The Rural Digital Opportunity Fund (RDOF) was supposed to drive affordable fiber into vast swaths of long-underserved parts of rural America. And while the FCC administered program accomplished some of that goal, a multitude of problems have plagued the program since its inception, putting both current and future broadband funding opportunities at risk.

The $20.4 billion RDOF program was created in 2019 by the Trump FCC as a way to shore up affordable broadband access in traditionally unserved rural U.S. markets.

The money was to be doled out via reverse auction in several phases, with winners chosen based on having the maximum impact for minimum projected cost.

During phase one of the program, the FCC stated that 180 bidders won $9.2 billion over 10 years to provide broadband to 5.2 million locations across 49 states and the Commonwealth of the Northern Mariana Islands.

But, according to ILSR data, roughly 34 percent of census blocks that won RDOF funding–more than $3 billion in awards – are now in default. All told, 287,322 census blocks were defaulted on by more than 121 providers as of December 2023.

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The defaults are only one part of a larger problem: namely that many communities bogged down in RDOF program dysfunction may risk losing out on the historic amount of federal funding to build modern broadband networks (BEAD) made possible by the 2021 bipartisan infrastructure law.

One Big Giant Mess

Massachusetts and New York officials hope to entice affordable housing property owners with new grant programs that would pay the retrofitting costs to expand high-speed Internet connectivity into decades-old affordable housing developments.

The programs aim to focus on the multitude of multi-dwelling units (MDUs) in those states, particularly housing developments built before the advent of the Internet.

With property owners and Internet service providers (ISPs) often reluctant to pay the costs of getting these buildings up to broadband speed, Massachusetts and New York have launched initiatives – using a portion of their federal broadband funds – to chip away at the digital divide in housing developments where a significant number of tenants live in buildings not wired to support reliable broadband or where the service is not affordable, thanks to agreements with monopoly providers.

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New York Bytes Into Broadband Affordability

In December, New York Governor Kathy Hochul’s office announced the state’s ConnectALL Office (CAO) was setting aside $100 million New York State received from the federal Capital Projects Fund (courtesy of the American Rescue Plan Act) to bring broadband connectivity to 100,000 affordable housing units across the Empire State.

In announcing New York's Affordable Housing Connectivity Program, Hochul said:

“With work, school, and essential government services going digital, affordable homes need affordable, reliable broadband, and this funding will help bolster our efforts to build housing equipped with the basic tools that New Yorkers need to succeed.”

Language added to a New York State budget bill is threatening to undermine a municipal broadband grant program established by Gov. Kathy Hochul’s office earlier this year.

Known as the Municipal Infrastructure Program, it was designed to provide grant funding for municipalities in the state eager to build publicly-owned, locally controlled broadband infrastructure as a way to ensure ubiquitous, affordable access to high-quality Internet after decades of frustration with expensive, spotty and uneven service from the regional monopolies.

Currently, New York state lawmakers are in the midst of budget proposal season in which the Governor’s office and both legislative chambers (the state Senate and Assembly) have until April 1 to reconcile and complete a final budget for the upcoming fiscal year.

Buried near the bottom of the Assembly budget proposal (A8805B) is a Trojan horse legislative sources say is being pushed by lobbyists representing Charter Spectrum, the regional cable monopoly and 2nd largest cable company in the U.S. that was nearly kicked out of New York by state officials in 2018 for atrocious service.

The rocky rural hills of West Virginia are a formidable foe when it comes to building high-speed Internet infrastructure that offers affordable high-quality service.

Nobody knows that better than Hardy Telecommunications (OneNet), a small community-owned cooperative that delivers affordable fiber to frustrated locals deemed too costly and cumbersome to be served by the incumbent telecom giants.

The cooperative serves parts of four counties (Hardy, Pendelton, Grant, and Hampshire). It connected its first fiber customer in 2013, after receiving $31.6 million in federal BTOP funding. Since then, the cooperative tells ILSR they’ve spent $20 million of their own funds to bring fiber to rural corners of the aptly-named Mountain State.

