Auction 904: The Rural Digital Opportunity Fund

The Rural Digital Opportunity Fund (RDOF) is a Federal Communications Commission (FCC) initiative designed to inject billions of taxpayer’s money into the construction and operation of rural broadband networks across America. RDOF is a key part of the FCC’s efforts to close the digital divide and ensure that all Americans have access to high-speed broadband. The intent of the program is to greatly improve the quality of life for communities in rural areas, while also creating a more connected nation as we move into the future. We will continue to provide updates on this significant initiative as more information becomes available.

The RDOF is providing a total of $20.4 Billion (USD) in funding over a ten-year period to help support broadband networks in rural communities across the United States. The RDOF funding was granted from a traditional high-cost Universal Service Funding (USF) vehicle and not dependent on legislative appropriations. This means that the FCC was able to begin disbursing these funds without waiting for Congress to appropriate the RDOF funds.

Distributed in a reverse auction fashion, the RDOF funds are awarded to Internet Service Providers who offer the best combination of price and performance in terms of speed and latency. Winning bidders have to be designated as Eligible Telecommunications Carriers (ETC); a designation that is obtained through state regulatory commissions. This reverse auction process is designed to incentivize broadband providers to build out their networks in rural areas and expand coverage to underserved communities across the United States.

RDOF Award Winners Deployment Obligations

RDOF participants are required to provide stand-alone voice service and broadband internet service at speeds consistent with their winning bids (which must be at least 25 Mbps downstream and 3 Mbps upstream (25/3 Mbps) at rates reasonably comparable to those available in urban areas to all locations within an awarded area over eight years of the 10-year period. Initial interim deployment milestones are based on those adopted for the Connect America Fund (CAF) Phase II Auction program. The eligible telecommunications carriers must complete:

• 40 percent of required deployment by the end of Year 3
• 60 percent of required deployment by the end of Year 4
• 80 percent of required deployment by the end of Year 5
• 100 percent of required deployment by the end of Year 6

Penalties will be assessed for failure to meet these milestones, with a forfeiture of 25 percent of the remaining balance of phase I support for each year or portion thereof that a carrier fails to meet its interim milestone. In addition, carriers that fail to meet their interim milestones will be required to provide service to an additional 10 percent of locations in their winning bid areas in order to complete their required deployment.

This program has accelerated the development of high speed internet networks all across America. The assistance from the U.S. Government along with the hard work and dedication from the Internet Service Providers, the United States is getting closer to becoming the first fully connected country. The initiative to be fully connected is closely followed by a fully 5G capable country.  More on that in a future story…

Major RDOF Phase 1 Auction Winners to receive Funding

The following 10 Internet Service Providers were the largest recipients of RDOF Phase I funding:

RDOF Electric Coop Consortium Phase 1 Winners

In order to get a slight edge and receive more funding,  several groups banned together to create five electric cooperative consortiums during Phase I of the RDOF. The FCC requirement was for each consortium to divide winnings equally. amongst members by December 22nd, 2020.

All RDOF Phase 1 Auction Winners

Below is a comprehensive list of all network providers and consortiums that were awarded Phase I RDOF funds, the amount they won, and the number of locations they have agreed to build network.