FCC Taking Comment on RDOF Location Transfer in Washington

WASHINGTON, May 20, 2024 – The Federal Communications Commission on Wednesday began taking comment on an application to transfer to a new provider more than 3,700 locations set to be served by the agency’s Rural Digital Opportunity Fund subsidy.

Delaware-based company Commnet Wireless won in the RDOF auction more than $777,000 per year over ten years to serve 5,639 Washington State homes and businesses. The company’s looking to pass on 3,761 of those locations in the island community of San Juan County, along with their corresponding $215,188 in yearly support.

It is looking to transfer the responsibility for those locations to Rock Island Communications, a for-profit subsidiary of San Juan County’s non-profit electric cooperative. Rock Island serves about 6,500 locations with a mix of fixed wireless and fiber, the companies wrote in their application, but does not currently receive RDOF or other high-cost support. The company’s looking to get certified by Washington State to be eligible for the transfer.

“Since becoming authorized to receive RDOF support, Commnet realized that the Assigned Census Blocks might be served in a more expeditious and cost-effective manner by Rock Island given its proximity to Commnet’s RDOF-supported areas in the Assigned Census Blocks, and its existing operations, resources and infrastructure,” the companies wrote.

Rock Island has been providing internet to the islands since 2014, the companies noted, with a current footprint of about 6,500 homes and businesses. The company has the existing infrastructure and financial capacity to better meet Commnet’s RDOF obligations, the companies wrote.

Comments on the applications are due May 29, with replies due June 5.

Commnet would retain some of the RDOF money it has received to cover expenditures it has already made toward serving the affected census blocks and would hand the rest, an “agreed-upon sum,” over to Rock Island, the companies said. Rock Island would then receive all future support for the transferred locations and be responsible for deploying service at 100 * 20 Mbps or higher by 2028.

Rock Island wrote that it expects it can deploy to 40 percent of the 3,761 locations within five months of receiving the necessary approvals. The default RDOF timeline doesn’t require that 40 percent milestone until the third year of deployment.

Commnet is not the first company to have second thoughts about RDOF deployments. Winning bidders defaulted on nearly one third of the $9 billion initially awarded, and even those that survived tougher FCC scrutiny have been handing back locations amid higher than expected costs.

Advocates and others have been pushing the agency to allow participants to default with lighter penalties in an effort to get commitments that might eventually fall through off the books. If areas are slated to be served by RDOF, they’re ineligible for the Commerce Department’s $42.5-billion broadband expansion program, for which states are currently finalizing their eligibility maps. The concern is that homes and businesses might be left without adequate broadband if they’re ineligible for BEAD.

The FCC is set to vote in June on a proposal to lighten the letter of credit requirements for RDOF, which would potentially ease the burden on participants.