RDOF News Update – FCC Rural Digital Opportunity Fund

June 21, 2022 Tony Veach

The FCC’s Rural Digital Opportunity Fund (RDOF) Phase I auction (Auction 904) concluded on November 25, 2020, with 180 winning bidders. The total amount of 10-year RDOF support won at auction is $9.23 billion. Winning bids cover 5,220,833 locations in 49 states and one U.S. territory. Winning bids for download speeds of at least 100 Mbps cover 99.7% of locations, with over 85% of locations covered by winning bids for Gigabit speed service.

A list of Auction 904 winning bidders is available here. A summary of the results by state is available here. An interactive map of the RDOF auction results is available on the Auction 904 web page. Additional information is available on the FCC’s RDOF auction website: https://www.fcc.gov/auction/904.

Below is an update on the latest RDOF news.

LTD Broadband Withdraws Petition For Reconsideration Of FCC Order Stripping Company Of RDOF Support In California

June 21, 2022 – LTD Broadband LLC has filed to withdraw its Petition for Partial Reconsideration of a July 2021 Wireline Competition Bureau Order denying LTD’s petition for waiver of the Rural Digital Opportunity Fund (RDOF) auction’s eligible telecommunications carrier (ETC) requirement. LTD Broadband sought waiver of the requirement to be designated as an ETC in areas it won RDOF support prior to June 7, 2021 for eight states where it was a winning bidder. The Bureau’s July 2021 Order denied the waiver request for the states of California, Kansas, and Oklahoma, which resulted in LTD being declared to be in default of its RDOF winning bids there. With respect to the state of California, LTD Broadband was deemed to be in default of the $187,506,059.70 in total RDOF support it won to serve 76,856 locations.

LTD’s Petition for Partial Reconsideration sought reconsideration of the Order, but only with respect to ETC designation in the state of California. However, LTD Broadband’s recent filing requests that the petition be withdrawn because “it has become apparent that LTD will not be able to obtain [ETC] designation for the required census blocks within a reasonable timeframe to allow it to meet its RDOF obligations.” In a May 2022 decision, the California Public Utilities Commission (CPUC) denied LTD’s request to rehear the CPUC order which rejected “LTD’s Application for a Certificate of Public Convenience and Necessity and request for ETC designation in California.” In its FCC withdrawal request, LTD notes that it “continues to believe that this [CPUC] decision was premised on errors of both fact and law,” but nevertheless it “has determined that the broad discretion afforded to the CPUC by the California courts makes it unlikely that it could obtain reversal of that decision.”

Rural Digital Opportunity Fund: FCC Authorizes RDOF Support For 513 Winning Bids (10th RDOF Authorization)

June 14, 2022 – The FCC’s Wireline Competition Bureau has authorized Rural Digital Opportunity Fund (RDOF) Phase I auction support for 513 winning bids. This is the tenth Public Notice authorizing RDOF support. A list of the authorized winning bids is available as Attachment A to the Bureau’s Public Notice. Attachment B contains a list of RDOF defaulted bids – winning bids associated with winning RDOF bidders or their assignees that have notified the FCC that they do not intend to pursue all or some of their winning bids in a state.

The first service obligation that must be met by the RDOF support recipients authorized by the Public Notice is the deployment of broadband service to 40% of locations in a state by December 31, 2025. The broadband service must meet the standards for which support was received (i.e., speed levels and latency). After that, these RDOF support recipients must achieve the following broadband service deployment obligations: 60% of locations in a state by December 31, 2026; 80% of locations in a state by December 31, 2027; and 100% of locations in a state by December 31, 2028.

Rural Digital Opportunity Fund: FCC Ready To Authorize 88 RDOF Winning Bids

May 25, 2022 – The FCC’s Rural Broadband Auctions Task Force, Wireline Competition Bureau, and Office of Economics and Analytics have announced they are ready to authorize support for 88 Rural Digital Opportunity Fund (RDOF) Phase I auction winning bids.

This is the tenth set of RDOF winning bids that are ready to be authorized. A list showing each winning bid ready to be authorized, the corresponding long-form applicant, each winning bid’s total amount of 10-year support, and other details is available as Attachment A to the Public Notice.

Also, Attachment B is a list of defaulted bids in Georgia (Trailwave Fiber Inc.), Iowa (Farmers Mutual Cooperative Telephone Company), Oklahoma (Terral Telephone Company), Tennessee (Newport Utilities), Texas (Valor Telecommunications of Texas, LLC dba Winds.), and West Virginia (GigaBeam Networks, LLC).

FCC staff reviewed the long-form applications associated with the winning bids, and determined they met all legal, financial, and technical requirements. To be authorized to receive the listed support amounts, however, each RDOF winning bidder must submit acceptable irrevocable stand-by letters of credit and Bankruptcy Code opinion letters for each state where they have winning bids that are ready to be authorized prior to 6:00 p.m. ET on June 9, 2022. The FCC will continue to review RDOF long-form applications on a rolling basis, and will announce other approvals of long-forms in future public notices. Additional information on broadband providers set to receive RDOF Phase I auction support and RDOF funding amounts by state are available on the FCC’s RDOF auction website: https://www.fcc.gov/auction/904.

