Phone (News - Alert) service in rural areas is a critical provision, but should all consumers be expected to foot the bill? At the same time, rural customers are increasingly complaining about the service received. This issue is gaining traction in 37 states, prompting the Federal Communications Commission (FCC (News - Alert)) to look into the problem.

According to this news report, some rural areas have seen a 2,000 percent increase in the number of complaints regarding phone service. Issues brought up include poor quality, inaccurate caller ID information, dropped calls, and delayed calls. For service providers serving these areas, least cost routing could be a contributing factor.

The problems are severe enough that hospitals aren’t able to connect with patients, and residents’ calls to police aren’t getting through. At the same time, some businesses are filing suit against their carriers because they say they are losing thousands of dollars in business due to the malfunctioning broadband system.

Part of the issue is that no one long-distance carrier can directly connect to every phone number on the globe, creating a need for least cost routing. Intermediate carriers step in to help complete the connections. The process of getting a call from point A to point B can go through a number of different avenues, which can make it difficult to track down and resolve the issues creating customer complaints.

Many are looking to the FCC to help resolve the issue, and resolve it nationally. In fact, taking the first steps toward resolving the rise in routing and termination problems with calls to rural carriers, the FCC recently created a Rural Call Completion Task Force that will be made up of staff members from several of its bureaus. Some, however, are not happy with what the FCC has proposed.

The FCC’s plan on addressing the issue includes passing the cost of improvements on to customers, indirectly. Rural telecommunications providers worry that the FCC’s proposed solution to the issue will not help consumers, and will negate their efforts in relation to least cost routing.

The FCC has proposed reforming the Universal Service Fund, which is a surcharge on phone bills that helps to subsidize service in the rural areas of the U.S. The reformation includes merging the USF into the Connect America Fund. According to the FCC, the $4.5 billion the USF has used each year to get broadband services to all rural areas is not succeeding.

FCC chairman Julius Genachowski (News - Alert) said the reform plan would ensure that money is spent more efficiently and in the right places. However, the rural telecommunications companies say that without the USF funds, they will have to raise their rates to bring in the funding for broadband investment.

These companies are already informing their customers that if the FCC goes through with the reform, they could see an increase in their monthly phone bills due to limitations in least cost routing. Some of these small companies get about 70 percent of their general revenue through the USF, so the increases could be severe in some cases.

If the rural telecommunications providers can’t stay in business, it could affect the economy of rural America. Without broadband services, there can be no Internet access or debit card usage, eliminating economic opportunities and driving costs higher in other areas.