Bring up the subject of affordable high-speed Internet to some of our rural Larimer County readers, and a frequent reply is “High-speed? Heck, we haven’t even got low-speed — which is just a notch above no speed.” Affordable broadband isn’t just for watching NetFlix from the comfort of your couch. It’s becoming as much a necessity as propane, water and power.
In what looks like a promising effort to kick-start rural broadband initiatives, Senate Bill 157 is making its way through this year’s legislative session at the state Capitol. The bill proposes some much-needed changes to the Colorado High Cost Support Mechanism, a 2.9 percent fee placed on all hardwired and wireless telephone bills (in addition to the half-dozen other taxes, er, fees). SB 157 proposes phasing out the HCSM by 2025 and turning over 50 percent of the remaining amount collected — between $25 million and $300 million — to the Governor’s Office for Information Technology to fund rural broadband initiatives. To that we say “Yay.”
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Customers of 91 communication companies contribute to the HCSM fund, which has been in effect since 1990 and is administered by the Colorado Public Utilities Commission. The HCSM fund collected over $56 million in 2011. It distributed $55 million that same year. Companies extending phone lines and installing switching equipment in rural areas are reimbursed over and above a statewide “benchmark.” The benchmark for monthly telephone service is $17 for residential, $35 for businesses.
Eleven companies received the subsidy, which ranged from 25 cents average cost per access line for CenturyLink’s 433,000 rural lines all the way up to an astounding $818 per line for Pine Drive Telephone Company’s 833 lines located in and around the town of Buelah, southwest of Pueblo. Pine Drive customers pay $17 for their basic phone service. CenturyLink received slightly over $50 million in HCSM subsidies while Pine Drive received $681,000. The Wellington area, serviced by CenturyLink, is subsidized at $4.13 per line.
The original premise of HSCM was to make sure all rural residents had a phone that, if needed, connected them to 911 emergency services. But, the modern world is evolving. Households are disconnecting their hardwire service and relying on cellphones. Cable television wires now carry “phone” calls using Voice Over Internet Protocol. And satellite dishes now beam Internet traffic to and from remote areas (albeit at a high cost).
CenturyLink, which recently acquired Qwest, is concerned about some provisions of SB 157 which would exclude the company from future subsidies. We’re glad that CenturyLink is so vocal about keeping a major source of revenue, and would — at least at this point — like to give them the benefit of the doubt. (From our perspective, the last good business decision Qwest made was to sell the company to CenturyLink. Before that, it was Qwest’s decision to split off the DexOne yellow pages, which are a complete waste of money in case you were asking.)
CenturyLink’s gripes about SB 157 deserve to be heard, with the caveat that the new communications landscape now requires that the company redouble its broadband efforts. The clock is ticking.