RURAL DIGITAL OPPORTUNITY FUND
In 2020, the FCC launched the Rural Digital Opportunity Fund (RDOF), a program designed to subsidize broadband deployment to 5.4 million unserved households. At the conclusion of the RDOF reverse auction, 11 providers received $170 million to serve 191,000 households in Ohio.
This is a good start, but it is unlikely to solve the problem. Potential issues with accounting, accountability, and transparency could leave up to 30% of Ohio’s awarded territory unserved.
The FCC calculated that providers would need a subsidy of $4400 per household to deploy a profitable, long-term viable fiber optic network in rural Ohio.
Aggressive bidding in the reverse auction drove the final subsidy down to just $889 per household, the 3rd lowest award in the nation.
Winning bidders will face significant financial challenges at this level of subsidy. Likewise, low penalties, minimal public disclosure, and a payment model that incentivizes serving low cost, high density locations at the expense of less dense, more remote areas could leave up to 30% of eligible territories unserved.
For more details, see Buckeye Hills Regional Council’s Feb 18, 2021 FCC filing (below).
COMMON SENSE SOLUTIONS
Appalachian Ohio needs a robust network that reaches all households and can support 30+ years of growth. Fiber-to-the-home is the only solution that can do this.
What it will cost
To run fiber to all locations known to have less than 25Mbps/3Mbps, it will cost:
- $497 Million for 57,873 households in the eight Buckeye Hills counties (Athens, Hocking, Meigs, Monroe, Morgan, Noble, Perry, Washington)
- $2.26 Billion for 265,831 households in all 32 Appalachian counties
How to make it work
Subsidized networks must be robust and open, funding must be transparent and accountable, and awards should go to the best value based on capacity and reliability, rather than lowest bidder.
- Robust: Networks must meet national standards for capacity, reliability, scalability, and support.
- Open: Designs must allow multiple providers to compete on an even footing. This works best when the network is built and maintained by a public-private partnership.
- Transparent: Recipients must provide full transparency, with quarterly public reports that include detailed lists of all locations served or passed.
- Accountable: Funding agencies must verify progress via public-partner or third-party testing/inspection before releasing payments, with substantial penalties for providers who overstate availability or performance.
While some industry members express concern about overbuilding, underbuilding is a much bigger concern – especially in areas where a single broadband provider has a de-facto monopoly.