Missouri Wants FCC to Return $177 Million in Defaulted Grants

WASHINGTON, March 19, 2025 – Missouri Attorney General Andrew Bailey called on the Federal Communications Commission Monday to return $177 million in defaulted broadband funding to the state.

The funding, initially allocated through the FCC’s Rural Digital Opportunity Fund, was meant to connect 85,000 unserved homes and businesses in Missouri. 

However, after multiple providers defaulted on their commitments, more than 40% of the state's originally approved locations remain without service, Bailey wrote in a letter to FCC Chairman Brendan Carr.

“We request that [$177 million in] defaulted funds be deposited into our Missouri Broadband Fund,” Bailey wrote, adding that the state’s Office of Broadband would ensure swift and judicious distribution of funds.

Bailey’s request is backed by state law. Under Section 1.513 of Missouri Revised Statutes, effective August 2022, the state is permitted to reclaim federal funds allocated for broadband deployment when providers “default or otherwise fail to complete deployment as agreed upon with the federal government.”

Bailey pointed to New York's success in reclaiming federal broadband dollars as precedent. In 2017 and 2020, the FCC permitted New York to redirect unallocated Connect America Fund money toward its state-run broadband program. 

However, Missouri may face an uphill battle. As Broadband Breakfast previously reported, FCC funds don't sit in an account waiting for redistribution.

As former deputy chief of the FCC Wireline Competition Bureau Carol Mattey explained, “The FCC has a budget for RDOF, but that doesn’t mean USAC [the Universal Service Administration Company] has been collecting the money. USAC only projects disbursements to authorized recipients.” In other words, the FCC must explicitly decide to direct defaulted funds, rather than merely transferring unspent dollars.

Missouri’s broadband struggles reflect deeper issues with RDOF implementation nationwide. Of the $9.2 billion awarded in the 2020 RDOF auction, over $3.3 billion has been defaulted on, although estimates vary.

Some industry experts, including Mattey, have argued that less than 2% of “post-authorized” RDOF funds have actually been lost, with most defaults occurring before final approvals. 

Either way, the sheer volume of failed RDOF projects has left millions of Americans still waiting for broadband.