By Jonathan Foxman - 12/12/07 05:30 PM EST
Reform of the universal service telecommunications system should be accomplished by objectively looking at the real causes of increase and excess in the Universal Service Fund, not stopping wireless carriers from building cell sites in rural areas.
Rural areas need wireless communications. Rural law enforcement and emergency medical services, as well as farmers, ranchers and other business people, struggle with poor wireless service every day in the state of Montana. For example, fading or non-existent wireless service can greatly delay reporting of a car crash, in turn delaying the delivery of emergency medical care at a time when every second counts.
Also, poor rural wireless service discourages businesses from locating in rural areas. Take tourism, the second largest industry in Montana after agriculture. Tourists and related businesses don’t visit or locate in areas with poor or nonexistent wireless coverage. However, that’s still the norm in many areas of Montana: low population density and mountainous terrain don’t support a business case for privately funded wireless buildout, as I told the Senate Commerce Committee when I was asked to testify before it in June.
Congress tried to make sure rural areas wouldn’t be left behind by passing the Telecommunications Act of 1996, stating that telecommunications services, choices and prices in rural areas should be comparable to those available in urban areas. The Universal Service Fund, which is supported by fees assessed on long distance and wireless service bills, was intended to achieve this goal, by leveling the playing field so all competitors in each market would have access to similar funding to build out rural areas.
As technology has advanced, we’ve seen an explosion in wireless services as consumers in the rural, remote and farming communities have demanded equal access to modern communications that their urban cousins have enjoyed for years. Yet some want to cap wireless funding and impede carriers’ ability to build wireless towers in rural areas. Building new infrastructure is a key purpose of the Universal Service Fund; in addition to paying for maintenance of older lines, the fund is also — and I would argue most importantly to citizens — supposed to help extend modern telecommunications service.
Presently, some at the FCC are convinced that something has to be done to curb the growth of the fund. In fact, the sky is not falling: Long-distance and wireless companies and their customers pay for the fund; the amount that consumers pay in each month is decreasing, and the cost of wireless service is also decreasing.
It’s critically important to know that growth in the fund has not been caused primarily by the new competitive companies (mostly wireless).
Growth in the fund has been caused by the FCC’s policy that allows wireline carriers to continue drawing over $3 billion each year even though they are losing customers at an accelerating rate. Growth to wireless carriers has been more than offset by growth in the amount wireless consumers pay in, now running at roughly $3 billion per year, more than three times what wireless draws out.
Limiting competitors’ access to the fund sends a direct message to rural areas that they are not entitled to the modern telecommunications networks available in urban areas.
I don’t think rural America deserves that kind of treatment. The American Corn Growers Association, the Federation of Southern Cooperatives, the National Family Farm Coalition, the National Grange and other esteemed agricultural groups have signed on to show their support of wireless carriers and rural development.
Meeting the Telecommunications Act’s promise of “reasonably comparable service” in urban and rural areas requires increased funding for rural wireless carriers, not arbitrary limitations, until consumers can get four bars all the way from Missoula to Idaho Falls.
Foxman is president and CEO of Chinook Wireless.