Few RDOF Phase 1 Carriers Miss 3-Year Buildout Milestone, Signaling Success
Few of the first tranche of rural digital opportunity fund program recipients authorized in 2021 are behind on their buildouts of broadband to unserved areas. The FCC has seen only a smattering of notifications in recent days from operators alerting it about falling short of the milestone of being 40% deployed as of the end of 2024 (see 2501160056). But broadband experts told us the rate of missed milestones could be higher when it comes to the second batch of RDOF carriers, authorized in 2022. That group has until the end of this year to meet its 40% buildout milestone.
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Since Jan. 1, eight providers that received RDOF Phase I awards have notified the FCC about falling short of the three-year 40% milestone in 10 different states (docket 19-126). The RDOF Phase I auction produced 180 winning bidders. The deadline for notifying the agency about missing the milestone was Jan. 15.
The low number likely reflects that the 2021 recipients included a lot of the best-resourced providers, broadband consultant Carol Mattey told us. Their applications were the easiest for the FCC staff to review, as they were strong and didn't generate follow-up inquiries from agency staff, she added. They were all for fiber deployments, and many were from electric cooperatives, Mattey said.
"It is not surprising that the applicants that sailed through the review process have, by and large, met their deadlines, because they had solid financial, technical and managerial capabilities," Mattey said. It's more likely that the companies whose applications raised questions for FCC staff and took longer to approve might miss deadlines.
The fact that few recipients missed milestones could be seen as "great news" for the FCC, said Connected Nation Vice President-External Relations Heather Huddleston. Some delays are inevitable, given that RDOF projects connect rural areas that are especially difficult to reach, she said. The FCC didn't comment.
Some operators said missed milestones are the product of circumstances beyond their control.
For example, Conexon Connect said falling short in Arizona, Illinois and Louisiana was deliberate. The company is delaying RDOF buildouts in some states until BEAD program funding decisions are finalized by state broadband offices. It said that in some cases its network will have to be modified to account for BEAD-funded areas. Conexon Connect told the FCC last week it "would have preferred to keep building in these states, but [NTIA] has made clear that it will not fund prior construction by Conexon Connect with BEAD funding."
Foothills Connect told the FCC that the start of its construction work in Kentucky was delayed for months "due to lack of responsiveness by those in charge of granting right-of-way access, eventually leading to escalation with state officials." It said three separate sets of contractors fell through as each "failed to meet the expected service standards and fell short of fulfilling their responsibilities," while a change in local pole attachment policies required subsequent substantial revisions to the company's engineering and construction plans. Such obstacles have been dealt with, and now it "anticipates substantial progress toward closing the current milestone gap and achieving future buildout milestones."
Environmental reviews have delayed construction of middle-mile facilities needed in some of its North Dakota RDOF locations, said Polar Telecom. It expects to hit the 40% buildout point by midsummer "and will be on track to meet future milestones."
Connected Nation's Huddleston said the FCC is unlikely to come down hard on carriers that are building out, as long as they're at least beyond the 20% threshold. Requiring quarterly status reports would be reasonable, she added.
Consequences of missing an interim deadline can range from quarterly progress reports, instead of annual, for carriers that miss the deadline by a small amount, to loss of universal service support for those that miss it substantially, Mattey said. The agency won't take action until after early March, she said, when companies report their deployment as of the end of 2024 to the Universal Service Administrative Company.