Lumen Defaults on 3,500 RDOF Locations

WASHINGTON, September 4, 2024 – Lumen told the Federal Communications Commission last week it was handing back more than 3,500 locations it won at auction in 2020.

“Lumen has observed deployment costs increase dramatically in many areas since it made its bids. In addition, in some areas, the number of locations to be deployed to is substantially different from the initial published auction numbers,” Lumen Vice President and Deputy General Counsel Joseph Cavender wrote to the agency. “As a result of these and other factors, Lumen’s planned RDOF deployment projects in these [census block groups] are not viable.”

The company handed back 1,468 planned locations in Wyoming, 1,331 in Colorado, 770 in New Mexico, and just 10 locations in South Dakota. It’s a relatively small portion of the more than 77,000 homes and businesses Lumen won in the Rural Digital Opportunity Fund auction.

Run by the FCC, RDOF is set to disburse more than $6 billion in total to get broadband to nearly 3.5 million homes and businesses. The program requires participants to serve every location in the census block groups they won, with provisions that allow for some increased support in the event a company finds more homes and businesses than expected in a given area. Lumen did not specify which government estimates in its relinquished areas were inaccurate.

The company said it was returning the service areas so they would be eligible for the NTIA’s $42.5 billion broadband expansion program, which disqualifies locations marked for service from other subsidy programs. Lumen added it was notifying the four state broadband offices of the move.

The vast majority of RDOF defaults came early in the process, when the FCC said it wasn’t convinced some of the biggest winners could make good on their commitments to more than a million locations, but smaller defaults have trickled in response to a rise in deployment costs.