Last month, I started posting comments from the public on the MN Public Utility Commission’s situation with LTD Broadband and a request to look at revoking their ETC designation. Last week, I added two more. Below I have excerpts from comments from:

• The Office of the Attorney General
• Institute for Local Self Reliance
• Minnesota Telecom Alliance and Minnesota Rural Electric Association

In order of appearance in my in-box.

The Attorney General notes that the Office of the Minnesota Attorney General—Residential Utilities Division will appear at the prehearing conference and all subsequent proceedings. And files the following comments…

The Office of the Minnesota Attorney General—Residential Utilities Division (“OAG”) files this letter to reiterate its support for (1) lifting the January 18, 2023 stay of this proceeding, and (2) suspending LTD Broadband LLC’s (“LTD”) expanded eligible telecommunications carrier (“ETC”) designation pursuant to the petition of the Minnesota Telecommunications Alliance (“MTA”) and Minnesota Rural Electric Association (“MREA”) (collectively “Petitioners”). The Minnesota Public Utilities Commission (“Commission”) alone is empowered to extend, withdraw, or suspend ETC designations, thereby safeguarding the integrity of rural broadband dollars. In the several months since the Commission extended expanded LTD’s ETC designation to include approximately 102,000 additional locations in Minnesota1 , extensive evidence has come to light calling into question the accuracy of LTD’s application and LTD’s ability to build out rural broadband internet service. The Commission must act to ensure vital federal resources do not flow to a provider incapable of delivering supported services, to the detriment of other viable entities and, ultimately, rural Minnesota broadband consumers.

The Attorney General outlines the reasoning in full notes.

The Institute for Local Self Reliance offers comments and is joined by the League of Rural Voters and AARP. There are seven pages of notes, which provide a nice history and great explanation of their remarks but here’s an abridged version…
Should the Commission Lift the January 18, 2023, Stay of This Proceeding?
Yes. Evidence-gathering by the Commission needs to start right away, for three reasons. …

Should the Commission Grant the MREA and MTA’s (Petitioner’s) Motion to Suspend LTD’s RDOF ETC Designation Previously Granted by the Commission?
Yes. The broad contours of LTD’s problematic history, revealed by the P-6995/M-21-133 dockets, has not changed. In May 2022 we and others wrote about how the provider had failed to obtain the ETC status it needed in half of the fifteen states for which RDOF awards were won; it does not appear to have rectified that status for many of those states. At the time of our last comment filing, LTD had been placed in involuntary default in a little less than a third of its national RDOF winning bids by the FCC. Since then (in August 2022) the Commission has placed all of LTD’s RDOF bids ($1.3 billion across 528,000 locations) into default (see map of Minnesota defaults below). …

Our other previously enumerated concerns likewise remain; these included concern that LTD would not be able to provide a network that would ensure emergency services would work properly when they are needed. Subscriber reporting bears those concerns out. For instance, a subscriber in Glenwood, Minnesota wrote last year: “I have absolutely had it with LTD Broadband. They cannot seem to provide the services they advertise. Internet is constantly interrupted or completely down. . . . with absolutely no communication and no way to contact them, since our phone is provided by LTD too, I obviously cannot call them to find out what their problem is” (emphasis added).
…
The bottom line is that if LTD is ultimately awarded its RDOF money for Minnesota households, we don’t believe it will be able to meet obligations. Every additional month the state delays in deferring to the FCC makes constructing a state BEAD plan more difficult, and makes that resulting plan more likely to miss unconnected households and more inefficient. All of this means that households that could have been reached – by previous rounds of Minnesota Border-to-Border grants, by RDOF wins from a provider capable of meeting its obligations, and future BEAD-funded locations – will be left out. If the PUC revokes the provider’s ETC status, Minnesota will be granted much more flexibility and power to meet the Internet access goals it has set for itself, enabling all Minnesotans to participate in strengthening community ties, distance education, remote work, telehealth delivery, and the modern economy for the next generation.

The Office of the Attorney General also submitted a number of requested documents:

copies of communications and documents shared by LTD Broadband, LCC and the Federal Communications Commission in connection with the company’s long-form application for Rural Digital Opportunity Fund (“RDOF”) support. A true and correct copy of LTD’s long-form application technical submission as provided by LTD is attached as Exhibit A.

correspondence from the FCC’s Wireline Competition Bureau that identify concerns with LTD’s long-form application. A true and correct copy of this correspondence as provided by LTD is attached as Exhibit B. The Department also obtained a copy of correspondence provided by the FCC’s Wireline Competition Bureau articulating its decision to deny LTD’s long-form application. A true and correct copy of this correspondence as provided by LTD is attached as Exhibit C.

The Department further obtained a confidential copy of LTD’s application for review filed with the FCC on September 8, 2022. A true and correct copy of this pleading as provided by LTD is attached as Exhibit D.

