Subject: [NEXTEL-1] Regulators reject subsidies for Nextel, Clear Talk

From: [email-masked]
Date: Fri, 30 Jul 2004 12:58:44 -0400

Regulators reject subsidies for Nextel, Clear Talk

BOISE -- State regulators have denied two wireless telephone companies
access to a special fund to subsidize extended service into high-cost
rural areas of Idaho.

The Public Utilities Commission split 2-1 in rejecting the applications
of Nextel Partners and Clear Talk to receive financial support from the
so-called Universal Fund, the pool supported by telephone companies to
subsidize phone service in sparsely populated rural areas where costs
are higher.

Idaho customers contribute about eight cents a month per residential
line and a quarter cent a minute per in-state long-distance calls to
that fund.

Nextel and Clear Talk said they needed the financial backing to increase
wireless service in several rural areas, fostering competition as the
fund is intended to do.

But the request was opposed by the traditional telephone companies and
cooperatives serving those areas -- Albion, Filer Mutual, Farmers
Mutual, Mud Lake, Project Mutual, Rural Telephone, Fremont Telecom and
Citizens Telecommunications of Idaho.
Commissioners Paul Kjellander and Dennis Hansen agreed, contending
Nextel and Clear Talk were seeking the special designation and subsidies
in the comparatively lower-cost service areas, like St. Anthony or
Rupert, while excluding the even more isolated higher-cost areas like
Island Park or Oakley.

Kjellander and Hansen also expressed concern about the pressure on the
Universal Service Fund, that is already providing subsidies to the
traditional phone companies so they can keep their rates affordable.

Commissioner Marsha Smith was the dissenter, arguing that the majority
was ignoring the specifics of the Universal Service Fund law, which does
not take impact on the fund into consideration.
http://www.magicvalley.com/news/business/index.asp?StoryID=5826

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