The FCC has issued a proposed $100,000 fine against LTD Broadband, which was the largest winning bidder in the Rural Digital Opportunity Fund (RDOF) auction. The commission said the company “apparently engaged in prohibited communications” with Cox Communications, which was another winning bidder in the auction.
The FCC’s concerns center on RJM, an investment agent that LTD hired to raise capital for investment in LTD. According to the commission, RJM and LTD never entered into a non-disclosure agreement that would have governed RJM’s activities as required by RDOF rules.
RJM sought investment from Cox and in doing so, shared information regarding LTD’s bids, bidding strategies and bidding outcomes with Cox during a quiet period before the auction started, the FCC said.
The commission noted that rules for the RDOF program define prohibited communications to include communications regarding “capital calls or requests for additional funds in support of bids or bidding strategies to the extent such communications convey information concerning the bids and bidding strategies directly or indirectly.”
Auction participants also were required to report any communications engaged in that “may be” prohibited to the FCC within five days of when the communications occurred, which LTD did not do, the FCC said.
LTD Broadband has 30 days to pay the fine. The company could seek a reduction or cancellation of the proposed forfeiture.
The RDOF auction awarded funding to cover some of the costs of deploying broadband to unserved rural areas, with funding for an area going to the company that committed to deploying service for the lowest level of support. LTD Broadband was tentatively awarded over $1 billion in the auction, although as of yesterday, the commission had not yet released any of the company’s funding.
Today’s notice about the LTD Broadband fine does not reference any action the commission might be planning to take against Cox, nor does it say it plans no action against that company. Cox won funding for areas of multiple states and at least some of its funding has been approved.