When the FCC announced the winners of the Rural Digital Opportunity Fund (RDOF) last December, many industry veterans were surprised by the appearance of LTD Broadband as the largest recipient of funds. The company managed to snag more than $1.3 billion to serve 528,000 locations across 15 states, but its capability to do so immediately drew skepticism from many (including us).

Now, a little less than a year later, the company's chickens are coming home to roost. In a recent ruling denying the company the expanded Eligible Telecommunications Carrier (ETC) status it needs to offer service in RDOF-awarded areas, the Iowa Utilities Board took LTD to task for a history of noncompliance and late payments:

Specifically, LTD had not complied with the Board’s February 22, 2019 order, as LTD had not yet filed a registration as a telecommunications service provider, was past due on its DPRS assessment, and had not yet filed an annual report with the Board for reporting years 2019 and 2020. 

[B]eyond the procedural flaws in LTD’s Application, the company’s responses to Board . . . illustrate that LTD has routinely submitted regulatory filings with obvious errors, if filings were submitted at all . . . It is for this reason that the Board takes seriously LTD’s history of inconsistent compliance with this provision, as the regulatory burden is minimal and the consequence of failing to uphold the obligation ETCs pledge to carry out impacts the rest of the industry, the Board, and most importantly, the Iowans served by the program.

But the regulatory board took its comments a step further, basing its ruling also on the fact that the company's behavior in the state betrays what looks like a lack of ability to meet its bidding commitments during the auction:

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. LTD’s responses and actions lack the candor that the Board would expect from a carrier seeking to evidence the expertise to take on this degree of expansion.

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If you have been following our series on the Accessible, Affordable Internet for All (AAIA) Act, you already know the proposed legislation calls for a $100 billion investment in expanding broadband access and affordability in unserved and underserved parts of the country. In this fourth installment of the series, we explore the part of the bill that contains the bulk of the funding. Of the $100 billion proposed in the bill, $85 billion of it can be found in the Title III - Broadband Access section.

Amending the Communications Act of 1934, Section 3101 of the bill appropriates $80 billion for “competitive bidding systems” to subsidize broadband infrastructure. That is to say, it requires the Federal Communications Commission (FCC), and states, to use “competitive bidding systems” for Internet Service Providers (ISPs) to bid on broadband deployment projects in “areas with service below 25/25 Megabits per second (Mbps), and areas with low-tier service, defined as areas with service between 25/25 and 100/100 Mbps.” The term “competitive bidding” seems to suggest a reverse auction process, though it hardly makes sense for each state to set up such a system given the logistical challenges. A legislative staffer responded to our email earlier this year saying he believed that language would allow for state programs that solicited applications from ISPs and scored them for evaluation, much like Minnesota’s Border-to-Border Broadband program operates. However, he noted that the FCC would interpret that language ultimately. More on this below. 

Prioritizing Higher Upload Speeds

It’s worth noting that this part of the bill implicitly acknowledges the insufficiency of the current FCC definition of a minimum broadband speed of 25/3 Mbps. As it stands now, the FCC defines “unserved areas” as parts of the country where there is either no Internet access or broadband speeds under 25/3. This legislation raises the bar and broadens the definition of “unserved areas.” It’s a step in the...