Areas Receiving ReConnect or State Broadband Support Won’t be Eligible for RDOF Auction

Areas that receive broadband funding through the US Department of Agriculture (USDA) ReConnect program or a state broadband program will not be eligible to receive funding through the Rural Digital Opportunity Fund (RDOF). In the RDOF Report and Order, adopted Jan 30 and released publicly on Feb 7, the Federal Communications Commission justified the decision by noting that it was “consistent with our overarching goal of ensuring that finite universal service support is awarded in an efficient and cost-effective manner and does not go toward overbuilding areas that already have service.”

In Jan, the FCC released a preliminary list of the number of locations by state that were potentially eligible for the first RDOF auction. Total eligible locations were estimated at six million, but New York was not included. In a response to a letter from NY Sens Charles Schumer (D-NY) and Kirsten Gillibrand (D-NY), the FCC said it would not categorically eliminate New York from RDOF eligibility. However, it appears that locations that received state funding will still not be eligible.

Similar opposing arguments about the New York example also could be used more broadly with regard to RDOF eligible areas and census blocks that may be excluded from the RDOF because of funding received through ReConnect or state broadband programs. Several related points worth noting:

• The concern that RDOF funding might support overbuilds funded through a state broadband program or ReConnect seems like a red herring, as RDOF rules already prevent funding from being used in areas where a competitor offers broadband service. A bigger concern is whether a single winner should be able to get funding through the RDOF and another broadband program. With this in mind, it’s worth noting that winning bids in the RDOF reverse auction are unlikely to cover the entire cost of deploying service to an area. The maximum anyone can request (i.e. the highest opening bid) was calculated via a cost model that according to some, covers construction costs at minimum speeds; however, winning bids typically are for considerably less funding. Is there a danger, though, that by combining multiple funding sources, a provider could collect more than it actually needs?
• It’s interesting to contrast the FCC’s moves with USDA’s action in its own rural broadband funding program known as ReConnect. That program awarded funding through a point system, with extra points going to projects in states that had their own broadband funding programs.
• The majority of states now have some type of broadband program — although details and available funding vary considerably from one state to another.