CoBank questions RDOF applicants’ ability to deliver

Telecompetitor reports…

CoBank, a lender specializing in rural telecom, has added its voice to a growing chorus expressing concern about the ability of some Rural Digital Opportunity Fund (RDOF) auction winners to deploy networks capable of supporting the broadband speeds they have committed to deliver. CoBank concerns relate to technology, expertise and financial prowess of certain winners.

They point out that the problem impacts just a few providers but represents a huge portion of the funding and areas…

Although there were more than 200 winners in the auction, the top 10 winners combined won more than three-quarters of the funding. And the ability of some of those top 10 winners to deliver what they promised has come into question.

Here’s what they have to say about LTD Broadband, which has qualified to apply to serve large swaths of Minnesota…

Some of the top 10 winners, including some that traditionally have used fixed wireless technology, submitted gigabit bids based on using fiber-to-the-premises (FTTP) as well as fixed wireless. Although FTTP is a proven technology, it’s costlier than fixed wireless and some critics have questioned whether some winning bids are really feasible based on an FTTP deployment.

CoBank raises a different concern – the size of some winning bids in relation to the winner’s existing operations. The report notes, for example, that LTD Broadband – the biggest winner in the auction – won support to provide coverage in 15 states, but currently only offers service in parts of two states.

CoBank’s research about LTD Broadband also suggests that the top speed the company currently offers is 35 Mbps downstream and 7 Mbps upstream. Those speeds are considerably less than the 100 Mbps to 1 Gbps speeds for which LTD Broadband won funding.

“Seems like lots of execution risk to us,” CoBank said of LTD Broadband in its report. (Telecompetitor spoke with LTD Broadband in late December, but the company was unwilling to say much about its RDOF win at that time, citing FCC quiet period restrictions.)

Another concern related to some RDOF winners, according to CoBank, involves to the letters of credit that the companies are required to obtain before funding can be released to them. A company seeking to grow seven-fold could have trouble obtaining the necessary letter, CoBank suggests.

And SpaceX, which also could serve some areas in Minnesota with RDOF funds…

One of the big winners was SpaceX, which is still in the process of deploying a constellation of non-geostationary satellites to support service at 100 Mbps. That technology is relatively unproven, but CoBank also questions whether the FCC should have awarded $885.5 million in RDOF funding to a company owned by the world’s richest man.

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

About Ann Treacy

Librarian who follows rural broadband in MN and good uses of new technology (blandinonbroadband.org), hosts a radio show on MN music (mostlyminnesota.com), supports people experiencing homelessness in Minnesota (elimstrongtowershelters.org) and helps with social justice issues through Women’s March MN.

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