Last summer, I embarked on a weekend tour of upstate New York with a law school classmate to visit his childhood home. We met at Syracuse airport and drove north, reaching Gouverneur, where his home is located, about 30 miles from the St. Lawrence River. The area surrounding the town, which has a population of about 4,000, is an agricultural community, with some downsized mining operations. It is also crisscrossed by well-maintained four-lane state highways. The further we drove north from Syracuse, the more frequently our iPhones entered the “SOS” mode (the GlobalStar satellite-delivered emergency texting service for iPhones), which continued throughout our drive into the picturesque upstate New York. This problem became even more noticeable the next day, when we drove through Adirondack National Park where a major Army Ranger school is located. Because we had no service, we could not use Google Maps or text, or even call. Except for Gouverneur, mobile service was inconsistent and, for many miles, virtually non-existent, despite the fact that my friend and I used two different mobile carriers.
Disconnected on Rural Highways. The lack of coverage was disconcerting, considering the terrain of the Adirondacks. It made me think about lack emergency communications and mobile connectivity that we are accustomed to in Boston. The absence of mobile connectivity in rural America is unacceptable. Limited rural service keeps farmers, mine workers, rural residents, commercial truck drivers transporting goods through America, and tourists like us from being able to call for help, use a map, and or staying in touch. The lack of cell service in rural America should be addressed now. Congress has the opportunity to solve the problem. Funding for the problem requires rethinking about amount of funding required, which agency of the government should best deliver the funds for rural America, and how the funding should be effectively and efficiently invested so the mobile industry can finally turn its attention to building a ubiquitous rural network.
Rural Cell Phone Service Facing Headwinds. While major mobile carriers cover portions of rural America, most of the rural areas are served by around 40 rural mobile carriers. These rural carriers built and own cellular digital infrastructure such as towers, fiber, and macrocells. They deliver primarily 4G LTE mobile broadband service.1 The smaller rural carriers are under intense pressure from their long-time loyal users to upgrade to 5G as the customers see the persistent national advertisements touting 5G. Customer revenues generally do not cover the costs to serve rural areas. In rural areas, there are few users per tower and thus mobile carriers, large and small, require external funds either from roaming revenues or from federal Universal Service Fund (USF) subsidies. The FCC USF High Cost Program, currently being contested at the Supreme Court, provides an estimated $500 million annually from its total $4 billion dollars to support rural mobile service. Adding to the financial pressure are the major carriers slowly edging into rural markets eroding the rural operators’ customer numbers and roaming revenue.2
Farmers Suffer from Poor Rural Mobile Coverage. Limited cell phone service in rural America significantly impacts the $3.7 trillion agricultural industry. The U.S. farming industry desperately requires cell coverage to connect new autonomous farming equipment. John Deere's goal is full farm equipment autonomy by 2030. The farm equipment company’s partnership with Starlink3 highlights the lack of cell service.4 The FCC's "Precision Ag Connectivity Task Force" acknowledges this need for rural cellular service for high-tech farm equipment.5 Addressing the lack of mobile coverage issue is crucial for maintaining the USA’s competitiveness in agriculture.
USDA Farm and Rural Focus: Good Stewards of Subsidies. The US Department of Agriculture (“USDA”) plays a significant role in supporting farmers and rural areas. In 2024, USDA provided farmers with $35 billion of direct subsidies. The USDA 2024 SNAP program provided funding of $115 billion, which is spent at grocery stores and farmers mar kets, and in turn is delivered to farmers. However, funding is not being allocated for needed 5G mobile service to help the farmer keep pace. Rural 5G coverage also could benefit other industries like mining, timber, and oil and gas.
Federal Funding Needed to Solve the Problem: $55 Billion. CostQuest Associates estimated that delivering 5G service to rural American could cost up around $55 billion.6 This cost estimate includes towers, fiber connections, and macrocells but not spectrum. CostQuestirm’s 2021 detailed cost study showed that delivering mobile service to underserved rural areas requires 55,777 new cell towers with an estimated cost of $53.14 billion. The CostQuest study estimated the average all-in cost per tower would be $895,642.
