CenturyLink, FairPoint, Frontier want voice service funded in areas not covered by CAF-II

The CEOs of CenturyLink (NYSE: CTL), FairPoint and Frontier Communications asked the FCC to provide financial support of voice services for residential and business customers that reside outside of areas covered by the Connect America Fund Phase II program.

Earlier this month, the FCC approved a proposal to modernize the Universal Service Fund (USF) program, with a particular focus on enabling rural rate-of-return carriers to provide standalone broadband.

The FCC will provide about $20 billion in support over the next 10 years to enable service providers in high cost areas to provide standalone broadband to customers that use their connections to power VoIP and video streaming.

CAF II is mainly designed to provide funding to service providers to bring 10/1 Mbps broadband to rural areas, something all three of these service providers have committed to do in their own territories.

However, one of the issues cited bythe joint petitioners is that the regulator will no longer provide financial support for voice service in rural areas.

"We write today to urge ongoing support for those Americans residing in the most rural, extremely high cost parts of the country -- residents who are not covered by CAF II support and who remain dependent on voice services to communicate with loved ones and seek assistance in times of crisis," said the service providers in a joint FCC filing. "Today these parts of the country are not yet supported by the CAF, but we understand that one option the Commission is considering is to include these areas in the competitive bidding process, which is the next step of CAF II. At this time, however, the Commission has ended universal service support for the voice networks in these areas."

The service provider added that those telcos that "have accepted the initial CAF II offers may only use the CAF support to deploy broadband to certain eligible census blocks."

CenturyLink accepted $500 million in CAF II funds, while Frontier announced it would accept $283 million in CAF II funding and FairPoint accepted over $37.4 million.

The three telcos have asked the FCC to continue to provide funding for voice services in the highest cost, most remote areas where service providers have accepted CAF II funds but have remaining customers that are not covered by the program.

"Voice access is critical to our customers in these areas for personal, professional and public safety reasons," the service providers said. "Therefore, voice service funding should be maintained while these areas await the Commission's actions to implement a workable broadband deployment solution."

In an earlier filing, Frontier said it estimated that providing services in these hard-to-reach areas costs service providers over $1 billion, for example.

Not everyone agrees with these telcos' concerns.

The National Cable Telecommunications Association (NCTA) says the regulator should deny an earlier request made by CenturyLink and Frontier to get an additional $176 million to provide services in rural areas not supported by the CAF-II program.

For more:
- see this FCC filing (PDF)

Related articles:
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CenturyLink, Frontier should not be given $176M to support rural market voice, says NCTA