Derek Barr, Assistant General Manager at Hardy Telecommunications, says the cooperative currently delivers broadband service to 5,050 rural subscribers – 4,736 of which are on fiber lines that simply wouldn’t exist without federal funding programs. Hardy Telecommunications also provides 68 customers with fixed wireless access (FWA) broadband service.

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“Our focus is fiber, and we're trying to build out fiber as much as we can,” Barr tells ILSR. “But it's very tough in our serving region. It's all mountains and a lot of trees, and a big chunk of our area is either state park or national forest land. It's also very hard to do fixed wireless because even if it might work in the winter, it's not going to work in the summer” when tree leaves block line of sight, he noted.

So the cooperative slowly and consistently expands fiber as it can, often in partnership with Pendleton County. As a result, locals have the option of a variety of double and triple play phone, cable, and fiber options, starting with a symmetrical 100 Mbps (megabit per second) downstream, 50 Mbps upstream fiber and phone bundle for $79 a month.

In the wake of the new rules issued by the Federal Communications Commission (FCC) to prevent digital discrimination, digital equity advocates from California to Cleveland are leveraging the new federal rules to spur local action.

In Los Angeles, city leaders have passed an ordinance to combat what advocates say are discriminatory investment and business practices that leave historically marginalized communities without access to affordable high-quality Internet. Similar efforts to mobilize communities and local officials are underway in Oakland and Cleveland.

In November 2023, the FCC codified rules to prevent digital discrimination, outlining a complaint process whereby members of the public can offer evidence of digital discrimination being committed by Internet service providers (ISPs). Though the FCC order does not outline local policy solutions, nor does it empower localities to carry out enforcement of the federal rules, it has the potential to open up conversations between local advocates and elected officials about new ordinances, stronger enforcement of existing ones, or public investment to facilitate competition and the building of better broadband networks.

Los Angeles First City in Nation To Officially Define Digital Discrimination At Local Level

The local organizing work behind the proposed ordinance in LA dates back to 2022 when digital equity advocates began to document inequitable broadband access across the county.

Waterloo, Iowa’s municipal broadband project has taken a major step forward after nearly two decades of planning.

Waterloo Fiber officials just launched their first limited fiber trial, will connect their first commercial customers in February, and are on target to deploy affordable fiber at speeds up to 10 gigabit per second (Gbps) to every last city resident by 2026.

When we last checked in with Waterloo in February of last year, the city was putting the finishing touches on a plan to spend $115 million to build a fiber backbone accessible to all 67,695 Waterloo residents, after locals approved the city issuing general obligation bonds to fund the start of the three-phase construction project.

Construction of the network began last summer at a groundbreaking ceremony hosted by Waterloo Mayor Quentin Hart.

“It will be the lifeline that connects our entire community, enabling businesses to thrive, students to excel and families to stay connected," Hart told attendees. "This fiber system will lay the foundation for a smart city innovation, economic growth and an enhanced quality of life for all our residents."

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Last month the city connected the first of four participants in a limited pilot project.

As digital inclusion practitioners and broadband-for-all advocates continue to push Congress to save the Affordable Connectivity Program (ACP), 22.5 million Americans now enrolled in the program are weeks away from being officially notified of its pending termination as ACP funds are on track to be depleted by the end of April.

The looming demise of the ACP – which provides income-eligible households with a $30 monthly voucher to pay for pricey Internet service bills ($75/month for Tribal citizens living on reservations) – comes at a crucial moment in the rollout of the “Internet For All” initiative. All 56 States and U.S. territories are poised to receive nearly $45 billion in broadband expansion funds from the bipartisan infrastructure law over the next year.

Separate from the BEAD program and Digital Equity Act funding, the bipartisan infrastructure law also established the ACP with a $14.2 billion allocation. At current enrollment rates, the program disburses about $650 million per month to Internet service providers (ISPs).