Utility subsidy will be limited for rural telephone coverage

The Colorado Public Utilities Commission issued an order Monday that caps a long-established subsidy to provide telephone service in hard-to-reach areas of the state.

The three-member commission said the ruling “recognizes technological and competitive changes in an evolving industry,” and sets a policy framework for reducing regulations on basic voice service.

Critics were not surprised at the order, but said it could leave some rural parts of the state without needed service and increase costs in other areas.

“This order jeopardizes essential support for rural Coloradans,” said Jim Campbell, vice president for regional regulatory and legislative affairs for CenturyLink, the state’s largest land-line telephone provider.

“Hundreds of thousands of rural citizens and tens of thousands of small businesses are at risk of being forced to rely on spotty wireless coverage, and may well lose any opportunity for future broadband expansion in their areas.”

The ruling makes a temporary $54 million cap on the state’s high-cost fund permanent. It’s that fund that telephone companies have relied on to help defray the high cost of providing services in hard-to-reach areas of the state. To get it now, companies will have to prove a real need.

The ruling also eliminates rate regulations in areas deemed to have adequate competition.

The commission will hold hearings starting next month to determine what parts of the state fit that description.

In its order, the commission said a starting point for determining that will be based on the availability of multiple providers, economic, technical or other physical barriers to providing service, and whether rates are “reasonable and comparable.”


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