LTD Broadband dealt blow as FCC prepares to issue $311M in RDOF funds

FCC meeting room
Acting FCC chairwoman Jessica Rosenworcel warned RDOF applicants to "follow the rules or we will disqualify you and move on.” (BRENDAN SMIALOWSKI/AFP via Getty Images)

The U.S. Federal Communications Commission (FCC) dealt LTD Broadband a blow as it announced an initial batch of $311 million in support for winners of the Rural Digital Opportunity Fund Phase (RDOF) I auction, denying the operator’s request for more time to prove its funding eligibility in three states.

Funding was authorized to a total of 48 providers, with the FCC noting in a press release the money will help fuel gigabit-speed deployments to nearly 200,000 homes and businesses across 36 states over the next decade. Cincinnati Bell Telephone Company, Consolidated Communications, Cox and NTS Communications were among those approved to receive funding, according to a public notice.

Acting FCC Chairwoman Jessica Rosenworcel said the support authorizations represent “a significant down payment on broadband deployment,” adding “today’s announcement means that help is on the way for hundreds of thousands of Americans without access to broadband.”

The $311 million approved by the FCC is just a fraction of the $9.2 billion awarded in the Phase I auction. However, additional funding appears imminent, with the public notice stating FCC “staff are reviewing information that is submitted with long-form applications on a rolling basis.”

RELATED: Charter scores big in Phase I of the FCC's RDOF auction for rural broadband builds

Its move comes after a months-long review of participants’ long-form applications following the announcement of winning bidders in December 2020. Earlier this month, two key Senators prodded Rosenworcel to explain what was taking so long and when it might begin distributing funds.

LTD takes a hit

Alongside the authorization news, the FCC announced it had partially denied a petition from top auction winner LTD Broadband for more time to prove its eligibility to receive funding in certain states.

As announced in December, LTD Broadband won $1.3 billion to provide service to 528,000 locations across 15 states. Its winnings included $187.5 million to cover 76,856 locations in California; $3.2 million to reach 2,122 locations in Kansas; and $81.1 million to connect 39,889 locations in Oklahoma.

Auction winners were required to demonstrate their status as an eligible telecommunications carrier (ETC) in all bid areas by June 7, 2021. That day, LTD Broadband petitioned the FCC to waive that deadline to give it more time to submit documentation proving its ETC status in California, Iowa, Kansas, Nebraska, North Dakota, Oklahoma, South Dakota and Texas.

RELATED: Trade group WTA scoffs at LTD Broadband’s fiber claims

But the FCC argued in an order issued today LTD Broadband dragged its feet seeking certification paperwork from state officials and denied its waiver petition for the states of California, Kansas and Oklahoma. The agency said it planned to issue a public notice finding “LTD in default on its bids” in those states.

“Consistent with the Commission’s direction in the Rural Digital Opportunity Fund Order, applicants who default will be subject to the applicable forfeiture under the Commission’s rules, and defaults will be referred to the Enforcement Bureau,” the order stated.

Other issues

Rosenworcel pressed other RDOF “applicants who are dragging their feet or can’t meet their obligations" to "follow the rules or we will disqualify you and move on."

The agency issued an initial list of bids in default, after receiving notifications from some winners that they do not intend to pursue “some or all” of their bids in certain areas. The lineup included bids from Charter Communications for coverage in Alabama, Indiana, Kentucky, Massachusetts, Michigan, South Carolina, Tennessee, Texas, Virginia and Wisconsin; Conexon Connect in Ohio, Texas and Virginia; and Redzone Wireless in Maine. LTD Broadband is not yet on the list. 

“Auction 904 support will not be authorized for these winning bids. We consider these winning bidders and assignees to be in default for these bids and subject to forfeiture,” the FCC said. It added defaulters “will be subject to a base forfeiture per violation of $3,000.”

Charter previously sought a limited waiver of its RDOF deployment obligations in Massachusetts and parts of Kentucky, Missouri, Virginia and Wisconsin. Last week, Charter awarded Gibson Technical Services a construction contract to handle its RDOF builds in Alabama, Louisiana and North Carolina.

Following concerns that large amounts of RDOF funding could be squandered on redundant coverage, Rosenworcel also warned the agency was “putting winning bidders on notice of their obligation to ensure that support goes to the areas that need it.” The regulator sent letters to 197 winning bidders, flagging the census blocks they won which already appear to have coverage and urging them to seek waivers where necessary.

The Competitive Carriers Association, which previously raised concerns about redundant coverage, applauded the move as one which would "help ensure that genuinely unserved areas are the ultimate target of much needed resources for rural America."