Verizon seeking USF money for rural LTE buildout

Verizon Wireless (NYSE:VZ) executives suggested that the FCC funnel government subsidies to rural carriers that enter into the operator's LTE licensing program. If Verizon's effort is approved, rural carriers that license LTE spectrum from Verizon could receive money from the government's Universal Service Fund to aid in the rollout of LTE network technology in underserved areas of the country.

Verizon executives Chris Miller, Maggie McCready and Tamara Preiss this week met with representatives from FCC Commissioner Meredith Attwell Baker's office, as well as staff from the FCC's Wireless Telecommunications Bureau and Wireline Competition Bureau to discuss the proposal.

"We addressed Verizon Wireless's rural LTE partnership program and said that, depending on how the anticipated [USF] mobility program is structured, those carriers that lease Verizon spectrum to offer 4G services in rural areas may be candidates to put this support to good use," the executives wrote in a filing with the FCC detailing the meeting. Verizon made its comments to the FCC in response to questions from the agency on the topic.

The chief of the Rural Cellular Association, Steven Berry, said Verizon should not be allowed to use USF funds to expand its reach, whether directly or through affiliate programs.

The FCC is working to overhaul the outdated Universal Service Fund--intended to help fund the deployment of telecommunications services in rural America--as part of its overarching national broadband plan. The cell phone industry has argued that wireless is an ideal technology to bring telecommunications to rural areas since cell towers generally cover more people at a lower cost than wired transmission lines.

"With respect to mobility funding in particular, we indicated that targeted, one-time infrastructure funding could help promote the commission's broadband objectives in certain areas," the Verizon executives wrote. "We indicated that the commission should allow carriers that participate in the [USF] program to use mobility funding to deploy either 3G or 4G services because there are areas that do not have 3G coverage today that will likely move directly to 4G."

Verizon announced earlier this year it was in discussions with a number of rural carriers to license to them its 700 MHz LTE spectrum as part of an effort to build out its LTE network. Under the proposed deals, Verizon would license the spectrum to the local carriers for a small fee; the local carrier would then sell the service. Either Verizon or the other carrier would be responsible for the network equipment. Verizon is also looking to strike data roaming deals with the carriers.

No deals have been announced so far.

Verizon plans to launch commercial LTE services in 25-30 markets by the end of this year, covering 100 million POPs.

For more:
- see this FCC filing

Related Articles:
Rural carriers open to Verizon's LTE licensing plans
Verizon considers licensing LTE spectrum to rural carriers
Verizon to launch LTE markets in Q4
FCC takes action on mobile roaming, USF reform
FCC proposes USF reform
One year at the FCC

Article updated Oct. 6 based on subsequent comments from Verizon and RCA.

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