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Telephone regulators worried about Oklahoma fund paid to rural carriers

by Paul Monies Modified: June 27, 2014 at 9:00 pm •  Published: June 26, 2014

As the federal government cuts support for small telephone companies, some Oklahoma officials are worried a provision in state law could raise the fees all customers pay on their phone bills.

Oklahoma Corporation Commissioner Bob Anthony said the Oklahoma Telecommunications Act of 1997 allows telephone companies to come to the commission for reimbursement if a federal or state action reduces their revenues or increases their costs.

“I don’t think there’s any business or nonprofit that has that argument,” Anthony said Thursday during a commission meeting. “It’s a heck of a deal.”

Attorneys for rural telephone companies said they need the reimbursements to keep providing affordable service to customers in high-cost areas and rural areas where cellular service is spotty.

The “make-whole” provision applies to telephone companies with fewer than 75,000 subscribers. Money for the reimbursements comes from the Oklahoma Universal Service Fund, a fee added to the bills of landline and wireless customers.

The Oklahoma fund paid out $6 million in fiscal year 2000, but that is expected to top $50 million for fiscal year 2015. Anthony warned that could soon grow to $100 million per year with additional requests for funding under the “make-whole” provision.

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.

More than $465 million came to Oklahoma telephone companies in 2012 from the federal Universal Service Fund, with more than $252 million of that going to the Lifeline program for low-income telephone service. Nationally, the fund paid out $8.7 billion in 2012.

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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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