CenturyLink Takes $3 Billion in Govt. Broadband Subsidies

CenturyLink says it has accepted $3 billion in in FCC Connect America Fund II (Universal Service) subsidy money (http://www.multichannel.com/news/technology/fcc-approves-framework-phase...) over six years to provide rural broadband service to 1.2 million households and businesses in 33 sates.

That will mean at least 10 Mbps service download and 1 Mbps service upload speeds in high-cost areas as determined by the FCC.

The subsidy is part of the FCC's overall migration of advanced communications subsidies from phone to broadband service.

“Our acceptance of the CAF II funding continues our commitment to further bridge the urban-rural digital divide by bringing high-speed broadband to households and businesses in many of CenturyLink’s most rural markets,” said John Jones, CenturyLink SVP for public policy and government relations, in a statement.

CenturyLink was eligible for $514 million per year, but declined CAF II funding for California, Mississippi, Oklahoma and Wyoming--according to CAF rules it has to decline money on a statewide basis. CenturyLink pointed out. Once that money is declined, it is open for competitive bidding by cable ops, for example, for parts of a state, bidding that CenturyLink would also be eligible for and may elected to participate in.

CenturyLink also took $75 million in phase one of CAF, which required delivering broadband of at least 4 Mbps download speeds.

Phase 1 of the CAF program provided almost $800 million to deploy broadband to 1.6 million people previously unserved by broadband, according to the commission. Phase two, a five-year plan, will spend almost $9 billion to continue that expansion, including upping the speed requirements for the subsidy from 4 Mbps to 10.

Incumbent (price cap) carriers--like CenturyLink--will have a right of first refusal for CAF funds in high cost areas, but they must serve all high-cost areas they serve in a particular state. There will be a competitive bidding process among other telecom providers, including cable ops, if the incumbent declines the money.

“CenturyLink’s acceptance of over one-half billion dollars from the Connect America Fund represents a huge investment in broadband for its rural customers,” said FCC Chairman Tom Wheeler in a statement. “This is the largest amount accepted by any company to date – and the opportunities that modern broadband will provide for the rural communities CenturyLink serves are priceless.”

John Eggerton

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.