Rural Digital Opportunity Fund: Starry Internet Defaults On All RDOF Winning Bids – $268 Million In 9 States

October 20, 2022 – Starry Internet (Connect Everyone LLC) has defaulted on all of its Rural Digital Opportunity Fund (RDOF) Phase I auction winning bids.

Starry won $268,851,315.90 in 10-year RDOF support to serve 108,506 locations in 9 states (Alabama, Arizona, Colorado, Illinois, Mississippi, Nevada, Ohio, Pennsylvania, and Virginia).[1]

The FCC’s Wireline Competition Bureau announced it was ready to authorize Starry’s RDOF winning bids in all the states in which Starry had placed winning bids except for Mississippi on August 31, 2022.[2]

Sometime thereafter, Starry notified the Bureau of its plan to default on all RDOF winning bids.[3]

Who Is Starry?

Starry is a relatively new Internet service provider that primarily serves densely populated cities. It uses fixed wireless technology to provide last-mile service.[4] Here’s how Starry described itself to the FCC in its petition for eligible telecommunications carrier designation in Alabama and Virginia:

Starry is a facilities-based Internet service provider that has offered service since 2017. Starry’s network technology currently provides high-speed, low latency-service coverage to millions of households across six states and the District of Columbia. Starry’s mission is to connect millions of consumers to better broadband by offering high-speed, low-cost service with exceptional customer care.

Starry’s fixed wireless technology has two key differentiators that enable Starry’s high-capacity, low-cost service. First, it operates in licensed millimeter wave spectrum, which has wide channel bandwidths for high capacity, and high EIRP for range. Second, Starry developed its own fixed wireless technology that utilizes the IEEE 802.11 ecosystem for baseband radios and Starry’s own frequency conversion and smart antenna technology. Starry combines these capabilities to design and deploy networks that achieve low-cost, high-capacity last mile service using licensed millimeter wave point-to-multipoint fixed wireless.[5]

Here’s how Starry described its plans for deploying service to its RDOF locations:

Starry intends to deploy a hybrid fiber licensed millimeter wave point-to-multipoint fixed network to provide service to the locations won through Auction 904. Starry will offer gigabit, low-latency speeds and will provide its customers with voice grade access to the Public Switched Telephone Network (“PSTN”) through an interconnected VoIP service provided with an integrated third-party VoIP vendor.[6]

So there you have it. Another RODF winner bites the dust. And it seems to be the same old story – a  provider enters the RDOF auction claiming it can meet the service obligations and after winning, determines it’s not up to the task. Although, Starry was and still is having cash flow problems. It recently announced it is laying off half of its workforce and implementing a freeze on hiring and expenditures. But, here’s the thing – Starry was a fixed wireless provider primarily serving major cities using what some would call a city-wide mesh network system. With RDOF, Starry was going to pivot to a more traditional fixed wireless service covering vast, sparsely-populated rural areas – 108,506 locations in 9 states. Starry was making a big bet, and it lost. Starry will now be on the forfeiture hook with the FCC’s Enforcement Bureau for defaulting on its RDOF bids.

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[1] Connect Everyone LLC, a Delaware Limited Liability Company, is a wholly-owned subsidiary of Starry, Inc. Rural Digital Opportunity Fund Phase I Auction (Auction 904) Closes; Winning Bidders Announced; FCC Form 683 Due January 29, 2021, AU Docket No. 20-34, WC Docket 19-126, WC Docket No. 10-90, Public Notice, DA 20-1422, (Dec. 7, 2020), https://docs.fcc.gov/public/attachments/DA-20-1422A1.pdf.

[2] Rural Digital Opportunity Fund Support For 2,072 Winning Bids Ready To Be Authorized; Bid Defaults Announced; Listed Auction 904 Long-Form Applicants Must Submit Letters of Credit and Bankruptcy Code Opinion Letters by September 15, 2022; AU Docket No. 20-34, WC Docket No. 19-126, WC Docket No. 10-90, Public Notice, DA 22-911 (Aug. 31, 2022).

[3] Rural Digital Opportunity Fund Support Authorized For 1,865 Winning Bids; Bid Defaults Announced, AU Docket No. 20-34, WC Docket No. 19-126, WC Docket No. 10-90, Public Notice, DA 22-1086, footnote 57 (Oct. 12, 2022), https://docs.fcc.gov/public/attachments/DA-22-1086A1.pdf.

[4] See Ben Popper, Jacob Kastrenakes, and Jordan Golson, The founder of Aereo is promising to bring gigabit internet to every home, The Verge (Jan. 27, 2016), https://www.theverge.com/2016/1/27/10841600/starry-wireless-gigabit-internet-project-from-aereo-founder.

[5] Connect Everyone LLC: Petition for Designation as an Eligible Telecommunications Carrier Pursuant to Section 214(e)(6) of the Communications Act of 1934, as amended, WC Docket No. 09-197, p. 2 (Jan. 6, 2021), https://www.fcc.gov/ecfs/document/1010742383225/1.

[6] Id. at p. 3.