AT&T (NYSE:T), CenturyLink (NYSE:CTL), Verizon (NYSE: VZ) and Consolidated Communications (NASDAQ:CNSL) have become the latest US telcos to accept funding from the FCC’s Connect America Fund.
Together the companies received a combined US$1bn to extend broadband to more than 2.3 million new rural locations.
Yesterday marked the deadline for operators to tell the FCC whether or not they would accept the phase-two funding, designed to deliver broadband to rural areas where the cost of deployment would otherwise be too high.
Incumbent AT&T has accepted US$428m in annual support to extend broadband to about 2.2 million customers in rural areas, the FCC said in a statement.
Commission chairman Tom Wheeler described AT&T’s acceptance as “a huge investment in broadband for its rural customers”.
“This is one of the largest amounts accepted by any company,” he said. “The financial support provided by American ratepayers will bring significant benefits to AT&T’s rural communities.”
Companies accept funding on a state-by-state basis and AT&T has accepted it for 18 of the 21 states in which it operates. If a company declines an offer for a certain state, it can still take part in a competitive bidding process to build out the market.
AT&T said it will meet commitments under the CAF programme with a combination of fixed and wireless technologies. This will include the construction of new wireless towers in unserved areas.
Separately, AT&T plans to extend 1Gbps FTTH service to an extra 11.2 million homes as part of the conditions for its recently-completed acquisition of DTH player DirecTV.
CenturyLink has accepted US$500m in annual CAF phase two funding, which it says will help it to deliver broadband to about 1.2 million rural households and businesses in 33 states.
The Monroe, Louisiana-based telco said it expects to finalise its build-out plan over the coming months and begin construction in early 2016.
During its Q2 2015 results call earlier this month, CenturyLink had said it intended to accept just US$300m in CAF funding.
Mattoon, Illinois-based Consolidated Communication has accepted US$14m in CAF phase two funding to deploy broadband to about 24,700 rural locations in seven of the 11 states in which it operates.
Commenting on AT&T, CenturyLink and Consolidated Communications’ acceptances of the funding, Jon Banks, senior VP of trade association USTelecom, said: “Today’s announcements are the culmination of months of work to analyse broadband support and obligations offered by the FCC earlier this year under its new Connect America Fund.”
Verizon said in an FCC filing that it has conditionally accepted a total US$49m in annual CAF support: US$32m for California and US$17m for Texas.
The carrier, which is in the process of selling wireline assets to Frontier Communications in California, Texas and Florida, requested a deferral of all CAF payments until the Frontier deal closes. The transaction still requires regulatory approvals from the FCC and California Public Utilities Commission.
Those to have already accepted CAF phase-two funding include Hawaiian Telecom, Frontier, Windstream and FairPoint Communications.
Over the next six years, CAF phase two will provide more than US$9bn to operators to expand broadband-capable networks throughout the US’s rural areas, the FCC said.
Companies which accept support must build out broadband to 40% of funded locations by the end of 2016, 60% by the end of 2018, 80% by the end of 2019 and 100% by the end of 2020.
