LTD Broadband, which was the biggest winning bidder in the Rural Digital Opportunity Fund (RDOF) auction, is suing the Iowa Utilities Board in connection with the eligible telecommunications carrier (ETC) filing that the provider made with the board.

Potentially at stake is $23 million in RDOF funding that LTD Broadband tentatively won to cover some of the costs of bringing high-speed broadband to certain unserved areas of the state. The company already had ETC designation for some areas of the state but was required to gain designation for the areas for which the company had winning bids before receiving RDOF funding for the state.

The utilities board denied LTD’s expansion request, arguing that the company had not made certain required filings for 2019 and 2020, was past due on the payment of certain assessments and routinely submitted filings with “obvious errors.”

LTD’s lawsuit argues that the Iowa board should reverse its decision which, according to LTD, was “arbitrary and capricious.” The provider alleges that it is being held to a higher standard than other providers and that the board “failed to take into account the magnitude of the loss of potential investment in Iowa’s underserved communities and the public policy interests.”

What the Iowa Utilities Board said in rejecting LTD’s request to expand its ETC designation suggests that the board did understand the magnitude of the decision but saw a different set of concerns.

The board cited “the scale of the additional responsibility that LTD seeks to take on” as “concerning from a public interest standpoint.”

“The record in this docket does not merit the expansion of a credential that signals to the public that LTD has evidenced the technical and financial capabilities required to carry out the public interest obligations of those entrusted with federal funds,” the board said.

Broader Concerns

LTD Broadband’s total RDOF winning bids came to $1.3 billion. The FCC has not yet released any funding to the company or to some other large winning bidders but instead has been reviewing the companies’ long-form applications for nearly a year.

The commission likely is taking its time because critics have questioned the ability of some of the larger winners’ ability to meet buildout commitments. LTD Broadband is among the companies whose capabilities have been questioned.

Even if LTD Broadband is successful in challenging the Iowa Utilities Board decision and even if the FCC approves the company’s long-form application, it’s not clear whether the company would be able to collect RDOF funding for the state.

Earlier this year, the FCC said it wouldn’t extend the company’s June 7 deadline to receive ETC designation for its RDOF areas in Iowa and some other states. The commission argued that the company waited too long to file for expansion of its Iowa ETC designation.

The company said it made that filing 30 days earlier with the understanding that the Iowa Utilities Board would require 30 days to issue a decision, which didn’t come until months later. The FCC said the company had known about the requirement for five months and should have filed with the utilities board earlier.

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