Rural Digital Opportunity Fund (RDOF)
The RDOF is the latest iteration of the FCC’s universal service fund (USF) program, providing $20.4B to ensure that telecommunications services for rural areas are comparable to those enjoyed in urban and suburban areas.
FCC announces $640 million through the Rural Digital Opportunity Fund
WASHINGTON, March 10, 2022— The Federal Communications Commission today announced that it is ready to authorize more than $640 million through the Rural Digital Opportunity Fund to fund new broadband deployments in 26 states bringing service to nearly 250,000 locations. To date, the program has provided $4.7 billion in funding to nearly 300 carriers for new deployments in 47 states to bring broadband to almost 2.7 million locations.
“Today’s funding will help connect hundreds of thousands of Americans to high-speed, broadband internet service,” said Chairwoman Rosenworcel. “As we approve this funding, we remain committed to making sure that this program serves areas that truly need broadband and funds carriers that can do the job, and our new Rural Broadband Accountability Plan will ensure just that.”
Earlier this year, Chairwoman Rosenworcel established the Rural Broadband Accountability Plan (RBAP), a new effort to monitor and ensure compliance for universal service high-cost programs including the Rural Digital Opportunity Fund and Connect America Fund Phase II Auction. The RBAP made a number of changes and enhancements to existing audit and verification procedures, including doubling the number of audits and verifications, conducting the first on-site audits for the programs, and focusing audits and verifications on the largest winning bidders.
A fact sheet on the RBAP is available here: https://www.fcc.gov/document/fcc-creates-rural-broadband-accountability-plan.
The Commission also announced a number of defaulted bids, making the Census Blocks in those defaulted bids potentially eligible for other funding programs. A list of the eligible Census Blocks covered by defaulted bids is available on the Auction 904 website under the “Results” tab, https://www.fcc.gov/auction/904/round-results.
Check out the FCC’s official release for more information.
RDOF reporting requirements
RDOF awardees will follow the same path that CAF II awardees do: “Submit geolocated broadband deployment data showing where the carrier built out broadband by latitude and longitude in the previous calendar year,” per the RDOF page on USAC’s website.
The RDOF awardees will need to file and certify deployment data into the HUBB Portal (High Cost Universal Broadband) per the same deadlines (see image below).
HUBB filing deadlines
RDOF build-out requirements
Should you bid and win on an RDOF eligible Census Block Group, you’d receive 10 years of support funds, distributed monthly. Payments will be received once a long-form application is submitted and approved.
In exchange, an awarded provider agrees to offer commercially at least one voice and one broadband service, meeting relevant service requirements. These services must be made available to the locations within the awarded census block groups, with buildout requirements totaled at the state level.
The location counts for the eligible census block groups in the RDOF auction were based on the Connect America Model (CAM), based largely on 2011 census data for those counts. Companies winning support in the RDOF auction will need to meet specific buildout requirements based on the CAM location count through the sixth year of the program.
By the end of the sixth year, the FCC expects to have revised location counts and if those counts are higher than the CAM locations counts. Funding recipients will have an additional two years to build to the adjusted location count.
RDOF Buildout Requirements timeline:
Per the FCC website:
“If there are fewer locations than originally estimated by the cost model, support recipients must serve the revised number of locations by end of year six. If there are more locations than originally estimated by the cost model, support recipients must serve the cost model-estimated number of locations by the end of year six and must serve the remainder of locations by the end of year eight.“
Finding Lat/Lon coordinates
Note that while the FCC provides the number of locations and the reserve price, the actual lat/lon coordinates, and addresses of RDOF eligible locations they do not provide. In order to meet the FCC reporting requirements, all awarded providers will eventually need lat/lon coordinates, and addresses to report the progress and completion of the locations served in an awarded area. If you need help finding locations, check out our BroadbandFabric Data Suites.
RDOF build-out requirements & the Connect America Model (CAM)
The eligible location counts for the RDOF auction came from the counts in the Connect America Model (CAM), which was pulled together from 2011 census data. This CAM model supports rural broadband funding programs by representing the number of locations needing broadband access. It uses multiple variables such as population density and terrain to estimate broadband deployment cost using fiber-based options to all sites in an area. However, the FCC points out in the January Report and Order the possible disparity between the CAM location counts used in RDOF and the actual number of real-time locations.
The FCC cites in the order several up-to-date location data sources they will have access to in the next few years. Whether from the Digital Opportunity Data Collection, developing a broadband serviceable location database, the 2020 census, or some other data source.
The order states that winning RDOF bidders will be required to serve the number of locations subsequently identified from the updated data. The Commission plans to publish revised location counts no later than the end of service milestone year six, around 2027.
If RDOF location counts increase
If the location count in an RDOF-funded area increases, the support recipient will not be required to offer voice and broadband to 100% of the new number of locations until year eight. Through year six, service availability requirements will come from the original CAM location count. There will be no specific milestones to reach for year seven. However, funding recipients will be required to report locations deployed in that calendar year to USAC as usual in their HUBB filing.
RDOF funding recipients will not receive additional funding unless the increase in location count exceeds 35% of the original CAM-calculated location count. They will, however, be able to request to have the new location count reduced in certain circumstances, such as if specific locations are uninhabitable or if it would be unreasonable to require the provider to deploy to particular locations. Examples of the latter might include areas in a development built after year six or where a provider would have to install new backhaul facilities to serve just a single location, the FCC said.
Service providers whose location counts increase by more than 35% will have the option of requesting additional funding from the commission. Note that buildout requirements aggregate at the state level, so the awarded census block groups within the same state need to meet or exceed this 35% threshold.
