CenturyLink getting $3B from feds to expand rural broadband

Internet provider CenturyLink is slated to receive more than $3 billion over the next six years from the Federal Communications Commission (FCC) to develop broadband service in rural communities.

CenturyLink will receive more than $505 million a year for six years to expand service in 33 states through an FCC program called the Connect America Fund. The new service will reach close to 1.2 million homes and businesses and more than 2.3 million customers, the FCC said Thursday.

{mosads}“CenturyLink’s acceptance of over one-half billion dollars from the Connect America Fund represents a huge investment in broadband for its rural customers,” FCC Chairman Tom Wheeler said in a statement. “This is the largest amount accepted by any company to date — and the opportunities that modern broadband will provide for the rural communities CenturyLink serves are priceless.”

The company declined to accept funding to expand broadband access under the program in four other states. In the states where it did accept funding, it will build out broadband service with a minimum download speed of 10 megabits per second and a minimum upload speed of 1 megabit per second.

The program is designed to promote broadband access in communities where it would otherwise be too costly for Internet providers to offer service.

“These are high-cost markets with many deployment challenges,” said John Jones, the company’s senior vice president for public policy and government relations, in a statement. “The Connect America Fund, along with our significant capital investments over the years, help make deploying rural broadband more cost effective.”

The effort grew out of the FCC’s efforts to take existing programs that subsidize phone service and update them to offer broadband. The commission voted earlier this year to formally consider whether to pay for broadband service through a program meant for low-income Americans. That item is controversial, because many on the right see the program as bloated and vulnerable to fraud.