October 24, 2017

FCC Grants Westelcom Request For Limited Waiver To Promote Advanced Broadband Deployment In Adirondack North Country

For Immediate Release

Watertown, NY – 4/24/17

The Federal Communications Commission (FCC) announced today that a limited waiver of FCC regulations sought by Westelcom, which provides fiber-based connections and advanced telecommunications service capability in the Adirondack North Country region, has been approved.  The waiver will enhance Westelcom’s ability to invest in broadband deployment and to advance its network capabilities in the rural Adirondack North Country.

Westelcom filed a petition with the FCC in February 2015 seeking the waiver after its status as a “rural” competitive local exchange carrier (CLEC) was changed to “non-rural” when the U.S. Census Bureau designated Watertown as an “urbanized area” in the 2010 Census.   The change in designation as a “rural” CLEC to a “non-rural” CLEC reduced immediately by 96 percent the fees, also known as interstate switched access revenue, that long distance carriers and other telecommunications service providers must pay to local telephone companies, like Westelcom, to originate and terminate interstate calls on the Westelcom network.

In granting the waiver, the FCC concluded that under the circumstances presented by Westelcom a 96 percent cut would not be in the public interest.  The waiver will allow Westelcom to phase in this reduction instead of being subject to the immediate 96 percent cut.

“We are very pleased by the action taken today by the FCC approving our request for a limited waiver and recognizing the unique circumstances that justified the waiver,” Paul Barton, President and General Manager of Westelcom, said.  “The waiver will allow Westelcom to generate the revenue needed to continue investing in the deployment of its fiber-based network serving the 6-county Adirondack North Country region of New York.”

In August 2011, the U.S. Census Bureau altered the standards for determining an “urbanized area.”  As a consequence, Watertown was reclassified as an “urbanized area” for census purposes.  Although Watertown’s population was only 27,023 in 2010, according to the Census Bureau, the new standards established by the Census Bureau resulted in a paper growth of Watertown’s population to 57,840.  This was achieved by extending Watertown’s boundaries into other surrounding communities – some more than 10 miles from Watertown – which included adding the 12,000-person-plus Fort Drum military reservation within Watertown’s boundaries.

The inclusion of Fort Drum and the subsequent reclassification of Watertown resulted in Westelcom no longer being considered a “rural” CLEC under the definition outlined in the FCC’s regulations.  However, as the FCC order states, U.S. Army policy results in Westelcom being “in the unusual position of being unable to make a credible attempt to win substantial business from the large enterprise (Fort Drum) whose inclusion in the defined urban area resulted in the area’s reclassification as urbanized.”

The FCC also noted in its Order granting the limited waiver that Westelcom would still have qualified as a rural CLEC if the Fort Drum population was not included in its service area.

“Without the inclusion of Fort Drum in the Watertown area,” the FCC said, “the urban area would not have sufficient population to be an urbanized area, thereby allowing Westelcom to remain eligible for the rural CLEC exemption.  U.S. Army regulations prevent Westelcom from availing itself fully of the significant market opportunity that Fort Drum would otherwise seem to provide.  Thus, from Westelcom’s perspective (that is, one that excludes Fort Drum), the Watertown urban area does not have sufficient population to qualify as an urbanized area.”

Recently, the U.S. Census Bureau reported that Jefferson County, whose seat is Watertown, experienced the second most dramatic population decrease in the U.S. last year.

Westelcom began operations in 1981 as a rural CLEC and has invested in excess of $5 million to deploy a fiber-based network that provides advanced telecommunications services in a 6-county region in the Adirondack North Country area of New York, which includes Watertown, Malone, Clayton, Elizabethtown, Ticonderoga, and Plattsburgh. Westelcom’s operations provide fiber-based connections and advanced service capability to multiple rural health care providers in the Adirondack North Country region and other business customers that otherwise would not have access to state-of-the-art services crucial to meeting consumers’ needs in the 6-county rural region.

Westelcom’s investments in advanced broadband have proven to be particularly important for critical community facilities and the health care industry in the Adirondack North Country.  Westelcom has become one of the primary providers of communications services to smaller health care facilities in the Adirondack North Country by interconnecting a significant number of hospitals, clinics, and practices.  This includes providing the Internet backbone for the Fort Drum Regional Health Planning Organization, whose purpose is to ensure that health care services provided through military and civilian facilities meet the needs of Fort Drum soldiers, their families, and the surrounding civilian community.

“Our customers in the 6-county Adirondack North Country will be the true beneficiaries of this decision to grant the waiver,” Barton added.  “The need for the waiver has been well-documented by Westelcom over the two year period that it has been reviewed by the FCC.”

Barton also expressed his appreciation for the efforts of U.S. Senators Charles Schumer and Kirsten Gillibrand and U.S. Representative Elise Stefanik and their staffs for their support for the waiver, as reflected in the extensive record of the proceeding before the FCC.

“Senators Schumer and Gillibrand have been instrumental in helping to ensure a full understanding and appreciation of the merits of Westelcom’s petition,” he said.  “We are grateful for their tireless and persistent efforts and leadership on behalf of their constituents.  They have demonstrated yet again their strong commitment to the interest of New York’s rural consumers by working to ensure advanced broadband services, especially for the delivery of healthcare, in the Adirondack North Country region.   Their efforts on behalf of Westelcom and our customers will help to ensure enhanced and expanded services for the benefit of the region.

“We also want to express our appreciation to Representative Stefanik and her staff, including the staff in her district offices, for their support and assistance.

“Most importantly, their efforts show how – joining together in a bipartisan effort – our lawmakers work to advance the interests of the Adirondack North Country.”

The FCC waiver process exists precisely to address the type of unique problem that confronted Westelcom and the 6-county rural Adirondack North Country region stemming from the 2010 Census Bureau designation of Watertown.  As a result of the waiver, Westelcom will be better positioned to continue its investment in advanced broadband in the rural Adirondack North Country by facilitating introduction of next generation services and the development of broadband health care networks.

“Granting the waiver will enhance broadband deployment in the 6-county rural hard-to-serve Adirondack North Country region,” Barton said, “and continue to meet the advanced needs of consumers in the area, particularly critical care facilities in the region and other health care service providers consistent with the policy long established by the FCC.”