A top state utility regulator is questioning why lawmakers still require millions of Oklahomans to subsidize rural phone and internet access.

Corporation Commissioner Bob Anthony said the state’s mandatory Universal Service Fund fees increased by as much as 500 percent starting July 1 for all cell phone and landline customers. Anthony said the fees on his phone bill jumped from 75 cents to $3.95 a month.

In addition to funding rural telephone companies, the fees are used to pay for high-speed internet for telemedicine, schools and libraries statewide.

In a recent letter to lawmakers, Anthony said while the fund has “many worthy beneficiaries,” he's concerned about increasing costs. Higher surcharges will largely benefit “a couple dozen privileged independent telephone companies who had good ol’ boy buddies in the Legislature in 1997,” he said.

He wrote that lawmakers have been receiving complaints from constituents about the fee hikes. The Corporation Commission, which regulates the state’s utilities, is responsible for ensuring there’s enough money in the Universal Service Fund to meet its obligations.

The fee increased so dramatically in part because the Oklahoma Supreme Court said the Corporation Commission must honor backlogged financial obligations it hadn't paid.

“The 1997 Oklahoma Legislature also foisted a costly ‘make whole provision' on the (funding) law whereby many independent telephone companies can demand money from the (fund) if any state or federal government actions cause any of their costs to go up or their revenues to go down,” Anthony said.

“But your constituents now see who ultimately pays — they do!” he wrote.

When reached by phone this week, Anthony said that some of the state’s $53 million subsidy enables $150,000 compensation packages for members of the same ownership family. And Oklahomans likely can’t question how their fees are spent because it’s classified as proprietary information.

“They’re receiving enormous sums of money, and your phone bill just went up to pay for it,” Anthony said.

But telecommunication experts said the fund is necessary to ensure access in rural parts of Oklahoma.

“We have expenses to get services to rural Oklahoma,” said Barry K. Moore, a lobbyist for rural telephone companies. “We work hard to get those services to rural Oklahoma. I don’t understand why a regulator whose duty it is to see that services are brought to Oklahoma citizens for a fair and reasonable rate and (provide) quality service would continue to harp and harp on a program that clearly works.”

He likened Anthony “antics and statements” to the inspector in "Les Misérables." In the Broadway musical, the character endlessly searches for a former reformed prisoner.

“This just never ends with him, so I’m not going to answer each and every utterance he makes,” Moore said.

The fund started because the only Oklahomans who had phones were in the metropolitan areas, said Jerry Whisenhunt, general manager and part owner of Pine Telephone, in Broken Bow.

Telecommunication access, though, is just as important to economic development as roads, water and sewers, he said.

His company has a fiber line that runs from Broken Bow to Oklahoma City, servicing every carrier for cell phones, internet and long distance, he said.

If that fiber line gets cut, the three counties his company serves — McCurtain, Pushmataha and Choctaw — couldn’t buy food, gas or use their cell phones to report it wasn’t working, Whisenhunt said.

Before 2015, his company received about $800,000 per year from the state fund to install, maintain and keep the three-county telecommunications system working. He said he doesn’t know the exact amount his company is currently receiving, but it has gone up.

Whisenhunt, who is an electrical engineer, said he makes $150,000 a year to manage the company. After working 35 years, Whisenhunt said his salary is reasonable because he could make more in the private sector.

But if Anthony believes companies are abusing the system, his agency should use its authority to audit companies and stop it, Whisenhunt said.

While there’s an evolution happening with funding phone and broadband access, Whisenhunt said people living in rural areas still need affordable telecommunication access.

“Somewhere in the middle, we’ve got to do what’s right and make the system work for what’s best for Oklahoma,” he said.

Stecklein covers the Oklahoma Statehouse for CNHI's newspapers and websites. Reach her at jstecklein@cnhi.com.

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