Verizon on CAF 1: Thanks But No Thanks

Verizon will take another pass on Connect America Funds (CAF) that the FCC is making available for broadband build-outs in high-cost rural and other hard-to-reach areas.

In a one-paragraph letter to the FCC Tuesday, Verizon said that it had "carefully considered the option of accepting the support available to the Verizon incumbent local exchange carriers under this program," but had concluded that it would "decline funding for CAF Phase I."

Verizon and AT&T both declined funding the first time around, but after the FCC tweaked the program, AT&T said Tuesday it would take $100 million in support and called CAF 1 a "model program."

Verizon had no comment, but a source said that the company was focusing its resources on its own wireless and wireline deployment plans, which "complement" the CAF program, the same points the company made in declining the funds the first time around. Verizon was only eligible for a little under $20 million.

The first phase (CAF 1) of the fund is transitional support as the FCC moves from the old high-cost support mechanisms for price cap carriers to the Connect America Phase II mechanism, in which the FCC will offer $1.8 billion annually to subsidize broadband build-outs in price cap territories via a combination of cost modeling and competitive bidding. It is part of the FCC's larger reform of the Universal Service Fund and its migration from traditional phone support to broadband.

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.