Earlier this week FCC announced the winners of the RDOF funding. There was a standout winner in Minnesota – LTD Broadband. In fact, beyond Minnesota, the LTD Broadband win is one of the biggest in the US. I’ve heard from several people who have been surprised by this. This is the first, but may not be the last, compilation of what folks are saying about RDOF.
Muninetworks (Chris Mitchell) is also in a mode of comment gathering…
The auction resulted in far more gigabit – 85% of locations I believe – than anyone expected, at far lower subsidy than expected. However, there is a lot of frustration and confusion because it is not clear that some of the top bidders can deliver. NTCA – The Rural Broadband Association – shared my original enthusiasm for RDOF and our concerns – best articulated over the years by Jon Chambers from Conexon – that the FCC was going to blow this auction by not ensuring those who bid had the capacity to deliver on the promised level of service. Shirley Bloomfield, CEO of NTCA, wrote this and recently tweeted on this:
Not feeling quite as bullish about this final outcome for RDOF #1 and worry that it will take years to show that rural America is still waiting for #broadband and resources needed will be gone. Hoping @FCC has a robust back-end review so the process won’t fail Americans again.
Doug Dawson, President of CCG Consulting, has addressed this in the greatest detail so far, arguing that this “means the FCC believes that fixed wireless technology is the functional equivalent of fiber” even though the underlying point-to-multipoint architecture “can’t be used to deliver giant bandwidth to more than a few customers – and it’s not really designed to deliver gigabit download, and certainly not a symmetrical gigabit.” The result? “By allowing WISPS to claim gigabit capabilities, the FCC cheated huge numbers of people out of getting fiber.”
And specifically about LTD…
But the real puzzle is LTD Broadband, the WISP that took away the biggest awards. They are slated to get $1.3 billion over the next 10 years to build gigabit to more than 500,000 locations – often islands in the middle of non-subsidized areas.
Notice that LTD only qualified to bid to build fiber at the gigabit tier. They do not have permission to substitute wireless, from what I (and everyone else I have talked to) understand.
OK, so what? Assume that LTD will just build fiber. Cooperative Network Solutions has published a map of the winners. These are high cost areas that were bid so long ago that successful fiber network operators in the adjacent areas decided the subsidies were too low for them. Somehow LTD is going to get financing and the expertise to build these areas all out with lower subsidies than what local folks could do? Seems improbable.
MinnPost also spoke about LTD…
While local broadband advocates celebrated the infusion of cash, the grant awards also raised some eyebrows. That’s because one relatively small company with Minnesota ties came away with the vast majority of the federal money for the state: LTD Broadband.
The company won nearly $312 million to develop high-speed internet in Minnesota, which is far more than was granted to other competitors, including larger companies like CenturyLink and local cooperatives like Arrowhead Electric. LTD Broadband’s success stretched beyond Minnesota, too. The company was awarded $1.32 billion in total for projects across 15 states, the highest amount of cash for any company in the FCC’s round of grants.
In an interview, Corey Hauer, LTD Broadband’s CEO, said he was confident his company could grow fast and meet the challenge. But local competitors and broadband experts said they were concerned LTD could not deliver what it promised, especially since the company has focused primarily on wireless internet technology while it now promises fiber-optic connections.
More on LTD…
LTD uses an internet technology called fixed wireless, where homes get service from a signal placed high on a structure, such as a water tower or a silo. It can be delivered cheaper than fiber-optic cables, which require physical connections to houses.
State officials in Minnesota prefer fiber projects in their own grant programs because they say the technology is more reliable and delivers faster speeds.
Hauer said Minnesota officials have been reluctant to support fixed wireless, which he says can meet essentially every need of home customers and businesses besides unusual tasks like downloading large games.
Still, Hauer said LTD has done fiber projects and will actually be obligated to build fiber in the grant areas. He said there may be a component of fixed wireless in broadband development for the grant program, but declined to go into details, saying the FCC prohibits divulging of certain development plans for grant-winners for now.
The company will be required to offer gigabit internet, which has speeds far above what Minnesota considers to be high-speed broadband. Hauer also contends LTD can spend less to grow their coverage, giving the feds more bang for their buck.
And a view from another provider…
Joe Buttweiler, director of business development for Consolidated Telecommunications Company (CTC), which is headquartered in Brainerd, said there is “a lot of anxiousness right now about the results.”
Auction winners must submit a longer application in coming months that gives more detail on their broadband plans, finances and technology to the FCC.
Buttweiler said many in the industry don’t believe LTD can offer gigabit speeds with fixed-wireless technology, but said if they intend to use fiber, “we’d love to see the plans that they’re going to provide to the FCC.”
Buttweiler said building a “full-fiber network throughout all of Minnesota” will be an expensive task that could be hard to fulfill at the cheap price LTD has promised. “I just have a really difficult time believing they can do it for that amount of money,” he said.
Buttweiler’s CTC is a member of the Minnesota Rural Broadband Coalition, while LTD is not. CTC also is a competitor. The company was awarded $2.04 million from the FCC grants.