With cracks in state USF availability widening fast, the Regulatory Commission of Alaska is bearing down on a short-term fix and long-term overhaul. Alaska commissioners discussed fixing USF at two public meetings in June. Seeking to stem the bleeding while the RCA considers broader changes, commissioners voted 4-1 at Wednesday’s meeting to seek comment on changing rules about what to do in a USF shortage. Commissioners said they will take further action in late July. State USF revenue is down in many states and Alaska is one of a few eyeing a shift to connections-based contribution as a possible long-term solution.
The Nebraska Public Service Commission executive director resigned after he couldn’t agree with the agency on a resolution to conflict-of-interest questions, the state telecom regulator said. Government watchdogs decried possible conflict of interest after Nebraska’s attorney general found no violations by PSC Executive Director Jeff Pursley, who consults on the side for telecom companies (see 1705170037). “The Commission and Dir. Pursley agreed that he would sever his ties with his part-time employer,” a PSC spokeswoman emailed us. “However, they could not come to an agreement on when that would occur and Director Pursley chose to resign.” The resignation is effective June 12; Pursley’s duties will be absorbed by staff until a new executive director is hired, the commission said in a Thursday news release. “Jeff is a man of many of talents,” said Chairman Tim Schram, praising Pursley’s USF experience.
California utility commissioners may decide if text messaging can be assessed USF fees, perhaps making it the first state to rule on whether texting is a telecom or information service. Public Utilities Commissioners could vote as soon as June 15 to open a rulemaking on whether text messaging is a telecom service that may be included in revenue-based surcharges for CPUC’s public purpose programs (PPP), which include California LifeLine, the Advanced Services Fund and other state programs, the agency said Friday. CTIA petitioned for a ruling that texting is an information service not subject to the fees, but consumer groups urged the CPUC to classify texting as a telecom service that may be assessed.
California utility commissioners may decide if text messaging can be assessed USF fees, perhaps making it the first state to rule on whether texting is a telecom or information service. Public Utilities Commissioners could vote as soon as June 15 to open a rulemaking on whether text messaging is a telecom service that may be included in revenue-based surcharges for CPUC’s public purpose programs (PPP), which include California LifeLine, the Advanced Services Fund and other state programs, the agency said Friday. CTIA petitioned for a ruling that texting is an information service not subject to the fees, but consumer groups urged the CPUC to classify texting as a telecom service that may be assessed.
Telecom companies urged convening of state USF contribution revamp workshops in Nebraska, even if they delay the Public Service Commission's proposed adoption of a connections-based mechanism (see 1703280032). CenturyLink, Cox Communications and Level 3 sought workshops, in reply comments dated April 21 and posted Wednesday at the PSC (NUSF-100). “It is abundantly clear that more information must be presented before a connections-based mechanism can be safely implemented,” and it’s OK if that causes the PSC to miss a self-imposed Jan. 1 deadline for action, Cox said. "Stabilization of the fund can be achieved in 2018 under the current methodology while a thoughtful, reasonable connections-based methodology is created.” In another reply, CTIA said the PSC shouldn’t adopt USF changes now but instead should urge the Federal-State Joint Board on Universal Service to craft a plan for all states. "Nebraska is not unique in seeing declining revenues for its universal service program,” CTIA said. “Other states are seeing similar trends,” but the Nebraska PSC is alone in proposing "a novel contribution mechanism,” it said. However, a rural independent company -- Great Plains Communications -- replied that the PSC should reject calls for delay. “Any such delay should not occur since the Commission has already amply demonstrated that NUSF contribution reform is an urgent matter due to the continued erosion of the NUSF remittances generated by the current NUSF contribution mechanism.”
It’s unfair to charge voice customers for broadband networks, but not guarantee voice services will be provided, said Nebraska Public Service Commissioner Crystal Rhoades Wednesday. On a webinar hosted by the National Regulatory Research Institute, Rhoades urged a revamp of USF contribution that includes broadband assessments. “We have to stop pretending that voice and broadband are separate things,” she said. “Ignoring the fact that we cannot build the network that we need without the inclusion of an assessment on broadband is almost delusional.” Competitive Carriers Association General Counsel Rebecca Thompson and NTCA Senior Vice President-Policy Mike Romano agreed. Not including broadband in the contribution base is “a disaster waiting to happen,” Romano said. The FCC has been mulling a contribution overhaul for more than 15 years, but politics remains a barrier to action, said ex-Wireline Bureau Deputy Chief Carol Mattey, now a consultant. Congress must be convinced it’s not taxing the internet to assess contributions on broadband, she said. But USTelecom Senior Vice President-Law and Policy Jonathan Banks said it’s forward-looking to fund broadband networks rather than voice lines. It’s important to take another look at USF contribution, but first there’s more work to do on the Connect America Fund, he said: “It’s important to keep our eye on the ball of getting current stuff done.”
It’s unfair to charge voice customers for broadband networks, but not guarantee voice services will be provided, said Nebraska Public Service Commissioner Crystal Rhoades Wednesday. On a webinar hosted by the National Regulatory Research Institute, Rhoades urged a revamp of USF contribution that includes broadband assessments. “We have to stop pretending that voice and broadband are separate things,” she said. “Ignoring the fact that we cannot build the network that we need without the inclusion of an assessment on broadband is almost delusional.” Competitive Carriers Association General Counsel Rebecca Thompson and NTCA Senior Vice President-Policy Mike Romano agreed. Not including broadband in the contribution base is “a disaster waiting to happen,” Romano said. The FCC has been mulling a contribution overhaul for more than 15 years, but politics remains a barrier to action, said ex-Wireline Bureau Deputy Chief Carol Mattey, now a consultant. Congress must be convinced it’s not taxing the internet to assess contributions on broadband, she said. But USTelecom Senior Vice President-Law and Policy Jonathan Banks said it’s forward-looking to fund broadband networks rather than voice lines. It’s important to take another look at USF contribution, but first there’s more work to do on the Connect America Fund, he said: “It’s important to keep our eye on the ball of getting current stuff done.”
