Lexington, KY - Make a 10-minute phone call to Radcliff, Ky., from Louisville, Ky., and it could cost you about a dollar. The same call to the city of Radcliffe - in the United Kingdom - will set you back 46 cents.
Ring up Ashland, Ky. from Richmond, Ky., and the charge will run about 42 cents for a ten-minute conversation. However, if your friend in Ashland calls you, the cost is only 15 cents.
Those unusual fee discrepancies, provided by AT&T, are examples of a much bigger problem the communications giant and the Kentucky Chamber of Commerce believe must be solved if the telecommunications industry is to help spur Kentucky's economy.
Industry observers say the current access rate system, created in 1984 to subsidize telephone service in rural America, relies on traditional, more expensive long-distance phone calls to keep those rural subsidies flowing. Meanwhile, consumers and businesses have jumped to wireless and broadband technologies to communicate. Broadband provides high-speed transmission of services such as data, voice and video over the Internet and other networks. Because of this advancement, subsidies to rural telecom providers are shrinking.
Into the discussion has stepped the Kentucky Chamber of Commerce, which sees rate reform and other communication updates as keys to economic development in Kentucky.
"The deployment of next-generation technology is critical to our endeavor, and having the right regulatory environment is a key piece of that puzzle," said David Adkisson, The chamber's president. "Access rate reform is needed now to protect rural connectivity, encourage investment in high-speed networks and grow jobs for the 21st century."
The chamber, along with various business, labor and consumer groups, have expressed that in a letter to Gov. Beshear, Attorney General Conway, various legislators and perhaps most importantly, the Kentucky Public Service Commission.
"It's about looking at the state's telecommunications and regulatory systems, which are based on wire line telephones in an age when we live in a wireless and broadband world," said Bryan Sunderland, vice president, public affairs for the Kentucky Chamber of Commerce.
The PSC says that, for the most part, telecommunications have been deregulated at state and federal levels. However a few pieces are still regulated by the Federal Communications Commission (FCC) and state commissions, and telecom access subsidies are one of them.
"A case filed by AT&T is under advisement. It has to do with funding mechanisms and interconnection charges," explained Andrew Melnykovych, public information officer for the Kentucky Public Service Commission. "At this point, it's too soon to say how the Commission will proceed. We're aware of the issue and of the request from the chamber but are still evaluating what we'll do next."
Putting this into dollar-and-cents terms, a study was conducted by Connected Nation, a national nonprofit organization that expands access to and use of broadband Internet and related technologies. It claims that a seven percent increase in the adoption of broadband technology nationwide would create 2.4 million new jobs per year, with 31,699 of them in Kentucky.
"Access reform would be good for consumers, business owners and jobs," said Brian Mefford, CEO of Connected Nation.
ConnectKentucky is a statewide effort to expand broadband access and increase demand for service. It has done extensive mapping of areas with or without broadband access. It uses partners and local volunteers to develop plans for bringing such access. It claims a success rate of more than 95 percent broadband penetration in the state. It would like to see the remaining obstacles removed in the telecom access system.
Rene True, ConnectKentucky's executive director, said the right technology provides "unforeseen opportunities," such as better and more affordable health care or the preparation of Kentucky children to succeed in a globally networked world. True also cites the ability of workers with the right technology to "reside in one of Kentucky's rural communities and succeed in a career that formerly required moving to a major metropolitan area."
Every entity with an interest in the issue is weighing in. AT&T Kentucky President Mary Pat Regan claims the current access system places an estimated $38 million in hidden subsidies on Kentucky consumers each year.
"The system isn't fair to consumers," she said, "and it discourages new competitors from coming into communities to offer new choices."
The Chamber's Adkisson doesn't want the state to fall further behind more fast-paced regions of the country.
"At a time when Kentucky is competing so aggressively with other states, we need to be more proactive than ever if we intend to attract new investment and jobs," he concluded.
The Kentucky Public Service Commission may not be able to resolve the issue in a timely matter. It cautions not to expect a quick resolution.
"We have telecommunications matters still pending before the commission that have been open for years rather than months because of the complexity involved," said Melnykovych. "There are federal regulations at issue, and you wind up in protracted litigation. You may have to come back to consider all or part of a commission decision. They are immensely complicated and time-consuming processes."