Rural Digital Opportunity Fund: FCC Authorizes RDOF Support For 830 Winning Bids (9th RDOF Authorization)

May 12, 2022 – The FCC’s Wireline Competition Bureau has announced it has authorized Rural Digital Opportunity Fund (RDOF) Phase I auction support for 830 winning bids. This is the ninth Public Notice authorizing RDOF support. A list of the authorized winning bids is available as Attachment A to the Bureau’s Public Notice. The authorizations were granted after the Bureau reviewed long-form application information for each authorized winning bidder, including letters of credit and Bankruptcy Code opinion letters, and concluded the submissions were acceptable. Consequently, the Bureau has directed and authorized the Universal Service Administrative Company to obligate and disburse Universal Service Fund support to each winning bidder. Support will be disbursed in 120 monthly payments, beginning at the end of May 2022. The first service obligation that must be met by the RDOF support recipients authorized by the Public Notice is the deployment of broadband service to 40% of locations in a state by December 31, 2025. The broadband service must meet the standards for which support was received (i.e., speed levels and latency). After that, these RDOF support recipients must achieve the following broadband service deployment obligations: 60% of locations in a state by December 31, 2026; 80% of locations in a state by December 31, 2027; and 100% of locations in a state by December 31, 2028.

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Minnesota Telecom Alliance Supplements Petition to Deny LTD Broadband’s RDOF Funding In Minnesota & Iowa

May 9, 2022 – The Minnesota Telecom Alliance (MTA) has filed a third supplement to the petition filed by it and the Iowa Communications Alliance seeking to deny LTD Broadband, LLC’s Rural Digital Opportunity Fund (RDOF) Phase I Auction long-form application. In their original Petition To Deny, filed in March 2021, the two groups’ contend that LTD Broadband simply does not have the experience, resources, and general wherewithal to meet its RDOF broadband network deployment obligations in Minnesota and Iowa. LTD Broadband won RDOF support to serve 102,005 locations in Minnesota ($311,877,936.40) and 12,916 locations in Iowa ($23,184,786.30).

The recent third supplement enters into the FCC’s record a petition filed by MTA and the Minnesota Electric Association with the Minnesota Public Utilities Commission (PUC) regarding LTD’s Eligible Telecommunications Carrier (ETC) status in Minnesota. Specifically, they request that the Minnesota PUC initiate a proceeding to revoke LTD’s expanded ETC designation and deny LTD’s funding certification for 2023. Arguments in their petition rely heavily on facts that have emerged out of a recent decision by the South Dakota PUC which denied an LTD request to expand its ETC designation to include 7,481 RDOF supported locations in South Dakota. The South Dakota Commission concluded LTD lacked the ability to build and operate the broadband network contemplated in its South Dakota RDOF bid. MTA and the Minnesota Electric Association claim “[n]ewly available facts will similarly show that LTD cannot meet the far more extensive commitments it made to qualify for RDOF funding for approximately 102,000 locations in Minnesota.”

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Rural Digital Opportunity Fund: FCC Ready To Authorize $200 Million In RDOF Support For 2,324 Winning Bids

May 3, 2022 – The FCC’s Rural Broadband Auctions Task Force, Wireline Competition Bureau, and Office of Economics and Analytics have announced they are ready to authorize support for 2,324 Rural Digital Opportunity Fund (RDOF) Phase I auction winning bids. This is the ninth set of RDOF winning bids that are ready to be authorized – $199,336,695 to fund new broadband deployments in 26 states and the Northern Mariana Islands to over 230,000 locations. A list showing each winning bid ready to be authorized, the corresponding long-form applicant, each winning bid’s total amount of 10-year support, and other details is available as Attachment A to the Public Notice. According to the FCC, so far, the RDOF program “has committed over $5.2 billion for broadband deployment to 3 million locations in 47 states and the Northern Mariana Islands.”

Also, Attachment B to the Public Notice is a list of defaulted bids in Colorado, Georgia, Idaho, Massachusetts, Nevada, New Mexico, Texas, and Virginia. The census blocks containing the defaulted RDOF bids will potentially be eligible for other broadband funding programs.

For this ninth set of ready-to-be-authorized RDOF winning bids, FCC staff reviewed the long-form applications associated with the winning bids, and determined they met all legal, financial, and technical requirements. To be authorized to receive the listed support amounts, however, each RDOF winning bidder must submit acceptable irrevocable stand-by letters of credit and Bankruptcy Code opinion letters for each state where they have winning bids that are ready to be authorized prior to 6:00 p.m. ET on May 17, 2022.

The FCC will continue to review RDOF long-form applications on a rolling basis, and will announce other approvals of long-forms in future public notices. Additional information on broadband providers set to receive RDOF Phase I auction support and RDOF funding amounts by state are available on the FCC’s RDOF auction website: https://www.fcc.gov/auction/904.

