LTD, FCC Argue RDOF Standard of Review in D.C. Circuit

WASHINGTON, Nov. 7, 2024 – Judges probed LTD Broadband and the Federal Communications Commission Monday during oral arguments in the company’s challenge to its $1 billion subsidy denial.

LTD’s attorney Michael Showalter argued the company received heightened scrutiny because of its smaller size. He said the agency should have given more weight to its letter of credit and engineer-certified network designs.

“The bureau is not allowed to apply a heightened standard of review for companies that are smaller,” he said. “It’s certainly allowed to review the application, but it’s not allowed to apply a heightened, skeptical, de novo first look.”

The company had initially won more than $1.3 billion to serve 528,000 homes and businesses in 15 states from the FCC’s Rural Digital Opportunity Fund auction. After the bidding process, winners submitted more detailed long-form applications to serve the locations they won, and the FCC denied LTD’s. The agency said it wasn’t convinced the company was financially or technically capable of scaling up to meet its RDOF commitments.

FCC attorney Maureen Flood said the idea the agency applied a unique standard of review to LTD’s application was “a fiction.”

“As the commission was evaluating whether a long-form applicant qualified for support, it considered scope, scale, and size in reviewing every application,” she said. “Here, what happened was commission staff looked at the information LTD filed with its long-form application and reasonably determined that LTD had failed to demonstrate that it could scale up.”

Showalter said the company was looking for judges to remand its denial back to the agency and require staff to use “the correct standard of review,” which he said the company thought would result in its application being approved.

“Under even the most deferential standard of review, LTD is not technically and financially qualified for universal service support, and the commission’s findings in that regard are reasonable,” Flood said.