July 20, 2022
LTD Broadband, the top bidder in the Rural Digital Opportunity Fund (RDOF) that can't seem to hold on to its funding, may see its dollars revoked in yet another state.
This time the company is being challenged in Minnesota, where the Public Utilities Commission (PUC) in that state has ordered an investigation to determine if the company can deliver on the $311 million it was designated by the FCC to build out in the state's rural areas.
Figure 1: LTD Broadband, a fixed wireless provider, has faced criticism and questions over its ability to build out gigabit fiber.
(Source: gualtiero boffi/Alamy Stock Photo)
As reported by MinnPost, the PUC reversed its earlier decision in June 2021 to approve LTD as an "eligible telecommunications carrier" (ETC) – a designation it needs in order to receive FCC grants – by asking an administrative law judge to determine if that status can be revoked.
LTD was originally awarded $1.32 billion in the $9.2 billion FCC auction in 2020. The company was to spend those funds expanding broadband across 15 states. But it has since had its ETC status challenged for a variety of reasons – including widespread doubt that the fixed wireless company can build out gigabit fiber – and has lost grants and withdrawn its bids in several states, including South Dakota and California.
The PUC's decision to investigate LTD came in response to a petition brought by the Minnesota Telecom Alliance and Minnesota Rural Electric Association requesting to initiate a proceeding to revoke LTD's ETC status and deny its funding certification for 2023.
"Since the LTD Expansion Order in June of last year, LTD has failed to obtain ETC designations for RDOF funding in seven of those 15 states," wrote the parties. "Newly available facts will similarly show that LTD cannot meet the far more extensive commitments it made to qualify for RDOF funding for approximately 102,000 locations in Minnesota. The record will also show that LTD's bid harms the public interest in Minnesota by preventing access to RDOF support and other public funds that could be used to extend broadband service to these locations, which include over 160,000 Minnesota residents."
LTD did not respond to a request for comment at the time of this writing.
But, in an email exchange, a spokesperson for the Wireless Internet Service Providers Association (WISPA) called LTD "a WISPA member in good standing" and said the organization trusts the FCC's vetting process. The FCC is in the process of evaluating each RDOF winner's long-form application to ensure they can deliver on their funding commitments and has already approved applications for roughly 300 bidders.
"[We] are confident that the FCC's RDOF vetting process is sound and backed by tremendous agency expertise; and we trust any related matters, such as here, will be conducted in an open, fair and transparent manner to ensure the unserved obtain the access they need, as delivered through RDOF," said the WISPA spokesperson.
The need for BEAD
The decision comes as the federal government is preparing to deliver $42.45 billion in BEAD grants, designated through the Biden administration's infrastructure law. One sticking point there is that regions that have RDOF dollars assigned will not be eligible for BEAD funding. If ISPs can't fulfill their RDOF obligations, those communities could be left without access to high-speed Internet for years to come.
That's a concern with LTD in Minnesota, as the company won $311 million of the $408 million awarded in the state.
Indeed, as the Minnesota Telecom Alliance and Minnesota Rural Electric Association wrote in their petition, "there is a great risk that no other federal broadband funding sources will be available for any of those approximately 102,000 locations until after LTD fails to meet FCC milestones, by which time current federal funding will be likely to have expired." It further cites BEAD as one such source of funding.
In response to questions from Light Reading, Cori Rude-Young, director of communications and public affairs at Minnesota PUC said BEAD funding may be a concern for the groups that brought the petition but was not the impetus for PUC's decision.
"The main focus is LTD's capability as an eligible telecommunications carrier (ETC). While BEAD [funding] may be a concern of the parties and may be factored into the proceeding schedule, the Commission's concern is the RDOF funding and the ETC designation related to that," said Rude-Young.
A pre-hearing conference with an administrative law judge on the LTD matter in Minnesota will be held on August 24, where a schedule will be set for the remaining proceedings.
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