A Deeper Dive on CAF II Winners: The New Carriers of Last Resort

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Just over 100 Connect America Fund II auction winners are getting set to deploy broadband service to unserved rural areas for which they won funding. Today we take a deeper dive into the auction results and consider the long-term impact that the CAF II winners may have on the communities that they’re moving into.

The CAF II auction awarded funding for areas where the incumbent local phone company is one of the nation’s larger price cap companies and where the cost to deploy broadband was estimated to be especially high or where the incumbent turned down funding at the level offered by the Federal Communications Commission. Funding went to the company that offered to provide service at the lowest level of CAF support. The price cap carriers won’t have much of a business left in markets for which another company won CAF funding — and when the FCC planned the auction, it said the incumbent carriers in that situation could petition to withdraw from a market. None of them have done that yet, but it is likely that they will do so eventually. Who will be the new carriers of last resort? Anywhere there was a winning bid, residents should be better off – at least in the short term – because of their improved speeds. And residents in areas won by a rate of return (ROR) carrier or rural electric company may be especially happy because they will be getting the highest speeds, and in many cases will also get local support that they might not have had previously.


A Deeper Dive on CAF II Winners: The New Carriers of Last Resort