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RDOF Order Passes With Goal of Holding Reverse Auction in 2020

Randy Sukow / Jan 30, 2020

The FCC today adopted a Report and Order establishing the Rural Digital Opportunity Fund (RDOF), a $20.4 billion program that will distribute universal service money over 10 years and extend broadband service where it does not yet exist. The order passed with the two Democratic commissioners “dissenting in part.” Said Chairman Ajit Pai, the aim now is to begin a reverse auction to distribute RDOF funds before the end of 2020.

Going into this morning’s meeting, there was significant industry debate over issues including the “Letter of Credit” requirement to participate in the bidding and establishing bidding preferences for gigabit services over lower-speed proposals. NRTC will study the final text of the order when it becomes available and will be ready to advise members on how changes to an earlier draft order apply to any planned broadband projects.

“We don't have unlimited funding and so one thing we cannot do in good conscience is waste this opportunity,” Chairman Ajit Pai said, summarizing the order. “We must target our limited funds to bring broadband to those who will otherwise not be served. That means limiting efforts to areas that do not have broadband and where there are no current federal and state programs that will ensure broadband is deployed in the near future.”

As outlined in an earlier draft of the order, Phase I RDOF will distribute about $16 billion in funds through a reverse auction, like the format of the 2018 Connect America Fund Phase II auction. Eligibility will be restricted to areas that do not have access to internet service of at least 10 Mbps upstream/1 Mbps downstream, as identified in FCC Form 477 data. A later RDOF Phase II will take place after the Commission completes work on more accurate broadband mapping. It will open eligibility in census blocks that Form 477-based maps have incorrectly marked as served.

Democratic commissioners complained that the FCC wrote the order in haste and should have waited until more accurate mapping was available for both Phases I and II.  “This is a ready-fire-aim approach that favors speed over funding the lasting results I think Americans truly need,” said Commissioner Geoffrey Starks.

“This is not the broadband plan we need. It is not guided by maps. It is not guided by data. It is guided by a desire to rush out the door, claim credit and pronounce our nation’s broadband problem solved,” said Commissioner Jessica Rosenworcel.

But prior to the Commission’s monthly agenda meeting this morning, Pai released a list of rural organizations and members of Congress that had released public statements praising the draft RDOF proposals. Commissioner Michael O'Rielly noted that even with flawed Form 477 data, the Commission can identify 8.4 million people in 2.7 million census blocks that do not have 10/1 Mbps service. “I believe those consumers have waited long enough and deserve to be prioritized,” he said.

Starks criticized a provision of the order that blocks RDOF funding for projects that receive USDA ReConnect or state broadband program funding.  “That means nearly 30 states that fund rural broadband through their own programs may find their eligibility reduced or eliminated,” he said. “These provisions discourage badly needed state and federal partnerships, risk unequal application of the rules between the states and create unnecessary risk of litigation.”

NTCA-The Rural Broadband Association showed enthusiastic support for the order overall, but also called for more discussion about the issues Starks raised. “It is important not to lose sight of those areas that are well-served today only by the grace of universal service support. These are market failure areas, where reasonably comparable consumer rates will not cover the costs of repaying loans taken out to build networks and the costs of maintaining networks once built,” said NTCA CEO Shirley Bloomfield in a statement.

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