RDOF Broadband Results Raise Concerns About Execution, Financial Risk

Key Points

• The FCC’s recently-released results for the first round of the Rural Digital Opportunity Fund (RDOF) left many questioning how the commission decided to allocate the funds.
• Bids that included fixed wireless represented almost half of the proceeds awarded to the top 10 recipients. And while it’s understandable why affordable fixed wireless played a large role in the initial round, gigabit speed claims seem optimistic.
• However, execution and financial risks could impede the ability of some of the smaller operators – who received a disproportionate amount of financial support – to follow through on their network build plans.
• The FCC also awarded significant financial support to SpaceX, which plans to use an unproven business model to provide high-speed, satellite broadband connectivity to rural America.
• RDOF success is defined by the FCC effectively distributing funds to maximize the impact on bridging the digital divide. Has the FCC done this? Time will tell, but there are doubters.

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