As part of the Connect America Fund Phase II grants in 2015, the FCC awarded CenturyLink and Frontier a combined total of $789.1 million in federal funds to expand broadband services to rural Americans. Dec. 31 was the deadline for CenturyLink to roll out 10Mbps/1Mbps broadband to 1.17 million homes and businesses in 33 states, while Frontier needed to expand its broadband services to 659,587 homes and business in 28 states. Both companies have failed, again, to meet their broadband deployment deadlines.
As reported by Ars Technica, CenturyLink and Frontier still have one year to finish their respective rollouts, according to the FCC’s grant stipulations. If the ISPs fail again, the Universal Service Administrative Co. (USAC), which is governed by the FCC, takes the money back—plus interest. Basically, if CenturyLink or Frontier don’t complete the rollout by the end of 2021, then the government is going to take back more money than what it gave to either of those companies to roll out broadband in areas that remain unserved.
Frontier said in its filing that the company was unable to complete its rollout in time because it was impacted by the covid-19 pandemic. The filing says that deployment hasn’t been completed in Alabama, Arizona, California, Illinois, Indiana, Iowa, Michigan, Minnesota, Nebraska, Nevada, New Mexico, New York, Ohio, Texas, Utah, Wisconsin, and West Virginia.
“Construction progress was somewhat impacted by the unprecedented challenges to rural broadband construction caused by the covid-19 pandemic. Specifically, although Frontier employees and construction crews continued their work to deploy broadband to unserved areas as quickly as possible throughout the pandemic, statewide shutdowns, local government lockdowns, curfews, state office closures, and hotel and business closures presented extraordinary obstacles to achieving year-end deployment goals.”
CenturyLink noted in its FCC filing that it failed to meet its broadband deployment quota in Arkansas, Arizona, Colorado, Idaho, Illinois, Indiana, Iowa, Kansas, Louisiana, Michigan, Minnesota, Missouri, Montana, Nebraska, New Mexico, North Dakota, Ohio, Oregon, South Dakota, Utah, Virginia, Washington, and Wisconsin. The company did not give a reason why.
Both companies also failed to meet their deployment obligations last year, and Frontier filed for Chapter 11 bankruptcy. Both companies were also awarded a second round of rural broadband grant money from the FCC’s Rural Digital Opportunity Fund Phase 1 auction last month. CenturyLink was awarded $262.4 million, and Frontier $370.9 million spread out over the next 10 years.
So even if both companies fail to meet the original obligations of their 2015 grant and have to give money back to the government, the government is still going to give them more money to continue rolling out broadband rural America. Not much of a punishment.