Summary: A Federal Communications Commission policy change designed to provide broadband internet access to a few parts of the country that are not currently served could hurt the companies most capable of providing that service.
Jobs, jobs, jobs.
That’s the claimed focus of politicians from city hall to the statehouse to the White House.
In rural America, jobs rely on access — to capital, to a trained work force, to on-time supplies and resources, to infrastructure — and increasingly to broadband Internet connections.
That’s why it’s so confusing that the Federal Communications Commission would be taking action that could have the effect of limiting the expansion and maintenance of broadband networks in rural America.
Tom Lovell, general manager and vice president of the Clear Lake Independent Telephone Co., explained that the FCC is making changes to the Universal Service Fund, a charge on phone bills that raises money to support rural telecommunications companies’ effort to establish services in rural areas.
The FCC is increasing the charges to phone customers to create a bigger pot of money, but then it is reducing the part of that pot that goes to rural telecoms.
In urban areas, where buildings are close together and the population is densely packed, it is relatively economical to string wire and fiber optic lines to provide communication services. Big companies are eager to serve these areas.
But in rural areas where the population is much less dense, it costs much more per customer to build the infrastructure needed to provide services.
The Universal Service Fund was established many years ago to help subsidize this extra cost so companies can afford to provide service in rural areas without that service being exorbitantly priced. As a result, small rural telecoms are providing voice, data and even video services to areas of the country that the big telecom companies have shunned.
The FCC wants to change the Universal Service Fund to the “Connect America Fund” and give half the money to large companies to entice them to expand service to those few areas of the country that don’t have broadband service.
Yet the companies that are already providing rural service — and that have the greatest potential to expand service into underserved areas — are the rural telecoms that will now see their service subsidies cut.
Those cuts could mean increased prices, reduced access and curtailed expansion in rural areas. It could mean reduced access or higher prices for schools, homes and businesses at a time when such access is critical to our continued economic recovery. It could even mean some rural telecoms are forced out of business.
It’s laudable that the FCC wants to expand rural broadband access. Unfortunately, we don’t think it has chosen the best, most affordable or most efficient way to do so.
The FCC should rethink this wrong-headed policy change and restore funding to the small telecoms that are already providing and expanding service to rural areas.