Missouri was the first state to ask the Federal Communications Commission (FCC) to return Rural Digital Opportunity Fund (RDOF) broadband funding awarded to providers in the state who later defaulted on their awards. But it may not be the last.
Telecompetitor spoke with Louis Riggs, a Missouri state representative who helped spearhead the letter sent by the state’s attorney general to FCC Chairman Brendan Carr asking for the funding. Riggs told us that officials in other states are having weekly calls to discuss similar letters to be sent by additional states.
“You, too, can do this and get your attorney general in the game,” said Riggs, referencing other states that lost funding through defaults in the 2020 RDOF program.
Missouri experienced $277 million in defaulted RDOF funds , either because a provider that was tentatively awarded funding was not ultimately authorized or because authorized providers were unable to meet deployment obligations. (The former are known as pre-authorization defaults, while the latter are known as post-authorization defaults.)
Every state experienced some level of defaults in the RDOF program, which tentatively awarded $9.2 billion to cover some of the costs of deploying broadband in unserved and underserved areas. Of the $9.2 billion, nearly $3.3 billion is in default.
“Give Us the Money”
Missouri could do a lot with its portion of the defaulted RDOF funding and is in a better position than federal administrators to determine how to use it, Riggs argued on our phone call, reiterating a point he made earlier this year in an op-ed piece that he penned for Benton Institute for Broadband & Society.
“We know what to do with it; we’ve been doing it now for a number of years,” he said.
He noted, for example, that 2022 legislation passed in Missouri established guardrails to prevent wasteful use of state broadband deployment funds.
Other states also have had success in managing broadband funding programs, Riggs noted. Several states have received Broadband Equity, Access, and Deployment (BEAD) Program funding applications for a large portion of eligible locations and expect to reach program goals with the budget available to them.
Missouri policymakers are currently discussing the exact parameters of how they would use defaulted RDOF funding. But Riggs noted that some network operators who had the runner-up bid in the RDOF auction have said that they could promptly deploy broadband based on cost studies already completed.
(Rules for the RDOF program didn’t include a contingency plan to award funding to the runner-up bidder in cases where an initial awardee was unable to undertake the deployment.)
“We’re saying, ‘Give us the money; we know what to do with it,’” commented Riggs.
Two Types of Defaulted RDOF Funds
Giving defaulted RDOF funding to the states would offer a means of addressing a problem facing some of the unserved locations that experienced post-authorization defaults. Some of those locations are not eligible for BEAD Program funding because, at the time states prepared their lists of BEAD-eligible locations, those locations were slated to receive RDOF deployments.
The upshot is that, after waiting several years for RDOF deployments, those locations currently have no clear path to receiving broadband service. And as defaults continue to occur, the number of locations in this predicament will grow.
It’s a different situation with unserved locations in a state that experienced pre-authorization RDOF defaults. In general, those locations are eligible for funding in the BEAD program. But the future of that program is unclear.
Current BEAD rules require funding recipients to prioritize fiber broadband deployments except in extremely high-cost areas. But the new National Telecommunications and Information Administration (NTIA) and Commerce Department administrators are considering changing the rules to shift more funding toward lower-cost satellite broadband service — a move that many rural stakeholders say would be short-sighted. Although fiber costs more to deploy, it offers the best performance and, as broadband demands continue to climb, the investment is more future-proof.
“If you’re going to DOGE something, don’t DOGE this,” said Riggs.
State-level legislators in unserved areas that experienced RDOF defaults likely are thinking that it would be preferable to obtain defaulted RDOF funds that could be used as the states see fit rather than to obtain BEAD Program funding under constrictive rules.
“The states have done an amazing job,” said Janie Dunning, state coordinator for ShowMe Broadband in an interview with Telecompetitor. “They made plans that suited each state and its needs.”
Dunning has been closely following RDOF developments. Along with Benton Institute and others, Dunning was instrumental in obtaining details from the FCC earlier this year about the defaults.
Receiving defaulted RDOF funds also could provide a hedge against additional RDOF defaults that Dunning expects to see as RDOF awardees continue to default.
