More RDOF Defaults Coming as Stakeholders Seek to Free BEAD Areas

As the rollout of the BEAD program is approaching it might be impacted by potential defaults in the previous RDOF program.

How? Let’s read the details and find out.

More RDOF Defaults Coming as Stakeholders Seek to Free BEAD Areas

As the Federal Communication Commission ( FCC) is preparing to distribute $42.5 billion in BEAD (Broadband Equity, Access, and Deployment) funding to provide broadband connectivity in rural areas, more RDOF defaults are expected underway.

The defaults involve network operators who won bids in the 2020 RDOF (Rural Digital Opportunity Fund) program but have not fulfilled their commitments for which they won the funding.

This means they have yet to deploy broadband infrastructure in the designated areas for which they won bids.

The FCC regulates the RDOF program, and it reportedly did not approve funding for some winning operators until 18 months or more after the auction was complete, by which time deployment costs had increased.

As a result, some RDOF winners began arguing that they could not carry out the deployments if the FCC did not make additional funding available to them.

The FCC does not appear to provide additional funding, but it has said that it can consider reducing default penalties for RDOF winners who have not fulfilled their commitments.

Also, check out “Top Broadband Developments of 2024“

Similarly, providers that won funding under the Connect America Fund (CAF II) are at default in the areas they won funding.

A group of seventy stakeholders sent a letter to FCC Chair Jessica Rosenworcel requesting to waive or reduce RDOF and CAF II default penalties for a short time period for those winners who are at risk of defaulting on their awards.

According to the BEAD rules, the locations that already received funding through federal programs such as RDOF and CAF II are ineligible for Broadband Equity Access and Deployment Program BEAD funding.

With RDOF defaults increasing, many rural and remote locations in the country are at risk of receiving zero connectivity.

The letter reads, “The commission should not permit these unserved rural communities to face this type of double whammy and be left behind once again.” As per the letter, some areas of Missouri and Mississippi are at highest risk.

Also, read “South Carolina Broadband Funding: Full $112.3M to Local Providers.”

These stakeholders, including broadband providers, trade associations, state and local officials, school districts, unions, and civil society organizations, argue that unforeseen challenges have made it difficult for some RDOF winners to meet their deployment obligations.

They believe relaxing penalties would free up these areas for BEAD funding and ensure broader access to rural broadband.

As per the reports, the defaults have affected about a third of the $9.2 billion that the FCC planned to award in the RDOF program.

The situation shows the challenges of deploying broadband infrastructure in underserved areas of the country.

While BEAD aims to address the digital divide, resolving the potential RDOF defaults is crucial to ensure its success and maximize rural access to broadband.