FairPoint Communications will accept $37.4 million of annual USF subsidies under Phase II of the FCC Connect America Fund (CAF II), a company release said Tuesday. The support for 2015-2020 will help FairPoint provide 10/1 Mbps broadband to about 105,000 homes and businesses with over 200,000 rural customers in 14 states, an FCC release said Wednesday. The Wireline Bureau in a Wednesday public notice authorized the CAF II distributions, the biggest chunks of which will go to upgrading high-cost networks bought from Verizon in three New England states: $13.3 million for Maine, $8.8 million for Vermont and $4.4 million for New Hampshire. "We are committing hundreds-of-millions of dollars in capital to build and upgrade infrastructure in our service territories to extend affordable broadband services to remote areas which will help businesses and residents alike stay connected to the world,” said CEO Paul Sunu in the company release. FairPoint was eligible for $38.2 million in 16 states but declined support for Colorado and Kansas. It said it would evaluate the competitive bidding process the FCC plans for areas where price-cap telcos decline CAF II money. FairPoint expects it will no longer receive $39.3 million in current high-cost "CAF frozen support" but will receive $7.4 million in transitional support. Wells Fargo analyst Jennifer Fritzsche said the transitional support will wind down in stages by 2018. "Like the other RLEC peers, we believe FRP will be able to use this CAF support to its advantage," she said in a note to investors. "While there is of course a [capital expenditure] element to this build, the additional revenue it receives from the buildout of these additional households should help it longer term. We view the recitation of the prior guide for both [free cash flow] and capex as a positive and continue to believe FRP has greater cost cutting opportunities which could further drive EBITDA higher." Price-cap telcos have until Aug. 27 to make their CAF II decisions, but some others have already make announcements: Frontier will accept its full $283.4 million (see 1506160039); Windstream will accept $174.9 million of the $178.8 million it's eligible for (see 1508050072); and CenturyLink expects to accept at least $300 million of the $514.3 million it's eligible for, though it's still reviewing whether to take support in 11 of its states (see 1508140052).

The FCC teed up Odyssey Acquisition's proposed takeover of ExteNet Holdings units, with comments due Aug. 31 and replies Sept. 7, the Wireline Bureau said in a public notice Monday in docket 15-189. The ExteNet subsidiaries provide telecom services in 19 states and Washington, D.C., and have authorizations to provide service in 14 other states. "The ExteNet Companies design, build, own and operate distributed networks providing connectivity to distributed antenna systems and small cells for use by national and regional wireless service providers (WSPs)," the bureau said. "The ExteNet Companies are 'carrier’s carriers' providing point-to-point telecommunications services to their WSP customers over fiber optic cables and other transport media connecting remote communication nodes to hub facilities and other signal traffic aggregation points, and do not provide services directly to retail customers." Odyssey owns and operates distributed network systems and other wireless infrastructure assets, the bureau said. The parties can transfer control of the assets after 31 days unless blocked by the commission.

Fiber networking provider Integra agreed to buy fiber connectivity company opticAccess, Integra said in a news release Tuesday. The 3,500-mile opticAccess network is along the West Coast and primarily serves the San Francisco and Los Angeles metropolitan areas, Integra said. The company said the acquisition will increase its near-net demand by nearly 40 percent and will provide an enhanced low-latency, long-haul fiber route between Seattle and Los Angeles. The transaction is expected to close in Q4 pending regulatory approval, Integra said.

The FCC gave Dominion Virginia Power until Oct. 19 to respond to Verizon's complaint against the utility's pole attachment rates, which the telco believes are excessive (see 1508040029), said an Enforcement Bureau letter posted Tuesday in docket 15-190. Noting its response was due in early September, Dominion (also known as Virginia Electric and Power Co.) had asked for a 60-day extension until Nov. 2 to respond to Verizon's 700-page complaint (see 1508130033). The bureau letter said Verizon would have until Nov. 9 to reply to Dominion's response unless commission staff rules otherwise.

The parties to litigation over the FCC's interim inmate calling service (ICS) rules, which regulated interstate rates, briefly updated the U.S. Court of Appeals for the D.C. Circuit on the commission's current rulemaking to adopt permanent ICS rules. In a joint status report filed Tuesday in the case of Securus v. FCC, No. 13-1280, the Department of Justice, FCC, Securus Technologies and other petitioners said the commission received "voluminous" comments and was now considering those submissions and holding ex parte meetings with interested parties on final rules. The parties said the court in January partially stayed the FCC's 2013 interim interstate ICS rules while leaving other parts intact (included rate caps). They also noted the commission in October issued an NPRM aimed at overhauling its ICS rules and then asked the D.C. Circuit to hold in abeyance its review of the interim interstate rules on the merits, a request which the court granted last December. The court asked the parties to file status reports every 60 days; Tuesday's report was the fourth such report. FCC Commissioner Mignon Clyburn, who as acting chairwoman oversaw the 2013 order, recently vowed to cut calling costs for inmate families (see 1507300067), and CenturyLink this week suggested capping all ICS rates "at or very near" interstate levels (see 1508170054). Some parties have told us the commission could issue an order this fall.

