Funding
Altice USA joins the growing list of near 100 companies that have failed to fulfill commitments made under RDOF.
Photo of Avoyelles Parish Courthouse by J. Stephen Conn used with permisssion
WASHINGTON, March 18, 2024 – Altice USA said Friday it is relinquishing 18 census block groups in Louisiana for which it was awarded funding from the 2020 Rural Digital Opportunity Fund to make way for higher speeds under another funding program.
In a letter addressed to the Federal Communications Commission, the internet service provider said defaulting on the census block groups spanning Bossier, Calcasieu, Iberia, Rapides, Sabine, St. Mary, and Avoyelles parishes will allow them to be eligible for the Broadband Equity, Access and Deployment program.
The letter notes that Louisiana is currently in the final stages of completing its BEAD eligibility map, which will show areas with adequate internet service.
Altice added in the letter that it has already deployed service in parts of the region for which it obtained RDOF funding and said it aims to guarantee that the remaining unserved areas qualify to receive “symmetric gigabit speeds” through the BEAD program.
The decision follows the FCC’s urging that providers default on areas they are incapable or unwilling to serve under RDOF to better prepare those locations for the $42.5-billion BEAD program, which will not go to areas that are already allocated RDOF money.
The FCC is currently considering granting a short grace period to allow companies that cannot fulfill their contractual obligations under the RDOF broadband expansion program to relinquish them without facing penalties.
If the amnesty period is not granted, service providers that default on RDOF bids are subject to a $3,000 base violation charge, with additional violations for each census block group forfeited in a bid.
In the letter, Altice acknowledges that it may be subject to the applicable non-compliance rules, but said it reserves its right to seek relief from any penalties, “including waiver of the commission’s rules.”
Altice has become the latest addition to the list of nearly one hundred companies notifying the FCC of their inability to meet previously made commitments, with more anticipated to do the same. Already, over 30 percent of the $9.2 billion in RDOF funding has been defaulted on.
The FCC is currently facing legal disputes with one provider, LTD Broadband, for which the agency proposed fining $22 million for defaulting on more than $1 billion in awards.
The evolving situation is leading to uncertainty as states work to complete their maps of BEAD-serviceable locations.
State broadband officials are addressing potential additional RDOF defaults. Recently, the Arkansas State Broadband Director reached out to all RDOF winners in the state, urging them to confirm their commitments under RDOF or notify any intention to surrender or default in the future, ensuring these locations can be serviced through BEAD.
State officials in Florida and Alabama express similar apprehensions and have incorporated clauses in their preliminary BEAD program proposals. If approved, these provisions would enable regions designated to receive funding from RDOF to also qualify for BEAD funding. The officials cite worries regarding potential fluctuations in the number of locations RDOF will serve.
Even in areas where providers are actively working to honor their commitments, there are lingering concerns regarding RDOF. This is because the program lacks a mandate for ISPs to deliver universal service; instead, it only requires recipients to extend coverage to 95 percent of homes within census block groups.
This results in 5 percent of census block groups lacking broadband connectivity, leading to clusters of unserved homes.
These isolated homes will be disqualified for BEAD eligibility, as the census block is deemed “served” by RDOF, despite the fact that the RDOF recipient won’t actually extend coverage to 100 percent of locations.
These areas are often considered the least desirable or least cost-effective for ISPs, meaning there is no financial incentive or market rationale for an ISP to provide broadband service to these households.
