MN PUC notes on LTD Broadband situation: stayed ruling, ILSR may intervene, LTD counsel withdraws

This is an ongoing saga that many of us are watching closely and some might want a little recap…

The Minnesota PUC decided to continue to move forward looking 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.)

Here’s the latest update

LTD requested that this matter be stayed pending LTD’s appeal of the Federal Communications Commission’s (FCC) denial of its Rural Digital Opportunity Fund (RDOF) long-form application. Minnesota Telecom Alliance (MTA) and Minnesota Rural Electric Association (MREA) (together, Petitioners), the Minnesota Department of Commerce and the Office of the Attorney General-Residential Utilities Division argue that this matter should proceed to hearing. The parties filed letters in support of their respective positions and the record on the parties’ requests closed on October 18, 2022, the date the last letter was filed.

On January 18, 2023, the MN PUC decided…

IT IS HEREBY ORDERED THAT: 1. These proceedings are STAYED pending a ruling by FCC on LTD’s appeal of the denial of its long-form application. 2. LTD shall serve and file a status report every 120 days beginning on February 1, 2023. 3. A prehearing conference will be held by telephone on March 6, 2023, at 2:30 p.m. to review the status of the case. A

They also decided (also Jan 18) …

On September 16, 2022, the Institute for Local Self-Reliance (ILSR) filed a Motion to Intervene (Motion). LTD filed an objection to the Motion on September 23, 2022. Based on all the files and proceedings of the matter, the Administrative Law Judge makes the following: [185245/1] 2 ORDER 1. The Motion of Institute for Local Self-Reliance is GRANTED. 2. The Institute for Local Self-Reliance is admitted to this proceeding as a full party. 3. The Institute for Local Self-Reliance will file a Notice of Appearance at its earliest convenience but in no event later than January 27, 2023.

And on January 19, Taft et al withdrew as LTD Broadband’s Counsel

Please take notice that as of January 19, 2023, and pursuant to Minn. R. 1400.5700, Taft Stettinius & Hollister LLP hereby withdraws as counsel for LTD Broadband, LLC. LTD Broadband, LLC’s address is PO Box 3064, Blooming Prairie, MN 55917 and its phone number is (507) 369-2669.

Will BEAD fund unlicensed spectrum? Good question and it will matter in Minnesota!

So many posts about the FCC maps and funding and details because the details will impact how much money communities will receive for broadband in the next few years. The issue this post – unlicensed spectrum versus licensed spectrum. Telecompetitor reports

The BEAD program is designed to cover some of the costs of deploying broadband to unserved rural areas. In establishing rules for the program, NTIA omitted fixed wireless service that relies totally on unlicensed spectrum for last mile connectivity from its definition of reliable service – a decision that impacts the BEAD program in two ways.

It makes FWA deployments using unlicensed spectrum ineligible for funding. And it makes areas that have high-speed broadband eligible for overbuilds if the only high-speed broadband available is FWA that relies on unlicensed spectrum.

But some folks want that changed…

Seven U.S. senators sent a letter to Alan Davidson, head of the National Telecommunications and Information Administration, today urging NTIA to revise its definition of reliable broadband for the Broadband Equity Access and Deployment (BEAD) program.

So what’s the difference between licensed and unlicensed spectrums?

Here’s a definition from IotaComm. I was hoping for a less commercial perspective but also high level enough to take in easily.

Most of the radio spectrum is licensed by the FCC to certain users, for example, television and radio broadcasters. Individual companies pay a licensing fee for the exclusive right to transmit on an assigned frequency within a certain geographical area. In exchange, those users can be assured that nothing will interfere with their transmission.

Alternatively, organizations can still use the airwaves to transmit communications without getting permission from the FCC, but they must transmit within those parts of the spectrum that are designated for unlicensed users. The amount of spectrum that is available for public and unlicensed use is very small—only a few bands. Both the size of the area and the lack of exclusivity mean there’s greater potential for interference from other users located nearby. (It’s like the “wild west” of radio communication.)

The Telecompetitor article touches on it a little…

NTIA hasn’t said much about why it defined reliable broadband as it did. But David Zumwalt, CEO of the Wireless Internet Service Providers Association (WISPA) told Telecompetitor a few months ago that NTIA’s primary concern was the future availability of unlicensed spectrum.

WISPA is particularly concerned about whether areas that already have unlicensed high-speed FWA will be eligible for overbuilding through the BEAD program, as many WISPA members already have made high-speed FWA deployments that rely on unlicensed spectrum.