CenturyLink plans to cut its workforce by about 1,000, the company confirmed Friday in an emailed statement. "After careful consideration, CenturyLink has made the difficult decision to reduce its workforce," the statement said. "This includes current positions as well as not backfilling open positions." Affected employees will receive severance packages and assistance to find new jobs, including within the company. "Additional steps will include minimizing the number of contractors we work with, reducing travel expenditures and further reductions of non-employee-related expenses." CEO Glen Post said on an Aug. 5 analyst call that CenturyLink was planning a "reduction in the number of employees" to cut costs, according to a transcript of the call. On that call, Chief Financial Officer Stewart Ewing said CenturyLink estimates it will take at least $300 million of the $514 million in annual USF support it's eligible for under the FCC's Connect America Fund Phase II. CenturyLink is continuing to evaluate whether to take more than that and expects to notify the FCC of its final decision on or before an Aug. 27 deadline for price-cap telcos, the company said in a separate emailed statement. Ewing said the $300 million would go to about two dozen states where CenturyLink serves high-cost areas and it's studying whether to take the CAF II subsidies in another 11 states. If the telco doesn't accept the CAF II support there, Ewing said the company could continue to receive about $100 million in USF "frozen support." He said the FCC is unlikely to write rules before late 2016 or maybe 2017 for a reverse auction in areas where price-cap carriers don't accept CAF II money.

Dominion Virginia Power asked the FCC for more time to respond to Verizon's 700-page pole-attachment complaint filed Aug. 3. Saying parties have 30 days to respond to such complaints, Dominion (also known as Virginia Electric and Power Co.) asked for a 60-day extension to Nov. 2. Dominion said the request was "reasonable in consideration of the enormous volume of materials to which Dominion must respond, and the substantial damages that Verizon claims it has suffered" under joint-use agreements of the power company's poles. The utility said Verizon wants to be refunded up to $16.8 million for pole attachments made since 2011. Verizon agreed to a 30-day extension, but Dominion said it needs more time prepare its response, particularly since under the rules it will be the company's "one chance to defend itself" against the claims. The telco asked the FCC to block Dominion efforts to collect "excessive and increasing" charges, ensure the telco pays the same rate as comparable providers under 2011 rules and refund the amounts it had overpaid (see 1508040029).

Windstream is partnering with Infinera to extend 100 Gbps "Wave transport service" across the country, the companies said in a news release Wednesday. Deploying Infinera's Intelligent Transport Network, Windstream this year has brought 100 Gbps service to 12 new markets -- including Buffalo, Denver, Houston, San Antonio, Oklahoma City and Tulsa -- and has added Infinera's 500 Gbps "super-channel technology" to 3,900 miles of fiber, they said. Windstream plans to expand 100 Gbps service to another seven markets by year-end, including Minneapolis and Louisville in September. In total, Windstream plans by year-end to have 1 Gbps-100 Gbps service on 121,000 miles of fiber with 100 Gbps service in 44 markets.

Sorenson Communications and CaptionCall urged the FCC to deny IDT Telecom's request for review of a Consumer and Governmental Affairs Bureau order setting the telecom relay service (TRS) fund's 2015-16 budget and industry contribution factor. IDT, which pays into the fund, petitioned the full commission to review the bureau order because it partially funded intrastate and other domestic IP-based relay services from the interstate and international jurisdictions, which the company said violated the Communications Act (see 1507290024). In a Tuesday filing in docket 10-51, Sorenson and CaptionCall called IDT's arguments "meritless." As an initial matter, they said, IDT's request was outside the scope of a bureau-level proceeding, challenging a rate methodology set by the full commission; if IDT wanted to change the rules, they said it should have filed a petition for rulemaking. They said IDT was also wrong on the policy merits: "The Communications Act gives the Commission wide discretion over the funding of the TRS program, and the Commission has reasonably exercised that discretion."

Rural telco groups presented FCC officials with a bevy of potential "technical assumptions" for implementing an overhaul of rate-of-return carrier USF support mechanisms. Representatives of the Independent Telephone and Telecommunications Alliance, NTCA, USTelecom and WTA said that none of their associations were ready to endorse the assumptions they outlined to the FCC in a document, but they were submitting them to help in the identification and discussion of issues that may need further examination and resolution. "This approach has not been fully defined or modeled, and thus does not represent a fully-formed proposal that has been vetted by or is necessarily supported by industry representatives; some of the associations also have continuing questions and some concerns about issues that may arise in connection with such an approach," the groups said in a USTelecom filing posted Tuesday in docket 10-90. Derrick Owens, WTA vice president of government affairs, told us that the assumptions incorporated feedback from FCC officials, and are to be used to generate projections for rural telco funding under proposed USF changes. "The idea is to see what the effects are for the companies and the fund in general, and to see what other issues will pop up that need to be addressed," he said. The groups in May proposed a two-track overhaul of rate-of-return USF that would create a voluntary model-based approach and revise existing USF mechanisms to support stand-alone broadband, but many details remain in play (see 1506030052 and 1506040028).