FCC to vote on overhaul of telecommunications industry

Journal Record, The (Oklahoma City), Oct 27, 2008 by Janice Francis-Smith

LaFuria said a wireless phone tower may cost about $300,000 to build, though the cost of building out the needed infrastructure in rural areas may grow increasingly expensive if additional towers are needed to get the signal over hills for even coverage. Harris estimated McLoud Telephone spends between $40,000 and $50,000 per mile on infrastructure.

"They get paid as if they were plowing fiber like us," Harris said of the wireless companies that receive USF funding. "But they are not plowing fiber, like us."

LaFuria agreed the costs are lower to build towers than to build lines and telephone poles. But if the federal government reduces how much money is provided to wireless companies from the USF fund, it will slow the process of adding coverage in rural areas. LaFuria estimated $33 million might build 110 new towers; if wireless companies receive less from the USF fund, they will simply build fewer towers per year. Wireless companies are also capable of expanding broadband service, said LaFuria, and their USF dollars could be applied toward that purpose if their funding is not reduced.

Incumbent telephone utility company AT&T, which serves much of Oklahoma, sent Martin and the FCC a proposal of their own, recommending changes similar to those proposed by Martin.

"AT&T itself stands to lose significant revenue as a result of this order," reads a letter AT&T executives sent to the FCC. "However, this is not the time for shortsighted parochial concerns. ... The telecommunications industry is in the midst of a revolution." The disparities created in the effort to help rural customers raises the price for all phone customers, wrote Robert Quinn Jr., senior vice president of federal regulatory affairs for AT&T.

"The existing intercarrier compensation and universal service systems are on a collision course with technological change," wrote Quinn - a sentiment echoed by Harris. More and more telecom companies are choosing to engage in Voice over Internet Protocol - VoIP - services, he said, which are not subject to any of the fees under consideration in the FCC's Nov. 4 vote.

"If everyone moves to VoIP, eventually no one will be paying into the fund at all," said Harris.

And without the USF fund, no one can provide affordable service to rural residents, he said.