Rural Digital Opportunity Fund

It would not be a stretch to say that the Federal Communications Commission’s Rural Digital Opportunity Fund (RDOF) reverse auction has left a bad taste in a lot of mouths. While the FCC was quick to announce success immediately after the close of the auction simply because most eligible areas were assigned, many policy makers and communities see the results as highly problematic and have roundly criticized the outcome, leaving us to ask: Is the FCC’s reverse auction fatally wounded or just bloodied?

With the Biden infrastructure debate in full swing, the cost to connect the rest of the unserved with broadband has taken center stage. The last version of the Accessible Affordable Internet for All Act proposes $80 billion in subsidies through reverse auctions to close the digital divide once and for all.

The Federal Communications Commission's Wireline Competition Bureau (WCB) seeks comment on several petitions for designation as an Eligible Telecommunications Carrier (ETC) for the purpose of becoming eligible to receive universal service support. The petitioners are winning bidders in the Rural Digital Opportunity Fund (RDOF) auction (Auction 904). ETC designation is a prerequisite to receiving universal service support available through the high-cost and Lifeline programs.

A research note from telecom financial analysts at MoffettNathanson Research shows the firm estimates SpaceX’s total addressable US market at full deployment at between 300,000 to 800,000 households, or less than 1% of the market. It’s a particularly noteworthy number, considering that SpaceX is poised to receive nearly $900 million from the Rural Digital Opportunity Fund (RDOF) to cover some of the costs of bringing broadband to unserved rural areas.

Before spending an additional $100 billion of public money on rural broadband, avoiding the mistakes of the past decade would be a good place to start.

Lesson #1: The digital divide was not a consequence of rural economics; it has been the policy of the federal government. Broadband is not simply a speed at a point in time. Rather than focus on a short-term goal of attaining any particular speed, public funding is better spent on long-term infrastructure, best defined as assets with a life of at least thirty years.

The Biden administration’s broadband plan tracks many of the ideas contained in the $94 billion “Internet for all” infrastructure bill that congressional Democrats introduced. And that is not a good thing.

The National Rural Electric Cooperative Association (NRECA), NTCA-The Rural Broadband Association, NRTC, the Wisconsin State Telecommunications Association and the Ensuring RDOF Integrity Coalition (ERIC) have asked the Federal Communications Commission to release a list of census block groups that provisionally won funding through the Rural Digital Opportunity Fund (RDOF) program but on which the winning bidder has defaulted.

Do you know how much money your state is getting from the Rural Digital Opportunity Fund (RDOF)? We crunched the data to find out how much RDOF money each state will get to expand internet access to rural Americans, breaking it down to dollars per resident.

Despite years of effort and tens of billions of dollars in subsidies, the United States still faces a stubborn rural-urban broadband gap. A large, one-time injection of federal capital can succeed in bridging the rural broadband divide if it is reasonably targeted and allocated through a reverse-auction program that serves as a transition away from the Federal Communications Commission’s Universal Service Fund. The current FCC program is funded through regressive fees levied on a shrinking base of telecommunications services.

Two state associations representing broadband providers have asked the Federal Communications Commission to deny the long-form application filed by LTD Broadband in the Rural Digital Opportunity Fund (RDOF) program. LTD Broadband had the largest amount of RDOF winning bids in the program and stands to gain $1.3 billion for broadband deployments in 15 states if its long-form application is approved.