SDN Blog

South Dakota Communications Companies Hail Governor-PUC DC Trip

Posted on Friday, October 22, 2010

Blog written by SDN Communications

PIERRE - Leaders of the South Dakota Telecommunications Association today hailed Tuesday's trip by South Dakota Governor Mike Rounds and South Dakota's three Public Utilities Commissioners to Washington, DC. The South Dakota group met with the Federal Communications Commission about policies contained in the National Broadband Plan that will be harmful to rural America.

SDTA executive director Rich Coit said Tuesday's trip elevated the discussion about the problems that small businesses and residential customers in South Dakota and elsewhere in rural America will face if the National Broadband Plan is implemented as it's currently proposed.

"The Federal Communications Commission has proposed changes to regulations that will have significant negative impacts in rural areas," Coit said. "These regulatory changes will drive down the ability of small telecommunications companies to deliver state of the art broadband service, while at the same time, it will dramatically increase the costs to South Dakota businesses and consumers."

The discussions centered on a document released earlier this year known as the National Broadband Plan (NBP). The stated goal of the NBP is to increase the availability and adoption of broadband (ie. high speed Internet) service in the United States by the year 2020.

The NBP calls for substantive changes in a variety of revenue mechanisms which allow communications companies to help recover their costs without placing the entire burden on the backs of individual consumers. Coit said these revenue mechanisms are especially important in rural areas like South Dakota where lots of infrastructure is needed to serve areas with large land masses and few people.

SDTA president Rod Bowar, general manager of Kennebec Telephone, Kennebec, SD, said that the changes proposed by the FCC would have major implications on the revenues small South Dakota telecomm companies receive from access charges and federal universal service funding.

"As currently proposed, the NBP lays out one set of goals for broadband speeds in rural America (4 megabits per second) and a second set of much higher broadband speeds for urban America (100 megabits per second)." Bowar said.  "The NBP proposes to provide universal service funding at only those levels necessary to deliver a FOUR megabit service. "

Bowar said that the United States has used universal service as a bedrock communications policy for nearly 80 years. Universal service is used to keep rates affordable for customers regardless of whether they live in a rural area or in an urban community.

"The plan puts tens of millions of South Dakota's universal service funding dollars at risk and could result in total annual revenue losses for South Dakota's rural broadband providers of more than $150 million," Bowar said. "That is revenue that is currently reinvested back into services in rural areas."

"The NBP  could be especially harmful to small businesses in rural areas. The continued viability and growth of such businesses is directly linked to the availability of affordable, high speed broadband services and speeds of FOUR Megabits or less will be inadequate for most residential and business uses in 2020," Bowar said.

Coit said Governor Rounds and PUC commissioners Dusty Johnson, Steve Kolbeck and Gary Hanson delivered a strong message to the FCC about the problems associated with the NBP.  "I was very encouraged by the fact that South Dakota's governor and all three PUC commissioners made this trip," Coit said. "I think that speaks volumes about how important this issue is and how detrimental the NBP will be to rural America if it is moved forward in its current state."

NOTE - The South Dakota Telecommunications Association is comprised of 20cooperative,small corporate, municipal and tribal telecommunications companies. Collectively, these companies serve approximately 80 percent of South Dakota's landmass, and roughly two-thirds of the state's incorporated communities.