FCC reallocates $4.5 Billion rural mobility fund

Nevada OutbackThere are still quite a few areas of the US without any cellular service, even if you ignore Alaska. The FCC has announced a major shift in how $4.5 Billion will be allocated over the next 10 years to address the issue. How will this be used and what are the new rules?

 

 

This article is based on FCC Mobility Fund II order, including the Challenge Process, also known as Connect America Fund and Universal Service Reform – Mobility Fund.

Shifting funds to other areas

The first notable change is that the majority areas of currently subsidised through the CETC scheme will have that funding completely withdrawn over the next three years. This is not new money, just shifting resources from existing areas with coverage available today from a competing non-subsidised provider to other areas with no service at all.

The funding shortfall may come as a shock to those who had invested in equipment expecting a longer timescale to repay the capital, and it may not necessarily guarantee healthy competition can continue in these existing areas in future. A transition period of three years gives some respite.

The result is that substantial funding of some $300 million a year will be shifted to deserving areas that currently have little or no service.

Determining the areas of greatest need

The FCC has a standard report (Form 477) whereby network operators state the level of service provided for each of the census districts they serve. The full dataset of spreadsheets are downloadable from their website.

Anywhere without the minimum 5 Mbps downlink will qualify. Specifically, that means download speeds of 5 Mbps at the cell edge with 70 percent probability during a 30 percent cell loading factor. This equates to coverage of around 87% of the overall cell area.

After much debate, it was decided that the Form 477 data isn’t good enough to use and a fresh one-off survey will be conducted. It's not so much the data is wrong, but the format it has been required to be submitted in overstates existing service. This map, published by the state of Utah last month, demonstrates how many population areas (in darker blue) are assessed to be covered despite the lighter blue areas being the only ones that actually have it.

There will be an opportunity to challenge the FCC survey findings by drive testing and submitting actual measurements, so that additional areas can be reclassified as deserving of the subsidy. A fairly detailed challenge process with clear criteria and timescales has been published.

Choosing 5Mbps wasn’t without debate

The FCC decided to stick to this figure but did note that some providers wanted to set the bar higher, say at 10Mbps, claiming that comparable service with urban areas is the goal. 12Mbps is a typical figure in cities but as of 2016, 45% within urban areas won’t even get 10Mbps.

Note that this figure relates to speeds available outdoors and not inbuilding. This tells me to expect plenty of sales of repeaters and/or Femtocells in these areas. Rooftop antenna should help maximise performance and data rates achieved.

The focus is entirely on 4G, with no money set aside for GSM or CDMA (or 5G) services.

A choice of speed rather than signal strength

Some other regulators around the world determine cellular coverage based on signal strength rather than data rate. For example, when the UK regulator revised the minimum LTE signal strength required to a lower figure, nationwide area coverage rose considerably.

Sharing resources, both wireless and backhaul between many people will affect the actual data rates received during different times of day.

Rural Carriers express dismay

Morning Consult reports that Rural Carriers are unhappy with the revised 5Mbps level of service, claiming it is inadequate for advanced services such as video streaming. While I’d argue that 3Mbps is perhaps enough for a basic video streaming service, resilience and stability are also important. Many rural cellsites run at a relatively low utilisation which is why it can be comparatively expensive to cover these areas.

The cost of providing service will vary enormously due to geography, topology and availability of existing infrastructure such as backhaul and power. Filling in pockets of habitation using low power small cells would be a big improvement for those involved, but high power/longer range/low capacity cells are probably going to be needed to qualify for the coverage area criteria.

Opportunities for new equipment vendors

The rural operators most likely to take up this subsidy will include many smaller players who are budget conscious. They may also be more nimble and accommodating to accept and use products from smaller and/or startup suppliers.

This may open up a new route to market acceptance for small cell vendors, although the high RF power required will limit these to a relatively small number. Such equipment no longer requires support for very large numbers of users per sector. If 5Mbps is to be offered to many users within a given cell sector, then physics naturally limits the number of concurrent active users.

Small cell products with capacity of 64 or 128 active users should be more than adequate for this application. Pricing, cost and simplicity of configuration will rule the day.

It remains to be seen whether other regulators adopt some or all of the aspects of this scheme. I could see a growing focus on LTE globally for this type of service, maximising the value of a single standard across both network and end user equipment.

The good news is that in the medium term, there should be fewer locations with no coverage and so any LTE phone should be able to call for help in an emergency.

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