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.

 

FCC Rejects RDOF applications of LTD broadband and Starlink

From the FCC

The Federal Communications Commission today announced that it is rejecting the long-form applications of LTD Broadband and Starlink to receive support through the Rural Digital Opportunity Fund program. The Commission determined that these applications failed to demonstrate that the providers could deliver the promised service. Funding these vast proposed networks would not be the best use of limited Universal Service Fund dollars to bring broadband to unserved areas across the United States, the Commission concluded.
“After careful legal, technical, and policy review, we are rejecting these applications. Consumers deserve reliable and affordable high-speed broadband,” said Chairwoman Rosenworcel. “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. We cannot afford to subsidize ventures that are not delivering the promised speeds or are not likely to meet program requirements.”
“Starlink’s technology has real promise,” continued Chairwoman Rosenworcel. “But the question before us was whether to publicly subsidize its still developing technology for consumer broadband—which requires that users purchase a $600 dish—with nearly $900 million in
universal service funds until 2032.”
In the initial auction results announced December 7, 2020, LTD Broadband won $1,320,920,718.60, and Space Exploration Technologies Corp. (Starlink) won $885,509,638.40.
Although LTD was a relatively small fixed wireless provider before the auction, it was the largest winning bidder in the auction, submitting winning bids in 15 states. Subsequently, it failed to timely receive eligible telecommunications carrier status in seven states, rendering it ineligible in
those states for support. Ultimately, the FCC review concluded that LTD was not reasonably capable of deploying a network of the scope, scale, and size required by LTD’s extensive winning bids.

Regular readers will know this is bittersweet news. LTD was awarded the opportunity to apply for $311 million to deploy fiber in Minnesota. On the one hand, this is $311 million that is unlikely to come back to Minnesota in the same way. On the other hand, many people were suspect with LTD’s ability to meet what they proposed. In Minnesota, the MN PUC recently agreed to look into revoking LTD’s credentials here; these credentials were required to get RDOF money. The FCC had previously proposed fining LTD for violating requirements.

 

Le Sueur County and Bevcomm are applying for Border to Border funds – again post-RDOF issues

Le Sueur County News posts an update of what’s happening with broadband plans in the county since they last applied for MN State Border to Border grants and were disqualified because they were in an area where LTD Broadband had subsequently been awarded an opportunity to apply for federal (RDOF)…

After two years of being walled off from state broadband dollars, Le Sueur County is reviving efforts to bring high speed internet to nearly 250 rural households.

At the July 26 Le Sueur County Board of Commissioners meeting, Broadband Initiative Coordinator Barbara Droher-Kline announced local internet service provider Bevcomm would be seeking a Border-to-Border grant to expand high speed internet service to 152 homes in Montgomery Township 89 homes in Lexington Township and 6 homes in Sharon Township.

Le Sueur County agreed to dedicate $350,000 toward the project with Montgomery, Lexington and Sharon townships compensating the county $1,500 per home in their respective territories.

The county has attempted to lift the project off the ground since September of 2020. Back then, Bevcomm requested $300,000 in matching funds from the county to build a $1.6 million fiber optic network providing 1 Gbps speeds to 239 homes.

The network was to build off of Bevcomm’s existing fiber optic network, constructed in partnership with Le Sueur County and a $2 million Border-to-Border grant in 2020.

Latest RDOF awards announced – none in MN and nothing to LTD

The FCC has announces the the latest rounds of RDOF funding.

By this Public Notice, the Wireline Competition Bureau (WCB), in conjunction with the Rural Broadband Auctions Task Force (RBATF) and the Office of Economics and Analytics (OEA), authorizes Rural Digital Opportunity Fund (Auction 904) support for the winning bids identified in Attachment A of this Public Notice.

As in the previous round – none were based in Minnesota.

Telecompetitor offers a perspective, noting that many of the top winners have yet to receive money…

There were over 400 winning bidders in the RDOF auction, but the top 10 winning bidders represent more than three-quarters of the total $9.2 billion tentatively awarded.

Over the last 18 months or so, the FCC has authorized funding for many smaller winning bidders and for five of the top 10 winning bidders. But the other five of the top 10 have not yet been deemed ready to authorize and questions have begun to arise about whether those other five will ever be authorized.

Several sources closely involved in the RDOF program have noted that the FCC has no deadline for reviewing RDOF long-form applications and might never approve some or any of those five bidders.

One of them is SpaceX, which plans to use satellite broadband to meet its service commitments. Concerns have arisen about the company’s ability to meet those commitments and about the longevity of that service. Another is LTD Broadband, which has received criticism about its ability to deploy fiber broadband as quickly and extensively as required.

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.

