The Minnesota PUC decided to continue to move forward to look at revoking LTD Broadband’s ETC designation. (Background: LTD was awarded an opportunity to apply for$311 million in federal RDOF funding. They needed the ETC designation from the MN PUC to qualify; industry folks asked the MN PUC to rethink their designation because there were concerns about LTD being able to fulfill the contract. Last month, their application for RDOF was rejected.)
Last month, MTA (MN Telecom Alliance) and MREA (Minnesota Rural Electric Association) asked the PUC to suspend LTD Broadband’s ETC status while they are under consideration for ETC revocation. There is a prehearing conference scheduled for April 24. Documents and information for that meeting have been posted on the MN PUC website. The most recent is from the Department of Commerce and signed by MN Attorney General Keith Ellison and supports the position to continue on the case…
Pursuant to Minn. R. 1400.6600 (2021), the Minnesota Department of Commerce respectfully requests that the Administrative Law Judge grant the Petitioners’ motion to certify the January 18 decision to stay this proceeding during the pendency of LTD Broadband’s Federal Communications Commission administrative appeal.1 THIRD PREHEARING ORDER (Jan. 18, 2023) (eDocket No. 20231-192240-01) (“Stay Order”); Petitioners’ Motion to Certify (Mar. 29, 2023) (eDocket No. 20233-194309-04). A Commission order directing the parties to proceed with this contested case would facilitate the ultimate termination of the matter and full record development prior to an FCC decision. While judicial economy is an important consideration, it should not come at the expense of other critical public interests. In this case, those interests include the sound stewardship of limited public resources—approximately $31 million a year—to an entity that may be incapable of delivering on its commitments to Minnesota.
The last sentence says a lot. The entire statement is surprisingly easy to read for those of us not steeped in legalese but I’m going to excerpt the part that it most pertinent to this update…
Although it is possible that the FCC may ultimately deny LTD’s appeal, Minnesota should still undertake a contested case proceeding now. If LTD’s administrative appeal prevails, absent suspension or resolution of this proceeding, federal support would begin flowing to LTD. 47 C.F.R. § 54.802(d) (2022); see, e.g., In re Rural Digital Opportunity Fund, WC Docket No. 19- 126, Rural Digital Opportunity Fund Support For 7,608 Winning Bids Ready to Be Authorized (Dec. 16, 2021). While this would be an acceptable outcome if LTD possesses the technical, managerial, and financial capability to deliver on its commitments, Petitioners have raised allegations that suggest LTD may be unable to deliver:
LTD has made significantly different construction cost representations to state agencies when seeking grant support than to the FCC for RDOF support. Thompson Decl. at 11.
LTD’s construction cost estimates are significantly less than those developed by Petitioners’ engineering consultants. Id. at 13.
The South Dakota commission already concluded that LTD lacked the capacity to construct and operate a much smaller network in South Dakota. In re Appl. of LTD Broadband, LLC for Designation as an ETC for Purposes of Receiving Federal Universal Support, Docket No. TC21-001, FINAL DECISION & ORDER DENYING APPLICATION at 16-17 (SD PUC Mar. 21, 2022).
LTD has already defaulted on RDOF locations in Iowa, Nebraska, and North Dakota, California, Kansas, and Oklahoma. Rural Digital Opportunity Fund Auction (Auction 904), DA 21-908, Order ¶ 16 (July 26, 2021); Rural Digital Opportunity Fund Auction (Auction 904), DA 21-1311, Order ¶ 18 (Oct. 20, 2021).
In addition to advancing this proceeding towards termination, lifting the Stay Order would reduce the risks associated with a sudden FCC reversal; namely, funding flowing to an entity the Commission ultimately concludes is incapable of delivering on its commitments. The secondary consequences of such an outcome are equally concerning. Alternative state and federal funding would no longer be available. Motion to Suspend at 21. Minnesotans in communities designated for RDOF support via LTD would continue to lack access to high-quality broadband and voice services. Given the important public considerations at stake and the time sensitivity of this proceeding, this factor supports certification of the Stay Order to the Commission
And here is their conclusion…
For the reasons discussed above, the Department respectfully requests that the Administrative Law Judge grant Petitioners’ motion to certify the Stay Order to the Commission.