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FCC Fines LTD Broadband For Violating RDOF Auction Rules On Prohibited Communications

May 3, 2022 – The FCC has issued a Notice Of Apparent Liability For Forfeiture against LTD Broadband LLC for repeatedly engaging in prohibited communications of its bidding and bidding strategies during the FCC’s Rural Digital Opportunity Fund (RDOF) Phase I Auction, and its failure to timely report such prohibited communications. The FCC has proposed LTD pay a forfeiture of $100,000. LTD, a fixed wireless broadband service provider, was the single largest winner of universal service support in the RDOF Phase I auction. As explained in the NAL, the FCC alleges LTD apparently violated the FCC’s auction rules on prohibited communications by willfully and repeatedly engaging in prohibited communications of its bidding, bidding strategies, and bidding results to Cox Communications, Inc. via LTD’s investment agent, RJM & Company, LLC. Also, LTD apparently violated the FCC’s auction rules by failing to report these communications to the FCC within the required five-day reporting window. LTD has 30 calendar days to pay the forfeiture or submit a written statement seeking reduction or cancellation of the proposed forfeiture.

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Rural Digital Opportunity Fund: FCC Authorizes RDOF Support For 1,345 Winning Bids (8th RDOF Authorization)

April 15, 2022 – The FCC’s Wireline Competition Bureau has announced it has authorized Rural Digital Opportunity Fund (RDOF) Phase I auction support for 1,345 winning bids. This is the eighth Public Notice authorizing RDOF support. A list of the authorized winning bids is available as Attachment A to the Bureau’s Public Notice. Some of the authorized winning bids include those made by Firefly Fiber Broadband; Centranet, LLC; Forked Deer Connect, LLC; Mediacom; Midwest Energy Cooperative; OzarksGo; Peoples Telecom of Kentucky; and Windstream.

The authorizations were granted after the Bureau reviewed long-form application information for each authorized winning bidder, including letters of credit and Bankruptcy Code opinion letters, and concluded the submissions were acceptable. Consequently, the Bureau has directed and authorized the Universal Service Administrative Company to obligate and disburse Universal Service Fund support to each winning bidder. Support will be disbursed in 120 monthly payments, beginning at the end of April 2022. The first servie obligation that must be met by the RDOF support recipients authorized by the Public Notice is the deployment of broadband service to 40% of locations in a state by December 31, 2025. The broadband service must meet the standards for which support was received (i.e., speed levels and latency). After that, these RDOF support recipients must achieve the following broadband service deployment obligations: 60% of locations in a state by December 31, 2026; 80% of locations in a state by December 31, 2027; and 100% of locations in a state by December 31, 2028.

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Rural Digital Opportunity Fund: FCC Ready To Authorize $313 Million In RDOF Support For 557 Winning Bids

March 25, 2022 – The FCC’s Rural Broadband Auctions Task Force, Wireline Competition Bureau, and Office of Economics and Analytics have announced they are ready to authorize support for 557 Rural Digital Opportunity Fund (RDOF) Phase I auction winning bids.

This is the eighth set of RDOF winning bids that are ready to be authorized – $313 million in ten-year RDOF support “to fund new broadband deployments in 19 states bringing service to over 130,000 locations.” According to the FCC’s News Release, so far, the RDOF program “has provided over $5 billion in funding for new deployments in 47 states to bring broadband to over 2.8 million locations.” A list showing each winning bid ready to be authorized, the corresponding long-form applicant, each winning bid’s total amount of 10-year support, and other details is available as Attachment A to the Public Notice.

For this eighth set of ready-to-be-authorized RDOF winning bids, FCC staff reviewed the long-form applications associated with the winning bids, and determined they met all legal, financial, and technical requirements. To be authorized to receive the listed support amounts, however, each RDOF winning bidder must submit acceptable irrevocable stand-by letters of credit and Bankruptcy Code opinion letters for each state where they have winning bids that are ready to be authorized prior to 6:00 p.m. ET on April 8, 2022.

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FCC Denies RHMD, LLC’s ETC Waiver Petition – RHMD, LLC Will Lose $18.3 Million In Rural Digital Opportunity Fund Support In Georgia

March 25, 2022 – The FCC’s Wireline Competition Bureau has issued an Order denying a waiver request submitted by RHMD, LLC that sought a waiver of the FCC’s June 7, 2021 deadline requiring each Rural Digital Opportunity Fund (RDOF) Phase I auction long-form applicant to demonstrate that it has been designated as an eligible telecommunications carrier (ETC) in each of the geographic areas for which it seeks to be authorized for RDOF support. The Bureau denied the waiver petition after determining RHMD “failed to engage in good faith efforts to pursue and obtain the required ETC designation and deny its petition.”

RHMD won $18,303,843.20 in 10-year RDOF support to deploy broadband service to 6,943 locations in Georgia. As a result of the decision to deny the ETC waiver request, RHMD is in default on its winning bids in Georgia. The FCC will eventually release a public notice officially announcing the default and loss of $18.3 million in RDOF support.

