FCC Draft Order Would Loosen RDOF, CAF II Auction Financing Rules

WASHINGTON, Nov. 20, 2024 – A draft of an order up for consideration at the Federal Communications Commission’s December meeting would loosen some financing rules for its broadband subsidy programs.

The public draft, released Wednesday, would ditch the agency’s current system for determining which banks are eligible to issue letters of credit to program participants. Should the order be adopted, a bank would have to be considered “well capitalized” by at least one of the federal agencies that regulate banks – the Federal Deposit Insurance Corporation, the Federal Reserve, and the Office of the Comptroller of the Currency. That’s the highest rating those agencies issue.

The rule changes would apply to the agency’s reverse auction-based subsidies, including the $6 billion Rural Digital Opportunity Fund and the $1.8 billion Connect America Phase II Auction. They would also extend to the agency’s 5G Fund, which had its rules finalized in August but hasn’t yet been implemented.