Windstream Jumps Into Broadband Stimulus Fray

Windstream Corp. (WIN), like its larger Bell counterparts, has overcome its reluctance about the broadband stimulus.

Applications for the second funding round were due Friday and yesterday at the two agencies doling out money, and Windstream said this week it decided to take part – this after the rural LEC last year expressed hesitation that the rules would be amenable to its business model.

On Monday, Windstream said it has applied for $238 million in Rural Utilities Service (RUS) grants to add broadband access to more than half a million homes and business in 16 states. Windstream would provide $80 million as part of a matching requirement, bringing the total project cost to about $318 million. Windstream already has pumped hundreds of millions of its own dollars in broadband investment, said Mike Rhoda, senior vice president of government affairs for Windstream.

“But the costs to deploy broadband to the vast majority of our remaining, unserved customers are prohibitive,” Rhoda said in a prepared statement. “The federal grants offered by RUS cover up to 75 percent of the costs and greatly improve the economics for deploying broadband deeper into rural America. The grants create opportunities for further broadband deployment that otherwise would not exist.”

Windstream proposes to expand its fiber network by more than 7,000 miles. The company, based in Little Rock, Ark., said high-speed Internet would be available to 93 percent of its 3 million voice lines, if the project is approved, up from 89 percent now. Speeds would range from 6mbps to 12mbps, Windstream said.

Last week, Qwest Communications International Inc., AT&T Inc. and a group of cable providers said they’d also changed their minds about not applying for broadband stimulus money. The feds changed some of rules from the first funding round, making the guidelines more attractive to some of the larger operators.

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