According to AT&T it shouldn’t be them anymore. Steve Alexander details the situation with long distance subsidies and the questionable future of ongoing subsidies in the Minneapolis Star Tribune. The Cliff Notes version is that AT&T and other companies pay a fee each time one of their customers makes a long distance call to someone in Minnesota. It goes to provide subsidies to companies who offered telephone service to rural areas, because rural areas are (or were) more expensive to serve.
That is still happening but the world outside these transactions has changed. Wireless providers and Internet phone services (for example Skype) do not pay the same fee. So I can understand AT&T’s perspective. The rural companies are concerned, however because they have built businesses based on consideration of these access fees. I can understand their perspective as well.
Added into the issues, I think is that neither AT&T nor the local rural telephone companies are planning for pure voice telephone service anymore. Both are in the telecommunications industry and that can mean, voice, data and video. For years the access fee has been “Macgyvered” to work – but the strain is showing. But this isn’t the only time and place that something like this has come up. The latest Net Neutrality iterations left that same Macgyvered door open by barring wireline-based broadband providers from “unreasonable discrimination” against Web traffic, but not imposing that same rule on mobile broadband providers.
So while I’m sure that AT&T would like to get this solved sooner rather than later, I think we need to take the time to look at the larger picture. If only there were a plan – such as a National Broadband Plan! And indeed the National Broadband Plan that came out last March does recognize that right now one of the issues with telecommunications policy is that not all providers are classified equally and we are still making decisions based on policies that were written before the advent of the Internet – and so there are loopholes and misfits that are not going push the US into a leadership position in terms of telecommunications.
The last line of the Star Tribune caught by eye; it’s a quote from Lee Selwyn, president of Economics and Technology, a telecom policy consulting firm in Boston…
“Rural telephone companies should get a subsidy if they can demonstrate they require it, but they shouldn’t automatically be entitled to it.”
I might change “telephone companies” to communities – but I think if the goal is to be a world leaders (and that is the stated goal of the Minnesota Broadband Bill and at least implied in the National Broadband Plan) the solution does involve looking at what it will take to deploy and maintain service (voice, data, video) to the far corners of the state and country. (I stress maintain here.) Then we need to develop policies that help reach that goal whether through telephone lines, wireless, cable, fiber…
Access charges were also the surprise main topic at a forum billed as linking broadband and economic development at the Humphrey School of Public Affairs on Wednesday night. It seemed like there was 2 hours of ATT’s point of view with the MN Telecom Alliance getting 10 minutes to provide their perspective. Access charges are the deep weeds of telecom policy but have been one of the primary sources of funding that has allowed our rural telephone companies to deploy FTTP and FTTN networks throughout their rural exchanges while the larger companies have generally struggled to provide DSL beyond the city boundaries of their central switch.
A primary question is why the intra-state long distance access fees are higher than the inter-state fees. Brent Christiansen of the MTA began to take a crack at that explanation, but did not have nearly enough time to inform the audience. It would be great to get a good explanation. Brent did do a good job in explaining the relative cost and value of a local calling area – in the metro, that area includes millions of people; in the rural exchanges, the local calling are might just be a few thousand.
One researcher discussed that lower access fees result in lower long distance rates. That could be, but I do not know of many firms making location decisions based on long distance rates. Many telephone plans seem to throw in long distance or provide a set number of minutes. Many people use their wireless phones for long distance.
There were two economic development topics on the agenda. A representative of the wireless industry talked about the economic impact of wireless technologies – the billions invested, the competitive nature of the marketplace and the growing industry of “app development”. He said the 80% of the apps on the market are free, but that it is still a multi-billion dollar industry.
Bernadine Joselyn got a few minutes to talk about our Blandin MIRC initiative and then showed the video of three MN communities building and using broadband for economic development. The voices of the community members on this video say it all and say it very well. The video brought the audience out of the deep weeds of policy detail and into the light of how critical rural broadband services are to the future of greater Minnesota, a point not really addressed until the event finale!