Okla. Official Says Per-Line USF Fee 'Working as Hoped'

Oklahoma commissioners will review the November change from a revenue-based contribution mechanism at a Jan. 11 meeting, Wreath said Tuesday. The OUSF administrator hopes to recommend some tweaks for commissioners to consider at the meeting. “From what we've seen already, it's working as hoped,” he said: Carriers have made the switch and more monthly revenue is expected. The administrator is surprised the commission hasn’t received complaints about fees on bills rising, said Wreath. Some customers called in with concerns after seeing news reports but were relieved to learn their fees would drop, he said. An OUSF financial report Tuesday showed a $17.9 million deficit on Sept. 30, before the OCC implemented the contribution method change.

Stakeholders continue talks toward a proposed legislative fix, but disagreements continue, said Wreath. The administrator filed a progress report Nov. 3. Shifting to connections reduced the need to move fast, said Wreath, so it may be best to open a notice of inquiry to work out what changes can be handled through commission rules without the legislature. With all parties now paying their fair share under the new method, they have more equal desire to reach agreement, he said.

Rural carriers “have heard nothing to suggest that there were any problems with the transition,” emailed Bill Bullard, attorney for Consolidated Communications and three other rural LECs that supported the change. Commissioners haven’t decided whether to seek legislation in 2022, but, based on the administrator’s Nov. 3 report, it seems likely they will opt for an NOI and rulemaking this spring and aim for legislation in 2023, Bullard said.

The Consolidated group supported an OUSF rulemaking in Nov. 18 comments on the administrator’s Nov. 3 report. The OCC itself can tackle many possible enhancements, they said. "Once the connection-based process has been in place long enough to develop real and sufficient data, the Commission will be free to consider any beneficial changes in a rulemaking.”

Proposed OUSF legislation is premature, and it’s too soon to revise the new contribution method, agreed Windstream: The telco "believes there are numerous issues and potential improvements in the OUSF and related processes" best addressed in a commission NOI or rulemaking. Another group of small rural LECs agreed more time should be taken and "will work with stakeholders to further address these issues.” The contribution method change was “fundamentally fair, equitable and non-discriminatory,” they said.

The administrator's recommendations "fall short of compliance with the Commission's tasking" because they don't eliminate the law's make-whole rule and fail to effectively cap the fund, commented CTIA in OSF docket 201900316. Suggested statutory changes "would result in a potentially unbounded expansion of OUSF funding, as well as significant jurisdictional expansion for the Commission." CTIA suggested capping the fund at $64 million and the monthly surcharge at $1.14 per connection through June 30, 2023, then permanently capping the fund at $50 million and the surcharge at $1, it said. CTIA disagreed with another proposal to require federal Lifeline providers to participate in state Lifeline.

"I think it was a little misrepresented that we didn't do what we were asked,” Wreath responded: The administrator was asked to meet with parties and the report lists everyone’s opinions. Don’t cap the fund until the legislature can decide an overall OUSF policy, said Wreath, saying the fund can be thoroughly audited without a cap.

CTIA and AT&T declined to comment on Oklahoma’s transition to connections-based contribution. Verizon and T-Mobile didn’t comment.

California

CPUC staff recommended switching to a per-access line surcharge for public purpose programs (PPPs) including USF earlier this fall (see 2110290062).

Staff's recommendation “ignores the real impacts of such a charge on a significant segment of communications consumers, wireless customers,” Verizon commented Wednesday. “Staff also fails again to understand the difficulties that prepaid wireless providers have in collecting surcharges from third party indirect sales of prepaid services.” A per-line method inequitably shifts burden to low-income people who are more likely to rely on cellphones, said CTIA: Wireless service surcharges would have a “four-fold increase.”

Staff didn’t account for big new federal funding, said AT&T. “The continued assessment of voice services to pay for broadband expansion no longer makes sense.”

VoIP providers are concerned a flat rate isn’t “technologically neutral and would continue to unfairly burden VoIP business customers, which … are already contributing to the PPP funds on an inequitable basis,” said the Voice on the Net Coalition: Maintaining a revenue-based method would keep CPUC rules aligned with the federal USF contribution method.

For the contribution change to work, the CPUC must define access line in a way “that is clear, equitable, technology-neutral and can be readily implemented, especially as it applies to multi-line business services,” said the California Cable and Telecommunications Association: Staff’s proposed definition is “confusing and imprecise.” CCTA agreed with staff that the commission can’t assess broadband. CalTel and other small RLECs suggested using the National Exchange Carrier Association’s access-line definition.

Frontier Communications “generally supports” a flat rate, but the CPUC should use the 911 surcharge definition of access line, the wireline carrier said. Staff’s proposed definition could include direct inward dialing lines, which “would result in drastic increases to the surcharge amounts paid by Frontier’s business and institutional customers, including schools, hospitals, and fire stations.” Frontier supported excluding broadband from the contribution base.

The proposal "fails to address California's needs" because it wouldn't add broadband to the contribution base, said two consumer groups. Staff’s recommendation “not only retains the voice-only contribution base, but also proposes to dramatically increase surcharge rates for residential voice customers by excluding business lines from the contribution base and counting access lines based on telephone numbers,” said The Utility Reform Network and Center for Accessible Technology. “The result would be an inequitable and highly regressive surcharge mechanism.”

The Greenlining Institute “calls for exempting people who are incarcerated and those who are Lifeline eligible because these are vulnerable populations for which the CPUC should target programs,” it said. Securus said it can't determine or assess surcharges using a per-access line method. The commission should either allow the prison telco to continue paying based on revenue, provide an alternative, or exempt the company from assessing and paying charges, it said.

The CPUC’s Public Advocates Office recommended different flat fees for large businesses, small businesses and residential customers, based on ability to pay. Incarcerated people and prepaid California LifeLine enrollees shouldn’t pay, said PAO.