Rural Digital Opportunity Fund

The 5th Circuit U.S. Court of Appeals upheld the decades-old funding mechanisms governing Federal Communications Commission subsidies, a decision that assures the delivery of billions of dollars in broadband aid across a variety of government programs. The FCC, for more than a quarter-century, has operated this pot of subsidies known as the Universal Service Fund, amounting to roughly $9 billion annually.

Residents of Morgantown (PA) became the latest to tap into Windstream’s Kinetic fiber network. But according to Jeff Small, President of Kinetic, Morgantown is just the beginning of Windstream’s plans for 2023. The newest passings in Pennsylvania are a part of Windstream’s national rollout to overbuild fiber on top of its historic DSL footprint. “We’re building 300,000 fiber passings a year,” explained Small. “When you look at the end of 2021, we had 164,000 fiber customers.

Cal.net, a service provider focused on offering fixed wireless access (FWA) and fiber broadband to California’s Central Valley and rural northern California, has a new CEO and new funding.

The Universal Service Fund is funded  by a quarterly surcharge on interstate and international telecommunications revenue. Each quarter, a private nonprofit known as the Universal Service Administrative Company (USAC) estimates how much money it needs to fund the Federal Communications Commission’s (FCC) myriad universal service initiatives. It also estimates the amount of telecommunications revenue expected to be generated by industry, and from there calculates the surcharge percentage necessary to cover program costs.

The total projected collected interstate and international end-user revenue base to be used in determining the contribution factor for the Universal Service Fund support mechanisms for the second quarter of calendar year 2023 (2Q2023) is $8,761,742,607.

Charter Communications has talked a lot recently about its rural expansion plans. But what it hasn’t drawn attention to is the fact that most - if not all - of its planned rural passings will be delivered with fiber. The operator originally announced its rural build plan in 2021 after the close of the Rural Digital Opportunity Fund (RDOF) auction. All told, it said it was planning to spend $5 billion – including $1.2 billion in RDOF subsidy money – to reach 1 million rural locations across 24 states over the coming years.

Here is an overview of the major federal funding vehicles for broadband that are helping to fuel the broadband investment cycle and are aimed at closing the digital divide so that all Americans have access to high-speed, reliable, affordable broadband:

US Senators Shelley Moore Capito (R-WV) and Amy Klobuchar (D-MN) reintroduced the Rural Broadband Protection Act (S.275), which would require a more thorough vetting and verification process for internet service providers seeking to participate in the Federal Communications Commission's high-cost programs. The bill would provide essential safeguards to the Universal Service Funds' (USF) high-cost programs by ensuring that funding goes to companies with both a proven track record of success and have demonstrated sound judgment in deploying in hard-to-serve areas.

I want to take on the phrase ‘technology-neutral’. This phrase is being used to justify building technologies that are clearly not as good as fiber. The phrase was used a lot to justify allowing Starlink into the Rural Digital Opportunity Fund (RDOF) reverse auction.

To Members of the 118th Congress, as you begin work on the many important issues facing our nation, NTCA–The Rural Broadband Association (“NTCA”) hopes that you will see broadband access as a key component to enhancing and sustaining our nation’s economic and civic well-being. We offer here a policy blueprint for achieving and sustaining universal broadband access in rural America.