NRECA is urging the Federal Communications Commission to reject requests for limited amnesty for internet service providers who default on certain federal funding obligations to build rural broadband and leave large swaths of America unserved.

“To give these participants a 'get out of jail free card' in the form of amnesty—no matter how abbreviated—and/or reduced fines would send a dangerous, ill-advised signal to internet service providers that default is an option regardless of the consequences to the communities left behind," said Greg Orlando, NRECA regulatory affairs director for broadband.

NRECA filed comments to the FCC on March 26 in response to recent calls to allow internet service providers to give up their broadband commitments after winning large sums from the Rural Digital Opportunity Fund and Connect America Fund II. Amnesty requests came from ISPs, trade associations, state and local officials, school districts and others concerned that some winning bidders may be unwilling or unable to fulfill their deployment obligations.

NRECA said communities covered by RDOF and CAF II winners who defaulted, including some of the country's hardest-to-serve areas, had been labeled “served" and became ineligible for the upcoming $42.5 billion Broadband Equity, Access and Deployment (BEAD) program.

In addition to BEAD money, areas where entities defaulted also missed out on potential funding through the U.S. Treasury's Capital Projects Fund and U.S. Department of Agriculture's ReConnect program.

“Granting amnesty will not deter future defaults but will have the opposite effect," NRECA told the FCC. “Rather than encouraging thoughtful participation from internet service providers in federal broadband programs moving forward, amnesty would only encourage bad actors to game future broadband auctions."

Although some electric cooperatives were forced to default due to inflation and other financial challenges, NRECA encouraged the FCC to maintain the integrity and requirements of its rural broadband programs.

As the FCC considers future programs aimed at closing the digital divide, NRECA made the following recommendations:

• Discontinue reverse auctions to award funding in high-cost areas.
• Employ greater due diligence and vetting on the front end of the application process.
• Set higher fines for defaults or noncompliance to help weed out entities with no intention of serving high-cost areas.

“As an association that represents hundreds of members committed to building broadband in their rural, high-cost communities, we feel that it is critical for the commission to stay the course to ensure integrity in the future, and focus on improving accountability, not only for RDOF and CAF II but any other programs aiming to bridge the digital divide," NRECA said.

Explore NRECA's resources on broadband.