The FCC Steps in to Solve the Problem. In 2011, the FCC started working to find a way to use the USF funding to support better mobile broadband in the rural areas. The FCC established a new two-phased Mobility Fund.7 In Mobility Fund Phase I, the FCC awarded $350 million for one-time support for capex only for 3G and 4G networks through a reverse bidding auction. The results of this process proved to be a race to the bottom where many carriers deployed cheap Chinese government subsidized equipment manufactured by Huawei and ZTE that eventually had to be ripped and replaced for billions of dollars. FCC staff used the FCC’s broadband connection data from the annually mandated FCC Form 477, to better determine which rural areas were being served with broadband mobile service and which were not.8 In 2017, the FCC initiated Mobility Fund Phase II for additional 4G build out. Rather than using Form 477 data, the FCC required carriers to submit coverage maps to determine unserved areas.9 In 2019, the FCC determined through its own drive testing that the coverage maps of T-Mobile, Verizon and US Cellular severely overstated mobile coverage in rural areas and scrapped the plan.
A Second Try: FCC’s 2020 $9 Billion 5G Fund Order. In 2020, the FCC tried again and retooled the Mobility Fund Phase II to use the funds for 5G. In adopting the 5G Fund for Rural America (“5G Rural Fund”),10 the FCC proposed using a reverse auction to deliver $9 billion in subsidies to winning mobile carriers for building 5G service to unsubsidized rural areas lacking 4G coverage at speeds of 5/1 Mbps.
The bidders could win a rural market by submitting the lowest bid for an unserved or underserved market that was not served by an unsubsidized carrier with 5/1 Mbps of coverage. An unsubsidized area is defined as an area where the carrier(s) serving it do not receive USF support. These areas, however, were selected without consideration for roads or homes covered.
In addition, the FCC did not conduct a cost study to determine the funds actually needed to solve the problem. The FCC planned to launch the auction by 2022. However, because of the deficient mapping issues (again due to overstated coverage and the development of a more accurate mapping tool) and the resulting passage of time, the FCC revised the 5G Rural Fund again.
Third Attempt: 2024 FCC’s 5G Fund Revised. On August 14, 2024, the FCC issued its current 5G Rural Fund order.11 The revised order sought to include unserved and underserved areas lacking 7/1 Mbps in areas where an unsubsidized carrier does not serve with speeds of 7/1 Mbps. The 2024 5G Rural Fund order required “some portion of a road” and homes to be included in the designated areas. The order also included the option for the winner to receive credits for deploying an open radio access network (“Open RAN”), rather than proprietary RAN to prevent vendor lock and to promote innovation and competition among vendors.
Criticism: Revised $9 Billion 5G Rural Fund. FCC Chairman (then Commissioner) Carr dissented from the 5G Rural Fund order. His primary objection related to the potential cost savings fiber deployment to towers that could occur if the $42.3 billion in BEAD funding were used instead of the 5G Rural Fund. Until BEAD was settled, he pointedly argued, the $9 billion spent on fiber that could serve towers may be wasted.12 Comments filed in response to the 2024 5G Rural Fund order criticized the mapping data pointing again pointing out overstated coverage on the map to be relied on to determine unserved areas.
Criticism centered on the data used for the map noting that the challenge data was derived from just the few mobile users in rural areas who had bothered to download the FCC app and thus was statistically flawed.14 Two associations advocating for rural mobile providers pointed out that the actual costs for 5G deployment across rural America well exceeded the $9 billion budget, pointing to CostQuest’s $53-$55 billion estimate.15
A Second Option: USDA Funding of $55 Billion. The USDA provides funding, primarily through low-cost loans and grants, for digital infrastructure for farm and rural areas through the Rural Utilities Service (RUS) Reconnect Program16 or the Federal Agricultural Mortgage Corporation (Farmer Mac). Farmer Mac has delivered $29.5 billion in loans for rural areas. In 2024, Farmer Mac distributed $800 million in low-cost loans for digital infrastructure.17
Congress could solve the problem by directing the needed $55 billion (or 0.8% of the total $7 trillion 2025 federal budget) to the USDA for delivering mobile service to farmers and rural America. Both RUS and Farmer Mac are well positioned with years of experience for distributing loans and funding to eliminate America’s rural mobile service gap. The $55 billion could be repaid to the U.S. Treasury from FCC spectrum auction proceeds or allocated from the annual USDA budget which is targeted at supporting farmers and rural communities.
The USDA could direct a major portion of the needed $55 billion, through a combination of competitive grants in two stages, in the first stage, experienced tower owners would apply for the funding through the normal RFP process, on a rural market area basis. Tower construction would include both capital costs for towers, fiber, and neutral-host Open-RAN macrocells. Neutral-host Open-RAN would allow multiple competing mobile carriers to use the same Open-RAN radios and antenna equipment on the towers.18
As second stage of the portion of the funding would be for annual operating expenses limited first to rural mobile carriers with less than 500,000 total subscribers who have been loyally serving the rural areas for decades. The USDA annual operating grants would be allowed for use only in the designated grant market areas. The funds would be for expenses for operating the neutral host networks including, Open RAN, fiber costs, and power operated by the rural carriers for itself. All carriers would have access to the neutrally hosted network and not just a single winner of an area.
