Working Toward the 5G Fund for Rural America: Option A Eligibility Analysis Rural Broadband Auctions Task Force & Office of Economics and Analytics Federal Communications Commission – Working Toward the 5G Fund for Rural America Working Toward the 5G Fund for Rural America: Option A Eligibility Analysis Introduction Since late 2018, major U.S. mobile wireless carriers have lit up 5G networks covering more than 200 million Americans in aggregate. And as a condition of its recently completed transaction with Sprint, T-Mobile made binding commitments to deploy 5G service covering 99% of the population nationwide within six years, and 90% of the population in rural areas within the same time period. The Commission remains concerned, however, that even with these significant deployment commitments, some rural areas will remain where there is insufficient financial incentive for mobile wireless carriers to invest in 5G-capable networks, and those communities could be excluded from the technological and economic benefits of 5G for years to come. As the next step in its efforts to close the digital divide and reform legacy high-cost support, the Chairman released a draft Notice of Proposed Rulemaking (NPRM) that would establish the 5G Fund for Rural America, making up to $9 billion in Universal Service Fund support available to carriers to deploy voice and advanced 5G mobile broadband services through multi-round reverse auctions in two phases. Phase I of the 5G Fund would target at least $8 billion in support to rural areas of our country that would be unlikely to see timely deployment of 5G broadband service absent high-cost support or as part of T-Mobile’s transaction-related commitments. The NPRM sought comment on an “Option A” proposal that would establish the areas eligible for support in Phase I of the 5G Fund based upon existing data sources that identify rural areas. To assist the public in understanding what areas would be eligible for support, staff has considered the degree of rurality of any given area using U.S. Department of Agriculture (USDA) Rural-Urban Commuting Area (RUCA) codes that employ U.S. Census Bureau and American Community Survey data to categorize census tracts based on population density, urbanization, and daily commuting patterns. In particular, the areas eligible for 5G Fund Phase I support would be any census tract that is part of RUCA codes 5-10, excluding from such tracts any census block categorized as “urban” or that is water-only. The top states in terms of land area percentage that would be eligible for 5G Fund Phase I support under this definition would be: 1) Nebraska (92%) 2) North Dakota (91%) 3) South Dakota (90%) 4) Montana (89%) 5) Wyoming (86%) 6) Vermont (85%) 7) Kansas (85%) 8) Maine (83%) 9) Colorado (81%) 10) Idaho (81%) The top states in terms of population percentage that would be eligible for 5G Fund Phase I support under this definition would be: 1) Vermont (47%) 2) Maine (34%) 3) Montana (33%) 4) North Dakota (33%) 5) South Dakota (32%) 6) Mississippi (31%) 7) Kentucky (27%) 8) Wyoming (26%) 9) New Hampshire (24%) 10) Iowa (23%) Consistent with the proposals in the draft 5G Fund NPRM, staff notes that the areas potentially eligible for Phase I support under Option A represent an upper bound on eligibility, and the actual areas that would be eligible in the Phase I auction may be significantly reduced due to T-Mobile’s binding 5G commitments. Because T-Mobile’s 5G commitments are based upon population covered and are not geographically-based, staff is unable to generate maps that take into account those areas that may be ultimately removed from eligibility due to commitments by T-Mobile to deploy 5G service in those areas. An online version of the maps in this analysis can be viewed on the Commission’s website at: https://www.fcc.gov/reports-research/maps/5g-fund-option-a-eligibility-analysis/. Data Sources The staff analysis and the maps contained herein rely upon U.S. Census Bureau population and geographic data, as well as the Rural-Urban Commuting Area codes released by the U.S. Department of Agriculture’s Economic Research Service. Summary of Eligibility Alabama 693,910 15% 57,105 131,174 44% Arizona 280,165 4% 189,321 294,200 64% Arkansas 660,073 23% 90,752 134,768 67% California 633,686 2% 256,714 403,503 64% Colorado 337,932 7% 217,295 268,422 81% Connecticut 29,042 1% 1,209 12,542 10% Delaware 37,198 4% 912 5,045 18% Florida 276,862 1% 29,588 138,949 21% Georgia 739,811 8% 60,303 149,482 40% Hawaii 69,989 5% 11,642 16,633 70% Idaho 246,478 16% 173,269 214,050 81% Illinois 653,874 5% 75,346 143,780 52% Indiana 671,096 10% 39,312 92,788 42% Iowa 693,305 23% 108,381 144,661 75% Kansas 428,644 15% 180,342 211,755 85% Kentucky 1,168,237 27% 69,742 102,279 68% Louisiana 365,703 8% 42,474 111,897 38% Maine 447,106 34% 65,942 79,887 83% Maryland 94,838 2% 4,984 25,151 20% Massachusetts 46,591 1% 2,375 20,205 12% Michigan 1,096,506 11% 99,303 146,600 68% Minnesota 831,131 16% 162,894 206,228 79% Mississippi 918,532 31% 84,360 121,533 69% Missouri 907,693 15% 117,679 178,050 66% Montana 324,685 33% 337,353 376,965 89% Nebraska 355,060 19% 182,099 198,956 92% Nevada 60,414 2% 184,563 284,329 65% New Hampshire 310,252 24% 17,249 23,189 74% New Jersey 11,566 0% 825 19,047 4% New Mexico 214,282 10% 228,011 314,194 73% New York 910,102 5% 60,748 122,049 50% North Carolina 1,187,971 12% 56,868 125,923 45% North Dakota 218,929 33% 163,461 178,705 91% Ohio 1,117,443 10% 54,194 105,828 51% Oklahoma 710,933 19% 139,363 177,662 78% Oregon 292,374 8% 189,450 248,607 76% Pennsylvania 717,228 6% 43,551 115,884 38% Rhode Island 1,051 0% 23 2,677 1% South Carolina 424,520 9% 26,082 77,864 33% South Dakota 263,300 32% 176,920 196,346 90% Tennessee 933,481 15% 57,094 106,802 53% Texas 1,248,594 5% 415,886 676,653 61% Utah 119,140 4% 162,222 212,885 76% Vermont 293,897 47% 20,352 23,874 85% Virginia 673,143 8% 38,581 102,257 38% Washington 354,556 5% 108,838 172,112 63% West Virginia 311,207 17% 27,823 62,266 45% Wisconsin 902,539 16% 96,197 140,290 69% Wyoming 145,718 26% 215,112 251,457 86% American Samoa 55,519 100% 197 197 100% N. Mariana Islands 58,883 100% 471 471 100% Guam 159,444 100% 531 531 100% Total 24,704,633 8% 5,145,308 7,671,602 67% Alabama Arizona Arkansas California Colorado Connecticut Delaware Florida Georgia Hawaii Idaho Illinois Indiana Iowa Kansas Kentucky Louisiana Maine Maryland Massachusetts Michigan Minnesota Mississippi Missouri Montana Nebraska Nevada New Hampshire New Jersey New Mexico New York North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Rhode Island South Carolina South Dakota Tennessee Texas Utah Vermont Virginia Washington West Virginia Wisconsin Wyoming American Samoa Northern Mariana Islands Guam