AT&T and cable providers raised doubts about Oregon Public Utility Commission authority to make interconnected VoIP providers pay into the state USF. The PUC at a teleconferenced workshop Wednesday took feedback on a preliminary proposal in docket AR-615 to require VoIP contribution. The agency is exploring the idea despite a recent 8th U.S. Circuit Court of Appeals ruling -- contested by states -- that VoIP is an information service (see 1809280057). A few other states are also weighing changes.
AT&T and cable providers raised doubts about Oregon Public Utility Commission authority to make interconnected VoIP providers pay into the state USF. The PUC at a teleconferenced workshop Wednesday took feedback on a preliminary proposal in docket AR-615 to require VoIP contribution. The agency is exploring the idea despite a recent 8th U.S. Circuit Court of Appeals ruling -- contested by states -- that VoIP is an information service (see 1809280057). A few other states are also weighing changes.
New Mexico is the third state to decide carriers should contribute by connection count to state USF rather than by percentage of revenue, following Utah and Nebraska. The Public Regulation Commission voted 4-0 at their livestreamed Wednesday meeting to switch to a $1.17-per-connection monthly surcharge Oct. 1, and 4-0 to open a docket to revise the amount for 2019. Commissioners rejected exceptions suggested by CTIA and others. As Oklahoma also weighs state USF changes, big carriers warned the state commission not to regulate broadband or re-regulate competitive services.
The New Mexico Public Regulation Commission aims to vote next week to change state USF contribution to a connections-based mechanism starting Oct. 1, Commissioner Patrick Lyons said at a livestreamed Wednesday hearing. Lyons plans to release a recommended decision by Thursday, to be considered by the full commission at its open meeting Wednesday. “We’re expediting this because we’re short on money for the" USF, Lyons said. State USF auditor GVNW Consulting's Blake Young recommended a $1.34 per connection charge for the remainder of 2018 and a $1.11 charge in 2019 to fully fund USF those years. The current revenue-based surcharge was about 6.1 percent in 2018, up from about 5 percent the year before. CTIA counsel Jeff Albright opposed changing from a revenue-based mechanism, saying it’s a “regressive tax” that shifts the cost burden to those who can less afford it. Making the change Oct. 1 may be too soon for some CTIA members, he said. New Mexico Exchange Carrier Group President Steve Metts supported the shift to connections as easier to administer and more sustainable than the revenue-based mechanism. He said his members likely can switch by Oct. 1. CenturyLink attorney Tim Goodwin supported changing to connections but said it would be better to implement the change Jan. 1 to avoid problems. Nebraska last week decided to move to a $1.75 per-connection fee in January for residential lines, but temporarily keeping the revenue-based system for business lines (see 1808080022). Utah in January became the first state to switch to connections from revenue (see 1807160062).
The Nebraska Court of Appeals dismissed CTIA’s lawsuit against the Nebraska Public Service Commission, as expected (see 1808080022). In an order forwarded to us this week, the court allowed an industry stipulation to resolve the state USF case. The association sued the Nebraska PSC over last year’s order to pursue a connections-based contribution mechanism but was expected to drop its appeal after the PSC revised certain definitions (see 1807250053).
Nebraska commissioners voted 4-1 for a hybrid state USF contribution mechanism with a $1.75 per connection surcharge for residential wireline, postpaid wireless and interconnected VoIP services and a 6.95 percent revenue-based surcharge for business and other services. CenturyLink and small rural carriers Wednesday applauded the Public Service Commission’s Tuesday rate design order in docket NUSF-111, which followed last year’s decision to move to a connections-based contribution mechanism. Cox and CTIA raised red flags. Other state commissions are working toward USF updates, including Alaska, New Mexico and Oklahoma.
