Connect America Fund CAF Carriers Opt for Seventh Year of Support

Telecompetitor provides an update on the CAF federal funding…

The CAF program offered money to the larger carriers, known as price cap carriers, in 2015 in exchange for committing to deploy broadband to rural portions of their local service territory lacking broadband service. Funding was based on a cost model. Carriers had to accept or reject funding on a state-by-state basis and most of them accepted most of the money they were offered. Funding was for six years, and deployments were expected to be completed by the end of the sixth year, but carriers had the option of electing to receive a seventh year of support. The sixth year of support ends at the end of this year.

In the December 2014 Connect America Fund report and order, the FCC stated that the purpose of the seventh year of support was to provide “a gradual transition to the elimination of support.”

They report on the providers that they know opted for a seventh year…

Over the past week, AT&T, Frontier and CenturyLink sent letters to the FCC electing to accept the seventh year of CAF support. Three other price cap carriers — Cincinnati Bell, Consolidated Communications and Windstream – also were eligible to request the seventh year of support and may have done so at an earlier date.

AT&T and CenturyLink accepted all funding for all states for which they accepted CAF funding. For AT&T, seventh year CAF funding totals approximately $427 million for 18 states. For CenturyLink, the total seventh year funding totals approximately $503 million for 33 states.

Frontier elected seventh year CAF funding for 25 of the 29 states for which it accepted funding back in 2015. The company did not accept funding for Idaho, Montana, Oregon or Washington – the four states where Frontier sold its operations to WaveDivision Capital, which uses the name Ziply for those operations.

The seventh year CAF Funding that Frontier accepted totals approximately $313 million.

The funding has been a mixed blessing in Minnesota. Some areas have seen improvements but they don’t always meet MN standards, CAF speed requirements are as low as 10/1 Mbps; Minnesota speed goals are 25/3 by 2022 and 100/20 by 2026. A connection to 10/1, and really even a connection to 25/3 does not necessarily get a community closer to the 100/20 goal. There have been some projects where state funding has been used to leverage federal funding and push for higher speeds.

Also, we reported in January (2020) that both CenturyLink and Frontier reported that they “may not have met” required milestones in Minnesota. In May, CenturyLink asked for an extension of deadline due to COVID.

This entry was posted in FCC, Funding, MN, Policy, Vendors by Ann Treacy. Bookmark the permalink.

About Ann Treacy

Librarian who follows rural broadband in MN and good uses of new technology (blandinonbroadband.org), hosts a radio show on MN music (mostlyminnesota.com), supports people experiencing homelessness in Minnesota (elimstrongtowershelters.org) and helps with social justice issues through Women’s March MN.

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