LTD Broadband Asks D.C. Circuit to Reverse FCC RDOF Denial

LTD Broadband asked the U.S. Court of Appeals for the D.C. Circuit Wednesday to overturn the FCC's denial of its Rural Digital Opportunity Fund Phase (RDOF) I auction long-form application. It filed a partially redacted petition (docket 24-1017). LTD was the largest RDOF winner, receiving an award of roughly $1.3 billion to deploy broadband to 528,088 locations across more than a dozen states (see 2012070039).

The ISP claimed that it could be liable to "forfeit almost $22 million on top of the federal money it no longer is eligible to receive" if the denial isn't reversed. LTD said it has "faced difficulty in obtaining financing" and is "disqualified from receiving hundreds of millions of dollars in support to deploy broadband services in rural states." The FCC didn't comment.

The FCC "abruptly changed course" under Chairwoman Jessica Rosenworcel's leadership, LTD said. "This sudden departure from the FCC’s established rules and procedures, which auction participants reasonably relied on when deciding whether and how to participate, was quintessential arbitrary and capricious agency action," LTD said in its petition. The ISP, which now goes by GigFire, said the FCC denied all its winning bids "despite voicing concern about only some of those bids."

LTD noted that the RDOF process didn't include requiring applicants to submit a letter of credit before obtaining FCC authorization to receive funds, but the FCC Wireline Bureau concluded based on the company's long-form application, before it could submit its letter of credit and accompanying bankruptcy opinion letter, that it "was not reasonably capable of complying with the FCC's public-interest requirements."

The ISP also said the FCC denied its requests to waive the deadline to receive eligible telecom carrier (ETC) designation in some of the states in which it won bids before its long-form application was reviewed. The FCC "recognized that LTD broadband did have an [ETC] designation in other states where it submitted winning bids" but "did not adequately explain why" it didn't approve LTD's application in those states "instead of rejecting the application outright."

"While the FCC’s review is not ministerial, it is not a wholly independent and deeply probing look at the application’s disclosures and certifications," LTD said. The agency "faulted LTD Broadband based on criteria that had no clear grounding in the auction rules or procedures," it said, citing the commission's criticism of the company's "choice of a certifying professional engineer."

The FCC "did not abide by its rules and procedures" in evaluating LTD's long-form application, the ISP said, noting the rules "directly reject the notion that a smaller or more successful bidder should receive more searching scrutiny."

The fair notice doctrine "does not allow an agency to penalize a regulated entity for conduct based on a reasonable interpretation of the commission's rules," LTD said. The FCC "singled out" the company and imposed "more demanding requirements" on the ISP than on similar applicants, it argued: "To LTD Broadband’s knowledge, the FCC did not apply this scope, scale, and size review to any other RDOF or Connect America Fund Phase II winner."