‘Proxy War’ Over Text Messaging Academic, NTCA Says
The record developed by the FCC makes clear that SMS is an information service and carriers should not have to pay into the Universal Service Fund based on SMS revenue, CTIA said in reply comments. The Wireline Bureau asked for comments on the topic, in response to an April 26 letter from the Universal Service Administrative Co. seeking guidance on the reporting of text messaging revenues for purposes of the USF.
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SMS is an information service since it includes “protocol conversion, computer processing, data storage, and information retrieval functionalities,” CTIA said. In contrast, SMS is not connected to the public switched telephone network (PSTN) so it is definitely not CMRS, the association said. “No sound policy reasons support imposing USF contribution requirements on SMS,” it said. “Treating SMS as an unregulated information service has resulted in tremendous public policy benefits and there is no basis in this record for reversing course.”
Disagreeing sharply with CTIA was Public Knowledge, filing with the Media Access Project, National Hispanic Media Coalition and New America Foundation’s Open Technology Initiative. “At a time of declining funding levels” for the USF, “it would be irresponsible for the Bureau to exclude text message revenues from contributions,” they said. “Such exclusion would immediately reduce current contributions and invite gamesmanship to reduce those contributions further in the future.” The Montana Telecommunications Association endorsed Public Knowledge’s stance, saying it and the co-filers “provide ample evidence that text messaging is subject to universal service contributions,” the association said. “From a practical standpoint, text messaging is used interchangeably with voice communications.”
NTCA said it also sided with Public Knowledge, but the question was academic. NTCA said that most commenters had been “consumed with using the USF contribution debate as a ‘proxy war’ in larger battles over regulatory classification.” The debate is “interesting” and “could help to solve the question presented,” but it is “not dispositive” and therefore “irrelevant,” NTCA said. Even if text messaging is only an information service, it can be assessed USF fees because it’s a service provided via the PSTN, NTCA said. Exempting texts “would place greater pressure on the fund” and “create artificial incentive for consumers to ’text’ one another in lieu of making voice calls,” the association said. Reacting to USTelecom’s call for a comprehensive USF proceeding rather than the piecemeal approach (CD June 8 p6), NTCA said the text message question is “limited” and therefore should be addressed here. “The Commission is not being asked to create new regulations; rather, USAC is merely seeking guidance from the Bureau on existing law and regulation as it applies to text messaging."
The Nebraska Public Service Commission said its contribution rules “must be anchored on a sustainable, predictable and competitively neutral foundation.” The Nebraska regulators concluded: “Piecemeal exclusions from the universal service funding base will erode this foundation, making it difficult for the Commission to accomplish the important goals envisioned by the National Broadband Plan.”