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Rural Digital Opportunity Fund: closing the digital divide in the USA

The Federal Communications Commission Rural Digital Opportunity Fund (RDOF) is investing billions of dollars in rural broadband networks, in order to close the digital divide. The funding initiative’s $20.4 billion budget will be awarded to providers over a 10-year period in equal monthly instalments following completion of an auction process.

A year ago, the Federal Communications Commission (FCC) claimed 21 million Americans were lacking high-speed internet access. However, Broadband Now states this figure is twice as high. According to the FCC, the Rural Digital Opportunity Fund will“ensure that networks stand the test of time by prioritizing higher network speeds and lower latency, so that those benefitting from these networks will be able to use tomorrow’s Internet applications as well as today’s.”

The RDOF consists of two phases. Up to $16.4B will be allocated in the first phase—$9.2B of which has already been awarded. A minimum of $4.4B will be awarded in the second phase. The first Phase exclusively focuses on census blocks that are completely unserved by an existing broadband provider. The second Phase includes areas that have not been completed in Phase I, as well as‘partially serviced’census blocks. A broad range of providers successfully competed in the first Phase. These included incumbent telcos, cable operators, electric cooperatives, satellite companies, and fixed wireless providers. The auction model has been chosen to ensure providers compete to offer the best possible service at the lowest cost. The auction has been designed to be technologically neutral and to prioritize bids for high-speed, low-latency offerings.

“I’m thrilled with the incredible success of this auction, which brings welcome news to millions of unconnected rural Americans,” said FCC Chairman Ajit Pai. “They now stand to gain access to high-speed, high-quality broadband service. We aimed for maximum leverage of taxpayer dollars and for networks that would meet consumers’ increasing broadband needs, and the results show that our strategy worked.”

Ajit Pai

FCC Chairman

Winning bidders will need to meet periodic buildout requirements in order to reach all locations assigned to them by the end of the sixth year. At present, the FCC is reviewing detailed long-form applications from winning RDOF bidders. Winners are incentivized to build as rapidly as possible.

Find out more about the Rural Digital Opportunity Fund Phase I auction including complete auction results and winning bids.