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Rural Digital Opportunity Fund: FCC Authorizes RDOF Support For 5,223 Winning Bids (7th RDOF Authorization)

March 15, 2022 – The FCC’s Wireline Competition Bureau has announced it has authorized Rural Digital Opportunity Fund (RDOF) Phase I auction support for 5,223 winning bids. This is the seventh Public Notice authorizing RDOF support. A list of the authorized winning bids is available as Attachment A to the Bureau’s Public Notice. Many of the authorized winning bids belong to Bright House Networks, Charter, and Time Warner Cable. The authorizations were granted after the Bureau reviewed long-form application information for each authorized winning bidder, including letters of credit and Bankruptcy Code opinion letters, and concluded the submissions were acceptable. Consequently, the Bureau has directed and authorized the Universal Service Administrative Company to obligate and disburse Universal Service Fund support to each winning bidder. Support will be disbursed in 120 monthly payments, beginning at the end of March 2022. The first broadband deployment milestone that must be met by the RDOF support recipients authorized by the Public Notice is 40% of locations in a state by December 31, 2025.

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Rural Digital Opportunity Fund: FCC Ready To Authorize $640 Million In RDOF Support For 952 Winning Bids

March 10, 2022 – The FCC’s Rural Broadband Auctions Task Force, Wireline Competition Bureau, and Office of Economics and Analytics have announced they are ready to authorize support for 952 Rural Digital Opportunity Fund (RDOF) Phase I auction winning bids.

This is the seventh set of RDOF winning bids that are ready to be authorized – $640 million in ten-year RDOF support for “new broadband deployments in 26 states bringing service to nearly 250,000 locations.” According to the FCC’s News Release, so far, the RDOF program “has provided $4.7 billion in funding to nearly 300 carriers for new deployments in 47 states to bring broadband to almost 2.7 million locations.”

A list showing each winning bid ready to be authorized, the corresponding long-form applicant, each winning bid’s total amount of 10-year support, and other details is available as Attachment A to the Public Notice. Attachment B contains a list of default bids. These are bids that RDOF winners or their assignees have notified the FCC that they do not intend to pursue. RDOF support will not be authorized for those bids, and the winning bidders and assignees are in default and may be subject to forfeiture penalties.

For this seventh set of ready-to-be-authorized RDOF winning bids, FCC staff reviewed the long-form applications associated with the winning bids, and determined they met all legal, financial, and technical requirements. To be authorized to receive the listed support amounts, however, each RDOF winning bidder must submit acceptable irrevocable stand-by letters of credit and Bankruptcy Code opinion letters for each state where they have winning bids that are ready to be authorized prior to 6:00 p.m. ET on March 24, 2022. The FCC will continue to review RDOF long-form applications on a rolling basis, and will announce other approvals of long-forms in future public notices. Additional information on broadband service providers set to receive RDOF Phase I auction support and RDOF funding amounts by state are available from the FCC’s RDOF auction website: https://www.fcc.gov/auction/904.

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FCC Designates RDOF Auction Winners Cyber Broadband & Tombigbee Communications As ETCs In Alabama

February 22, 2022 – The FCC’s Wireline Competition Bureau has designated Cyber Broadband Inc. and Tombigbee Communications, LLC as eligible telecommunications carriers (ETCs) in Alabama. The ETC designation is limited to the areas in Alabama where the two providers were Rural Digital Opportunity Fund (RDOF) Phase I auction winners. Specifically, ETC designation in the areas in Alabama “is conditioned upon, limited to, and effective upon the carriers’ authorization to receive support under the [RDOF] program.” Additionally, the Bureau has stated that “[a]ny such ETC designation covering RDOF supported areas, however, should not be interpreted as an entitlement to support or an indication that the Bureau will ultimately authorize the petitioner for support.”

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Rural Digital Opportunity Fund: FCC Authorizes RDOF Support For 2,576 Winning Bids (6th RDOF Authorization)

February 14, 2022 – The FCC’s Wireline Competition Bureau has announced it has authorized Rural Digital Opportunity Fund (RDOF) Phase I auction support for 2,576 winning bids. This is the sixth Public Notice authorizing RDOF support. A list of the authorized winning bids is available as Attachment A to the Bureau’s Public Notice. The authorizations were granted after the Bureau reviewed long-form application information for each authorized winning bidder, including letters of credit and Bankruptcy Code opinion letters, and concluded the submissions were acceptable. Consequently, the Bureau has directed and authorized the Universal Service Administrative Company to obligate and disburse Universal Service Fund support to each winning bidder. Support will be disbursed in 120 monthly payments, beginning at the end of February 2022.

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Rural Digital Opportunity Fund: FCC Ready To Authorize $1.2 Billion In RDOF Support For 5,254 Winning Bids

January 28, 2022 – The FCC’s Rural Broadband Auctions Task Force, Wireline Competition Bureau, and Office of Economics and Analytics have announced they are ready to authorize support for 5,254 Rural Digital Opportunity Fund (RDOF) Phase I auction winning bids. This is the sixth group of RDOF winning bids that is ready to be authorized – $1.2 billion in ten-year RDOF support for 23 broadband service providers to serve over 1 million locations in 32 states.

