Blackfoot Asks FCC to Waive Over $1 Million in RDOF Penalties
Cites ‘unforeseeable site-specific geographic and economic challenges’ as reason for default
WASHINGTON, July 9, 2025 – Blackfoot Communications has asked the Federal Communications Commission for a $1.4 million break.
The Missoula, Montana based internet service provider was awarded $12.7 million through the FCC’s Rural Digital Opportunity Fund to serve 2,687 locations with broadband internet. In May, it defaulted on 688 of those locations in Missoula, Lake, Flathead, and other counties, citing “extraordinary cost increases.”
Under current FCC regulations, Blackfoot would be required to pay 1.75 times the statewide average award ($12.7 million divided by 2,687 locations) for each of the 688 defaulted locations, plus an additional 10 percent of the total support it was promised through the RDOF program. If applied, these regulations would put Blackfoot on the hook for more than $6.9 million, or more than half of the money it was originally awarded.
FROM SPEEDING BEAD SUMMIT
Panel 1: How Are States Thinking About Reasonable Costs Now?
Panel 2: Finding the State Versus Federal Balance in BEAD
Panel 3: Reacting to the New BEAD NOFO Guidance
Panel 4: Building, Maintaining and Adopting Digital Workforce Skills
On Thursday, Blackfoot asked the FCC to reduce the penalty multiplier it would pay for each of the 688 defaulted locations from 1.75 to 1.5, and to reduce the support it would forfeit from the RDOF program to 5 percent from 10 percent. If granted, these reductions would result in a $5.5 million penalty, over $1.4 million less than what would be required without the waiver.
Blackfoot, led by CEO Jason Williams, justified this reduction by arguing that doing so would serve the public interest by saving taxpayer dollars. It claimed to be on track to reach the program’s next milestone with its remaining locations, and argued that because the relinquished locations were disconnected from its other RDOF locations, requiring the ISP to build there would “force wasteful expenditure on economically unsustainable infrastructure or compromise Blackfoot’s ability to serve the viable locations where it has demonstrated successful progress.”
In Lake County, Blackfoot claimed that its initial cost estimate rose from $4.25 million to $10.75 million, and from $1.73 million to $4.1 million in Missoula County since the initial RDOF buildout estimates. Blackfoot blamed these cost increases on market conditions, mandatory traffic control measures, and “significantly higher than expected rock excavation requirements in Lake County.”
Blackfoot noted that it promptly contacted the Montana Communications Advisory Commission when it discovered that it would no longer be able to serve the relinquished locations, and cited the FCC’s July 2024 Public Notice that claimed that earlier defaults “limit the support recovery and penalty costs to the carrier.” Blackfoot also said that it ensured that the relinquished locations were eligible for the BEAD program, and suggested that due to their “extremely challenging terrain and sparse population densities” they would best be served by “different technological approaches.”
Blackfoot’s default, and its request to be granted a limited waiver of the RDOF program’s forfeiture and default penalty rules, was only the latest in a series of similar requests made by other carriers since awards were announced in December 2020. As of January 2024, roughly one-third of funds granted to RDOF applicants had been defaulted on, and many more defaults have followed since. The Senate passed a bill in June designed to strengthen the vetting process for carriers seeking to participate in future high-cost broadband projects.
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