Breckenridge target of think tank broadside against federal phone subsidy
July 12, 2013
A recently released report charges telephone service providers of affluent ski communities, including Breckenridge and Aspen, with taking advantage of federal communication subsidies meant for rural and low-income families.
However, it appears that the only Colorado telephone company named in the Alliance for Generational Equity report does not in fact serve the communities of Breckenridge or Aspen.
Alliance for Generational Equity is a self-proclaimed nonprofit, non-biased organization headquartered in Las Vegas.
According to a research paper written by Thomas Hazlett, professor of law and economics at George Mason University, and Scott Wallsten, senior fellow at the Georgetown University Center for Business and Public Policy, several rural phone companies have been abusing subsidies provided by the Federal Communication Commission’s Universal Service Fund by as much as $24,000 per phone line, per year.
During a press conference call Wednesday the researchers said those subsidies were created to provide voice and data service to underserved rural communities and low-income families, but have been exploited by phone companies serving “wealthy enclaves” to rake in untold sums of profit for themselves.
Among the top 10 abusers of the FCC subsidies is South Park Telephone Co. Hazlett, Wallsten and Dave Herman, vice president for policy at Alliance for Generational Equity, suggested South Park Telephone Co. provides service to customers in and around Breckenridge and Aspen ski resorts.
But neither the town of Breckenridge nor Breckenridge Ski Resort were mentioned anywhere in the 54-page Hazlett/Wallsten report. Aspen was mentioned once, and only in passing, with no real data tied to the claim the rich and famous are benefiting from subsidized phone service.
The only reference to Aspen reads:
“The consensus among economists is that the universal service system in telephony is an ill-targeted subsidy scheme funded by an inefficient and regressive tax system. In short, poor urban consumers pay significant telecommunications fees to subsidize affluent phone customers in Aspen, Colo., and Jackson Hole, Wyo., — meccas for the rich and famous who enjoy High Cost Fund dollars to finance their local phone networks.”
In reality, South Park Telephone Co. serves approximately 200 customers in and around the town of Fairplay, according to its website. In 2010, South Park Telephone Co. received more than $1.1 million in FCC subsidies to provide telephone service to its 180 customers, which equals out to be more than $6,000 per line and about $18,000 less than the most prolific abusers of the subsidies mentioned in the report.
Furthermore, Lisa Wachob, a representative with South Park Telephone Co., said none of its close to 200 customers reside in Breckenridge or Aspen.
When asked for an explanation, Will Harwood, a spokesman for the Alliance of Generational Equity, said people receiving service on the north end of South Park Telephone’s service area are close enough to the ski resort community to lump those customers in with actual Breckenridge residents.
“Alliance for Generational Equity physically inspected the service area and found people living there who work in and own businesses in Breckenridge,” Harwood said in an email. “In the nicer part of the service area on the end about eight to 10 minutes from Breckenridge, it’s basically a “suburb” in terms of the home owners.
“So, the ‘Breckenridge Ski Resort area’ description is entirely accurate.”