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Subsidy for rural telephone companies under review at Oklahoma Corporation Commission

by Paul Monies Published: July 9, 2013

There were about 1.6 million landlines for business and residential customers in Oklahoma in 2010, according to the Corporation Commission. A breakdown of subscribers by company is not available under the commission's confidentiality rules.

In commission filings, rural telephone companies said it would be fairer to move funding to the Oklahoma Universal Service Fund.

“Likewise, we believe such a change would result in a smaller surcharge to a larger base of contributors that would include all customers (wireless and Voice over Internet Protocol) who have access to the rural company's networks to terminate calls,” said Craig Cook, who filed testimony on behalf of more than 35 rural telephone companies.

The High Cost Fund has paid about $37.1 million each year to rural telephone companies in Oklahoma since 1996, Verizon's Don Price said in his testimony. That funding has stayed the same even though the telecommunications market has changed drastically since then.

“Thus, in some cases, the surcharges may exceed the charges for the long-distance service itself,” Price said. “The fund, therefore, imposes a severe financial burden on Oklahoma's telecommunications consumers that is, to my knowledge, unprecedented among the states.”

Price said the High Cost Fund was intended to be temporary and to ease the transition to competition for rural phone companies when it was established.

The wireless companies also argued they weren't involved in negotiations on the proposed settlement, even though the Oklahoma Universal Service Fund is assessed on their customers.

Administrative Law Judge Jacqueline T. Miller recommended the three-person Corporation Commission approve the proposed settlement. She said regulators and an independent third-party would review disbursements to rural phone companies to make sure they're not receiving more money than they are entitled.

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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