CenturyLink accepts $500M in CAF II funds, plans to extend broadband to 1.2M rural households

CenturyLink is accepting $500 million in the second phase of the FCC's Connect America Fund (CAF-II), enabling it deliver broadband services to about 1.2 million rural households and businesses in 33 states over the next six years.

The service provider said it is accepting 33 CAF II statewide offers to deliver Internet speeds of at least 10/1 Mbps to locations in FCC-designated, high-cost census blocks.

John Jones, senior vice president for public policy and government relations at CenturyLink said in a release that the "Connect America Fund, along with our significant capital investments over the years, help make deploying rural broadband more cost effective."

After finalizing its six-year buildout plan in the coming months, CenturyLink plans to begin network construction early next year.

The telco said that it has declined CAF II statewide offers for the states of California, Mississippi, Oklahoma and Wyoming. Under the FCC's CAF II rules, if a service provider decides to not accept a statewide offer the funding will be subject to a competitive bidding process where all eligible service providers can bid to serve all or part of those areas.

It said it could elect to participate in the FCC's bidding process and compete for CAF II support once the auction rules and requirements are finalized by the FCC.

CenturyLink is the latest telco to accept CAF II funding. Fellow ILECs FairPoint,Frontier and Windstream have also accepted CAF II funds. However, its large Tier 1 peers AT&T (NYSE: T) and Verizon (NYSE: VZ) have yet to announce whether or not they will accept CAF II funding.

Similar to its other ILEC compatriots, CenturyLink also participated in CAF-I, accepting $75 million in support to bring 4 Mbps broadband to 114,000 unserved rural locations.