MTA to ‘wait and see’ on annual dividend payout

PALMER — Some folks may have noticed the absence of a dividend payment this year from Matanuska Telephone Association.

“At this time the board has decided to wait and see,” said MTA director of marketing and sales Carolyn Hanson of this year’s capital credits payout. She said board members voted to set aside the money, but have not voted to approve dividend payments to members, as has been the practice in the past.

While the MTA board has historically paid dividends, she said the co-op has no obligation to issue checks.

“It’s been the practice, but it’s not required,” Hanson said.

The local co-op, which celebrates 60 years in business this year, is taking a wait-and-see posture while the process to reform the Federal Communications Commission’s Universal Service Fund moves forward.

“FCC reform is impacting revenue streams,” Hanson said.

The Universal Service Fund was created in 1997 as a means to reach the Congressional universal service goals as mandated by the Telecommunications Act of 1996.

But changes were approved Oct. 27, 2011, for a six-year transfer process that will transition money from the Universal Service Fund High-Cost Program to a new $4.5 billion a year Connect America Fund for broadband Internet expansion, effectively putting an end to the USF High-Cost Fund by 2018.

As a small, rural carrier, Hanson said MTA already is planning and preparing for reduction in funding support.

But while this process moves forward, she said MTA is working closely with Alaska’s congressional delegation to make sure federal rule-makers understand how the change will impact the bottom line for small, rural carriers.

“It will impact all rural areas,” Hanson said.

MTA’s coverage area spans 10,000 square miles, and in that area are sprinkled 90,000 residents, some of whom subscribe to the local co-op’s services.

Hanson said it is costly for the co-op to build out the network to keep pace with population growth and changes in technology. She said the co-op has relied on federal subsidies to provide service.

The new Connect America Fund passed in 2011 phases out wireless subsidies during the next five years, she said.

Hanson did not say when the MTA board might make a final decision regarding whether it would disperse capital credit payments this year.

“We are continually assessing the health of the business,” she said. “MTA is a strong company, but the industry is rapidly changing.”

Sen. Mark Begich has worked for a couple of years to communicate with FCC staff such as Chairman Julius Genachowski and director Mignon Clyburn about Alaska’s unique delivery challenges. Including bringing them here to see for themselves.

In November 2012, Begich was one of 30 senators who signed a bipartisan letter to the FCC reminding them “to respect the needs of rural Americans and the role private investment plays in rural broadband during reform of the Universal Service Fund.”

Contact managing editor Heather A. Resz at 352-2268 or heather.resz@frontiersman.com.