The Federal Communications Commission’s recent rule changes are having a significant impact on Citizens Mutual Telephone Company and its consumers, forcing a reduction of capital spending, significantly due to the lack of certainty in future revenue streams.
Citizens Mutual Telephone Company is only expanding to the extent that we can do it with our own cash reserves. While we are fortunate at Citizens to have planned far enough ahead to bring advanced fiber optic network services to two-thirds of our customers, the reality for the future is this: There has already been a staff reduction by 5 percent with the possibility of future reductions if the impact of the transformation order are as dire as we expect. Additionally, two-thirds of the territory we serve do not have access to fiber optic services.
It’s a concern that the independent telecommunications companies in Iowa have been voicing for the past several years as the FCC discussed the potential rule changes. And now, these concerns are turning into reality, according to an independent study conducted for the Iowa Telecommunications Association (ITA) by the Center for Economic Development and Business Research in the W. Frank Barton School of Business at Wichita State University.
One hundred independent telecommunications companies participated in the study, which indicated that all of the companies foresee loss of revenue as a result of the FCC’s November 2011 Transformation Order on the Universal Service Fund (USF) and Intercarrier Compensation. The study reports that USF dollars funded for these companies will drop $47.1 million from 2012-17. The Universal Service Fund is a pool all providers contribute to in order to ensure accessibility to high-cost areas as stipulated by the Telecommunications Act of 1996.
These are the companies that invested millions in Iowa’s network infrastructure and are dedicated to providing reliable and affordable broadband options to consumers in rural and urban Iowa.