More RDOF Defaults on the Horizon?

There’s been much handwringing this year over the prospect of defaults in the Federal Communications Commission’s (FCC) Rural Digital Opportunity Fund (RDOF) program, but very little empirical analysis of the actual extent of default that has occurred to date or data-driven projections of what’s likely to occur in the future. It’s time to dig deeper to figure out what’s going on at the local level. The FCC authorized 379 companies to receive $6 billion in RDOF support over a ten-year term, covering just under 3.5 million locations in 48 states and one territory. Companies receive funding to serve a specified number of locations in eligible census blocks, which were grouped together for purposes of auction bidding into eligible census block groups. As of July 10th, only 16 out of 379 authorized recipients have defaulted, but in many instances, they have only defaulted on some (not all) of their authorized locations. While defaulting parties have specified the census block groups for which they are defaulting—and the FCC has promptly announced which corresponding census blocks are no longer subject to an enforceable commitment to deploy broadband, which opens up those areas for other funding programs—the FCC has not published a list showing the relevant number of locations associated with defaulted census blocks. Nor am I aware of any outside party that has undertaken a systematic attempt to figure this out.

[Carol Mattey is a former senior official from the Federal Communications Commission, where she led teams working on initiatives to modernize the FCC’s $9 billion Universal Service Fund to support broadband. She currently is the principal of Mattey Consulting LLC, which provides strategic and public policy advisory services to broadband providers and other entities seeking funding for broadband.]