When the nation faced the financial crisis in 2009, Congress passed a stimulus package that included funding for rural broadband. Because so much of that money was misspent, I would suggest that a better approach this time around would rest on at least three criteria:
1. Use existing mechanisms and accelerate the implementation.
2. Spend money in ways that create jobs.
3. Focus funds on projects that are ready to go.
There is one such broadband program that meets these three criteria, the FCC’s Rural Digital Opportunity Fund. I suggest the President and Congress direct the FCC to accelerate the RDOF program in a way that will lead to new rural broadband infrastructure investment and construction this year.
First, the FCC should use its published list of census blocks eligible for funding. The FCC and its critics can endlessly tinker with a list of unserved areas. Let’s use the current list and move on.
Second, the FCC should use its schedule for the application process to become a bidder in the RDOF auction (referred to as the short-form application) and add an accelerated long-form option.
The FCC should accept with the short-form application an attendant long-form application for those projects that would win funding automatically under the rules of the RDOF auction, i.e., fiber-to-the-home (FTTH) Gigabit-capable networks. The long-form application can be identical to forms used in the CAF II auction, and should include proof of a letter of credit with the application.
Third, the FCC should separately evaluate the long-form applicants, while continuing its established process for qualifying bidders through the short-form application. The census blocks identified in the long-form application would be removed from the RDOF auction, unless two or more FTTH Gigabit applicants seek funding for the same blocks.
Fourth, successful FTTH Gigabit long-form applicants would be awarded census blocks by September, while all other census blocks would remain in the auction. Under the current rules, the FTTH Gigabit tier applicants will win in the auction anyway, and almost certainly win at the reserve price. It would be straightforward to award those blocks early. The FCC should condition those awards on an accelerated construction timetable, such as initial construction within six months and initial service availability within one year.
Finally, the remainder of the RDOF would proceed on its current schedule. If there is concern about awarding funds at 100% of the reserve price, then the FCC can follow its current rule and finalize awards following the auction at the clearing round price. The clearing round will likely be at 100% for the Gigabit tier bidders, but a small adjustment to 80% or 90% (if that were the clearing round) for the remaining time would be fair.
I believe RDOF is the best designed rural broadband program by any federal agency. The funding our coop clients received in the Connect America Fund auction leveraged five to ten times private investment in rural infrastructure. Whether the current health and economic crisis lasts a few months or a year, funding for long-term rural fiber networks will be money well spent.
It should be more evident than ever that each rural home and business needs access to real broadband service. Many Americans are being forced to continue their school or work from home because of the Coronavirus. The internet, by enabling many to work from home, may be the only thing that keeps our economy afloat and people employed in the near future.
I have spoken with enough electric coops to know that fifty to one hundred new fiber projects are waiting on the RDOF auction. Let’s jumpstart the RDOF now, put people to work on construction projects, and secure a better interconnected future.