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Rural telephone companies seek funding from Oklahoma's phone fee fund

A reduction in support from federal programs is leading rural phone companies to tap the Oklahoma Universal Service Fund to help pay for basic phone services. Several wireless companies oppose the reimbursements made under the state’s “make-whole” law.
by Paul Monies Published: July 25, 2014
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“They’ve got an obligation — whether they serve one customer or 75,000 customers — to stand ready, willing and able to provide the service,” he said.

“We believe it is in the public interest that Terral remain a viable company to continue to provide service it is obligated to, pursuant to your rules under state law.”

Terral is asking the commission to reimburse it for lost revenue in a lump sum of about $353,000, and approve monthly payments of $26,000.

Kimberly Prigmore, an attorney for the commission’s public utility division, said Terral met the requirements for reimbursement under the law. She said Verizon and Sprint raised numerous side issues that were designed to distract and confuse.

“This should be a relatively simple case, as found by the (administrative law judge),” Prigmore said. “You simply apply the law as written.”

Totah wants the commission to approve a lump sum of $1.16 million for lost federal support from 2001 to 2009. It also wants monthly reimbursements of $20,300 back to 2010.

Totah serves about 1,500 Oklahoma customers in rural exchanges in Nowata, Osage, Rogers and Washington counties. An affiliated company has about 800 customers in southern Kansas.

Attorneys for Verizon and Sprint questioned why Totah waited so long to apply for reimbursements. Sprint attorney Nancy Thompson also questioned whether the company could show it needed the reimbursements.

“Until you know they need the money, you should not be giving them the money,” Thompson said.

Totah attorney Kim Argenbright said the law doesn’t require telephone companies applying under the “make-whole” provision to undergo a rate review or earnings investigation.

She said the reimbursement amounts are determined by federal cost studies.

The Corporation Commission has approved more than $24.6 million in “make-whole” reimbursements from 2009 to 2013. Some of that was for relocation of telephone company equipment from road repairs or construction.

The Oklahoma Universal Service Fund is a companion to the federal Universal Service Fund. The funds help pay for telephone service to rural areas and low-income customers, as well as Internet service for schools, libraries and hospitals. Money for both funds come from separate surcharges on telephone bills.

by Paul Monies
Energy Reporter
Paul Monies is an energy reporter for The Oklahoman. He has worked at newspapers in Texas and Missouri and most recently was a data journalist for USA Today in the Washington D.C. area. Monies also spent nine years as a business reporter and...
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