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RDOF Defaults and Possible Enforcement Action Revealed by Commission

The FCC’s Wireline Bureau in a public notice Wednesday formally announced a host of Rural Digital Opportunity Fund defaults and said the defaulting companies will face RDOF penalties and, for one of them, possible enforcement action. The defaults -- by…

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Mercury Wireless, PVT Networks, Cable One, Sparklight and Fidelity Cablevision -- were previously announced by the companies in letters to the Wireline Bureau, and encompass census block groups (CBGs) in Idaho, Illinois, Indiana, Kansas, Michigan, Missouri and New Mexico, the PN said. Mercury's defaults are being referred to the Enforcement Bureau “for further consideration,” the PN said. Mercury is defaulting on 9,082 model-estimated locations in Indiana out of the 13,529 it agreed to serve, and 55,175 of 77,925 locations in Michigan, the PN said. It also defaulted on all 8,398 locations it agreed to serve in Illinois, all 29 locations in Kansas and all 5,023 locations in Missouri. “We expect carriers to live up to their deployment commitments, and those who fail to meet their obligations can jeopardize the opportunity to bring broadband to the promised areas and undermine the integrity of the programs,” said the PN. “Such defaults are particularly regrettable when the carrier waits years after authorization to default, making it difficult to correct the problem and otherwise accommodate the defaulted areas in other deployment programs.” Many funding programs make areas ineligible for broadband deployment funding where a provider is already under an enforceable commitment to serve, the PN said. Formally announcing the defaults and informing other governmental entities “avoids leaving these areas unserved for the duration of the RDOF deployment terms because providers may now have access to alternative funding to serve these areas,” the PN said. “This was a very difficult decision for Mercury to make, as we continually strive to deploy highspeed broadband throughout rural America,” the company said in a letter Monday informing the FCC about some of the Michigan defaults. “Factors outside of the company’s control, including rising costs and competitive encroachment, have rendered deployment to many RDOF CBGs economically unviable and ultimately unachievable,” it added.