The Nebraska Public Service Commission expects CTIA to drop its appeal of a PSC order shifting state USF to connections-based contributions, a PSC spokesman said after commissioners voted 5-0 Tuesday for an order revising definitions for the contested order in docket NUSF-100. Adopting definitions from a Friday stipulation by CTIA, Cox and other Nebraska carriers, the PSC redefined connections-based contribution mechanism as “a fixed or flat rate surcharge assessed on a per-connection basis,” connection as “any form of technology used to provide an end-user with access to an assessable service” and assessable service as “any service subject to a contribution obligation” to Nebraska USF. The industry stipulation said the appeal by CTIA and other parties at the Nebraska Court of Appeals would end after the PSC adopted the definitions. The commission, meanwhile, is weighing USF rate design in docket NUSF-111. CTIA earlier pulled a similar lawsuit against the Utah PSC after reaching agreement with that agency (See 1807030046). CTIA didn't comment.
U.S. District Court in Salt Lake City dismissed CTIA’s lawsuit against the Public Service Commission related to connections-based USF contribution policy. The court Tuesday granted a joint motion (in Pacer) by CTIA and the PSC after the parties told the court in May that they were trying to resolve their dispute (see 1805080019). “CTIA is pleased that the Commission’s rulemaking process reached a successful conclusion," a spokesperson emailed. A PSC spokesperson declined to comment. The wireless association earlier sued the Nebraska PSC in Nebraska Court of Appeals for agreeing to move to a connections method at an unspecified date (see 1804120046).
ITTA and members voiced their views to FCC Commissioner Brendan Carr and an aide, who spoke at a membership meeting that included executives of Blackfoot Communications, CenturyLink, Cincinnati Bell, Comporium Communications, Consolidated Communications, Consolidated Companies of Nebraska, Great Plains Communications, Hargray Communications, Ritter Communications and TDS Telecom. "Attendees expressed positions consistent with ITTA’s prior advocacy related to the universal service high-cost program budget for rate-of-return carriers; the need for reforms of the universal service contribution methodology; support for stay of the rural call completion rules adopted in April 2018; proposed Commission action related to 8YY originating access charges; and a proposed Commission rule to withhold federal [USF] disbursements to any USF recipient purchasing equipment or services from any communications equipment or service providers identified as posing a national security risk to communications networks or the communications supply chain," said a filing posted Tuesday in docket 10-90.
Rural telcos pressed the FCC to hike their USF subsidies, encountering less opposition in replies this week than in initial comments on an NPRM in docket 10-90 (see 1805290060 and 1803230025). RLECs said there's broad support for increasing rate-of-return (RoR) high-cost funding beyond a budget set in 2011 and modesty increased above $2 billion. WTA backed "fully funding" the "outdated" budget to meet broadband demand, first to $2.43 billion this year and gradually to $2.975 billion in 2026. It said RoR USF should be a single budget. NTCA cited "consensus" the agency should "right-size" the budget to account for past and future inflation. A group of Nebraska carriers receiving support based on an Alternative Connect America Cost Model (A-CAM) said increasing their monthly funding from $146 per location to $200 would be a "reasonable balance." The Pennsylvania Public Utility Commission backed hiking A-CAM support to $200/location and increasing the overall budget to account for inflation, including for carriers receiving legacy support. GVNW Consulting on behalf of Illinois RLECs (here) and Granite State Telephone (here) urged keeping a "100 percent overlap" requirement for challenging support based on unsubsidized competition, while GeoLinks, a wireless ISP, urged changes. The Broadband Alliance of the Midwest and the Eastern Rural Telecom Association were among the other RLEC parties replying. The National Tribal Telecommunications Association called for easing a rural-growth cap generally and budget controls for tribal carriers, and Gila River Telecommunications pushed a tribal broadband factor. The Wireless ISP Association said it and NCTA had sought rural USF changes, including moving toward auctions for distributing subsidies. "Arrayed against this reasonable, market-based approach are a handful of [RLECs and allies], all with a vested interest in maintaining the status quo," WISPA said. "Broad aspersions are cast on the ability of competing providers to offer new service to unserved areas without any supporting data other than the skewed information produced by the failed challenge process." USTelecom opposed the auction proposals.