Now that the dust has settled a bit, it’s time to do some RDOF analysis. And there is no shortage of things to analyze.
RDOF is a historic shift in public policy for rural broadband. What was once the funding domain for a handful of large telcos to bring comparable telecom service to rural markets, has now become a battleground of sorts for very small upstarts to very large tech celebrities (I’m talking about you Elon).
Let’s start this RDOF analysis with some important facts:
- The auction awarded $9.2 billion for rural broadband support, leaving $6.8 billion on the table. By my math, phase II of the auction will actually have more money to award than phase I. More on that in a minute.
- California, at $695 million, will receive the most RDOF funding from this phase. Rhode Island will receive the least, with $1.2 million allocated.
- A total of 5.2 million locations across 49 states and the Norther Mariana Islands are covered from phase I.
- Cable company Charter won support for the most locations (over 1 million) and traditional WISP LTD Broadband was awarded the most funding at $1.3 billion.
- Over 99% of auction winners have committed to deploying service at speeds of at least 100/20 Mbps, with 85% committing to gigabit broadband.
RDOF Analysis Surprises and Controversy
There are indeed some surprises (and quite a bit of controversy). Cable company Charter winning as much as it did to serve rural America was a surprise to me. I didn’t think Charter would be this aggressive in pursuing RDOF funds for rural market expansion.
I expected fixed wireless to be a major player, but not this major. I certainly didn’t expect an exclusively urban focused (until now anyway) WISP like Starry Internet to be this aggressive for rural expansion and walk away with $269 million in funding. Four WISPs are among the top 10 winners, with those 4 alone winning $2.6 billion, or close to 30% of the total RDOF phase I take.
SpaceX was a bit of a wild card. I expected them to win some funding, if for nothing else, just as an experiment. But the satellite broadband company, which is now only in beta trials, won close to 10% of the total RDOF phase I budget.
These surprises, among other things, are fueling some considerable controversy. There are many angles to this controversy, but a large part of it centers on a bit of ‘smoke and mirrors’ fears.
Specifically, many winners have committed to gigabit service, but are apparently quite light on the details of how they will actually accomplish that commitment. The fear is, they won the money saying they can do one thing, but in reality, many observers are skeptical. And determining whether they can actually deliver, may take years to find out, and by then, it may be too late to do anything about it, some argue.
“As a matter of transparency and accountability for critical values for precious government resources, it is essential now for the FCC to vet thoroughly those who may have made promises behind the scenes in their applications claiming the ability to deliver Gigabit and 100 Mbps services using technologies that have never done so on a widespread basis – or at all – in rural America,” said NTCA-The Rural Broadband Association CEO Shirley Bloomfield in a blog post.
Phase II of RDOF
Where this gets even more interesting to me is phase II of the program, which will now have more money available, roughly $11.2 billion (the total RDOF budget is $20.4 billion). Whereas phase I was to focus on unserved territory, phase II expands that reach to underserved. The auction was split into two phases because of the poor state of broadband availability maps, which consider an entire census block to have broadband even if only a single location can get it. Phase II will be based on more detailed data and is intended to address the current data deficiencies.
The data will still rely on broadband providers to report it accurately, however. That accuracy has at times been questioned and will likely be questioned again, considering how high the stakes are. Add this to the brewing controversy from phase I, which is sure to spill over into phase II, and you have quite the conundrum. The new Biden administration and its incoming FCC Chair may have a ‘hornet’s nest’ to deal with. A timeline for phase II of the RDOF program has not yet been established.