While the federal government’s $42.5 billion Broadband Equity Access and Development (BEAD) program is a significant priority for service providers, Lumen envisions a path to leverage its existing fiber infrastructure to help states.
During the Citi Global Technology, Media, and Telecom Conference, Chris Stansbury, Lumen's EVP and CFO told investors that the company will evaluate the BEAD program on a case-by-case basis, meaning it must see a business case to participate.
“BEAD has an impact on our consumer business,” he said. “Our view is we’ll participate if we think that there’s an opportunity there.”
He added that the BEAD program poses various challenges for Lumen.
“The returns around BEAD are complex because it’s a bid-down process, so we’re not going to do anything that does not make sense to do and it’s easy to cross that line,” Stansbury said. “We want to expand connectivity, but we want to do it in a smart way.”
Middle mile focus
One way that Lumen sees itself being a participant in the BEAD process is through the middle mile.
The service provider partnered with the State of California to help it build a middle-mile network that other broadband providers can use to deliver services to consumers and businesses.
Under California’s Broadband for All initiative, the state awarded Lumen an over $400 million contract for network infrastructure for the middle mile broadband initiative.
“The way we can impact BEAD positively is what we did in California,” Stansbury said. “We’re taking capacity we have in our network to help build the backbone of what they will ultimately build off of that.”
California’s equitable access vision
The State of California Middle-Mile Broadband Initiative is a partnership among several organizations that aims to create an open-access middle-mile network and bring equitable high-speed broadband service to all Californians.
California’s effort Lumen will bring open-access, middle-mile connectivity to hundreds of California communities by the end of 2026, paving the way for last-mile readiness.
While the company did not disclose other agreements with other states, it did say when it announced the deal with the that it “hopes to repeat it with more public-private partnerships around the country.”
The state’s middle-mile network is being funded by Senate Bill 156, which allocates $6 billion over three years for state middle-mile broadband infrastructure and last-mile projects that provide internet connections to homes, businesses and community institutions. The funding for this effort is divided into three buckets:
- $3.25 billion to acquire, build, maintain and operate a critical statewide open-access middle-mile network.
- $2 billion to complement the middle-mile investment to build last-mile infrastructure in coordination with federal and state universal service programs, such as those to connect schools, disabled users and low-income households.
- $750 million Loan Loss Reserve Fund to assist local governments, tribes, and non-profits secure enhanced private financing to construct and operate new public fiber networks.
Stansbury said that its involvement in the State of California Middle-Mile Broadband Initiative enables it to help a state bring broadband to areas with limited options today in a way that it can prove a business case for.
“We can get internet into more people’s hands but do it in a way that makes more economic sense for us,” he said.
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