Today the MN Public Utilities Commission heard from  Minnesota Telephone Alliance (MTA) and the Minnesota Rural Electric Association (MREA) and LTD Broadband about the case that MTA and MREA have made that the PUC should consider looking into LTD’s ETC license. Having ETC designation was part of the requirements to get the $311 million that they have qualified to potentially get to deploy FTTH in many part of rural Minnesota.

The PUC is moving forward with three of the recommendations (actually 1, 3 and 7 from the list below):

1. Open a proceeding to determine whether there is cause to revoke the ETC designation of LTD (Petitioners, Department, and OAG),
2. Refer the matter to the Office of Administrative Hearings (OAH) with the request that proceedings provide for discovery, the cross-examination of expert witnesses, and be conducted expeditiously (LTD and Department), or
3. Delegate scheduling to the administrative law judge (ALJ), designated lead commissioner, or subcommittee of commissioners (Department),

Full notes from the meeting (not proofed)

 

Should the Commission initiate a proceeding to consider revoking LTD Broadband LLC expanded ETC designation, which was granted in the Commission’s June 3, 2021, Order Approving Petition for ETC Designation in Certain Census Blocks?

1. Open a proceeding to determine whether there is cause to revoke the ETC designation of LTD (Petitioners, Department, and OAG), or
2. Decline to open a proceeding (LTD).

[If the Commission selects decision option 1, also select a type of procedure in decision options 3-5 and a schedule in decision options 8-10.]

Questions:

What would trigger us to change the ETC license? (Asked to petitioners.)

You have to ask yourself if you have reason to believe that LTD will be unable to fulfill their obligations. We think they won’t be able to meet their obligations. They have lost 30 percent of bid locations by missing deadlines. We’ve heard many complaints on their service. Three other states have decided to revoke their license because they felt they would not be able. North Dakota went so far as to say they would not be able to meet the obligations – going beyond simply concern. We’d like you to look into the facts to see how you feel once you take a second look.

So we said earlier that we had trust. And now we’re saying there may be evidence to the contrary. That’s the procedure?

Yes. Right now it’s a matter of deciding that it’s worth a second look. Then if you decide yes, then we look into the information leading to a revocation of license.

So what does LTD say about this?

You’re asking the same question as you asked a year ago – nothing has changed. This is a reconsideration rule. We don’t think this is a good idea. There’s nothing happening in MN that would make LTD less able as an ETC. They are on schedule with other federal contracts in Minnesota.

Also this might be a slippery slope. Any time an ETC is new and runs into a bump, can they be brought to the PUC again?

It seems that the petitioners are putting LEC )Local Exchange Carrier) rules on LTD and LTD is not an LEC.

Last year, the PUC decided this was a good idea because it meant $311 million federal funds coming to Minnesota.

Yes – we did say yes to LTD’s ETC because of the promise of the money. But we’re hearing from local communities that this possible contract is actually keeping them from getting grants and other funding that would help build broadband. We’re seeing this especially in Le Sueur. The next 6-10 months is a critical time for these communities for getting money.

As soon as we (LTD) get the money, we can start building broadband. Others could build in this area with their own money. The grants are the only tricky thing. Broadband wouldn’t get built as fast as the complaints seem to think it would happen. More than half the areas LTD bid on in MN had no competitive bids. The RDOF goes as fast at the FCC is making decisions. Maybe the complaints aren’t with LTD, they have with the FCC process.

Sounds like the Office of Attorney General thinks we should reopen this topic?

Yes. (From OAG.) The allegations raised do warrant further investigation. The PUC is not a court, it’s an ongoing process and things change.

Yes – I agree. (From another OAG person.) Today we are talking about opening a case that talks about whether LTD is the right chose for Minnesota. ETC designations are not static – but we need to look at changes.

What does the local Government say?

Le Sueur County is small and rural. We have been working for 5 years about how to get better broadband. We were successful with Border to Border grants. Unfortunately our last grant was denied because of the situation with LTD and RDOF. We are going to re-submit that application but it will now cost $400,000 more. We know our area well – the needs and the existing infrastructure. We don’t understand how LTD can meet our needs for the price that they bid.

