Neb. PSC Applies Per-Line USF Fee to Enterprise Lines
Nebraska's Public Service Commission voted 4-1 to expand the state USF’s connections-based method for residential services to now include business and government lines. At another Tuesday meeting, the Oklahoma Corporation Commission delayed shifting to a per-line monthly surcharge from a revenue-based mechanism.
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The Nebraska USF (NUSF) decision changes the policy from the August 2018 decision to adopt a hybrid contribution method under which residential services paid per connection, while business and government services paid a percentage of revenue. The same fee will apply to all three services starting Jan. 1, said the order in docket NUSF-119. The commission will set the amount through its annual NUSF-4 proceeding, which has a hearing May 18, said PSC NUSF Director Cullen Robbins.
Commissioner Tim Schram (R) was the lone dissenter. The commission should have capped assessable connections for multiline business and government entities, he said. Schram supports “fairness in applying the charges” but is uncomfortable potentially raising costs amid the pandemic, he told the videoconferenced meeting. Commissioner Dan Watermeier (R) said a fully connections-based approach is simple and easy to understand.
Applying the connections-based method to business lines will “stabilize remittances” and “promote a more equitable contribution mechanism,” said the order. “If not remedied, the instability relative to business user contributions will place more pressure on residential subscribers to maintain the overall stability.” COVID-19 isn’t a good reason to wait, it said. “The pandemic has highlighted the importance of having sufficient broadband capabilities” and its effects “are no less significant for residential users than they are for business users.”
Nebraska law requires the commission to retain a revenue-based framework for prepaid wireless, the order said. Some other services don’t “lend themselves” to a per-line fee, including fixed local private line and switched toll and toll private lines, it said.
OCC Chairman Todd Hiett tabled the USF proposal rather than vote after the other two commissioners at the livestreamed meeting voiced discomfort. The Republican said he would vote yes because the commission has talked for six years about the fund’s unsustainability. Barring any commission action, Oklahoma USF Administrator Brandy Wreath will soon file a motion to increase the 6.28% revenue-based surcharge to more than 10%, Wreath told commissioners.
The record contains “a lot of testimony” but not enough “substantive evidence” to support a change to connections, said Commissioner Dana Murphy (R). Murphy isn’t saying a hybrid mechanism is best or connections-only is worst, she said. “I think it goes beyond funding, and we’re just focused on one part ... It’s not just about the definition of connections. It’s about the impact to the customers.”
Commissioner Bob Anthony (R) suggested parties could get more time to debate how to define connections and whether the commission should consider a hybrid mechanism. Wreath responded that the agency is using the “publicly known” FCC definition of connection, and parties opposed a hybrid approach because it would be an “accounting nightmare” that would double administrative costs.
The OCC has vacillated (see 2104060029). Commissioners voted 2-1 March 9 to shift to connections-based contribution. March 30, they voted 2-1 to vacate the order in docket OSF 201900316 after objections from AT&T and Cox Communications. They didn’t comment now.
Other states are weighing changes. The California Public Utilities Commission plans a May 20 virtual prehearing conference in its USF contribution revamp proceeding, Chief Administrative Law Judge Anne Simon said Friday. It starts at 2 p.m. PDT. VoIP and wireless providers warned against a line-based method (see 2104230063).
The Arizona Corporation Commission should consider how to retool state USF to support broadband, Chairwoman Lea Marquez Peterson (R) told an April 14 meeting. “I'm not interested in seeking increase in the overall fund or surcharge amount” but “reallocating the money we're already collecting in a more impactful way,” she said. “We have an underutilized, really obsolete tool out there that I think we need to restructure.” Peterson said her team would analyze legal jurisdictional issues before bringing up for vote at a commission meeting a proposal seeking comment. Peterson’s office didn’t comment now.