According to foreign media CNET, the Federal Communications Commission (FCC) will vote on the rules of its proposed plan later this month, which proposes to allocate $ 20.4 billion of funds to broadband providers serving rural areas of the United States. The funds will be distributed over the next decade and will also be made available to cable suppliers, wireless operators and electric cooperatives (which are usually excluded from government subsidies) with a view to eventually closing the rural digital divide.

FCC Chairman Ajit Pai introduced the proposed rules of the Rural Digital Opportunity Fund to FCC colleagues on Wednesday. The FCC will vote on the rules on January 30.

Pai said in a statement: “This new fund will target rural areas across the country that currently do not have sufficient broadband and will deploy high-speed broadband to millions of rural American residents in an efficient and effective manner.”

The rule requires a two-stage reverse auction to allocate funds to the fund, which means that the lowest bid will win the auction. The first phase will provide $ 16 billion in funding for areas in the country today that do not have high-speed broadband. The second phase of the auction will go to areas served by broadband. Areas that did not receive funding in the first phase can continue to bid for funds in the second phase of the auction.

Auctions will also prioritize bids from broadband providers, which promise to provide faster speeds. This means that if two bidders meet the FCC’s settlement price, faster bidders will be subsidized. The auction will also prioritize areas that currently lack 10 Mbps Internet download speeds and prioritize funding for tribal lands. FCC officials told reporters in a briefing that the first phase of the auction is expected to begin later this year.

The agency estimates that approximately 6 million locations will qualify for the first phase of the auction.

The FCC voted in August to develop a “Rural Opportunity Fund,” which essentially replaced the Connect America Fund II auction to allocate funds for general service funds to rural operators.  The purpose of the new fund is to enable operators to bid for the right to use these funds to provide broadband services in high-cost, underserved areas such as rural communities.

One of the biggest differences between the fund and the FCC’s Connect America Fund II auction is that the fund will also allow any company that offers broadband to bid. This means that funding will not be limited to existing telephone companies, which traditionally received first rural government subsidies. Instead, cable providers, utilities and wireless operators will also be hit on funding to build broadband networks.

While the fund was established with bipartisan support in the FCC and Congress, some Democrats believe that these funds should not be allocated until the FCC completes its work to improve its broadband map to ensure accurate knowledge of where broadband exists. The FCC’s current Form 477 data collection process has been widely criticized for overestimating coverage of some areas.

But FCC officials told reporters that the lack of coverage of the data used in the first phase of the auction is not controversial. Pai said in a blog post on Wednesday that he hopes to provide funds to operators serving rural areas as soon as possible, which is why the auction was divided into two phases. He said that once the FCC obtains more accurate broadband deployment data, it will begin the second phase of the auction to allocate funds to some service areas.

“We don’t want millions of rural American residents to wait longer to get the economic, educational, and healthcare opportunities that high-speed broadband offers,” said Pai.