CenturyLink takes $54M in CAF funds to expand rural broadband reach

August 20, 2013 | By Sean Buckley

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CenturyLink (NYSE: CTL) is accepting $54 million from the FCC's Connect America Fund (CAF) Phase I fund in order to extend broadband services to over 92,000 homes and businesses in hard to reach areas of its service footprint.

Complemented by its own capital investment, CenturyLink will invest over $108 million through 2016 to offer up to 4/1 Mbps speeds to residential and business customers in 33 of the 37 states where it currently offers service.

The telco said that its own capital investments will exceed the amount of CAF Phase I funding it accepts from the FCC.

This latest award follows the $35 million in CAF Phase I funding it accepted last year to bring broadband to 45,000 rural homes and businesses. By using the FCC's program, CenturyLink is supplying broadband to almost 140,000 consumers.

Although CenturyLink was eligible for $90 million, it only accepted $35 million last year because it said that the FCC's rules made it uneconomic to bring broadband to other areas.

Steve Davis, CenturyLink executive vice president for public policy and government, said an earlier interview with FierceTelecom that "One of the difficulties is that the FCC decided they'd support $775 per household."
Similarly, Windstream only accepted $653,000 of the $60.4 million it was offered, citing the limitations of the FCC's rules on how to spend the money.

Other telcos, including FairPoint Communications (Nasdaq: FRP) and Frontier Communications (Nasdaq: FTR) also received CAF Phase I funding. FairPoint got a $2 million CAF grant to expand broadband service to rural areas in Vermont, while Frontier will use the $72 million CAF grant it got from the FCC to expand broadband throughout its respective service territories.