Some Say Verizon Likely To Accept CAF Phase II Support
Verizon is expected to accept FCC Connect America Fund (CAF) Phase II support in light of its pending sale of wireline systems in California, Florida and Texas to Frontier Communications (see 1502050059), said advocacy group officials in interviews this and last week. The company won't confirm that. It will submit a letter to the FCC on the funding, a Verizon spokesman told us Monday. Frontier had said in FCC filings that it will rely heavily on CAF Phase II funds to expand broadband to underserved and unserved areas of California and Texas. Because its transaction with Verizon likely won't be approved before the Thursday's CAF deadline, it can't apply to accept the federal funding for the states. Frontier has said it will accept the full $283.4 million in CAF Phase II support it's eligible for (see 1506160039).
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Frontier has been working with the FCC and Verizon in an attempt to receive the funds for the three states involved in the transaction,a Frontier spokeswoman told us. Representatives from Frontier and Verizon have appeared in recent weeks at the California Public Utilities Commission's public participation hearings, answering questions about the proposed transaction. Reports are mixed on the opinions expressed by Verizon about its acceptance of the CAF Phase II support, but some said they expect the telco to accept in the three states with operations being sold to Frontier.
Regina Costa, The Utility Reform Network telecom policy director, said Verizon Pacific Region President Tim McCallion told attendees last week at a CPUC hearing that his company plans to accept the funds on Frontier's behalf before the deadline. Rachelle Chong, general counsel for the California Emerging Technology Fund, said she didn't attend every hearing, but at the several she did attend, McCallion only said Verizon was looking into the issue and would make a decision by the deadline. Debbie Goldman, Communications Workers of America telecom policy director, said the CWA is "very optimistic" about Verizon's acceptance of the CAF Phase II support, and the money could be a significant factor in the amount of broadband expansion completed by Frontier. "This is a great thing," she said.
Chong said CETF would like to see Frontier make certain commitments to rural broadband expansion, and its receipt of CAF Phase II funds could affect those commitments. Frontier is seeking to use nearly $32 million annually in CAF Phase II support for six years in California, and $16.5 million throughout six years in Texas, it said in FCC filings. If Verizon doesn't accept the funds by the deadline, it's unclear what action may be taken. The FCC didn't comment, and a Frontier spokesman said the company hasn't heard any talk of a deadline extension by the commission. "Absent acceptance of the funding ... there will be a multiple-year delay for deployment in these areas, if broadband is deployed at all," Frontier told the FCC in a letter submitted in July.