February 18, 2016

Schumer, Gillibrand Urge FCC to Grant Phase-In Period for Westelcom to Maintain Broadband Services to the North Country

Senators: FCC Is Miscategorizing Watertown as an “Urban Area,” Not a Rural One, Preventing Westlecom From Accessing the Vital “Rural Exemption” Rate It Deserves for Serving the North Country If Approved, FCC Waiver Would Reverse 96 Percent “Flash Cut” and Replace with Gradual Adjusted Rates Until 2020, and Ensure the Infrastructure For Expanded Rural Telehealth Medicine Schumer and Gillibrand: North Country Residents Deserve High-Speed Broadband and This FCC Waiver for Westlecom Will Help The

Washington, D.C. – U.S. Senators Charles E. Schumer and Kirsten Gillibrand today wrote to the Federal Communications Commission urging the agency to approve a waiver requesting to retain its classification as a rural broadband provider that would allow Westelcom, a leader in the deployment of fiber-based broadband in the North Country, to meet the FCC’s overall goals of expanding broadband deployment in rural areas and ensure the infrastructure for expanded rural telehealth medicine. Westelcom provides service to six counties across the region including communities in and around Watertown, Malone, Clayton, Elizabethtown, Ticonderoga and Plattsburgh. By reversing the 2015 flash cuts to gradual rates extended until 2020, the waiver would allow Westelcom to continue broadband services while transitioning into the new classification.

In 2012, the Census Bureau reclassified Watertown as an “urbanized” area. The FCC cited this new classification in determining that Westelcom was no longer covered by the FCC’s “rural exemption” rate for its interstate access services. As a result, the company was denied the transition period provided ordinarily to small rural carriers which would have phase down accesses service rates and ensure rural carriers have an adequate amount of time to maintain their investments, preventing rapid reduction in revenue for companies and services for consumers. The FCC waiver would gradually bring access charges to zero instead of subjecting the company to an immediate revenue cut.

“This mistaken FCC reclassification means Westelcom will lose – overnight – the federal funding it counts on each year to help provide reliable broadband services to North Country communities. Anyone who has visited the North Country knows full well that it is not an ‘urbanized’ area. This misclassification is not only bad for the company, which employs local workers, but could lead to service interruptions for residents who rely on broadband for everything from keeping in touch with their loved ones to accessing the best healthcare to powering their local businesses. The FCC should grant Westelcom the waiver they need to transition these services, to make sure we are not leaving residents and businesses in the dark,” said Senator Schumer.

 

“For the last year Westelcom, the leading broadband service provider for the North Country was left in a state of uncertainty from this pending application,” said Senator Gillibrand. “The waiver Westelcom is requesting provides an essential grace period which allows the company the opportunity to reset and responsibly prepare for the FCC reclassification standards. This helps safeguard and maintain consumer broadband services that local residents and health care facilities depend on in the North Country.”

 

“Westelcom appreciates the support from Senators Gillibrand and Schumer,” said Paul Barton, President and General Manager of Westelcom Network Inc. “We hope this will encourage the FCC to recognize the unique circumstances that warrant the waiver which has been requested and share in our commitment to the deployment of robust broadband networks in New York's rural Adirondack North Country region and especially the advancement of rural telemedicine networks. Westelcom and our consumers are appreciative that Senator Gillibrand and her staff have taken the lead on this important issue and all of our community is fortunate to have two U.S. Senators who have such a strong and ongoing commitment to rural broadband deployment.”

 

Schumer and Gillibrand in their letter to the FCC explained further delayed action would cause adverse effects to the rural areas of the North Country. The current flash cut means a 96 percent loss in access revenues and reduces investments to the fiber-based network serving the area. Also, Westelcom is one of the primary providers of communications services to health care facilities, hospitals and clinics. This includes broadband for the Fort Drum Regional Health Planning Organization, a medical facility dedicated to Fort Drum soldiers, their families, and the surrounding civilian community.


The full text of Schumer and Gillibrand’s letter to the Federal Communications Commission included below.

 

Mr. Tom Wheeler

Chairman, Federal Communications Commission

445 12th Street, SW

Washington, DC 20554

 

Dear Chairman Wheeler,

 

We write to urge the Federal Communications Commission (FCC) to grant a limited waiver petition for Westelcom Network, Inc. (Westelcom) with respect to 47 C.F.R.§ 61.26(a)(6) of the FCC’s rules – which defines rural competitive local exchange carriers (CLECs). Located in the Adirondack North Country of New York, Westelcom services six counties across the region and has been a leader in the deployment of fiber-based broadband in this area. Through their broadband network investments, Westelcom has become a critical source of communication services to medical centers seeking to provide telehealth medicine.

The 2012 Census Bureau reclassified Watertown, New York — one of Westelcom’s major service areas — and, for classifications purposes, included the Fort Drum military base within its population total. The inclusion of this military base increased the population associated with the Watertown area and caused it to be reclassified to an “urbanized” area.  Under the new classification, Westelcom no longer meets the FCC’s definition of a rural CLEC and is no longer eligible to use the “rural exemption” rate for its interstate switched access services.  Of course, as anyone who has been there knows, Watertown is far from urban and I urge you to rectify this bureaucratic mistake as soon as possible.

As you know, the FCC’s 2011 USF/ICC Transformation Order included a transition period for rural CLECs to phase down access service rates to ensure that rural carriers have an adequate amount of time to maintain their investments, preventing the possibility of a rapid reduction in revenue for those companies. Because of this transition period, rural CLECs have the ability to continue their investments in broadband networks to insure that the needs of these communities continue to be met.

The rapid  reclassification of Watertown  to an “urbanized area due to the  Census Bureau change means that Westelcom will be denied the transition period provided to rural CLECs, and will result in an immediate 96 percent loss in access charge revenue for Westelcom.  Without this revenue, Westelcom will not be able to continue its investments into the deployment of the fiber-based network serving specific rural areas of upstate New York such as Malone, Clayton, Elizabethtown, Ticonderoga, Plattsburgh, and Watertown, New York.

We are deeply concerned that the failure to act promptly in this matter will directly harm the rural areas served by Westelcom. It has been almost a year since Westelcom filed an application for a limited waiver requesting reconsideration for a reasonable transition period. It is crucially important that the health and service needs of the constituents in the Adirondack North County of New York are not compromised.  The relief requested in this waiver petition is consistent with the Commission’s goal of ensuring the deployment of robust broadband networks in rural America, including the sparsely-populated rural Adirondack North Country region in New York, and the advancement of rural telemedicine networks. 

 

Thank you for your attention to this matter.
           

Sincerely,

 

Chuck Schumer
United States Senator


Kirsten Gillibrand                                                                                             
United States Senator