Regional wireline service provider Frontier Communications Corp (FTR - Free Report) has reportedly unveiled attempts to conduct tests to deploy fixed broadband. The company aims to accelerate rural broadband, while trying to abide by the Federal Communications Commission's (FCC) CAF-II funds.
In relation to its broadband-related initiatives in under-served areas, Frontier received over $283 million in annual Connect America Funding Phase II (CAF-II) support from the FCC in 2015. The CAF was set up by the FCC to primarily accelerate broadband infrastructural development in rural areas. After meeting all of the CAF-I requirements in the third quarter of 2015, the company now looks to expand into new markets using the CAF-II funds.
The $283 million under CAF-II was given to supply broadband services to over 6,50,000 rural locations that could not be reached previously, economically. Overall, Frontier remains on track with its CAF-II obligations.
As of June 2017, Frontier has reached 40% of its target in nine states. They include Arizona, Connecticut, Georgia, Montana, New York, North Carolina, Pennsylvania, Washington and West Virginia. By 2017 end, Frontier claims to reach over 500,000 homes and businesses, while trying to explore all possible avenues for further expanding broadband in high-cost rural areas, including through the CAF Phase II Auction.
Frontier is not the only service provider trying to deploy fixed broadband wireless to accelerate rural broadband expansion. Fellow rural-centric providers like CenturyLink Inc (CTL - Free Report) , Consolidated Communications Holdings Inc (CNSL - Free Report) and Windstream Holdings Inc (WIN - Free Report) are also witnessing similar opportunities to conduct trials of fixed wireless spectrum in the range of 3.54-3.70 GHz frequency band.
Allowing greater success connecting homes and businesses through obstructions such as trees and buildings is what make these spectrum bands perfect for rural areas as against 5 GHz and higher bands.
Overall, the three service providers are on track to expand broadband services to more homes via the CAF-II program through these spectrum bands. In particular, the companies are in the process of investing more than $3 billion to provide broadband to more than a million homes and businesses (representing more than two and a half million Americans) each year as part of CAF-II program
Price Performance and Zacks Rank
In the past month, shares of Frontier have declined 8.4% as against the industry‘s increase of 3.7%.
Currently, Frontier is a Zacks Rank #4 (Sell) stock.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
In September, Frontier Communication sought permission from the FCC to retire copper networks in a portion of its Spencerport, New York, central office service area. The company wants to migrate its customer base in these regions to high-speed fiber-optic networks. All customers will be shifted to the FTTH (fiber-to-the-home) network architecture.
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