CenturyLink this morning said it would accept $54 million of $90 million offered to the company through the Connect America Fund program to help cover some of the cost of bringing broadband to areas that cannot get broadband today. Under the terms of the program established for this year, the company also will invest an additional $54 million or more of its own in the broadband deployments, which will include 33 of the 37 states where the company is the incumbent local telephone service provider.
“CenturyLink is investing millions of dollars to deploy broadband to thousands of Americans who live in areas that would be cost prohibitive to serve without programs like the FCC’s Connect America Fund,” said CenturyLink Executive Vice President for Public Policy and Government Relations Steve Davis in today’s announcement.
The Connect America Fund program got underway last year and is funded by the telecom industry using money that previously would have gone toward the cost of providing voice service to high-cost rural areas. The FCC is transitioning away from that program to one focused on broadband.
The commission last year established a yearly funding amount for each of the nation’s largest price cap carriers, based on the number of rural lines in a carrier’s territory. Last year CenturyLink accepted $35 million of the $90 million it was offered.
The company likely accepted a higher amount of funding this year because the terms of the program changed somewhat for this year. Last year, carriers were offered $775 per line to bring service to customers that could not get broadband speeds of 768 kbps downstream and 200 kbps upstream.
This year’s program again offers that option but also gives carriers the option of accepting $550 per line for homes that cannot get service at speeds of 3 Mbps downstream and 768 kbps upstream. And it appears that CenturyLink is primarily targeting homes in that category. According to today’s release, the company expects to bring service to nearly 95,000 homes for this year, which works out to an average of $568 per home.
Update- In a follow up interview, Steve Davis offered some additional details about CAF funding requirements for this year.
Before carriers can accept funding for any customers who currently get service above 768kbps downstream but below 3 Mbps, they must first confirm that they have brought service to every customer lacking service above 768 kbps who can be economically served for the $775 support rate.
CenturyLink, he said, did a “painstaking location-by-location analysis to find everywhere we could conceivably build broadband economically.”
He also noted that CenturyLink aims to use a fiber-to-the-neighborhood approach to serving the homes it will upgrade through the Connect America program.