REGIONAL- The Federal Communications Commission last week rejected troubled LTD Communication’s $1.3 billion application to build high-speed broadband internet networks in Minnesota and across …
REGIONAL- The Federal Communications Commission last week rejected troubled LTD Communication’s $1.3 billion application to build high-speed broadband internet networks in Minnesota and across the nation, a move that should open the door for other companies to provide more timely broadband solutions across a wide swath of the North Country.
Nevada-based LTD, a small fixed wireless internet provider with limited installations in Minnesota, was the surprise largest winner of the FCC’s December 2020 Rural Development Opportunity Fund auction, and almost immediately industry insiders expressed doubt that the company could deliver on its promise to bring high-speed fiber optic broadband to unserved areas in 15 states. As part of its winning bid, LTD was designated to receive $311 million for Minnesota, including tracts in the North Country covering areas from Ely to Cook and more.
The award effectively barred any other companies from competing for services to locations in LTD’s North Country awards, as areas designated for federal financial subsidies were not eligible for alternative funding from other sources, such as the state’s Border-to-Border broadband funding initiative. Additionally, LTD would have up to ten years to install the RDOF-subsidized tracts it was awarded.
But while other successful bidders started receiving money from the FCC last year, LTD stumbled through a series of miscues in its applications to various states to be designated an “eligible telecommunications carrier,” a prerequisite for the FCC to disburse the awarded funds.
LTD failed to obtain the designation in Oklahoma and Kansas because they didn’t meet those state’s deadlines, and requests to the FCC to extend its own deadlines for its applications in California, Iowa, Nebraska, and North Dakota. According to FCC rules, these represented defaults that made LTD ineligible to receive any funds for development in those states.
The company was dealt another blow when South Dakota’s Utilities Commission rejected LTD’s application outright, citing serious concerns about their ability to make good on their plans there.
LTD gained the ETC designation it needed for Minnesota last year, but in May the Minnesota Telecom Alliance and Minnesota Rural Electric Association petitioned the Minnesota Public Utilities Commission to revoke that status, citing LTD’s failures in other states. In July, the MPUC agreed to open an investigation that could have resulted in revoking LTD’s designation. MPUC noted at the time that there was no information indicating when the FCC might take action on LTD’s long-form application.
That investigation became moot after last week’s FCC action, which also stripped another top-ten bidder, Elon Musk’s Starlink satellite-based broadband network, of its RDOF winnings.
“Consumers deserve reliable and affordable high-speed broadband,” said FCC Chairwoman Jessica Rosenworcel in a press release announcing the rejections. “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.”
The release went on to say that 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.”
Funds forfeited by the two companies will be redesignated for a future FCC auction, and it’s uncertain how much, if any, of the $311 million award to LTD for Minnesota will return to the state through a future unknown bidder.
LTD’s demise may well turn into gain for numerous projects around the state that have funding applications in for some of the tracts once blocked by the company’s now defunct RDOF award. Given the prolonged period of time taken by the FCC to consider LTD’s long-form application, the Minnesota Border-to-Border program began accepting applications for state funding for those projects. If LTD had received RDOF funding, those applications would have been voided, but now they can be considered.
An example of a North Country location that could benefit from new funding opportunities is Cook. Installation of a state-assisted broadband network by Paul Bunyan Communications for the community may get underway in the next few weeks, but the company had to remove some locations from its plans because they fell just inside of federal tracts awarded to LTD. Given that the news is fresh, Paul Bunyan officials have yet to issue any formal statements about future possibilities for LTD-forfeited tracts, and no such plan for Cook is known to be in the works. But new options are now available for numerous Minnesota communities now that they are no longer blocked from them by LTD.
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