Phase II of the FCC's Connect America Fund (CAF) is accelerating, with CenturyLink (NYSE:CTL) and Consolidated Communications (NASDAQ:CNSL) being the latest service providers to sign on for the $1.7 billion rural broadband funding program.
CenturyLink will accept approximately $500 million a year for six years from the CAF to bring high-speed Internet services to approximately 1.2 million rural households and businesses in 33 states. Once CenturyLink's CAF II six-year build-out plan is finalized over the coming months, construction is expected to begin in early 2016.
CenturyLink previously accepted approximately $75 million in CAF phase I interim, one-time support to bring broadband with 4 Mbps download speed to nearly 114,000 unserved rural locations.
Consolidated Communications has accepted offers totaling $14 million in annual CAF Phase II support to deploy broadband to approximately 24,700 rural locations across seven states.
Other telecommunications providers that have accepted CAF money this month include Hawaiian Telecom, FairPoint Communications and Windstream Communications.
The FCC created the CAF program in 2011 to facilitate the deployment of high-speed Internet access in high-cost locations by transitioning Universal Service Fund money that was supporting rural landline service to the build-out of broadband infrastructure in rural communities. The program generally requires participating companies to provide at least 10 Mbps downstream and 1 Mbps upstream, though in some areas downstream speeds of 4 Mbps are permissible.
