White paper: An update on connecting rural America

AN UPDATE ON

CONNECTING RURAL AMERICA

The 2018 Microsoft Airband Initiative

EXECUTIVE SUMMARY

Our work and daily lives are increasingly becoming digital. The rise of cloud computing, combined with new productivity, communication, and machine learning tools, enables us to do more, and much more quickly. We now communicate, learn, innovate, and solve problems in ways that were simply unimaginable just a generation ago. But reaping the benefits of this exciting new digital world requires a high-speed broadband connection, a link not available to 25 million Americans, 19 million of whom live in this country's rural areas.

At Microsoft, we believe this is an urgent national problem that can be solved. It will require a focused and comprehensive solution that combines private sector capital investment in innovative technologies with strategic financial and regulatory support from the public sector. Together, we can achieve an ambitious goal-to eliminate the rural broadband gap by July 4, 2022.

The Microsoft Airband Initiative is our contribution to this national effort. Launched in 2017, it is a five-year commitment to tackle this persistent problem in innovative ways, like harnessing unassigned broadcast spectrum known as TV white spaces to bring broadband connectivity to 2 million unserved rural Americans.

In the year and a half since we announced the Microsoft Airband Initiative, we have established partnerships in 16 states that will bring broadband connectivity to more than 1 million rural residents who currently lack access. Through these partnerships, we have demonstrated that fixed wireless technologiesincluding TV white spaces technologies, alongside traditional fiber optic and satellite coverage, can be the most cost-effective way to expand broadband availability in rural communities.

We also launched a wide range of pilot projects to test the use of TV white spaces and validate new business models and technologies. We have worked with hardware manufacturers to create an ecosystem of affordable and scalable TV white spaces devices. We've formed a partnership with the National 4-H Council to help people in rural counties gain critical digital skills to put their newfound connectivity to work. And we have worked with policymakers to create a stable regulatory framework that will drive further investment in rural broadband technology and infrastructure.

While we've made significant progress, we know there's a lot more to do to truly close the rural broadband gap. In the year ahead, we will increase the number of states with Microsoft Airband Initiative infrastructure projects and expand the work we are doing to offer skills training in rural communities. We will also continue to advocate for policies to accelerate the investment in innovative technologies needed to close the rural broadband gap.

We are excited to share this Microsoft Airband Initiative update as we deepen our commitment to bringing affordable broadband connectivity to rural communities-and to all Americans.

1

INTRODUCTION: AMERICA'S RURAL

BROADBAND GAP

INTRODUCTION: AMERICA'S RURAL BROADBAND GAP

MORE THAN 20 MILLION AMERICANS LACK ACCESS TO

HIGH-SPEED BROADBAND-A GAP THAT IS EXACERBATING THE PROSPERITY AND OPPORTUNITY GAPS ACROSS OUR COUNTRY, ESPECIALLY BETWEEN RURAL AND URBAN AREAS. AS THE ECONOMY, THE WORKPLACE, AND OUR DAILY

LIVES BECOME MORE DIGITAL, IT'S CRITICAL WE CLOSE THIS DIVIDE. WE SIMPLY CAN'T AFFORD TO LEAVE ENTIRE COMMUNITIES BEHIND.

Brad Smith, President Microsoft

During the past few years, how people work, play, shop, and learn about the world has changed dramatically. Industries have been reinvented. Jobs are being redefined. The way we create community and connect to people is being reimagined. New ways to treat diseases emerge almost every day.

Driving this remarkable transformation are cloud computing, advanced data analytics, and now, rapid progress in artificial intelligence. These technologies promise to speed progress in science and research, improve productivity, accelerate economic growth, strengthen communities, empower individuals, and help us find new ways to address some of the most pressing challenges we face in health care, education, sustainability, food security, and economic development.

But if technology-driven change and progress is a certainty, equitable access to the opportunities it creates is not. In our digital, cloud-enabled world, a reliable broadband connection is essential for everything from running and growing a business to completing school assignments, applying for a job, accessing high-quality health care, keeping upwith the news, connecting with friends and family, and enjoying entertainment.

In short, broadband is the electricity of our age-a fundamental prerequisite for full participation in modern life and a basic requirement for access to the economic and educational opportunities that make success and prosperity possible for individuals and communities.

Unfortunately, broadband access is something millions of Americans lack today. According to the most recent statistics from the Federal Communications Commission (FCC), 25 million people in this country do not have access to a broadband-speed connection to the internet. The vast majority-more than 19 million-live in rural areas.1 This means nearly 31 percent of rural residents in the United States are unable to take advantage of digital services and capabilities that are an everyday part of life for many urban residents. And there are strong indications that the FCC's numbers underestimate just how wide the gap between urban and rural America truly is.

Addressing this isn't just an issue for people who live in rural American communities-it is an urgent national problem. We simply can't afford to leave so many people behind as a new generation of technology breakthroughs drives new levels of opportunity and progress.

Expanding access to broadband networks so that students, parents, farmers, workers, and small business owners across rural America can gain new skills, find and create well-paying jobs, increase productivity, and tap into new markets is essential for local communities to thrive and critically important to the nation's overall economic prosperity.

To begin to address the rural broadband gap, on July 11, 2017, we announced the Microsoft Airband Initiative. As we shared then, we believe advances in key technologies, changes to regulatory standards for communications, innovative business models, and the growing demand for a range of cloud services have laid the foundation for an ambitious but achievable national goal-to eliminate the rural broadband gap by July 4, 2022.

The Microsoft Airband Initiative is our contribution to this effort.

A comprehensive approach that combines private sector capital investments focused on new technologies with strategic financial and regulatory support from the public sector, the Microsoft Airband Initiative can serve as a catalyst for building the infrastructure the United States needs to ensure that broadband access is available to every American-including all who live in rural areas of this country.

The Microsoft Airband Initiative is a technology model that uses a combination of fixed wireless technologies-including unassigned broadcast spectrum often referred to as "TV white spaces"-alongsidetraditional fiber optic and satellite coverage.

This approach can reduce initial capital and operating costs by more than 80 percent compared with using fiber optic cable alone and by approximately half compared with current fixed wireless technologies that use other spectrum bands.

At the heart of Microsoft Airband Initiative is our goal to bring broadband access to 2 million people in rural America who currently lack access by July 4, 2022. To achieve this, we shared three major initial commitments when we announced the Initiative in 2017:

• 11. We would provide direct investment to telecommunications companies for projects to expand access to broadband in rural areas of 12 states within 12 months.

• 2. We would invest in digital skills training for people of all ages in newly connected communities.

• 3. We would offer royalty-free access to our patents and sample source code related to TV white spaces technology.

A lot has happened since we announced the Microsoft Airband Initiative. We've made important progress and learned many lessons.

All of our experiences have reinforced our belief that the rural broadband gap can be eliminated by 2022. Today, our commitment to work to ensure that all Americans have access to broadband is stronger than ever.

We are excited to provide this update on the Microsoft Airband Initiative as part of our ongoing effort to work in partnership with the public and private sectors, national and local organizations, and residents of unserved and underserved rural communities to expand access to broadband connectivity in rural America.

A NATIONAL STRATEGY FOR BRIDGING THE RURAL

BROADBAND GAP