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CenturyLink, Frontier to FCC: Subsidize Voice Networks in Remote Areas

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CenturyLink, Frontier Communications and FairPoint Communications are seeking funding from the Federal Communications Commission to support voice services in certain remote and high-cost areas of the nation that they described as “uneconomic to serve.”

While commending the FCC for adopting rules to fund the second phase of the Connect America Fund (CAF) – a multibillion-dollar subsidy program to bridge the digital divide – the telecommunications carriers requested aid to support Americans who are not covered by the broadband subsidies, still dependent on voice services, and live in rural areas that are very expensive to serve.

In an April 5 letter to the FCC, the top executives of CenturyLink, Frontier and FairPoint expressed their understanding that the FCC was considering whether to include areas of the country that are not covered by the broadband subsidies in a competitive bidding process, which marks the next step of CAF II funding. But for now, the FCC has stopped providing support used to maintain the carriers’ voice networks in those areas, the letter noted.{ad}

“This loss of voice support in effect amounts to an unfunded mandate to provide voice service to extremely remote, high-cost areas that are uneconomic to serve,” wrote CenturyLink CEO Glen Post, Frontier CEO Daniel McCarthy and FairPoint CEO Paul Sunu. “At the same time, these are the areas where the Universal Service Fund has the maximum impact; these are areas where voice services are essential for seeking help during natural disasters such as fires, floods, and tornados.”

An FCC spokesman did not immediately respond Friday to a request for comment on the letter.

“According to the FCC’s own model, the estimated costs of continuing to serve these areas are extensive–more than $1 billion,” Frontier spokeswoman Brigid Smith said in an emailed statement to Channel Partners. “CenturyLink and Frontier have requested only $176 million in interim funding to ensure that these customers can maintain service while the FCC continues to consider a long-term solution for serving these areas. These are the very highest cost areas, and although the FCC recognizes that carriers need support to provide service in these areas, it is not currently providing support to do so.”

The FCC last year authorized 10 telecom carriers – including CenturyLink, Frontier and FairPoint – to receive nearly $9 billion in CAF II funding over six years. Combined with the carriers’ own investments, the funding will expand broadband to nearly 7.3 million rural customers in 45 states and one U.S. territory, the FCC noted last September in a news release.

CenturyLink, alone, has accepted roughly $500 million a year for six years in funding. The Monroe, Louisiana-based company said it would expand broadband to 1.2 million rural homes and businesses in 33 states.

Frontier, which is receiving $330 million in CAF II support annually through 2020, is extending broadband to more than 750,000 homes and businesses, Smith said.


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