[1st-mile-nm] Frontier Communications to receive support from Connect America Fund

[Richard Lowenberg]

Frontier to Bring Broadband to All Unserved Homes in its Territory

(to include NM service area)

7/9/12 by Joan Engebretson

http://www.telecompetitor.com/frontier-bring-broadband-all-unserved-homes-territory/

Frontier Communications may go down in history as the first 
communications service provider to receive support from the new 
broadband-focused Connect America Fund. The company today became the 
first large price cap carrier to agree to bring broadband to customers 
in its service territory that currently cannot get broadband service, in 
exchange for receiving $775 per line in support from the new Connect 
America Fund to help cover a portion of total deployment costs. 
Importantly, Frontier agreed to accept the funding for every unserved 
line in its territory – a decision some other price cap carriers have 
hinted they may not make.

Back in April, the FCC said it would target $71,979,104 to Frontier if 
the carrier agreed to bring broadband to unserved areas within its 
territory by certain target dates. The carrier said today it plans to 
accept the full amount, which will bring service to 92,876 new 
households.

In today’s announcement, Frontier Executive Vice President of External 
Affairs Kathleen Quinn Abernathy said the CAF support would “supplement 
the more than $1.5 billion of private investment made by Frontier over 
the last two years.” She also noted that Frontier already has deployed 
broadband to 80% of its customers.

Customers that cannot yet get broadband tend to be in areas that are 
the most costly to serve. And some price cap carriers had expressed 
concerns about whether they could make a business case out of bringing 
broadband to all of these high-cost areas at a support level of $775 per 
line, hinting that they might opt to reject a portion of the funding, 
thereby triggering a reverse auction for any areas the carriers opt not 
to serve within their territories.

FCC Chairman Julius Genachowski undoubtedly is thrilled that at least 
one price cap carrier not only has agreed to participate in the program, 
but has not rejected any portion of the support. Not surprisingly, he 
made a point of issuing a press release applauding Frontier’s decision – 
and giving the FCC a pat on the back as well.

“This is the most significant effort ever undertaken to connect rural 
America to broadband,” said Genachowski.

The chairman noted that approximately 200,000 rural Americans will get 
broadband for the first time as a result of Frontier’s decision – a 
reasonable estimate that apparently assumes an average of about two 
people per household.

Carriers and policymakers have debated the possibility of using either 
high-speed DSL or 4G LTE technology in order to meet target broadband 
speeds of 4 Mbps downstream and 1 Mbps upstream at the targeted level of 
support. Frontier apparently has not yet decided what technology it 
plans to use.

“We are in the process of determining all of our engineering 
requirements,” a spokeswoman said in an email to Telecompetitor.

Back in April, the FCC said it would target a total of $300 million in 
Connect America funding to price cap carriers who agreed to bring 
broadband to unserved areas. Although Frontier is the first to raise its 
hand, other carriers in line to potentially receive funding include 
Alaska Communications Systems, AT&T, CenturyLink, Consolidated 
Communications, Fairpoint Communications, Hawaiian Telecom, Virgin 
Islands Telephone Co., Verizon and Windstream.
Those other carriers have until later this month to indicate whether 
they will agree to build-out commitments in exchange for $775 per new 
broadband line.

Eventually the FCC also plans to create a Connect America Fund program 
for smaller rate of return carriers, who also have unserved households 
within their territories. But how that program might be structured is a 
matter of considerable controversy and no decision has yet been made 
about how the program would be structured.



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Richard Lowenberg
1st-Mile Institute
Box 8001, Santa Fe, NM 87504
505-989-9110 / 505-603-5200
www.1st-mile.com   rl at 1st-mile.com
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