The FCC is getting pushback on letters sent last month to 197 companies that had winning bids in the Rural Digital Opportunity Fund (RDOF) auction. Each company received a list of census blocks for which it won funding to deploy broadband but where the FCC said the company might want to seek a waiver request.
The RDOF was a reverse auction designed to award funding to unserved rural areas to the company that committed to deploying service for the lowest level of support.
The FCC told recipients that it was sending the letter “in light of complaints that the program was poised to fund broadband to parking lots and well-served urban areas” and offered “an opportunity to withdraw . . . funding requests from those places already with service or where significant questions of waste have been raised.”
The letter also said that it was the recipients’ responsibility to “conduct due diligence to ensure that you can meet the [RDOF] public interest obligations.”
RDOF Waiver Pushback
Two telecom industry associations, USTelecom—The Broadband Association and NTCA—The Rural Broadband Association, disagreed with that assertion.
In a joint letter, the associations argued that the FCC already conducted a process to challenge eligible census blocks and that the commission previously established “a very clear post-auction process to address the fact that the number of actual locations that providers must ultimately serve will differ from the number identified by the commission before the auction.”
In addition, the associations noted that a true-up process was already planned to account for the disconnect between eligible locations and actual RDOF service locations.
“Winning bidders must demonstrate many things in their long-form applications before being deemed eligible to receive funding, but also requiring winning bidders to conduct their own broadband availability investigation prior to the commission completing its own mapping work was not contemplated in the RDOF Order,” the associations argued.
The associations noted that some members may avail themselves of the waiver opportunity outlined in the letters but also noted that “to the extent that providers do not elect to seek a waiver at this time, the commission’s existing rules can sufficiently address any deficiencies caused by subsequent improvements to currently imprecise broadband availability data.”
When the FCC urged companies to seek RDOF waiver requests, the commission said that it would consider not imposing the fine traditionally associated with such requests.
“To maximize your likelihood of success, . . . we recommend that your waiver request include a showing that defaulting on these bids will serve the public interest by, for example, targeting scarce Universal Service funds to where they are needed most,” the FCC said.
Several companies have done exactly what the FCC recommended and sent back lists of census blocks for which they seek waivers and have used language similar to what the commission recommended in making those requests.
For example, Frontier – one of the top 10 winning bidders in the RDOF auction — noted that some census blocks on the FCC list were made up of large commercial buildings with access to commercial fiber or were solely parking lots and portions of airports.
“While Frontier is confident that it can ‘meet [RDOF] public interest obligations,’ Frontier agrees to return the census blocks . . . if the commission grants a waiver . . . of the auction default rules related to the return of these blocks.”
Other companies that were among the top winners in the RDOF auction and that are seeking waivers for some census blocks include AMG Technology/Nextlink, Windstream, and Connect Everyone (Starry). The same is true for some companies with smaller winning bids.
Meanwhile, LTD Broadband, the biggest winning bidder in the RDOF auction, said it would seek waiver requests for all the census blocks on the FCC list, which includes dozens of pages.
The wording of LTD’s response suggests that the company did not investigate the census blocks in question when it received the FCC letter last month.
“In light of the commission’s findings, LTD submits that relinquishment of the affected census blocks would serve the public interest,” LTD said in its letter.
LTD has received a lot of criticism from stakeholders questioning whether the company has sufficient resources to complete all the deployments for which it won funding. As a result, the company may view the FCC waiver request letter as a welcome opportunity to reduce its deployment commitment.