FCC Plans to Better Scrutinize RDOF Funding After Free Press Investigation Exposed Questionable and Wasteful Subsidies

WASHINGTON — On Monday, the Federal Communications Commission announced its intention to authorize an initial round of more than $311 million in funding for new broadband deployments. The original series of federal subsidies, based on the lowest bids broadband providers submitted in the auction phase of the Rural Digital Opportunity Fund (RDOF), came under heavy scrutiny after Free Press published a six-part investigation. The Free Press reports included exposés of several questionable applicants that sought to bring connectivity to unoccupied parking lots, storage tanks and traffic islands, as well as urban areas that other providers already served.

In response, the FCC has sent letters to 197 winning bidders from 2020, giving each the opportunity to withdraw its funding requests should the money be applied to building out broadband to places already served or “where significant questions of waste have been raised.”

Among recipients of these letters is Elon Musk’s Starlink, the satellite-internet company that won RDOF awards nationwide, including in many densely populated urban areas. The FCC has also denied all funding for AB Indiana, and rejected LTD Broadband’s application to serve in California, Kansas and Oklahoma — representing more than $271 million of the $1.3 billion awarded to the company — due to a failure to secure necessary state-level certifications in a timely fashion.

In a press statement, Acting FCC Chairwoman Jessica Rosenworcel said that the agency is “refocusing the program on unserved areas and putting winning bidders on notice of their obligation to ensure that support goes to the areas that need it.”  

In the closing days of the Trump administration, Rosenworcel’s predecessor, then-Chairman Ajit Pai, trumpeted the program as an example of his leadership. Subsequent reporting by Free Press Research Director S. Derek Turner found that the RDOF program was riddled with errors, waste and insufficient oversight. Turner discovered that of the $886 million in subsidies that went to Elon Musk’s Starlink, a portion would have paid for build-out to places where there’s no need for services.

Free Press Research Director S. Derek Turner made the following statement:

“We appreciate the new Commission’s close attention to the issues we originally raised at the tail end of the Pai FCC. While we have yet to fully review the series of recommendations and actions released today, it’s encouraging that Acting Chairwoman Rosenworcel wants to get this right. In a rush to take credit for this program before his departure, Ajit Pai ignored early criticism and rapidly awarded money to the likes of Elon Musk for building broadband bridges to nobody. Pai wanted to put a pretty bow on a bad process. Under Rosenworcel, the FCC seems determined to do the due diligence that Pai skipped to ensure that federal money actually connects real people — as opposed to traffic medians — to affordable services.”