Charter Hands Back More RDOF Census Block Groups to FCC

WASHINGTON, June 4, 2024 – Major broadband provider Charter Communications announced on May 31 it is surrendering another 59 census block groups the company had committed to serve with government subsidies.

In April, the company backed out of an additional 117 census block groups it was set to serve through the Federal Communications Commission’s Rural Digital Opportunity Fund.

Charter had initially pinned the number at 133, but submitted a separate letter May 31 by Luke Platzer, Charter’s counsel at Jenner & Block, saying that 16 of those were included by mistake.

The April return amounted to roughly 23,000 homes and businesses, according to the FCC, although that number is slightly inflated by the accidentally included block groups. 

Charter did not indicate how many locations were affected by last week’s return, which includes census block groups in Michigan, Missouri, Oregon, and Wisconsin. The company cited “unforeseen circumstances beyond Charter’s control” as the reason for handing back more census block groups. In April, the company pointed to the high cost of replacing utility poles and consistent disagreements with the utility companies that own them.

Charter, the second-largest broadband ISP in the country, had 30.5 million subscribers located across 41 states at the end of the first quarter of 2024.

RDOF has been plagued by defaults since the program’s reverse auction took place in 2020, with nearly one-third of the $9.2 billion initially awarded now in limbo. Much of that came after companies that bid for large areas failed to convince the FCC they could make good on their commitments, but companies are continuing to hand back locations or asking to transfer them to other providers.

The FCC is set to vote this week on a proposal to loosen some of the program’s financing requirements in an attempt to keep on board participants struggling with rising costs, but some advocates and RDOF winners are pushing the agency to take a more drastic approach. 

They’re asking the commission to allow providers to exit the program with less severe financial penalties in an effort to open up their committed areas to the Commerce Department’s $42.5-billion broadband expansion effort. States are already in the process of finalizing their coverage maps for that program and, the thinking goes, homes and businesses currently marked as RDOF commitments might be out of luck if projects go south in the future.

Charter, RDOF’s biggest winner, was originally set to receive about $1 billion over 10 years through the program.

The company, based in Stamford, Conn., won’t receive any future support for the locations it gave up in April and will have to return the money already disbursed for those locations to the FCC, the agency said in a release following those withdrawals.  The agency has the ability to levy fines against companies that fail to meet their RDOF buildout obligations. 

“We will continue to use the available tools to monitor Charter’s compliance with the applicable deployment obligations in its remaining supported service area,” the agency wrote.