Two state associations representing broadband providers have asked the FCC to deny the long-form application filed by LTD Broadband in the Rural Digital Opportunity Fund (RDOF) program. LTD Broadband had the largest amount of RDOF winning bids in the program and stands to gain $1.3 billion for broadband deployments in 15 states if its long-form application is approved.
In a joint filing with the FCC, the Minnesota Telecom Alliance and the Iowa Communications Alliance argue that “there is no indication that LTD has the technical, engineering, financial, operational, management, staff, or other resources to meet RDOF build-out and service obligations.”
The RDOF program used a reverse auction to provisionally award funding for broadband deployments in unserved areas to the providers that committed to deploying service for the lowest level of support. According to the filing by the state telecom associations, LTD had winning bids totaling $311.9 million for Minnesota and $23.2 million in Iowa.
The auction used a weighting system to favor bids to deliver higher-speed service and LTD committed to deploying service in the highest speed tier for many of its winning bids. The highest speed tier is for service providing speeds of at least 1 Gbps downstream and 500 Mbps upstream.
For bids in the gigabit speed tier, LTD committed to using fiber technology, although the company’s deployments to date have relied heavily on fixed wireless technology delivering lower speeds.
Arguments made by the Minnesota and Iowa associations in their filing about LTD Broadband RDOF concerns:
- LTD won funding in five states in the Connect America Fund (CAF II) auction but was fined $3,563 for defaulting on bids in one census block in Nebraska and another in Nevada. The FCC rejected LTD’s argument that it had been unable to obtain designation as an eligible telecommunications carrier in those states – a requirement for obtaining funding.
- The company has been criticized by the Minnesota Department of Commerce for failure to comply with its obligations to advertise Lifeline service to eligible customers.
- The Better Business Bureau gives LTD’s Minnesota operations a failing rating based on the length of time it has been operating and because the company failed to respond to a complaint filed against the business and currently has 14 complaints filed against it.
- The associations estimate that the LTD Broadband RDOF build-out will cost the company between $5,000 to $8,000 per location, yielding estimated 15-state construction costs of $2.6 billion to $4.2 billion. Noting that the company does not likely have the required funding on hand, the petitioners argue that the FCC should “place a substantial and stringent burden of proof on LTD to demonstrate reasonable, workable and detailed technical plans for constructing and operating its RDOF broadband networks . . . and to show that it has clear and certain access to the financial resources necessary to meet the realistic and detailed costs of such technical plans.”
The filing reminds the FCC that 160 members of Congress sent a letter to the commission urging the commission to thoroughly vet winning RDOF bidders.
LTD Broadband did not immediately respond to a request for comment from Telecompetitor about the filing by the state associations.
When Telecompetitor talked to LTD Broadband CEO Corey Hauer in late December, he said, “We have a history of very rapid growth. We expect that to continue. We have met challenges of growth and scale as we’ve grown.”