Money is part of Connect America Fund to foster rural broadband
WASHINGTON – The Federal Communications Commission announced that 10 communications service providers accepted $1.5 billion from the federal government as part of the regulatory agency’s Connect America, a subsidy designed to encourage the development of broadband infrastructure in rural or low-income areas.
Under terms of the agreement, each carrier has committed to bringing broadband speeds of at least 10 megabits per second to 7.3 million rural customers over the next six years. Each carrier will need to build out 40% of funded locations by the end of 2017, 60% by the end of 2018, 80% by the end of 2019, and reach completion in 2020.
The three largest carriers receiving funds included CenturyLink, which will receive $506 million; AT&T with $427 million; and Frontier, which will receive $283 million. The remaining funds will be divided among Cincinnati Bell, Consolidated, Fairpoint, Hawaiian Telecom, Micronesian Telecom and Windstream.
Verizon Communications accepted $48 million in federal funds, which were accepted on behalf of Frontier. Verizon is selling its California and Texas subsidies to Frontier and, if the move is approved, the federal money will go to Frontier. If the deal is stopped by regulators, Verizon will give the money back to the FCC.
“Today we are taking a significant step forward in narrowing the rural-urban digital divide,” said FCC Chairman Tom Wheeler. “Access to modern broadband is critical to life in today’s society. The financial support provided by American ratepayers through the Connect America program is an investment in the future of our rural communities that will pay dividends for all Americans for years to come.”
The FCC under Wheeler has strongly committed to providing broadband access to all Americans. As an FCC statement noted, “Like telephone service in the 20th Century, broadband has become essential to life in the 21st Century.”
However, there has been some controversy over the Connect America Fund from Republicans concerned about the potential the program has for fraud, waste and abuse.
Despite these concerns, the FCC plans on providing more than $10 billion over the next six year for Connect America.
