Colorado Telecom Reform Bill to Phase out State USF; Solution with CenturyLink Sought
A Colorado bill seeks to modernize the state’s telecom law by phasing out subsidies in competitive areas of the state and investing in broadband in unserved areas, among other things. The bill targets CenturyLink customers in rural, hard-to-serve areas and could result in their loss of service, said CenturyLink, the largest provider in the state. Rural providers in the state support the bill, saying it might help them offset some of the revenue loss resulting from the FCC’s USF reform.
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Most stakeholders are on board with the bill, after legislators worked with them for nearly a year, said Rep. Angela Williams (D-Denver), one of the bill’s sponsors. Other sponsors include Sen. Mark Scheffel (R-Parker), Sen. Lois Tochtrop (D-Thorton) and Rep. Carole Murray (R-Castle Rock). A similar measure was introduced last year but failed because it was introduced too late, Williams said. Colorado telecom law hasn’t been changed for 25 years, she noted.
Under the proposal, the state USF would be phased out by January 2025. The bill also calls for a one-time transfer of $5 million from the high-cost fund in March 2013 to establish the Broadband Capital Investment Fund, which would help finance buildout in unserved areas. The high-cost fund is supported by a surcharge on cellphone and landline bills. The bill proposes to freeze the surcharge and transfer an undetermined amount from the high-cost program to the broadband fund annually until both programs are phased out. The bill also proposes to remove price caps on basic phone service in competitive markets.
The FCC’s USF/intercarrier compensation reform order hit the rural providers in the state hard, said Pete Kirchhof, executive vice president of the Colorado Telecom Association. Additionally, some rural providers received Rural Utilities Service loans, he noted. The FCC’s order could jeopardize those projects, he said. The rural companies hope the bill could help offset some of the impact of the FCC order, he said.
CenturyLink has nine-out-of-10 customers in areas that receive support from the state’s high cost fund, said Kenny Wyatt, mountain region president for CenturyLink. The bill targets only CenturyLink customers, he said. If the bill passes, phone bills would go up, or in some cases, it just may be too expensive to serve some customers, he said. Legislators are trying to find a solution that would please CenturyLink, Williams said.
Meanwhile, the bill excludes all VoIP services. If the bill passed, Colorado would join more than 20 states that have specifically pre-empted state regulation of VoIP, said Glenn Richards, head of the VON Coalition.