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What Happens to the Estimated $2.8 Billion in RDOF Defaults?

The remaining RDOF budget of approximately $14 billion may never be awarded.



Photo of banknotes by John Guccione used with permission

Nearly every winning bid in the Rural Digital Opportunity Fund rural broadband funding program has now either been authorized or deemed to be in default. Of the $9.2 billion over 10 years tentatively won in the auction, over $2.8 billion has gone into default, according to an estimate from Cooperative Network Services, a rural broadband consultancy that has been keeping tabs on the program, shared exclusively with Telecompetitor.

Three of the 10 largest winning bidders — LTD Broadband, SpaceX and Starry — alone generated nearly $2.5 billion in defaults and there were many other smaller defaults. In some cases, all of a company’s bids were deemed to be in default. In addition, many companies had a portion of their bids deemed to be in default.

What happens with the money associated with the RDOF defaults?

The Federal Communications Commission has had no official word about that and didn’t answer a question from Telecompetitor about it.

It’s an unfortunate situation, said Paul Solsrud, product manager for Cooperative Network Services, in an email to Telecompetitor.

“The most unfortunate outcome… is the delay in getting better service to millions of people who really need it,” he said. “The providers are ready and willing to construct networks, and citizens are eager to get connected, but unfortunately, many rural Americans continue to play the waiting-game.”

“Many high-quality, community-based providers lost out in the auction due to low bids by competitors who ultimately defaulted.”

RDOF defaults

The RDOF program was designed to cover some of the costs of bringing broadband to unserved and underserved rural areas. Funding for an area was tentatively awarded to the company that committed to deploying service for the lowest level of support.

The FCC has taken considerable heat for not vetting applicants more closely prior to the auction, but instead relying, in large part, on a review of winning bidders’ long-form applications that were submitted after the auction.

Dissatisfaction with the auction may have played a role in federal lawmakers’ decision to put agencies other than the FCC in charge of more recent broadband funding programs, including the Capital Projects Fund, the State and Local Fiscal Recovery Fund and the Broadband Equity Access and Deployment program.

The existence of those funding programs may not bode well for the future of the RDOF program, as some people have questioned whether RDOF is still needed.

The total budget for RDOF was $20.4 billion over 10 years, of which the FCC planned to award up to $16 billion in the initial auction. Winning bids only came to $9.2 billion and, based on Cooperative Network Services estimate, only about $6.4 billion has been awarded, with few, if any, additional awards expected.

Potentially, the remaining RDOF budget of approximately $14 billion may never be awarded.

Carol Mattey, founder of Mattey Consulting and former deputy chief of the FCC Wireline Competition Bureau, offered her take on the situation in a phone interview with Telecompetitor.

As she explained, “The FCC has a budget for RDOF but that doesn’t mean USAC [the Universal Service Administration Company] has been collecting the money. USAC projects the money it has to disperse. USAC only projects disbursements to authorized recipients.”

Mattey doesn’t expect the FCC to move forward with further RDOF funding in the foreseeable future.

“At some point in the future, the commission might decide to move forward with additional funding if the BEAD program is unsuccessful in getting internet to everyone,” she said.

Mattey also noted that the FCC said last year that it would undertake a proceeding about ongoing support that may be needed to operate broadband networks after they are built in areas where revenues aren’t sufficient to cover those costs. She noted, however, that the commission has not yet begun that proceeding.

This piece was originally published on Telecompetitor on May 22, 2023, and is reprinted with permission.

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House Democrat Introduces Bill to Add Local Parks to E-Rate Program

The Technology in the Parks Act would also put parks in line for used computers and equipment from federal agencies.



Screenshot of Rep. Danny Davis, D-Illinois, at a House hearing on November 15.

WASHINGTON, December 1, 2023 – A House Democrat announced on Friday a bill that would fund broadband internet and devices for public parks.

The Technology in the Parks Act would expand the Federal Communications Commission’s E-Rate program to include local parks. That program currently provides approximately $4 billion in yearly broadband subsidies for schools and libraries through the FCC’s Universal Service Fund. Adding public parks would allow them to request government money toward the cost of internet each month.

The move is “crucial to bringing broadband access to these community spaces,” said the bill’s sponsor, Rep. Danny Davis, D-Illinois, in a statement.

In an effort to provide devices on the subsidized connection, the bill would also put parks in the U.S. General Services Administration’s Computers for Learning program. That would give parks access to computer equipment no longer being used by federal agencies. 

The bill would also tap the Department of Labor to implement a grant program for “technology training programs” in local parks.

Similar programs aimed at helping people navigate and participate in online spaces are drawing funds from other federal agencies. The Commerce Department’s $42.5 billion broadband expansion program makes room for states to fund digital literacy trainings, and its $2.75 billion Digital Equity Act programs are targeted at such efforts.

Reps. Raúl Grijalva, D-Arizona, and Bruce Westerman, R-Arkansas, introduced a similar bill on November 29 that would expand broadband in national parks managed by the federal government.

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North Carolina Releases Final Guidance on $100 Million Pole Replacement Program

Providers may receive up to $10,000 for each utility pole they replace in unserved areas.



Photo of Nate Denny, deputy secretary for broadband and digital equity at the North Carolina Department of Information Technology.

WASHINGTON, November 27, 2023 – North Carolina’s broadband office released on Monday final guidance for its $100 million pole replacement program.

