NTCA CEO Dings Cable for RDOF Defaults

WASHINGTON, June 24, 2024 – The head of a rural broadband trade group chided the cable industry last week for defaulting on commitments made as part of a Federal Communications Commission subsidy program.

“Right now, there is a great deal of noise from the cable industry on how they are going to be the ones who bring connectivity to these markets,” NTCA CEO Shirley Bloomfield wrote in a blog post on Friday. “That said, looking at their track record on Rural Digital Opportunity Fund or even American Rescue Plan funding, pardon me if I remain skeptical on their actual commitment to serving these markets beyond the enterprise customers who might be attractive. The farm at the end of the road? Likely not so much.”

Asked if Bloomfield would name specific cable companies, NTCA provided a statement from her saying:

“We tend not to see large cable providers venture much, if at all, beyond their relatively settled franchise boundaries. And where they have participated in grant programs, we are still waiting to see substantial expansion into deeply rural areas.”

NTCA represents smaller broadband providers that serve rural parts of the United States.

The FCC’s RDOF program has struggled with defaults from the outset – nearly a third of the $9.2 billion initially awarded went into limbo when the agency decided winning bidders LTD, Starlink, and Starry weren’t capable of serving the more than 1.2 million total locations they committed to.

But there has been a stream of providers handing back locations since the major defaults in 2022, including some from cable companies.

Major cable company Charter Communications, the RDOF auction’s biggest winner, has handed tens of thousands of locations back to the FCC, citing rising costs that make deployments “uneconomical.” The company has pointed out in filings that the returns make up a small portion of the more than 1 million locations it was slated to serve with RDOF money.

Altice USA, another cable company, has backed out of the lion’s share of the 5,220 homes and businesses it was originally awarded funding for. The company has returned more than 5,000 of those to the agency.

Wireless company Commnet has opted to ask the FCC for permission to transfer some of its RDOF service areas to local providers. 

The agency recently put forward a proposal to loosen the financing requirements for RDOF in an effort to keep providers on board. Participants are required to build out to 40 percent of their locations within the first three years of receiving funds, either the end of 2024 or 2025 depending on the provider.

Some RDOF winners and others have been asking the FCC to allow defaults with smaller financial penalties, an effort to get off the books projects that might fall through in the future.

The separate $42.5-billion BEAD program considers RDOF commitments ineligible for funding, and some observers have said rural, hard-to-serve areas could be left without subsidized broadband if BEAD maps have been finalized before all uncertain RDOF projects have been abandoned.

Time for such a measure is running out, though, as states are continuing to make progress finalizing BEAD maps.