For this sixth set of ready-to-be-authorized RDOF winning bids, FCC staff reviewed the long-form applications associated with the winning bids, and determined they met all legal, financial, and technical requirements. To be authorized to receive the listed support amounts, however, each RDOF winning bidder must submit acceptable irrevocable stand-by letters of credit and Bankruptcy Code opinion letters for each state where they have winning bids that are ready to be authorized prior to 6:00 p.m. ET on February 11, 2022. The FCC will continue to review RDOF long-form applications on a rolling basis, and will announce other approvals of long-forms in future public notices. Additional information on broadband service providers set to receive RDOF Phase I auction support and RDOF funding amounts by state are available from the FCC’s RDOF auction website: https://www.fcc.gov/auction/904.

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FCC’s Rural Broadband Accountability Plan Will Increase USF High-Cost Audits, Target RDOF Compliance

January 28, 2022 – The Federal Communications Commission (FCC) has announced the creation of the Rural Broadband Accountability Plan, which is a new FCC effort to ensure compliance with FCC rules for the universal service fund’s (USF) high-cost program. The FCC has released a Fact Sheet containing limited details on the new oversight plan.

Under the Rural Broadband Accountability Plan, the number of USF audits performed by the Universal Service Administrative Company (USAC) in 2022 will double, as compared to 2021. Audits will include on-site audits, audits and verifications based upon random selection, and increased verifications prior to a program’s first required deployment milestone. Service providers that receive a large amount of USF support “will be subject to an on-site audit in at least one state.” Service providers that are considered higher-risk recipients “will be subject to additional audits and verifications.” Also, in an effort to increase transparency within the high-cost support programs, the results of verifications, audits, and speed and latency performance testing will be made available to the public on USAC’s website.

The new Rural Broadband Accountability Plan efforts will apply to all of the FCC programs that distribute USF high-cost support, such as: Connect America Fund (CAF) Phase II Model; Alternative Connect America Cost Model (Original A-CAM) and Revised ACAM; ACAM II; Connect America Fund Broadband Loop Support (CAF BLS); Rural Broadband Experiments (RBE); Alaska Plan; CAF Phase II Auction; and Rural Digital Opportunity Fund (RDOF).

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Rural Digital Opportunity Fund: FCC Authorizes RDOF Support For 2,521 Winning Bids (5th RDOF Authorization)

January 14, 2022 – The FCC’s Wireline Competition Bureau has announced it has authorized Rural Digital Opportunity Fund (RDOF) Phase I auction support for 2,521 winning bids. This is the fifth Public Notice authorizing RDOF support. A list of the authorized winning bids is available as Attachment A to the Bureau’s Public Notice. Many of the winning bids authorized for support belong to Windstream. The authorizations were granted after the Bureau reviewed long-form application information for each authorized winning bidder, including letters of credit and Bankruptcy Code opinion letters, and concluded the submissions were acceptable. Consequently, the Bureau has directed and authorized the Universal Service Administrative Company to obligate and disburse Universal Service Fund support to each winning bidder. Support will be disbursed in 120 monthly payments, beginning at the end of January 2022.

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Rural Digital Opportunity Fund: FCC Ready To Authorize $1.041 Billion In RDOF Support For 7,608 Winning Bids

December 16, 2021 – The FCC’s Rural Broadband Auctions Task Force, Wireline Competition Bureau, and Office of Economics and Analytics have announced they are ready to authorize support for 7,608 Rural Digital Opportunity Fund (RDOF) Phase I auction winning bids. A list showing each winning bid ready to be authorized, the corresponding long-form applicant, each winning bid’s total amount of 10-year support, and other details is available as Attachment A to the Public Notice.

This is the fifth set of RDOF winning bids that is ready to be authorized – $1,041,074,000 in ten-year RDOF support for 69 broadband service providers to serve 518,088 locations in 32 states. So far, the FCC has announced over $2.7 billion in funding to RDOF Phase I auction winning bidders for new broadband service deployments. Information on broadband service providers set to receive RDOF Phase I auction support and RDOF funding amounts by state are available from the FCC’s RDOF auction website: https://www.fcc.gov/auction/904.

For this fifth set of ready-to-be-authorized RDOF winning bids, FCC staff reviewed the long-form applications associated with each winning bid, and determined they met all legal, financial, and technical requirements. To be authorized to receive the listed support amounts, however, each RDOF winning bidder must submit acceptable irrevocable stand-by letters of credit and Bankruptcy Code opinion letters for each state where they have winning bids that are ready to be authorized prior to 6:00 p.m. ET on Friday, January 7, 2022. The FCC will continue to review RDOF long-form applications on a rolling basis, and will announce other approvals of long-forms in future public notices.

