The costs of providing telephone service to rural America are much higher than for more urban areas of the country. By definition, small rural subscribers are scattered throughout large geographic areas. In rural areas, the average number of subscribers per route mile runs about 6.3; the average number of subscribers per square mile is 4.4. These figures differ dramatically from those of the Bell operating companies (BOCs), which show an average density of 130 subscribers per route mile and more than 33 per square mile. Small rural local exchange carriers (LECs) also report a higher proportion of residential versus business subscribers; they face higher unit costs for usage-sensitive equipment because they cannot take advantage of economies of scale; and have higher loop-related costs because their local loops are longer and their service areas more remote.
At the Organization for the Protection and Advancement of Small Telephone Companies (OPASTCO), we are concerned that the telecommunications bills before Congress and the regulatory reforms under consideration at the Federal Communications Commission (FCC) could impose a severe and detrimental impact on the availability and price of basic local telephone service and long-distance service for rural Americans. At the heart is the concept of universal service and its accompanying support mechanisms.