Folks in Minnesota may have a special interest in this issue. According to the FCC map, LTD Broadband is serving a large portion Southern Minnesota with unlicensed spectrum, as the map below indicates.

MN Attorney General, MTA and MREA and Taft law chime in on MN PUC’s investigation into LTD Broadband

This is an ongoing saga that many of us are watching closely and some might want a little recap…

The Minnesota PUC decided to continue to move forward looking 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.) I have been tracking new documents posted to the PUC site. The latest is a letter from Taft Law supporting LTD’s request to wait until after the conclusion of LTD’s appeal of the FCC’s denial of its RDOF long-form application to address their ETC status. They do this by recapping what has happened in PUC offices in other states. The PUC has received some reactions to that request…

 

MN Attorney General Keith Ellison says…

The Office of the Attorney General—Residential Utilities Division (“OAG”) files this supplemental letter pursuant to Ms. Severson’s October 14, 2022 email stating that all parties may file additional responses or supplemental information by 4:30 today. This letter responds to the letter submitted earlier today by LTD Broadband LLC (“LTD” or “Company”).

LTD claims that the OAG’s concerns that the Company could receive support before it is thoroughly vetted, that Rural Digital Opportunity Fund (“RDOF”) support could flow prematurely to the Company, and that it could be three years before the Federal Communications Commission (“FCC”) or the Minnesota Public Utilities Commission (“Commission”) could act if that occurred are unfounded. LTD claims are inaccurate and warrant a further response.

First, it is the Commission, not the FCC that is responsible for determining whether LTD should receive an eligible telecommunications carrier (“ETC”) designation, or in this case have its designation revoked. If the Commission determines that LTD is not able to meet its RDOF commitments in Minnesota and revokes LTD’s expanded ETC designation, any decision by the FCC is moot; LTD would no longer be eligible to receive RDOF support even if the FCC Bureau[1]level decision is overturned.

Second, even if the OAG has six-to-eight weeks’ notice before LTD’s long-form application is approved and the “ready to authorize” Public Notice issues, once an ETC receives “ready to authorize” status, there is no delay in disbursement of support. Rather, the Public Notice states that, upon its issuance, “the Universal Service Administrative Company (USAC) is authorized and directed to take the steps necessary to disburse from the Universal Service Fund the amounts identified in” the Public Notice and to disburse the support in “120 monthly payments, which will begin at the end of [the] month.” It defies logic for LTD to suggest that six-to-eight weeks would be sufficient time to take the appropriate next steps to determine whether the Company’s expanded ETC designation should be revoked prior to “LTD actually receiv[ing] RDOF support.” Once RDOF support is disbursed, it is very difficult to recover. Thus, it is vital that discovery commence and the contested case be conducted “expeditiously,” as requested by the Commission in its referral order.

Third, it is entirely accurate to say that it could be three years before the Commission or the FCC could act to stop the flow of RDOF support to LTD. This is because the FCC’s rules do not require LTD to provide the Commission with any information about whether the Company is meeting its FCC-mandated network buildout requirements until the third year that LTD receives RDOF support. And consumers, to the extent they have concerns about LTD’s performance, will not raise their concerns with the FCC or USAC, nor would the FCC or USAC likely be the ones to address them. As the entity tasked with designating and certifying ETCs, that task falls to the Commission. Indeed, the instructions to the annual certification form for RDOF recipients states that “[i]f USAC believes there may be a violation or potential violation of a statute or a Commission regulation, rule, or order, [the ETC’s] form may be referred to the Federal, state, or local agency responsible for investigating, prosecuting, enforcing, or implementing the statute, rule, regulation, or order.”

The MTA and MREA say (in part)…

This letter is submitted in response to the letter filed on behalf of by LTD Broadband, LCC (“LTD”) on October 13, 2022.

Petitioners agree with the Department of Commerce (“Department”) and Office of Attorney General (“OAG”)1 that LTD’s request for stay should be denied and this proceeding be conducted expeditiously as the Commission has ordered. 2 As the Department and OAG stated, the Nebraska and South Dakota decisions actually “highlight why the Minnesota proceeding should continue.” Those two decisions preserved a status quo in which LTD is currently not eligible for Rural Digital Opportunity Fund (“RDOF”) support. As a result, the Nebraska and South Dakota decisions protect the public interest in those states from the negative consequences of a possible reversal of the FCC’s decision to deny LTD’s long form.

