DZS gets amped for RDOF

Staying true to the word of its new CEO, DZS (formerly Dasan Zhone) is entering the chase for the billions of dollars tied to the US Rural Digital Opportunity Fund (RDOF).

Phase I auction of the RDOF opens for bidding October 29.

The network access vendor, now led by telecom industry vet Charlie Vogt, today introduced "RDOF Amplify!," a program designed to "sponsor and assist" RDOF recipients. Boiled down, it means DZS, which is touting US-based manufacturing located in Tampa, Florida, wants to be front and center as RDOF winners seek out fixed and mobile products and technologies to foot the bill in rural areas in need of broadband.

Vogt, who took the reins of DZS effective August 1, views RDOF as a growth driver as it looks to accelerate its business in North America.

"The pursuit of the Rural Digital Opportunity Fund [is] something that we're going to be aggressively pursuing," Vogt said on the company's Q2 2020 earnings call in August. "There's pretty amazing players in the United States. I think there's a great opportunity for DZS to be successful in that particular market, especially with our fiber access platform."

Industry watchers note that suppliers such as DZS will need to tweak their business models for RDOF winners that are faced with multi-year projects.

"Over the last few years, many access vendors have changed their sales models to emphasize a software licensing component that is layered on top of their traditional hardware costs, not unlike what the airlines did when they added baggage fees to develop additional revenue streams from passengers," Teresa Mastrangelo, principal analyst and founder of BroadbandTrends, explained in DZS's announcement. "Although these costs may seem relatively innocuous in the first year, they add up when accounting for the serviceable life of these products, in some cases doubling the effective cost over time. Given the 10-year duration of RDOF, awardees are encouraged to assess the total cost versus first cost, comparing solution cost with and without annual license fees."

Hundreds of qualified bidders

While DZS will have plenty of competition in the RDOF arena from other suppliers focused on wireline access, it will also see activity from satellite broadband providers.

A set of companies – SpaceX, Hughes and Viasat – all are eligible to bid in the RDOF bonanza, Space News reported, citing the FCC's list of qualified bidders released October 13.

That eligibility also arrives as SpaceX inches toward a commercial launch in the wake of ongoing beta testing. Meanwhile, Viasat is exploring a constellation of low-Earth orbit (LEO) satellites and Hughes Network Systems, which has plowed $50 million into OneWeb, is now in better position to deliver lower-latency services over a LEO system, Space News points out.

The FCC list includes 386 qualified bidders with designs on servicing about 6 million homes and businesses in the initial phase. The FCC has not set dates for RDOF's phase II.

Several cable operators also qualified, including Altice USA, Allen's TV Cable Service, Atlantic Broadband, Blue Ridge Cable, Cass Cable TV, Cox Communications, Mediacom Communications and Midco.

Charter Communications, which signaled its intent to jump into the bidding in July, appears to be a qualified bidder listed under its CCO Holdings subsidiary.

Related posts:

• Viasat tees up LEO satellite broadband plan to reach rural US
• Dasan Zhone becomes DZS, outlines plan under new CEO
• Charlie Vogt heads back to the future
• Charter's RDOF plan could target 2.5M homes
• Hughes to join OneWeb consortium

— Jeff Baumgartner, Senior Editor, Light Reading, special to Broadband World News