S.C. PSC Poised to Say if Wireline, Wireless Direct Rivals
The South Carolina Public Service Commission is poised to decide whether wireless and wireline are in direct competition with each other. The PSC decision also will determine whether wireless companies will be required to pay into the state USF per the state’s 1996 Telecom Act, which is similar to the 1996 federal act of that name.
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Wireless companies already pay into the federal USF. The PSC heard arguments Tuesday and Wednesday on the petition filed by the South Carolina Telephone Coalition in August in docket 2015-290-C. The coalition is made up of 21 rural LECs in South Carolina. There is no timeline for a decision, but proposed orders are due Dec. 18, said a spokeswoman for the PSC.
While many question the idea of applying a new “tax” to wireless companies, which could then trickle down to customers, Dukes Scott, South Carolina Office of Regulatory Staff executive director, said in an interview the commission is deciding only one matter: whether wireless competes with wireline. “If the commission does decide that wireless is competitive to wireline, then the law already says that once that happens the commission shall require the companies pay into the USF,” Scott said. “We’ve got about half the number of landline phones that we had just 10 years ago and we’ve got about four times the amount of cellphones.”
To South Carolina Telephone Coalition members, there is no way to argue that wireless doesn't compete with wireline, said Keith Oliver, Home Telecom senior vice president-corporate operations, in an interview. As wireless grows, consumers are moving away from wireline services, which proponents of the coalition’s petition say shows competition exists between the two, Oliver said. “There are either three or four times as many wireless accounts as there are landline accounts,” he said. “The wireless customers are not helping at all to pay into [USF], whereas the landline customer is, so we haven’t seen equity. And we just felt like it was time for the commission to make this declaration so we can put everybody on the same page.”
It’s obvious wireless and wireline are in competition with one another, said Roger Entner, Recon Analytics analyst, in an interview. On USF contributions, Entner said that if state consumers are using the fund to buy wireless services, then wireless should be paying into it, and the same for broadband.
On the argument that wireless providers shouldn’t pay into the state USF, Oliver said the cost would be only about 38 cents per line per month. The total fund wouldn't increase, it would just be “fairly” distributed to all voice users rather than to just the state’s wireline users, Oliver said. “This fee is not one that has to be passed on to the user,” he said. “Based on Verizon’s financial filings, they’re making almost a 34 percent net margin on customers today. So while they have done their best to rile customers up and say ‘this is a new tax,’ it’s literally going to be less than one percent. And they could easily take that fee and consider it a cost of doing business.” CTIA, T-Mobile and Verizon didn't comment.