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.
RDOF Phase II
The goal of RDOF Phase II is to deploy broadband service to locations in Census Blocks that are partially served and locations that were not awarded during the Phase I auction.
Total: $11.2 billion
Eligible Entities: Eligible Telecommunication Carriers (ETC’s)
Grants are available through a reverse auction to certified Eligible Telecommunication Carriers (ETC’s).
Phase II is not yet scheduled, with timing still being discussed by the Commission. The FCC plans to use the new Broadband Data Collection (BDC), formally the Digital Opportunity Data Collection (DODC), to determine the eligible Census Blocks for partially served areas.
This likely means Phase II will not be scheduled until after the FCC implements the Broadband Data Collection program.
- Phase II Not yet scheduled – Will not be scheduled until after the Broadband Data Collection of 2021 is complete
RDOF Build-Out requirements
Should you bid and win on an 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 blocks groups, with buildout requirements totaled at the state level, per the following timeline:
Per the FCC Auction 904 website:
“If there are fewer locations than originally estimated by the cost model, support recipients must serve the revised number of locations by the end of year six. Suppose there are more locations than originally estimated by the cost model. In that case, 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, they do not give the actual lat/long coordinates and addresses of RDOF eligible locations. 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 Location Data.
RDOF buildout requirements & The Connect America Model (CAM)
The eligible location counts for the RDOF auction came from the Connect America Model (CAM) counts, which were 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, in the January Report and Order, the FCC points out 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 other data sources.
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, 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 location count increases by 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 decrease
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 default and will not have an additional six months to comply.
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 fully comply 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 that a provider doesn’t have sufficient evidence to show that it offered 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 modified, 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 are 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.
Broadband DATA Act
This Act was signed into law in March 2020, mandating the FCC to create a Broadband Serviceable Location Fabric to be the basis of Broadband Maps from now on. Much of the language was influenced by the Broadband Mapping Initiative, for which CostQuest was the lead consultant. You can read the full report here: Broadband Mapping Initiative Summary of Findings.
Broadband Data Colletion (BDC)
Update: In March 2021, the FCC renamed DODC to Broadband Data Collection (BDC).
Evolving away from the FCC’s Form 477, the BDC is an effort to continue to refine the public’s understanding of broadband service coverage in the U.S. The main difference from Form 477 is the shift from coverage reporting at the census block level to coverage reporting at the sub-census block level using coverage polygons. More on BDC is below.
Form 683: RDOF Long-Form Application
Update: we’ve built guides for filing your long form application
Winning 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.
RDOF Reporting requirements
Unless something changes, RDOF awardees will follow the same path that CAF II awardees do: annually report the geocoded locations (lat/lon + address or textual reference) “where you have newly deployed facilities capable of delivering broadband that meets or exceeds the defined speed tiers in the previous year”, per the USAC Website.
That likely means that RDOF awardees will need to file locations in the HUBB Portal (High Cost Universal Broadband) per the same deadlines (see image below).
HUBB Filing deadlines
Form 477 reporting requirements
Any RDOF reporting requirements are in addition to existing Form 477 Requirements, which as of this writing, have not been substantially changed. Should you need a refresher, more detail can be found on the FCC website.
BDC (DODC) reporting requirements
UPDATE (March 2021), DODC was renamed to Broadband Data Collection (BDC).
Adopted in August 2019, the DODC was the first step towards more granular broadband maps and the improvement of Form 477. The gist is that providers would file coverage polygons as a means of indicating where they provide service (or could provision without extraordinary effort) within a Census Block.
Though adopted in August 2019, no Public Notice has been released by the Commission’s OEA (Office of Economics and Analytics) indicating the formal requirements and deadlines. It’s our understanding that USAC (previously charged with administering this) has put the corresponding RFP on hold indefinitely. The Commission will likely take it from here. Read the original order.
UPDATE (July 2020), per the Second Report and Order, the Commission adopted:
- Requirements for providers of fixed and mobile broadband service to report broadband coverage and availability
- The data will be collected semi-annually, with filing deadlines of March 1 to reflect data as of December 31 of the previous calendar year, and September 1 to reflect data as of June 30 of the then-current calendar year. OEA will issue a Public Notice announcing the initial filing deadline at least 6 months prior to that deadline.
- The collection of crowdsourced data, the use of audits, and other measures to help verify the accuracy of the data
- The Broadband Serviceable Location Fabric (Fabric), a dataset of all locations where fixed broadband service can be installed
- Standards for incorporating verified data from governmental entities and certain third parties into the FCC’s broadband coverage maps
More detail will be provided as additional clarity is provided.