Rural Electric Co-ops Question Viability of Winning RDOF Bids, Worry RDOF May Have Opposite Effect of Intention

Some of the winning bids in the Federal Communications Commission's Rural Digital Opportunity Fund (RDOF) auction were for unrealistically low levels of support and the net result could be that those areas do not get service, according to two of the rural electric cooperatives that bid in the auction. Midwest Energy Communications (MEC) won $37 million in the RDOF auction as part of a consortium organized by the National Rural Telecommunications Cooperative (NRTC). The company will use the funding toward the full $165 million cost of a fiber-to-the-premises deployment that will make service available to 40,000 locations in rural Michigan. The company dropped out of bidding for 30-some census block groups when it was underbid by a company bidding to use fixed wireless service in the fastest speed group—1 Gbps. “MEC contends that the blocks were lost to other bidders that cannot and will not be able to deliver service at the level claimed in the tier they bid,” said Bob Hance, MEC CEO. He added that “wireless technology is not capable of providing gigabit service, even in the most ideal circumstances.”

Another RDOF bidding story came from Mike Malandro, president and CEO of Maryland’s Choptank Electric Cooperative. Choptank bid to provide service using fiber broadband in unserved rural areas of the state but dropped out of the auction when it was underbid by a “very small company.” (Malandro subsequently confirmed that the company was Talkie Communications which, according to FCC data, plans to use FTTP for its deployments.) “The money available was not enough to commit to serving the area in a six-year time frame,” said Malandro of Choptank’s decision to drop out. “Prior to the RDOF auction, I had great hope for [closing] the digital divide quicker, but I now feel that the RDOF has done the opposite.”