June 22, 2017 at 5:46 pm #7881
For many years, due to FCC regulations, Direct Communications was unable to offer customers Internet service without an accompanying landline telephone service at an affordable rate. This was because the FCC traditionally viewed providing all Americans with reliable telephone service as the justification for supporting rural networks, and the FCC rules in place for rural telecom providers like Directcom reflected that policy. (Read more about that old policy here.)
As is the case with most government regulation, the rules always lagged several years behind what was actually going on with regular folks on the ground. In Eagle Mountain for example, with mostly young homeowners, 99% of the families are already paying for multiple mobile phones in their home. Nobody wants or needs traditional landline phone service. We have been pleading this case for years to regulators, and asking for support for standalone broadband service (Internet without an accompanying phone.)
The way we got around the dislike of traditional phone service for many years was to market our fiber Internet with an accompanying low-cost ephone, where we offered a free emergency phone service with a limited number of outgoing minutes, and all customers had to pay was the taxes we were required to collect on behalf of the state and federal government. This was a workaround, but was cumbersome and confusing to customers, who still didn’t understand why that had to pay for a phone service they never used.
Thus, in 2016, when the Federal Communications Commission finally announced in its much-anticipated Order and Further Notice of Proposed Rulemaking on USF Reform for rate-of-return carriers (FCC 16-33) that they were going to explore Broadband loop support, we were extremely excited. The Order made various rule changes to how remote networks could be funded, to add support for standalone broadband service, which had not been supported in the past.
What this meant for customers in Eagle Mountain was that the FCC would change their rules to financially support building and maintaining the network in Eagle Mountain (which is classified as a remote area) and Directcom could now allow customers to subscribe to Internet-only service. This was what we had been asking the regulators to do for many years, because this was what customers wanted.
This FCC reform process began in Spring 2016, and it took about a year before the regulations were in place so that Direct Communications could begin to offer standalone service to our customers in Eagle Mountain. The State of Utah was also very helpful at the last legislative session, passing a law to support rural networks in Utah who have broadband capacity to allow customers to select the services that best meet their needs.
Finally, on June 2, 2017, we rolled out standalone broadband service over Fiber, which we called Simplifiber, obviously a riff on the Simplify slogan that is so culturally popular in Utah particularly.
The new Simplifiber packages offered significantly more value to customers, with twice, and in many cases, three or four times the Internet bandwidth, for the same or less monthly cost.
Direct Communications is very much a pioneer in this new standalone broadband venture in the rural telecommunications industry, and is taking on significant risk in signing up for this reform program. As far as we know, we are the first telecom in Utah to wholeheartedly jump in and agree to move our financial support mechanisms to standalone broadband. We feel confident though, that our customers will support this change and migrate to standalone broadband service, especially because it makes financial sense to the customer. Even in today’s divided society, everyone can agree that more speed for less money is a good thing. It’s Simplifiber.
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