The Federal Communications Commission (FCC) took its single biggest step to date to close the digital divide by establishing the new Rural Digital Opportunity Fund to efficiently fund the deployment of high-speed broadband networks in rural America through action approved on Jan. 30. Through a two-phase reverse auction mechanism, FCC will direct up to $20.4 billion over 10 years to finance up to gigabit-speed broadband networks in unserved rural areas, connecting millions more American homes and businesses to digital opportunity.

Without access to broadband, rural Americans cannot participate in the digital economy or take advantage of the opportunities broadband brings for better education, health care and civic and social engagement. In recent years, the commission said it has made tremendous strides toward increasing the availability of broadband in rural America, but more work remains to be done, and the Rural Digital Opportunity Fund is a key part of FCC’s continuing efforts.

FCC said the first phase of the Rural Digital Opportunity Fund will begin later this year and will target census blocks that are wholly unserved with fixed broadband at speeds of at least 25/3 Mbps. This phase would make available up to $16 billion to census blocks where existing data show that no such service is available whatsoever. Funds will be allocated through a multi-round reverse auction like that used in the 2018 Connect America Fund (CAF) Phase II auction. The staff’s preliminary estimate is that about 6 million rural homes and businesses are located in areas initially eligible for bidding in the Phase I auction.

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The Rural Digital Opportunity Fund auction will prioritize networks with higher speeds, greater usage allowances and lower latency. To support the deployment of sustainable networks in this auction, the auction will prioritize bidders committing to provide fast service with low latency. FCC anticipates that this will encourage the deployment of networks that will meet with needs of tomorrow as well as today. Bidders must also commit to provide a minimum speed that's more than double what was required in the CAF Phase II auction.

Phase II of the program will make available at least $4.4 billion to target partially served areas -- census blocks where some locations lack access to 25/3 Mbps broadband -- using the granular, precise, broadband mapping data being developed in FCC’s Digital Opportunity Data Collection, along with census blocks that were not awarded in the Phase I auction.

Related:Rural America still lacks adequate broadband access

The Connect America Fund has successfully distributed resources to help bridge the digital divide, and that success will be carried forward in the new Rural Digital Opportunity Fund, FCC added. Both programs, supported by the Universal Service Fund, are part of the commission’s ongoing commitment to provide rural America with the same opportunities available in urban areas.