Federal Communications Commission (FCC) announced the result of Connect America Fund Phase II auction that allocated $1.488 billion to expand rural broadband service in 45 states in the next 10 years.

The latest development will be a good news for telecom equipment makers such as Ericsson, Nokia, Huawei, ZTE, among others.

FCC said 103 providers won support from the Connect America Fund to expand broadband in rural areas.

More than half of over 700,000 homes and small businesses will receive high-speed Internet service of at least 100 megabits per second. 19 percent will have gigabit service. 711,389 locations or 0.25 percent will have at least 25 Mbps service, more than twice the 10 Mbps minimum standard for the Connect America Fund program.

WINNERS

3E8 Broadband Solutions
Air Link Rural Broadband
Allen’s T.V. Cable Service
AMG Technology Investment Group
ArisWave Consortium
Armstrong Telephone Company – Northern Division
Barry Electric Cooperative
BEK Communications Cooperative
Ben Lomand Communications
Benton Ridge Telephone Company
Bloosurf
Broadband Corp

“By tapping the mechanisms of the marketplace, the Phase II auction served as the most appropriate and cost-effective way to allocate funding for broadband in these unserved communities,” FCC Chairman Ajit Pai said.

The auction encouraged innovation and deployment of robust service by giving providers the flexibility to use any broadband technology to meet the FCC’s buildout and performance standards for fixed broadband service.  The auction design included a weighted preference for service with higher speeds, higher usage allowances, and lower latency.

Though the 713,176 locations had an initial reserve price of $5 billion over the next 10 years, the final price tag to cover these locations is now only $1.488 billion.

Providers must build out to 40 percent of the assigned homes and businesses in a state within three years of becoming authorized to receive support. Buildout must increase by 20 percent in each subsequent year, until complete buildout is reach at the end of the sixth year.

FCC said it is working toward the launch of a $4.53 billion Mobility Fund Phase II auction to expand 4G LTE wireless coverage throughout rural America. Connect America Fund is in the midst of providing over $9 billion over a six-year period for rural broadband in areas served by large carriers.