The opposite is true in Minnesota. In Minnesota, a stay would allow LTD to obtain RDOF funding in the event of an FCC reversal before the Commission would have an opportunity to determine whether it should revoke the Eligible Telecommunications Carrier (“ETC”) designation LTD needs to qualify for this RDOF funding.

The Commission initiated this proceeding out of concern (based on information presented by Petitioners and other commentors) that LTD would not be capable of delivering on its RDOF commitments to provide broadband to over 102,000 unserved locations in Minnesota. The purpose of the proceeding was to reexamine whether LTD qualifies for the ETC designation which is a precondition to receiving RDOF funding. Given the importance of the decision and its potential effects, the Commission wanted the proceeding completed “expeditiously.” 3

Staying this proceeding would frustrate the Commission’s intent and could lead to severe and irreversible harm to the public interest that this proceeding was initiated to protect. Approval of RDOF support for LTD in Minnesota would significantly reduce Minnesota’s share of approximately $41.5 billion in new federal broadband funding under the Broadband Equity, Access, and Deployment (“BEAD”) program. 4 Each state’s share of this BEAD funding will be “distributed primarily based on the relative number of “unserved” locations … in each State and Territory.”5 If the FCC were to reverse its decision as to LTD in Minnesota, LTD’s 102,000 Minnesota locations would no longer be considered unserved.6 These locations are a very substantial share of Minnesota’s unserved locations. As a result, Minnesota’s BEAD funding would be proportionately and substantially reduced.7

Taft Law (LTD Broadband) says…

Pursuant to Ms. Severson’s October 14, 2022 email stating that all parties may file additional responses or supplemental information by 4:30 today, I write to provide a brief response to statements made in the October 14, 2022 letter jointly submitted by the Department of Commerce and the OAG (“Department/OAG Letter”).

The Department/OAG Letter expresses concern that LTD could receive RDOF support before it is “thoroughly vetted,” that RDOF support could “flow prematurely” to LTD, and that it “could be three years” before the Commission or FCC could act if that occurred. Those concerns are unfounded.

First, RDOF support cannot flow to LTD until and unless LTD is successful in challenging the FCC staff decision denying LTD’s long-form application. If LTD is successful in doing so, and the FCC grants LTD’s long-form application, that will mean that LTD has been “thoroughly vetted” by the FCC and that RDOF support is not “flowing prematurely” to LTD.

Second, it is important to understand the chronology of the process. If and when LTD successfully challenges the FCC staff decision, and assuming the FCC’s process that has been consistently applied, then the FCC will issue a “Public Notice” saying it is “ready to authorize” support, subject to LTD submitting a letter of credit and bankruptcy opinion letter within a few weeks thereafter. Once LTD submits these documents, the FCC will issue another Public Notice stating that LTD is “authorized” to receive RDOF funding. That generally happens the second week of each month. The soonest any support would be wired from the FCC to LTD would be the last business day of the month. So if and when LTD’s appeal is successful, there would still be plenty of time—around six to eight weeks—for the parties in this proceeding to regroup and determine next steps before LTD actually receives any RDOF support. The Department and OAG have repeatedly suggested that there would be a risk of imminent harm if the FCC staff decision is reversed—the chronology above demonstrates why that concern is significantly overstated. As I stated at our previous conferences, LTD would agree to provide periodic updates to you and the parties regarding the status of LTD’s application for review. Third, it is an exaggeration to say that it could be three years before the Commission or FCC could act to stop the flow of RDOF support to LTD. Each year, the Commission will have the opportunity to review LTD’s compliance with ETC requirements—the 2022 review is just concluding. See Commission Docket No. P999/PR-22-8. In addition, if the FCC, USAC, Commission, a party to this proceeding, or even an LTD customer identified a truly urgent concern relating to LTD’s compliance with the RDOF and ETC requirements, the FCC and USAC could act to temporarily suspend the flow of support. Indeed, USAC and the FCC have done so where, for example, a letter of credit lapses.

