FCC to hold big 5G auction, spend $20B for rural internet

The U.S. communications regulator will hold a massive auction to bolster 5G service, the next generation of mobile networks, and will spend $20 billion for rural internet.

5G will mean faster wireless speeds and has implications for technologies like self-driving cars and augmented reality. The rollout started last week in the U.S. and South Korea but will take years.

The Federal Communications Commission said Friday that it would hold the largest auction in U.S. history, of up to 3,400 megahertz, to boost wireless companies' networks.

Rolling out 5G has been a source of tension between the U.S. and China. The U.S. government has effectively banned the Chinese telecom equipment maker Huawei in the majority of U.S. networks due to concerns about Chinese government spying and has pressured allies to do the same as they build out 5G. Huawei, the world's largest maker of such equipment, has said this security concern is unfounded.

The FCC also said Friday that it will be "repurposing" funds from existing programs to provide $20.4 billion, over a decade, to internet providers, with the goal of connecting up to 4 million rural homes and small businesses to high-speed internet.

It's more expensive for telecom companies to serve spread-out rural areas than cities and suburbs, so the government provides grants to incentivize them to build internet networks in rural parts of the country. The agency has spent billions subsidizing rural broadband -- $34.5 billion from 2010 to 2017, according to the Government Accountability Office -- with more money coming from other programs. As of the end of 2016, there are 24 million Americans without access to broadband.

FCC Chairman Ajit Pai said Friday that he hopes to start the auction in December and the fund proceeding later this year.

The agency said he will talk about these 5G initiatives at a White House event with President Donald Trump later Friday.