Panel ends subsidies for rural phone firms
A Colorado Public Utilities Commission decision Tuesday to phase out subsidizing telephone service providers in hard-to-reach areas of the state could lead to high bills for consumers, critics of the decision said.
The three-member commission decided that because there appears to be so much competition in voice telephone service, there’s no need to pay providers extra money to provide that service.
But the providers themselves say that while the telecommunications technology has vastly improved in recent years, the Colorado mountains are still there. As a result, getting telephone lines to rural areas is just as difficult as it’s always been, even if it’s for wireless or satellite service.
“The Colorado Telecommunications Association remains concerned that its members can continue to provide quality telephone service at an affordable price for rural Colorado residences, farms and ranches, businesses and critical community services,” said Pete Kirchhof, executive director of the association, which represents the smallest telephone companies that service the most rural parts of the state, including the Delta and Nucla-Naturita telephone companies.
“The PUC’s decision to create an effective competition test that can be used to determine funding for rural high-cost areas, especially one that presumes wireless service is a substitute for basic telephone service, could have negative impacts on quality of service and price for rural customers.”
Officials with the state’s largest landline telephone provider, CenturyLink, agreed, saying the next concern is how the PUC will decide which areas have competition, and what that will mean for consumer’s monthly bills in those areas that the PUC determines are competitive.
CenturyLink receives about $50 million a year from the subsidy, in part, because it is by law designated as a provider of last resort in most of the state. That means regardless of the cost of providing service, it is required to do so.
“Obviously, we’re disappointed at the direction that they’re taking,” said CenturyLink spokesman Randy Krause. “It will make it very difficult, it’s safe to say, for rural Colorado to get affordable basic telecommunications services. That’s what it really boils down to.”
Krause said the commission ignored the advice of several consumer advocacy groups, including its own staff.
Bonnie Petersen, executive director of Club 20, said the decision is a major setback in rural Colorado’s efforts to beef up broadband service, which is considered a major economic development tool.
The PUC only has authority over voice telephone service, and didn’t consider the need to expand that telecommunications service to include high-speed Internet, she said.
The next battle with the commission will be in January when it defines what effective competition means in specific areas of the state.
Petersen said if that includes wireless service, which can be spotty at best in mountainous areas, consumers could find themselves paying higher phone rates.
“The definition of basic service is single voice-grade telephone line,” Petersen said. “We need to redefine basic service to say that it includes some level of broadband, which seems appropriate in this day and age considering nearly every person accesses their telecommunication service, which includes some level of data.”