LTD Broadband asks MN PUC to hold off on decisions on ETC designation based on other states’ actions

This is an ongoing saga that many of us are watching closely and some might want a little recap…

The Minnesota PUC decided to continue to move forward looking 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.) I have been tracking new documents posted to the PUC site. The latest is a letter from Taft Law supporting LTD’s request to wait until after the conclusion of LTD’s appeal of the FCC’s denial of its RDOF long-form application to address their ETC status. They do this by recapping what has happened in PUC offices in other states…

I write to provide a brief update on activity in other states that you should know about as you continue to consider how to proceed in this matter. As you know, LTD’s position is that all litigation activity before you should be stayed until the conclusion of LTD’s appeal of the FCC’s denial of its RDOF long-form application. Two recent orders support LTD’s request.

As was referred to in passing at one or both of the previous conferences in this matter, LTD has been engaged in proceedings before other state public utility commissions concerning its eligibility as an eligible telecommunications carrier (“ETC”) in those states for purposes of receiving RDOF funding. Indeed, the main basis for the MTA’s May 22, 2022 Petition was activity before the South Dakota Public Utilities Commission (“SD PUC”). See Petition at 2, 4, 6, 15-21.

Recent developments in two of those state commission proceedings support LTD’s request for a stay in this matter. First, on September 26, 2022, the Clerk of the Nebraska Supreme Court and Court of Appeals stayed an appellate proceeding in which LTD was challenging the denial, by the Nebraska Public Service Commission, of LTD’s ETC status in that state (the “Nebraska Stay Order”). A copy of the Nebraska Stay Order is attached. It provides that the Nebraska appellate proceeding is stayed pending resolution of LTD’s appeal of the FCC staff’s decision, and it requires LTD’s counsel to provide an update if the FCC appeal is not complete by January 21, 2023. The spirit of the Nebraska Stay Order is consistent with LTD’s request in this proceeding—it recognizes that having dual proceedings go forward at the same time would be unnecessarily duplicative and expensive.

Then, on October 12, 2022, the SD PUC issued an order closing LTD’s ETC docket there (“SD Order”). A copy is attached. In March 2022, the SD PUC denied LTD’s request for ETC designation for purposes of RDOF funding. LTD filed a Petition for Reconsideration or Rehearing. As described in the SD Order, that request was still pending as of August 10, 2022 when the FCC staff denied LTD’s long-form application. In light of the FCC staff decision, LTD requested that the South Dakota docket be suspended, and the South Dakota Telecommunications Association (“SDTA”) requested that the docket be closed. Yesterday, in the SD Order, the SD PUC granted the SDTA’s motion, closing the docket. But LTD still has an opportunity to file a motion to re-open the proceeding as new developments occur, for example if LTD wins its appeal of the FCC staff’s decision. See, e.g., In re Brookings Muni. Util. d/b/a Swiftel Comms. for Designation as an Eligible Telecommunications Carrier, Order Reopening Docket, Docket No. TC04-213, 2007 WL 8674044 (So. Dak. Pub. Utils. Comm’n, Sept. 18, 2007) (reopening docket to adjust compliance filing dates). Notably, one of the SD PUC Commissioners specifically stated at the Commission meeting that such a motion could be filed, indicating that the effect of the SD Order was to simply stop the proceedings until and unless LTD’s appeal of the FCC’s decision is successful. So the SD Order is consistent with LTD’s request to you.

South Dakota PUC closes the docket on LTD Broadband without giving ETC designation

KELO reports

State regulators have shut the door for what might be the final time on a company that has been seeking a federal subsidy to provide broadband service in many under-served areas of South Dakota.

The South Dakota Public Utilities Commission on Tuesday decided to close the docket on LTD Broadband. The Minnesota company has been seeking designation by the state commission as an eligible telecommunications carrier so that it could receive federal funding.

South Dakota Telecommunications Association has been fighting against granting the designation, arguing that LTD Broadband lacked the financial wherewithal to accomplish the project.

SDTA requested the closure. LTD Broadband wanted the commission to only suspend the docket.

The story is important in Minnesota because the Minnesota PUC is also looking at LTD Broadband’s  status as an eligible telecommunications carrier (ETC). The ETC designation is (or maybe was) important when LTD Broadband applied for larger amounts of federal (RDOF) funding because ETC was required by those receiving funding. LTD Broadband was awarded the opportunity to apply for the funds but as since been disqualified.

So one might ask why the ETC designation is still an issue. In South Dakota, they want to make sure that unresolved issues do not leave South Dakota in a precarious position in the future…

The state commission’s chairman, Chris Nelson, said Tuesday that the state commission had “bent over backwards” to allow LTD Broadband to make its case. “We’ve gone a long distance trying to make this thing work,” he said.