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Rural Digital Opportunity Fund: FCC Announces RDOF Defaulted Bids

December 16, 2021 – The FCC’s Rural Broadband Auctions Task Force, Wireline Competition Bureau, and Office of Economics and Analytics have announced that several Rural Digital Opportunity Fund (RDOF) Phase I auction winning bidders have notified the FCC that they do not intend to pursue some or all of their RDOF winning bids. The winning bidders and assignees are considered to be in default for these bids and subject to FCC Enforcement Bureau action, including forfeiture penalties. A list showing these defaulted bids is available as Attachment B to the Public Notice. The census blocks associated with the defaulted bids will be potentially eligible for other broadband funding programs. The FCC expects to announce additional RDOF defaults in future public notices.

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Rural Digital Opportunity Fund: FCC Denies Hotwire Communications Waiver Petition – Hotwire Defaults On RDOF Winning Bids In Florida

December 16, 2021 – The FCC’s Wireline Competition Bureau and Office of Economics and Analytics have denied a petition filed by Hotwire Communications, Ltd. (Hotwire) seeking waiver of the FCC rule that prohibits an RDOF winning bidder from making a major modification to its pending long-form application. Consequently, Hotwire has defaulted on its RDOF winning bids in the state of Florida.

When Hotwire filed its short-form application to participate in the RDOF Phase I auction, it listed one direct owner, Michael Karp, as having 100% ownership interest, and did not disclose any pending or prospective changes in ownership. Hotwire then won $5,150,040 in 10-year RDOF support to serve 3,233 locations in Florida. Hotwire’s RDOF long-form application contained the same ownership information as its short-form application.

Hotwire subsequently amended its RDOF long-form application to disclose that on April 22, 2021, Michael Karp consummated a transaction in which he transferred his ownership interest to a new entity, Hotwire Holdings, LLC, and Hotwire became a wholly-owned subsidiary of Hotwire Holdings, LLC, resulting in the following ownership breakdown:

Following the transaction, Mr. Karp holds a 40% equity and voting interest in Hotwire Holdings, LLC, while four funds owned by The Blackstone Group, Inc. hold an aggregate equity and voting interest of 50%, and a company owned solely by Mr. Karp’s wife, Kristen Johnson, holds the remaining 10%. Hotwire’s long-form amendment further reports that a single individual, Stephen Schwarzman, ultimately controls 50% of Hotwire Holdings, LLC, through a chain of Blackstone holding companies. The amendment further explains that Hotwire Holdings, LLC, is controlled by a board of managers comprised of Mr. Karp, Ms. Johnson, and two Blackstone executives.

Concurrently with its RDOF long-form amendment, Hotwire fired a petition for waiver of the major modification prohibition, and argued the transaction was pro forma transfer. The FCC denied the waiver petition. First, the FCC determined the transaction was not a pro forma transfer because “[s]ixty percent of the voting stock and equity ownership of Hotwire…changed hands, with 50% of the equity and voting stock now being controlled by Blackstone.” Second, the FCC “conclude[d] that Hotwire has not demonstrated good cause to grant its requested waiver.” The FCC determined that Hotwire presented a situation that the rule prohibiting major modifications to a long-form application is intended to address:

The purpose of the rule is to foster participation and competition in the auction by ensuring that an auction applicant’s ownership information, real parties in interest, and financial condition can be fully assessed prior to the start of bidding, resulting in a pre-auction process that is transparent for the Commission, auction participants, and other interested parties and that enhances auction competition by leveling the informational playing field. The rule also promotes transparency and competition by limiting the extent to which after the close of bidding and prior to authorization of the award a winning bidder can turn around and “shop” its winning bids to others. Among other things, the prohibition deters bidders from participating with an expectation that, post-auction, they may be able to leverage their winning bids in a late effort to gain financing, and it avoids unfairness to other bidders that comply with the auction rules. Furthermore, the rule promotes competition within the auction by encouraging interested entities to participate in the bidding directly and compete for the desired offered items, rather than subsequently combining their resources with a winning bidder after the auction.

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Rural Digital Opportunity Fund: FCC Authorizes RDOF Support For 2,008 Winning Bids (4th RDOF Authorization)

December 14, 2021 – The FCC’s Wireline Competition Bureau has announced it has authorized Rural Digital Opportunity Fund (RDOF) Phase I auction support for 2,008 winning bids. This is the fourth RDOF support authorization. A list of the authorized winning bids is available as Attachment A to the Bureau’s Public Notice. The authorizations were granted after the Bureau reviewed long-form application information for each authorized winning bidder, including letters of credit and Bankruptcy Code opinion letters, and concluded the submissions were acceptable. Consequently, the Bureau has directed and authorized the Universal Service Administrative Company to obligate and disburse Universal Service Fund support to each winning bidder. Support will be disbursed in 120 monthly payments, beginning at the end of December 2021.

