Harrison County, Texas officials say they’re poised to use the county’s remaining Rescue Plan (ARPA) funds to strike a fiber expansion partnership with Etex Communications, a subsidiary of the locally-owned Etex Telephone Cooperative.

The Harrison County Commissioners Court says it’s putting the finishing touches on a $4.5 million public-public partnership with Etex that will help deliver fiber access to the Western end of the heavily underserved Texas county with the help of $1.5 million in federal ARPA funds.

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ARPA Funds To The Rescue

Etex Telephone Cooperative was originally formed in 1952 to meet the communication needs of people living in rural northeast Texas. Beginning with 743 members when the co-op was first created, the provider now services more than 12,600 members scattered across a service territory of 710 square miles of rural East Texas.

“Internet is a big issue. It’s almost as fundamental as water and electricity. You gotta have it,” Harrison County Judge Chad Sims tells The Marshall News Messenger. “It is an essential thing. So we’re happy to partner with ETEX.”

EMPOWER Broadband, a subsidiary of Mecklenburg Electric Cooperative (MEC), is asking the Federal Communications Commission (FCC) to waive financing requirements attached to the provider’s takeover of thousands of subsidized broadband locations from RiverStreet Networks. It’s a move the cooperative says will save it millions of dollars in errant additional penalties.

It’s also highly representative of the ongoing challenges facing a program that has long been criticized for dysfunction and mismanagement.

The FCC program not only fell short of fulfilling its original promise, it now risks boxing numerous communities out from what could be a generational funding opportunity made possible by the 2021 infrastructure bill.  

During the 2018 Connect America Fund (CAF) Phase II auction, RiverStreet was awarded $32.1 million in financing to provide high-speed Internet to 13,518 locations in Virginia. RiverStreet is looking to divest 3,757 locations across three counties, poised to receive $8.1 million in annual CAF II broadband deployment support.

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According to a May RiverStreet filing with the FCC spotted by Broadband Breakfast, the divestment is necessary because the company “encountered certain obstacles that have prevented it from meeting its CAF II buildout milestones in the assigned CBGs.”

The Federal Communications Commission (FCC) says it won’t be providing broader relief for broadband operators that have defaulted on grant awards via the agency’s messy and controversial Rural Digital Opportunity Fund (RDOF) broadband subsidy program.

According to an FCC public notice, the FCC stated it found "no demonstrated need for broad relief" from provider penalties connected to either the RDOF or Connect America Fund II (CAF II) programs. It also shot down calls for a broader amnesty program for defaulters.

“Given the flexibility available under the existing default processes…we decline to provide a blanket amnesty,” the agency’s Wireline Competition Bureau said.

In a letter to the agency last February, a broad coalition of providers and consumer organizations suggested that either reduced penalties – or some sort of amnesty program – might speed up defaults, freeing areas for upcoming broadband infrastructure bill (Broadband Equity Access And Deployment, or BEAD) subsidies.

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The group was quick to point out that areas where RDOF and CAF II money has been committed are considered “served” for purposes of BEAD deployments, potentially boxing out many desperate U.S. communities from billions in potential funding.

“Many of the RDOF and CAF II awardees who cannot or will not deploy their networks are located in states with the greatest connectivity needs, like Missouri and Mississippi,” the authors wrote. “The Commission should not permit these unserved rural communities to face this type of double whammy and be left behind once again.”

But in its statement, the FCC insisted that changes to its approach aren’t necessary because, it claims, its existing processes are working.

As debate continues about the “collision course” between the Rural Digital Opportunity Fund (RDOF) and Broadband Equity, Access, and Deployment (BEAD) programs, it is worth highlighting the unique leverage Tribal nations have to resolve these concerns on Tribal lands as well as the challenges they may face in navigating the process.

Existing state and federal grant/loan programs are considered “enforceable commitments” under BEAD rules, making locations funded through those programs, including RDOF, ineligible for BEAD grants (unless those awards are declared to be in default). This rule prevents “duplication” of federal or state funding for broadband infrastructure build-outs.