Nelson noted that the FCC staff has reached the same conclusion that the state commission had and said he doesn’t think the federal commission will overturn its staff’s decision. Nelson said he doesn’t want an unresolved issue of LTD Broadband’s eligibility to cloud future funding opportunities for other companies seeking to deliver broadband in South Dakota.

LTD Broadband responds to ILSR’s participation in PUC case

This is an ongoing saga that many of us are watching closely and some might want a little recap…

The Minnesota PUC decided to continue to move forward looking 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.)

In early September, the PUC asked LTD to share their long form RDOF application. They also invited folks to send comments (by Sep 16) in advance of a prehearing conference call planned for Sep 20. Several folks did response including the Institute for Local Self Reliance.

Here’s LTD’s response to ILSR’s offer to act as proposed intervenor…

LTD Broadband, LLC (“LTD”) respectfully objects to the Motion to Intervene filed by the Institute for Local Self-Reliance (“ILSR”) because ILSR has not met the standard set forth in Minn. R. 1400.6200. ILSR’s Motion does not make the showings required by that rule, and ILSR has also failed to demonstrate that its alleged interests will not be adequately represented by other parties to this proceeding such as the Minnesota Department of Commerce (“Department”) or the Office of the Attorney General—Residential Utilities Division (“OAG[1]RUD”). Under Minn. R. 1400.6200, subp. 1., a person who desires to intervene in a contested case proceeding must submit a petition that meets four requirements: the petition “[1] shall show how the petitioner’s legal rights, duties, or privileges may be determined or affected by the contested case; [2] shall show how the petitioner may be directly affected by the outcome or that petitioner’s participation is authorized by statute, rule, or court decision; [3] shall set forth the grounds and purposes for which intervention is sought; and [4] shall indicate petitioner’s statutory right to intervene if one should exist.” If the petition makes these showings, it should be granted “unless the judge finds that the petitioner’s interest is adequately represented by one or parties participating in the case.” Minn. R. 1400.6200, subp. 3. ILSR’s Motion fails to make the required showings.

The response is longer but continues in the same theme. This is the tactic that LTD Broadband took in the live meeting at the PUC earlier this year too. They focus on the formalities of the process rather than addressing the issues of the case.

Update on MN PUC looking to revoke ETC designation for LTD Broadband – ILSR proposed intervenor

A brief update on an online Minnesota broadband saga.

The Minnesota PUC decided to continue to move forward looking 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.)

In early September, the PUC asked LTD to share their long form RDOF application. They also invited folks to send comments (by Sep 16) in advance of a prehearing conference call planned for Sep 20.

The Institute for Local Self Reliance responded as a proposed intervenor

  1. The applicant, Institute for Local Self-Reliance (ILSR) is a research and advocacy nonprofit organization with offices in Minnesota, focused on building an American economy driven by local priorities. ILSR works with a diverse group of allies, partners, and local communities on policies to improve local Internet access. ILSR represents the interests of local communities that are not necessarily represented by any other part in the proceeding and has a statutory right to intervene pursuant to Minn. R. 1400.6200 (2021).

  2. ILSR can provide facts and insight as well as extensive contextual information related to broadband access, funding, and deployment in Minnesota.

  3. We recognize the petition against LTD Broadband’s expansion in Minnesota as an opportunity to advocate for the public interest and ensure that valuable public dollars are spent in a way that will bring quality, affordable connectivity to communities as soon as possible. The applicant hereby requests it be allowed to intervene as a party in the above-captioned proceeding.

Update on MN PUC looking into LTD Broadband – movements forward

Last week, I mentioned that the Minnesota PUC decided to continue to move forward looking 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 week, the PUC asked LTD to share their long form RDOF application. They also invited folks to send comments (by Sep 16) in advance of a prehearing conference call planned for Sep 20. So afar a Lawyer from Moss and Barnett sent a– Nondisclosure Agreement – Trade Secret Information for Richard J. Johnson relating to the Protective Order issued September 1, 2022 and enclosed a Certificate of Service. The document highlights the folks who will have access to the long form application.

Not much news but it looks like there is movement forward.

Update on LTD Broadband hearings at MN PUC – next meeting scheduled for September 10

In July, the Minnesota Public Utilities Commission (PUC) held a hearing to decide whether or not to look into revoking LTD Broadband’s ETC designation. The designation was important because their ability to receive a large amount ($311 million) was in part dependent on having the designation. They decided to move forward. In August, the FCC rejected LTD’s application for the federal funds based on numerous reasons. So the big question was whether the PUC would continue on with its investigation or not. They did.

