Rural Digital Opportunity Fund Defaults Estimate: Over $2.8 Billion -- What Happens to That Money?

Nearly every winning bid in the Rural Digital Opportunity Fund (RDOF) rural broadband funding program has now either been authorized or deemed to be in default. Of the $9.2 billion over 10 years tentatively won in the auction, over $2.8 billion has gone into default, according to an estimate from Cooperative Network Services, a rural broadband consultancy that has been keeping tabs on the program. Three of the 10 largest winning bidders — LTD Broadband, SpaceX and Starry—alone generated nearly $2.5 billion in defaults and there were many other smaller defaults. In some cases, all of a company’s bids were deemed to be in default. In addition, many companies had a portion of their bids deemed to be in default. What happens with the money associated with the RDOF defaults? Potentially the remaining RDOF budget of approximately $14 billion may never be awarded. Carol Mattey, founder of Mattey Consulting and former deputy chief of the Federal Communications Commission's Wireline Competition Bureau, doesn’t expect the FCC to move forward with further RDOF funding in the foreseeable future. Mattey also noted that the FCC said in 2022 that it would undertake a proceeding about ongoing support that may be needed to operate broadband networks after they are built in areas where revenues aren’t sufficient to cover those costs.