PIERRE, S.D. (KELO) — A company wanting to deliver broadband to some underserved areas of South Dakota has been turned down for designation as an eligible telecommunications carrier.

The South Dakota Public Utilities Commission voted 2-1 on Friday to deny the application from LTD Broadband Ltd.

The company, based in Blooming Prairie, Minnesota, wanted to provide broadband internet access and broadband-voice bundled offerings in parts of 21 South Dakota counties: Brookings, Butte, Clay, Codington, Corson, Custer, Dewey, Hamlin, Hand, Jones, Lake, Lawrence, Lincoln, Lyman, Meade, Minnehaha, Pennington, Stanley, Todd, Union and Yankton. 

The commission’s decision means that LTD Broadband can’t receive federal Universal Service Fund support for those areas from the federal Lifeline program and through the Rural Digital Opportunity Fund.

The South Dakota Telecommunications Association actively opposed the application, arguing that LTD Broadband didn’t have the capability to successfully complete the project and be profitable.

Commissioner Kristie Fiegen said LTD Broadband hadn’t met its burden. “I believe they lack the evidence to provide the services in South Dakota to meet the public interest,” she said.

Commissioner Gary Hanson wanted the company approved. “This has been a real contentious issue before us,” Hanson said. “I don’t believe the PUC ever denied an ETC status.”

Chairman Chris Nelson said the decision should be based on the importance of protecting “the scarce dollars” in the universal service fund. “State commissions have a unique insight that is impossible to have at the federal level,” he said.

“This is not the conclusion I would have preferred. We need every possible company to solve the broadband problem,” Nelson added. “This isn’t where I wanted to end up with this docket.”

Hanson didn’t back off. “The risk we are taking is we have a bird in hand and there’s no one in the bushes,” he said. “These can take a long time if we don’t pursue it now.”

Nelson countered, “Half of these areas are going to be covered by the end of this year.” He said there’s at least another $100 million of government support to reach into remaining areas.

Hanson answered, “A pot of two billion dollars may not be enough.” He added, “Even if (the owner) fails, we benefit. But we won’t benefit if we have to wait and wait and wait like we have.”

Nelson responded there’s going to be a lot of buildout. “This is going to happen. It needs to happen responsibly.” 

Fiegen and Nelson agreed on the denial. Said Fiegen “You can tell the three commissioners are passionate about broadband expansion.”