AT&T, Verizon Say No Thanks to Broadband Rollout Funds

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Telecom giants AT&T and Verizon have respectfully declined the FCC's invitation to accept phase I Connect America funding to extend broadband service in rural areas.

The FCC, which is migrating phone subsidies in the Universal Service Fund from telecom to broadband, announced the launch of the first phase of funding July 25, saying that $115 million would be invested by companies in 37 states.

But AT&T was not one of them. The deadline for participation was July 24.

"AT&T is in the midst of evaluating its options for further rural broadband deployment," said Robert Quinn, senior vice president of regulatory affairs for AT&T, in a letter to the commission. "As our chairman stated last month, we are optimistic about AT&T's ability to get more broadband into rural areas, particularly as the technology continues to advance. However, until AT&T finalizes that strategy, it cannot commit to participating in the incremental support program, as it must by today's date."

Verizon issued the following comment: "Verizon carefully evaluated participation in this stage of the new FCC program, and we decided not to participate in order to focus resources and capital on our own wireline and wireless broadband deployment plans. Verizon's prior deployment and additional plans for private investment in broadband complement the FCC's universal service goals and the Connect America Fund. We invest billions each year to deliver world-class wireline and mobile broadband services, and regardless of whether or not Verizon is a direct recipient of FCC funding we will continue to work with the FCC to help deliver the promise of broadband to all Americans, wherever they live."

Verizon was only eligible for $19.7 million, according to the company, one of the reasons it passed. It gave a shout-out in its brief letter to the FCC declining to participate. "Verizon fully supports the landmark reforms of the Federal Universal Service Fund that the Commission adopted in the USF-ICC Transformation Order last November. These reforms will modernize the program and ensure that USF support will now be used to offset the cost of broadband deployment in rural America."

Those that did accept included Frontier Communications, which took $71.9 million, and CenturyLink, which said last week it would accept $35 million from the fund to deploy service to 45,000 homes. The company was actually eligible for $90 million, but said restrictions on the funds made further deployment "uneconomical," though it has filed a waiver of those restrictions, and said it would roll out service if granted. The National Cable & Telecommunications Association opposes the merger, saying CenturyLink should not be able to use the money to overbuild existing service.

FairPoint Communications in Burlington, Vt., is using $2 million to expand broadband in the state.