Takeaways from the FCC’s LTD Decisions

In a one-two punch, the Federal Communications Commission (FCC) rejected LTD’s appeal of the earlier decision declaring it to be in default for its Rural Digital Opportunity Fund (RDOF) winning bids and proposed to fine LTD over $21 million for its defaults. The two decisions provide a cautionary tale for states as they begin their competitive grant processes in 2024 for National Telecommunications and Information Administration’s $40+ billion Broadband Equity Access and Deployment (BEAD) program. The FCC has been much criticized for the outcome of the RDOF auction, even though other RDOF awardees are busy at work, building networks and offering high-speed, reliable broadband service to customers ahead of schedule. In the case of LTD, the FCC staff found, after extensive review of LTD’s long-form application, that LTD was not reasonably capable of complying with the FCC’s requirements. In the coming year, many states will be commencing competitive grant processes to award their allotted BEAD funding. Whether there are multiple competing applications for a given geography, with the one with the highest score selected, or only one applicant for a given area, it is critical that states conduct a rigorous process to ascertain whether prospective BEAD grantees have access to capital sufficient to complete the proposed project, and the managerial capability to execute. The LTD experience shows that it’s not wise to rely on applicant certifications; someone needs to dig into the details and assess the ability to perform. 

[Carol Mattey is a former senior official from the Federal Communications Commission, where she led teams working on initiatives to modernize the FCC’s $9 billion Universal Service Fund to support broadband. She currently is the principal of Mattey Consulting LLC, which provides strategic and public policy advisory services to broadband providers and other entities seeking funding for broadband.]