The program, funded by the American Rescue Plan Act, will reimburse broadband providers for utility pole replacement costs. Expanding networks can involve attaching equipment to those utility poles. When a pole needs to be replaced to accommodate more equipment, pole owners typically pass the cost on to attachers.

Telecommunications companies have cited this extra cost as a barrier to quick broadband deployments, something utility companies dispute. The two industries have been in conflict on the issue for years, with both continuing to push the FCC to weigh in on a cost sharing regime.

North Carolina’s plan is an effort to smooth over the issue for future broadband expansion efforts, Nate Denny, the state department of information technology’s deputy secretary for broadband and digital equity, said in a statement. 

“It addresses a significant barrier to closing the digital divide in remote parts of our state,” he said.

Under the program, broadband providers can apply for 50 percent of the replacement cost for each pole replaced, up to $10,000 per pole. Pole replacement costs in unserved areas after June 1, 2021 are eligible for reimbursement. 

The program will kick off in February 2024 and accept applications from qualified providers.

The FCC has authority in 26 states over the terms of agreements between investor-owned utilities and telecom companies, which does not include publicly owned utilities or broadband providers that solely provide internet. The agency is set to vote on updated pole attachment rules at its December meeting.

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Expert Opinion

Kate Forscey: National Security and Global Success Depend Upon Prioritizing Telecom Funding

The Affordable Connectivity Program and the Rip-and-Replace program are both central funding needs for the industry.



The author of this Expert Opinion is Kate Forscey, contributing fellow for the Digital Progress Institute

With the government now funded into the new year, it’s time for Congress to take another look at its broader priorities, especially when it comes to the race with China for dominance in next-generation technologies. Whether it’s AI or cloud computing or virtual reality, if the United States is to remain competitive, we need to make secure and effective communications a priority. This means finally connecting all Americans to high-speed broadband and ensuring that our connectivity cannot be undermined by foreign adversaries.

Two popular programs are central to this goal: the Affordable Connectivity Program and the Rip-and-Replace program. Both of these programs have tremendous bipartisan, bicameral support; but both have been underfunded and now risk dying on the vine. Congress has the opportunity to fully fund these programs if it has the will to do so.

Let’s break it down.

The Affordable Connectivity Program provides low-income American families and veterans with discounts on Internet service and connectivity equipment, including higher discounts for those living on Tribal lands. With affordable broadband, more Americans can get online and be a part of the digital economy.

The ACP has been wildly successful, connecting over 21 million households to essential broadband they could otherwise not afford. And it continues to garner widespread support, with the vast majority of voters (78%) calling for its extension, including 64% of Republicans, 70% of Independents, and 95% of Democrats.

Congress provided the ACP with $14.2 billion in 2021—but funding is now running low and is projected to be fully exhausted by spring 2024. Governors, lawmakers on both sides of the aisle, public interest groups, and Internet service providers are all raising the alarm about its imminent depletion. That’s why the Biden Administration in October called on Congress to replenish the program’s coffers with an additional $6 billion.

A good start, but not the whole story. Our foreign adversaries are well known for their espionage, and while a spy balloon might get the attention, a far more insidious problem lurks in our communications networks: equipment designed and produced by Chinese suppliers Huawei and ZTE. A bipartisan Congress passed the Secure and Trusted Networks Act to eradicate national security threats such as these, but sufficient funding for the Rip and Replace program has never materialized.

Again, the Biden Administration has stepped up and identified a need for $3.1 billion to fully fund the program as a “key national security priority” in its emergency supplemental funding request. It’s a narrative we can all get on-board with: that broadband falls under the umbrella of national security as a whole. American consumers and institutions both benefit from American-built networks and increased protection at home. But communications providers can’t live up to these needs on their own.

As it stands, the responsibility to get affordable, secure connectivity programs across the finish line rests with Congress. Even with a consensus of support for these two programs, the devil is in the details of how to make the price tags palatable to enough policymakers on Capitol Hill. The key is ensuring that any changes preserve the widespread efficacy of the program that has made it popular so far.

For example, Congress could cut the cost of the ACP by limiting the additional Tribal funding to rural Tribal lands. Any such change should be grounded in an evaluation of existing need in urban areas, but could be an opportunity to ensure funds are being directed to areas of greatest need. And Congress should consider indexing the ACP to inflation. The high inflation of recent years has wreaked havoc on the budgets of consumers—and inflation-proofing the program would ensure that broadband remains affordable for all Americans even should inflation come back.

As for Rip-and-Replace, those of us urging for more funds could concede putting safeguards in place to ensure the money is being used for its intended purpose – the kind of compromise needed to get such policies across the finish line

These are just some ideas as we head into the final funding fight. Not everyone is going to be on the same page on what is and isn’t working best, but shared success starts by recognizing that we all have the same endgame. Congress must ensure that adequate funding for the ACP and Rip and Replace program are included in any year-end spending package. We have an all-too-rare opportunity to win the race for high-tech dominance—we just need to provide the resources.

Kate Forscey is a contributing fellow for the Digital Progress Institute and principal and founder of KRF Strategies LLC. She has served as senior technology policy advisor for Congresswoman Anna G. Eshoo and policy counsel at Public Knowledge. This piece is exclusive to Broadband Breakfast.

Broadband Breakfast accepts commentary from informed observers of the broadband scene. Please send pieces to The views expressed in Expert Opinion pieces do not necessarily reflect the views of Broadband Breakfast and Breakfast Media LLC.

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