Frontier Communications, TracFone, Virgin Mobile and several small rural telcos will receive funding from the Universal Service program to conduct trials aimed at increasing broadband adoption among low-income Americans. In an order adopted today, the FCC said it will target a total of $14 million to 14 different awardees, which also included cable companies, tribal telcos and others. The FCC freed up funding for the trials through reforms to the Universal Service low-income program announced earlier this year.
The awardees receiving the highest amounts of funding for their trials were Nexus, which will receive $2.8 million for pilot tests in eight states; Puerto Rico Telephone Company, which will receive $2.5 million; XChange, which will receive $1.9 million for a New York City pilot test; Partnership for a Connected Illinois, which will receive $1.5 million and Virgin Mobile, which will receive $1.2 million for trials in Massachusetts and Ohio.
All other recipients were awarded less than $1 million, including Vermont Telephone, which won $150,000 for a pilot test that will study the effect of increasing end user prices on retention.
Alpine Communications and Leaco Rural Telephone won a combined $200.000 for a project in Iowa and New Mexco that will test the effects of decreasing subsidy amounts over a one-year period. The National Telecommunications Cooperative Association worked with those companies on their application.
The NTCA also worked initially with three rural Illinois telcos who ultimately applied for funding through the Partnership for a Connected Illinois Project, which included a total of seven rural telcos. That project will look at the effects of access to digital literacy and consumers’ choice among plans offering varying data speeds.
Several other small telcos also won funding for applications that they filed individually.
Frontier Communications was awarded approximately $420,000 for a project in Ohio and West Virginia that will study the impact of financial incentives to take digital literacy training.
The FCC received a total of 24 applications for the low-income pilot program. Ten of the applications were rejected because they either proposed to fund items not eligible for pilot program support or they duplicated other projects that were better designed as field experiments, the FCC said in today’s order.
The TracFone project, which will involve several states, and the Virgin Mobile project both aim to study the effects of subsidy amounts and discounted equipment, but the parameters of the two projects apparently were sufficiently different to merit both companies receiving funding.
The FCC previously said it would make as much as $25 million available for the pilot tests. An FCC spokesman said the commission only awarded $14 million because “we were trying to be fiscally responsible and make awards for only the best projects.”
A complete list of funding winners can be found in today’s order.