Today, we informed the FCC that AT&T is willing to accept up to $100 million from the Connect America Fund (CAF) Phase 1 to deploy broadband to approximately 129,000 locations that lack any fixed broadband service of at least 768 kbps/200 kbps. Last year, AT&T declined the CAF support that was available to it, due largely to uncertainty about the company’s overall strategy for rural areas, as well as uncertainty about some of the obligations associated with acceptance of CAF money. In both cases that uncertainty has been resolved such that acceptance of this funding, and the associated obligations, now makes sense for AT&T.

Last summer, AT&T was in the middle of a strategic review regarding, among other things, its rural properties. The outcome of that review was Project VIP, a multibillion dollar investment in wired and wireless broadband. We decided to expand our U-verse and IPDSL footprint, as well as our LTE build. Acceptance of CAF funding will permit a further expansion of the U-verse/IPDSL footprint to additional locations that stand to benefit greatly, as they currently have no fixed broadband service of at least 768 kbps/200 kbps.

To its credit, the FCC also addressed the uncertainties we had identified. In particular, they clarified that: (1) CAF Phase 1 recipients will not be subject to any later-adopted broadband measurement requirements; (2) recipients will be in compliance with the requirement that pricing and usage allowances be “reasonably comparable” to urban areas, if they offer identical plans in such areas; (3) acceptance of funding will not trigger reporting requirements beyond the funded locations; and (4) obligations will end within three years.

CAF Phase 1 is now a model of what universal service must be in the 21st century. It entails clearly-defined obligations that are limited in time and geographic scope, and to which providers voluntarily agree in exchange for funding. The FCC deserves kudos for the design of this program.

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