TMCnet News
Rural telephone companies seek funding from Oklahoma's phone fee fund [The Oklahoman, Oklahoma City :: ](Daily Oklahoman (Oklahoma City) Via Acquire Media NewsEdge) July 25--Rural telephone companies that are seeing a decline in federal funding to help provide basic phone service want to tap a state fund that comes from surcharges on telephone customer bills. More than a dozen cases are pending at the Oklahoma Corporation Commission under a section of the state's telecom law that allows small telephone companies to seek reimbursement from the Oklahoma Universal Service Fund. Attorneys for the rural phone companies and commission staff said the fund has to reimburse them for lost revenues or increased costs from a federal or state action under the "make-whole" provision. Several wireless companies oppose those efforts. Corporation commissioners heard arguments Thursday in two cases that are testing the "make-whole" provision for decreases in federal funding. Attorneys for Sprint Communications Co. and Verizon Communications want the three-person commission to set aside recommendations from an administrative law judge to approve reimbursements for Terral Telephone Co. and Totah Telephone Co. Jack Clark Jr., an attorney for Verizon, said since the Federal Communications Commission placed a cap on how much it was willing to reimburse phone companies for corporate operations expenses in 2011, there has been a "rash of cases" for funding from the Oklahoma Universal Service Fund. "We do not believe it is equitable for consumers across the country to subsidize the cost of service for some consumers that pay local rates that are significantly lower than the national average," Clark said. Terral, which has seen its customer count drop from 215 in 2012 to about 160, offers basic landline service for $14 per month. The company serves many elderly and low-income customers in rural Jefferson County on the Oklahoma-Texas border, an area with spotty wireless service. Clark said the national average for basic landline service in urban areas was about $20 per month. Terral should raise its rates to make up for the loss of some federal funding, he said. "Verizon is not asserting that raising rates need entirely cover the funding requirement," Clark said. "What Verizon is proposing is that Terral subscribers should have some skin in the game." Ron Comingdeer, an attorney for Terral, said the commission must approve the reimbursements under the law. He distributed a list of cases where commissioners already approved reimbursements under the "make-whole" provision. "The Oklahoma Universal Service Fund is designed to keep local rates reasonable and affordable," he said. Comingdeer said Terral lost 25 percent of its customers following rate increases in the last three years. If the company kept raising its rates to make up for the decrease in federal funding, it could enter a "proverbial death spiral." "They've got an obligation -- whether they serve one customer or 75,000 customers -- to stand ready, willing and able to provide the service," he said. "We believe it is in the public interest that Terral remain a viable company to continue to provide service it is obligated to, pursuant to your rules under state law." Terral is asking the commission to reimburse it for lost revenue in a lump sum of about $353,000, and approve monthly payments of $26,000. Kimberly Prigmore, an attorney for the commission's public utility division, said Terral met the requirements for reimbursement under the law. She said Verizon and Sprint raised numerous side issues that were designed to distract and confuse. "This should be a relatively simple case, as found by the (administrative law judge)," Prigmore said. "You simply apply the law as written." Totah wants the commission to approve a lump sum of $1.16 million for lost federal support from 2001 to 2009. It also wants monthly reimbursements of $20,300 back to 2010. Totah serves about 1,500 Oklahoma customers in rural exchanges in Nowata, Osage, Rogers and Washington counties. An affiliated company has about 800 customers in southern Kansas. Attorneys for Verizon and Sprint questioned why Totah waited so long to apply for reimbursements. Sprint attorney Nancy Thompson also questioned whether the company could show it needed the reimbursements. "Until you know they need the money, you should not be giving them the money," Thompson said. Totah attorney Kim Argenbright said the law doesn't require telephone companies applying under the "make-whole" provision to undergo a rate review or earnings investigation. She said the reimbursement amounts are determined by federal cost studies. The Corporation Commission has approved more than $24.6 million in "make-whole" reimbursements from 2009 to 2013. Some of that was for relocation of telephone company equipment from road repairs or construction. The Oklahoma Universal Service Fund is a companion to the federal Universal Service Fund. The funds help pay for telephone service to rural areas and low-income customers, as well as Internet service for schools, libraries and hospitals. Money for both funds come from separate surcharges on telephone bills. ___ (c)2014 The Oklahoman Visit The Oklahoman at www.newsok.com Distributed by MCT Information Services |