Study: 'Targeted' Universal Service Support for Telecommunications Carriers Is Needed to Ensure Rural Consumers' Continued Access to Affordably Priced Services

OVERLAND PARK, Kansas, July 12 /PRNewswire-FirstCall/ -- Four leading telecommunications companies serving small, semi-rural and rural communities today provided important new findings to the Federal-State Joint Board on Universal Service (Joint Board) regarding the need for explicit universal service support targeted to high-cost areas. The study was conducted by Balhoff & Rowe, LLC, in connection with a review of the Texas Universal Service Fund (USF).

The companies -- CenturyTel, Consolidated Communications, Inc., Embarq Corporation, and Windstream -- filed the study with the Federal-State Joint Board on Universal Service. The study of the Texas USF offers important insights to the Joint Board regarding emerging challenges in high-cost areas. The study is directly applicable to the Joint Board's work because the Texas USF addresses many of the same issues, and faces many of the same challenges, as the federal universal service system.

Indeed, Commissioner Tony Clark, who chairs the Telecommunications Committee of the National Association of Regulatory Utility Commissioners (NARUC), commented that "[the] work is groundbreaking in that it finally starts to answer, 'what is truly rural?' 'what is truly high cost?' and 'how do we have a universal service system that is responsive to that reality?' It is a template for a discussion that should be happening coast-to-coast."

    Key points in the study:

      *  There are clear signs that the current federal universal service
         system will soon fail to meet the needs of consumers in high-cost

      *  Although competitors increasingly are serving consumers in rural
         towns where costs are lower, they generally do not serve consumers
         outside of those towns where costs are higher; importantly,
         competitors appear unlikely to offer services in those regions in the
         foreseeable future.

      *  Competitors are making the financially rational choice to avoid
         serving high-cost areas altogether, but carriers of last resort (like
         the four sponsors of the study) are compelled to serve the areas
         outside of rural towns -- often at a significant loss. With
         competition, regulators increasingly are unable to count on, among
         other things, averaging costs between rural towns and outlying rural
         areas to support universal service goals.

    A copy of the report can be found at

    About CenturyTel

CenturyTel (NYSE: CTL) is a leading provider of communications, high speed Internet and entertainment services in small-to-mid-size cities through its broadband and fiber transport networks. Included in the S&P 500 Index, CenturyTel delivers advanced communications with a personal touch to customers in 25 states. CenturyTel's web page address:

About Consolidated Communications

Consolidated Communications Holdings, Inc. is an established rural local exchange company (RLEC) providing voice, data and video services to residential and business customers in Illinois and Texas. Each of the operating companies has been operating in its local market for over 100 years. With approximately 232,000 local access lines, 56,000 DSL subscribers and 8,400 IPTV subscribers, Consolidated Communications offers a wide range of telecommunications services, including local and long distance service, custom calling features, private line services, dial-up and high-speed Internet access, digital TV, carrier access services, and directory publishing. Consolidated Communications is the 14th largest local telephone company in the United States. Consolidated Communications' web page is


Embarq Corporation (NYSE: EQ), headquartered in Overland Park, Kansas, offers a complete suite of communications services. The company has approximately 20,000 employees and operates in 18 states. EMBARQ is included in the S&P 500. For consumers, EMBARQ offers an innovative portfolio of services that includes reliable local and long distance home phone service, high-speed Internet, wireless, and satellite TV from DISH Network(R). For businesses, EMBARQ has a comprehensive range of flexible and integrated services including local voice and data services, long distance, Business Class DSL, wireless, enhanced data network services, voice and data communication equipment and managed network services. For more information, visit

About Windstream

Windstream (NYSE: WIN) provides voice, broadband and entertainment services to primarily rural customers in 16 states. The company has approximately 3.2 million access lines and about $3.2 billion in annual revenues. Windstream is included in the S&P 500. For more information, visit

About Balhoff & Rowe, LLC

Balhoff & Rowe, LLC, is a specialized professional services firm focused on providing financial-regulatory advice. The principals of the firm have more than forty years of combined experience in advising investors and regulators on complex investment and policy issues. Balhoff & Rowe's services include research, think-tank projects, advocacy efforts, and financial and transactional advice for various companies, carriers and policymakers.

SOURCE Embarq Corporation 

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