- Approximately 1.9 million RDOF locations are scheduled to not receive service due to provider defaults
- Given RDOF locations are ineligible for BEAD funding, defaults won't help matters in closing the digital divide
- RDOF will likely continue chugging along, as the future of the Universal Service Fund (USF) remains uncertain
With all the buzz around what will and won’t happen to the Broadband Equity, Access and Deployment (BEAD) program, it’s easy to forget the government’s Rural Digital Opportunity Fund (RDOF) is chugging along – albeit on a road rife with defaults and rural areas left behind.
As of 2025, internet service providers (ISPs) have defaulted on $3.3 billion of the $9.2 billion total in RDOF awards, according to a study from the Benton Institute for Broadband & Society. Meaning 1.9 million of approximately 5.2 million eligible RDOF locations are no longer scheduled to receive service.
The Benton Institute analyzed recently published Federal Communications Commission (FCC) data that broke down RDOF defaults by state and ISP. States like California and Massachusetts have a whopping 94% and 89% of RDOF awards in default. And in New Jersey’s case, 100% of its RDOF funding is in default, so none of the state’s eligible RDOF locations will be connected.
Among ISPs, the ones with the highest tally of defaulted locations are Starlink (whose bids the FCC rejected in 2022) with 629,831, LTD Broadband (528,088), Mercury Wireless (122,645) and Connect Everyone (108,506).
When the FCC selected RDOF winners in its reverse auction in 2020, all other applicants in those areas were “effectively denied,” the Benton Institute noted. So, if a provider defaulted on its bids, there were no backup applicants to take its place.
“Every RDOF default prevented a different and potentially more viable project from moving forward,”3 said the Benton Institute. “And, since one out of every three locations defaulted, defaults effectively locked huge swathes of the country into the digital divide.”
Defaults are stacking up as the RDOF program, which is designed to run for 10 years, hits the halfway mark. RDOF participants must complete 40% of their deployments by the end of year three, which is either end of 2024 or ’25 depending on when providers were authorized to receive funding. And defaults will likely continue to happen.
“It is clear from the defaults that RDOF is not going to move us materially closer to closing the rural access divide,” New Street Research policy analyst Blair Levin told Fierce.
RDOF hurdles also complicate matters for BEAD, because locations covered by an RDOF award are ineligible for BEAD grants.
Levin has said BEAD so far has been handled better than RDOF, as the latter program had its auction rushed and used a “crappy map.” At the time, the FCC hadn’t released its revamped national broadband map that was used to calculate state BEAD allocations.
But with new NTIA leadership at the helm, changes to the BEAD program are imminent. It’s not clear how such changes, which will likely include dialing down BEAD’s fiber preference, will impact deployment timelines.
Concerns for RDOF participants
RDOF meanwhile will likely continue on its same path in the new administration, said WISPA Director of Communications Mike Wendy. However, larger issues surrounding the Universal Service Fund (which RDOF falls under via the High Cost program) “still need addressing.”
First things first, the Supreme Court must rule on whether the USF funding mechanism is unconstitutional or not. The verdict is set to happen sometime this summer.
Aside from meeting their deployment milestones, RDOF recipients should be “mindful of BEAD coming online soon and its potential effect on already tight labor markets and supply chain matters,” Wendy said. President Trump’s tariffs on China and other trade partners could further put a wrench on the telecom supply chain.
Providers building out RDOF locations have to also keep in mind competitors will be carrying out BEAD projects in surrounding areas, according to Carol Mattey, founder of Mattey Consulting.
"RDOF areas are a checkerboard of census blocks," she said at a recent webinar hosted by Meridian Capital. If a provider is building out RDOF projects but chooses not to participate in BEAD, they "may be subject to increased competition because the BEAD winner may be running facilities through [RDOF census blocks] to get to adjacent BEAD locations."
Charter is one notable example of a provider that's been bullish on RDOF but doesn't intend to apply for as many BEAD grants. On the RDOF front, the company said it's scheduled to complete its RDOF build by the end of 2026.