Rural Digital Opportunity Fund Auction Begins October 22, 2020

The auction for Rural Digital Opportunity Fund (“RDOF”) support is expected to begin October 22, 2020, with a preliminary list of eligible areas for Phase I portion of the auction expected to be released soon.  The list of Phase I eligible areas will be based on current Form 477 data, which list will be subject to a challenge process similar to the CAF Phase II Auction challenge.  An overview of RDOF funding and requirements is provided below.

RDOF Funding: The RDOF auction will provide a total of $20.4 billion in support over 10 years to expand broadband to a minimum of 25/3 Mbps, and up to 1 Gigabit.  The first phase will provide $16 billion for wholly unserved census blocks in nationwide, multi-round, reverse, descending clock auction.  The remaining $4.4 billion will be auctioned in a second phase to cover partially served census blocks

Service Milestones: RDOF recipients will be required to meet graduated service milestones, but recipients will be required to offer voice and broadband service to ALL eligible homes and small businesses within the awarded areas, without regard to the number of locations identified by the model (CAM) and without adjusting awarded support amounts, with a limited exception. Updated location counts will be published no later than at the end of service milestone six, and the new location counts will be used to determine whether a RDOF recipient offers required voice and broadband throughout designated areas by the end of milestone year eight.

Performance Tiers:  RDOF funding will be awarded based on weighted performance and latency tiers with support assigned in the auction’s clearing round to bidders with the lowest weighted combined performance and latency tiers (highest speeds, most usage, lowest latency).

Reserve Prices: The CAM will be used to establish area-specific reserve prices, but the RDOF auction departs from the previous $52.50 high-cost threshold, and will now include some census blocks where the CAM estimates the cost per location equals or exceeds a $40 per month cost benchmark.  The per location support cap has been raised to $212.50.

Prioritizing Census Blocks: The RDOF auction will prioritize census blocks that lack 10/1 Mbps over eligible census blocks that have 10/1 Mbps, but that lack 25/3 Mbps, which will be accomplished by reducing the support threshold for such census blocks by an additional 25% to $30, which will have the effect of raising the support cap to $222.50 for these blocks.

Auction Application and LOCs: The RDOF auction process will follow past auctions with a short form application to participate and a long form application to be completed by winning bidders.  Winning bidders will be required to maintain a letter of credit with notable modifications to the CAF Phase II Auction.

Reporting and Non-Compliance: RDOF recipients will be subject to the same reporting requirements, the same non-compliance measures applicable to all high-cost ETCs, the same framework for support reductions with regard to service milestones, and the same process for drawing on letters of credit as implemented in the CAF Phase II auction.

If you are interested in learning more about participating in the RDOF auction, please contact Robin Tuttle, [email protected], Clare Andonov, [email protected], or Dee Herman, [email protected].