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The FCC said yesterday that all price cap carriers eligible to receive a seventh year of Connect America Fund (CAF) support have opted to do so. The total value of the funding accepted is nearly $1.5 billion.

Carriers that will receive the funding include AT&T, Lumen/CenturyLink, Cincinnati Bell, Consolidated, Frontier, Windstream and Northwest Fiber, which does business as Ziply, as well as several smaller companies.

Price cap carriers historically have been larger publicly held telecommunications companies, with both urban and rural footprints. Those companies were offered funding back in 2015 to deploy broadband to parts of their local service territories lacking broadband service.

Carriers had to accept or decline funding on a state-by-state basis and most of them accepted most of the funding they were offered. Funding was for six years, by which time deployments were expected to be completed. That six-year period ends at the end of 2020.

The December 2014 Connect America Fund report and order, however, includes the option for the seventh year of support, noting that its purpose would be to provide “a gradual transition to the elimination of support.” (story continues below)

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Carriers accepting the seventh year of funding are required to “continue providing broadband with performance characteristics that remain reasonably comparable to the performance characteristics of terrestrial fixed broadband service in urban America.”

Telecompetitor previously reported that AT&T, Frontier, CenturyLink and possibly others had sent letters to the FCC saying that they wanted to receive the seventh year of CAF support. According to today’s FCC public notice about the seventh year of CAF funding, all eligible carriers have requested the additional funding.

The funding that will go to Northwest Fiber/ Ziply was originally offered to Frontier, which sold its operations in four states to Ziply owner WaveDivision Capital.

A listing of carriers that will receive the seventh year of CAF support that includes the amount of funding each carrier will receive by state can be found in the public notice.

CAF funding that carriers were offered in 2014 did not cover all unserved locations in the carriers’ local service territories. Funding for remaining locations will be awarded through the upcoming Rural Digital Opportunity Fund auction. The incumbent price cap carriers and their competitors will have the opportunity to bid in the auction, with funding going to the company that commits to deploying service for the lowest level of support. A weighting system will favor bids for faster, lower-latency service.

Funding for local service territories where the incumbent carrier is a smaller rate-of-return carrier is handled through a separate FCC Universal Service Fund program.

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One thought on “Carriers to Receive Seventh Year of CAF Support, Worth $1.5 Billion for Rural Broadband

  1. Like I said earlier, a waste of money. Show me any of these companies starting to actually deploy true rural broadband because they are not. They are just building out fiber to support their current customers. Like CARES another waste of money that does not deliver rural broadband.

    Just building the war chest for these companies fiber expansion that has nothing to do with rural broadband.

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