09. RDOF Discussion July 3, 2021
Honorable Mayor and fellow City Councilmembers,
The Internet Expansion Funding policy questions we need to consider are significant. As we have discussed several times
before: not only do Scandia decision makers need to strive to make good decisions, but it is also just as important that
we do things in the right way. Since I have not received the answers to many of the questions I brought to the IAC in
April, I am hopeful the Council will address them on Wednesday.
I have attached a map 1 of the areas the IAC is currently looking to expand into. Please note the expansion include five
areas inside, and four areas outside, RDOF funding territory.
The DEED grant we supported was planned to service to 78 homes at a cost to Scandia of $165,000. MidCo renegotiated
with DEED to remove the 44 homes inside their RDOF territory. It should also be noted that 9 of the remaining 34 homes
are in another provider’s RDOF territory. Tonight, we are also being asked to support an additional expansion area
around Quality Trail for a cost of $85,000. This new area includes 64 homes, 14 of which are inside another provider’s
RDOF territory.
I have also attached an excerpt from the FCC’s RDOF policy document 2 that indicates the FCC will defund any area
where additional State agency subsidies are provided. It is clear the reason for the revisions to the DEED grant were
done to avoid conflicts with the FCC RDOF policy. The FCC RDOF policy seems clear that the federal government’s goal is
to not duplicate funding targeted to a particular area.
I do not think the Council should put our expansion efforts at any risk over a potential to conflict with the FCC policy, and
I question if we should fund one provider’s expansion into another providers RDOF territory. We can debate what would
happen with the FCC, but we will not find out until it is too late. Instead, I propose we address the following policy
questions and avoid any potential conflict and to ensure we are prepared for future expansion, regardless of who the
provider might be:
Should the City provide supplemental funding to a provider for internet expansion:
1. In RDOF areas where that provider has been awarded RDOF funding?
I suggest: No. Note: If yes, this could result in those RDOF areas being defunded by the FCC.
2. In areas where another provider has been awarded RDOF funding, and that other provider has brought forward
an acceptable expansion plan to the city?
I suggest: No. Note: If yes, this could result in those RDOF areas being defunded by the FCC.
3. In areas where another provider has been awarded RDOF funding, but that other provider has NOT brought
forward an acceptable expansion plan to the city?
I suggest: Yes. Note: If yes, this could result in those RDOF areas being defunded by the FCC.
4. In areas, already serviced by a provider and the services meet or exceed the City’s internet goals?
I suggest: No.
5. In areas, already serviced by a provider and the services DO NOT meet or exceed the City’s internet goals?
I suggest: Yes.
I also suggest the Council modifies to the MidCo agreement being proposed tonight to address all the 2021 expansion
funding, not just the Quality Trail area.
Attached are two alternatives 3 and 4 that show how Scandia can provide the same level of funding MidCo is hoping for
this year and results in Scandia receiving the same total number of homes served.
I do not believe we should ever hand over money to any vendor and then allow them to change the way they intend to
spend it, without our consent. This year’s DEED grant (as renegotiated by MidCo) costs Scandia $4,853 per home served
($165,000 / 34 homes).
Either of my proposals gives our residents and MidCo what we both want. I believe we need to work with MidCo to
contract for the entirely of this year’s expansion; avoid all potential conflicts; and fund the expansion at a more
acceptable per home funding level. I have been trying to work through the IAC to get this information in front of the
Council for a long time now. I am glad the time has finally come.
I see either of my proposals as win-win for the residents of Scandia and for MidCo. I hope you will agree with me and
look forward to a meaningful dialog on Wednesday.
Steve Kronmiller
Scandia City Councilmember
ATTACHMENTS
1. Potential expansion areas the IAC is currently exploring:
Link to: 2021 Expansion Areas Map
2. FCC RDOF Policy Statement:
Nexus to State and Federal Broadband Subsidy Programs
The FCC has adopted a policy that would identify and exclude from RDOF eligibility census blocks that have been
awarded funding through other similar federal and state broadband subsidy programs. The FCC states the intent behind
this policy is to ensure the auction does not award duplicative or unnecessary support, and instead targets RDOF funding
in areas that would otherwise not be served by broadband.
