California tops up federal broadband subsidy bids, as FCC trims RDOF eligibility list

by Steve Blum • , , , ,

Pouring wine

Californian communities lost potential broadband subsidy money last week, but might have gained some back yesterday. On Thursday, the Federal Communications Commission eliminated 48,000 “locations” – homes, businesses, community facilities – in what appears to be 3,100 census blocks from the preliminary eligibility list for the Rural Digital Opportunity Fund (RDOF), following a review of tens of thousands of challenges from incumbent broadband providers who wanted to freeze out potential competitors. I say “appears to be” because the FCC’s numbers don’t line up with census bureau stats – that discrepancy should be resolved eventually.

Yesterday, California governor Gavin Newsom signed assembly bill 82 into law. It waives restrictions on the California Advanced Services Fund (CASF) – California’s primary broadband infrastructure subsidy program – and allows the California Public Utilities Commission to add money from it to RDOF-funded projects.

A census block is eligible for RDOF money if it lacks broadband service at 25 Mbps download/3 Mbps upload speeds. CASF subsidies are usually restricted to census blocks without service at 6 Mbps down/1 Mbps up, which means that far fewer rural homes and communities are eligible. AB 82 allows CASF funds to be spent on projects that also receive RDOF money.

RDOF subsidies are awarded via a reverse auction. Broadband providers bid down the amount of money they’re willing to accept in exchange for offering a particular level of service in a given area. Putting CASF subsidies on the table allows Californian providers to bid lower and, it is hoped, win even more federal money that’ll be spent here.

Thursday’s changes mean about 10% of the locations are gone from the preliminary RDOF eligibility list that the FCC published in March. Because of the formulae used to calculate maximum subsidy amounts, only 6% of the maximum potential money is off the table. But the maximum doesn’t mean much. The ten year total reserve price for eligible census blocks in California dropped from $2.5 billion to $2.3 billion. In theory, all of that money could end up in California. In reality, it won’t – half or a little better is a more realistic expectation.