By Marc McCarty
Today I re-read my Blog from December 2020 about the winners of the FCC Rural Digital Opportunity Fund (RDOF) auction awards. It was an exciting time! Over $9.2 billion awarded — $346 million to Missouri providers that promised to connect nearly 200,000 Missouri locations to high-speed internet!
Twenty months later, while some Missourians now have the service available, many do not, and for some the connection promised by the funding will never come at all.
Why?
Part of the answer was described in the December 2020 Blog:
“Companies receiving awards are required to submit much more detailed information to the FCC throughout next year before their award is final. That information includes engineering data, deployment plans and financial data, and failure to submit it by the deadlines can result in forfeiture of the award.”
As this map shows, as we approach the second anniversary of the initial FCC award announcement, companies who won awards in the areas of the state shaded in yellow still have not been able to satisfy the FCC’s criteria to begin receiving funding. Those areas shaded in red represent locations where companies have “defaulted” and lost their chance for federal funding. This map does not include the latest disqualifications of “winning companies” — $885 million to Star Link (disqualified because it could not show it could deliver service to all locations at the promised speeds) and $1.3 billion to LTD Broadband (disqualified because it failed to obtain necessary state issued licenses to offer internet service). LTD Broadband’s disqualification is particularly relevant for Missouri because it represents the majority of Missouri locations that had not been funded.
Of course, even in areas where the final applications for funding have been approved by the FCC, another reason many folks are waiting for broadband service is that the funding is spread over 10 years and the providers have 6 years to meet their obligation.
On August 15, the Department of Economic Development began taking applications for up to $265 million of state grant funding for broadband infrastructure, and Missouri likely will receive hundreds of millions of dollars more funding over the next few years through the Infrastructure Investment and Jobs Act programs.
Government officials are very concerned that this new funding does not go to areas already covered by another federal grant funding award. For example, under the DED program:
“project areas where high-cost support from the federal Universal Service Fund has been received by rate of return carriers, funding from the National Telecommunications and Information Administration Broadband Infrastructure Program, or where any other federal funding has been awarded to provide broadband service at speeds of 100/20Mbps will not receive Program funding.”
This of course, seems very logical. Why should the federal or state government pay twice for the same promised broadband access?
However, this logic breaks down when the promised federal funding is delayed for months or even years and then ultimately denied, or where the funded project cannot deliver the promised levels of broadband access.
This is a problem that is unlikely to go away. The FCC, NTIA and USDA (Reconnect) all have had funding programs in place over the past several years, with slightly different criteria for eligibility, requirements for connectivity levels, and build-out timelines. In some cases, the funding program did not require, and the provider did not commit to build out the locations to the current 100/100 Mbps or 100/20 Mbps standard.
Some of these issues can be addressed through a focused grant application and challenge process of the type DED has implemented. After all, providers that do expect to move forward with federal funding should be able to make that intent known. Further, in situations where “preliminary” awards were granted only to ultimately be rejected during an extended evaluation process – such as Star Link and LTD Broadband — the DED Broadband office has already taken steps to encourage applicants to make the case for funding through a new addition to its broadband program grant FAQ:
Questions added August 22, 2022:
Q31:The Federal Communications Commission today announced that it is rejecting the long-form applications of LTD Broadband and Starlink to receive support through the Rural Digital Opportunity Fund program, what does that mean for my broadband application?
A31:Due to the FCC rejecting the long-form applications of LTD Broadband and Starlink, areas within Missouri that may have been considered federally funded/awarded may no longer be considered federally funded. In the application, for Section IV Questions 13 & 13a, if your proposed service area was a previously funded area, but it is no longer, provide an explanation of how the area was previously awarded, and why that proposed service area is eligible for this Program’s funding.
Certainly, it also would be helpful if all federal agencies had more consistency in their requirements and process for funding programs and more transparency to identify when an “awarded” area: (1) actually is reasonably likely to qualify for funding and (2) is building infrastructure capable of meeting modern standards for broadband service (100/100 Mbps or 100/20 Mbps).
Finally, it might be appropriate to consider more objective criteria for determining if an area that is unserved or underserved actually should be excluded because of a competitor’s challenge. For example, Ohio’s state grant program definitions exclude unserved and underserved communities from participation in its grant program only when a competitor’s network is actually under construction and expected to be deployed within 24 months. Likely there are other ways of addressing this issue, but for the sake of residents and businesses currently on the other side of the digital divide, solutions need to be found. For Missourians without access, it is little comfort to learn that they live in an area that cannot participate in new rounds of federal and state funding for broadband, because funding was promised but never provided in a prior award or was used to construct infrastructure that doesn’t meet current standards. In either case, these folks are unconnected, with no realistic prospect of becoming connected, unless their homes and businesses are eligible to participate in future federal and state grant programs.
