AT&T, CenturyLink, Frontier’s rural wireline, wireless expansions could benefit from FCC’s $2B CAF auction

A sunset over a barn structure
AT&T, CenturyLink, Frontier and other providers will be able to tap into an additional $2 billion auction to expand rural broadband services. (Getty/ehrlif)

AT&T, CenturyLink, Frontier and other providers that want to further expand rural broadband will soon be able to bid in the FCC’s $2 billion additional CAF II auction.

The regulator has identified nearly 1 million homes and small businesses that will be eligible for broadband deployment support over the next 10 years.

A large majority of the rural areas the FCC identified do not have access to broadband internet service. Given the low density of these areas, service providers are unlikely to expand service without federal support. 

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RELATED: FCC sets up complementary $2B CAF II auction aimed at rural broadband expansion

“Closing the digital divide is my number one priority, and through this innovative Connect America Fund auction, we are poised to take the next big step in reaching that goal,” said Ajit Pai, chairman of the FCC, in a release. “In rural America, broadband opens the doors of opportunity by connecting remote communities to global markets, jobs, education, health care and information.”

Expanding CAF

In 2016, the FCC approved a reverse auction that will provide an additional $2 billion in funds to rural broadband providers via the regulator's CAF II program to accelerate rural broadband growth.

The auction is intended to expand service to census blocks unserved by broadband delivering speeds of 10/1 Mbps in 20 states where the price cap carriers declined the FCC’s 2015 CAF-II offer. During the auction, the FCC will address locations across the country with extremely high deployment costs.

The FCC has adopted four technology-neutral service standards: delivering 10/1 Mbps speed; delivering 25/3 Mbps and offering a usage allowance of 150 GB a month; meeting an above-baseline tier that requires bidders to provide 100/20 Mbps and an unlimited monthly usage allowance; and meeting a Gigabit performance tier that requires bidders to commit to provide at least 1 Gbps downstream and 500 Mbps upstream and offer an unlimited monthly usage allowance.

Several large wireline operators including AT&T, CenturyLink, Frontier and Windstream accepted $9 billion over six years from Phase II of CAF to expand broadband in their rural service areas. Later in March 2016, the FCC reformed its broadband support for the nation's smallest carriers, providing $20 billion over the next decade.

Multitechnology approach

Service providers that have been using CAF II funds have been applying the funding toward various technologies to address rural broadband services. AT&T, for one, has advocated the use of fixed wireless to fulfill its CAF II requirements. In September, the service provider added locations in nine new states.

Branded as AT&T Fixed Wireless Internet, the service is now available to residents and small businesses in parts of Arkansas, California, Illinois, Indiana, Kansas, Michigan, Ohio, Texas and Wisconsin. The offering initially launched in Georgia four months ago and is now available across 160,000 locations in 18 states.

Frontier, meanwhile, has continued to make progress in expanding wireline-based broadband to more rural communities in its footprint. The service provider recently announced that it is expanding broadband services in the rural areas of eight additional states in 2017.

Like AT&T, CenturyLink, Consolidated, Frontier and Windstream have also cited interest in using broadband wireless as a complementary technology to address rural broadband builds. In a joint FCC filing (PDF) with Frontier related to a request to create flexible use of spectrum bands between 3.7 and 24 GHz, Consolidated and Windstream also expressed interest in being able to use 3.7-4.2 GHz band spectrum for rural fixed point-to-multipoint deployments, such as through the rules proposed by the Broadband Access Coalition.

CenturyLink has sought the FCC’s approval to conduct trials of 3.4 to 3.7 GHz fixed wireless spectrum bands as a likely way to extend broadband to hard-to-reach rural areas where it can't extend wireline facilities.

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