So more than the lose of the RDOF money – folks are concerned that the RDOF project is blocking other money?

Right. This isn’t about competitive animus – it’s about wanting to get broadband to our communities.

Can LTD respond to the idea that nothing has changed? We are hearing about a lot of change.

Nothing has changed in Minnesota. In South Dakota it boiled down to one consultant being convincing. The FCC may or may not use ETC status in their decision making for funding.

We have concern that if we move forward and do reject the ETC would the $311 million come back to Minnesota?

No. The funds will roll into RDOF 2 and reauctioned.

Do you think it’s worth the risk?

More dangerous than having the money leave MN is spending the money and not getting what we need.

Would you be opposed to a trade secret agreement?

Yes – because our long form application is a work in progress.

AFTER BREAK

Sounds like LTD will be sharing info with the PUC.

Comments from PUC Commissioners

• I think we should move forward with proceedings – including testimony and cross examination. (Means)
• I agree – we should send to OAH for more development (Sullican)
• Yes – we should focus on ETC designation. So we really need to focus on 1, 3 and 7. (Tuma)
• I think we need to looing info proceeding. (Sieben)

The are moving forward with:

Open a proceeding to determine whether there is cause to revoke the ETC designation of LTD (Petitioners, Department, and OAG),
Refer the matter to the Office of Administrative Hearings (OAH) with the request that proceedings provide for discovery, the cross-examination of expert witnesses, and be conducted expeditiously (LTD and Department), or

Delegate scheduling to the administrative law judge (ALJ), designated lead commissioner, or subcommittee of commissioners (Department),

Here are all of the items on their docket:

Should the Commission initiate a proceeding to consider revoking LTD Broadband LLC expanded ETC designation, which was granted in the Commission’s June 3, 2021, Order Approving Petition for ETC Designation in Certain Census Blocks?

1. Open a proceeding to determine whether there is cause to revoke the ETC designation of LTD (Petitioners, Department, and OAG), or

2. Decline to open a proceeding (LTD).

[If the Commission selects decision option 1, also select a type of procedure in decision options 3-5 and a schedule in decision options 8-10.]

What type of procedure should be used?

3. Refer the matter to the Office of Administrative Hearings (OAH) with the request that proceedings provide for discovery, the cross-examination of expert witnesses, and be conducted expeditiously (LTD and Department), or
4. Initiate an expedited proceeding pursuant to Minn. Stat. § 237.61 for record development (Petitioners), or

[If the Commission selects decision option 4, also select a type of expedited proceeding in decision options 5–6.]

What type of expedited proceedings should be used, and should it include party crossexamination?

5. Designate a sub-committee of Commissioners under Minn. Stat. §216A.03, subd. 8 (Petitoners), [if selected, also select a sub-option], a. with party cross-examination, or b. without party cross-examination. Or
6. Designate a lead Commissioner under Minn. Stat. § 216A.03, subd. 9 (Petitioners) [if selected, also select a sub-option] a. with party cross-examination, or b. without party cross-examination. What schedule should be used?
7. Delegate scheduling to the administrative law judge (ALJ), designated lead commissioner, or subcommittee of commissioners (Department), or
8. adopt one of the schedules proposed by the petitioners (Petitioners), or
9. adopt the schedule proposed by LTD (LTD).

Should the Commission order LTD to submit its FCC RDOF long form application to the Commission?

10. Require LTD to provide its long form application to the Commission, Department of Commerce, Attorney General’s Office and Petitioners subject to the terms of an approved Protective Order(Petitioners, Department, and OAG), or
11. Do not require LTD to provide its long form application to the Commission (LTD). Should the Commission address LTD’s certification for Rural Digital Opportunity Fund (RDOF) funding in 2023?
12. Do not address LTD’s certification for Rural Digital Opportunity Fund (RDOF) funding in 2023 (LTD, Department, and OAG), or
13. Decline to certify LTD for 2023 funding (Petitioners).