TDS CFO says A-CAM extension could help it reach 160K with fiber faster

TDS Telecom has long urged the Federal Communications Commission (FCC) to extend its Alternative Connect America Model (A-CAM) program, which subsidizes broadband deployments in high-cost areas. During Q1 2023 earnings, CFO Michelle Brukwicki made it crystal clear why.

“For us, this means getting fiber to almost all of our 160,000 A-CAM addresses,” she said.

In 2017, TDS Telecom secured 10 years of A-CAM support to deliver speeds of at least 25 Mbps downstream and 3 Mbps upstream to 159,612 locations across 25 states. Two years later, it signed on to receive two additional years of funding. All told, TDS Telecom will receive $1.01 billion in funding over a 12-year period.

The FCC is currently weighing a proposal to extend the A-CAM program by another six years in exchange for operators deploying faster speeds of 100/20 Mbps. Brukwicki said TDS believes the FCC is “moving toward” adoption of the extension and hopes action will be taken by Q3.

The A-CAM program does not require a specific technology to be used to deliver the speeds in question. It was not immediately clear what TDS has used to date for its A-CAM deployments to deliver the currently required 25/3 Mbps speeds, but from the sound of it at least portion of these locations are not served with fiber. Fierce has reached out to TDS to clarify and will update this story with any information provided.

“We’re very enthusiastic about an A-CAM extension because we believe that extending the current federal A-CAM program first and then pursuing BEAD program funding would be the fastest path for TDS Telecom to take fiber deeper into our communities,” Brukwicki said.

TDS added 25,000 new passings in the quarter, taking it to a total of 607,000. That’s more than halfway to its goal of 1.2 million fiber passings by 2026. Brukwicki noted that TDS’ full year 2023 goal is 175,000 new passings and it will be ramping up new fiber rollouts “significantly” as the winter months – and associated bad weather – begin to fade away.

She stated approximately 40% of its footprint is now served with fiber, with speeds of 1 gig or higher available to 67% of customers. As of the end of the quarter, 33% of its footprint was still served with copper infrastructure providing speeds of 100 Mbps or less.

In terms of its service mix, 11% of customers are taking speeds of a gig or faster, with another 8% on 600 Mbps plans. A majority (53%) remain on tiers offering speeds of 100 Mbps to 300 Mbps.

Revenue of $253 million was up 1% year on year in Q1 from $251 million, with residential revenue of $169 million up 4%. Net income of $8 million in the quarter fell from $23 million.