FCC wants to fine Starry, 21 others $9M for RDOF defaults

The Federal Communications Commission (FCC) is back this week with another round of proposed fines for Rural Digital Opportunity Fund (RDOF) auction winners that have defaulted on their obligations. While some well-known names – Charter Communications, Altice USA, Shentel – were among the nearly two dozen companies the FCC targeted with a total of $8.8 million in fines, just two entities accounted for the vast majority of that sum.

According to the FCC, the defaults span a total of 22 entities and impact 293,128 locations across 31 states.

Starry, which bid in the RDOF auction as Connect Everyone, topped the list, with a proposed fine of $3.8 million. Its presence is perhaps unsurprising given Starry announced in October plans to abandon all of its winning RDOF bids as part of an unsuccessful attempt to regain its financial footing. It subsequently filed for bankruptcy in February. Starry’s original $269 million in winning RDOF bids would have helped it cover more than 108,000 locations. The proposed FCC fine covers Starry’s default on $245 million in winnings.

GeoLinks wasn’t far behind Starry, with a proposed fine of nearly $3.1 million for defaulting on $129.7 million in winning RDOF bids. The FCC had announced GeoLinks’ default alongside Starry’s in October. But unlike Starry, GeoLinks’ reason for defaulting wasn’t financial but rather its inability to secure the necessary Eligible Telecommunications Carrier (ETC) designation from the California Public Utilities Commission (CPUC).

Together, the fines proposed for Starry and GeoLinks accounted for almost $6.9 of the $8.8 million in total fines the FCC announced. Cal.net, which found itself in the same boat as GeoLinks in October, was hit with a proposed fine of $540,000. And fixed wireless operator Mercury Broadband was notified of proposed fines totaling $441,000 covering defaults in Indiana and Kansas.

The remaining fines the FCC proposed were mostly small. Shenandoah Telecommunications (Shentel) defaulted on $3.8 million in winning bids, earning it a proposed fine of $36,000, while Charter Communications was hit with two different proposed fines totaling $12,000. Altice USA subsidiary Cebridge Telecom got a proposed fine of $1,236.

It’s worth noting the fines mentioned above aren’t final just yet. All parties named will be given a chance to respond to the FCC’s allegations with evidence and legal arguments before the matter is resolved.

This round of fines comes after the FCC proposed a total of $4.3 million in fees for 73 auction participants in July 2022. LTD Broadband and Charter received two of the largest fines in that round. The agency indicated it plans to continue pursuing companies which have failed to live up to their RDOF obligations.

FCC Enforcement Bureau Chief Loyaan Egal said in a statement “we will be steadfast in making sure that those who impede the timely deployment of broadband-related infrastructure are held to account.”