RDOF News Update
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.
Etheric Communications Defaults On RDOF Winning Bids In California
May 23, 2023 – The FCC’s Wireline Competition Bureau has announced that Etheric Communications LLC has defaulted on its Rural Digital Opportunity Fund (RDOF) winning bids in California, and has been referred to the FCC’s Enforcement Bureau. For defaulting, Etheric is subject to a base forfeiture per violation of $3,000, subject to a 15% limitation of its total assigned support for the bid for the support term, and dependent on an upward or downward adjustment based on FCC forfeiture guidelines. In a related Order on Reconsideration, the Bureau denied Etheric Communications petition for reconsideration of a Bureau decision to dismiss Etheric’s request for waiver of the RDOF eligible telecommunications carrier (ETC) designation documentation deadline.
FCC Denies Wavelength LLC’s RDOF ETC Waiver Petition, Resulting In Default On California RDOF Bids
May 23, 2023 – The FCC’s Wireline Competition Bureau has dismissed as moot, and in the alternative, denied, Wavelength LLC’s petition for waiver of the June 7, 2021, Rural Digital Opportunity Fund (RDOF) eligible telecommunications carrier (ETC) designation documentation deadline for winning RDOF bids in California. In February 2023, the California Public Utilities Commission (CPUC) issued a decision denying Wavelength’s request for ETC designation, rendering the waiver petition moot. The Bureau denied the waiver petition on the merits after concluding that it does not serve the public interest to delay action “while Wavelength pursues what could be a lengthy process seeking recourse” before the CPUC. Wavelength won RDOF support to deploy gigabit, low latency service to more than 68,000 locations in California and Arizona. The Bureau will release a future public notice announcing Wavelength’s default on its California RDOF bids.
FCC Issues $8.7 Million In Fines To Rural Digital Opportunity Fund Applicants That Defaulted On Their RDOF Bids
May 1, 2023 – The Federal Communications Commission (FCC) has issued a Notice of Apparent Liability (NAL) covering 22 Rural Digital Opportunity Fund (RDOF) Phase I Auction applicants that apparently defaulted on their bids for support between May 3, 2022, and December 16, 2022. Each of the 22 RDOF applicants identified in the NAL apparently willfully violated Section 1.21004(a) of the FCC’s rules by defaulting on its respective bid for support by withdrawing its application with respect to certain areas, or by its failure to meet deadlines and requirements to which it agreed when it participated in the RDOF auction. The 22 applicants’ defaults span 2,994 Census Block Groups. The NAL proposes forfeitures totaling $8,778,527.39.
Appendix A to the NAL explains the relevant, unique facts pertaining to each of the 22 RDOF applicants, and describes with each entity’s conduct in relation to the RDOF auction. Appendix B identifies the specific Census Block Groups in default that were subject to forfeiture and the attendant assigned USF support. Appendix C lists the mailing address for each of the 22 RDOF applicants.
Mergers & Acquisitions: Yellowhammer Networks Acquiring BroadLife Communications’ Alabama RDOF Support & Obligations
April 7, 2023 – The FCC’s Wireline Competition Bureau is seeking public comment on s Section 214 application filed by BroadLife Communications, Inc. and Yellowhammer Networks, LLC requesting consent for the transfer of certain assets from BroadLife to Yellowhammer. The transaction involves the assignment and Yellowhammer’s assumption of BroadLife’s Rural Digital Opportunity Fund (RDOF) support obligations in certain Alabama census blocks and right to receive corresponding RDOF support. Additionally, the Bureau is seeking comment on Yellowhammer’s petition for designation as an eligible telecommunications carrier in census blocks in Alabama where BroadLife is authorized to receive RDOF support. Comments are due on or before April 21, 2023, and reply comments are due April 28, 2023. Comments on the transfer of control application must reference WC Docket No. 23-23. Pleadings for the ETC Petition must reference WC Docket Nos. 09-197 and 23-23.
BroadLife, a Delaware corporation, describes itself as a “developer and potential provider of broadband Internet access service over fiber-based networks.” BroadLife is an ETC that is authorized to receive $26,461,542 in RDOF support over ten years to provide service to 7,483 locations in Alabama. However, BroadLife does not currently offer any telecommunications services in the RDOF census blocks.
