Lumen execs: Fiber builds a bigger bang for the buck than RDOF

While Lumen, CenturyLink's enterprise business, reaped the financial rewards from the Federal Communications Commission's Connect America Fund (CAF) II, the Rural Digital Opportunity Fund (RDOF) is taking a back seat to Lumen's fiber builds. Lumen CEO Jeff Storey and CFO Neel Dev said they see better returns from its fiber-to-the-home (FTTH) investments than in the FCC's RDOF project for rural broadband. In the RDOF reverse auction results that were announced in December, Lumen was awarded just over $262 million to deploy broadband in 77,257 locations across 20 states. With the quiet period for RDOF ending, Lumen execs provided some color on RDOF. "We took a very disciplined and ROI-based approach to RDOF," Dev said. "In fact, even after factoring in the subsidy, we see better returns from the fiber-to-the-home investments we are making with our micro-targeting strategy. Even when you net out the subsidy, our returns that we see on fiber-to-the-home is significantly higher." Dev added, "[O]ne of the largest winners of RDOF just announced that it's a $5 billion price tag to build out to about one million homes. If you compare that to the 400,000 homes that we just enabled last year, we certainly didn't spend a couple of billion. And so we have a different profile in terms of where we're investing fiber-to-the-home, and we'll be success-based on that front."