AT&T, CenturyLink to Expand Broadband to Rural America Through Subsidies

By Josh Long

AT&T, CenturyLink and Consolidated on Thursday said they would accept nearly $1 billion in annual subsidies over six years to deliver broadband service to millions of rural locations.

The telecommunications companies are accepting the funds from Phase II of the Connect America Fund.

“We commend CenturyLink, Consolidated and AT&T for making these significant commitments to bring new broadband service to over 2.3 million rural locations throughout the country in places that have historically been difficult to serve,” said Jon Banks, senior vice president of the United States Telecom Association (USTelecom). “Today’s announcements are the culmination of months of work to analyze broadband support and obligations offered by the Federal Communications Commission earlier this year under its new Connect America Fund.”

CenturyLink said it would bring high-speed Internet service to around 1.2 million rural homes and businesses in 33 states, a plan supported by its acceptance of around $500 million annually in CAF subsidies.

The amount of Connect America Funding that CenturyLink accepted, FCC Chairman Tom Wheeler said, represents “the largest amount accepted by any company to date – and the opportunities that modern broadband will provide for the rural communities CenturyLink serves are priceless.”

“Our acceptance of the CAF II funding continues our commitment to further bridge the urban-rural digital divide by bringing high-speed broadband to households and businesses in many of CenturyLink’s most rural markets,” said John Jones, senior vice president for public policy and government relations with Monroe, Louisiana-based CenturyLink. “These are high-cost markets with many deployment challenges.”

CenturyLink said it planned to complete its six-year, build-out plan in the coming months and anticipated beginning construction early next year.

Dallas-based AT&T plans to use $427.7 million in CAF funding to serve nearly 1.12 million locations in 18 states including its home state of Texas.

“AT&T is committed to rural and small town America, and to using all available technologies to serve those who live in hard-to-reach and remote areas,” an AT&T spokesman said.

The company declined an offer of model-based support in Missouri, Nevada and Oklahoma.

“In deciding whether to accept the funding, we carefully analyzed a number of factors including the regulatory obligations associated with accepting the funds and whether the funding makes deployment economically feasible (including by using our advanced fixed wireless technology),” the AT&T spokesman noted.

Consolidated Communications Holdings Inc., a Mattoon, Illinois-based communications provider in 11 states, said it has accepted $14 million in subsidies to deploy broadband to 24,700 rural locations across seven states.

Under the CAF rules, the telecom providers will deliver broadband speeds of at least 10 Mbps download and 1 Mbps upload.