AT&T: FCC's CAF-II should just support broadband services

AT&T (NYSE: T) may be the largest landline voice provider in the United States, but it said that as this once lucrative service source continues to decline, the FCC's Connect America Funds part II (CAF-II) funds should focus solely on broadband and not voice.

In a recent letter to the FCC, AT&T outlined how in both Illinois and Louisiana, there was a high amount of consumers that did not have a subscription to a POTS service plan. Earlier, AT&T conducted an analysis of POTS service for its Illinois Bell Telephone Company subsidiary service territory.

Although AT&T noted that there were a number of geographical and demographic differences between Illinois and Louisiana, only a "minority" of households in Louisiana had a POTS line. At the same time, less than 1 percent of consumers in each geographic category had AT&T as their Lifeline voice provider in both states.

"Using the methodology we employed in the Illinois analysis, AT&T estimates that in the extreme high-cost Remote Area Fund (RAF) CBs [census blocks] in Louisiana, between 176 and 272 households receive Lifeline benefits but we know that only 7 of them receive that benefit from AT&T Louisiana," wrote AT&T in its filing. "And, in Connect America Fund Phase II (CAF II) eligible CBs, we estimate that between 9,118 and 12,955 households obtain Lifeline service but we know that just 577 obtain that benefit from AT&T Louisiana."

AT&T found during its analysis that in Illinois "58% and 53% of households in CAF II and RAF CBs have not chosen AT&T POTS for their voice service," while in "Louisiana, these percentages are 55% and 58%, respectively."

The service provider said that these results suggest that not only are there are a number of other sources where consumers can get voice services in both states, but also the amount of alternative voice providers "may not be as relevant as the mere fact that there are alternatives."

AT&T added that the CAF II service obligations should be "narrowly tailored to the service that CAF II-eligible areas lack – broadband – and do not require recipients to offer voice on a standalone basis or to participate in the Lifeline program."

After initially turning down funds, AT&T told the FCC in August 2013 that it would accept up to $100 million from the regulator's Connect America Fund (CAF) Phase I to bring broadband to about 129,000 locations that today don't have access to at least a 768/200 Kbps connection.

For more:
- see the FCC filing

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