AT&T Takes $100 Million in CAF Broadband Build-Out FundingNow Calls Phase 1 of Broadband Subsidy 'Model Program' 8/20/2013 5:59 PM Eastern
AT&T Tuesday said it was accepting $100 million in Connect America Funding, which it said would help it expand its U-Verse/IPDSL broadband service to 129,000 "locations" without service of at least 768kbps/200kbps.
Last year, AT&T and Verizon passed on the first round of funding. AT&T said at the time it was still reviewing its options, but it was also unhappy with some of the conditions put on the money. With both AT&T and Verizon passing, most of the $300 million in Phase 1 money ($185 million) went unused.
The FCC in May modified the requirements for the CAF 1 money to try and make it more attractive--the $600 million is being handed out in two phases--and AT&T likes what it sees, according to a company blog post announcing its acceptance of the money and now calling CAF Phase 1 a "model of what universal service must be in the 21st century."
Among the FCC "clarifications" AT&T cited as reasons for its decision to accept the subsidies: "(1) CAF Phase 1 recipients will not be subject to any later-adopted broadband measurement requirements; (2) recipients will be in compliance with the requirement that pricing and usage allowances be 'reasonably comparable' to urban areas, if they offer identical plans in such areas; (3) acceptance of funding will not trigger reporting requirements beyond the funded locations; and (4) obligations will end within three years."
The first phase of the fund is transitional support as the FCC moves from the old high-cost support mechanisms for price cap carriers to the Connect America Phase II mechanism, in which the FCC will offer $1.8 billion annually to subsidize broadband build-outs in price cap territories via a combination of cost modeling and competitive bidding. It is part of the FCC's larger reform of the Universal Service Fund and its migration from traditional phone support to broadband.
Cable operators have long complained that there are inaccuracies in the map that could allow, and have allowed, for overbuilding of existing service. The American Cable Association Tuesday asked the FCC to look into what it said were some possible errors in areas identified as eligible for support.
At the same time the FCC modified CAF 1 in May, it released the second tranche of money and expanded its definition of unserved area from those without dial-up speeds (768 downstream/200 Kbps upstream) to some areas lacking up to the FCC's definition of high-speed access (at least 3 Mbps downstream and 768 Mbps upstream).