FCC Rural Digital Opportunity Fund – News Update
Rural Digital Opportunity Fund: FCC Ready To Authorize Support For 1,460 Winning Bids
July 26, 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 1,460 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 for each bid is available as Attachment A to the Public Notice.
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 Monday, August 9, 2021.
A separate letter of credit must be submitted for each state where the RDOF applicant has winning bids that are ready to be authorized, in an amount equal to at least the first year of support in the state. The value of the letter of credit must increase each year until it has been verified that the RDOF support recipient has met certain broadband buildout milestones. The FCC’s Public Notice contains instructions for the submission of letters of credit and Bankruptcy Code opinion letters. 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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LTD Broadband To Lose RDOF Support In California, Kansas, and Oklahoma – A Total Of $271.8 Million
July 26, 2021 – The FCC’s Wireline Competition Bureau has partially denied a petition submitted by LTD Broadband that sought waiver of the June 7, 2021 deadline requiring a Rural Digital Opportunity Fund (RDOF) auction winning bidder to be designated as an eligible telecommunications carrier (ETC) in areas it won RDOF support. The Bureau found that LTD Broadband “failed to engage in good faith efforts to pursue and obtain the required ETC designation” in California, Kansas and Oklahoma.
LTD Broadband was the biggest winner in the FCC’s RDOF Phase I auction in terms of total support, winning $1.32 billion to serve 528,088 locations in 15 states. In California, LTD Broadband won $187,506,059.70 in RDOF support to serve 76,856 locations. In Kansas, it won $3,228,948 to serve 2,122 locations. And in Oklahoma, it won $81,098,352.90 to serve 39,889 locations.
As a consequence of the Wireline Bureau’s decision, LTD Broadband will be in default of its RDOF winning bids in California, Kansas, and Oklahoma. In total, LTD Broadband will be stripped of $271.8 million in RDOF support.
LTD Broadband’s petition sought a waiver of the ETC requirement for eight states where it won RDOF support: California, Iowa, Kansas, Nebraska, North Dakota, Oklahoma, South Dakota, and Texas. The Wireline Bureau’s Order only addresses the request for waiver for the states of California, Kansas, and Oklahoma.
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FCC Denies AB Indiana LLC Petition For Waiver Of RDOF ETC Requirement; Strips Company Of $668,304
July 26, 2021 – The FCC’s Wireline Competition Bureau has denied a petition submitted by AB Indiana LLC that sought a waiver of the June 7, 2021 deadline requiring each Rural Digital Opportunity Fund Phase I Auction long-form applicant to demonstrate that it has been designated as an eligible telecommunications carrier (ETC) each area it seeks RDOF support. The FCC concluded that AB Indiana “failed to engage in good faith efforts to pursue and obtain the required ETC designation from the states for which we deny their petitions.” AB Indiana LLC won a total of $668,304.10 in RDOF support in Florida to serve 261 locations.
Here is how the Wireline Bureau describes AB Indiana’s waiver request:
In its two-sentence request, AB Indiana seeks an extension of the requirement to provide documentation of its ETC designation in the state of Florida. Specifically, AB Indiana explains that it “engaged with the Florida Public Service Commission (PSC), but [has] not yet received such designation.” AB Indiana did not provide any additional detail in its request regarding when it filed its ETC application with the state or any discussions it had with Florida PSC staff.
Here is the Bureau’s full explanation as to why it denied the waiver request:
We deny AB Indiana’s request to waive the deadline to submit documentation of its ETC designation in Florida. As noted above, AB Indiana failed to provide any rationale for its delay in meeting the June 7 documentation deadline. Moreover, AB Indiana did not file its ETC application with the state within the 30-day “good faith presumption” window; indeed, AB Indiana only filed its ETC application on June 7, 2021 – the same day as the Commission’s established deadline. Because AB Indiana’s request lacks any rationale to waive the deadline requirement and because the applicant failed to avail itself of the “good faith presumption” window, we do not find any good cause that warrants waiving the deadline established by the Commission with regard to AB Indiana’s ETC designation.
As a result of the decision, the Wireline Competition Bureau will soon release a Public Notice that declares AB Indiana in default of its RDOF winning bids in Florida, stripping the company of $668,304.10 in RDOF support.
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FCC Identifies RDOF Funded Census Blocks That Raise Concerns About Wasteful Spending – Will Allow Winners To Withdraw Funding & Seek Waiver Of Default Penalties
July 26, 2021 – The FCC has sent letters to 197 winning bidders from the Rural Digital Opportunity Fund (RDOF) Phase I auction to notify them 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 contains a list of the specific census blocks for each RDOF winner. In the letter, the FCC directs 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.
Each RDOF winner is given the chance to withdraw funding for the identified census blocks. The letter also informs each RDOF winner that the FCC “will entertain requests for waiver of the penalties normally associated with defaults,” but “recommend[s] that [each] waiver request include a showing that defaulting on these bids will serve the public interest by, for example, targeting scarce Universal Service funds to where they are needed most.” The FCC will release a public notice to announce any defaults that occur pursuant to this process.
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Rural Digital Opportunity Fund: 589 Default Bids Announced
July 26, 2021 – The FCC’s Rural Broadband Auctions Task Force, Wireline Competition Bureau, and Office of Economics and Analytics have announced that to date, Rural Digital Opportunity Fund (RDOF) winning bidders, or their assignees, have defaulted on 589 winning bids. Attachment A to the FCC’s Public Notice identifies the default bids, along with the corresponding winning bidders or assignees. Each bidder that has defaulted will be subject to penalties, including monetary fines, as determined by the FCC’s Enforcement Bureau. Because these areas will not receive RDOF funding, they will become eligible for other broadband funding opportunities.
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