New FCC rulings block rural access to affordable broadband
Actions will have an impact on the economic growth and prosperity of Carroll County
July 24, 2013
Western Iowa Networks
The Federal Communications Commission's recent rule changes are causing our company to scale back on future projects intended to provide expanded broadband access and opportunities for our clients. The FCC's change will prohibit broadband adoption in our rural communities and block many of our customers from access to reliable and affordable broadband.
Over the past several years, independent telecommunications companies in Iowa have stressed the adverse impact of the FCC's rule changes. And now, an independent study confirms that these rule changes will slow or halt the expansion of broadband availability in Iowa.
The study, based on a survey of 100 Iowa independent telecommunications companies, concludes that these companies will lose revenue because of the FCC's November 2011 Transformation Order on the Universal Service Fund and Intercarrier Compensation. The FCC's actions will result in a drop in high-cost USF funding to these companies in the amount of $47.1 million from 2012 to 2017, according to the study.
As a result of this sharp drop in revenue, many of these companies will have to decrease their investment in expanding broadband service, which will hinder economic development and growth in rural Iowa.
The recent study was conducted for the Iowa Telecommunications Association (ITA) by the Center for Economic Development and Business Research in the W. Frank Barton School of Business at Wichita State University.
Iowa's small, local telecommunications companies have been supporting the network infrastructure across the state, especially in rural areas. These are often the only businesses willing to serve customers in sparsely populated areas, where providing service is much more costly than in densely populated urban areas.
Wichita State's findings are consistent with a 2012 survey of ITA members in which eight in 10 of 81
respondents in Iowa reported that because of the FCC's new rules they were delaying or canceling plans to deploy fiber in their service areas.
The latest research from Wichita State shows the rules changes will have a negative effect on employment and wages across Iowa, as well as state tax revenue.
Telecommunications companies responding to the survey said they would be forced to cut their workforce almost 10 percent by 2017, resulting in a direct loss of $14.9 million in wages. Because rural local exchange carriers provide service in 97 of Iowa's 99 counties, the report says, the resulting ripple effect will translate into a statewide loss of $25.8 million in wages, leading to an estimated loss of $2.3 million in income and sales-tax revenue by 2017.
Economic growth is a constant building process. Rural communities have the same broadband needs for hospitals, schools, online banking, real-time stock quotes and a many other needs similar to urban areas. People live in our smaller rural communities because it's their choice. The FCC, or any other agency, should not prohibit individuals from choosing where they want to live, where they want to raise their family or where they want to start a business due to the lack of broadband.
Our communities have large farming and agribusiness operations that are very reliant on reliable and affordable broadband. This includes monitoring of cattle, feedlots and security in these remote locations. We can grow our current manufacturing facilities by allowing them to bring more services in-house rather than outsourcing to other states or countries.
Working from home is a very attractive option for some employers that want to attract high-quality workers, and lack of broadband service is often the main hurdle preventing employers from adding new employees to their organization.
Our ability to serve our school systems with large broadband pipes and affordable service plans has allowed them to offer one-on-one teaching initiatives in the communities we serve. In most school systems this is offered to all grades and income levels, thereby allowing an equal and competitive learning environment for all children. These students are the future of the school districts and the future leaders in our communities. The school systems need to be able to educate our children, and the Iowa Communications Network has not been able to keep up with fast-paced changes in technology.
The FCC's actions will have an impact on the economic growth and prosperity of Carroll County. These actions stand in the way of our community's access to reliable and affordable broadband services. Our current residents and businesses will feel the impact. Plus, these actions make it more difficult to attract new business and industry to our county.
I encourage you to reach out to your elected officials to voice your concerns about the impact on our community and urge them to put pressure on the FCC to further investigate the economic impact of its rule changes. Visit www.iowalinkedup.org and click on the "Take Action" tab.
Help support Carroll County's future and economic growth.
(Editor's Note: Chuck Deisbeck is CEO of Western Iowa Networks in Breda.)
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