Concerns about Rural Digital Opportunity Fund – areas with state broadband grants ineligible

I’ve written about this before – but clearly in Minnesota we have reason to pay attention. Telecompetitor reports…

Areas that receive broadband funding through the USDA ReConnect program or a state broadband program will not be eligible to receive funding through the Rural Digital Opportunity Fund (RDOF).

In the RDOF Report and Order, adopted January 30 and released publicly on February 7, the FCC justified the decision by noting that it was “consistent with our overarching goal of ensuring that finite universal service support is awarded in an efficient and cost-effective manner and does not go toward overbuilding areas that already have service.”

The article goes on to offer some counter points to the RDOF decision…

  • The concern that RDOF funding might support overbuilds funded through a state broadband program or ReConnect seems like a red herring, as RDOF rules already prevent funding from being used in areas where a competitor offers broadband service. A bigger concern is whether a single winner should be able to get funding through the RDOF and another broadband program. With this in mind, it’s worth noting that winning bids in the RDOF reverse auction are unlikely to cover the entire cost of deploying service to an area. The maximum anyone can request (i.e. the highest opening bid) was calculated via a cost model that according to some, covers construction costs at minimum speeds; however, winning bids typically are for considerably less funding. Is there a danger, though, that by combining multiple funding sources, a provider could collect more than it actually needs?

  • It’s interesting to contrast the FCC’s moves with USDA’s action in its own rural broadband funding program known as ReConnect. That program awarded funding through a point system, with extra points going to projects in states that had their own broadband funding programs.

  • The majorityof states now have some type of broadband program, according to The Pew Charitable Trust — although details and available funding vary considerably from one state to another.

This entry was posted in Funding, Policy by Ann Treacy. Bookmark the permalink.

About Ann Treacy

I have a Master’s Degree in Library and Information Science. I have been interested or involved in providing access to information through the Internet since 1994, when I worked for Minnesota’s first Internet service provider. I am pleased to be a part of the Blandin on Broadband Team. I also work with MN Coalition on Government Information, Minnesota Rural Partners, and the American Society for Information Science and Technology.

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