Single Bid Default Bars Company from RDOF Participation

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The FCC’s Wireline Competition Bureau (Bureau) has denied a petition for waiver of the rule prohibiting entities that defaulted on all of their Connect America Fund (CAF) Phase II (Auction 903) bids from participating in the Rural Digital Opportunity Fund (RDOF) Phase I auction (Auction 904). Following Auction 903, petitioner Johnson Telephone Company (Johnson) defaulted on its single winning bid for 47 locations and paid a $3,000 penalty. Because this default of a single bid amounted to Johnson defaulting on “all” of its Auction 903 bids, the FCC will bar Johnson from participating in Auction 904 pursuant to the FCC’s RDOF eligiblity rules. The FCC was unpersuaded by Johnson’s arguments the rule was an “extremely harsh penalty” and that it was “doubtful that the Commission realized the harsh impact of this policy upon a small company.” Indeed, the FCC reiterated that it “expects all bidders to act in good faith and [takes] voluntary defaults very seriously.”

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