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Feds to award rural broadband money to bidding providers

  • Cables connecting phone, cable and Internet service come out of a wall connector. AP photo



Recorder Staff
Wednesday, February 21, 2018

Qualified internet companies willing to close the digital divide in rural Massachusetts may be eligible for federal dollars through the Federal Communication Commission’s Connect America Fund.

The FCC says about 13,000 rural homes and businesses still have no access to high-speed internet in Massachusetts.

Crocker Communications is planning to submit an application in hopes that additional federal money will either allow for 100 percent build-out in the towns served by Crocker, or else enable a rate reduction for future broadband subscribers.

Westfield Gas & Electric, a Westfield utility company that has been hired to build town-owned broadband networks in the area, is also looking into this program.

Up to $2 billion in federal funding is intended to help offset the cost of extending broadband service into rural areas throughout the country over the next decade.

The FCC will distribute the money through what it calls “an innovative reverse auction,” in which internet service businesses submit proposals for service in regions with no internet.

The FCC says the funding program could provide opportunities “for new entrants to the marketplace, regardless of technology, including phone companies, fixed wireless service providers, satellite providers, cable companies and electric utility broadband providers.”

“The idea is to get the most competitive bidder,” said FCC spokesman Mark Wigfield. “This program has been in the making for some time.”

According to Wigfield, the FCC created the first Connect America Fund (CAP I) in 2011 and offered financial incentives for broadband build-out to the country’s largest providers, including Verizon, in Massachusetts. “CAP II is a follow-up, in states where the big guys didn’t take the money, in areas where it was too costly to serve,” Wigfield said.

The eligible areas for this funding include regions in states where larger telephone providers declined an earlier offer, and areas that are not served by a current carrier or unsubsidized service provider with certain broadband speeds. Eventually, a CAP III will be set up for the most remote areas that still have no high-speed internet.

“Connecting the unconnected in rural America is my top priority,” FCC Chairman Ajit Pai said in a news release. “I’m excited that our CAF auction will provide opportunities and cooperatives to bridge the digital divide for the Massachusetts consumers and small businesses that lack high-speed access today.”

The application period for providers who want to participate in the auction runs from March 19 through March 30. The CAP II program is to start July 24.

Separate plan

The Massachusetts Broadband Institute (MBI), which is overseeing last-mile broadband development, is separate from the FCC plan. But last year, MBI and the state Department of Telecommunications and Cable sent a letter to the federal Commission, asking that CAF I money declined by large telecommunications companies for rural Massachusetts build-outs in the last round be made available to the state again.

“Unfortunately, the FCC did not take up the suggestion, but the commonwealth did make that ask,” said spokesman Brian Noyes.

Crocker Communications President Matthew Crocker said he has been looking into CAF funding for about a year. If Crocker qualifies, the company will have up to 180 days to be designated as an Eligible Telecommunications Carrier. “We’re planning on qualifying to participate in the auction,” he said. “Then we’re allowed to bid — if we get the support of the towns.”

Crocker said getting towns’ support is crucial, since the company would be responsible for servicing their networks for 10 years under its CAF agreement with the FCC.

Crocker said the company hopes to provide 96 percent coverage to towns through the MBI grants, town matching funds and USDA rural utility loans. But if Crocker also gets the Connect America Funds, it may be able to provide 100 percent coverage or reduce monthly rates to subscribers.

“We won’t know what we get (from the FCC) until we win the auction,” he said.

Aaron Bean, operations manager for Westfield Gas & Electric, said his company is still reviewing the criteria for a CAF grant, to see if a municipal utility/telecommunications entity would qualify.

“The model we’ve been employing is the towns own their broadband networks and we assist with the operations,” Bean said.

If CAF is limited to private companies, said Bean, the chances of getting another grant are unlikely. “But it doesn’t hurt to at least try,” he said.