Yellowhammer is a Delaware limited liability company. Yellowhammer and its affiliates are infrastructure development companies that do not currently offer domestic telecommunications services. Yellowhammer is held by private equity funds Meridiam Infrastructure North America Fund III, LP and its parallel funds (collectively, Meridiam Fund III), and thus held indirectly through limited partnership and limited liability company interests by numerous investors. Meridiam Fund III and all its subsidiaries, including Yellowhammer, are managed by Meridiam Infrastructure North America Corporation, a Delaware corporation. Yellowhammer is ultimately controlled Thierry Déau, the President of Meridiam, a citizen of France.
Pursuant to an Assignment and Assumption Agreement, and subject to FCC consent of the Section 214 application and the Yellowhammer ETC Petition, BroadLife has agreed to assign to Yellowhammer:
RDOF support that BroadLife has received and will have received prior to the consummation of the transaction, net of state and federal income taxes owed on RDOF support BroadLife received in 2022;
BroadLife’s entitlement to receipts of all future RDOF support; and
All of BroadLife’s obligations associated with the receipt of RDOF support for the Alabama RDOF locations.
The proposed transaction would involve the exchange and assumption of Universal Service Fund high-cost mechanism obligations. As a result, the parties’ Section 214 application has been accepted for non-streamlined processing in order for the Wireline Bureau to sufficiently analyze whether the parties’ proposed transaction would serve the public interest. Additional information is available from the Bureau’s Public Notice and the parties’ Section 214 application and supplement.
Rural Digital Opportunity Fund: FCC Authorizes RDOF Support For 1,764 Winning Bids (17th RDOF Authorization) (Hughes Network Systems, LLC & Resound Networks, LLC)
January 13, 2023 – The FCC’s Wireline Competition Bureau has authorized Rural Digital Opportunity Fund (RDOF) Phase I auction support for 1,764 winning bids. This is the seventeenth Public Notice authorizing RDOF support. Attachment A to the Bureau’s Public Notice contains a list of the authorized winning bids, which belong to Hughes Network Systems, LLC (Rhode Island) and Resound Networks, LLC (Arizona, Arkansas, Colorado, Kansas, New Mexico, Oklahoma, and Texas).
The 1,764 winning bid 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 2023. 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 1,764 RDOF Winning Bids (Hughes Network Systems, LLC and Resound Networks, LLC)
December 16, 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 1,764 Rural Digital Opportunity Fund (RDOF) Phase I auction winning bids. This is the thirteenth 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. The 1,764 winning bids belong to Hughes Network Systems, LLC (Rhode Island) and Resound Networks, LLC (Arizona, Arkansas, Colorado, Kansas, New Mexico, Oklahoma, and Texas).
Attachment B contains a list of winning bids associated with winning bidders or their assignees that are in default. They belong to Resound Networks, LLC (Texas) and Xiber LLC (Illinois, Michigan, and Ohio). RDOF support will not be authorized for these default bids, and the bidders are subject to FCC enforcement action.
To be authorized to receive the support amounts listed for each of the 1,764 bids, Hughes and Resound 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 January 9, 2023. 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.
Rural Digital Opportunity Fund: FCC Authorizes RDOF Support For 80 Winning Bids (16th RDOF Authorization)
December 15, 2022 – The FCC’s Wireline Competition Bureau has authorized Rural Digital Opportunity Fund (RDOF) Phase I auction support for 80 winning bids. This is the sixteenth Public Notice authorizing RDOF support. Attachment A to the Bureau’s Public Notice contains a list of the authorized winning bids, which belong to GigaBeam Networks, LLC (West Virginia), and Pear Networks LLC (Vermont).
The 80 winning bid 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 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.
Rural Digital Opportunity Fund: FCC Authorizes RDOF Support For 497 Winning Bids (15th RDOF Authorization)
November 10, 2022 – The FCC’s Wireline Competition Bureau has authorized Rural Digital Opportunity Fund (RDOF) Phase I auction support for 497 winning bids. This is the fifteenth Public Notice authorizing RDOF support. Attachment A to the Bureau’s Public Notice contains a list of the authorized winning bids. One authorized winning bid belongs to Shenandoah Cable Television, LLC in Virginia, while the other bids belong to California Internet, L.P. dba GeoLinks in Arizona and Nevada. Attachment B to the Bureau’s Public Notice contains a list of winning bids associated with winning bidders or their assignees that have notified the Bureau that they do not intend to pursue all or some of their winning bids in a state. They belong to Peoples Communication, LLC in Texas, and Shenandoah Cable Television, LLC in Virginia.
The 497 winning bid 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 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.
