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UPDATE 1-FCC chair to propose $9 billion in funding for rural wireless coverage over 10 years

By David Shepardson

(Adds Verizon statement, details on 5G uses in rural America)

By David Shepardson

WASHINGTON, Dec 4 (Reuters) - Federal Communications Commission Chairman Ajit Pai said on Wednesday he will propose $9 billion in funding over 10 years to boost next-generation 5G wireless coverage in rural U.S. areas.

That figure is about twice what Pai proposed last year over the same period and would be aimed at helping to bring 5G networks to sparsely populated rural areas that often struggle to obtain access to wireless services or the internet.

"We must ensure that 5G narrows rather than widens the digital divide and that rural Americans receive the benefits that come from wireless innovation," Pai said in a statement.

Pai plans to formally propose rules for the funding early next year and he said he would set aside at least $1 billion for “precision agriculture.” Farmers around the world are deploying next-generation wireless for such agricultural uses as monitoring crops and gauging water temperature and salt concentration.

The funding will come from the FCC's Universal Service Fund, derived from surcharges on telephone service. It also provides subsidies to schools and libraries.

Last month, the FCC voted 5-0 to bar funding for equipment from companies it has deemed national security threats, including Huawei Technologies Co and ZTE Corp .

Pai had proposed a $4.5 billion fund over the same period but cancelled that last year until the FCC could extensively review 4G LTE coverage maps. An FCC staff report released Wednesday said coverage maps submitted by Verizon Communications Corp, U.S. Cellular Corp and T-Mobile Us Inc "likely overstated each provider’s actual coverage and did not reflect on-the-ground performance in many instances."

Verizon said it was "not responsible for the agency’s" coverage mapping problem. "The industry told the FCC more than two years ago how to build a coverage map that better aligns with real-world experiences. For policy reasons, the FCC rejected the industry’s consensus proposal in favor of a more expansive definition of coverage. Verizon simply followed the FCC's instructions."

The other carriers did not immediately comment.

The FCC found that minimum download speeds were achieved in just 62% of staff tests and staff was unable to obtain any 4G LTE signal in many drive tests. The FCC told reporters on a conference call Wednesday that Pai did not plan to bring any enforcement actions against the carriers as a result of the findings.

The FCC said it plans to award the funds in a reverse auction. (Reporting by David Shepardson in Washington Editing by Tom Brown and Matthew Lewis)