Starry, an internet and new wireless provider, has told the FCC it will default on its Rural Digital Opportunity Fund (RDOF) bids in nine states. The news comes just weeks after the Commission said it was ready to authorize the company’s winning bids, according to Telecompetitor.
Starry was one of the top 10 winning bidders in the RDOF auction, with winning bids totaling about $269 million. The FCC released the information about Starry on Wednesday. It also listed other companies that told the agency they planned to default on at least a portion of their winning bids, including Cal.net and California Internet/GeoLinks.
Defaulting companies are subject to a base forfeiture of $3,000 per census block group, but that amount could be adjusted upward or downward. A Starry spokesperson declined to comment on the news, according to Telecompetitor.
Complicated Auction
The RDOF auction was structured differently than traditional FCC spectrum auctions. “Bidders” in the reverse auction were awarded funds based on different criteria, such as latency, speed and how fast they believe a company can bring broadband to a rural area, Inside Towers reported. Funding for a census block group went to the company that committed to the deployment for the lowest level of support.
Some observers questioned whether some of the largest winners, like Charter and Starry, could actually deliver what they said they could on their applications, Inside Towers reported. Shirley Bloomfield, CEO of NTCA – The Rural Broadband Association, urged the FCC to scrutinize the winners, saying, “It’s essential for the FCC to vet thoroughly those who may have made promises behind the scenes in their applications claiming the ability to deliver Gigabit and 100 Mbps services using technologies that have never done so on a widespread basis – or at all – in rural America.”
West Virginia Republican Senator Shelley Moore Capito told then-FCC Chairman Pai she was concerned too. Because of the nature of a “reverse auction, it is entirely possible, if not likely, that a bidder will be required to invest their own funds to cover costs above and beyond the RDOF subsidy,” she said.
Starry’s bid was based on using a combination of fiber and fixed wireless to deliver speeds up to 1 Gbps. The Commission put Starry on a ready-to-authorize list in August after personnel reviewed the company’s long-form application. But the company had not yet received full authorization, which comes after the Commission has reviewed and approved a company’s bankruptcy opinion letter and letter of credit.
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