 

August 24, the PUC heard from interested parties and have decide to ask for materials from LTD, give folks an opportunity to respond and to meet again (via phone) on September 20…

  1. LTD shall serve and file the long-form application, related correspondence, and attachments by August 26, 2022.
  2. Parties wishing to intervene in this proceeding must file their requests by 4:30 p.m. on September 16, 2022.
  3. A prehearing conference will be held by telephone on September 20, 2022, at 2:30 p.m. to review the status of the case, define the issues and set the dates for hearing. At that time, please call 1-866-705-2554 and when prompted enter passcode 406954.
    Dated: September 1, 202

FCC fines providers for RDOF defaults including $2.3M to LTD for defaults in KS and OK

Fierce Telecom reports

The Federal Communications Commission (FCC) is cracking down on operators who have backed out of their Rural Digital Opportunity Fund (RDOF) commitments, fining 73 auction participants a total of $4.3 million for defaulting on their winning bids. One operator, LTD Broadband, alone accounted for more than half of the overall assessment.

In an order released late last week, the FCC slapped LTD Broadband with a $2.3 million fine for defaulting on 768 census block groups in Kansas and Oklahoma. The FCC last year denied the company’s request for more time to prove its eligibility to receive funding in those states.

Mainstream (MN) look at FCC’s rejection of LTD Broadband and Starlink RDOF applications

Yesterday, the FCC announced their rejection of LTD Broadband and Starlink RDOF applications.

A recap at the highest level: LTD Broadband and Starlink qualified for the opportunity to get millions of dollars in federal contracts for broadband. There were questions about their ability to deploy these networks. The communities where they might have deployed networks have been unable to some other funding because of this deal. They have been frustrated for a year and a half. The FCC rejection of these providers means a loss of funding (hundreds of millions) coming to Minnesota BUT it also means these communities are free to find other opportunities.

Mainstreet media in Minnesota has been following the story, that in fairness includes some seriously wonky details. Here are what some of those sources are saying today:

  • MinnPost: In an email to MinnPost, Corey Hauer, the CEO of LTD, said company officials are “extremely disappointed in the FCC staff decision.”
    “I don’t believe the FCC fully appreciated the benefits LTD Broadband would bring to hundreds of thousands of rural Americans,” Hauer said. “We are continuing to review the letter and are evaluating our next steps.”
    FCC spokeswoman Anne Veigle said LTD can file a petition for reconsideration or an “application for review to appeal.”
  • Star Tribune: The FCC’s ruling on LTD is “a big deal,” said Brent Christensen, president of the Minnesota Telecom Alliance.
    “This is all uncharted territory,” Christensen said. “A lot of us don’t know what is going to happen.”
    An FCC spokesman said the locations for LTD’s winning bids will be eligible for other state and federal rural broadband funding programs. The federal government is expected to conduct other subsidy auctions.
  • Rueters: The FCC noted that Starlink, a fast-growing constellation of internet-beaming satellites, relies on nascent low-earth orbit satellite technology and had sought funding to provide 100/20 Mbps service to 642,925 locations in 35 states.
    “We must put scarce universal service dollars to their best possible use as we move into a digital future that demands ever more powerful and faster networks,” Rosenworcel said. “We cannot afford to subsidize ventures that are not delivering the promised speeds or are not likely to meet program requirements.”
    The FCC said the two companies both provided inadequate responses to questions and are not capable of complying with commission requirements.

 

OPPORTUNITY: Contract Broadband engineering expert to help PUC investigate LTD Broadband

An opportunity from the State to look into LTD Broadband and their ability to help Minnesota fully take advantage of RDOF funding. (Get more background.)

The telecommunications regulatory unit at the Minnesota Commerce Department (Department or Commerce) has the responsibility to conduct investigations on telecommunications matters,  advocate before the Minnesota Public Utilities Commission (MPUC or Commission) and enforce Minnesota statutes, rules, and orders of the Commission pertaining to telecommunications. The telecommunications regulatory unit at the Department is within the Division of Energy Resources. Minnesota Statutes section 216A.07 authorizes the Department to represent the public interest in all Commission proceedings.

