TDS Telecom accepts $75.1M in FCC A-CAM funding to expand rural broadband

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TDS Telecom will use the FCC funds to expand and improve broadband services to nearly 160,000 homes in 25 states over the next 10 years.

TDS Telecom has elected to accept about $75.1 million a year for the next 10 years from the FCC’s Alternative Connect America Cost Model (A-CAM) to expand rural broadband availability.

The telco, which participated in the Broadband Stimulus program developed by former FCC Chairman Julius Genachowski, will use the funds to expand and improve broadband services to nearly 160,000 homes in 25 states over that time frame.

Depending on location and the availability of facilities, TDS said most rural area customers eligible for CAF funding will receive guaranteed broadband speeds of 25/3 Mbps. Under the agreement, most of the remaining customers will receive speeds of 10/1 Mbps.

RELATED: TDS says it will reach 22% of its ILEC addresses with FTTH

Kevin Hess, executive vice president at TDS, said that while 95% of its customers can get an internet connection, the A-CAM funding will enable the telco to provide higher speed services in rural, less densely populated areas.

"We look forward to working with our local communities on this massive endeavor to improve internet speeds," Hess said in a release. "Today's consumers want to work remotely and are seeking faster speeds than the existing, deployed DSL technology was designed to handle.”

Rural broadband focus

Joining fellow telco Consolidated Communications, TDS Telecom is among 182 companies to receive a total of $454 million in alternative rural broadband funding.

The FCC noted in its Nov. 2 notice that the total amount of model-based support that carriers accepted for A-CAM funding would exceed the regulator’s overall 10-year budget by over $160 million annually.

After issuing the A-CAM Revised Offer Order, the FCC said a large group of service providers expressed interest in taking advantage of the new funds.

“In the A-CAM Revised Offer Order, the Commission found that strong demand among rate-of-return carriers for model-based support warranted allocating an additional $50 million annually from existing cash in the high-cost account to the A-CAM budget for the 10-year term,” the FCC said in a release announcing the participants.

TDS told investors during its third-quarter call that it was looking at how to use the FCC’s modified universal service funding mechanism to support further broadband buildouts. 

In August, TDS was offered $82.3 million of support revenue annually for 10 years, which would replace about $50 million of declining annual support.

Projects getting underway

TDS plans to start putting together network and construction resources to implement the project beginning as soon as the first quarter of 2017.  

As the telco finalizes the buildout plans, TDS will make more information, including maps, available on the website in the next few weeks.

TDS said this information will help residents look up information to see how this federal program may impact their specific location.

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