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Major RDOF winner LTD withdraws from California awards Thumbnail Image

Major RDOF winner LTD withdraws from California awards

On June 21, 2022, fixed wireless internet service provider LTD Broadband announced that it will no longer use the Federal Communications Commissions’ Rural Digital Opportunity Fund grant for telecom builds in rural California. 

The company petitioned the FCC in June of 2021 to extend deadline requirements for the funds granted them. The petition was denied shortly thereafter. In response, LTD issued a petition for partial reconsideration in August, which they redrew this week. 

“It has become apparent that LTD will not be able to obtain Eligible Telecommunications Carrier designation for the required census blocks within a reasonable timeframe to allow it to meet its RDOF obligations,” said LTD in a new filing.

The California Public Utilities Commission denied LTD’s application and request for ETC designation in California. 

LTD asserts that “this decision [by the CPUC] was premised on errors of both fact and law.” Former LTD lawyer Kristopher Twomey had, unknown to LTD, submitted the ETC application 5 weeks later than reported to the company and the press. 

The company claimed in the August petition for partial reconsideration that it was “affirmatively misled by its then-counsel as to when the application should have been filed according to the CPUC communications division staff and when it was actually filed.”

However, “the broad discretion afforded to the CPUC by the California courts makes it unlikely that it could obtain reversal of that decision [to deny request for ETC designation],” said the report issued this week, announcing its withdrawal from California. “It would therefore be an imprudent expenditure of time and money to continue litigating that case.” 

LTD Broadband is not the first company to default on RDOF funds. At least five companies have asked the FCC to waive penalties for defaulting on coverage areas they promised to connect with their winning bids. 

The $9.2 billion RDOF funds were allocated via reverse auction where awards were given to companies that could promise coverage for areas at the least amount of money. LTD had been tentatively awarded the largest amount of funding at $1.32 billion, although that number was subsequently trimmed to $984 million.

Charter received the next-largest initial award, at $1.22 billion.

The difficulties the FCC faced in allocating RDOF funds could have implications for the rollout of the $42.5 billion in funds through Broadband, Equity, Access, and Deployment program, even though the programs operate very  differently.

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