The FCC said yesterday that it is ready-to-authorize Rural Digital Opportunity Fund (RDOF) money for two more companies that won comparatively small amounts in the auction. In addition, the commission released a list of defaulted bids with five companies on it.
The two companies whose funding the FCC is ready to authorize are Cyber Broadband for bids in Alabama, as well as North Texas Fiber for bids in Texas. The list of defaulted bids was comprised primarily of census block groups that initially were thought to lack broadband but were later determined to have service already.
The RDOF program covers some of the costs of making broadband available in unserved areas. The FCC tentatively awarded $9.2 billion in the program using a reverse auction in which funding was slated to go to the company that committed to deploying service for the lowest level of support.
Winning bidders were required to submit long-form applications and obtain eligible telecommunications carrier (ETC) status if they didn’t already have it. A company is put on an RDOF ready-to-authorize list when the FCC has reviewed and approved its long-form application. The company then has about two weeks to obtain a letter of credit and a bankruptcy opinion letter, which the FCC reviews and approves prior to putting the company on a list of authorized bidders.
Three-quarters of the funding tentatively won in the auction is slated to go to just 10 companies. Among the top winning bidders, most of the companies planning to deploy fiber broadband have had all or most of their funding released. Several companies planning to use alternate technologies – including gigabit fixed wireless and low earth orbit satellites – have not yet appeared on a ready-to-authorize list. Gigabit fixed wireless has received criticism as a relatively unproven technology and LEO satellites have been criticized because they also are relatively unproven and have a limited lifespan.
LTD Broadband, which was the largest winning bidder and which plans to use fiber broadband for its deployments, also has not yet appeared on an RDOF ready-to-authorize list. The company has received considerable criticism from people who question whether it has the resources to complete the bids for which it won funding.
A lot has changed on the rural broadband front since the RDOF auction was completed in late 2020. Since then, legislators have made an unprecedented amount of funding available for rural broadband. The $9.2 billion tentatively awarded in the auction is only a fraction of the $42.5 billion that will be awarded through the Broadband Equity Access and Deployment (BEAD) program created in the infrastructure act and that will be administered by NTIA.
Rules for that program were recently released and they reveal lessons learned from the RDOF auction. Rather than using a reverse auction to award funding, the BEAD program will use a merit system that prioritizes fiber broadband.
Unserved locations that are supposed to receive broadband through the RDOF program are not eligible for BEAD or other funding programs, but just this week, we got some additional clarification about that. Alan Davidson, head of NTIA, told attendees at an industry conference this week that if an area has yet to receive RDOF funding authorization, that area should be eligible for BEAD grants, and it would then be up to the FCC to “deconflict” any potential overlap.
The complete ready-to-authorize list released yesterday can be found at this link.
Yesterday’s list of defaulted bids can be found here.