CHARLESTON, W.Va. -- Frontier Communications stands to lose $1.5 million a year in federal subsidies -- money the company uses to expand high-speed Internet in West Virginia -- unless the Federal Communications Commission waives new rules that take effect July 1.
The FCC is soliciting comments about Frontier's waiver request through Feb. 11, the agency announced earlier this week.
Frontier contends FCC's new rules would unfairly penalize the company because it has a variable rate structure in West Virginia.
"[The waiver] will prevent Frontier from losing money that is used for broadband expansion," said Dan Page, a company spokesman.
For years, rural telecommunications providers such as Frontier have received federal subsidies to provide telephone service in high-cost rural areas.
The money comes from the federal "Universal Service Fund," which makes phone service available and affordable in the nation's most rural communities.
The federal fund is financed by extra charges for long-distance calls tacked onto phone customers' bills. The Universal Service Fund pays out about $4.3 billion to telecommunications companies each year.
The new FCC rules are designed to ensure customers of Frontier and other companies are paying a minimum contribution to the telecommunications network that serves them.
Companies that charge local rates below the FCC's minimum rate stand to lose universal service funding.
West Virginia has a rate structure that's different than other states. Phone companies here offer customers four separate calling plans.
The cheapest plan -- at $7 a month -- charges extra for each phone call. The most expensive plan offers a flat rate of $29 a month, and there's no additional charge regardless of where you call or how long you talk.