Conclusion. Congress can immediately provide a solution by allocating the $55 billion of funding through either a USDA farm program or a better funded FCC directed 5G rural mobile program. The solution will benefit America’s agricultural, mining, utility, oil and gas, and timber industries. In addition, every driver on the 4.2 million miles of US roads will benefit from the safety and convenience of continuous mobile connectivity while they tour the country for moving, business, or taking in our beautiful national parks. It is time to move forward. We do not want to have this problem be the same in 2030.
1“There are also dozens of other facilities-based mobile wireless service providers throughout the United States, many of which provide service in a single, often rural, geographic area.” FCC, 2022 Communications Marketplace Report, GN Docket No. 22-203 (2022), para. 6.5
2See, Mike Dano, “It's a hard-knock life for most small US wireless carriers,” Light Reading (July 3, 2023) https://www.lightreading.com/broadband/it-s-a-hard-knock-life-for-most-small-us-wireless-carriers; Roaming fees are paid when a customer from one carrier uses the service of another carrier – such as the small rural carrier.
3Rachel Jewett, “John Deere Details Early Access Program for Starlink Solution,” Via Satellite Today (Aug. 30, 2024) https://www.satellitetoday.com/connectivity/2024/08/30/john-deere-details-early-access-program-for-starlink-solution/
4Martha DeGrasse, “John Deere taps Starlink to connect autonomous tractors”, Fierce Network (Jan 17, 2024) https://www.fierce-network.com/tech/john-deere-taps-starlink-connect-autonomous-tractors
5Report of the “Task Force for Reviewing the Connectivity and Technology Needs of Precision” (2023) https://www.fcc.gov/sites/default/files/2024-Report-PrecisionAg-Task-Force-without-Signatures.pdf; See also, Jordan Arnold, “The Future of American Farming” Benton Institute(2021) https://www.benton.org/sites/default/files/FutureAmericanFarming.pdf
6“Ubiquitous Mobile Connectivity: A Plan for Nationwide 5G”, CCA (2021)
7Connect America Fund; Universal Service Reform – Mobility Fund, Report and Order and Further Notice of
Proposed Rulemaking, 32 FCC Rcd 2152, 2154, para. 5 (2017)
8 FCC, Wireless Telecommunications Bureau, Working Toward Mobility Fund II(2016), https://apps.fcc.gov/edocs_public/attachmatch/DOC-341539A1.pdf
9This same mapping challenge process was used for BEAD
10Establishing a 5G Fund for Rural America, GN Docket No. 20-32, Notice of Proposed Rulemaking and Order, FCC 20-52 (2020).
115G Fund for Rural America, Second Report and Order, FCC 24-89, 89 Fed. Reg. 101358 (2024)
12Brendan Carr Dissenting Statement, 5G Fund, Second Report and Order GN Docket No. 20-32 (2024)
13“Establishing a 5G Fund for Rural America, Fed. Reg. https://www.federalregister.gov/documents/2024/12/13/2024-23404/establishing-a-5g-fund-for-rural-america
14The FCC mapping project challenge process relied on a FCC-provided mobile app to be downloaded by mobile users resulting in a limited number of mobile mapping challenges. Only 175 challenge mobile availability corrections challenges were made compared 2.7 million challenges for the fixed broadband map. 152020 5G Fund Order, Statement of Commissioner Jessica Rosenworcel, 35 FCC Rcd. at 12324.
16 USDA's RUS provides grant and loan financing for digital infrastructure in rural communities https://www.usda.gov/sustainability/infrastructure/broadband/reconnect-loan-and-grant-program and https://www.rd.usda.gov/about-rd/agencies/rural-utilities-service
17 In 2024, Farmer Mac achieved a business volume of $29.5 billion at year-end. Farmer Mac is the “nation's secondary market provider that increases the accessibility of financing for American agriculture and rural infrastructure.” Congress chartered in 1988 under the Agricultural Credit Act of 1987 to help farmers with low cost credit and is publicly traded, NYSE - AGM. https://www.farmermac.com/wp-content/uploads/Farmer-Mac-Reports-2024-Results.pdf
18 Tower companies have been offering neutral-hosting equipment for the mobile carriers for years.
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