CenturyLink (NYSE: CTL) is now eligible to receive about $90 million from the FCC's Connect America Fund (CAF), enabling it to extend broadband services to more rural homes that are located in areas where it was too expensive to build the necessary facilities to serve them.
In addition the company may be able to get other CAF-I funds that it declined to accept last year.
This additional CAF-I funding is made possible by the FCC's move to allocate up to $485 million to expand wireline broadband in rural areas. In Phase II of the CAF program, the FCC said it "will provide $1.8 billion for both voice and broadband service, all without increasing growth in the fund." The regulator added that any funding that is not accepted in Phase 1 will be used to connect unserved communities in CAF Phase II.
CenturyLink is reviewing how much of the Phase I, round 2 funds it will be able to accept and deciding which communities it will target. Complementing the CAF-I funding, CenturyLink said it will also spend "an equal amount of its own capital over the next three years to deploy broadband service in rural America."
CenturyLink only accepted $35 million of the CAF I funding it was eligible for last July because they said that the $775 per household restriction the FCC imposed in the CAF-I rules would not work.
Steve Davis, CenturyLink executive vice president for public policy and government, said at that time that the restrictions on the initial round made "further deployment uneconomic."
Likewise, Windstream (Nasdaq: WIN) accepted only $653,000 of the $60.4 million it was offered, citing the limitations of the CAF-I rules.
Windstream didn't reveal whether it will take additional funding, but issued a statement in support of the FCC's move.
Last month, CenturyLink, Frontier (Nasdaq: FTR), and Windstream sent a letter to the FCC asking them to provide additional Connect America Fund (CAF) Phase I money to extend broadband into more rural locations.
- see the CenturyLink release
- and the FCC release
CenturyLink, Frontier, Windstream ask FCC for more CAF-I broadband funding
CenturyLink gets $35M in FCC CAF funding for broadband expansion
Frontier secures $72M Connect America loan to expand broadband reach
FCC opens $300M fund to boost rural broadband access