In recent years, many states have developed and implemented their own broadband programs to help close the digital
divide. According to the National Telecommunications and Information Administration’s (NTIA) BroadbandUSA, more
than half the states have their own broadband subsidy program, which may lead many broadband service providers in
those states to be ineligible for RDOF. On March 9, 2020, a letter citing concerns and follow-up questions was sent to
FCC Chairman Pai from several Senators. Among the concerns raised was a belief that the FCC should incentivize states
to take action and create their own broadband programs, not deter them by restricting eligibility for federal programs,
such as RDOF. Chairman Pai responded with a letter on March 27, 2020, stating:
With regard to state programs, the Commission continues to support state efforts to connect more Americans to
broadband and welcomes the opportunity to partner with states (as it has with states like New York) to align
their funding streams with ours so as to stretch our funding as far as possible. In response to your questions, if a
state hasn’t already issued a formal funding commitment, that area will not be excluded from the Rural Digital
Opportunities Fund Phase I Auction. In a similar vein, a “broadband subsidy program from 12 years ago” would
have no bearing on our inquiry, nor would a future program that “ha[s] not yet awarded funding.” I should also
note that our goal is to not duplicate funding targeted to a particular area. This means—consistent with the
principle I outlined above—if a service provider has state-based funding and a commitment to deploy 25/3
Mbps or better service in one area, it cannot receive FCC funding to deliver similar service to that same area. But
it would still be eligible to participate in the Rural Digital Opportunity Fund in other areas in the state that are
unserved and not covered by a funding commitment.
Additionally, the FCC plans to consult with the United States Department of Agriculture (USDA) Rural Utilities Service to
exclude any census blocks that substantially overlap with a ReConnect awardee from eligibility. As stated in FCC
Chairman Pai’s March 27, 2020, letter, the intent behind this provision is to limit the potential for overbuild of existing
broadband infrastructure, thereby allocating funding to areas wholly lacking broadband infrastructure.
3. Funding Alternative 1: Do not fund expansion in ANY RDOF territory:
4. Funding Alternative 2: Do not fund expansion into MidCo’s RDOF territory, but fund
expansion into OTHER RDOF territories:
Area Color Parcels Addesses Scandia Funds Scandia Cost
MidCo RDOF Yellow 142 90 No 0.00
Quality Trail Purple 59 50 Yes 126,262.63
DEED Light Red 32 25 Yes 63,131.31
Across the Street from RDOF Grey 26 14 Yes 35,353.54
Other RDOF - Quality Trail Dark Red 17 14 No 0.00
Other RDOF - DEED Green 14 9 No 0.00
Other RDOF - Paris Ave Blue 13 12 No 0.00
Other RDOF - TBD Brown 4 3 No 0.00
239th Dark Purple 11 10 Yes 25,252.53
318 227 99 250,000.00
Average Cost per Address 2,525.25
Area Color Parcels Addesses Scandia Funds Scandia Cost
MidCo RDOF Yellow 142 90 No 0.00
Quality Trail Purple 59 50 Yes 91,240.88
DEED Light Red 32 25 Yes 45,620.44
Across the Street from RDOF Grey 26 14 Yes 25,547.45
Other RDOF - Quality Trail Dark Red 17 14 Yes 25,547.45
Other RDOF - DEED Green 14 9 Yes 16,423.36
Other RDOF - Paris Ave Blue 13 12 Yes 21,897.81
Other RDOF - TBD Brown 4 3 Yes 5,474.45
239th Dark Purple 11 10 Yes 18,248.18
318 227 137 250,000.00
Average Cost per Address 1,824.82