WASHINGTON, January 5, 2023 – The Federal Communications Commission announced the conclusion of the Rural Digital Opportunity Fund long-form application review last month, which means that no more money will be awarded through Phase I of the program, and no additional defaults or forfeitures will be announced. 

The announcement coincided with news of another service provider failing to fulfill their initial bid within the program. Wavelength, a service provider from Arizona, defaulted on its commitment to deploy services to 12,418 locations, after failing to demonstrate its financial qualifications to receive RDOF support adequately. 

Three years prior, the FCC had announced granting RDOF awards totaling $9.2 billion in Phase I of the auction. However, following the comprehensive long-form process, the final awards amount to slightly over $6 billion. This indicates that more than $3 billion, or one-third, in awards were defaulted on, meaning that the bidder couldn’t fulfill the promised project.

The FCC has faced considerable backlash for what critics say is an insufficient screening of applicants and overreliance on winning bidders’ long-form submitted after the auction.

Three of the initial largest winning RDOF bidders, LTD Broadband, SpaceX, and fixed wireless startup Starry, contributed to nearly $2.5 billion in defaults, with several smaller defaults also recorded.

A total of 379 of the original 427 long-form applicants have successfully secured winning bids, with 97 percent of locations covered by winning bids for Gigabit speed service. 

Notable winners include Charter Communications, bidding as CCO Holdings, securing a significant $1.1 billion to deploy services to over 993,000 locations spread across 24 states. 

The Rural Electric Cooperative Consortium, with more than 90 participating electric cooperatives across 22 states, brought in $1.05 billion to serve nearly 600,000 locations.

Windstream Communications acquired $522 million to serve 192,501 locations, while AMG Technology Investment Group, bidding for Nextlink, won $428.9 million to serve 205,000 locations. Frontier obtained $427.8 million for 148,000 locations, and CenturyLink secured $262 million for service areas spanning 20 states.

There has been no word on what will happen with the more than $3 billion in defaulted RDOF funds. RDOF was originally budgeted for $20.4 billion, but it’s not clear when or if the remaining money will be awarded.

Service providers that default on RDOF bids are subject to a $3,000 base violation charge, with additional violations for each census block group forfeited in a bid.

WASHINGTON, December 18, 2023 – The Eleventh Circuit Court of Appeals ruled against a conservative nonprofit that challenged the constitutionality of the Universal Service Fund. 

The USF spends about $8 billion annually to fund four internet subsidy programs for rural infrastructure, low-income households, schools and libraries, and healthcare providers. It has been funded since 1996 by fees on phone bills from voice providers, with the Federal Communications Commission’s Universal Service Administrative Company responsible for collecting and distributing the money.

Consumers’ Research, along with other conservative groups, has been on a legal offensive against the USF, filing multiple federal suits alleging the fund is unconstitutional and taking the chance to air its concerns again in October by challenging the FCC’s contribution factor for this quarter. 

In each suit – two pending before the Fifth Circuit and one pending before the D.C. Circuit, with another struck down by the Sixth Circuit in May – the group argues that Congress did not put proper guardrails on the commission’s authority to collect the fund and that the FCC abused what authority it does have by handing responsibility to USAC.

The Eleventh Circuit disagreed. In a ruling issued on December 14, the judges found that Section 254 of the Telecommunications Act of 1996, which sets out the commission’s USF responsibilities, is in line with statutes that have survived similar challenges in the past. 

Section 254 directs the FCC to collect fees from telecommunications carriers to support universal service for low-income and rural areas, and to implement policies around the fund that are “necessary and appropriate for the protection of the public interest, convenience, and necessity.” Consumers’ Research alleged this is too broad to satisfy the nondelegation doctrine, a legal standard which requires Congress to articulate an “intelligible principle” when delegating duties to federal agencies, but the Eleventh Circuit found the law meets that standard.

The court also ruled that the FCC oversees USAC closely enough that the fund is still functionally under the agency’s control, not improperly delegated to a third party as the suit alleged.

That follows similar reasoning to the Sixth Circuit’s decision and an initial ruling from the Fifth Circuit. But the Fifth Circuit agreed in July to rehear the case with a full panel of five judges, signaling a potential reversal of its previous decision. Oral arguments took place in September and no ruling has been issued yet.

In a concurring opinion, Eleventh Circuit Judge Kevin Newsom expressed dissatisfaction with the precedent that kept Section 254 standing, saying its “mealymouthed shibboleths provide no meaningful constraint,” but that statutes he finds similarly vague have been found to provide enough guidance to avoid being struck down.

If the Fifth Circuit were to find the law in violation of the nondelegation doctrine, it would tee the issue up for potential review by the Supreme Court.

WASHINGTON, November 20, 2023 – A tribal broadband leader said Friday the federal government has failed to uphold its trust responsibility to provide health, safety and welfare to Native American tribes, speaking at an event in the broadband community on Friday.

The leader, Adam Geisler, president and chief operating officer of Tribal Ready, said that the digital divide persisted on tribal lands partly because federal agencies and internet providers haven’t met funding and deployment obligations.

In the “Ask Me Anything” event, Geisler, a member of the La Jolla Band of Luiseño Indians, discussed his journey from being tribal leader to a division chief for tribal broadband connectivity at the National Telecommunications and Information Administration, and eventually to his role at Tribal Ready.

Geisler emphasized the importance of understanding tribal sovereignty, which he described as the ability of tribes to govern their people, lands, and processes. He highlighted the unique political standing of tribes in the United States and their relationship with the federal government.

One critical aspect of this is the importance of tribal data sovereignty, which involves control over the collection, access, and use of data related to tribes.

In addition to the federal government’s failure to uphold its trust responsibilities, industry broadband has had shortcomings despite being subsidized. Federal funding alone will not close the digital divide without policy and statute revisions for flexibility and practical application, he said.

Geisler also touched on the successful allocation of the 2.5 GigaHertz (GHz) band of spectrum to tribes, viewing it as a step in the right direction but insufficient in fully addressing connectivity needs.

He advocated for a mixed-technology approach to broadband solutions, recognizing that different technologies like fiber, wireless, and satellite can complement each other to provide comprehensive coverage.