Federal regulators have quietly scheduled a vote to overhaul the
nation's telecommunications industry on Nov. 4 - the day most other
Americans will be preoccupied with the vote for the next president
of the United States.
David LaFuria, general counsel and spokesman for a group called
Connecting Rural America, doesn't like the timing of the Federal
Communications Commission's scheduled vote. He also doesn't like the
fact that neither he nor the rest of the general public have had a
chance to look over the drafted order the FCC will be voting on next
week. And even though he hasn't actually seen the drafted order,
LaFuria thinks it may include a few proposals that he won't like one
bit - especially the part about the federal Universal Service Fund.
The proposal under consideration by the FCC is intended to
promote phone service expansion in rural areas, bring broadband to
places that don't have high-speed Internet access, and address
inequities in the system used to provide financial support to
The vote may result in more expensive telephone bills for
customers and lost revenue for telecommunications companies. Many
industry experts agree something needs to be done about the current
structure, but express their concern over which companies might be
hurt the most by the proposal to be considered Nov. 4.
Connecting Rural America describes itself as a "grass-roots
coalition of advocacy groups, community leaders and elected
officials working for equality in wireless telecommunications"
supported by U.S. Cellular, the nation's sixth-largest wireless
service carrier. U.S. Cellular provided the names of additional
coalition members, which include the National Coalition Against
Domestic Violence, the National Governors Association, the National
Lieutenant Governors Association, and the League of Rural Voters,
"We're not going to argue against reform," said LaFuria. "We want
the fund to be more efficient. The problem only applies to the $33
million provided for wireless phone companies. It could mean
significantly less money for wireless companies to use in rural
areas. It could mean all of it; it could go to zero."
The Universal Service Fund, or USF, is administered by the
federal government. Telecommunications companies across the country
pay into the fund, and the money is redistributed to help companies
expand service in rural areas. In areas with sparse population, it
is not cost-effective for a company to invest in infrastructure just
to reach a few new customers, so the federal government subsidizes
Because such a large portion of Oklahoma is rural, the state
typically receives more from the fund than state telecom companies
pay into it. Oklahoma companies pay about $74 million into the fund
each year, said LaFuria, but get about $140 million back. Incumbent
wire-line telephone companies get about $107 million per year from
the fund to build and make improvements to the infrastructure in
rural areas, while wireless companies get $33 million per year to
build phone signal towers in rural areas.
In early October, FCC Chairman Kevin Martin gave an overview of
some of the changes he would like the commission to vote on.
Martin's plan would reduce the amount of USF money allocated to
wireless companies because it costs less to build cell phone towers
than it does for traditional phone companies to build wires and
telephone poles. Under the current system, wireless and wire-line
companies are reimbursed for their costs for building infrastructure
at a similar rate.
Martin's proposal would also change the way telephone companies
pay to pass calls through each other's networks, known as
"intercarrier compensation reform." Under the current system, a
phone company might find it cheaper to pass a call between two
people in Oklahoma through phone interchanges in New York than to
send a call through a more direct route, depending on which company
they may have to pay for access. …