FCC questions the legitimacy of some rural internet bids

Commission asks for more due diligence on almost 200 funding applications

The Federal Communications Commission (FCC) is re-examining winning applications in its program to provide internet access to rural Americans. 

The FCC wrote to several winning bidders in its Rural Digital Opportunity Fund (RDOF) program yesterday to question them over the validity of their coverage. It wrote 197 letters to applicants for funding identifying areas it suspected already had broadband services. 

Recipients of the letter included Starlink Services, owned by Elon Musk's SpaceX, which was among the biggest winners of the RDOF auction with an $885.5 million bid to provide internet access across 35 states. The FCC has raised questions about coverage in 34 of them. 

The RDOF program is part of a $9.2 billion funding program to bridge the digital divide by offering broadband access across 49 US states. It allocated the funds via a reverse auction across 300 companies with 180 winners. The bids were to serve areas without broadband download speeds of at least 25Mbps and upload speeds of at least 3Mbps. 

Winning bidders got the chance to divide their bids between different entities — such as subsidiaries working in specific states — which then filed long-form applications for the funding. 

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Yesterday, the FCC announced it was ready to provide $311 million to 48 broadband providers across 36 states. However, it needed more due diligence from some of its long-form applicants, it said. 

"Concerns have nonetheless been raised that certain areas included in the Rural Digital Opportunity Fund auction are already served by one or more service providers that offer 25/3 Mbps broadband service or otherwise raise significant concerns about wasteful spending, such as parking lots and international airports," the letter warned. 

Recipients of these letters have until August 16 to reexamine their bids and weed out areas with adequate broadband access. They must then write to the FCC explaining why they are pulling those bids. The FCC will then announce all the areas where bidders pulled out. 

The FCC released a list of bidders that have already defaulted on some bids, although this did not include all of the companies it wrote to this week. So far, the defaulted bids total $78.5 million. 

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