Qwest Communications (NYSE: Q) has filed an application for a federal stimulus grant to extend broadband at speeds of 12 to 40 Mbps to rural communities throughout its local service region.
“Much like the water and electric programs the government established to encourage rural development, federal grants are needed to enable the deployment of broadband to high-cost, unserved areas,” said Steve Davis, senior vice president of Qwest Public Policy and Government Relations.
In its application, Qwest proposes to build facilities to serve more than half a million homes, schools, businesses and hospitals that lack access to today’s high-speed Internet capabilities. It plans to introduce the service at download speeds of 12 to 40 Mbps. Customers will be able to choose from a full array of broadband services and features.
The total cost of the proposed deployment would be $467 million. Qwest is requesting a grant for $350 million from the Broadband Initiatives Program (BIP), which is administered by the Rural Utilities Service, an agency of the U.S. Department of Agriculture (USDA). When Congress enacted the American Recovery and Reinvestment Act last year, it directed the USDA to establish a program that would stimulate broadband deployment to hard-to-serve rural areas. The BIP provides 75 percent of the build-out costs. The remaining 25 percent, or $117 million, would be funded by Qwest.
The rural communities included in Qwest’s broadband application are located throughout its local service region, which is comprised of 14 Midwestern and Western states. The area features expansive terrain where the construction of broadband facilities is expensive and difficult, making the one-time federal funding necessary.
“Our plan to deploy service to customers in unserved rural areas supports the national initiative recently undertaken by the Federal Communications Commission to ensure that all Americans have access to broadband. As the FCC has found, access to the Internet is increasingly essential for competing and succeeding in the world’s expanding knowledge-based economy,” Davis said.
The RUS has indicated that it will consider BIP applications during the summer and award the grants by Sept. 30, 2010.
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