WASHINGTON-Customers of at least one rural telecommunications cooperative are cutting the cord at the rate of five to 10 per month, J. Frederick Johnson, executive vice president and general manager of Farmers Telecommunications Cooperative, based in Rainsville., Ala., told RCR Wireless News.
Johnson said that number includes only the customers cutting the cord from Farmers’ landline business to sign up for its wireless subsidiary, which serves about 11,000 customers today. Johnson said he faces at least 4-percent attrition monthly as customers cut the cord for wireless service provided by Cingular Wireless L.L.C., Verizon Wireless or Sprint Nextel Corp. Those numbers-which Johnson believes could be higher because of the customers that move into his service territory but never sign up for wireline service-represent real competition, even though many policy-makers believe competition only exists if it is on the same platform.
“I have lost 4 percent of my customers to wireless,” said Johnson. “In rural America, when your customers leave you and go somewhere else for telecom-that is real competition.”
Johnson made his comments as part of a luncheon briefing sponsored by the Foundation for Rural Service.
FRS supports the continuation of universal service, but Johnson said universal service should not be used to create artificial competition. For example, he said it costs him $20 million to serve two square miles, but a wireless carrier can put up a tower and base station for less than $25,000 and serve the same two square miles-and get the same subsidy.
At the luncheon, FRS released, “Telecommunications Deregulation: A Balancing Act for Rural America.” The report is written by L. Marie Guillory, principal of Guillory & Hjort P.L.L.C.
Guillory believes regulations to keep the universal-service system and intercarrier compensation are necessary for rural players. “
