NEW YORK (TheStreet) -- Shares of Frontier Communications (FTR) are rallying by 2.66% to $5.01 on Tuesday after the company said today that it accepted more than $283 million in annual Connect America Funding (CAF) from the Federal Communications Commissions to expand broadband service to 650,000 unserved locations in its 28-state service area.
"CAF Phase II is a critical next step in delivering broadband service - and the major economic benefits associated with it - to rural America," President and CEO Dan McCarthy said.
The communications company accepted the funding more than two months before the formal August 27 deadline because it is "eager to start building the infrastructure necessary to provide service to these markets as soon as possible," McCarthy added.
In 2011, the FCC established the CAF to facilitate broadband deployment to millions of Americans living in rural areas without access to broadband infrastructure.
Separately, TheStreet Ratings team rates FRONTIER COMMUNICATIONS CORP as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate FRONTIER COMMUNICATIONS CORP (FTR) a HOLD. The primary factors that have impacted our rating are mixed, some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, generally higher debt management risk and disappointing return on equity."