RDOF areas are already 30% Served by broadband. That's a good thing.

The Broadband Equity, Access, and Deployment (BEAD) program can subsidize broadband buildout to any location that doesn’t have 100 Mbps download/ 20 Mbps upload throughput available according to the NTIA’s definition of reliable broadband. That’s 11.9 million Unserved and Underserved locations in the 50 states + D.C.. But, the official BEAD rules state:

[States] may not treat as “unserved” or “underserved” any location that is already subject to an enforceable federal, state, or local commitment to deploy qualifying broadband…

In other words, BEAD funds can’t be used where another federal program is already funding the location. One of the bigger federal programs this clause is referencing is the currently-in-flight FCC Rural Digital Opportunity Fund (RDOF) program. At the time the winners were announced, $9.23 billion was committed by the FCC over 10-years to cover over 5 million Unserved locations. According to the recently released FCC Funding Map, 3,458,796 of those locations have been authorized by the FCC for funding.

Something surprising happens when we match the RDOF areas against the FCC’s Fabric of locations: 30 percent of the locations in RDOF areas, 1 million locations, are already Served according to NTIA’s definition.

Before we investigate further into the RDOF locations that are already Served, let’s first remember the role these RDOF locations are playing. From the perspective of a state, they’re kind of a “freebie”: the state will get funding from BEAD for any Unserved location regardless of RDOF commitments. But the FCC is paying for the buildout in those areas, and the state isn’t even allowed to spend BEAD money in the area. Some states were — and will still — benefit tremendously from this. Arkansas has 180,000 locations committed by RDOF ISPs out of 310,000 total Unserved and Underserved, or 58% of their locations. Mississippi has 56% of its locations covered, and Ohio has 48%.

(The Swiss cheese RDOF areas do create other problems as Doug Dawson illustrates here. I plan to get into more detail on this in future posts.)

RDOF projects are at various stages of completion. Twenty-seven project areas, 10% of the sizable RDOF projects, are already more than 80% Served. Another 48 project areas — 18% of the total projects— are between 20-50% complete. Only 36% of the projects are more than 80% Unserved and Underserved locations.

Since the number of Served locations is surprising, at least to me, let’s look closer at a couple of them. First is a Gigabit project in Arkansas won by the North Arkansas Electric Cooperative. They won subsidies to serve 9,414 locations in Arkansas (9,408 according to the Fabric). Over 98% of those locations are already Served, and were also Served according to the first version of the National Broadband Map released last November with data as of June 2022.

Below is another example in Tennessee where the Meriwether Lewis Electric Cooperative has deployed fiber to 9,235 of the 9,289 Fabric locations in their RDOF area.

I don’t think anything is amiss here, just surprising. I assume what happened is that these providers were already planning to deploy FTTH broadband in their footprint when RDOF happened, and had maybe even already started. If you were already planning to build the broadband, any RDOF subsidy is just an added bonus, and you certainly aren’t going to let Starlink or a competitor get the subsidy, so you’ll win the reverse auction at all costs. The fact that they’re already done their build just shows it would have happened anyway.

The chart below shows the total Unserved and Underserved for each state, where the total bar height is all the locations that are Unserved or Undeserved according to the FCC maps. The blue section of the bar is the locations which the FCC is funding through the RDOF program, and the BEAD program cannot fund.

In my previous estimates of the cost to reach all the Unserved and Underserved with FTTH broadband, I assumed all the RDOF areas were Unserved or Underserved. That isn’t the case, but this change only makes a marginal difference. Every state will have: (1) an Extremely High Cost Location threshold above which they don’t need to build fiber, (2) private capital matches that will provide at least 25% of the needed capital (and hopefully much more), (3) ARPA projects that are funding broadband in some locations in some states, and (4) RDOF projects that still cover large numbers of locations in many states. In states with average costs to build fiber to their residents, there’s enough money.