Three of the largest independent wireline telcos--CenturyLink (NYSE: CTL), Frontier (Nasdaq: FTR), and Windstream (Nasdaq: WIN)--have 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.
Signing the letter were CEOs Glen F. Post, III, CEO and president of CenturyLink; Maggie Wilderotter, chairman and CEO of Frontier Communications; and Jeff Gardner, CEO and president of Windstream.
"The public policy established by the Administration and articulated in the National Broadband Plan recognizes that broadband connectivity is more than a game changer--it is a life changer and absolutely necessary to our country's economic recovery and prosperity," the executives said in the letter to the FCC. "High-speed broadband has become an indispensable platform for economic growth and job creation and provides access to educational opportunities and improved healthcare."
While CenturyLink, Frontier and Windstream jointly said they "stand ready and able to use this funding, in conjunction with our own private capital, to create jobs and invest in rural America," their use of the CAF-I funds has been divided.
Frontier was one of the first service providers to receive CAF funds to expand broadband availability in unserved and underserved areas. Last June, it accepted $71.9 million in CAF-I funding, which it will use to upgrade facilities in its territory to provide broadband DSL service to an additional 92,876 households.
CenturyLink and Windstream, however, only accepted a portion of CAF funding because they said that the $775 per household restriction the FCC imposed would not work.
Although CenturyLink was eligible for $90 million in CAF Phase I funding, it only took $35 million. Likewise, Windstream accepted only $653,000 of the $60.4 million it was offered, citing the limitations of the CAF-I rules.
Outside of these service providers, AT&T (NYSE: T) and Verizon (NYSE: VZ) decided last year to not accept CAF-I funding. At that time, AT&T said it had other ways to advance broadband in rural areas while Verizon said that the funding amount was too small.
Last November, AT&T finally revealed its rural network strategy via its Project VIP initiative, in which it will spend $14 billion to make upgrades to move its wireline network to an IP-based infrastructure and migrate some of its harder-to-reach copper customers to 4G LTE wireless services.
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