Successful Rural Digital Opportunity Fund Auction To Expand Broadband To Over 10 Million Rural Americans

Millions of rural Americans in 49 states and the Commonwealth of the Northern Mariana Islands will gain access to high-speed Internet service through the Rural Digital Opportunity Fund (RDOF) Phase I auction. Auction results show that bidders won funding to deploy high-speed broadband to over 5.2 million unserved homes and businesses, almost 99% of the locations available in the auction. Moreover, 99.7% of these locations will be receiving broadband with speeds of at least 100/20 Mbps, with an overwhelming majority (over 85%) getting gigabit-speed broadband. Charter Communications was assigned the most locations, just over 1.05 million. A total of 180 bidders won auction support, to be distributed over the next 10 years.

A broad range of providers successfully competed in the Phase I auction, including cable operators, electric cooperatives, incumbent telephone companies, satellite companies, and fixed wireless providers. And the FCC’s structuring of the reverse auction yielded significant savings, as competitive bidding among over 300 providers yielded an allocation of $9.2 billion in support out of the $16 billion set aside for Phase I of the auction. Importantly, the $6.8 billion in potential Phase I support that was not allocated will be rolled over into the future Phase II auction, which now can draw upon a budget of up to $11.2 billion in targeting partially-served areas (and the few unserved areas that did not receive funding through Phase I).

The auction unleashed robust price competition that resulted in more locations being awarded at less cost to Americans who pay into the Universal Service Fund. The 5,220,833 locations assigned support in the auction had an initial reserve price of over $26 billion over the next decade; through vigorous competition among bidders, the final price tag to cover these locations is now just over $9 billion, with the vast majority of locations receiving gigabit broadband—far above the 25/3 Mbps minimum level of service that providers could bid on in the auction. Providers must meet periodic buildout requirements that will require them to reach all assigned locations by the end of the sixth year. They are incentivized to build out to all locations as fast as possible.