The USA, Rural Broadband and RDOF (Rural Digital Opportunity Fund)

The penetration of reliable and affordable technology, particularly telecommunication, in rural America is still trailing behind metropolitan areas, resulting in a deep digital divide.

In April 2020, the Federal Communications Commission (FCC) released a report stating that 6.5 percent of the population (21.3 million Americans) lack access to broadband internet connectivity. An independent study later indicated that the number could be twice as many.

Regardless of the actual figures, the truth is, a majority of Americans in rural areas have no access to broadband or fixed internet connections. This is largely due to poor or non-existent network coverage of telecom services.

Over the last five years, the federal government has spent over $22 billion expanding rural broadband connectivity through several initiatives.

According to FCC’s estimations, another $80 billion is needed to bring high-speed home internet to unserved and poorly covered rural areas. The RDOF is the FCC's latest major effort to ensure all Americans have access to reliable and affordable broadband internet.

What Is the Rural Digital Opportunity Fund?

On February 7, 2020, the FCC released a report and order describing the framework and rules of the RDOF auction to provide financial support to companies willing to build out broadband infrastructures in rural America.

The RDOF has $20.4 billion budgeted to subsidize extensive network buildouts over the next ten years in rural areas lacking broadband and fixed voice services. The FCC interestingly defines broadband internet as a connection with at least 25 Mbps downstream and 3 Mbps upstream bandwidth.

The funds will be released in two phases. Phase I is scheduled for launch on October 22, 2020, with a $16 billion budget. Details of Phase II however are yet to be released.

Phase I follows these five steps:

1. The FCC determines the eligible areas where broadband and telecom providers need government subsidies to build new network infrastructures or upgrade existing ones.

2. Telecom service companies submit bids or accept subsidy offers through a reverse auction to start buildout projects and service delivery.

3. Winning bidders receive funding.

4. Telecom services regularly report on their progress in setting up infrastructure for mass-market internet and voice services distribution.

5. The FCC reviews progress reports to ensure all projects run as expected.

The reverse auction funding approach was first introduced in 2011 to create a competitive bidding process and restructure the benchmark cost modeling for constructing modern high-end networks.

In a reverse auction, the FCC invites bids from several qualified carriers (sellers) and only picks the lowest or most reasonable tender.

How RDOF Will Help Close the Digital Gap?

One of the main reasons for low internet availability in rural areas is the high cost of setting up network and service infrastructures. Most carriers consider unserved areas as high-cost, low-value markets with barely enough buyers for an attractive ROI.

The RDOF initiative is indeed a step in the right direction toward solving this problem. Ideally, the FCC will subsidize the cost of setting up the network infrastructure, giving telecom companies the much-needed financial backing and incentive to provide eligible rural areas with high-speed internet.

Reliable internet connectivity will definitely open up these rural areas to numerous online commerce, learning, and entertainment opportunities.

And, in many ways, the program will also benefit the carriers themselves along with other local enterprises.

More Players in the RDOF Program

The private sector is also chipping in to help realize FCC’s and RDOF’s goals.

Companies such as Render Networks is one of the many companies doing their part in facilitating country-wide internet coverage.

It offers robust software solutions to companies that build out and deploy high-speed fiber networks across the country. Render’s software brings a whole new level of efficiency to large-scale network build processes, from design and construction to deployment and maintenance.

Learn more about Render Networks’ commitment to RDOF and delivering reliable, high-speed broadband.