Before we dig in, this article builds on an understanding of the Rural Digital Opportunity Fund (RDOF), the most recent federally run reverse auction meant to subsidize the cost of bringing broadband connectivity to the unserved parts of the U.S. Should a refresher be helpful, feel free to check out our RDOF Resource Center.
On January 19th, Congress wrote a letter urging the FCC to vet RDOF winners, to ensure that the $9.2 billion to be distributed through Phase 1 is allocated efficiently. This letter comes as long-form applications are being submitted by winning bidders who wish to prove to the FCC that they can provide internet and voice services consistent with their bids in the auction. Led by Representatives Clyburn and Walberg, as well as Senators Klobuchar and Thune, the letter reads:
“We urge the FCC to validate that each provider in fact has the technical, financial, managerial, operational skills, capabilities, and resources to deliver the services that they have pledged for every American they plan to serve regardless of the technology they use…”
Media headlines surrounding this letter, that garnered bipartisan support from 150+ senators and representatives, has left many in our industry asking: How will the FCC meet Congress’ challenge?
tl;dr – Though some may have concerns as to whether RDOF winners can actually provide the speed of service they’ve promised, to as many people as they’ve promised it to, the vetting process to secure the funding is incredibly detailed and should have a high bar. FCC staff, including technical experts across technology types, will pour over network designs and financial statements for as long as they need to feel satisfied. In short, winners will not just be handed checks for millions of dollars, but a question remains: how many will live up to their end of the bargain over the next 10 years?
What’s happened with RDOF so far
Before rushing into any narratives about which companies can (or can’t) meet their obligations, it’s helpful to first understand how we got here, so here’s the skinny:
- Purpose of RDOF: to bring quality internet service to the unserved* areas of the U.S. with the least amount of subsidy funding possible
- The rules:
- Only unserved areas were included in the first auction (Auction 904)
- Only providers meeting certain requirements can receive funding
- Better service (mainly higher speed, lower latency) = more funding
- Reverse auction format: lower bids likely to win (quality of service a factor), providers bid on census block groups (CBGs)
- Auction winners must be approved through an application process to receive funding
- Once approved, awardees receive support for 10 years, but must adhere to buildout requirements to avoid loss of support funding or penalties
- The timeline:
- July 2020 – Interested companies raised their hands (Short Form Application)
- October 2020 – Balance a low bid while providing the best service (Auction 904)
- Jan/Feb 2021 – Winners prove to the FCC that they can do it so they can receive funds (Long Form Application)
- 2021 – FCC reviews winners’ applications to determine whether any applicants default, triggering penalties and making those CBGs eligible for future funding
*Unserved: either wholly lacking broadband service or having service less than 25Mbps Download/3Mbps Upload.
So, what exactly will the FCC do to ensure that funds are used most effectively? The short answer is: they’ll try to filter out winning bidders that don’t pass the sniff test now and employ a few measures to hold awardees accountable as they build out their networks.
The FCC’s due diligence
Even before this letter from Congress, the FCC had outlined an intensive due diligence process, meant to provide ample opportunity for FCC staff to closely examine how winning bidders’ plans, infrastructure, and finances map to the commitments of their awarded areas. In general, the series of certifications, letters, and financial documents all provide bits of signal, no pun intended, as to whether a given applicant can meet their buildout obligations.
The bulk of the due diligence, however, comes during the Stage 2 submissions of the Description of Technology and System Design, which are due by February 15th, 2021. Stage 2 submissions are effectively the technical detail that explains exactly how an applicant will meet their obligations. The main sections of these submissions where the FCC is likely to spend time are:
- Overall Network Design: This isn’t an overview, this is a soup to nuts breakdown, with technology-specific requirements. The main areas covered are: network architecture (last mile to interconnection to voice service), network scalability, design methods/engineering assumptions, and consumer path use cases demonstrating how the design will meet peak end-to-end performance requirements.
- Project Plan: Monthly and quarterly schedules detailing the 6 year buildout plan that will offer voice and broadband service to at least 95% of the required locations, including how the network will be operated/managed/scaled over time.
- Network diagrams certified by a Professional Engineer (P.E.): Uniquely identifying all segments of proposed networks, major network nodes, and links (last mile, middle mile, interconnection, long haul). The goal here is to understand every piece of the network, its capacity, and how nodes will ultimately be connected.
The path forward
OK, no more listing of requirements, I promise. If you do want to hear experts break down the whole process, check out the Long Form tutorials.
From here, this becomes largely a waiting game. The February 15th deadline will come and go, with the FCC staff taking as much time as they need to review, ask questions, and do their due diligence on auction-winning bidders. Once they are satisfied, they’ll announce the winners via Public Notice and providers will be off to the races in trying to build out their networks. Winners will have 6 years to bring service to 5.2 million Americans who have been without reliable broadband service.
There will be bumps in the road, but the FCC can meet Congress’ challenge by sticking to a high bar in this year’s due diligence and staying the course with the momentum of the Broadband DATA Act. With any success, unserved communities will have new opportunities for personal and professional growth, for distanced learning and telemedicine, and the Digital Divide will lessen.