Frontier Communications is wasting no time getting started on its Connect America Fund Phase II deployment. The company today said it will accept $283 million in annual funding from the FCC to cover some of the costs of bringing broadband to parts of its local service area that cannot get broadband today or only have low-speed broadband available. The FCC confirmed that Frontier would accept the entire $283,401,855 in CAF II funding that the commission offered the company in April. According to the FCC, the funding will go toward bringing service to more than 1.3 million households in 28 states.
“CAF Phase II is a critical next step in delivering broadband service – and the major economic benefits associated with it – to rural America,” said Frontier CEO Dan McCarthy in a press release announcing the decision.
The announcement makes Frontier the first company to announce its plans for CAF II funding. Back in April, nine other price cap carriers also were offered funding in the $1.7 billion annual program.
Frontier Accepts CAF II
McCarthy noted that Frontier had reviewed the FCC’s rules and made the decision to accept CAF II funding more than two months before the formal deadline in August because “we are eager to start building the infrastructure necessary to provide service to these markets as soon as possible.”
It’s not surprising that Frontier made the decision to accept all of its funding, as company executives said previously that they expected to accept a large amount of it.
The timing of Frontier’s decision is a bit of a surprise, though. When price cap carriers were offered funding in the first phase of the CAF program, all of them, including Frontier waited until the deadline or just a few days before the deadline to announce their decision. But accepting funding sooner rather than later would appear to be a smart decision, considering that any work requiring digging into the ground comes to an end around November in northern parts of the country when the ground freezes solid.
Funding offered to carriers in the CAF II program was based on a forward-looking cost model. Rules for the program require carriers to accept funding on a state-by-state basis, in exchange for agreeing to bring broadband at speeds of at least 10 Mbps downstream/ 1 Mbps upstream to unserved households. If a carrier declines funding for a state, funding will be awarded through a competitive bidding process.
At least one other price cap carrier – Windstream – has said it expects to accept all or most of the funding offered.
FCC Chairman Tom Wheeler has pledged to take action on establishing a similar program for the nation’s smaller more rural carriers this year.