New tech, old laws trouble for telecoms

Wednesday, May 19, 2004

By Steve Moyer

Nevada Daily Mail

Technology changes fast, laws change slowly. Those two facts are giving telephone companies headaches as new competitors coming into the marketplace aren't covered by the regulations that cover the older companies.

"It's just a matter of making it fair for everyone," Carolyn Hall, CenturyTel telephone company, said. "The ones who are going to be impacted the worst are rural customers." The reason she says is that the newer technologies are piggybacking on the infrastructure provided by companies that pay into the Universal Service Fund, which was created to bring telephone service to rural areas.

Companies that provide these competitive services -- Voice over Internet Protocol, cable companies, satellite service companies and Competitive Local Exchange Companies -- do so by bypassing paying into the fund and by avoiding compensating other telephone companies for the use of their lines and equipment, and are able to provide service cheaper than traditional companies.

The problem says Hall is that someone has to pay for the infrastructure that all of these companies use and if it isn't the new companies' customers it will be the customers they don't serve, those too far away from wireless towers, those in very small communities that the CLECs and VoIP's don't want to bother with who bear the brunt of paying for the infrastructure everyone uses.

"If policy makers allow this practice to continue, local telephone companies won't be able to maintain quality service at current price levels or continue to invest in new technologies," Hall said.

Judith Wormington, Sofnet, Monet, agreed that there were differences in what taxes companies pay. "We're paying most of the taxes every telephone company pays," said Wormington. "In the act (Telecom Act of 1996), there are a lot of different classifications and what taxes you pay are based on which classification you fall into." Both agree that rural communities need to have the technology available in order for their residents to compete. "As any small city economic development planner will tell you, advanced telecommunications infrastructure is critical," Hall said. "Having access to affordable broadband Internet service, on which most future applications will ride, means being on comparable footing with urban areas when it comes to creating new jobs and keeping existing jobs. Rural America cannot afford to be a technology "have-not" in the global economy."

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