Speak Your Piece: Dear FCC…
[imgbelt img=Tel1.jpg]Yes, rural America needs broadband. But the best way to do that in many places is through local carriers. Reforms to the Universal Service Fund proposed by the FCC, however, could put these small, rural companies out of business.
Dear FCC Commissioners and Staff:
With a decision on Universal Service Fund reform drawing near, I want to take a moment to share my feelings on this highly important issue in a public forum, with hopes that my message will be heard.
I have been involved in the rural telecommunications industry my entire life. I come from a family-owned rural telecom business (Walnut Communications) that has been operating in rural Iowa for nearly 100 years.
Against all odds in the early 1900s, my great-great uncle, my great-grandfather, and a group of farmers built the foundation for Walnut Telephone Company. It was truly a community effort. Farmers and volunteers offered assistance, equipment and even their own wagons to help build the phone lines miles outside of town.
Over the years, the company faced great adversity, survived the Great Depression, and even earned the respect of AT&T during a time when AT&T stopped at nothing to squash competition, including destroying farmers’ telephone equipment and ripping out lines. Now, Walnut Telecommunications faces its greatest challenge yet—surviving the directives of the National Broadband Plan.
I care very much for my family’s business and the rural area that I came from, and I cannot ignore four generations of ancestors who have poured their lives into providing telecommunications in a very small community in Iowa—a community that has little growth, an aging demographic, few high-income residents or large businesses. Despite these demographic and geographic challenges, Walnut Communications has historically been a leader in advanced telecom technologies, installing the first digital switch in Iowa, offering the first cellular service in Iowa, upgrading all customers to DSL in the 1990s, and most recently, deploying high-speed fiber-to-the-home.
Walnut Communications and hundreds of other Rural Local Exchange Carriers (RLECs) have been able to make these groundbreaking investments and provide advanced telecommunications services at rates reasonably comparable to urban Americans because of the financial stability that the current rate-of-return and USF facilitate.
USF enables these companies to take risks on technologies and secure private capital for critical investments in broadband infrastructure, despite being located in economically challenged and sparsely populated high-cost regions. Yet, the FCC contends that RLECs are wasteful, inefficient, and apparently not worthy of ongoing USF subsidies.
In my analysis of the USF reform proceeding, I have personally found very little evidence to suggest that RLECs are in any way wasteful and inefficient. Sure, there are likely a few “bad actors” in the industry, but the bad actions of the few should not be used to penalize the RLEC industry as a whole. Large companies like AT&T, Verizon and Windstream echo the FCC’s accusations against RLECs, but these giants provide no evidence to suggest that they are actually willing to provide service in extremely rural high-cost, low-return areas.
If these companies wanted to serve rural areas, they could have done it already. But they haven’t, because in investor-owned public companies low-return investments are scrapped in favor of higher return ventures.
The RLEC industry is not a high profit game. RLECs provide outstanding service to their rural communities because they care about the communities. A hundred years ago, AT&T did not want to provide service in extremely rural areas, and today, they still don’t. RLECs were established to help prevent an urban-rural divide in telephone service, and yet here we are 100 years later facing the same problem with broadband service.