Invest in broadband service

By Kirby Underberg

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Palo Cooperative Telephone Association has deployed a state-of-the-art fiber network to every home in our service territory. All of the residents in our territory have access to the latest and greatest technologies available.

However, a recent ruling by the Federal Communications Commission threatens our ability to cover ongoing operational costs and continue to advance services without adequate funding.

For the last several years, independent telecommunications companies have been speaking about the potential negative impact of the FCC's rule changes. A recent study conducted for the Iowa Telecommunications Association by the Center for Economic Development and Business Research in the W. Frank Barton School of Business at Wichita State University confirms that the broadband availability in Iowa could be impacted by the FCC's actions.

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.

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 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 decision to build the fiber network in Palo was in conjunction with repairs needed after the flood of 2008 and the need to offer competitive services to our customers. Without the damages caused by the flood, we would have had a very different scenario with the reduced revenues and changes made by the order. The true effects of the order are the continued reduction of revenues and its impact on our ability to continue to provide the same level of services to our customers.

Our company is located on the edge of the second-largest city in Iowa. Having reliable and affordable broadband available opens our community to people wanting to move to a small town and have the appropriate connection needed to work from home or simply for entertainment. Our investment in broadband positions our community for additional economic growth, whether residential or commercial.

One of the businesses we serve is the nuclear power plant; having access to these same reliable and affordable broadband services is critical to that facility and all companies for the future.

The FCC's actions stand in the way of our community's continued access to reliable and affordable broadband services. Lack of access will inhibit our community's economic growth and prosperity.

I encourage you to reach out to your elected officials 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 our region's future and economic growth.

Kirby Underberg is general manager of Palo Cooperative Telephone Association in Palo. Comments: kunderberg@netins.net