Rural phone companies frustrated by FCC rule change - KWWL - Eastern Iowa Breaking News, Weather, Closings

Rural phone companies frustrated by FCC rule change


You may soon notice a new charge on your monthly phone bill.  Many phone companies say they're being forced to hike rates because of a new FCC rule that revamps the Universal Service Fund, which accounts for up to 70 percent of their revenue.

Changing how that money can be spent is especially concerning for small, rural phone and internet companies.

Veryl Sievers keeps a close eye on the Chicago Board of Trade's grain prices at the Tama-Benton Co-op in Dysart.  With corn trading near eight bucks a bushel, having accurate information quickly is important.

"I think if we want to maintain competitiveness, we need to have broadband and continue to use that," Sievers said.

Historically, a major part of how phone companies keep your services running and make upgrades to the system, comes through money you pay on your monthly bill to the Universal Service Fund, or USF.

But a new FCC rule changes how utilities can use that money.  It will create one big pot of dollars that will largely be directed at expanding broadband services in larger cities.  The result:  small companies like Farmers Cooperative Telephone Company are forced to raise your rates, which still won't fully cover the lost USF money.

"All the dollars that come in, especially being a cooperative, are earmarked for certain things.  Now that the upgrade money is gone, we're looking to gain that somewhere else," said Mark Harvey, general manager of Farmers Cooperative Telephone Company.

In Dysart, that means Farmers Co-op is putting a $5 million fiber line build on hold.  Not only does that prevent modernizing and speeding up local service, it cuts off dollars that would've come into town for the construction project.

"It affects our community between that crews that were going to come to work on this project, eating at our coffee shops, buying fuel at our gas stations, and just living in the area the next two to three years," Harvey said.

Right now, rural phone companies are on hold with the FCC, hoping for more clarity on the new rules, to see if they can somehow still afford service upgrades for customers.

The Dysart Farmers Co-op phone company is raising rates by 50 cents a month for residential customers, and a dollar a month for businesses.  And gradual fee hikes will continue for six years.

The company encourages customers frustrated by the fee hikes to contact your legislators about the FCC's rules.  There's a link to do that, along with more information on the rule change at

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