Construction Costs Cause Latest RDOF Defaults

WASHINGTON, July 2, 2024 – Two more telecommunications providers defaulted on census blocks and service locations awarded under a federal broadband deployment subsidy program.

Missouri-based broadband provider Co-Mo Connect and Texas-based telephone provider Coleman County Telephone Cooperative defaulted on five census blocks and three locations, respectively, citing high construction costs.

Both companies received funding through a reverse auction from the Federal Communications Commission's Rural Digital Opportunity Fund. RDOF calls for spending $20.4 billion over 10 years to bring fixed broadband and voice services to millions of unserved homes and small businesses in rural America.

The two companies were the latest providers to surrender RDOF locations. Nearly a third of the program's initial $9.2 billion in funding that was allocated for the build out of rural broadband infrastructure has gone into some kind of default status.

Co-Mo Connect Chief Financial Officer Jordan Fischer filed a letter with the FCC on June 28 stating that the escalating costs of construction due to the COVID-19 pandemic had rendered the projects financially unviable.

Co-Mo reiterated its commitment to providing service to its remaining awarded Census Block Groups.

“Co-Mo is committed to closing the digital divide and delivering gigabit-tier broadband and voice services to rural communities in Missouri, including the remaining 63 CBGs,” Fischer’s letter said.

Facing similar setbacks, Coleman submitted a letter to the FCC on Monday, relinquishing three of its locations. The letter, signed by President Rodney Dean, stated that the company had analyzed the costs of buildout and regulatory compliance in relation to funding and concluded that the buildout would not be "fiscally feasible."

Coleman calculated that RDOF would provide the company only $28.57 per month for each of their 11 locations over a ten-year period to build out infrastructure.

Both Co-Mo and Coleman said that their defaulted locations can become eligible for funding under the Broadband Equity, Access, and Deployment program run by the Commerce Department’s National Telecommunications and Information Administration.