OPPORTUNITY: MN PUC is looking for members

The Secretary of State reports…

The Office of the Minnesota Secretary of State today released notice of vacancies for various state boards, councils and committees that are accepting applications. Minnesotans are encouraged to apply and serve in demonstration of public service. The newest vacancies are listed below, and the full list of 792 vacancies / 1312 positions can be found on our website Open Positions.

Applications may be submitted online, and must be submitted within 21 days of the “Publish Date” listed on our Open Positions page, to be assured of full consideration by the appointing authority. Appointing authorities may choose to review applications received by the Secretary of State after the 21 day application period.

One open position is at the Public Utilities Commission

Web Site

Supporting Entity/Enabling Legislation Supported by Public Utilities Commission

ENABLING LEGISLATION
MS 216, 216A, 216B, 216E, 216F, 216G, 216H, & 237
Enabled: 08-01-1980

Note: It also looks like there’s a opening in the Broadband Task Force but that has actually been filled.

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.

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.

Representative Dave Lislegard asks MN PUC to revoke LTD Broadband’s ETC designation

I’ve been tracking what’s happening with MN PUC looking into revoking LTD Broadband’s expanded ETC designation (get background). The latest development is that Representative Dave Lislegard sent a letter to the MN PUC…

I’m writing to encourage the Public Utilities Commission to revoke LTD Broadband’s expanded ETC designation and to expedite the proceeding.

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

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.

MN PUC will move forward on looking into LTD’s ETC designation, which may alter RDOF standing

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
  1. 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?

  1. 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
  2. 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?

  1. 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
  2. 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?
  3. Delegate scheduling to the administrative law judge (ALJ), designated lead commissioner, or subcommittee of commissioners (Department), or
  4. adopt one of the schedules proposed by the petitioners (Petitioners), or
  5. adopt the schedule proposed by LTD (LTD).

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

  1. 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
  2. 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?
  3. Do not address LTD’s certification for Rural Digital Opportunity Fund (RDOF) funding in 2023 (LTD, Department, and OAG), or
  4. Decline to certify LTD for 2023 funding (Petitioners).

Minneapolis Star Tribune outlines the issues with LTD Broadband and possible federal funding (RDOF)

I have been tracking the situation with LTD and RDOF since the beginning. Here’s a succinct update…

LTD Broadband was awarded the sole opportunity apply for funding to expand fiber in much of Minnesota. The opportunity has been controversial. Some question their ability to fulfill the order, should they get it. To that end, Minnesota industry associations are asking the MN PUC to revoke the ETC status for LTD Broadband. In fact, the PUC has that issue on their agenda for a meeting scheduled for Thursday (July 14) a1 10am. People are invited to attend in person or remotely.

The Minneapolis Star Tribune article outlines the whole ordeal if you want more detail; here’s a portion I found interesting…

Winning [RDOF] bidders were chosen on their promises of low costs and high internet speeds. The companies were given three years to meet build-out benchmarks and three more years to complete their projects.

But federal subsidies cover only a portion of a fiber project’s costs, and LTD has been awarded grants to cover 528,000 U.S. locations — 102,000 in Minnesota alone. It would be a massive broadband buildout.

In comments to the state PUC, four Minnesota counties that would host LTD’s projects — LeSueur, Pine, Jackson and Chippewa — were skeptical of the company’s abilities to follow through, as was the Minnesota Association of Townships.

“LTD’s unproven track record causes us considerable concern that they will be able to provide broadband services to the the areas they were awarded,” Jackson County Administrator Ryan Krosch said in a PUC filing.

Counties also faulted LTD for a lack of a communication.

“Chippewa County representatives have attempted to contact LTD on several occasions to collaborate and request updates on their progress,” County Auditor Michelle May said in comments to the PUC. “Those attempts have failed” and the county has “lost faith” in LTD, she said.

Hauer said he has personally met with county officials across the country.

“The question from counties is always ‘when,’ and, of course, the answer is ‘as soon as possible.’ We want to do it as quickly as we can,” he said.

MN PUC responds to request to revoke LTD Broadband’s ETC designation: PUC MEETING on July 14

The next chapter starts in the story of LTD Broadband and RDOF awards. It reads like a good soap opera for a very niche audience. The more you know, the more interesting it is. Here’s a high level recap akin to a TV series catch up…

LTD Broadband was awarded the sole opportunity apply for funding to expand fiber in much of Minnesota. The opportunity has been controversial. Some question their ability to fulfill the order, should they get it. To that end, Minnesota Telephone Alliance (MTA) and the Minnesota Rural Electric Association (MREA) filed with the Minnesota Public Utilities Commission, asking them to revoke the ETC status for LTD Broadband. Earlier this month, the PUC posted replies they received on the request.

Today they have posted the staff analysis and announced a meeting on July 14. Here are the details:

Thursday, July 14, 2022
10:00am
Large Hearing Room, 121 7th Pl E, Suite 350, St. Paul, MN 55101 AND Online via WebEx, See attached instructions

There’s a push to get people in the room or on the Webex if you have any concerns. There are four agenda items; LTD is third. But I’m pretty sure the building is airconditioned and has wifi so maybe worth the drive.

The staff analysis highlights a few points: the FCC may drop LTD without the hearing, RDOF investment is $311 million, which may not be reinvested in MN is out and LTD doesn’t think the PUC has authority to make a decision…

There are several things the Commission may wish to consider in determining how this matter should proceed. First, the OAG made several key points in comments and reply comments. The OAG pointed out there is the possibility of the FCC denying LTD’s long-form application. If this were to occur during the pendency of this proceeding, this proceeding would be rendered moot. Even if the record in this proceeding suggests the Commission not revoke LTD’s RDOF ETC designation, LTD will not be eligible to receive RDOF funds.34 This suggests that this proceeding might be premature.

Additionally, in the event the Commission determines that LTD’s RDOF ETC designation should be revoked, this RDOF Phase I support ($311 million) will not automatically be redistributed to Minnesota RDOF ETCs. As the FCC has done in the past, the funds will likely be rolled into a new RDOF Phase I auction or into the RDOF Phase II auction.35 As such, the Commission should proceed with caution regarding this matter.

Finally, LTD raises the question of Commission jurisdiction over carriers in circumstances such as LTD Broadband (non-certificated voice over internet protocol (“VOIP”) providers). …

LTD argued that these rules are not applicable to carriers such as LTD. These rules apply only to providers operating under a certificate of authority. LTD also argued that the Commission’s June 3, 2021, LTD Expansion Order acknowledged that its oversight of LTD arises from delegated authority under federal law rather than state law.

And here’s the distillation of the decision options that I suspect they will discuss at the July 14 meeting:

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?

  1. 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
  2. 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?

  1. 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
  2. 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?
  3. Delegate scheduling to the administrative law judge (ALJ), designated lead commissioner, or subcommittee of commissioners (Department), or
  4. adopt one of the schedules proposed by the petitioners (Petitioners), or
  5. adopt the schedule proposed by LTD (LTD).

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

  1. 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
  2. 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?
  3. Do not address LTD’s certification for Rural Digital Opportunity Fund (RDOF) funding in 2023 (LTD, Department, and OAG), or
  4. Decline to certify LTD for 2023 funding (Petitioners).

 

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.