The Federal Communications Commission (FCC) met yesterday to finalize the rules of the upcoming Rural Digital Opportunity Fund (RDOF). As most of you know by now, RDOF is the largest wireline support program in history, with Phase 1 providing up to $16 billion to deliver broadband to unserved eligible locations.
Although there is typically a short delay before the final order is published, the Commission made at least one surprise announcement when they stated Low Earth Orbit (LEO) satellites will be allowed to file at the low latency tier. This decision is a departure from the previous draft, but satellite providers are still prohibited from bidding at the gigabit tier. Still, it seems the announcement may not be the proverbial pot of gold at the end of the rainbow for SpaceX and others when Chairman Pai's statement on the matter is taken into account: "And, at the request of one of my fellow commissioners, we also don’t entirely close the door on low earth orbit satellite providers bidding in the low-latency tier. But the Public Notice makes clear that staff will not be able to approve an application from a low earth orbit provider unless the applicant can demonstrate a proven track record of providing a mass-market retail broadband service to consumers with low latency. And given the timing of the application window, I have every reason to believe that this hurdle will be insurmountable."
Ultimately, the FCC's decision confirmed that satellite providers cannot bid at the gigabit tier: a positive for rural electric utilities who will still retain an advantage at the clearing round thanks to fiber broadband having the lowest overall weight.
Less surprising is the Commission’s decision to allow fixed wireless and DSL bidders to at least attempt filing as gigabit providers. This position has always been in the mix, but again, FCC staff will closely (and skeptically) review such requests.
To summarize the key takeaways from yesterday’s meeting:
1. Fiber providers such as rural electric cooperatives remain the lowest weight bidder
2. The FCC will allow LEO (but not GEO) satellites to at least file as a low latency, but non-gigabit, service provider
- Such requests will still be scrutinized by the staff at the short form stage and, if Chairman Pai's remarks are any gauge, are unlikely to be approved
3. The final public notice will confirm that any terrestrial technology—other than fiber—that files at the gigabit tier will be subject to close, skeptical review at the short form stage and that such applications could very easily be deemed defective with the applicant directed to shift to the 100 or 50 Mbps tier
Finally, Commissioner O'Reilly's comments provided some needed clarity regarding recent proposals to accelerate the RDOF auction. The Commissioner stated, "I commend the Chairman for moving forward with the auction despite certain calls to ‘expedite’ funding for a particular class of providers. In addition to undermining any principles of technology neutrality, such an approach would have huge downsides, including greater numbers of Americans left in the dust without broadband service. As long as we meet the timelines established by the Commission, we will get the Phase I money out the door in an expeditious fashion."
Despite a couple of wrinkles, yesterday's RDOF outcomes tracked along the path our consortium continues to travel. FiberRise and our partners still believe in the superior ability of electric utilities, especially rural electric cooperatives, to be the best bridge across America's digital divide.