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Rural Digital Opportunity Fund: FCC Authorizes RDOF Support For 311 Winning Bids (3rd RDOF Authorization)

November 12, 2021 – The FCC’s Wireline Competition Bureau has announced it has authorized Rural Digital Opportunity Fund (RDOF) support for 311 winning bids. This is the third RDOF support authorization. A list of the authorized winning bids is available as Attachment A to the Bureau’s Public Notice. The authorizations were granted after the Bureau reviewed long-form application information for each authorized winning bidder, including letters of credit and Bankruptcy Code opinion letters, and concluded the submissions were acceptable. Consequently, the Bureau has directed and authorized the Universal Service Administrative Company to obligate and disburse Universal Service Fund support to each winning bidder. Support will be disbursed in 120 monthly payments, beginning at the end of November 2021.

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Rural Digital Opportunity Fund: FCC Ready To Authorize $709 Million In RDOF Support For 2,081 Winning Bids

November 10, 2021 – The FCC’s Rural Broadband Auctions Task Force, Wireline Competition Bureau, and Office of Economics and Analytics have announced they are ready to authorize support for 2,081 Rural Digital Opportunity Fund (RDOF) Phase I auction winning bids. Funding will eventually go to 50 broadband service providers to deploy broadband services to over 400,000 locations in 26 states. A list showing each winning bid ready to be authorized, the corresponding long-form applicant, each winning bid’s total amount of 10-year support, and other details is available as Attachment A to the Public Notice. Much of the funding in this announcement will be provided to rural electric cooperatives.

This is the fourth group of RDOF winning bids that is ready to be authorized – a total of $709,060,159 in ten-year RDOF support. In total, the FCC has announced over $1.7 billion in funding to RDOF Phase I auction winning bidders for new broadband service deployments.

A list of broadband providers and RDOF Phase I auction funding amounts by state, is available from the FCC’s RDOF auction website: https://www.fcc.gov/auction/904.

The FCC reviewed the long-form applications associated with each winning bid, and determined they met all legal, financial, and technical requirements. To be authorized to receive the listed support amounts, however, each RDOF winning bidder must submit acceptable irrevocable stand-by letters of credit and Bankruptcy Code opinion letters for each state where they have winning bids that are ready to be authorized prior to 6:00 p.m. ET on November 30, 2021. The FCC will continue to review RDOF long-form applications on a rolling basis, and will announce other approvals of long-forms in future public notices.

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FCC Denies LTD Broadband ETC Waiver Request; LTD Stripped Of RDOF Support In Iowa, Nebraska, & North Dakota

October 20, 2021 – The FCC’s Wireline Competition Bureau has released an Order partially denying a petition filed by LTD Broadband LLC seeking waiver of a Rural Digital Opportunity Fund (RDOF) Phase I auction long-form requirement.

LTD Broadband sought waiver of the FCC’s June 7, 2021 deadline requiring each RDOF long form applicant “to demonstrate, with appropriate documentation, that it has been designated as an eligible telecommunications carrier (ETC) in each of the geographic areas for which it seeks to be authorized for [RDOF] support.” LTD Broadband requested the waiver for eight states where it won support. The Wireline Competition Bureau, in a decision issued in July 2021, denied the waiver with respect to California, Kansas, and Oklahoma. It will rule on the merits of LTD’s waiver with respect to South Dakota and Texas in a future decision.

In this Order, the Bureau has denied “LTD’s request to waive the deadline to submit documentation of its ETC designations in Iowa, Nebraska, and North Dakota.” As for its reasoning, the Bureau “note[d] that LTD did not file its ETC applications in any of these three states within the 30-day ‘good faith presumption’ window,” and concluded that LTD Broadband failed to demonstrate good cause justifying waiver of the June 7th ETC documentation deadline. As a consequence of the decision, LTD Broadband is in default of its winning bids in Iowa, Nebraska, and North Dakota. Accordingly, LTD will lose the following support amounts it was awarded from the RDOF auction:

Iowa – $23,184,786.30 in ten-year support to serve 12,916 locations

Nebraska – $33,228,644.00 in ten-year support to serve 28,729 locations

North Dakota – $ 8,574,318.00 in ten-year support to serve 831 locations

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Rural Digital Opportunity Fund: FCC Ready To Authorize Support For 1774 Winning Bids

October 20, 2021 – The FCC’s Rural Broadband Auctions Task Force, Wireline Competition Bureau, and Office of Economics and Analytics have announced they are ready to authorize support for 1774 Rural Digital Opportunity Fund (RDOF) Phase I auction winning bids. A list showing each winning bid ready to be authorized, the corresponding long-form applicant, each winning bid’s total amount of 10-year support, and other details is available as Attachment A to the Public Notice.

FCC staff are reviewing RDOF long-form applications on a rolling basis, and will announce other approvals of long-forms in future public notices.

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FCC Denies NW Fiber LLC Waiver Request; Strips Company Of $7 Million In RDOF Support In Washington

October 20, 2021 – The FCC’s Wireline Competition Bureau has released an Order denying a petition filed by NW Fiber, LLC seeking waiver of the Rural Digital Opportunity Fund (RDOF) Phase I auction long-form requirement.

