Wall St Journal looks at LTD-RDOF broadband situation

The Wall Street Journal is covering the LTD-RDOF issue…

The top dollar winner was LTD Broadband LLC of Las Vegas, which won rights to $1.3 billion to extend fiber-optic cable to rural communities scattered over 15 states, in some cases beating out local competitors.

LTD has since missed deadlines to be certified by local regulators in six of the 15 states, prompting the FCC to block the company’s access to the broadband funds there. At least 275,000 people live in affected areas of those states, census and FCC data show.

LTD asked the FCC for more time to be certified, but the agency denied that request. LTD is appealing the FCC’s decision in four of the six states.

In nine other states, FCC officials are still reviewing LTD’s ability to do the job, even though the agency has authorized more than 300 other bidders to move forward.

Corey Hauer, LTD’s chief executive officer, blamed the missed deadlines on bad advice and actions by an outside lawyer. He said LTD has begun building fiber networks even without the federal funds and expressed optimism that officials will reconsider.

Some commentary on why the auction was held as it was…

FCC officials said they designed the auction to maximize upfront participation.

“You want an open process so that new entrants can come in and compete,” said FCC Commissioner Brendan Carr, who was part of the Republican FCC majority that enacted rules for the auction.

Mr. Carr and Jessica Rosenworcel, the FCC’s new Democratic chairwoman, both said they would support reviewing the front-end requirements for future broadband programs.

LTD is now undergoing post-auction vetting, a process Ms. Rosenworcel said is used to “weed out nonqualified bidders.”

The next round of federal broadband funds will be managed not by the FCC, but by states and the U.S. Commerce Department, who are jointly empowered to choose projects that will receive $42.5 billion for broadband deployment program in last year’s infrastructure bill.

The problem is that post-auction vetting is like your brother calling “ever dibs” on the last piece of cake in the fridge; if he isn’t going to eat, the cake will just spoil. LTD was by definition the only bidder allowed to submit long form proposals in many areas. That leaves those communities hostage and in the end, if LTD can’t meet the requirements, the money will be lost to the state.

Replies submitted on MN PUC petition to look at LTD Broadband’s eligibility for funding

Minnesota Telephone Alliance and the Minnesota Rural Electric Association jointly filed with the Minnesota Public Utilities Commission, asking them to revoke the ETC status for LTD Broadband. The petition stems from LTD being the winner in the RDOF auction in Minnesota to receive $311 million to bring broadband to 102,000 passing in the state. In the RDOF filings, LTD promises to build fiber-to-the-premise. The petition contends that LTD can’t make the financial commitments to fulfill the RDOF pledge.

  • The PUC invited comments on the petition until June 1, 2022; earlier this month, I annotated those comments. The reply period is ended June 8. Here’s a look at what came in (links below go to their full responses):
  • Chippewa County – they support a proceeding to consider revoking the ETC status. Chippewa is in an area impacted by situation. In 2017, they did a feasibility study that indicated it would cost $15 million to get broadband to residents. They are worried that costs will go up and because LTD would be given 10 years to complete the project, they are concerned that residents will be left unserved/underserved for years and they are concerned about the loss of economic opportunity during that time. Also, they have tried to connect with LTD and failed. They “have lost faith that LTD can fulfill their promises.”
  • MN Attorney General Keith Ellison – The original comments from the AG supported a proceeding and recommended that LTD share their long form. The reply addresses specific issues that LTD and others made in their earlier comments. I’ll pulling out the ones that I think are most salient to a wider audience. They point out that ETC forms are in flux and suggest that supports a proceeding to look at ETC status and to look at it separately for RDOF and CAF II funding (another pool of federal funds). They recommend that the PUC sees LTD’s long form application for RDOF award but also recommend strict confidentiality. The long form should help the PUC determine capacity. If LTD is turned down during a proceeding, the AG feels the proceeding is moot.
  • MN Telecom Alliance and MN Rural Electric Association – As expected, MTA and MREA still support the proceeding. They mention other incidents where LTD has been called out unfavorably. They also highlight the tone of LTD’s comments; they relied on technicalities to stop the proceeding rather than address their ability to meet requirements for ETC designation. They also question, in detail, the legitimacy of LTD’s specific concerns. They are generally in agreement with earlier comments from folks who generally support moving forward with the proceeding; although they feel like the proceeding is important regardless of the RDOF award because the federal folks look to state agencies to know the people and the territories.
  • LTD – As expected, LTD disagrees with most of the commenters. They claim that the commenters bring nothing new to the table. They assert that the commenters are not addressing the question at hand – whether a proceeding makes sense procedurally. but rather are commenting as if it has. They also do not want to be singled out and feel if their ETC designation is being questioned, so should everyone else’s. They maintain that if the ETC is revoked, it opens a door where competitors could start similar proceeding with other ETCs.
  • Department of Commerce – they support a proceeding to consider revoking the ETC status and referred to the Office of Administrative Hearings with discovery, witnesses and LTD’s long form application. They note that rules have been changed for Border to Border funding; last time communities in areas that might receive RDOF finding were disqualified from state funding; this year they are only disqualified if the funding has been decided (enforceable commitment).

