Qwest Seeks $350M for Rural Broadband Push

Qwest Communications International Inc. (NYSE: Q) is asking the government for a $350 million grant to help it extend broadband services to rural communities within its 14-state region.

Qwest, which filed its application in Round 2 of a broadband stimulus package that will eventually hand out a total $7.2 billion in grants, said it would use the funds to offer download speeds ranging from 12 Mbit/s to 40 Mbit/s to 500,000 broadband-starved homes, schools, businesses, and hospitals in the Western and Midwestern United States. (See Qwest Asks for $350M Broadband Stimulus.)

Qwest spokesman Tom McMahon noted that the telco plans to use a mix of fiber-to-the-node and VDSL technologies to reach those intended download speeds.

"In fact, the fiber would help us serve more than half of the proposed coverage area with download speeds of 40 Mbit/s," he said, in a message to Light Reading Cable. "Many areas also will be able to upload at speeds of 20 Mbit/s. And, all areas would be able to get download speeds of at least 12 Mbit/s."

Qwest is seeking $350 million from the Broadband Initiatives Program (BIP) component of the broadband stimulus effort, which is being run by the United States Department of Agriculture (USDA) and supplying 75 percent of project buildout costs.

With that as the backdrop, Qwest has also pledged to put $117 million of its own money toward the project, noting that it needs this one-time government infusion to help the telco bring broadband to rural areas, where construction is too cost-prohibitive to accomplish completely on its own.

Qwest, by the way, is already using VDSL to deliver downstream speeds of 40 Mbit/s in parts of some of its larger markets, including Denver; Tucson, Ariz.; Salt Lake City; and Minneapolis/St. Paul, Minn. (See Qwest Attacks Comcast With 40 Mbit/s.)

Qwest, like many major telcos and MSOs, did not apply for funds in Round 1. The Rural Utilities Service (RUS) and National Telecommunications and Information Administration (NTIA) have not released a list of who applied in Round 2, but based on what's trickled out so far, it appears that larger telcos and MSOs are more apt to throw their hats in the ring this time.

The National Cable & Telecommunications Association (NCTA) , along with several Tier 1 and Tier 2 cable operators and other partners, are using Round 2 to apply for $52 million that they intend to use to help spur broadband adoption in less-affluent areas. (See Big Cable Joins the Broadband Stimulus Fray .)

The RUS and NTIA are expected to consider applications this summer, and announce the grant winners by Sept. 30, 2010.

— Jeff Baumgartner, Site Editor, Light Reading Cable