Mower County looking at using RODF, ARPA and Border to Border funds to improve broadband access

Gov Tech reports on Mower County’s plans for better broadband. It reads like alphabet soup with a mix of RDOF, ARPA and BTB funds, which is both of sign of the complexity and availability of various funding sources right now. If you’re community needs better access and they aren’t looking into options like these you should ask why. There’s a lot of money being invested right now but that won’t go on forever…

During the Mower County Board of Commissioners meeting on Tuesday, County Administrator Trish Harren laid out where the county currently stands in getting better broadband Internet coverage for the county.

As of last year, nearly 85% of the county’s residents had access to broadband, but that access is mostly condensed to high population densities, which includes Austin and small town areas.

More detail…

While 85% of the population is served, however, nearly 90% of the geographical makeup of Mower remains underserved.
That leaves large swaths of the county with either spotty coverage or no coverage at all.
However, a pair of funding opportunities are allowing the county some flexibility in terms of filling out that coverage.
Through the Federal Communications Commission’s based Rural Digital Opportunity Fund (RDOF) and Minnesota Border to Border (BTB) grants, Mower County is hoping to spread that access even further.
The RDOF uses an auction format where the winner of a reverse bidding process agrees to build out for a certain amount of money. In Mower County, LTD Communications was a top 10 bidder at $1.3 billion. They are also the largest provider in this area. Charter Communications had a bid of $1.2 billion
BTB runs through a grant process with a well of $95 billion to draw from in grant money. Grant applications for that program are due by Aug. 4.

And info on specific, proposed projects…

The northeast LTD project would come in at an estimated $2.45 million and would lay 82 miles of fiber over an area north of Grand Meadow and stretching east to parts surrounding Racine. It would also include 376 passings, or physical locations where residences and businesses would hardwire into the fiber network.
The southwest project would lay 138 miles of fiber with 209 passings at an estimated cost of $3.5 million over an area south of Austin and stretching east to the Rose Creek area.
Charter will also be part of this BTB project, serving an area to the south of Austin where LTD doesn’t serve. Its side of the overall project will include 99 passings coming in at around $677,000.
In order to form a partnership with projects coming out of the RDOF and the BTB programs, the county has agreed to set aside $750,000 in ARPA money of which $585,000 will be committed to the LTD projects and $99,000 will be committed to the Charter project.

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.

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).

Top RDOF bidders have not been funded yet – will NTIA set up a deadline through BEAD opportunity?

Telecompetitor reports

It’s been 18 months since the Rural Digital Opportunity Fund (RDOF) auction was completed and the FCC has not yet released funding for five of the top 10 winning bidders.

It’s beginning to look like that isn’t going to happen, considering that the other five top winning bidders have had all or most of their funding released, as have scores of smaller winners.

They look at the bidders, including LTD Broadband…

The fifth large winning bidder that hasn’t had funding released is LTD Broadband, a small company that traditionally deployed fixed wireless but that won funding for gigabit fiber broadband. Critics have questioned the company’s ability to meet its deployment commitments.

The FCC also has come under fire over RDOF, as critics have argued that the commission should have had more stringent screening in advance of the auction, rather than waiting for after the auction to review and approve companies’ long-form applications, a key step in funding authorization.

There are concerns and it sounds like one way around awarding or declining the bids is to leave them on the shelf…

“The FCC appears to have very significant questions” about the five bidders, said Blair Levin, policy analyst for New Street Research. While working at the FCC in 2009, Levin headed up the team that wrote the National Broadband Plan.

“It’s not that they lied or misrepresented themselves,” Levin continued. “But the commission doesn’t appear to have confidence that those enterprises will do what they said they would do.”

Carol Mattey, founder of Mattey Consulting, said several months ago that the FCC might never authorize certain winning bidders but wouldn’t reject them either because rejections could be appealed. Mattey was deputy chief of the FCC Wireline Competition Bureau at the time the RDOF auction was established.

There have been many complaints from communities in Minnesota who have been left in RDOF limbo, waiting to hear whether LTD gets the funds or not because in many instances, the fact that the may have RDOF money means they are disqualified for other funds. Apparently there’s no timeline on the RDOF awards but it sounds like there’s a push to try to change that…

Alan Davidson, who heads up NTIA, threw the FCC another curve ball regarding the BEAD program when he said that areas that had winning RDOF bids that have not been authorized should be eligible for BEAD funding. It would be up to the FCC to “deconflict” those areas, Davidson said.

If providers still haven’t received RDOF authorization by the time the BEAD program starts and if the areas involved are included in the BEAD program, potentially the providers could bid again and win, Levin notes. A provider’s ability to do this, of course, would depend on the specific rules for each state where a company had winning RDOF bids

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).

 

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).