FCC to Disburse $385 Million for Broadband Buildout

The disbursement is about $270 million more than was given out during the first round in 2012. AT&T, which last year accepted nothing and this year is seeking $100 million, said the commission had addressed several uncertainties that prevented it from taking money last year (CD Aug 21 p3). “This second round builds on lessons learned from the first, and includes changes to incentivize private investment, improve program clarity, and maximize deployment where consumers lack broadband,” a commission spokesman said. The commission expanded Phase I eligibility this year to include any location that lacks Internet service speeds of at least 3 Mbps down and 768 kbps up, and also offered partial funding for locations that had slower speeds.

The commission this year provided clarity on the scope of a telco’s obligations, making clear that once a provider deploys as required under the parameters of the order, its USF obligations then cease, an FCC official said. The first order was silent on the issue, which led to some concerns about whether new obligations could be added -- but that was never the commission’s intent, the official said. Also new this round is a challenge process that didn’t exist during the first phase, which may have encouraged participation, the official said. The commission will only subsidize broadband where a competitor doesn’t currently provide it, but some telcos have disputed the accuracy of the National Broadband Map. The new process will let telcos officially challenge its accuracy, which could open up more areas for eligibility, the official said.

Windstream is asking for $124 million in funding. In a letter Tuesday, the ILEC said it was “pleased” to accept the $60.4 million in incremental support allocated it for 2013, and it also “elects to accept” $63.5 million above that initial allocation (http://bit.ly/172ZmUm). The money would help deploy broadband to nearly 218,000 locations that are either unserved or lack broadband speeds, the telco said. In 2012 Windstream accepted just 1 percent of the $60 million allocated to it, saying it could find only 843 locations eligible under the CAF rules (CD July 25 p3).

"It is now economically viable for Windstream to participate,” said Eric Einhorn, senior vice president-government affairs and strategy. Last year telcos could get funding only for locations with, at most, dial-up access available to them. “There were very few of those locations left for which $775 per location made deployment a viable economic proposition,” Einhorn said. With the commission expanding eligibility to offer $550 for locations that have some broadband but can’t meet the 4/1 standard, “it greatly enhances our ability to participate in the program."

Windstream stands to connect the most locations of all the telcos receiving funding this round, according to a spreadsheet released by the commission (http://fcc.us/1d2LsZA). Next highest is AT&T, with 129,000 locations; Frontier, with 119,000 locations; CenturyLink, with over 92,000; and Puerto Rico Telephone (PRT), with nearly 41,000. The $31.5 million disbursed to PRT “will be used to upgrade telephone plant and equipment to 4/1 Mbps speeds in census blocks that currently are not served by PRT DSLAMs and therefore, we believe, have no broadband whatsoever,” the telco said (http://bit.ly/12ptZ6u). FairPoint will connect about 5,500 locations, Hawaiian Telcom 1,300, and Alaska Communications Systems 316 locations (http://bit.ly/1bTSk7v).