ATLANTA -- With the state’s blessing and oversight, AT&T and other big telecommunication companies pay into a fund to subsidize 17 rural companies that string together fewer and more spread out customers.
Companies such as Crawford’s Public Service Telephone Co. say they depend on that fund because wiring the country is relatively costly. Opponents counter that the rural areas are coasting on the cash. There’s a bill moving through the state House that would kill the fund that handed out $16 million in 2011.
It’s a “hidden tax,” said bill sponsor state Rep. Mark Hamilton, R-Cumming, and he’s afraid it will grow and loom larger on consumers monthly telephone bills.
His House Bill 855 would phase out Universal Access Fund awards by 2015.
The small companies, he said, are not being innovative, offering new services or finding some other way to make money. Instead, they are grabbing “what they can while they can.”
Not so, said John Silk, executive vice president of the Georgia Telecommunications Association, an industry group for the state’s small telecommunication companies.
“If you look at our companies,” he said, “we have cut way back. We have become more efficient.”
If the UAF is cut, he predicted, it will hurt rural Georgia via poorer quality telecommunications.
By law, every home in Georgia must have access to phone service at a reasonable price. But as more people switch to cell phones or Skype, every telephone company is losing revenue, which includes government-mandated fees that can be passed on to land-line subscribers. Every house still has to have a wire attached to it, even if the people inside are choosing not to use it. That’s putting a new squeeze on all copper-stringing companies.
Companies such as Public Service are “struggling” to serve their far-flung customers, said state Rep. Robert Dickey, R-Musella. “Our rates are already high.”
He thinks cutting the fund would drive rates higher. Besides that, he does not envision AT&T coming to Crawford County. The large companies “don’t want to serve rural areas. They never have, never will.”
Yet there are 13 small telecommunication companies that opted out of the UAF in return for less regulation.
Hamilton praised such companies as innovators.
However, such companies still use federal rural subsidies and one-off assistance. Federal requirements are a little different. The federal government is explicitly trying to push broadband into the country, while Georgia’s laws only speak to phone service. Wilkes Telephone and Electric Co. based in Washington, Ga., for example, under the American Recovery and Reinvestment Act, received a $33.7 million grant and $14.4 million loan for rural broadband rollout.
AT&T, Comcast and groups of other cable companies testified in favor of House Bill 855 at a Thursday hearing. They pointed out that handouts from the UAF are rising, from roughly $2.5 million in 2005 to the $16 million last year.
Silk counters that whatever the amounts are, they are scrutinized, audited and approved by state regulators at the Public Service Commission. The PSC is charged with regulating the telecommunication companies’ rates and also ensuring an appropriate return on investment.
A vote on the bill by the Telecommunications Subcommittee of the state House Energy, Utilities and Telecommunications Committee is tentatively scheduled for Wednesday.
