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Optical Networking, Redefined.
January 7, 2021

RDOF and its Opportunities for Rural Network Providers


Consumer and enterprise demand for faster speeds and higher bandwidth may have surged in 2020, but the shift was always on the agenda. Increased adoption of technologies like the IoT, 5G, ultra high-definition streaming and cloud gaming have led network operators to invest in network upgrades to do more with existing fiber infrastructure. We are thrilled to talk about a program that is completely changing the game for the U.S. optical networking industry and underserved areas of the country that do not already have fiber networks. We’re referring to the Federal Communications Commission’s (FCC) Rural Digital Opportunity Fund (RDOF). Here is why this program is so important.

What is RDOF?

RDOF is an FCC program that will help close the digital divide in the U.S. The FCC has allocated $20.4 billion to qualifying providers for the construction of rural broadband networks in underserved areas of the nation. This total budget is being awarded across two phases. Winners of the Phase I auction, which has already occurred, will receive support from a $9.2 billion fund over a period of 10 years. Phase I focused on those U.S. census blocks in which no providers were offering service at an absolute minimum speed of 25/3 Mbps. In Phase II, the remaining money will be spent on areas not completed in Phase I as well as those census blocks that have already been deemed as partially serviced. 

RDOF Results

The winners of the Phase I auction have been named here. According to Telecompetitor, the top winners “plan to deploy service supporting gigabit speeds throughout a large part, if not all, of the areas for which they won funding.” These organizations include LTD Broadband, Charter, Rural Electric Cooperative Consortium, SpaceX, Windstream, AMG Technology (Nextlink), Frontier, Resound Networks, Connect Everyone (Starry) and CenturyLink. In total, 170 entities, some of which are consortiums of multiple companies, won funding. These include household names like Cox and Hughes. Here are the two most important takeaways from the Phase I auction:

  1. The top 10 winners account for 76% of all the money awarded
  2. 85% of the winning bids were for gigabit services 

What RDOF Means for the Optical Networking Industry 

Overall, the RDOF program will bring a new surge in demand for the optical equipment manufacturing industry. The proliferation of high-speed services throughout rural America will require the deployment of fiber to new locations. Just how the Phase I winners will go about deploying fiber remains to be seen. Some individuals are already raising concern that the winners may run into trouble attempting to deliver on their commitments. For now, the auction bids show that some network operators are examining leveraging Fiber-to-the-Premise (FTTP) and Fiber-to-the-Home (FTTH). Others may pursue different types of network architectures. 

Here is the critical point. As they get ready to roll out new fiber into rural areas, network operators will need flexible engineering companies that can design and manufacture optical equipment to their precise specifications. Deploying fiber in rural areas brings a host of challenges – not all of which can be solved by traditional, large-name NEMs. At Precision OT, we have worked with MSOs, service providers, telcos and a host of other clients who have had difficulties merging off-the-shelf optical transceiver solutions with their own highly customized networking equipment. Where the big-name NEMs cannot solve for such unique requirements, our team can.  

Speed to Market, Customer-Centric Support and Cost-Effectiveness: Key Precision OT Benefits

True custom solutions deliver the flexibility, agility, performance and reliability that today’s network operators need, especially as they look to deploy new fiber networks in remote and challenging physical environments. Filling an order is one thing, but offering hands-on support throughout a customers’ optical networking journey is essential to speeding time to market and lowering the total cost of ownership. As we have written earlier, “network operators are seeking out vendor partners that offer value that goes beyond an NEM’s one-size-fits-all approach.” Though we have an extensive inventory of optical networking equipment, we leverage our Advanced Engineering Group and lab to fully test out solutions and how they will impact your network before launching them in the real world. In this way, we can act as a trusted advisor for new high-speed, broadband network deployments across rural America.

One final point worth considering is that many network operators end up overpaying NEMs for transceivers by 50% or more, according to data from Gartner. These companies often use a variety of Fear, Uncertainty and Doubt (FUD) tactics that make operators hesitant to invest in third-party optics. However, with Precision OT, our customers get the NEM-compatible equipment they need with reliable support (we offer lifetime warranties) – all in a cost-effective manner. For RDOF winners that wish to complete their rollouts on time and on budget, Precision OT could be the perfect partner.

Want to know more about what Precision OT does and how our Advanced Engineering Group can help you? Read our blog, download our available resources and watch our recent Light Reading webinar on access networks, or reach out to us with any question you might have!