Colorado's proposed telecom reform bill (SB-157) is already drawing criticism from CenturyLink (NYSE: CTL), the state's largest telco.
CenturyLink, which established its presence in Colorado via its acquisition of Qwest last April, believes that the proposed bill will "slash jobs statewide and risk hundreds of millions of dollars in investment in broadband."
At issue is the High Cost Support Mechanism. Created in 1990 when the telco was known as US West and later Qwest, the state, using funds collected from ratepayers, reimburses the service provider over $50 million a year to cover service costs to about 417,000 customers situated in remote areas of cities such as Aurora, Parker and Fort Collins and the rates they pay.
The service provider argues that by preventing it from recouping costs to serve harder to reach rural areas, the proposed SB-157 could increase the price of traditional phone service 400,000 customers in Colorado. Under the proposed legislation, the state would drive the over $60 million a year that goes to international long distance carriers into a multi-million dollar fund in the Governor's Office of Information Technology.
"The High Cost Fund exists to ensure reliable phone service to Coloradans in areas that are very expensive to serve," said Kenny Wyatt, mountain region president for CenturyLink in a statement. "Operating and maintaining a network in the most remote parts of our state come at a cost - one that has been funded by the High Cost fund for many years."
Voice services are only one part of the equation.
Wyatt argues that the regulatory changes that the SB-157 bill proposing could put at risk from being able to take advantage of the FCC's Connect America Fund for new broadband deployments.
"The entire telecommunications industry is working with the FCC to determine how to best utilize billions of dollars to build out broadband in unserved and underserved areas," said Wyatt. "Changing the rules in Colorado right now puts at risk any chance of Colorado benefitting from that potential investment."
The proposed SB-157 bill follows an effort by the Colorado General Assembly has developed the Rural Broadband Jobs Act, or Senate Bill 12-129. With 12-129, Colorado would require the state's Public Utilities Commission and Office of Information Technology (OIT) to provide information on what communities have decent broadband service coverage.
- see the release
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