CenturyLink Takes $3B In Subsidies For Building Out Rural Broadband

New submitter club77er writes with a link to a DSL Reports article outlining some hefty subsidies (about $3 billion, all told) that CenturyLink has signed up to receive, in exchange for expanding its coverage to areas considered underserved: According to the CenturyLink announcement, the telco will take $500 million a year for six years from the Federal Communications Commission (FCC)'s Connect America Fund (CAF). In exchange, it will expand broadband to approximately 1.2 million rural households and businesses in 33 states. While the FCC now defines broadband as 25 Mbps down, these subsidies require that the deployed services be able to provide speeds of at least 10 Mbps down.

Comments

Subsidies are okay. Exclusivity is not.

[fustakrakich]

If they take our money to build the line, they are acting as an agent of the state (so, yes we can say the government put in the line) and they must lease it out at reasonable rates.

Re: Subsidies are okay. Exclusivity is not.

[kenh]

Ha-ha, that's funny.

Why doesn't that apply for football stadiums that are built with taxpayer subsidies?

Re: Subsidies are okay. Exclusivity is not.

[fustakrakich]

Complaining means squat. If they are paying the price they must be okay with it. It is the only reason the tickets cost 100+. If people don't turn their backs, I can hardly be expected to take their complaints seriously.

Re:3 billion buildout 1.2 million served?

[jeffb (2.718)]

Your region doesn't get math education subsidies, either, does it?

Here's a better idea

[dirk]

Instead of giving Century Link 3 billion dollars to build the infrastructure and then have a monopoly where they can overcharge the customer, let's take that 3 billion and have the government build the infrastructure. Then we let any company who want so use it do so for a small fee. Then not only do we have infrastructure, but we also have competition and at least a small income from the lines, which is better for everyone.

Re:Here's a better idea

[Anonymous Coward]

Because the gov't doesn't have the personnel with the proper knowledge to do something like this. This is better performed by the private sector using the gov't as a funding mechanism. If the gov't did this they would simply have to contract it out to get the requisite personnel and then it would cost more and we'd get less because gov't adds overhead.

Re:3 billion buildout 1.2 million served?

[guruevi]

The problem is the cost per item. This is more than just a subsidy, it's simply paying for getting the entire job done and if that were the case, why doesn't the government just contract that job out. These companies have gotten the same subsidies over and over again, even avoided taxes since the 90's for that exact promise.

There are a few facts:
- Even in rural areas, people tend to cluster together, you can easily get 100 houses/living spaces in a small area
- There is already fiber in lots of places with inhabitants due to regular phone lines or even DSL/ISDN (which even in rural areas no longer use switchboards or trunks, they are switched onto a packet line, generally fiber) and both lit and dark fiber strung in the past four decades. Even so, existing copper can in most cases easily maintain the speeds being requested.
- Most DSL/ISDN lines can be easily upgraded with software and minor hardware to comply with these requests.
- It is relatively cheap to tap a fiber from a pole even for a (very) long run. I once lived in such place, a 2.5 mile run from the nearest fiber on existing electric/phone poles would've cost me only $15k including installation, hardware and (I assume) profits for the installer and that was for a 1Gbps fiber.
- Single houses in the middle of nowhere will still not get anything because the company will not find them profitable
- These companies often only provide service 'to the pole' (not to the meter/modem/termination point as most people assume). Most/all utilities have this provision, even in a city, you might not notice unless you have to fix something (or if it's already buried) but when you do then you can go and climb the (live) pole yourself or hire someone to do it. The rest (a 20-200ft run depending on property layout) the customer still has to pay for during installation.