DC Circuit Rejects LTD's Rural Digital Opportunity Fund Appeal
A federal appeals court Tuesday upheld the FCC's decision to deny LTD Broadband more than $1.3 billion in rural broadband subsidies, ruling that the agency didn't violate the Administrative Procedure Act when it found the company unqualified.
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In a per curiam opinion, the U.S. Court of Appeals for the D.C. Circuit rejected LTD’s petition (No. 24-1017) to overturn the FCC’s 2022 denial of its long-form application under the Rural Digital Opportunity Fund (RDOF). LTD was the largest winning bidder in the auction, conditionally being awarded funding to serve more than 500,000 locations across 15 states.
The FCC properly concluded LTD didn’t meet the legal, technical and financial requirements to receive the RDOF support, said Judge Judith Rogers, writing for the unanimous three-judge panel.
The judges heard oral argument in November, during which they pressed the FCC and LTD on the review process (see 2411050040). LTD argued that the FCC changed the rules mid-process, ignored the company's record and unfairly penalized it for issues in one state. But the court disagreed, pointing to the agency’s wide discretion and ample evidence in the record.
The panel noted that LTD had never previously managed a buildout of the scale it proposed. The judges also cited limited experience deploying fiber and said the company was slow to meet certain regulatory milestones. By the end of 2021, LTD still hadn’t secured eligible telecom carrier designations in five states. In some states where it did, it hadn’t filed the required certifications on time.
In addition, the court highlighted the FCC’s concerns about LTD’s ability to provide gigabit-speed service, as promised. It found LTD’s past operations were “a far cry” from what would be needed to meet its RDOF commitments, the opinion said.
The FCC "gave LTD fair notice" of its review process and engaged with the company about various "insufficiencies" with its long-form application "multiple times" for a year and a half, the court added. It noted that the FCC also "gave LTD one last chance" to address outstanding agency concerns before declaring the company in default.
The judges also dismissed LTD’s claim that it had a right to the funds once the auction ended. They emphasized that winning bidders were told funding would follow only after a successful long-form review. In denying the petition, the court effectively closed the door on LTD’s bid to secure the RDOF funds. The ruling backed the FCC’s authority to vet applicants after an auction has ended.
"LTD won, big time," the court acknowledged: "But that award was conditional on LTD's successful completion of the long-form application process." LTD didn't comment.