FCC fines LTD Broadband $100k for breaking RDOF rules with Cox talks

LTD Broadband hit another speed bump in relation to the Rural Digital Opportunity Fund (RDOF), as the Federal Communications Commission (FCC) accused it of repeatedly violating quiet period rules during the Phase I auction. According to a notice of apparent liability, the FCC’s allegations center on communications LTD Broadband had with Cox Communications through the former’s investment agent, RJM & Company.

The FCC has long had anti-collusion rules in place which prohibit auction applicants from directly or indirectly communicating information about bids or bidding strategies with one another to preserve the fairness of its proceedings. The rules apply to anyone who submits an application, regardless of whether that application is approved, and kick in following the application filing deadline. So, for the RDOF auction, the quiet period began on July 15, 2020 and ended on January 29, 2021. Applicants are expected to self-report violations within five days of their occurrence.

Following the start of bidding in the RDOF auction in October 2020, LTD Broadband hired RJM in November to help raise money to expand its operations, the FCC said. However, the company failed to have RJM sign a non-disclosure agreement to help ensure the details LTD shared with RJM about its bidding success weren’t passed on to third parties. RJM subsequently spoke with Cox Communications representatives by phone and email in December 2020 and January 2021, the FCC found. LTD did not report the violation.

The agency concluded LTD’s communications with Cox violated its quiet period rules and proposed a forfeiture of $100,000 for the offense. LTD will be able to petition the FCC to reduce or cancel the proposed fine.

The fine is the latest setback for LTD Broadband. Though the company emerged as the largest winner in the RDOF auction with bids totaling $1.3 billion, the company has struggled to secure the state approvals needed to have the FCC authorize its winnings.

More funding released

News of the violation came the same day the FCC announced it was ready to authorize the latest batch of RDOF funding. The nearly $200 million pot covers bids for 230,000 locations across 26 states and raises the total amount of funding approved to date to more than $5.2 billion. Among those authorized to receive funding were Cable One, Conexon Connect, Lumen Technologies-owned Qwest Corporation and Wisper.

Out of the top ten winners in the RDOF auction, Charter Communications, Frontier Communications, Windstream, Lumen Technolgies (which bid as CenturyLink) and some members of the Rural Electric Cooperative Consortium have had winning bids approved in a “ready to authorize” notice. LTD Broadband, SpaceX’s Starlink, Nextlink, Resound Networks and Starry are still waiting.

Resound recently told Fierce technology advances would allow it to use fixed wireless access to deliver gigabit speeds to some RDOF locations it previously planned to cover with fiber. That plan, however drew ire from the National Rural Electric Cooperative Association and NTCA – The Rural Broadband Association, which said the move raised questions about auction transparency and accountability. In a letter to the FCC, the pair urged the agency exercise “careful scrutiny” of winning bidders’ proposed technologies and plans “to ensure the most effective use of universal service resources and serve the interests of consumers in need.”