Copyright 2000 The Omaha World-Herald Company
Omaha
World-Herald
December 31, 2000, Sunday SUNRISE EDITION
SECTION: BUSINESS; Pg. 11R;
LENGTH: 793 words
HEADLINE:
Telephone Firms Still Show Commitment to Rural Areas
BYLINE: JOHN TAYLOR
SOURCE:
WORLD-HERALD STAFF WRITER
BODY:
Even though local
telephone competition in Nebraska is showing up first in larger towns, rural
parts of the state aren't being forgotten in companies' search for customers.
"There is a race to be the first one everywhere to provide broadband
service, and that means in the rural areas, too," said Eric Carstenson,
president of the Nebraska Telecommunications Association, which represents 38 of
the state's phone companies.
At the same time, a number of the state's
small rural local phone exchanges are already providing many of their customers
with sophisticated, high-speed access.
The Telecommunications
Act of 1996 opened up local phone competition throughout the nation.
That included rural areas, too, although companies wanting to compete with the
existing phone company in a rural area have to convince regulators that the
competition is in the public interest. "It's such a small market that if you
divide it up, then it could become uneconomical for anybody to serve it," said
Gene Hand, communications director of the Nebraska Public Service Commission.
Rural areas also have been caught up in the volatility of the
telecommunications industry, which has seen a number of mergers, including US
West's acquisition by Qwest Communications International Inc. earlier this year.
In June 1999, Citizens Utilities (now Citizens Communications Co.) of
Stamford, Conn., acquired 530,000 rural telephone lines from Qwest for $ 1.65
billion in cash.
Included in the acquisition were 14,603 lines in 15
Nebraska towns: Ainsworth, Atkinson, Atlanta, Emerson, Farwell, Howells,
Humphrey, Creston, O'Neill, Oxford, Pilger, Randolph, Silver Creek, St. Libory
and Valentine.
The sale also included 32 towns in Iowa.
And
then, in September 1999, Citizens announced the acquisition from GTE Corp. of
local phone services in 37 Nebraska towns, including Kearney and Columbus.
"As companies change hands I think we will see a continuing commitment
to rural Nebraska," Carstenson said.
Despite the sale of some of its
rural holdings, he said, Qwest has shown in other ways "a big commitment to
investing in infrastructure in rural areas."
In April, Qwest predecessor
US West agreed to lease part of its phone lines to 13 companies that provide
high-speed, digital subscriber lines - technology needed to provide fast
Internet access.
Tim Sandos, a Qwest vice president, said that his
company "doesn't want to sell all of its rural lines."
"We don't ever
want to sell a customer, but we're back to the regulatory environment."
Because Qwest is prevented from selling long-distance service, along
with high speed data service and basic phone service, it can't be competitive,
Sandos said.
"Because we can't sell those extra services we can't make
enough of a profit to be able to provide advanced high-speed data services out
in the rural areas," he said.
While local service competition will be
slower in coming to rural areas, said Carstenson, the state's telecommunication
customers aren't living in some digital wasteland.
All of Nebraska's
communities are served by digital switching, he said, and 96.1 percent of
Nebraska's phone exchanges are connected by fiber optic lines.
"The
competition will come first in the urban areas," he said, "but it will flow
quickly to the rural areas."
And in some of the rural areas, the bigger
phone companies will encounter companies like Hamilton Telecommunications of
Aurora, which serves 7,000 telephone lines in central Nebraska.
"We've
got some interesting things going on," said Gary Warren, executive vice
president.
Among Hamilton's customers is Dr. John Allen, a radiologist
who lives seven miles from Marquette who can receive ultrasound, CT scans and
MRI images over a high-speed digital line directly to his home from the Grand
Island hospital, where he is employed.
"If somebody comes into the
emergency room on the weekend or at night and wants him to take a look at
something, instead of hopping in the car, the hospital calls him and tells him
to dial up and look at (an X-ray)," he said.
Hamilton, a local exchange
phone company, also provides Internet service in Sidney, North Platte and
Central City, among others, Warren said.
"In most of our towns there
aren't a whole of lot of companies that are excited about coming in and
competing, except wireless companies," he said.
However, Warren said
Hamilton has Internet competition in most of the towns it is in, so "we're used
to it there."
While competition is a concern for small companies like
his, he said, "we're mindful of it, and we try to make sure we manage our
business so we're prepared for it."
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