Recent stories in the press highlight how important landline phone connections are to some customers in rural areas as several states consider legislation to ease the requirement to provide low-cost telephone service to anyone who wants it.
There is no doubt that the decades old policy of universally available service needs to be revamped to reflect today’s competitive alternatives to traditional landlines in most parts of the country. However, many consumers, small business owners and anchor institutions such as health care facilities rely on voice and data services in areas that are remote, costly to reach, and generally not well served by carriers. This is why so many rural customers value the affordability and reliability of their local landline service, which is frequently the only provider investing in and providing service to such areas. Policy makers also realize that in rural markets, the landline is the gateway to affordable broadband services.
Companies like CenturyLink, which has been in business since the 1930s, have continued to invest in upgrading their landline connections as technologies have improved. These upgrades and maintenance costs can add up to thousands of dollars per phone line. Even if companies like CenturyLink are allowed by regulators to charge market rates, the revenues will not be enough to cover the cost of providing the service to customers in remote, high-cost areas.
CenturyLink has stepped in while other companies are selling off their landlines to fill the void for consumers who value their landline service. This puts CenturyLink and its customers squarely in the middle of this debate. Many of CenturyLink’s urban customers can choose among several competitive options for phone service, but for the company’s rural consumers, the affordability, reliability and security of a landline phone is essential.
Some states, like Vermont, have begun to recognize the value of landlines and the economic benefits that carriers of last resort continue to provide to rural high cost areas. Vermont is considering legislation that would create a state universal service fund to compensate carriers for maintaining service in rural areas. Colorado is another state where CenturyLink and other rural carriers are fighting to keep the state’s universal service fund while the state struggles to address the competitive challenges carriers are facing for voice and video services throughout the more populated areas of the state.
The public interest dictates that states should provide explicit funding to those carriers who bear the cost of implementing universal service to rural customers. CenturyLink supports efforts to find the proper regulatory balance between eliminating unnecessary and outdated regulations while preserving the goals of universal service. The company stands by its rural customers and accepts its responsibility as the carrier of last resort where such policies are valued, where competitive risks are recognized, and where economic incentives are adequate to support the underlying policies.