Before the

 

My name is Paul Waits.  I am President of Ritter Communications, based in Jonesboro, Arkansas, and I manage a company that provides a wide variety of communications services across Northeast and North Central Arkansas.  On behalf of our company and our communities, we welcome Commissioners Adelstein and Copps, and are encouraged by the interest this hearing reflects regarding the future of broadband services in Arkansas.

 

Last year, Ritter Communications celebrated its 100-year anniversary as a telephone company, having its roots in providing basic telephone service in Poinsett and Mississippi Counties.  Since that time, the company has grown and diversified, and presently owns and operates other incumbent telephone operations in Boone and Newton Counties, cable TV franchises across Northeast and North Central Arkansas, competitive communications and business integration services in Jonesboro, as well as a number of wireless partnerships with Alltel.  All of these varied business interests are sufficient in scale to cause us to weigh among and balance competing interests internal to our company, e.g., cable versus telephone, wireless versus wireline, in formulating and advocating positions on policy issues.  We think this puts us in a unique position to offer observations and recommendations that balance such disparate interests.

 

In the context of the current availability and future of broadband services, our greatest concern is the needs of the most rural areas we serve, specifically the sparsely-populated areas of Newton and Boone Counties, and the rural agricultural communities of Northeast Arkansas.  Some of these areas present extraordinary economic challenges related directly to the cost of deployment, as well as the general level of computer literacy and ownership.  We estimate that we have the capability to provide high speed internet access services to about 90% of our telephone company customers in the mountainous areas of North Central Arkansas, and about 98% of our telephone company subscribers in Northeast Arkansas.  All central offices and remote terminals are equipped with DSL technology, but distance limits of DSL prevent availability to the most remote customers.  In our cable TV areas, we can provide high speed internet access to virtually 100% of the homes passed in these hybrid fiber-coax systems.  The percentage is greater for cable because such systems typically do not extend to areas with low subscriber density.

 

As a nation, we have virtually achieved universal telephone service as a direct result of the long-standing public policy of promoting universal telephone service through implicit and explicit rate averaging across the country.  Governmental programs such as the Federal Universal Service Fund (Fund) have been instrumental in supporting the investment required for rural telephone services, and such is still needed for many areas too sparsely populated to economically justify either wireline or wireless coverage.   To get a first-hand view of the rural needs and challenges, we invite and would welcome members of the Committee to tour our rural service areas.

 

Today, high speed internet access is fast becoming indispensable to basic communications and commerce, just as the telephone has been for many decades.  This is true across all spectrums of human interaction, including education, medical care, governmental services, creative endeavors, as well as business communications and collaboration.  We believe the FCC and Congress must take the first step to affirm a new, expanded policy of universal service, one that defines basic service to include broadband access to the public Internet.

 

In doing so, we must be careful not to legislate an internet access speed, i.e., not to cast in bureaucratic stone the definition of what we mean as broadband.  Instead, we should allow the definition of broadband to evolve as technology and its application evolves.  Internet video applications that are emerging at a rapid pace will fuel consumer demand for faster connections, just as distributed computing and software hosting will drive demand for faster, more reliable connections for businesses large and small. 

 

In recent years, Ritter Communications has been deploying fiber to the premise services to the medical community in Jonesboro, in direct response to demand for very high bandwidth to support video applications used for remote diagnostics.  The gigabit-per-second level bandwidth required could only be provided today by direct fiber connections, since wireless and other wireline technologies lack this ability.  We believe this trend will continue and extend to other business applications and activities, and there will be a diverging standard that will emerge between mobile and fixed technologies in recognition of the limitations of mobile technologies to support high-definition video applications.

 

We believe that current federal funding for universal service is in jeopardy, and warrants reformation to ensure sustainable and predictable support for rural communications services, which is rendered more imperative by the need to expand such funding for broadband access services.  The amount of funding for rural support is eroding as the base for such support is attriting because of the transition, ironically, to Internet-based telephony, which does not collect universal service fund fees.  Support for rural carriers is also adversely affected by the transition of telephony minutes and access services from wireline to wireless services, which do not contribute support in the form of carrier access charges.  It is imperative that the FCC focus on these issues to ensure that rates and services are, in the words of the Telecom Reform Act of 1996, “reasonably comparable between urban and rural areas of the nation.”

 

We consider it unfortunate that the federal universal service program has become a political target because of some confusion regarding its purpose, e.g., whether its mission is to promote rural competition, and/or to provide for comparable rural services and rates in high cost areas.  These twin goals are now at odds.  The fund has grown in scale and scope to the point that there is a growing concern that it should be better targeted to the needs of the rural public.  We share this concern.  This will be particularly true if the fund is transitioned to promote and support the funding of rural broadband services.  In this context, we believe the identical support rule, allowing competitive carriers to receive support based on the incumbent carrier’s costs, has created some burdens on the fund, with questionable benefits for the public.  Although some of Ritter Communications’ business interests benefit from this rule, we are concerned about the long-term sustainability of the Fund, and the continued viability of the most rural areas of the State of Arkansas.   We believe a better long-term policy is to continue to target high cost areas, with funding solutions based on each provider’s actual costs to serve those areas.

 

We are indeed encouraged by the interest this hearing represents, and share a concern regarding the need for a proactive policy on the assessment and support of broadband services, especially in the most rural areas of the State.  As a company actively engaged in providing broadband services in a wide variety of locales, using a variety of technologies, to a broad mix of customers and customer types, we believe we have some unique perspectives to offer to this conversation.  

 

We respectfully recommend that federal policy first be augmented to redefine and expand basic service to include broadband access services.  In the pursuit of this goal, such policy should provide for an evolving definition of broadband access services, and that policy’s primary focus should be to ensure, at a minimum, that the most rural, high cost areas of the State are not left out of the digital age.