RDOF and Macon County

Jeff Lee, LittleT Broadband

I have been meaning to write a blog article about this topic for some time, after the news came out earlier this year about FCC RDOF auction winners. Better late than never, I suppose.

What is RDOF?

Mentioned in previous posts, RDOF stands for Rural Digital Opportunity Fund. This is a federal subsidy program for broadband/internet expansion that is administered by the FCC, and is a continuation of earlier programs called Connect America and Connect America II. The FCC collects information about internet availability across the US and then maps this based on population census blocks. Those blocks with less than a 25/3 internet service available (25 Mbps downstream and 3 Mbps upstream) are eligible for RDOF subsidy funding based on a reverse auction process (lowest bidder wins). Established telecommunications and internet service providers bid on census blocks in hopes of winning the auction and ultimately constructing new networks that are subsidized through federal funds.

Though well intentioned, the RDOF program is not perfect. For example, the way the FCC determines eligibility for census blocks is flawed and has been the source of much debate. They depend on existing service providers to submit annual forms (Form 477) which state what services they provide in a given area. If a single home in a block has service of 25/3 or better, providers are allowed to declare the whole area served and it becomes ineligible for federal subsidies. The FCC knows that this process is flawed as do most states. Unfortunately any changes will be for future programs and will not affect the current program and elgibility of blocks.

Another problem is forcing providers who win the auction to follow through. Previous versions of this program have funded the construction of fiber networks that were never put into service. We have 80+ miles of buried fiber in the Otto area, that once constructed was never activated, and was of course paid for by our tax dollars. These previous programs, developed in part by the telecommunication companies and lobby organizations, lacked sufficient control of the funding to ensure that service was actually provided. The current RDOF program has many changes intended to help improve this and keep companies more accountable. Only time will tell if the new program is more effective in this area.

Who was the Winner for Macon County and when will this new broadband/internet project start?

At the end of 2020, the RDOF auction winners were announced for the latest funding round. For the eligible census blocks within Macon County, Charter Communications won the auction for these blocks, with a promise of $9M in subsidies from the fed. There were a number of news articles highlighting this in the local papers. Sounds great, problems solved. So, what does this actually mean, and when will I have high-speed internet at my house? Well, don’t hold your breath… 

It is important to understand that just because one or more service providers won the auction for certain census block areas, the steps of actually approving these providers is not yet complete, and there is a lengthy process that is followed before any subsidy payments flow. To win the auction for an eligible census block, an applicant submits what is call a “Short Form” application. This short form contains basic information about the company and its plans, including what performance network they propose to provide and their bid to build and provide service. If there is competition for a block, auction bidders win based on their bid and the type of service they propose to provide. Bear in mind that there are not many companies competing for census blocks in difficult areas like WNC.

Once the auction winners are notified by the FCC, they must then submit a "Long Form" application for the the blocks won. This long form contains much more detailed information about the proposed plan, including the network design and the financial information that demonstrates the proposed network will become a sustainable business. All long form applications must be reviewed and ultimately approved by the FCC, a process which may involve multiple iterations and can take many months. Another shortfall in these programs is that winners don’t always submit long forms for every block won in the auction. This is referred to as defaulting on an auction bid. Though there are imposed financial penalties should this happen, they are not substantial for a large corporation and can be considered a cost of going through the process. All this means is that until all long forms are approved and published sometime later this year, we will not really know which blocks within Macon County are to actually benefit from RDOF subsidies and an eventual broadband network.

After the long form application is approved by the FCC, annual subsidy payments will begin to the service provider and a time clock for construction starts. To remain in compliance with the program, a provider who has begun to receive federal subsidy payments must provide service to 40% of the of the eligible households within the first 3 years, and must provide service to an additional 20% per year up through year 6 (100% service). Annual subsidy payments then continue through year 10. There are financial penalties associated with not meeting these compliance targets.

Assuming all of Charter’s plans are approved, when can we get service from them here in Macon County?

This is a burning question on the minds of all Maconions needing access to real high-speed internet. This is also the question on the minds of the Macon County Broadband Committee and similar committees and county governments across WNC. To get some answers, the Appalachian Regional Commission arranged a zoom call with representatives from Charter back in March of this year. All WNC counties affected by the Charter RDOF wins were represented on this call.

Though making no hard commitments, the representative from Charter provided the following tid bits of information during the zoom call.

1. The Charter rep stated that the company is committed to building a network and serving all blocks won in the RDOF auction. That remains to be seen, and we will not actually know for sure until long forms are approved and published by the FCC later this year.
2. Upon long form approval, they will spend up to one year in the planning phase prior to any construction.
3. During years 2-3 they will focus on construction in the easily reachable areas. Since Charter’s closest network presence to our area is eastern Haywood County, that means they will likely work their way West from Waynesville, and build out areas as they go to ensure meeting the FCC compliance targets.
4. Years 4-5-6. They will continue to build West into Macon County and beyond. Areas close to major roads would likely see service first, with those harder to reach seeing service by the end of year 6.

Great! So when will I see service at my house?

Based on the responses from Charter, it is unlikely that Macon County will see much if any new service until after year 3. Remember the clock will not actually start until late 2021 at the ealiest. This is purely speculation, but is based on the facts that Charter must construct a new network from East to West and that construction will take years.

Being a Macon County resident, when you can get service from Charter depends on several things.

• You must live in a census block for which Charter is able to follow through.
  In other words, Charter has chosen to complete a long form application for your area, it has been approved by the FCC, and they have started to receive subsidy payments from the Fed.
• Where in your area do you live?
  Are you close to a main road or on the side of a mountain ridge. Locations that are easy for construction will receive service before more difficult areas.

My intent in providing this info is not to reduce optimism that internet progress is coming, but rather to provide a more complete picture of the process and situation. When news comes out of a big federal grant win for our area, it is hard not to get caught up in the excitement. However, the reality is that RDOF, like all federal grant and subsidy programs, is not perfect and takes effect over many years. In the case of Charter and their arrival in Macon County, we are talking about a process that will take 6 years or more.

Know that other internet service options are being developed. By the time Charter reaches our area, the hope is that this will become another option available which will increase competition and keep costs down.