Rural Digital Opportunity Fund (RDOF) Phase I Winning Bidders

The Federal Communications Commission (FCC) today announced the winning bidders of the Rural Digital Opportunity Fund (RDOF) Phase I Auction (Auction 904). Overall, 180 bidders secured $9.2bn of support from the FCC, over a 10-year period, across 5.2 million locations throughout the United States.

The RDOF auction offers up to $16bn of support, paid over 10 years, to bidders that pledge to provide voice and broadband service to unserved census block areas. Indeed, unserved, is defined as locations having broadband download speeds of less than 25 megabits per second and upload speeds of less than 3 megabits per second.

To sum up, within these 5.2 million locations, download speeds of 100 megabits per second will cover 99.7% of these locations. Additionally, download speeds of 1 gigabit per second will cover over 85% of these locations.

RDOF Phase I Winning Bidders by Total Assigned Support Over 10 Years

Top 10 Winning Bidders in the RDOF Phase I Auction

1. LTD Broadband receives support of $1.3bn in 528k locations, equating to $2,501 of support per location
2. Charter Communications receives support of $1.2bn in 1.1m locations, equating to $1,156 of support per location
3. Rural Electric Cooperative Consortium receives support of $1.1bn in 618k locations, equating to $1,786 of support per location
4. SpaceX receives support of $886m in 643k locations, equating to $1,377 of support per location
5. Windstream receives support of $523m in 193k locations, equating to $2,715 of support per location
6. Nextlink (AMG Technology) receives support of $429m in 206k locations, equating to $2,082 of support per location
7. Frontier Communications receives support of $371m in 127k locations, equating to $2,916 of support per location
8. Resound Networks receives support of $311m in 219k locations, equating to $1,417 of support per location
9. Connect Everyone receives support of $269m in 109k locations, equating to $2,478 of support per location
10. Lumen Technologies receives support of $262m in 77k locations, equating to $3,396 of support per location

Takeaways from the Top 10 Winning RDOF Bidders

Charter Communications has followed through on its aggressive approach to the RDOF auction. Specifically, in July 2020, Charter stated publicly its intention to participate in the RDOF auction, with the potential to have “multi-million” passings and “multi-billion” in investments dollar-wise, over an 8-year period. Indeed, Charter has also bid aggressively with a comparably low $1,156 of support per location, which implies that it is stretching to locations with lower returns on invested capital. Moreover, Charter’s strategy is clearly one of volume since the company secured the greatest number of locations at 1.1 million.

In addition, two of the top 10 bidders, LTD Broadband and SpaceX, are relatively new entrants in the telecommunications sector. Indeed, with winnings of $2.2bn between the two companies, it will be important to track their execution of their broadband network builds. For example, SpaceX, through its Starlink satellite broadband service is deploying an 11,943 satellite constellation to provide connectivity services.

Other Digital Infrastructure Winning Bidders Part of the Pool of 180 Bidders

Finally, we highlight other key digital infrastructure company winners of the RDOF Phase I Auction.

• Consolidated Communications receives support of $58.9m in 27k locations, equating to $2,179 of support per location
• Cincinnati Bell receives support of $26.9m in 11k locations, equating to $2,416 of support per location
• Grain Management receives support of $19.2m in 6k locations, equating to $3,257 of support per location
• Cox Communications receives support of $6.6m in 8k locations, equating to $808 of support per location
• Atlantic Broadband (Cogeco) receives support of $5.4m in 4k locations, equating to $1,395 of support per location
• FiberLight receives support of $1.8m in 5k locations, equating to $380 of support per location
• Altice USA receives support of $0.8m in 5k locations, equating to $163 of support per location

Following the results of the RDOF Auction, Consolidated Communications announced it will enable speeds of 1 gigabit per second to an additional 300k homes and small businesses in 2021. Specifically, Consolidated Communications will upgrade a total of 1.6 million additional passings to fiber by 2025.