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Qwest seeks $350M from stimulus for rural broadband

 

Denver Business Journal

Greg Avery

March 26, 2010

 

Qwest Communications International Inc. said Thursday it is applying for a $350 million federal stimulus grant to help it extend high-speed Internet service to rural areas of its local phone-service region.

The Denver-based telecom (NYSE: Q) had signaled in January that it was reconsidering its earlier decision not to apply for available rural-broadband funds under the American Recovery and Reinvestment Act because of what it called unrealistic rules. But those rules were later revised. (DBJ report.)

Qwest now will ask for the stimulus funds to cover 75 percent of the cost of a planned $467 million project to extend broadband service with download speeds of 12 to 40 megabits per second (Mbps) to more than half a million homes, schools, businesses and hospitals in rural communities in Qwest's 14-state service territory. Qwest would cover the remaining $117 million itself.

The stimulus funds would come from the "Broadband Initiatives Program" administered by the Rural Utilities Service, an agency of the U.S. Department of Agriculture. The $7.2 billion program's goal is to promote efforts to expand access to tens of millions of people who lack broadband and who live within 60 miles of a city or town.

"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," Steve Davis, Qwest senior VP of public policy and government relations, said in a statement.

The company expects that the Rural Utilities Service will consider the latest round of broadband-grant applications over the summer and award grants by Sept. 30.

Last year, Qwest and other major broadband providers AT&T, Verizon, Comcast and regional telecoms snubbed the first round of broadband stimulus grants and low-interest loans, saying that rules for the program then in effect made participation economically unrealistic.

"The good news is that they seem to have heard us in Washington, D.C.," Chuck Ward, Qwests Colorado president, said in January.

Originally, Qwest would have been eligible to have only half of its broadband infrastructure expansion project funded. Now, in the second round of funding, stimulus funding would cover up to 75 percent of the project if Qwest's application is OK'd.

Qwest's service territory covers Colorado as well as Washington, Oregon, Idaho, Utah, Arizona, Montana, Wyoming, New Mexico, North Dakota, South Dakota, Nebraska, Minnesota and Iowa.

 

The DBJ's Greg Avery contributed reporting | Compiled by Mark Harden