A proposal to phase out a statewide high-cost Universal Service program in Colorado has attracted the ire of CenturyLink, which is the incumbent local carrier in a large part of the state and a major recipient of funding from the current program.
“There is still a need in Colorado for high-cost support,” said Jim Campbell, regional vice president of regulatory and legislative affairs for CenturyLink, in an interview with Telecompetitor. If adopted, Campbell said the proposal, outlined in Colorado State Senate Bill SB-157, would be “devastating from a jobs perspective.”
The Colorado bill aims to eventually replace the high-cost Universal Service program, which is funded through a customer surcharge, with a broadband capital investment fund administered by the office of information technology—a move which appears similar to what the FCC is undertaking on a national level with the transition of today’s voice-focused federal Universal Service fund to a broadband-focused Connect America Fund.
But Campbell argued that what the Colorado bill outlines for its broadband fund is much vaguer than what the FCC has put forth. “The Connect America Fund creates a financial discipline for getting money to deploy broadband,” said Campbell. In contrast, he said, the Colorado bill “picks winners and losers amongst consumers.”
According to Campbell, the Colorado bill calls for current high-cost Universal Service funding to be phased out “very quickly” for carriers over a certain size, including CenturyLink, while funding for smaller carriers will be phased out over a 12-year period.
That’s a big problem, considering that nine out of 10 customers in areas receiving support from the Colorado high-cost fund are in areas served by CenturyLink, Campbell said. He added that CenturyLink has no idea whether it will be able to obtain alternative funding through the new broadband program because plans for that program are so vague. According to the bill’s summary only “part of the revenue” freed up by reductions in the high-cost Universal Service program will be redirected to the new broadband fund.
CenturyLink also took issue with the bill’s plan to reduce originating intrastate access charges to interstate rates—a move the company said would divert millions of dollars to international long-distance carriers who pay access charges on calls completed to people in Colorado.
Originating access charges seem to be a new carrier battlefield. Although the FCC specified in the Connect America Fund that intrastate terminating access charges should be brought to interstate rates, the commission declined to take such action on the originating side. But Campbell said some states are looking at legislation that would impose a similar requirement on originating access charges.
In general, however, Campbell does not believe the Colorado legislation is any indication of a nationwide trend.
“The bill is very unique to Colorado,” said Campbell. “This we haven’t seen and hope not to see in other states.”
In addition to phasing out the high-cost Universal Service program, the Colorado bill recommends another measure that is typically favored by large incumbent telcos. It proposes eliminating price controls for all retail services except basic residential local exchange service and emergency service. It also proposes to periodically re-examine whether competition has advanced sufficiently in particular geographic areas so that price controls on these services may also be eliminated.
Telecompetitor tried without success to contact the SB-157 bill’s sponsor, Colorado state senator Mark Scheffel.