Not all of these were made public but two maps were:

Minnesota Telecom Alliance and Minnesota Rural Electric Association also submitted comments; here is a part of those comments…

On June 3, 2021, the Commission granted an expanded Eligible Telecommunications Carrier Designation (“ETC Designation”) to LTD Broadband, LLC (“LTD”) for 102,005 locations in Minnesota based on a record that the Commission recognized was limited, while ultimately concluding that the record at that time did “not contain evidence sufficient to disprove the certifications in LTD’s petition or otherwise support a finding of failure to meet any of the ETC-designation criteria.”2 Facts now available refute LTD’s initial certifications and leave no basis for allowing that designation to remain in effect, absent an affirmative showing by LTD that it will meet its ETC obligations. Moreover, allowing it to remain in effect could result in those locations becoming ineligible for any part of the $652 million of Broadband Equity Access and Deployment (“BEAD”) Program funding that was allocated by the National Telecommunications and Information Administration (“NTIA”) to Minnesota on June 26, 2023.3

Minnesota is now entering a critical time period during which BEAD funding decisions will be made. The Minnesota Department of Employment and Economic Development, Office of Broadband Development (“OBD”) is on schedule to award the first round of BEAD funding recipients in September 2024, and applications for that funding will necessarily be required no less than 30 days before that date (12 months from now). These facts show that completion of a contested case is unlikely before the first round of BEAD funding is awarded, even if a contested case is conducted expeditiously. Further, allowing LTD to retain its ETC Designation would create uncertainty and likely chill applications for BEAD funding by qualified providers. OBD has recognized that BEAD funding is a “once-in-a-lifetime infusion of funding for broadband deployment.” 4 Moreover, if the Federal Communications Commission’s (“FCC”) long-form denial is reversed or modified with respect to Minnesota and LTD is authorized for funding under Rural Development Opportunity Fund (“RDOF”), the 102,005 locations encompassed by LTD’s ETC Designation would become ineligible for BEAD funding. As a result, it is essential that the Commission at least suspend that ETC Designation unless and until LTD can demonstrate to the Commission that it can meet its obligation to provide broadband service to those locations.

A discussion follows.

Last week, I mentioned that the Minnesota PUC was looking for comments on the Petition of LTD Broadband LLC for Designation as an ETC. Today, I see that they got a comment…

A message from Brad Gustafson:

LTD’s RDOF award should be fully cancelled. This award has prevented local service providers from moving forward with local grants to distribute fiber. LTD does not have the knowledge of what it takes to build in our region with the amount of rock we have. They can not build for what they said they can. If they are allowed to move forward, the projects, if they ever start, will fail. It will also prevent local providers from expanding their services. Those residents then must wait the 10 years LTD would have to build out the region. I strongly feel LTD will not and cannot deliver on what they promise.

I am torn between posting these as I get them or as they come in. I think I will post as they come in but perhaps compile them all once the date for comment has passed (Aug 11) if there has been a big response.

I have been tracking the saga of MN Public Utility Commission (PUC) investigation into LTD Broadband. Here’s a recap…

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. Earlier, their application for RDOF was rejected. On April 23, they held a preconference to decide whether or not to continue to look into revoking their ETC status. IN early May, several sides of the issue chimed in with opinions.

And here’s the latest news from the PUC (as of July 5, 2023)…

On January 18, 2023, these proceedings were stayed pending a ruling by the Federal Communications Commission (FCC) on LTD’s appeal of the denial of its Rural Digital Opportunity Fund (RDOF) long-form application. 1

On March 29, 2023, Petitioners filed a Motion to Suspend ETC Designation (Motion to Suspend) and a Motion to Certify the Stay Order and the Motion to Suspend. Commerce filed a response to Petitioners’ Motion to Certify on April 12, 2023. The OAG filed a Response to the Motion to Suspend and Motion to Certify on April 12, 2023. LTD filed a Response in Opposition to the Motion to Certify on April 12, 2023, in addition to a letter requesting additional time to respond to the Motion to Suspend if said Motion is certified to the Commission. The Administrative Law Judge declines to act on LTD’s request as it is not ripe until the Motion to Certify is granted.

Based upon the submissions of counsel and the hearing record, IT IS HEREBY ORDERED THAT:

1.Petitioners’ Motion to Certify is GRANTED.
2. The Administrative Law Judge hereby certifies the Stay Order and the Motion to Suspend to the Commission.
3. These Contested Case proceedings are STAYED pending the Commission’s ruling on the Stay Order and the Motion to Suspend.

The document outlines the players and the issues in some detail. Here’s the conclusion…

As to the Stay Order, a review of the factors compels certification. By definition, a review of a stay order is a controlling matter of law and would materially speed up the ultimate termination of the hearing. Here, it also allows the Commission to formally consider the effects of the FCC’s denial of LTD’s long-form application on this proceeding.

When considering whether to certify a pending motion, the administrative law judge will consider the factors listed in the rule, but “especially weighty are considerations of timeliness, agency expertise, and the nature of the issue involved.”25 All those factors strongly favor certifying the Motion to Suspend. Certification would lead to a quicker resolution of the issues, the issues are of import, and they are squarely within the Commission’s expertise. For all the reasons detailed above, Petitioners’ Motion to Certify the Stay Order and Motion to Suspend is GRANTED.

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.

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.