CenturyLink Urges More Funding in Return for 10 Mbps CAF
Building 10 Mbps broadband downstream under Connect America Fund Phase II would cost between $5 billion and $6 billion more than building 4 Mbps, “vastly more” than the CAF funding that would be made available over even seven years, CenturyLink…
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officials told aides to FCC Commissioners Ajit Pai and Jessica Rosenworcel Dec. 1 and aides to commissioners Mignon Clyburn and Mike O’Rielly Dec. 2, according to an ex parte filing made available by the company. The filing hadn't been posted in docket 10-90 Friday. Industry sources have said the CAF draft order, scheduled to be taken up by the commission on Thursday, would raise the minimum broadband speeds required under CAF from 4 Mbps to 10 Mbps, but would increase the length of funding under the proposal from five years to six years, with the provider having an option for a seventh year (see 1411260040). Saying that’s not enough to offset the additional cost of providing higher speeds, CenturyLink Senior Vice President-Federal Regulatory Affairs Melissa Newman and Vice President-Federal Regulatory Affairs Jeffrey Lanning said CAF funding also doesn't include “any provision for operating expense or replacement capital expenditure in these sparsely-populated, high-cost areas.” As a result, “it is likely that CenturyLink would find that it could accept such statewide offers of support in some states but not in others,” the ex parte said. “CenturyLink recognizes that it may be appropriate to increase the CAF II obligation to 10 Mbps downstream, but only if the Commission also adopts commensurate changes in the construction period, after-tax funding, and deployment flexibility to meet the increased cost associated with the increased speed,” the filing said. Distributing Phase II funding through auctions instead of statewide offers of support would lead to “considerable delays in broadband deployment as it will take many months to adopt rules, conduct auctions, and issue certifications before construction can begin,” CenturyLink said. “In addition, by their nature, auctions will lead to ‘cherry picking’ by providers, leaving many areas behind without any CAF II provider,” the filing said.