AT&T, CenturyLink receive millions of dollars for rural Internet push

The Federal Communications Commission (FCC) recently announced that telecom carriers in Arkansas will receive more than $54 million from the Connect America Fund to provide broadband services in rural and remote areas of the state with little or no high-speed Internet access.

This is the second phase of funding through the federal program created in 2011 under the Universal Service Fund, the controversial federal subsidy program established by the 1996 Telecom Act to promote universal access to telecommunications services in rural and remote areas.

The FCC began transitioning and reforming the USF in October 2011 by approving a six-year transfer process that would move all monies from the program into the Connect America (CAF) program. Nationwide, 10 telecom carriers accepted $1.5 billion in annual support for rural broadband deployment from the fund last week, which will go toward expanding broadband to nearly 7.3 million rural consumers in 45 states nationwide and one U.S. territory over the next six years.

“Today we are taking a significant step forward in narrowing the rural-urban digital divide,” FCC Chairman Tom Wheeler said in statement. “Access to modern broadband is critical to life in today’s society. The financial support provided by American ratepayers through the Connect America program is an investment in the future of our rural communities that will pay dividends for all Americans for years to come.”

In Arkansas, AT&T and CenturyLink split the lion’s share of the federal bounty from the Connect America program, almost equally dividing some $40 million from the $54 million that went to telecoms with operations in Arkansas, including Little Rock-based Windstream.

According to the FCC, ATT received more than $21.3 million to deploy high-speed broadband services to 51,792 consumers in rural areas of the state. AT&T has nearly 122 million wireless customers across its national network. Altogether, AT&T accepted $427.7 million in annual ongoing support from CAF to expand and support broadband for more than 2.2 million of its rural customers. FCC officials said the funding will likely be distributed over a six-year period with an option for a seventh year, which would push AT&T total outlay to more than $3 billion.

Monroe, La.-based CenturyLink also said it will accept $19.7 million from the federal fund that is earmarked for rural consumers in Arkansas. The rural telecom provider said it will use the USF disbursement to provide high-speed Internet services to more than 45,000 rural households and businesses across the state. CenturyLink officials said the high-speed Internet access brings many benefits to rural communities, including economic development and better access to education and healthcare services such as distance learning and telemedicine.

“We’re pleased to help bridge the urban-rural digital divide by bringing high-speed broadband to more than 45,000 households and businesses in high-cost markets in Arkansas,” said Kevin McCarter, CenturyLink east region president. “While CAF II funding does not address all markets in our footprint, our company investment for CAF II is significant, and we look forward to working closely with Arkansas policymakers to find funding and deployment solutions for additional markets.”

Arkansas Department of Information Systems Director Mark Myers said, “This significant investment by CenturyLink and the FCC will strengthen the state’s current efforts to bring high-speed fiber-optic broadband connectivity to every school district in Arkansas, as well as benefit rural health care providers, community business owners and families.”

Companywide, CenturyLink accepted $505.7 million in ongoing support from the CAF program to expand broadband services for 2.3 million of its rural customers. According to CenturyLink’s Arkansas “fact sheet,” the rural telecom giant has 133,000 access lines in Arkansas and has invested more than $1.1 billion in the company’s network across the state.

FCC Chairman Wheeler said CenturyLink’s acceptance of more than $500 million dollars from the Connect America Fund represents the largest amount accepted by any company since the program began nearly four years ago.

“This is the largest amount accepted by any company to date – and the opportunities that modern broadband will provide for the rural communities CenturyLink serves are priceless,” Wheeler said.

This is the second round of funding from the Connect America Fund since it began, and the amounts distributed this year are substantially higher than Phase I when the FCC began transitioning from the earlier USF subsidy program.