By JOE SNYDER
---- — 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.
A 2012 survey of ITA members provided similar findings with 80 percent of respondents indicating the FCC’s ruling were delaying or canceling plans to deploy fiber or expand servies.
The latest research from Wichita State shows the rules changes will have a negative effect on employment and wages across Iowa, as well as state tax revenue. Telecommunication companies will be forced to cut their workforce within the next four years, resulting in a $14.9 million loss in wages. Because these companies provide service to nearly all of Iowa’s 99 counties, the ripple effect will translate into a statewide loss of $25.8 million in wages with an estimated loss of $2.3 million in income and sales tax revenue by 2017.
Citizens Mutual Telephone Cooperative provides the services that businesses and residents in Davis County need to survive and thrive. Any reduction in Citizens Mutual’s ability to grow these services will leave the businesses of our community in a poor position to compete against their urban counterparts.
Quality broadband touches all aspects of our community. It allows our students to compete in the classroom with those from larger communities. It allows all of our customers to live in a small-town community and still enjoy the availability of services otherwise restricted to large cities. It allows our senior citizens to remain in their homes longer and with a higher quality of life. And it gives our businesses a chance to compete against businesses in larger communities.
The FCC’s actions will have an impact on residents and businesses in Davis County. These actions stand in the way of our community’s access to reliable and affordable broadband services. The lack of access will also have a negative impact on our community’s economic growth.
I encourage you to reach out to your elected officials to voice your concerns and urge them to put pressure on the FCC to further investigate the economic impact of its rule changes. Visit www.iowalinkedup.org and click on the “Take Action” tab.
Let’s ensure that all Iowans have access to affordable and reliable broadband.
Joe Snyder is general manger of Citizens Mutual Telephone Cooperative in Bloomfield.