Joint Board, FCC Inaction on USF Contribution Could Delay State Reform
The uncertain timing of a federal USF contribution overhaul stirred debate over whether states should proceed with changes to their own funds. In replies Friday at the Nebraska Public Service Commission, some telecom companies urged the PSC to wait to revamp its surcharge methodology until the FCC Federal State Joint Board on Universal Service and the FCC act on federal contribution reform. It’s unclear when the Joint Board will issue a recommendation; the FCC USF contribution reform proceeding has been open for more than a decade.
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“It is unlikely the Joint Board will get out a recommendation before November, but that could change,” said NARUC General Counsel Brad Ramsay Tuesday. FCC Commissioner Jessica Rosenworcel, the federal chairwoman of the Joint Board, earlier had indicated not to expect action until after the U.S. Court of Appeals for the D.C. Circuit ruled on the FCC net neutrality order (see 1511130032). The D.C. Circuit ruled last month (see 1606140023). “Commissioner Rosenworcel is beginning discussions with state members of the joint board to find a sustainable path forward and is assessing all options, essentially,” an informed source said Tuesday. “No conclusions have been reached.”
With state USF revenue on a sharp decline, the Nebraska PSC is seeking to revamp its contribution method as the first step in broader state USF reform. The Nebraska USF got $10.4 million in contribution remittances in the three-month period ending March, down from $12.4 million in the same quarter two years earlier, said a commission report. The commission proposed moving to a connections-based surcharge from the current revenue-based model. Other states are also seeing revenue fall, for a variety of reasons (see 1607010010). In replies in Nebraska PSC Docket NUSF-100, Windstream, CTIA, Cox and Charter said it would be foolish for the state commission to act before the Joint Board and the FCC.
“Only by waiting for the FCC to act can the Commission ensure circumvention of significant, avoidable costs from multiple resource-intensive implementation processes,” CTIA said. “Misalignment with the federal program would also require a revision of the NUSF itself, as state programs cannot be inconsistent with or burden federal universal service support mechanisms.” While it waits, the commission could open a new docket to develop a strategic plan for state USF reform, the wireless association said. Acting on contribution at the same time as the FCC considers a national revamp “is likely to be uneconomical of both the [PSC's] and industry's resources and bears a substantial risk of further confusing efforts to reform the contribution methodology,” Cox and Charter said jointly.
CenturyLink and rural independent telcos said Nebraska can’t afford to wait for the Joint Board and FCC: “While CenturyLink understands there are risks associated with proceeding with contributions methodology reform while the FCC is also considering changes to its contribution methodology, it is also important to note that the FCC has been investigating contributions methodology reform for more than a decade and does not appear to be close to issuing an order." Without near-term action by the state commission, the viability of NUSF programs "will continue to be at risk,” the rural telcos said.
The Utah Public Service Commission, which is considering contribution reform amid projections that its fund could run out early next year, tentatively decided last week to increase its revenue-based surcharge as an interim step while the state legislature considers broader changes (see 1607150017). But in Nebraska, CenturyLink urged the state commission to revamp contribution “in one step,” agreeing with earlier comments by CTIA and Frontier that interim steps could complicate matters and increase costs for telecom companies and customers.