Some States Not Likely To Help With CAF II Build-out, Look for Ways To Connect Everyone

The number of residents that will be connected in South Dakota after the build-out is complete is significant, said Chris Nelson, chairman of the state's PUC. Even though the connectivity rate will increase, the state still has a ultra-high cost census blocks, so the concern now becomes how those residents will get broadband, he said. Because the state doesn't have its own USF, the state commission likely won't have direct involvement in the issue, he said. The hope is that the companies will continue expanding the network to those ultra-high cost areas without incentives, Nelson said. “As the companies roll out the infrastructure, are there are going to be some of those ultra-high cost Census blocks that the companies on their own will say 'you know what, we've now got this structure pushed further out into our network, we're just going to take care of those Census blocks,'” he said. “That's what I'm going to be watching to see how much of that is going to take place. There's going to be areas where that's not going to happen, but I'm hopeful that there will be spots where that will happen.”

Nebraska won't be helping any of the companies that accepted funding in the state with the CAF Phase II buildout, said Nebraska Public Service Commissioner Crystal Rhoades. Instead of focusing all of the funding and time on high-cost areas, the commission is choosing to put available state funds into building out a broadband network in those ultra-high cost areas that aren’t going to be hit by the FCC funding, she said. “It is our intention to continue to support that program and to continue to help those companies to build out in those extremely high-cost areas,” Rhoades said. “When 90 percent of your state is a high-cost area, the vast majority is an extremely high-cost area. It just doesn't have the population density to make it feasible to build out.”

Since the money from the FCC likely won't cover the full project in any of the states, companies will have to invest in the network buildouts with their own capital, said a telco executive. John Jones, CenturyLink senior vice president-policy and government relations, said the company has committed to build out about 1.2 million locations across 33 states over the next six years. While the FCC had to leave the ultra-high cost areas out of the budget for this project, the connectivity is a start, he said. The decision to leave out the ultra-high cost areas created funding gaps in some of the states; the company believes some state leaders will be open to discussing solutions to address those gaps, Jones said. But the company plans to first focus on the buildout that's supported by the FCC CAF program, he said. CenturyLink's CAF Phase II will finalize its six-year build-out plan over the coming months, with construction expected to begin in early 2016, said Jones.

The funding accepted by AT&T, CenturyLink, Frontier and Windstream will go a long way to help provide access to wireline broadband in rural portions of Georgia, said Georgia Public Service Commissioner Tim Echols. Because Georgia doesn’t have ultra-high cost areas like other some of the other states, the funding will substantially complete the availability of broadband in high-cost areas in the state, he said. Even though the companies will be investing a large chunk of money into expanding the network, Georgia law doesn't allow the PSC to regulate emerging technology, so the commission can't support the buildout, he said. "The legislature could certainly fund whatever they believe to be in the state's best interest,” Echols said. "That, of course, is beyond the scope of my duty."

Washington Utilities and Transportation Commission Chairman David Danner said CenturyLink’s acceptance of nearly $150 million to expand broadband in the state is a commitment to the future of those rural communities. Wider availability and faster Internet speeds will provide new opportunities in rural communities and support economic development, education, healthcare and public safety, he said. The UTC will be monitoring the company’s progress in meeting the FCC mandatory milestones associated with the broadband expansions over the next six years, he said.

In Iowa, CenturyLink, Consolidated Communications, Frontier and Windstream accepted a total of $53.2 million in funding from the FCC CAF II that will lead to expanded broadband Internet services to nearly 90,000 homes, said a release from the Gov. Terry Branstad’s office. A big focus of Branstad’s administration has been expanding access to broadband (see 1506220034). The Republican governor said technology and access to broadband is the “greatest equalizer” for rural communities in the state.

Before accepting the funding, a company has to think through a lot of issues, including regulatory obligations associated with accepting the funds and whether the funding makes deployment economically feasible, said AT&T in its acceptance letter. It isn’t a cheap endeavor, so the company has to think carefully about everything, an AT&T spokesman emailed. “It’s a challenge to bring reasonably-priced high-speed Internet access services to these areas because it is very costly and often uneconomic.”