Rural telcos should be OK despite a possible...

Rural telcos should be OK despite a possible FCC re-definition of “broadband,” said Guggenheim Partners analyst Paul Gallant in a research note Monday. The FCC recently proposed to redefine “broadband” as 10 Mbps, up from 4 Mbps, in order to be eligible for Connect America Fund money (CD April 8 p1). “Given the tone of the Democratic majority in announcing the proposed increase, we suspect the FCC is likely to raise minimum deployment speeds from 4 to 10 Mbps,” Gallant said. That could lead to higher projected costs and a risk carriers wouldn’t accept CAF Phase II money, but “the FCC is sensitive to this risk and is likely to explore adjustments to other buildout factors” that might make it more “economically attractive” for telcos to accept CAF II payments for broadband buildout, Gallant said. Telcos like CenturyLink, Frontier Communications and Windstream are likely to accept the money, he said. They would start getting those payments in lieu of USF support around July 2015, he said. (See separate report on broadband speeds above in this issue.)