TDS Says Rural Consumers Broadband Deployment put on Hold

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Federal Communications Commission adopts universal service and inter-carrier compensation reform order for some consumers—not all—according to TDS

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The Federal Communications Commission (FCC), at their regularly scheduled October meeting, adopted the first in a series of universal service and inter-carrier compensation reforms impacting communications carriers nationwide.

The following statement can be attributed to Drew Petersen, vice president of external affairs and communications for TDS Telecommunications Corp. (TDS):
“TDS applauds the FCC’s initial efforts to modernize and evolve the federal universal service fund (USF) and inter-carrier compensation (ICC) regimes of this country. These efforts are focused on removing waste, network duplication, and abuses in the current system. However, much more is required to incentivize rural carriers, like TDS, to continue expanding and maintaining the high-cost Internet networks necessary to connect rural America.

“With the issuance of the FCC’s national broadband plan (March 2010), the entire rural communications industry was encouraged to develop a rural consensus framework that set a course to accomplish the ultimate goal of continued broadband deployment, modest impacts on consumer rates, and continued maintenance and expansion of high-cost rural networks.

“The rural communications industry actively responded with the construction and development of an industry consensus framework which included a plan for rate-of-return USF/ICC reform (the only detailed reform roadmap filed at the FCC this year). Today, the FCC overlooked the rural USF portion of the consensus framework directed at reforming the fund for a broadband enabled world. Instead, it puts that part of the plan out for additional comment in its proposed further notice of rulemaking.

“When rural communications companies filed the industry framework for reform we sought predictability. Today’s decision provides companies, like TDS, with continued uncertainty. That jeopardizes the expansion of broadband to rural Americans.

“For rate-of-return USF/ICC reform to be successful—it must include not only a mechanism to restructure inter-carrier compensation and the contribution it makes to network cost recovery. It must also be forward-looking USF reform that focuses support on broadband networks, including connecting those networks to the Internet. Without such reforms, rural areas will: (1) see higher rates for consumers; (2) have carriers unable to maintain service in their higher-cost areas; and/or (3) be faced with carriers unwilling to invest in newer, more efficient IP enabled switching technologies. Carriers providing service must have some level of certainty that costs for future investments will be recoverable.

“It is imperative the FCC continue its work and focus on addressing rural broadband issues. The FCC must lay out a longer-term vision for promoting broadband-capable investment for rural carriers. They must define a rural reform plan that presents a reasonable path forward for such comprehensive reform.

“TDS stands ready to work with the FCC to create and adopt a compensatory, forward-looking universal service and inter-carrier compensation reform plan as soon as possible. The FCC has a great opportunity to construct and implement a thoughtful approach toward reform that will incentivize rural carriers to complete the job they have embarked upon: Ensuring all Americans have access to affordable and reliable broadband services.

“Failing to adopt the rural consensus framework for USF reform is nothing short of a missed opportunity for rural consumers and small and medium-sized businesses operating in sparsely populated areas. Simply put, don’t put rural consumers and businesses on hold—now is the time for the FCC to act.”

TDS Telecommunications Corp. (TDS®) is the seventh largest telecom provider in the U.S. For more than 40 years, the company has been connecting people with high-speed Internet, phone, and TV entertainment services in hundreds of rural, suburban, and metropolitan communities across 30 states. Today, TDS has more than 1.1 million equivalent access lines in service and 2,700 employees. Business customers select from the latest technologies, including: VoIP (managedIP) phone service, dedicated Internet, data networking, and hosted-managed services. Visit http://www.tdstelecom.com or http://www.tdsbusiness.com for more information.

TDS Telecommunications Corp. also manages the operations of VISI Incorporated, TEAM Technologies, and OneNeck IT Services Corp. through TDS Hosted & Managed Services, LLC. These companies employ more than 350 people who specialize in providing hosted application management, managed hosting, cloud services, and next generation data centers. Visit http://www.visi.com, http://www.team-companies.com, and http://www.oneneck.com for details.

TDS Telecommunications Corp. headquartered in Madison, Wis. is a wholly owned subsidiary of Telephone and Data Systems, Inc. [NYSE: TDS, TDS.S]. A Fortune 500® company, Telephone and Data Systems provides wireless, local and long-distance telephone and broadband services to approximately 7.1 million customers in 36 states through TDS Telecommunications Corp. and U.S. Cellular [NYSE: USM], its 84-percent owned wireless subsidiary. Founded in 1969 and headquartered in Chicago, Telephone and Data Systems employed 12,300 employees as of June 30, 2011. Visit http://www.teldta.com for investor information.

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Cindy Tomlinson