FCC Denies Funding for Two of the Biggest Winners of Rural Digital Opportunity Fund Money
‘We are continuing to review the letter and are evaluating our next steps,’ LTD said.
Ahmad Hathout
WASHINGTON, August 10, 2022 – LTD Broadband’s prolonged effort to get certification status in several states and Starlink’s still nascent and pricey satellite broadband project have proven enough for the Federal Communications Commission to deny them funding from the Rural Digital Opportunity Fund, the agency announced Wednesday.
The reverse auction process for the $9.2-billion fund culminated in December 2020 to awards of $1.3 billion for LTD Broadband – the largest winner in the auction – and $885 million for SpaceX’s Starlink project. But since the winners were announced, a new-look commission emerged under the leadership of Jessica Rosenworcel to weed out projects that did not align with the goals of the program – including bids in areas with adequate coverage or areas that don’t need the services pitched.
In a decision on Wednesday, the commission said that the limited number of dollars available cannot go to support Starlink’s still developing technology. “Starlink’s technology has real promise,” Rosenworcel said in a press release. “But the question before us was whether to publicly subsidize its still developing technology for consumer broadband—which requires that users purchase a $600 dish—with nearly $900 million in universal service funds until 2032.”
For LTD, the commission ruled that it “failed to timely receive eligible telecommunications carrier status in seven states,” adding the “relatively small fixed wireless provider…was not reasonably capable of deploying a network of the scope, scale, and size required by LTD’s extensive winning bids.
“We must put scarce universal service dollars to their best possible use as we move into a digital future that demands ever more powerful and faster networks,” Rosenworcel said. “We cannot afford to subsidize ventures that are not delivering the promised speeds or are not likely to meet program requirements.”
In a statement to Broadband Breakfast, LTD CEO Corey Hauer said, “We are extremely disappointed in the FCC staff decision. I don’t believe the FCC fully appreciated the benefits LTD Broadband would bring to hundreds of thousands of rural Americans. We are continuing to review the letter and are evaluating our next steps.”
In the same release on Wednesday, the FCC announced it has authorized $21 million in funding to three companies to deploy gigabit service to nearly 15,000 locations in Tennessee, Texas, Utah and Wyoming. The commission has so far authorized more than $5 billion to bring fiber gigabit to over three million locations in 47 states, it said.
The FCC had provided winning bidders an opportunity last year to review the areas in which they won bids and to relinquish those areas they find are not in need of services. The aftermath included several defaults in areas, some of which were attributed to updated broadband maps from the commission. The commission said that it may waive penalties for the defaults, but last month proposed fines of $4.3 million against 73 RDOF applicants for violations related to those defaults.
