Windstream Works to Upgrade As FCC Finds Broadband Lacking

by Luke Jones  on Monday, May. 13, 2013 12:00 am  

Windstream expects to catch up with the data demands of that 80 percent of customers by the end of 2013, Redmond said, and the company will continue to invest in the network for the next two to three years.

“Really, this is a demand issue,” Redmond said. “Our network performs as advertised. It works. What all carriers are dealing with is a kind of explosion of Internet demand and traffic. We see things like the number of connected devices in the household has tripled over the past few years.”

The other 20 percent is made up of its most rural customers, which is one of its most difficult markets.

“Frankly, Windstream is one of, if not the most, rural high-speed Internet carrier out there,” Redmond said.

“Some of the network is so rural, so few homes per mile, you’re passing less than 10 homes per mile,” said Barry McCarver, an analyst for Stephens Inc. in Little Rock. “You’re building fiber that many miles away, you’ll never get a return on the capital you used to build it.”

It’s an area where Windstream has historically relied on federal subsidies to help cover the huge expense; future funding is currently a gray area for the company.

Working on Funding

Redmond said Windstream is working with the federal Connect America Fund, as well as rural peers Frontier Communications Corp. of Stamford, Conn., and CenturyLink Inc. of Monroe, La., to get the funding needed to run fiber out to those areas. (Frontier, by the way, was the only Internet service provider to significantly improve its broadband speed performance between FCC tests in April and September 2012.)

“We’re very hopeful that here in the very near future that we can secure some of the funding to address the remaining 20 percent of our customer base in most rural markets,” he said.

“We don’t really know for sure what the CAF funding is going to look like going forward,” McCarver said. “We’re hopeful we’ll hear more about that in the coming year, but there’s nothing set in stone.”

McCarver also noted that he was optimistic on the broadband service as a whole: The service may shrink but it remains relevant and competitive.

“It has periods where it grows, then it definitely has corridors where it declines,” he said. “Conservatively, I think it will decline over time, but to put that into perspective, they had 6,800 new customers in 2012 and lost almost 90,000 voice lines.”

 

 

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