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 is a relatively new Internet service provider that primarily serves densely populated cities using fixed wireless technology to provide last-mile service. 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).
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. Sometime thereafter, Starry notified the Bureau of its plan to default on all RDOF winning bids. The FCC Wireline Competition Bureau described Starry’s default as follows:
Connect Everyone LLC (Connect Everyone) notified us that it planned to default on all its winning bids. We had previously announced that Connect Everyone was ready to authorize in all states in which it had placed winning bids except for Mississippi. Our grant of an ETC designation for Connect Everyone in Alabama and Virginia was conditioned on Connect Everyone being authorized for RDOF support in the relevant areas. Because Connect Everyone will not be authorized for RDOF support for any of its winning bids in Alabama or Virginia, our conditional high-cost ETC designation Connect Everyone in Alabama and Virginia is null and void, and Connect Everyone will not be a high-cost ETC for the areas covered by its Alabama and Virginia winning bids.
Rural Digital Opportunity Fund: FCC Authorizes RDOF Support For 1,865 Winning Bids (14th RDOF Authorization)
October 12, 2022 – The FCC’s Wireline Competition Bureau has authorized Rural Digital Opportunity Fund (RDOF) Phase I auction support for 1,865 winning bids. This is the fourteenth Public Notice authorizing RDOF support. Attachment A to the Bureau’s Public Notice contains a list of the authorized winning bids, which belong to the following three entities: AMG Technology Investment Group, LLC (d/b/a Nextlink Internet) (Illinois, Indiana, Iowa, Kansas, Louisiana, Minnesota, Nebraska, Oklahoma, Texas, Wisconsin, and Wyoming); Northern Arapaho Tribal Industries (Wyoming); and Safelink Internet LLC (Nevada).
Attachment B to the Bureau’s Public Notice contains a list of winning bids associated with winning bidders or their assignees that have notified the Bureau that they do not intend to pursue all or some of their winning bids in a state. They belong to the following three entities: Cal.net, Inc. (California); California Internet, L.P. dba GeoLinks (California); and Connect Everyone LLC (Alabama, Arizona, Colorado, Illinois, Mississippi, Nevada, Ohio, Pennsylvania, and Virginia).
The 1,856 winning bid 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 October 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.
Rural Digital Opportunity Fund: FCC Authorizes RDOF Support For 49 Winning Bids (13th RDOF Authorization)
September 13, 2022 – The FCC’s Wireline Competition Bureau has authorized Rural Digital Opportunity Fund (RDOF) Phase I auction support for 49 winning bids. This is the thirteenth Public Notice authorizing RDOF support. Attachment A to the Bureau’s Public Notice contains a list of the authorized winning bids, which belong to two entities: Cyber Broadband Inc (Alabama) and E Fiber San Juan, LLC (Utah).
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 September 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.
Starlink Files Application For Review Of FCC Decision Denying Long-Form Application For RDOF Support
September 9, 2022 – Starlink Services, LLC has filed an Application for Review of the Wireline Competition Bureau’s decision denying SpaceX’s long-form application to obtain support for its winning bids in the Rural Digital Opportunity Fund (RDOF) Phase I auction. Starlink, through its parent SpaceX, initially won $885,509,638.40 in 10-year RDOF support to serve 642,925 locations in 35 states. Following extensive review of Starlink’s long-form application, the Wireline Competition Bureau, in an August 10, 2022 Public Notice, concluded Starlink failed to demonstrate that it is reasonably capable of complying with the FCC’s requirements.
In its Application for Review, Starlink argues the Wireline Competition Bureau decision “is flawed as a matter of both law and policy.” First, Starlink claims the decision “fails legally because it contradicts the record—including SpaceX’s and Starlink’s proven capabilities—it contradicts the Commission’s stated rules for the program, and it rests on unsupported conjecture and outside-the-record information apparently cherry-picked from somewhere on the Internet.” Second, Starlink claims the decision “fails the RDOF’s very purpose: closing the digital divide.” Ultimately, Starlink requests that the Federal Communications Commission: (1) reverse the Wireline Competition Bureau decision by finding that SpaceX is reasonably capable of meeting its performance obligations in its winning bid areas; (2) order the Wireline Competition Bureau to grant SpaceX’s Long Form for those states where it has submitted proof of ETC status; and (3) direct the Wireline Competition Bureau to grant SpaceX’s request for waiver of the deadline to submit evidence of ETC designations in those states where it has yet to receive such designations.
