“Lumen Facing FCC Penalties After Withdrawing from RDOF Locations”
WASHINGTON, September 13, 2024 — A federal agency is holding Lumen Technologies accountable after the company withdrew from thousands of Rural Digital Opportunity Fund (RDOF) locations across three states.
Lumen, which initially won bids to serve over 77,000 homes and businesses in the 2020 RDOF reverse auction, is now defaulting on 3,500 of those locations. The Federal Communications Commission (FCC) announced in a public notice that it intends to recover all previously allocated financial support for these defaulted areas when Lumen’s deployment term concludes.
Lumen’s Withdrawal and Impact on Rural Communities
Led by CEO Kate Johnson, Lumen decided to withdraw from RDOF locations in New Mexico, South Dakota, and Wyoming. The company, based in Monroe, Louisiana, provides Internet access to customers in 16 states. At the end of the second quarter, Lumen reported 2.65 million broadband subscribers, a decrease of 52,000 from the previous quarter.
“Lumen has observed deployment costs increase dramatically in many areas since it made its bids,” said Lumen Vice President and Deputy General Counsel Joseph Cavender in an August letter to the FCC. Cavender acknowledged that Lumen may be subject to non-compliance penalties as a result of its defaults.
FCC’s Response to Lumen’s Default
In its public notice, the FCC emphasized that it expects companies to fulfill their obligations to connect underserved areas to broadband, especially after securing federal funding.
“While some defaults are anticipated due to changes in business plans or economic conditions, carriers are still expected to meet their deployment commitments. Failing to do so jeopardizes the opportunity to bring broadband to these communities and undermines the integrity of our programs,” the FCC’s Wireline Competition Bureau stated in the notice.
If the FCC is unable to find an alternative provider for these defaulted areas, they will be prioritized for service under other federal broadband access programs.
FCC Urges Transparency from Other Providers
The FCC also requested that any other companies considering withdrawal from RDOF locations contact the Wireline Competition Bureau and consult with relevant state broadband offices or Tribal governments to discuss their circumstances.
