Idaho PUC Sees ‘Steady Decline’ in State USF, as More Commissions Weigh Changes
Idaho USF probably isn't sustainable and may require a legislative fix, Public Utilities Commission staff said at a teleconferenced Wednesday workshop. The PUC is assessing state USF viability, as several other states also are expected to revamp state funds this year. State changes are appropriate, but federal action is needed, Joint Board on Universal Service State Chair Chris Nelson told us.
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Idaho has seen a “steady decline” in state USF that’s “not going to change drastically,” said IUSF Administrator Alyson Anderson. Over a five-year average, Idaho residential and business lines each declined 10 percent, and billed minutes declined 12 percent, she said. IUSF opened 2018 with a $22,489 cash balance. The PUC last year asked for a large increase to the surcharge -- now 25 cents per residential line and 44 cents per business lines -- and might have to increase the fee again this year, Anderson said: “I don’t see how it’s going to sustain itself.”
The legislature likely must amend or replace the state’s 1988 USF statute, which is “antiquated to say the very least,” said PUC telecom analyst Carolee Hall. "It's time for a new dawn. … I just don't think we can sustain this program much longer.” The agency wants position papers by Jan. 31 and plans a second workshop Feb. 28, she said.
“The statute is fairly rigid," limiting the state commission’s ability to make major USF changes, said PUC President Paul Kjellander in an interview. Kjellander, who didn’t attend the workshop, agreed the legislature should update the statute that’s currently tied to a “declining business model.” The legislature is unlikely to revamp state USF this session, which goes until late March, but “something may come out of this and we just need to be in a position to be honest brokers when that time comes to let the legislature know what the options are and what some of the pluses and minuses are,” Kjellander said.
Facing a similar state USF revenue decline, the Utah Public Service Commission switched Jan. 1 to connections-based USF contribution. CTIA sued the Nebraska Public Service Commission in Nebraska Court of Appeals over the commission’s decision to move to connection-based USF contribution at an unspecified date, with CTIA’s brief due to the court Feb. 20. The PSC opened a fresh rulemaking to weigh rate design options, with comments due Jan. 30. The Regulatory Commission of Alaska is seeking comment on sunsetting the state's USF (see 1801160014). The New Mexico Public Regulation Commission also is mulling a USF contribution revamp (see 1711020044).
“States are realizing that for their universal service funds to remain viable, relevant, and meeting the needs of today’s consumer, changes may need to be made,” emailed Nelson, also a South Dakota PUC member. “Several states have most appropriately stepped forward to make those changes.” State members of the USF Joint Board “believe those same kinds of evaluations and changes need to be made regarding the contribution methodology for the federal fund,” said Nelson, the board’s state chair. “Most importantly if changes are made in contributions to the federal fund, those changes must not burden the ability of states to manage their funds as each state sees fit.”
Congress should update the Telecom Act to bring certainty to USF, Kjellander said. “Then we’ll know what the actual policy is rather than pingpong public policy established by one FCC and then altered by another.”
Expect changes to state USF funds this year, predicted National Regulatory Research Institute Telecommunications Principal Sherry Lichtenberg. “More states will move to a connections-based system so that they can address both stand-alone broadband and make up for the reduction in revenue based on the move to bundled service and VoIP,” she said. “I would expect a move to include VoIP providers, including cable, in state USF assessments, as well as stand-alone broadband providers.”
The Idaho PUC should collect money from VoIP and wireless providers, a technologically neutral approach that would provide more money to the fund, said CenturyLink Idaho Director-Regulatory Affairs Jim Farr at Wednesday’s workshop. If the commission collects money from wireless carriers, it also should distribute money to wireless carriers, replied CTIA Director-State Regulatory Benjamin Aron.
It’s too soon to assess Utah’s switch to connections-based contribution, PSC Telecom Manager Bill Duncan emailed us Wednesday. “We'll see as contributions start coming in for January. I suspect there will be continual education of providers for the first couple of months.”