Qwest seeks broadband stimulus grant

After dropping hints several weeks ago that it might apply for broadband stimulus funds in the second funding round, Qwest Communications today confirmed that it will seek a $350 million grant from the Broadband Initiatives Program administered by the Rural Utilities Service.

As a requirement of that program, Qwest also said it would provide $117 million toward the cost of its proposed project, which would bring broadband at speeds of 12 to 40 Mbps to rural areas throughout its 14-state region.

Qwest did not apply for stimulus funding in the first round, but in January Qwest’s Colorado president Chuck Ward told a local newspaper that the guidelines for the second funding round were more favorable because they made projects within 50 miles of an urban center more feasible financially. In February Qwest CEO Ed Mueller told participants on the company’s fourth quarter earnings call that the company was considering an application for the second round. 

Although few large carriers applied for broadband stimulus funding in the first round, Level 3 was successful in obtaining funding to build points of presence to its high-speed network in rural areas of several states. Qwest’s application could be looked upon favorably now that the crafters of the National Broadband Plan released last week have called out the lack of broadband in many areas served by major U.S. telcos. Of nearly 7 million households that do not have access to broadband, two-thirds are in areas served by larger price cap carriers, the plan authors said.