MSEC Communications Withdraws From RDOF Broadband Program

WASHINGTON, May 20, 2026 – MSEC Communications has notified the Federal Communications Commission that it is withdrawing from the Rural Digital Opportunity Fund program. The company cited mounting construction and regulatory costs tied to serving the remaining locations in its award area. The Texas-based provider had originally been awarded nearly $4.2 million to deploy broadband service to 9,024 locations. According to the company, it has already completed deployment to more than 92 percent of those locations but determined the remaining buildout was no longer financially sustainable. “The estimated cost to deploy to the remaining locations significantly exceeds this amount,” the company wrote in its filing. “When these costs are combined with the additional costs of ongoing regulatory compliance … the Company cannot justify continuing to participate in the RDOF program.” MSEC, a high-speed fiber-optic internet service provider for regions of rural Texas, said additional obligations, including network performance testing, milestone verification reviews, letter of credit requirements, Lifeline administration and the possibility of serving additional locations, contributed to the decision. The provider stated it withdrew from the program so other federal funding could eventually become available for the remaining underserved areas. The withdrawal adds to a growing list of RDOF defaults as providers struggle with rising labor, material and infrastructure costs associated with rural broadband deployment. Approximately 37 percent of RDOF locations nationwide have experienced defaults, with Texas’ defaulting in 10 percent of its affected locations, according to mapping from the Benton Institute for Broadband & Society published earlier this year. The data is based on FCC Auction 904 filings tracking support recipients and defaults. The FCC has increasingly signaled it intends to hold defaulting participants accountable. Last year, the agency rejected a request from broadband provider Mercury Wireless to waive approximately $25 million in penalties tied to defaults affecting more than 92,000 RDOF locations. “Mercury’s decision to bid on areas, win support, apply for support, and then default has potentially delayed the deployment of broadband to tens of thousands of Americans living in high-cost areas,” the FCC wrote at the time. It remains unclear what penalties, if any, MSEC could face following its withdrawal.