Starry, Nextlink, Resound still waiting on $1B in RDOF support

More than a year and a half after the close of the Rural Digital Opportunity Fund (RDOF) auction, fixed wireless providers Starry, Nextlink and Resound Networks are among the unlucky few still waiting for their winning bids to be authorized. But despite the Federal Communications Commission’s (FCC) stunning decision last week to reject over $2 billion in support for big bidders LTD Broadband and Starlink, the companies have expressed confidence their subsidy money will come through.

Starry, Nextlink and Resound were among the top 10 winners in the RDOF auction, collectively taking home just over $1 billion. That means they account for about half of the $2 billion in remaining bids the FCC has left to process.

Fellow fixed wireless access providers Etheric Communications and GeoLinks together represent another half-billion dollars that has yet to be awarded. The companies won $248.6 million and $234.9 million in the RDOF proceeding, respectively. An FCC representative confirmed none of the aforementioned companies have had RDOF support authorized. But that’s expected to change in the near future.

Resound CEO Tyson Curtis told Fierce via email “We fully expect to be authorized soon and look forward to deploying our fiber and FWA network to bring gigabit speeds to more than 219,000 unserved locations.” Similarly, Nextlink CEO Bill Baker told Fierce it believes the FCC is in the final stages of reviewing its long-form application and is “hopeful” it will ultimately be approved.

Starry sang a similar tune during its Q2 2022 earnings, noting the FCC was in the “final stages” of reviewing its long-form application. It stated it was “confident” its application “will be granted in the near term” and when asked for an update a company representative referred Fierce to the statements it made during earnings.

It's unclear why the approvals are taking so long and whether it has to do with FWA technology. While not commenting on specific applications, the FCC representative pointed out it has already “disbursed RDOF funding to some fixed wireless [providers] at the above baseline (100/20 mbps) level.” But it’s worth noting that providers like Nextlink bid at the gigabit tier for both fixed and wireless, which could mean they’re subject to a different level of scrutiny.

That could especially be true after the National Telecommunications and Information Administration (NTIA) announced rules for the Broadband Equity, Access, and Deployment (BEAD) program which specified areas served by broadband connections reliant on unlicensed spectrum would be deemed unserved. Resound and Nextlink have recently touted FWA trials which used unlicensed 6 GHz spectrum to achieve gigabit speeds. It remains to be seen, of course, whether the NTIA’s stance will influence the FCC’s decision.

For those still waiting, the impacts of the extended approval timeline are starting to show. For instance, Starry had originally included seven months of RDOF support in its full year 2022 revenue guidance. But given it’s already August, that estimate is certainly off.

Meanwhile, Baker noted the supply chain situation has changed drastically over the last 12 to 18 months, and it now expects the cost to execute its RDOF builds is “probably 25 to 35% higher” that it originally anticipated when it bid. On a more positive note, he added the lengthy approval process has given it time to get ahead of the curve in terms of pre-build planning.

“We’ve already teed up thousands of fiber route miles in our RDOF obligation areas to be built out starting as soon as possible after notice of authorization,” Baker said. He added Nextlink is “very confident” that it will be able to meet the FCC’s criteria of being financially, operationally and technically capable of executing on it RDOF obligations.

“We’re very hopeful,” he concluded “We feel our very large CBRS holdings in our RDOF service area puts us in a unique position when it comes to gigabit wireless in the future. So we’re hopeful the FCC sees the same thing.”

The FCC told Fierce last week it expects to conclude its review of pending RDOF applications “soon.”