The bidding strategy for this fall’s “reverse” Rural Digital Opportunity Fund (RDOF) auction is to bid as low as possible while maintaining a financially feasible broadband project. But how do you find that bidding sweet spot? By using JSI’s RDOF Bid Optimizing Tool, which uses your broadband business plan to help you determine the lowest possible bid for your project.

This incremental business case model allows you to analyze conditions for up to 25 census block groups, either individually or as a package. The easy-to-use model walks you through the major inputs, which is especially useful if you are just entering the broadband market. You simply input your CAPEX, subscriber build up, revenues based on APRUs, and expenses and the model shows you, based on your inputs, what bid makes sense and how low you could go in reserve price for the chosen area. In addition, you can change the reserve price, your expected take rates, and planned homes passed to identify how low you can bid for the project to remain financially viable.

The model’s three financial statements and dashboard also help with your broadband business planning by providing details on net present value (NPV) and internal rate of return (IRR), when net income and cash flow turns positive, and how much cash outlay is needed.

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What is the RDOF Auction?

The FCC plans to hold a “reverse auction” this fall to award $16 billion in federal support to fund rural broadband buildout projects in unserved census block groups across the country. Unlike usual auctions, the funds will be awarded to the bidder with the lowest bid. That’s why it is so important to look closely at your project’s forecasted costs and penetration rates so that your bidding strategy makes financial sense in the long run.

The auction itself kicks off in late October, but anyone interested in participating must submit a short-form application to the FCC before July 15. JSI is available to help with this application, as well as to answer any questions you have about the auction.