FCC's Rural Broadband Fund Faces Trouble: ISPs Want More Money

03.08.2023 - 17:05 / pcmag.com

An FCC program meant to expand high-speed internet in rural America is facing a new snag: At least some of the participating internet service providers say they need more funding to complete their projects, along with an option to bail.

The issue concerns the FCC’s Rural Digital Opportunity Fund (RDOF), which will award $20 billion in funding over the next decade to ISPs that win bids to build broadband networks for select areas. The program’s goal is to deliver at least 100Mbps—but potentially up to a gigabit—in internet speeds. But in recent weeks, some of the RDOF winners say they need even more funding, citing inflation and rising construction costs.  

The request comes from a group called the Coalition of RDOF Winners. In letter(Opens in a new window) sent earlier this week, the coalition urges the FCC “to address the massive and unprecedented increases in broadband deployment construction costs RDOF winners are facing—that could never have been anticipated" when the RDOF auction took place in fall 2020.

Since then, "the cost of fiber more than doubled, and the cost of pipe, handholes, and splice cases more than tripled since we started construction," the coalition said in a June letter(Opens in a new window).

To ensure the broadband projects go through, the coalition is asking the FCC for “supplementary” funding for ISPs that request it, along with a short “amnesty window” that’ll let companies bail from their bids without suffering financial penalties. 

Without the amnesty window, ISPs that withdraw from their projects face tens of thousands of dollars in fines. Last month, the FCC proposed(Opens in a new window) a $4.3 million penalty against 73 RDOF applicants for defaulting on their bids. 

According to the coalition, other forms of relief could include the FCC offering an extra year of funding, making more subsidies available earlier during the program, and allowing RDOF winners to relinquish certain project areas. 

Which ISPs are part of the coalition remains unclear. A lawyer for the group refused to say, according(Opens in a new window) to Ars Technica. But according to an earlier filing(Opens in a new window), Arkansas-based Aristotle Unified Communications and the Texas company Tekwav attended an FCC meeting with the coalition, where they requested the additional funding. In June, the coalition also provided the FCC a letter(Opens in a new window) signed by three GOP senators from Mississippi and Ohio, who inquired about freeing up more funding.   

The news doesn’t bode well for the rural broadband fund. But another lobbying group, Advocates for Rural Broadband (WTA), sent a letter(Opens in a new window) to the FCC last month, faulting other ISPs for failing to account for potential