Pennsylvania is staking its claim to more than $23 million in federal funding that Verizon turned down to expand high-speed internet service to rural customers in the state.
The Federal Communication Commission's Connect America Fund provides funding to telecommunications providers to build new network infrastructure or upgrade existing broadband networks in regions that lack it. Companies that take the money must agree to offer fast internet speeds as well as meet other targets.
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Verizon was eligible for nearly $23.3 million annually — nearly half of the total federal allotment to Pennsylvania — but declined to accept the money, which Pennsylvania officials fear could wind up going to a provider in another state through a competitive bidding process.
A Verizon spokesman said Wednesday he had no information on the company's decision. John H. Johnson said Verizon complies with a state law that requires phone companies to offer broadband to any customer who requests it. However, the state mandates much slower speeds than the federal program.
The Pennsylvania Public Utility Commission has asked the FCC to ensure the money rejected by Verizon stays in Pennsylvania, while U.S. Sen. Bob Casey, D-Pa., also called on the FCC to keep the funding in the state.
"Losing all or part of this funding would be unfair to Pennsylvania residents in rural and high-cost areas and contrary to the FCC's goal of ensuring broadband access for all," he wrote in a Dec. 22 letter to FCC Chairman Tom Wheeler.
Casey noted that Pennsylvania telephone subscribers consistently contribute more than $100 million to the federal universal service fund, which supports the broadband program.
Twenty percent of Pennsylvanians living in rural areas lack access to broadband internet, according to an FCC report cited by Casey. The number rises to as high as 69 percent in some rural counties.
Public Utility Commission spokesman Nils Hagen-Frederiksen said Wednesday the commission hopes to "find a way to ensure the citizens of Pennsylvania continue to benefit." Keeping the money rejected by Verizon in Pennsylvania would entail "finding somebody else to step up and accept that funding," he said.