FCC launches new mobile broadband subsidy

The agency's Mobility Fund will give up to $300 million to carriers to provide service to new areas in the US

The U.S. Federal Communications Commission has begun the process to get competitive bids for new mobile broadband subsidies designed to bring 3G or 4G service to areas in the country that do not have it.

The FCC on Wednesday announced bidding procedures for the first phase of its new Mobility Fund and released a map of areas eligible for Mobility Fund service. The map includes large areas if the U.S. Mountain West, including large parts of Idaho, Nevada and Washington state, as well as large parts of Alaska. But several areas in the eastern U.S. are also eligible, including large chunks of West Virginia, northern New York and Maine.

The Mobility Fund, created in 2011 as part if the FCC's revamp of telephone subsidies under the Universal Service Fund, will award up to US$300 million to mobile providers that bring service to new areas. Winning bidders must deploy either 3G service within two years or 4G service within three years of the award.

With the launch of the Mobility Fund, the FCC has recognized mobile service as a universal service priority for the first time, said FCC Chairman Julius Genachowski.

"For too many, dead zones in mobile coverage are too common, and today's action will help close those gaps," Genachowski said in a statement,. "By using market-based mechanisms, we'll ensure more gaps in mobile coverage are closed, and that every dollar is spent wisely and efficiently."

The FCC will award the funds in a reverse auction, in which mobile providers will compete to be the lowest-priced provider to bring service to an area. Bidders will compete both with others that may be seeking support in the same area, but also with carriers bidding for support in other areas.

The FCC on Wednesday released a public notice detailing the procedures for Phase I of the Mobility Fund. The window for filing short-form applications opens on June 27 and closes on July 11. The auction will be a single-round, sealed-bid auction, and the FCC will require that the winning bidders provide coverage to at least 75 percent of the road miles in each census tract for which they win support.

In addition to the Phase I funding, the FCC will also offer an additional $50 million in one-time support to tribal lands and $500 million each year for ongoing support of mobile services.

Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's e-mail address is grant_gross@idg.com.

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