FCC puts controversial proposal on hold

Monday, November 3, 2008 | 4:03 p.m. CST; updated 8:22 p.m. CST, Monday, November 3, 2008

COLUMBIA — The Federal Communications Commission on Monday called off a Tuesday vote on a controversial proposal that pits smaller phone carriers against larger firms.

Boone County and nationwide customers of CenturyTel and other phone companies that service rural areas could see their rates increase by $2 to $15 per month under the FCC proposal, according to a CenturyTel spokeswoman.

Annmarie Sartor, external communications manager of CenturyTel, said that larger companies such as AT&T Inc. and Verizon Communications Inc. are expected to benefit monetarily. Smaller companies such as CenturyTel, Embarq and Windstream Communications, are expected to see a revenue loss under the new proposal, Sartor said.

The range in rate increases is due to the many different ways phone companies charge each other to connect calls, she said.

The proposal aims to streamline the intercarrier compensation system, which requires telephone companies to charge fees when other companies access their networks.

Under the proposal, large companies that typically pay more to use smaller companies networks would pay less. Smaller companies could see a loss in revenue, and their customers could see an increase in their bills to make up for it.

Supporters of the proposal, such as AT&T Inc. and Verizon Communications Inc., praise the measure as an attempt to cut their yearly expenditures. These companies expect to cut costs by streamlining the intercarrier system.

Efforts to reach AT&T for comment were not successful.

Rural customers would see an increase in cost because there are fewer people to absorb the increased cost, Sartor said.

Cuts in federal funding of about $16 million per year could also affect cell phone service in Missouri, said David LaFuria, a consultant for Connecting Rural America hired by U.S. Cellular.

The cuts would be in the Universal Service Fund, LaFuria said, which is a federal program that is provided in part by a charge to customers' bills. It helps provide funding for telephone service in rural areas. In one way, the decrease in funding will affect rural Missouri areas by limiting the number of towers that could be built in them, LaFuria said.

Without constructing more cell phone towers, LaFuria said, safety issues could arise. "Accidents
 will go unreported," LaFuria said. "Domestic violence victims will find it more difficult to 
reach out for help."

Opponents of the proposal were angry that the FCC planned to vote on the proposal Tuesday and said they had been given little information with which to inform consumers about the proposal's effects.

"No one has seen (the proposal) except for the chairman and the four commissioners," Sartor said. "All we know is what we've gotten from briefings and people close to the FCC."

On Monday afternoon, the four members of the Federal Communications Commission released this statement:

"We approached this proceeding with the common goal of modernizing our universal service and intercarrier compensation policies, and commend the desire to tackle some of the most important issues facing this Commission. It is equally important to ensure that any reform proposal receive the full benefit of public notice and comment — especially in light of the difficult economic circumstances currently facing our nation."


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