligations in the milestone report must be 
certified by an engineer with the same qualifications as required for 
submitting the Broadband Data Collection biannual filings described in 
Sec.  1.7004 of this chapter.
    (c) Each service milestone report must be submitted via the 
Commission's Broadband Data Collection portal.
    (d) All data submitted in and certified to in any service milestone 
report shall be subject to verification by the Administrator and 
Commission staff for compliance with the 5G Fund performance 
requirements specified in Sec.  54.1015(c).
    (e) Compliance with paragraphs (a)(1) through (3) and (b) of this 
section will not be required until after the completion of such review 
by the Office of Management and Budget as the Office of Economics and 
Analytics and

[[Page 101400]]

Wireline Competition Bureau deem necessary. The Commission will publish 
a document in the Federal Register announcing that compliance date and 
revising or removing this paragraph (e).

0
10. Add Sec.  54.1022 to read as follows:


Sec.  54.1022   Cybersecurity and supply chain risk requirements.

    (a) A 5G Fund support recipient must implement operational 
cybersecurity and supply chain risk management plans meeting the 
requirements of this section as a condition of receiving 5G Fund 
support.
    (b) A 5G Fund support recipient must certify that it has 
implemented plans required under paragraph (a) of this section and 
submit the plans to the Administrator by the date announced by the 
Office of Economics and Analytics and the Wireline Competition Bureau 
in a public notice or within 30 days after approval under the Paperwork 
Reduction Act, whichever is later.
    (c) A 5G Fund support recipient that fails to comply with any 5G 
Fund cybersecurity or supply chain risk management requirement is 
subject to the following non-compliance measures:
    (1) The Wireline Competition Bureau shall direct the Administrator 
to withhold 25 percent of the 5G Fund support recipient's monthly 
support for failure to comply with paragraph (b) of this section until 
the support recipient makes the required certification and submits the 
required plans.
    (2) At any time during the support term, if a 5G Fund support 
recipient does not have in place operational cybersecurity and supply 
chain risk management plans meeting the requirements of this section, 
the Wireline Competition Bureau shall direct the Administrator to 
withhold 25 percent of the support recipient's monthly support.
    (3) Once the 5G Fund support recipient comes into compliance, the 
Administrator shall stop withholding support, and the support recipient 
will receive all of the support that had been withheld pursuant to this 
section.
    (d) A 5G Fund support recipient's cybersecurity risk management 
plan must reflect at least the National Institute of Standards and 
Technology (NIST) Framework for Improving Critical Infrastructure 
Cybersecurity v.1.1 (2018) (NIST Framework) or any successor version of 
the NIST Framework, and must reflect established cybersecurity best 
practices that address each of the Core Functions described in the NIST 
Framework, such as the standards and controls set forth in the 
Cybersecurity & Infrastructure Security Agency (CISA) Cybersecurity 
Cross-sector Performance Goals and Objectives or the Center for 
internet Security Critical Security Controls.
    (e) A 5G Fund support recipient's supply chain risk management plan 
must incorporate the key practices discussed in NISTIR 8276, Key 
Practices in Cyber Supply Chain Risk Management: Observations from 
Industry, and related supply chain risk management guidance from NIST 
800-161.
    (f) If a 5G Fund support recipient makes a substantive modification 
to a plan under this section, the carrier must file an updated plan 
with the Administrator within 30 days of making the modification. A 
modification to a plan under this section is substantive if at least 
one of the following conditions apply:
    (1) There is a change in the plan's scope, including any addition, 
removal, or significant alternation to the types of risks covered by 
the plan (e.g., expanding a plan to cover new areas, such as supply 
chain risks to Internet of Things devices or cloud security, could be a 
substantive change);
    (2) There is a change in the plan's risk mitigation strategies 
(e.g., implementing a new encryption protocol or deploying a different 
firewall architecture);
    (3) There is a shift in organizational structure (e.g., creating a 
new information technology department or hiring a Chief Information 
Security Officer);
    (4) There is a shift in the threat landscape prompting the 
organization to recognize that emergence of new threats or 
vulnerabilities that were not previously accounted for in the plan;
    (5) Updates are made to comply with new cybersecurity regulations, 
standards, or laws;
    (6) Significant changes are made in the supply chain, including 
offboarding major suppliers or vendors, or shifts in procurement 
strategies that may impact the security of the supply chain; or
    (7) A large-scale technological change is made, including the 
adoption of new systems or technologies, migrating to a new information 
technology infrastructure, or significantly changing the information 
technology architecture.
    (g) Compliance with paragraphs (b) and (f) of this section will not 
be required until after the completion of such review by the Office of 
Management and Budget as the Office of Economics and Analytics and 
Wireline Competition Bureau deem necessary. The Commission will publish 
a document in the Federal Register announcing that compliance date and 
revising or removing this paragraph (g).

[FR Doc. 2024-23404 Filed 12-12-24; 8:45 am]
BILLING CODE 6712-01-P