If RDOF location counts decreases
Suppose an RDOF-funded area has fewer locations than the CAM indicates. In that case, the provider receiving support for that area must notify the Commission no later than March 1st following the fifth year of deployment. The sooner, the better, if the actual number of locations is so low that the service provider would not meet CAM-based buildout obligations for years three or four.
If the new location count is less than 65% of the CAM locations within an RDOF-funded area, totaled at the state level, the provider receiving support for that area will have its support amount reduced proportionately.
RDOF compliance rules
Service providers that fail to meet buildout milestones are subject to various non-compliance measures based on the service provider’s compliance gap. Which is the degree to which the service provider fails to meet a milestone. The chart below details these non-compliance measures.
Any support recipient who believes they cannot meet their three-year milestone must notify the FCC Wireline Competition Bureau and explain why it occurred. Suppose a support recipient has not met the milestone and has not made this notification by March 1st following the third-year service milestone. The recipient will then be deemed in default and will not have an additional six months to come into compliance.
As service providers that fail to meet other buildout milestones move toward compliance, they may move up from a lower to higher non-compliance tier.
If a support recipient misses the milestones for year six or year eight, depending on its deadline for full completion, it will have 12 months from the date of the service milestone deadline to come into full compliance.
If a support recipient does not come into full compliance after the one-year grace period for its sixth- or eighth-year service milestone, USAC will recover support from the provider. USAC will take the exact recovery measures if they determine a provider doesn’t have sufficient evidence to show that it was offering service to the required locations by the sixth- or eighth-year deadlines. The amount of support recovered will vary, depending on whether a provider’s CAM location count is adjusted, and if it is adjusted, whether it is adjusted upwards or downwards.
In cases where a provider’s CAM location count is not adjusted or is adjusted downwards:
- If a provider has deployed to 95% or more (but less than 100%) of the CAM location count or of the adjusted CAM location count if there are fewer locations, USAC will recover an amount of support equal to 1.25 times the average amount of support per location received in the state for that provider for the number of locations to which the provider has not deployed service.
- If a provider has deployed to 90% of CAM locations (but less than 95%), or of adjusted CAM locations if there are fewer locations, USAC will recover an amount of support that is equal to 1.5 times the average amount of support per location received in the state for that provider over the support term for the number of locations to which the provider has not deployed service, plus 5% of the support recipient’s total RDOF support authorized over the ten-year support term for that state.
- If a provider has deployed to fewer than 90% of the CAM location count, or of the adjusted CAM location count if there are fewer locations, USAC will recover an amount of support that is equal to 1.75 times the average amount of support per location received in the state for that provider over the support term for the number of locations to which the provider has not deployed service, plus 10% of the provider’s total RDOF support authorized over the ten-year support term for that state.
In cases where a provider’s new location count is greater than its CAM location count, thereby giving the provider eight years to complete deployment, and the provider does not meet the eight-year service milestone after the one-year grace period:
- If the provider has deployed to 95% or more of its new location count, but less than 100%, USAC will recover an amount of support that is equal to the average amount of support per location received in the state for that provider over the support term for the number of locations to which the provider has not deployed service.
- If the provider has deployed to 90% or more of its new location count, but less than 95%, USAC will recover an amount of support that is equal to 1.25 times the average amount of support per location that the provider received in the state for the number of locations to which the provider has not deployed service.
- If the provider has deployed to 85% or more of its new location count but less than 90%, USAC will recover an amount of support that is equal to 1.5 times the average amount of support per location that the provider received in the state for the number of locations to which the provider has not deployed service, plus 5% of the support recipient’s total RDOF support authorized over the ten-year support term for that state.
- If a provider has deployed to less than 85% of its new location count, USAC will recover an amount of support that is equal to 1.75 times the average amount of support per location that the provider received in the state for the number of locations to which the provider has not deployed service, plus 10% of the provider’s total RDOF support authorized over the ten-year support term for that state.
Letters of Credit
USAC also will be authorized to draw on a provider’s letter of credit to recover all the support covered by the letter of credit if a support recipient:
- Does not meet relevant service milestones
- Does not come into compliance during the one-year grace period applicable after the full completion deadline or the six-month “cure period” associated with providers in Tier 4 at any point during the buildout if the provider does not timely repay the support associated with the non-compliance gap.
Suppose a support recipient is in Tier 4 status during the buildout period or has not deployed to 100% of CAM locations by the end of year six, and USAC has initiated support recovery. In this case, the support recipient will then have six months to pay back the support that USAC seeks to recover. If the support recipient does not repay USAC by that deadline, the FCC will issue a letter to that effect, and USAC will draw on the letter of credit to recover all the support covered by the letter of credit.
Suppose a support recipient has closed their letter of credit, and USAC determines later that the support recipient does not have enough evidence to demonstrate they offered service to all the required locations. In this case, the support recipient will be subject to additional non-compliance measures and sanctions if they do not repay the commission after six months. These non-compliance measures and sanctions include, but not limited to, existing FCC enforcement procedures and penalties associated with the Universal Service Fund high-cost program, potential revocation of eligible telecommunications carrier (ETC) status, and suspension or debarment.
Form 683: RDOF long-form application
Update: We’ve built guides for filing your long-form application
Bidders or their designees must:
- Provide in their long-form applications additional information about qualifications, funding, and the network that they intend to use to meet their obligations
- Detail the intended network plan, including a network design complete with a signature from a Professional Engineer (PE)
- Within a specified number of days, submit a letter from an eligible bank committing to issue a letter of credit; upon notification that the entity is ready to be authorized, must obtain a letter of credit from an eligible bank that remains open and covers disbursements until compliance with certain service milestones is complete and verified
- Within 180 days of being announced as winning bidders, certify they are eligible telecommunications carriers in any areas for which they seek support and submit relevant documentation.
Once a long form application is approved, the long-form applicant will be authorized to begin receiving support.