More ISPs Say Midco Misclassification Cost Them Subsidy Support
They say Midco doesn't offer voice service in their areas.
Jake Neenan
WASHINGTON, Sept. 26, 2024 – Seven more broadband providers are telling regulators they received less subsidy money than they should have because one midwest provider was misclassified.
The Federal Communications Commission’s Enhanced ACAM program subsidizes the construction and maintenance of rural broadband through the agency’s Universal Service Fund, to the tune of $18 billion over the next 15 years. It offered participants less annual support for locations in their service area that are already served by an unsubsidized competitor.
The companies say fixed wireless provider Midcontinent Communications, or Midco, was classified as an “unsubsidized competitor” when it shouldn’t have been. They say they lost out on a total of more than $800,000 in annual support between them for 1,782 locations Midco serves.
In addition to not receiving subsidies, the classification hinges on providing both qualifying broadband and voice services, and the companies say Midco doesn’t provide voice service at some locations in their service areas.
“[A] sampling of quick address searches on Midco’s website confirms that Midco only offers broadband at such locations; no voice service is available,” the companies wrote. They submitted separate letters but used largely the same construction.
The companies asking for the reclassification include Wiktel, Manchester-Hartland, KMTelecom, Venture, HTC, Albany Fiber, and Alliance Communications. They operate in Minnesota and the Dakotas.
The companies, all fiber providers, argued their higher capacity infrastructure better served the homes and businesses at issue.
“The misidentification of these locations, and associated reduced support, in effect denies these locations meaningful access to fiber,” they wrote to the agency.
The FCC can adjust the Enhanced ACAM awards until the end of 2025. Data on voice service was only available on a state level when the program was stood up in 2023, and the agency dealt with this by assuming providers that offered voice service in a state offered it everywhere in that state.
It’s not the first time the FCC has heard about misclassifying Midco. Two other Minnesota providers, Arvig and Bevcomm, asked the agency to reclassify the company in July, saying they lost out on more than $2.8 million annually.
The agency asked for comments on Arvig and Bevcomm’s complaint, eventually extending the deadline from Sept. 13 to Friday “in order to provide sufficient time to review the specific locations identified by Arvig and BEVCOMM in support of their claims.” NTCA, the trade group for rural ISPs, submitted comments supporting the two companies. It's raised similar concerns to the agency.
Midco received money from a previous FCC subsidy to build out most of the relevant fixed wireless facilities – albeit for locations outside the complainants’ areas – which could potentially also cut against its “unsubsidized competitor” classification, but Arvig told Broadband Breakfast last month the lack of voice service was more straightforward evidence of a misclassification.
Midco did not immediately provide a comment.