The Department requests proposals for a technical expert or experts with engineering, financial and management expertise required to develop and successfully run gigabit broadband networks. The experts will determine whether LTD Broadband, LLC (LTD) has, or reasonably can be expected to obtain, the technical, managerial and financial resources to deploy and maintain a broadband network to meet expectations consistent with requirements of the Rural Digital Opportunity Fund (RDOF) to serve approximately 102,000 locations, as provisionally awarded by the FCC.

A Request for Proposals (RFP) and required forms are available to view and download on the Minnesota Department of Commerce’s RFP website at https://mn.gov/commerce/industries/rfp/ through the submission deadline.

Proposals must be submitted by no later than Friday, August 22, 2022 at 11:59 PM Central Time. Proposals must be submitted to energy.contracts@state.mn.us. Instructions for submitting proposals are detailed in the RFP. Late proposals will not be considered.

This request does not obligate the State to complete the work contemplated in this notice.  The State reserves the right to cancel this solicitation. All expenses incurred in responding to this notice are solely the responsibility of the responder.

FCC Proposes Fines of $4.3M Against 73 RDOF Applicants for Defaults – some with MN connections

The FCC reports

The Federal Communications Commission today proposed $4,353,773.87 in fines against 73 applicants in the Rural Digital Opportunity Fund auction (Auction 904) for apparently violating Commission requirements by defaulting on their bids between July 26, 2021 and March 10, 2022. The FCC provided clear guidance in its rules and notices on the monetary forfeitures associated with defaults in Auction 904. The bid defaults prevented 1,702 census block groups with 129,909 estimated locations in 36 states from seeing timely new investments in broadband infrastructure.

The applicants defaulted on their respective bids by withdrawing applications in certain areas, or failing to meet deadlines and requirements required in the auction rules after having already placed winning bids in Auction 904. In order to be authorized to receive universal service support, winning bidders or their assignees were required to provide information that demonstrated they are legally, financially, and technically qualified to fulfill the Auction 904 public interest obligations. The Notice of Apparent Liability proposes forfeitures for 73 applicants and two bidding consortia. However, the Notice does not propose forfeitures for applicants who defaulted on bids in response to the FCC’s letters identifying census blocks that may have been already served or raised significant concerns about wasteful spending.

There was one bidders found in default in MN…

  1. Aspire Networks 2, LLC (Aspire); FRN: 0030311583; File No.: EB-IHD-22- 00033836; NAL/Acct No.: 202232080013. Aspire is a competitive local exchange carrier registered in Delaware and Minnesota that provides internet services to rural locations in Minnesota.9 Aspire’s parent company, Atlantic Engineering Group, Inc. (AEG), a Georgia company, was part of the AEG and Heron Broadband I (Consortium).10 The Consortium timely submitted its Short-Form Application to participate in Auction 904 and was a successful bidder.11 The Consortium then assigned two CBGs to Aspire, which timely filed its Long-Form Application in Auction 904.12 On February 16, 2021, Aspire notified the Commission of its intent to default on its two CBGs subject to forfeiture in Minnesota.13 WCB declared Aspire to be in default on July 26, 2021, and referred the company to EB for enforcement action.14 The Commission finds that Aspire apparently committed two violations by defaulting on its CBGs subject to forfeiture, which places the company’s base forfeiture at $6,000.00.15 Aspire’s assigned CBGs in default subject to forfeiture amounted to $6,470,222.30, thereby capping the maximum possible forfeiture at $970,533.34, which is 15% of Aspire’s defaulted support subject to forfeiture in Auction 904.16 Because the base forfeiture is less than the 15% cap established in the Rural Digital Opportunity Fund Order, 17 the Commission finds that the forfeiture amount of $6,000.00 against Aspire is appropriate here.

LTD was also one of the bidders found in default…

  1. LTD Broadband LLC (LTD Broadband); FRN: 0020926788; File No.: EB-IHD-22- 00033870; NAL/Acct No.: 202232080047. LTD Broadband is a Nevada company that provides fiber and fixed wireless service to customers, businesses and governmental entities located in rural areas.306 LTD Broadband timely submitted its Short-Form Application to participate in Auction 904 and was a successful bidder.307 On August 16, 2021, LTD Broadband notified the Commission of its intent to default on certain census blocks.308 On August 25, 2021, LTD Broadband also notified the Commission that it would not seek reconsideration of WCB’s denial of the company’s deadline waiver request for its Kansas and Oklahoma bids.309 The areas where LTD Broadband intended to default cover 768 CBGs subject to forfeiture. WCB declared LTD Broadband to be in default on December 16, 2021,310 and on January 28, 2022,311 and referred the company to EB for enforcement action. The Commission finds that LTD Broadband apparently committed violations by defaulting on 768 CBGs subject to forfeiture, which places the company’s base forfeiture at $2,304,000.00.312 LTD Broadband’s CBGs in default subject to forfeiture amounted to $78,496,778.40, thereby capping the maximum possible forfeiture at $11,774,516.76, which is 15% of LTD Broadband’s defaulted support subject to forfeiture in Auction 904.313 Because the base forfeiture is less than the 15% cap established in the Rural Digital Opportunity Fund Order, 314 the Commission finds that the forfeiture amount of $2,304,000.00 against LTD Broadband is appropriate here