Telecom providers criticized a Nebraska proposal to change the state USF contribution formula from one based on revenue to a connections-based mechanism using phone numbers. In February, the Public Service Commission proposed a $1.29 surcharge for mobile voice, $1.24 for residential fixed voice and a five-tiered scheme for assessing charges to business lines. The current revenue-based contribution factor is 6.95 percent. But in testimony Friday released this week in docket NUSF-100, business line providers including Cox, Frontier and Windstream said the scheme for business lines isn't clear and may be tough to manage. For business lines, it’s not clear what revenue is to be considered in determining the surcharge -- only the business tariff rate or also extended-area-service fees and long-distance charges, Windstream said. Long-distance charges can fluctuate widely month to month, and business bundles could further complicate assessment, it said. Frontier said its billing system can't segregate or sort business customers into the five proposed tiers. Level 3 said assessing based on the number of phone numbers could hurt enterprise and government customers that have many phone numbers. CenturyLink said the business tiers are hazy and distinguishing between mobile and fixed lines for USF fees isn't equitable. CTIA said assessing different fees to mobile and fixed lines is “unreasonably discriminatory.” In other testimony, Communications Director Cullen Robbins proposed three alternative plans for contribution fees: (1) set mobile and residential voice surcharges equal at $1.29 and use two categories for businesses, single-line and multiline; (2) charge mobile and fixed the same fee and have one charge for business lines; and (3) use two categories for business -- single line and multitiered -- and treat residential fixed voice as a single-line business. "Continued declines in Nebraska Universal Service Fund (NUSF) remittances as a result of the erosion of the assessable base has led to a need to revise the contribution mechanism for the NUSF," Robbins said. A connections-based system is "more stable and predictable than the current mechanism,” he said. Some wireline companies supported the principle of assessing USF fees by connection as bringing more stability to USF. "A connection-based mechanism should be less volatile than a revenue-based mechanism, and … it should be less vulnerable to erosion of the contribution base," Windstream said. But Charter said it would be better to keep the status quo. "Moving away from this system will be complex, costly, confusing, and will likely need to be duplicated if the FCC ultimately changes the federal system,” it said. "Continuing with a revenue-based system is the most efficient, the most trusted, the most enforced and most enforceable, system yet devised. As [Winston] Churchill said: 'Democracy is the worst form of government, except for all the others.' The same can be said for revenue-based contribution systems -- at least at this time.”
Rural telco groups again recommended the FCC hike their USF funding support, as replies were posted Monday and Tuesday in docket 10-90. NTCA repeated its call for providing additional funding for carriers that opted into the alternative connect America cost model (A-CAM) mechanism and for those receiving nonmodel support. "Budget shortfalls throughout the entirety of the RLEC High Cost program undermine the goals of the [March 2016] Rate-of-Return Reform order and threaten to leave far too many rural Americans with access only to substandard and/or unaffordable" broadband service, the group replied, citing a "unanimous record" in initial comments supporting additional funding (see 1702140043). The Eastern Rural Telecom Association's reply said it "strongly supports full funding" of both the A-CAM and nonmodel funding mechanisms. The reply of a group of Nebraska rural telcos said it supports funding A-CAM recipients at $200 per location, which it calculated would require $104 million a year, not the $110 million initial commenters cited, because some carriers elected not to receive the support. It disputed previous calls for "fully funding" the A-CAM mechanism. "The highest cost-companies have costs far in excess of $200 per location," said the Nebraska group. It nevertheless backed the $200 amount as a "realistic policy outcome" that "recognizes the Commission's budget limitations." It said calls for additional nonmodel support "are being addressed in a separate proceeding and thus are not germane" to the rulemaking.
Rural telco groups again recommended the FCC hike their USF funding support, as replies were posted Monday and Tuesday in docket 10-90. NTCA repeated its call for providing additional funding for carriers that opted into the alternative connect America cost model (A-CAM) mechanism and for those receiving nonmodel support. "Budget shortfalls throughout the entirety of the RLEC High Cost program undermine the goals of the [March 2016] Rate-of-Return Reform order and threaten to leave far too many rural Americans with access only to substandard and/or unaffordable" broadband service, the group replied, citing a "unanimous record" in initial comments supporting additional funding (see 1702140043). The Eastern Rural Telecom Association's reply said it "strongly supports full funding" of both the A-CAM and nonmodel funding mechanisms. The reply of a group of Nebraska rural telcos said it supports funding A-CAM recipients at $200 per location, which it calculated would require $104 million a year, not the $110 million initial commenters cited, because some carriers elected not to receive the support. It disputed previous calls for "fully funding" the A-CAM mechanism. "The highest cost-companies have costs far in excess of $200 per location," said the Nebraska group. It nevertheless backed the $200 amount as a "realistic policy outcome" that "recognizes the Commission's budget limitations." It said calls for additional nonmodel support "are being addressed in a separate proceeding and thus are not germane" to the rulemaking.