Nextlink Internet says that it is almost two years ahead of schedule in construction related to its FCC’s Connect America Fund II (CAF II) auction winnings–but says that funding reductions “could imperil those advances” and has asked the FCC not to make those funding reductions.
Nextlink, which was the biggest winner in the 2018 CAF II program, says that its $281 million CAF II project is mandated to be 40% completed as of now, but the company already has reached 70% completion. The company had reported a completion rate of 50% last August. The projects cross six states.
Nextlink also claims that the equipment it is deploying is capable of supporting speeds that are five times what its CAF II win requires. In the future, the network will support speeds that are 10 times what is required in many CAF II areas.
Progress is threatened, however, according to a Nextlink press release.
“Because there are fewer locations in our rural footprint than the FCC originally projected, we are at risk of facing a funding reduction of over $21 million,” Nextlink Chief Strategy Officer Claude Aiken said in the press release. “Our build costs have increased beyond original projections due to inflation, and the funding reduction will slow our construction and hamper our goal to offer higher speeds in many CAF areas.”
The company has filed a petition asking the commission to not make the $21 million reduction to the company’s CAF funding.
The company outlines its rationale for the request in its filing.
“Deployment costs are essentially related to the size of a census block’s service area, not the number of locations passed,” Nextlink said. “Furthermore, given the commission’s own current difficulties in generating accurate broadband deployment maps, it is particularly unjust to tie CAF Phase II funding reductions to an accuracy-enhancing process (ELAP) that bears no reasonable relationship to deployment costs. Lastly, the public interest will be harmed by the potential slowing of Nextlink’s ability to continue its rapid broadband deployment to rural areas that need it the most.”
Nextlink noted in today’s release that it has more than 90,000 customers in seven states. It has almost 1,000 employees in more than 40 field offices. The company, which gained an investment from Cable One in August 2020, also was one of the top winners in the Rural Digital Opportunity Fund (RDOF) funding auction.
Joan Engebretson contributed to this report
One thought on “FCC Set to Reduce Nextlink CAF II Award by $21M, Nextlink Says “Please No””
Nextlink has launched wireless internet service to a lot of very small towns here in Oklahoma, and it works well from I have heard from people who use the service. They have launched service here in my small town, which is also being built out by two different fiber providers, one the local land-line telephone company and the other replacing the old cable TV system with a total fiber build. The small-town America and rural digital divide is being tackled pretty well by all these providers, so the government funding assistance programs are working.