Updated August 20th with information about Hawaiian Telcom
Add FairPoint Communications to the list of carriers that have accepted Connect America Fund dollars in exchange for agreeing to bring broadband to portions of their local service territories where broadband isn’t available today or is available only at low speeds. And add FairPoint territories in Colorado and Kansas to the list of places where the FCC will be using a competitive bidding process to award CAF funding.
FairPoint Accepts CAF
FairPoint said late yesterday that it would accept $37.4 million annually to bring service to approximately 105,000 locations in 14 states and would decline funding for two states – Colorado and Kansas. The amount accepted represents the vast majority of the $38.2 million FairPoint was offered earlier this year. The CAF program calls for carriers accepting funding to receive the funding for seven years.
The FCC based the amount of CAF support offered to each of the nation’s 10 or so incumbent price cap carriers based on a cost model, and carriers were given until later this month to accept or decline funding on a state-by-state basis.
In a press release announcing its funding acceptance, FairPoint noted that it was accepting funding for some locations that “will prove to be uneconomical to serve” but added that it opted to accept funding “based on many factors including the totality of the business and regulatory model for each state.”
FairPoint, as well as competitive companies, will have the opportunity to bid to provide service to unserved areas of its territory in Colorado and Kansas. The FCC plans to award funding to the provider that offers to deliver service for the lowest level of support – and in the auction, unlike with the initial funding offer, carriers will not be required to provide service to an entire state.
Other Carriers’ Decisions
FairPoint is the third price cap carrier that has indicated its plans for CAF funding. Previously Frontier accepted all of the funding it was offered, while Windstream accepted funding for all of its states except New Mexico.
The broadband-focused CAF program eventually will replace today’s voice-focused high-cost Universal Service program, with funding transitioning from one program to the other. Similar reforms are planned for the nation’s smaller rate of return carriers, but reforms for those carriers are lagging behind those for the larger price cap carriers.
Several carriers – including AT&T and Verizon – have not yet indicated their plans for CAF funding and have until later this month to do so. Price cap carriers in total were offered $1.7 billion annually in the program.
Update- August 20th- Hawaiian Telcom said yesterday that it will accept more than $4 million annually in CAF funding.