NW Fiber, an ISP headquartered in Colfax, Washington, participated in the RDOF auction as part of a two-entity consortium with St. John Telephone, Inc., a rural local exchange carrier that provides services in and around St. John, Washington. The consortium was the winning bidder in 14 census block groups in Washington, all of which were subsequently assigned to NW Fiber. Specifically, the company was awarded $7,116,876.00 in ten-year support to serve 1,057 locations. However, as explained in its waiver petition, NW Fiber was unaware of the RDOF auction’s long-form requirement because it “had relied upon St. John for the consortium’s FCC filings and compliance.” NW Fiber learned of the January 29, 2021 long-form filing deadline on February 8, 2021, after the FCC contacted St. John to inquire about the missing long-form. NW Fiber then requested a waiver of the deadline with respect to 14 census block groups in Washington where it won support.

The Bureau has denied NW Fiber’s waiver request, concluding NW Fiber “has not established special circumstances to warrant a waiver of the January 29 deadline.” To explain its decision, the Bureau explained that “[i]t is well established that a lack of familiarity with or ignorance of the Commission’s rules and procedures does not constitute special circumstances that justify granting a waiver.” Also, the Bureau noted that even after NW Fiber filed its waiver petition, the company “has continued to miss required deadlines and failed to complete the requirements of the program established by the Commission.” To drive the point home, the Bureau then said it doubted NW Fiber’s ability to follow through on the RDOF program’s obligations:

Given the company’s continued failure to meet the Auction 904 long-form requirements and deadlines, we have significant concerns about its ability to fulfill the ongoing deployment and reporting requirements that all Auction 904 support recipients must satisfy.

The Bureau will release a public notice in the near future finding NW Fiber in default on its bids in the state of Washington.

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Rural Digital Opportunity Fund: FCC Ready To Authorize Support For 484 Winning Bids

October 7, 2021 – The FCC’s Rural Broadband Auctions Task Force, Wireline Competition Bureau, and Office of Economics and Analytics have announced they are ready to authorize support for 484 Rural Digital Opportunity Fund (RDOF) Phase I auction winning bids. A list showing each winning bid ready to be authorized, the corresponding long-form applicant, each winning bid’s total amount of 10-year support, and other details is available as Attachment A to the Public Notice. However, the support amounts listed in Attachment A are subject to change.

According to the FCC’s News Release, “[i]n this funding wave, 42 broadband providers will bring fiber-to-the-home gigabit broadband to approximately 65,000 locations in 21 states over the next 10 years.”

The FCC reviewed the long-form applications associated with each winning bid, and determined they met all legal, financial, and technical requirements. To be authorized to receive the listed support amounts, however, each RDOF winning bidder must submit acceptable irrevocable stand-by letters of credit and Bankruptcy Code opinion letters for each state where they have winning bids that are ready to be authorized prior to 6:00 p.m. ET on October 22, 2021. FCC staff are reviewing long-form applications on a rolling basis, and will announce other approvals of long-forms in future public notices.

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Rural Digital Opportunity Fund: 85 Winning Bidders Reject RDOF Support In 5,089 Census Blocks

October 7, 2021 – The FCC’s Rural Broadband Auctions Task Force, Wireline Competition Bureau, and Office of Economics and Analytics have released a preliminary list of areas where Rural Digital Opportunity Fund (RDOF) Phase I auction winning bidders have notified the FCC that they do not intend to pursue RDOF support.

In July 2021, the FCC sent letters notifying 197 RDOF winning bidders that some census blocks where they won support are already served or raise concerns about wasteful spending. Specifically, these problematic census blocks are “already served by one or more service providers that offer 25/3 Mbps broadband service or otherwise raise significant concerns about wasteful spending” because they contain parking lots, international airports, or otherwise do not contain residential or business locations. Each letter contained a list of the specific census blocks for each RDOF winner. In the letter, the FCC directed the RDOF winner “to conduct due diligence” by assessing whether existing broadband service in the identified census blocks will affect their ability to meet RDOF requirements and deployment milestones.

According to the FCC, “85 winning bidders have chosen not to pursue buildout in 5,089 census
blocks in response to letters the FCC sent asking applicants to review their bids in areas where
there was evidence of existing service or questions of potential waste.” The preliminary list of the identified areas where letter recipients indicated they will no longer pursue funding is available on the FCC’s RDOF – Auction 904 website under the “Results” tab.

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Rural Digital Opportunity Fund: FCC Authorizes RDOF Support For 466 Winning Bids (2nd RDOF Authorization)

September 15, 2021 – The FCC’s Wireline Competition Bureau has announced it has authorized Rural Digital Opportunity Fund (RDOF) support for 466 winning bids. The authorizations were granted after the Bureau reviewed long-form application information for each authorized winning bidder, including letters of credit and Bankruptcy Code opinion letters, and concluded the submissions were acceptable. A list of the authorized winning bids is available as Attachment A to the Bureau’s Public Notice. Consequently, the Bureau has directed and authorized the Universal Service Administrative Company to obligate and disburse Universal Service Fund support to each winning bidder. Support will be disbursed in 120 monthly payments, beginning at the end of September 2021.

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