I live in North Carolina, and in the last few days, I heard a few things about the RDOF grant awards that I found to be disturbing. First, a state politician is claiming that the RDOF awards are going to take care of the rural broadband problems in the state, so there is no longer any reason for the state to be looking at broadband solutions. I also heard from a few county broadband groups who are wondering if they still have a role to play in seeking better broadband.
I had not previously analyzed the North Carolina RDOF winners, so this set me off to gather the facts. The following is what I found about the tentative RDOF awards in North Carolina. I say tentative because the FCC still has to approve each recipient and award and the FCC just recently received the long forms that start the review process.
- North Carolina has tentatively been awarded $166.6 million in grants, to be paid to grant winners over 10 years or $16.66 million per year.
- The grants cover 155,137 households in North Carolina or roughly 350,000 people. In a state with 10.5 million people, the grants propose to bring improved broadband to 3.4% of the people in the state.
- The RDOF grant works out to $1,074 per household.
Here are the RDOF winners in North Carolina:
- Charter – $142.1 million
- Starlink – $17.4 million
- Windstream – $4.2 million
- Wilkes Membership Cooperative – $1.3 million
- Co-op Connections Consortium – $721,000
- CenturyLink – $530,000
- Mediacom – $304,000
- Connecting Rural America – $33,600
- Carolina West Wireless – $460.
Charter is the big winner, taking over 85% of the RDOF award in the state. Starlink got over 10% of the award in the state, and everybody else combined got a little less than 5%.
Recall that RDOF was only awarded in places where the FCC broadband maps say that broadband speeds are less than 25/3 Mbps. In the latest FCC broadband report to Congress, just released in January of this year, the FCC claimed that 456,000 people in rural North Carolina don’t have broadband – and the RDOF only covers one-third of those folks. But we also know that the FCC mapping data is full of problems. The State of Georgia undertook an analysis of the FCC mapping and determined that the number of homes in Georgia without broadband is twice what is claimed by the FCC. It’s hard to know the actual number of people in North Carolina without 25/3 Mbps broadband, but it has to be a lot more than 456,000.
The most troublesome aspect of the RDOF grants in the state is the average award of $1,074 per household. This might be adequate for Starlink if they provide a free receiver for customers (not known if they will do that), but this doesn’t come close to building the technology promised by Charter. Charter has promised to build gigabit infrastructure and that means building either a traditional HFC (hybrid fiber/coaxial) network or fiber. The RDOF grant is bringing broadband to some of the most rural places in the state. As a point of comparison, I’ve analyzed several rural counties in Minnesota recently that have perhaps the lowest rural construction costs imaginable – and the all-in costs in those counties were at least $6,600 per passing. It’s not hard to guess that the costs in rugged Appalachia could easily be as much as $15,000 per passing. Charter has pledged an additional $3.8 billion in equity to match the RDOF funds, meaning $5 billion in total budget. Nationwide, Charter won the grants to cover 1.06 million homes, meaning they have set aside funds of about $4,727 per passing. I have trouble envisioning that Charter has enough money to bring gigabit broadband with that budget.
There are other troubling aspects of the RDOF grants. There have been technical concerns raised recently about the ability of Starlink to meet both the build-out deadlines and the speeds promised for RDOF. In North Carolina, a lot of the Starlink funding is going to Appalachia, and there is a concern about the ability of homes in the mountains and woods to get the needed view of the horizon to see satellites.
Perhaps the biggest downside to the RDOF grants is that grant award winners have six years to build the promised solutions. That’s a long time to wait for households that are hurting without broadband today. And it’s a really long time to wait if some of the RDOF homes never get the promised broadband.
Unfortunately, the facts in a lot of states probably look similar to North Carolina. This has prompted widespread warnings from members of Congress and from various telecom associations that the RDOF awards are troubling. But even if the award winners can somehow reach every pledged home for the grant money as awarded, we know that the RDOF grants will not alone solve the rural broadband problems in North Carolina. Local broadband committees need to keep pressing ahead to find broadband solutions. Politicians can’t use the partial solution brought by RDOF as cover for not supporting broadband solutions.