Frontier, Lumen Seek to Save Ariz. USF
The Arizona Corporation Commission should cancel state USF, cable and wireless companies said in comments Friday on a March 4 notice of inquiry on possibly sweeping changes. The ACC had asked about expanding Arizona USF support to broadband -- or eliminating the fund altogether (see 2203070031). Wireline companies disagreed with ending AUSF, with Lumen favoring making it a broadband fund.
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“AUSF is outdated, unnecessary and should be eliminated,” said Cox: Only one carrier gets support and the telecom landscape has changed. Landline demand “has significantly declined and many other communications options are now available,” the company said. “Hundreds of millions of dollars of federal funding is being made available to support deployment of broadband infrastructure, particularly in rural, higher-cost service areas.”
Much federal high-cost funding will be available for remaining unserved or underserved areas, “making the AUSF obsolete,” commented CTIA. The commission should “eliminate the AUSF program, which places an unnecessary financial burden on consumers and distorts the competitive telecommunications landscape in Arizona.”
Wireline telcos sought to save state USF. As the fund’s only recipient, Frontier Communications understands why elimination would be considered, it said: But there is a public policy benefit to keeping the fund, and coming federal dollars won't necessarily support voice.
Frontier would lose $760,000 annually “at a time it continues to lose its subscriber base to migration to other voice service providers,” it said: It needs “pricing flexibility to both compete for customers in competitive areas and price services at market rates.” Frontier said it asked in a separate proceeding for the ACC to give it more rate flexibility as part of an order to phase out AUSF support. Alternatively, the ACC could revise AUSF “to target grant funding, on a case by case basis, for voice service providers to reach the most remote service locations and to support middle-mile infrastructure projects to improve network reliability in remote communities across the state,” it said.
The ACC legally can kill state USF, but “there may still be a need for support in the highest cost, rural areas … where it is economic for a provider to serve customers,” said Lumen, filing under the name CenturyLink. Eliminating the surcharge on customer bills would kill the fund, it said.
Lumen supported transitioning the fund to broadband. “While a very small fraction of consumers still subscribe to landline voice service, reliable, high-speed internet access is essential in today’s society.” If AUSF is used for broadband, avoid overbuilding areas receiving public funds, the carrier said. Lumen cautioned against expanding eligibility to non-telcos, including nonprofits, electric cooperatives, state agencies and local and tribal governments, saying funds should go only to those with a “successful track record in broadband deployment.”
Frontier disagreed with transitioning the fund. “The need for diversion of state USF support from voice to broadband is waning as billions of dollars of state and federal funding is being targeted directly to broadband deployment in under-served and unserved areas,” it commented. The ACC could expand the fund to all types of voice providers -- both for distribution and contribution -- but any “attempt to expand to internet or broadband service providers would face serious and almost certain legal challenges.”
CTIA opposed expanding or repurposing the state fund. Cox said federal law restricts state authority over wireless and broadband. The Regulatory Commission of Alaska also is considering a possible state USF sunset (see 2203180066).