Rural Digital Opportunity Fund

The US telecommunications market has significantly evolved since Congress last overhauled the Communications Act more than a quarter century ago. But the Federal Communication Commission’s universal service distribution policies – though periodically tweaked – are still rooted in a framework designed to support incumbent telephone companies. However, the Congress and the FCC now have before them an opportunity to reimagine and reinvent universal service policy for the future.

On July 27, 2023, the U.S. Senate's Universal Service Fund (USF) Working Group invited public comment on the future of the USF with the stated goal of creating a bipartisan forum to guide education, awareness, and policymaking on the USF. The opportunity to weigh in with the senators has had me thinking about the importance of the USF for bringing affordable broadband infrastructure and services to millions of people around the country. So I'm taking this opportunity to share my thoughts on one of the most important tools in our national effort to reach truly universal broadband.

The Federal Communications Commission’s Wireline Competition Bureau (WCB) seeks nominations for the following Board member positions on the Board of Directors of the Universal Service Administrative Company (USAC) listed below for a three-year term:

Cuba City Telephone Exchange Co. and Cal-Ore Communications notified the Federal Communications Commission of their decisions to withdraw from the Rural Digital Opportunity Fund (RDOF) support program. Cuba City and Cal-Ore’s letters constitute notification to the FCC that these carriers are defaulting on their obligations to meet their service milestones.

The Coalition of Rural Digital Opportunity Fund (RDOF) Winners has filed an emergency petition with the Federal Communications Commission regarding its request for extra funding or other relief measures. The group argues that the COVID pandemic has raised deployment costs dramatically and that the funding the companies won is now insufficient.

Over the past 26 years, the Universal Service Fund — a federal subsidy pool collected monthly from American telephone customers — has spent close to $9 billion a year to give Americans better phone and internet connections, wiring rural communities in Arkansas, inner-city neighborhoods in Chicago, and public libraries and schools across the country. Now it faces the biggest crisis of its existence, and Congress appears paralyzed in the effort to fix it.

On July 24, 2023, the Federal Communications Commission authorized a new subsidy program, Enhanced A-CAM (Alternate Connect America Cost Model). This program will extend subsidies to small, regulated telephone companies at a cost of about $1.27 billion per year for ten years.

Recognizing the impact of the coronavirus (COVID-19) pandemic on financial markets and on the ability of providers to successfully conduct their operations, the Federal Communications Commission's Wireline Competition Bureau (Bureau) waived the FCC’s letter of credit (LOC) rules for Connect America Fund Phase II auction (Auction 903) and Rural Broadband Experiments (RBE) support recipients in 2020 and 2021. Recipients of support from both programs were permitted to comply with the less extensive letter of credit rules established by the FCC for the Rural Digital Opportunity Fund (RDOF).

Today, many months after passage of the landmark Infrastructure Investment and Jobs Act, the states are finally on the cusp of implementing National Telecommunications and Information Administration’s $40+ billion Broadband Equity Access and Deployment program. Some states are confidently moving ahead quickly, while others are in the early days of developing concrete plans for how they will manage this historic federal investment.

A group known as the Coalition of Rural Digital Opportunity Fund (RDOF) Winners is still hoping that the Federal Communications Commission will release additional funding to the companies to help cover the large increases in deployment costs that the winners have experienced since the RDOF rural broadband funding auction was completed in 2020, just prior to the start of the COVID-19 pandemic in the US. One of the companies seeking extra funding is Aristotle Broadband, which won $62 million in the auction for deployments primarily in Arkansas and Mississippi, including persistent poverty cou