States 'Hammer Out' Possible Broad USF Changes
Oklahoma could soon join a small and growing list of states adopting USF connections-based contributions. In Oregon, parties are discussing other rule changes, and in Texas, small rural LECs are taking the Public Utility Commission to court for not fully funding USF. Other states mulling changes include California and Kentucky.
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The Oklahoma Corporation Commission might pull the trigger on a connections method later this month, despite delays earlier this year (see 2106150051). Commissioners plan to weigh USF at the July 29 meeting at 9:30 a.m. CST, a spokesperson said Tuesday. At July 7’s meeting, Chairman Dana Murphy said she would soon propose an interim order with an implementation date around Nov. 1 and a plan to review how things are working in 180 days. Commissioners might also, or instead, vote on an order to double the current revenue-based rate to 12.73% from 6.27% (see 2106150051), she said. States with a connections-based method include Maine, Montana, Nebraska, New Mexico and Utah.
“We've been kicking the can down the road for a long time,” Murphy told the webcast meeting. The chairman said she has never been opposed to connections but has long thought problems were broader than funding. Murphy sought more clarity on details, including whether the fee would still be $1.03 per connection as earlier proposed.
“We have an emergency,” said Commissioner Bob Anthony. “We have an $11 million deficit, and we're withholding full payment from lots of companies, probably many of whom who need it badly.” Criticizing the fund as a “black box,” Anthony sought more transparency about where money goes. Oklahoma USF Administrator Brandy Wreath countered that information about who gets money and how much is posted online. Anthony replied there isn’t enough public detail about the entities getting money, including how many customers they have: “That is what I think is a problem, and we're not talking about a trivial amount of money.”
The Oregon PUC canceled a Monday deadline for comments in its USF update docket (UM-2040). “The deadline was removed as stakeholders got together to make a proposal to resolve the investigation, which is slated to be discussed” at an Aug. 4 workshop, said a PUC spokesperson Monday. The state adopted temporary rule changes last year and is weighing permanent changes. The PUC said last year it didn’t plan to change the contribution method due to state law (see 2008110047).
Oregon telecom and cable associations “are trying to hammer out” a five-year agreement, said Oregon Telecommunications Association Executive Vice President Brant Wolf Tuesday. “At this point, the only thing we have agreed to is to continue working towards a settlement.” The proceeding has other parties, but OTA and the Oregon Cable Telecommunications Association (OCTA) believe if they “can reach a common understanding about a few issues then we will be able to wrap the proceeding up ... quicker,” Wolf emailed. The commission would have to OK any deal. OCTA didn't comment.
In Texas, small telcos are appealing an order by the Travis County District Court in Austin to dismiss their lawsuit challenging the PUC’s decision not to raise the surcharge on consumer bills to fully fund USF (see 2106210048). The Texas Telephone Association (TTA) and Texas Statewide Telephone Cooperative notified the lower court June 24 they're appealing at the 3rd Texas District Court of Appeals in Austin.
“Our member companies are striving to meet their service and provider of last resort requirements, even while being shortchanged by the state,” emailed TTA Executive Director Mark Seale. “We hope for a speedy appeal and reinstated financial support.”
Once the lower court’s record is filed with the appeals court, plaintiffs will have 30 days to file an initial brief, said Richards Elder attorney Daniel Gibson for TSTCI. The PUC continues not to act on USF even with all-new commissioners, he said. TSTCI is working with legislators who sponsored this year’s vetoed USF legislation “to raise awareness and bring more political pressure regarding this issue from a local and consumer level,” he said. The PUC doesn’t comment on litigation, a spokesperson said.
The California PUC sought comment by July 28 on a possible move to connections-based contribution in docket R.21-03-002. Administrative Law Judge Hazlyn Fortune sought comment July 2 on questions including about “wide-ranging inconsistencies between how much subscribers pay for service and how much they pay in surcharges.”
The Kentucky Public Service Commission plans to launch a formal review of the state USF’s solvency by Feb. 1 next year, said an April order that reduced payments to Lifeline carriers providing unlimited voice service to $6 from $8 monthly per customer. The PSC took that action to stabilize the fund after January doubling the revenue-based surcharge to 15 cents, the highest it has been in two decades.