FCC Defends Denial of LTD Broadband's Long-Form RDOF Bid

The FCC defended the Wireline Bureau's decision denying LTD Broadband's long-form application for the Rural Digital Opportunity Fund. LTD, which was the largest winning bidder, sought a reversal of the decision, claiming the FCC improperly denied its entire application. In a Monday reply brief to the U.S. Court of Appeals for the D.C. Circuit (docket 24-1017), the commission said it "repeatedly stated that the bureau would perform an in-depth review of long-form applications" to consider the technical and financial information of winning bidders (see 2405090056).

"There would have been no reason to have required the submission of that information if the bureau was not permitted to review it," the FCC said. LTD "had ample notice" of the bureau's application review process and any "confusion" the company "may have had about long-form application filing requirements should have been resolved through its communications with the bureau over the course of a year and a half."

In addition, the FCC noted that LTD failed to "sufficiently differentiate between geographic locations" to help the bureau determine whether some but not all service areas it applied for could be approved for support. LTD "never raised the possibility of limiting its long-form application to cover something less than all of its winning bids" and the FCC "had no basis to do so."

FCC staff "repeatedly contacted LTD through March 2022," the commission said, but the company didn't submit technical or financial information in response to requests. The commission received a letter from LTD in May 2022 describing the "remaining deficiencies" in its long-form application. It then gave the provider another chance to address them.

LTD's plans "entail a high risk" that it would be unable to "cover all necessary debt payments over the life of any loans" and its technical filings "reflect a lack of understanding of how significantly their business needs to scale up to achieve equipment purchases, hiring, construction, deployment, maintenance, operations, and customer service for the sizeable network" of its winning bids, the bureau concluded when it denied the long-form application.

"After reviewing LTD’s long-form application and accompanying documents, the bureau determined, and the commission affirmed, that LTD was not reasonably capable of meeting its public interest obligations," the FCC said. It added that LTD's argument that its long-form application was improperly denied lacks merit because the bureau followed the commission's auction rules and procedures. In-depth reviews require "more than checking applications for completeness," the FCC said, and it's "plainly not in the public interest to award universal service funds to an applicant that has not shown that it is likely to fulfill its public interest obligations."

"LTD had ample notice of the procedures that the bureau would use and the standard that the bureau would apply" in reviewing its long-form application, the FCC said. "Any confusion LTD about filing a successful long-form application should have been dispelled through" the 18-month period the bureau communicated with the company, it noted.

LTD's "conception of long-form application review also flies in the face of the ordinary meaning of the term." The company's "highly constrained view" of the process "takes no account" of the extensive information required of winning bidders. The FCC urged the court to deny LTD's petition.