A look at comments submitted on MN PUC petition to look at LTD Broadband’s eligibility for funding

I just wrote about Doug Dawson’s take on the situation for LTD and the PUC and RDOF. I thought about adding this info – but to make it easier to find this info later, I decided to do two posts. But I’m going to borrow from Doug’s post for a quick background for new readers.

Minnesota Telephone Alliance and the Minnesota Rural Electric Association jointly filed with the Minnesota Public Utilities Commission, asking to revoke the ETC status for LTD Broadband. … The petition stems from LTD being the winner in the RDOF auction in Minnesota to receive $311 million to bring broadband to 102,000 passing in the state. In the RDOF filings, LTD promises to build fiber-to-the-premise to all of these passings. The petition contends that LTD can’t make the financial commitments to fulfill the RDOF pledge.

The PUC invited comments on the petition until June 1, 2022; now the reply comment period is open until June 8. Here is an annotated list of folks who submitted comments (links below go to their full response):

  • Institute for Local Self Reliance (national nonprofit research/advocacy group) – they support a proceeding to revoke ETC status. They are joined by League of Rural Voters and AARP-Minnesota. They give a detailed history of LTD and broadband in Minnesota, including offering context that LTD may be standing in the way of MN communities getting a share of the unprecedented funding coming from federal sources.
  • Le Sueur County – they support a proceeding to revoke the ETC status. They provide a frontline perspective noting that before the RDOF was announced, the County estimated FTTH would cost $12 million to build; LTD has bid closer to $1 million. That seems like a significant difference. They had a grant application in for State Border to Border funding for a project but it was rejected once LTD was awarded the opportunity to apply for RDOF money.
  • MN Attorney General Keith Ellison – they support a proceeding to revoke ETC status. They also say that LTD should share their RDOF long form submissions with the MN PUC. IN fact they suggestion that all RDOF ETCs share their forms. They recognize that while MN may lose the federal funding designated for LTD if the ETC is revoked; if it is not revoked the designated areas may find it difficult to get other funding, which holds them in a funding limbo.
  • Pine County – they offer recommendations that may speak more to the role of the FCC. They also talk about the difficulty is working to get ubiquitous broadband in the county when an outside vendor has a claim to funding for portions of the community and those claims have a 10 year hold if funds are received.
  • Minnesota Department of Commerce – they took a wait and see approach. They have detailed information and recommendations for what the PUC should consider. They say, “In response to the current proceeding, LTD should share its position and address the troubling allegations filed in the petition. Commerce will make recommendations to the Commission on whether to hold a proceeding and the nature of any possible proceeding in Reply Comments.”
  • LTD Broadband – they oppose the proceeding and cite legal aspects of the moving forward saying there is no legal basis for the petition and assert that broadband expansion through LTD Broadband is in the public interest.

Another take on LTD Broadband, the MN PUC and RDOF

Doug Dawson  (Pots and Pans)  has a nice overview of what’s happening with LTD Broadband and the Minnesota PUC…

I read a lot of petitions and pleadings at regulatory commissions. But one of the most extraordinary filings I can remember was made recently in Minnesota, where the Minnesota Telephone Alliance and the Minnesota Rural Electric Association jointly filed with the Minnesota Public Utilities Commission, asking to revoke the ETC status for LTD Broadband. I call this extraordinary because I can’t recall ever seeing a big group of petitioners asking to decertify another carrier.

The petition stems from LTD being the winner in the RDOF auction in Minnesota to receive $311 million to bring broadband to 102,000 passing in the state. In the RDOF filings, LTD promises to build fiber-to-the-premise to all of these passings. The petition contends that LTD can’t make the financial commitments to fulfill the RDOF pledge.

You can visit the site for more detail. I’ve written about the situation a lot in the past but always interesting to hear it again. His conclusion seems likely…

When I first read this petition, my first thought was that the primary reason for the petition is to put pressure on the FCC to reject LTD Broadband. I’m not sure what else is happening at the MPUC, but this filing likely means it’s not going to have a quiet summer.