States Await New Language in Order, as RDOF Concerns Continue

Concerns continue over new Rural Digital Opportunity Fund language in the order that was approved along party lines at Thursday's FCC meeting and could restrict support in areas that get state USF-like funding (see 2001300001). Stakeholders Tuesday were awaiting the order's release. "We are working to get it out as soon as possible," an FCC spokesperson emailed.

The agency said last month that New York and Alaska would be categorically excluded from Phase I of the RDOF auctions (see 2001140028). That language appears to be softened in the final order. Chairman Ajit Pai said he will work with New York stakeholders to determine rural areas that might be eligible under the same criteria used for the rest of the RDOF. The FCC provided support to a New NY Broadband Program through its Connect America Fund (see 2001060061). “We want to expand broadband in New York as widely as possible, and we want to continue to collaborate closely with the FCC to do so," said a spokesperson for the Empire State Development's Broadband Program Office.

New language was added to the order last week precluding RDOF participation where broadband networks received federal or state funding or where there are enforceable obligations to deploy broadband. In New York, Charter Communications was obligated under the terms of a 2016 acquisition of Time Warner Cable to upgrade existing broadband networks and expand to 145,000 additional homes, said New York BPO officials. "The FCC requires us to build out our broadband network to two million homes within five years, by May 18, 2021, at a speed requirement of at least 60 Mbps," a Charter spokesperson emailed. The state's Public Service Commission extended Charter's deployment deadline until September 2021, BPO officials told us. With the state broadband program and Charter's deployment, more than 98 percent of households in New York should have access to broadband when the current phase of buildouts are done, they said.

Alaska isn't participating in Phase I RDOF auctions, "but it's not quite as dire, or as simple, as that," said Alaska Telecommunications Association Executive Director Christine O'Connor. ISPs in Alaska receive USF broadband support through 2025 or 2026 under separate programs including the Alaska Plan, A-CAM and the CAF track, she said. She doesn't know what's next. Timing on RDOF Phase II is still in question, but O'Connor said Alaskan providers "might not want to be included in RDOF." The extremes of geography and the cost to deploy would make their bids outliers. "We might not want to get rolled up in the second round," she said.

Like other state officials contacted for this story, Kyle Rosner, broadband policy specialist with Virginia Gov. Ralph Northam's (D) office, wanted to withhold reaction until he's able to review the official order. The office will examine whether the new language is a hindrance to states. In the weeks before the RDOF vote, Virginia officials asked the FCC to allow RDOF money to be used as broadband block grants for the state to allocate. "We're still in conversation with the FCC folks about that," Rosner said. "It's in the early stages. The FCC and the commonwealth of Virginia share the goal of connecting folks." He said he supports the RDOF program and is hopeful about Virginia's participation: "It's a boatload of money."

"The new language threw us for a loop," said CCG Consulting President Doug Dawson. "It's a whole bunch of questions marks, but we know it won't be good." He expects stakeholders to ask their elected officials to tell the FCC "please don't do what you said" in the final order. He's concerned any provider counting on state matching funds mightn't bid in RDOF. Rural electric cooperatives that were counting on annual state matching grants mightn't bid if they have to borrow additional money for fiber. "Financing for those things is always on a razor blade," he said.

The National Rural Electric Cooperative Association is "eager to review the final order language to learn how various details, including the state program provision, may affect interested electric co-op bidders," emailed a spokesperson. "We’re also reaching out to our members to better understand the potential impact.”