Phone system could be reworked for digital era

Rural towns hoping bill can bring them modern communication

DENVER – Once upon a time, in an ancient land called Colorado, life was grim.

Phones were not smart. Mail was not electronic. If people wanted tweets, they had to go outside and listen to birds. And if they wanted to call someone, they had to use a telephone attached to the wall with a cord.

Almost everyone used the same phone company, Mountain Bell.

The year was 1987 A.D.

And it was the last time Colorado updated the laws that govern phone service.

Now, legislators want to rewrite the law for the digital era. As they do, people from rural Colorado are hoping lawmakers don’t forget about places where the 21st century has yet to arrive – at least in a technological sense.

“Every 10, 20 years you get a crack at something like this,” said Patrick Swonger, founder of Operation Link Up in Silverton, a group that has been trying to bring high-speed broadband to the town for years.

The bill in question, Senate Bill 157, will start its legislative voyage Monday in the Senate Business, Labor and Technology Committee.

It would mostly scrap the old way of running the phone system, with a regulated monopoly – these days, it’s CenturyLink – providing basic phone service.

“Technologies are changing at the speed of light, and customers have more telecom choices today than ever before. Our telecommunications laws are decades old and in desperate need of reform, and the time for that reform is now,” said Sen. Mark Scheffel, R-Parker, one of the sponsors.

His bill promises to be a battle royale among lobbyists for CenturyLink and other firms such as Comcast, AT&T and Verizon as they jockey for advantage under the potential new law.

In the old days of 1987, the phone company built a network of wires and made money by selling phone service to people and businesses. The company was a monopoly, regulated by the Public Utilities Commission. The PUC levied fees on everyone’s bill and used the money to subsidize the phone company to serve far-flung areas where there are too few customers to make money.

The 70-page bill deregulates much of the business. In places where consumers can choose from among five or more phone service providers, the bill ends most of the old regulatory system and relies on market competition to keep phone service affordable.

But the most controversial part comes down to the removal of a $50 million subsidy to CenturyLink for rural phone service.

Every phone customer – regular or wireless – in Colorado pays a 2.9 percent tax to pay for the subsidy. The fee raises about $54 million a year, most of which goes to CenturyLink.

The company claims a subsidy for most communities in Southwest Colorado, ranging from $4.42 a month per residential phone line in Durango to $79.76 around Mesa Verde National Park.

CenturyLink officials said the bill would lead them to operate at a loss, raise prices or even end service entirely in some areas.

“This bill targets only our customers, and places the burden on them to cover the cost to receive services. Both the company and our customers will be forced to make tough decisions,” said Kenny Wyatt, president of CenturyLink’s mountain region, in a prepared statement.

When the subsidy is phased out, half the savings would reduce fees on customers’ phone bills, and the other half would go into a fund run by the governor’s office to promote broadband development in hard-to-reach areas.

The broadband fund has people from Southwest Colorado excited.

Silverton residents have been butting heads against CenturyLink and its predecessor, Qwest Communications, for seven years to get broadband service.

“We’re the poster child of what happened in the past with rural telecommunications,” said Swonger, who until this week was a Democratic candidate for the state House of Representatives.

Swonger and his allies want legislators to amend SB 157 to allow local governments to build broadband infrastructure and let anyone use it.

Current law forbids cities from going into the telecom business, but he compares an ideal modern communications network to the road system – it is built by the government, but anyone can drive on it.

Swonger estimates that Silverton needs $10 million to $12 million to fill the last 21-mile gap in the regional broadband network.

He thinks SB 157 isn’t perfect, but it’s something he and his allies can work with.

“This is the closest thing that I’ve seen (to an ideal bill). We can work with this and mold and shape some of the language,” Swonger said.

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