The debate has emerged because some communities are concerned that RDOF-funded building has not yet begun and, in some cases, may never be built-out. In the meantime those locations remain ineligible for BEAD because of these enforceable commitments.

However, the rules about enforceable commitments and duplication are different on Tribal lands. When issuing its BEAD guidance, the National Telecommunications and Information Administration (NTIA) determined that federal and state grant funding for buildout on Tribal lands – like RDOF – that do not carry Tribal Government Resolutions of consent are not considered to be enforceable commitments.

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Without formal Tribal consent in the form of a legally binding agreement, which includes a Tribal Government Resolution, funding programs like RDOF should have no bearing on the BEAD eligibility of locations on Tribal lands. As long as they are not currently receiving service from a provider, these locations should remain BEAD-eligible.

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

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.

Peppered by winding country roads and remote islands, Maine exemplifies the challenges in even deployment of affordable broadband. But thanks to tenacious island communities and forward-thinking state leadership, a growing roster of community-owned broadband networks are leading the charge toward affordable access in the Pine Tree State.

Peggy Schaffer, former executive director of the state of Maine's broadband mapping and expansion effort, ConnectMaine, has played a starring role in shoring up Maine’s broadband mapping data after years of federal dysfunction.

Schaffer’s well versed in the broad array of challenges faced by remote Maine communities, and says she’s long been impressed by the “scrappy” nature of Maine’s community-owned island deployments, which have faced down and overcome no limit of onerous challenges in an  ongoing quest to finally bridge the state’s long standing digital divide.

Maine is currently ranked 49th in the U.S. in terms of resident access to gigabit-capable broadband service. Like so much of the country, the state is heavily dominated by regional monopolies that failed to uniformly deliver affordable, next-generation broadband, despite decades of federal subsidies, regulatory favors, and tax breaks.

Now local Maine communities are taking matters into their own hands, beginning with long-neglected island residents no stranger to unique logistical challenges.

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‘It’s A Story Of Perseverance’

Five years ago, the Central Virginia Electric Cooperative (CVEC) announced the creation of the Firefly Broadband initiative, a subsidiary specifically built to leverage the co-op’s existing electrical assets to deliver affordable fiber to 13 underserved Virginia counties.

Half a decade later, the coop says it has successfully completed its $150 million expansion project, deployed 3,600 miles of new fiber, passed 40,000 total homes and businesses, and directly connected 20,000 state residents–many for the first time ever–in less than 52 months.

“Central Virginia Electric Cooperative partnered with Conexon to perform a feasibility study for a fiber build across their entire service territory – 13 counties and 3600 miles,” CVEC VP of Communications Melissa Gay told ILSR. “Once the target costs, offerings and take rates were determined, we chose to race to secure supplies and labor. Finding great partners has been a tremendous help to the success of our project.”

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Buoyed by numerous grants including a $28 million combination loan and grant from the USDA's ReConnect Program, Firefly now provides local residents symmetrical 100 Mbps (megabits per second) fiber for $50 a month, and symmetrical 1 Gbps (gigabit per second) service for $80 a month. There are no contracts and no data caps.

About 90 percent of households connected had no broadband access previously, according to Bruce Maurhoff, Firefly’s senior vice president and chief operating officer.

Concerns are mounting that over $2.8 billion in potential broadband grants doled out by the Federal Communications Commission’s (FCC) Rural Digital Opportunity Fund (RDOF) could be wasted, further eroding the already well-criticized program’s disjointed effort to expand broadband access across rural America.

In 2019, the Ajit Pai FCC created the $20.4 billion RDOF with an eye on shoring 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 often declared 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 of the $9.2 billion in winners, over $2.8 billion has gone into default, meaning the bidder couldn’t actually deliver on promised projects. 

We've tracked the RDOF awards since the auction concluded, including for the providers that defaulted on their wins.

These issues have not only imperiled RDOF program funding, but have thrown a wrench in the works of numerous additional government efforts to shore up broadband access, from the FCC’s long-criticized quest to accurately map U.S. broadband access, to the implementation of newer grant programs overseen by other agencies.