Rural telcos confront VoIP

Rural telecom carrier representatives discussed the impact of voice-over-IP technology on their businesses at the Western Telecommunications Alliance convention in Dallas Wednesday.

Theron Jensen, general manager of the Hemingford Cooperative Telephone Company, a small incumbent local exchange company in western Nebraska with less than a thousand access lines, told the crowd that his company began using VoIP a few years ago to allow a large corporate customer to transfer calls from office to office.

"It cut us out of $400 to $500 a month in long-distance [revenue], but the good news is I have a happy customer that will be harder for [VoIP provider] Vonage to take away," Jensen said.

Hemingford used a 5.8-GHz fixed wireless solution from Airspan Networks, which Jensen said was an educational experience. Working for a rural carrier serving a sparsely populated area, Jensen said he didn’t expect competition from anyone other than perhaps Vonage or the local cable company. But when he learned that a solution in the unlicensed 5.8-GHz band could serve thousands of users economically, he realized he was more vulnerable to competition than he’d thought.

"Our company is potentially a target for a [competitive local exchange carrier]," Jensen said. "We’ve got a few entrepreneurs in the area that might want to do this. We’re glad to have discovered this before they did."

Other speakers discussed how VoIP legislation and regulation could affect rural carriers, including WTA lawyer Jay Driscoll, who reported on the current perceptions--or misperceptions--of VoIP among politicians in Washington.

"The hype and hysteria over VoIP technology has captivated Congress right now," Driscoll said. "Everybody’s talking about it; everybody wants to be part of it."

"The hype at the congressional level is that VoIP is going to save the world, drive down prices and solve the rural problem," he said. "We know that’s not true."

To protect the growth of VoIP, many legislators are in favor of imposing a one- to three-year moratorium on VoIP regulation, which Driscoll suggested could be dangerous for carriers who are losing revenue to VoIP-based competitors. "Once you put a moratorium in place, you never get it back," Driscoll said, adding that he is working to educate members of Congress on the issue.

While many of the WTA show’s attendees had questions about the challenges and implications of implementing VoIP, another speaker, MetaSwitch regional manager Bob Harvey, closed his remarks by reminding attendees of the inevitability of VOIP implementation. "Next year you’ll all be back with stories about how you did it and where and all that stuff," he said.