CenturyLink Hungry for More Broadband Subsidies, Wireless ISPs Grumble

CenturyLink Inc. earlier this summer asked the Federal Communications Commission for a waiver that would let the telecommunications carrier access another $32.6 million in broadband subsidies in underserved areas from the recently created “Connect America Fund.”

The problem is that certain wireless Internet service providers already offer broadband services in the areas where CenturyLink is seeking subsidies.

So it shouldn’t surprise you that WISPA (Wireless Internet Service Providers Association), an organization that represents wireless ISPs, strongly opposes CenturyLink’s petition.

“Why should our government continue to pour billions of taxpayer dollars into infrastructure such as copper telco lines, even when the telco industry leaders have admitted that DSL is ‘dead,’ said Rick Harnish, executive director of WISPA, in an email to us. “That would be similar to loaning billions to an Edsel factory to produce more inferior cars.”

Most wireless ISPs, Harnish explained, don’t receive subsidies.

CenturyLink cites a number of reasons why it should receive funding. For instance, the company claims certain wireless ISPs charge higher rates than wireline broadband providers, endure line-of-sight restrictions that prevent them from providing service at all to certain locations within their coverage areas and impose far more stringent data caps than wireline providers. CenturyLink also claims the WISPs face capacity constraints that limit the use of spectrum at the necessary speeds to run bandwidth-hungry apps.

Monroe, La.-based CenturyLink is asking for a waiver that would allow it to spend broadband subsidies in communities only served by a wireless ISP and under two specific conditions: Either the community lies within a state that has not independently verified coverage of the wireless ISP shown in the so-called National Broadband Map and objective data shows the company could not plausibly serve those areas; or the wireless ISP imposes unusually high retail prices or unusually rigid data caps.

Created by the National Telecommunications and Information Administration, in collaboration with the FCC, the National Broadband Map shows broadband coverage in neighborhoods across the nation.

“The waiver application we filed … would allow CenturyLink to spend tens of millions of dollars to bring more broadband services to more rural and high-cost customers who do not have reasonable access to broadband service today,” CenturyLink spokeswoman Meg Andrews told us in an email. “These funds would be provided by the FCCs Connect America Fund, as well as additional investment dollars would be provided by CenturyLink. If the waiver application is approved, CenturyLink will build needed broadband services to thousands of homes in Arizona, Colorado, Washington, Oregon and several other states.”

WISPA claims CenturyLink’s reasoning with respect to several issues, including its objections concerning the accuracy of wireless ISP coverage, is flawed.

“What they don’t realize [is] in that 50 miles of contiguous coverage, a wireless ISP might have 10 different access points serving that area,” Harnish said, addressing CenturyLink’s argument that the service areas shown on the National Broadband Map are inaccurate. “It was pretty simply to invalidate that claim. It’s denser coverage than that from an infrastructure standpoint.”

CenturyLink is seeking the waiver in order to obtain funding in phase one of the FCC’s Connect America Fund. U.S. regulators last year created the fund to shift Universal Service subsidies from phone service to broadband in order to expand high-speed Internet service to rural America and other places that are underserved.   

The FCC has earmarked $300 million in phase one funding, which could mean coverage for roughly 387,000 housing units, and the FCC requires that every service provider support at least one otherwise unserved location for every $775 it receives in subsidies, according to CenturyLink.

The FCC announced in April that CenturyLink is entitled to roughly 30 percent of the phase-one funding because it serves the largest number of high-cost wire centers, noted CenturyLink, which became the nation’s third-largest traditional phone company following its 2011 acquisition of Qwest Communications International Inc.

“But under the one location-per-$775 requirement, CenturyLink could feasibly accept funding to serve only a small fraction of those 116,000 locations if it could not spend CAF I funds to deploy broadband to the areas nominally ‘served’ by the WISPs in question,” CenturyLink stated in the petition.

A spokesman for the FCC did not respond when asked when the funding will become available.

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