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FCC Disqualifies Major RDOF Bidders LTD and Starlink

Randy Sukow

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The FCC yesterday rejected the long-form applications of two major bidders in the 2020 Rural Digital Opportunity Fund (RDOF) reverse auction. LTD Broadband and Starlink (SpaceX) between them provisionally won more than $2.1 billion in support over 10 years.

The Commission “determined that these applications failed to demonstrate that the providers could deliver the promised service. Funding these vast proposed networks would not be the best use of limited Universal Service Fund dollars to bring broadband to unserved areas across the United States,” Chairwoman Jessica Rosenworcel said a statement (PDF).  “We cannot afford to subsidize ventures that are not delivering the promised speeds or are not likely to meet program requirements,”

Yesterday’s decision could affect NRTC members and other potential rural participants in various current and upcoming broadband support programs. Ambiguity over the funding eligibility in many locations lingered as long as the FCC rulings on the LTD and Starlink were pending. The decision affects possible future awards through the American Rescue Plan Act (ARPA), the ReConnect Loan and Grant programs and the upcoming $42.5 billion Broadband Equity, Access and Deployment (BEAD) program.

The FCC decision confirms many of the points NRTC and NRECA raised in a joint white paper filed with the FCC in 2021.  The paper questioned the qualifications of many RDOF auction winners based on their technical and financial ability to provide broadband service.

The Commission originally intended to distribute $16 billion through RDOF’s first phase. With this decision, it has authorized a bit more than $5 billion, less than a third of that goal.  It remains unclear whether there will be a second phase of RDOF and whether money not distributed through the first phase would carry over to any potential Phase II of RDOF.

Many organizations and members of Congress in early 2021 raised similar questions about technical, financial, managerial and operational capabilities of a number of winning bidders.

“The RDOF auction exists to fund broadband deployment for rural Americans, not finance science experiments or underwrite risky bets,” NRECA Chairman Jim Matheson said, quoted in newsletter Communications Daily. The Daily also quoted John Janka, lobbyist for Starlink competitor Viasat as saying, “The Commission reached the right decision today.” Additional industry reaction is expected later today.

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