MinnPost looks at the PUC’s decision to investigate LTD Broadband

More mainstream media on the situation with LTD Broadband and the Minnesota PUC from MinnPost

The embattled telecom company LTD Broadband has been stopped from building subsidized high-speed internet infrastructure in several states. Now, LTD might be in trouble in Minnesota.

The Minnesota Public Utilities Commission Thursday ordered an investigation of LTD to determine if they should block the small company from using a whopping $311 million in federal money for construction of broadband in Minnesota’s rural areas amid fierce criticism alleging LTD can’t deliver fiber internet as promised.

“We don’t want to get a situation where they claim they have ability to build out and they get out there and they can’t do it – scrambling for more assets and then all of the sudden it just collapses,” Commissioner John Tuma, a Republican, said in an interview following the PUC’s hearing.

They include a perspective from LTD…

Corey Hauer, the company’s CEO, has told MinnPost it can expand rapidly and has simply figured out how to deploy fiber-optic cable easier, faster and cheaper than aggrieved competitors. Hauer characterized the regulatory filing as a nuisance.

On Thursday, Andrew Carlson, an attorney for LTD, told the PUC the company is in good standing in Minnesota. He said reopening its state credentials would set a dangerous precedent allowing critics to continually question their process and force investigations “anytime any other competitor has complaints or concerns or just competitive animus against” an eligible telecom provider. It could also jeopardize that FCC funding for Minnesota altogether, he said.

The plan moving forward…

The PUC largely ruled against LTD, ordering what’s known as a contested case hearing before an administrative law judge to take a closer look at the capability of the company. The commission did not cancel LTD Broadband’s status, but it decided to consider whether it should and seek more information, following recommendations from the AG’s office, the Minnesota Department of Commerce and a state task force on broadband policy.

Mainstream media look at PUC’s decision to investigate LTD Broadband

I wrote about this yesterday, but always good to see what the mainstream press are saying about telecom issues; here’s what the Minneapolis Star Tribune is saying about LTD and the PUC…

Minnesota utility regulators Thursday approved an investigation into revoking a key permit for LTD Broadband, the big winner of a federal auction to provide broadband to rural areas.

Revocation of LTD’s telecommunications permit in Minnesota could result in the company — and the state — losing out on $311 million in federal broadband subsidies.

Trade groups for Minnesota telecom and rural electricity providers petitioned the Minnesota Public Utilities Commission (PUC) for the revocation investigation.

They say that since the PUC granted LTD the permit last year, several events have occurred in other states that call into question the company’s ability to deliver on its commitments — a claim LTD denies.

If you haven’t been watching this story play out, I think the thing that’s hard to understand is that losing the $311 million may be better than wasting it and not getting what communities need. The article touches on that point…

The Minnesota Department of Commerce and the state attorney general’s office both recommended that the PUC initiate the revocation investigation.

Sieben said she has some concern about whether LTD’s grant money “would come back to Minnesota” if the PUC revokes the company’s ETC status.

Kristin Berkland, an assistant Minnesota attorney general, said there is no guarantee it would come back to a Minnesota (broadband) provider.

But Berkland said it is just as dangerous for the $311 million to be rebid as it is for “commitments made for that money not being carried out.”

Four counties — all of which would host LTD projects — and the Minnesota Association of Townships have supported a revocation investigation. In PUC filings, they also said they’re concerned about LTD’s ability to live up to its commitments.

Some — including LeSueur County — have noted that areas covered by LTD’s federal grants in Minnesota haven’t been eligible for a big pot of state broadband subsidies. The state rejected LeSueur County’s bid for two broadband grants in early 2021 because they would’ve overlapped with LTD’s federal awards.