LTD Broadband battles Iowa for $23M in RDOF funding in court

LTD Broadband sued the Iowa Utilities Board in a last-ditch effort to hold on to Rural Digital Opportunity Fund (RDOF) money it won in the state, arguing the regulator improperly denied the company’s bid to expand its designation as an Eligible Telecommunications Carrier.

The operator won nearly $23.2 million in the RDOF reverse auction to bring connectivity to 12,916 locations in Iowa. But under Federal Communications Commission (FCC) rules, RDOF funding cannot be distributed if an operator is not listed as an ETC in the areas where it won. Status as an ETC simply means that a state has certified an operator as eligible to receive federal universal service funding.

In a lawsuit filed in Iowa district court, LTD noted it applied for and was granted ETC status for certain census blocks in Iowa in 2019 in order to receive support from the FCC’s Connect America Fund II program. After securing winning bids in the RDOF auction, LTD said it applied for an expansion of its ETC designation to the areas it won funding. However, instead of receiving a prompt response, it accused the Iowa Utilities Board of first delaying action on and then improperly denying its application in November.

“LTD did everything required by law to amend its ETC designation,” it asserted. “Although LTD provided all requested information in a timely manner and there were no further requests for information, the Board did not act on LTD’s amendment despite its awareness of the June 7 FCC deadline…Not only did the Board take much longer to rule on LTD’s request than any other applicant, it held LTD to a different standard than the one it applied for similarly situated ETC applicants.”

LTD asked the court to reverse the Board’s denial of its ETC expansion.

RELATED: LTD Broadband dealt blow as FCC prepares to issue $311M in RDOF funds

The lawsuit is the latest front in LTD’s battle to hold on to the $1.3 billion it won in the RDOF auction to provide service to 528,000 locations across 15 states.

In July, the FCC denied LTD’s request for more time to secure the necessary ETC status in California, Kansas and Oklahoma and said it planned to issue a public notice finding the operator in default on its bids in those states. In October, the FCC also denied LTD’s request for an extension in Iowa, Nebraska and North Dakota. LTD had also asked for more time in South Dakota and Texas, but the FCC deferred a decision on those.

In August, LTD filed a Petition for Partial Reconsideration of its July ruling, asking again for more time to prove its ETC status in California. It followed up last month with a Petition for Reconsideration related to the FCC’s October order, asking the agency to revisit the ruling impacting Iowa, Nebraska and North Dakota.