CenturyLink has warned the FCC that the company may not meet deadlines for completing broadband deployments funded through the CAF (Connect America Fund) program. In a meeting with senior commission officials this week, CenturyLink representatives attributed the deployment delays to the COVID-19 pandemic and asked the commission for a deployment deadline extension.
In a letter that CenturyLink sent to the FCC summarizing the meeting, the company noted a range of reasons why the pandemic was causing CAF deployment delays, including:
- Some localities have mandated a complete work stoppage that extends to broadband deployment.
- Numerous permitting agencies are shut down or have scaled back operations, substantially reducing their ability to process permit applications.
- Higher instances of backorders and product unavailability for electronics, fiber and other equipment needed for broadband deployment.
In 2015, the CAF program offered money to incumbent carriers including CenturyLink for deploying broadband in unserved areas of their local service territories. Carriers had the option of accepting or rejecting funding on a state-by-state basis, and CenturyLink was one of the biggest funding recipients. The company accepted about $500 million annually for all but four of the 37 states in which it operates.
Funding recipients were required to deploy service to 40% of locations for which they accepted funding by the end of the third year of support and to add an additional 20% of locations each year thereafter. Program rules call for all deployments to be completed by the end of this year.“Even a modest initial extension at this time would substantially reduce pressure and facilitate network operators’ ability to address and successfully respond to pandemic-related challenges,” CenturyLink wrote in its letter, which references a similar recommendation from USTelecom.
This isn’t the first time CenturyLink has warned the FCC of a potential delay in meeting CAF deployment milestones. Earlier this year, the company said it was not certain if it had met the 80% deployment milestone, which came at the end of last year.
CAF Deployment Deadline Extension
It would seem likely that the FCC will offer some type of CAF deployment deadline extension, as the commission has been quite lenient in extending other deadlines during the COVID-19 pandemic.
Some of the funding that CenturyLink and other incumbent local carriers did not accept in the CAF program was awarded through the CAF-II reverse auction, and winners in that auction also face deadlines, which the FCC may be asked to extend as well.
As the initial CAF program winds down, the FCC is gearing up to replace it with the Rural Digital Opportunity Fund. Incumbent carriers will no longer get first refusal rights on funding but instead, all funding will be awarded through a reverse auction.
That auction is scheduled to start later this year, but it, too, could be delayed as a result of the pandemic.