A recent audit of Kansas’ rural telephone service found it is generally well run and efficient, but suggests that lawmakers should consider the types of services taxpayers are now subsidizing.
The audit was conducted of the Kansas Universal Service Fund, which was established in the 1990s.
“This includes broadband data and other unregulated services not contemplated in the state’s definition of universal service or in its definition of enhanced universal service,” auditors said.
Sen. Marci Francisco, D-Lawrence, notes that broadband service today can include services similar to cable TV delivered through a phone line.
The Kansas Legislature’s Telecommunications Study Committee hired the private firm QSI Consulting Inc. to conduct the audit and make recommendations to lawmakers.
Sen. Mike Petersen, R-Wichita, who chairs the special committee, said the audit would be presented during the 2015 session to the standing House and Senate utilities committees.
The Kansas Universal Service Fund, or KUSF, was established at a time when widespread access to the Internet was in its infancy. The goal was to ensure that the whole state would have access to basic phone services for making local calls and 911 emergency service.
It was also meant to help phone companies invest in the infrastructure needed to deliver broadband data service, which at the time was still being defined.
Revenue was initially about $96 million a year, but that dropped to about $46 million in 2013, mainly because the state’s largest phone company Southwestern Bell – now known as AT&T – was allowed to phase out its support. AT&T’s participation in the fund ended in January.
The audit found that some companies are not necessarily using the funds to build infrastructure, contrary to the program’s intentions.
“The KUSF and capital expenditure data we analyzed demonstrates that at least seven carriers spent substantially less on capital improvements than they received in KUSF payments over the past five years,” the report said.
The audit showed some of the success of the program, noting that Kansas ranks second in the nation for availability of broadband service in rural areas.