Many State Regulators Leery of Missoula Plan

Me., Neb. and Vt. regulators, filing collectively as “Early Adopter State Commissions,” said the Telecom Act spurred their reform of state access charge regimes, decrying further consumer costs that would arise from implementation of the Missoula Plan. The Missoula Plan’s “Early Adopter Fund” is “insufficient” to ease additional costs it would impose on states that already reformed intercarrier compensation, the filing said. After decreasing their intrastate access rates, states recovered lost revenue through local rate increases or new state universal service funds. “Regardless of how the price was paid, however, consumers in early adopter states have paid the full price of these state access reforms and they have not always seen matching toll rate decreases,” said the filing. The group said they're making progress in talks with Missoula backers about changes to reflect their concerns.

“The plan requires states that restructured their rates to subsidize states that have not,” the Ill. Commerce Commission said: “Illinois has historically taken a proactive approach to eliminating competitive distortions in intercarrier compensation rates and minimizing implicit subsidies.” Ill. is an early adopter of reform, but “it is uncertain, based upon the terms of the plan, whether Illinois would receive any substantial funding from [the Early Adopter Fund],” the commission said.

The Del. PSC, representing a “payer state,” said it “simply cannot, in good conscience, support an intercarrier compensation reform plan that imposes significant burdens on the citizens of Delaware without any real indication of off- setting benefits to Delaware.” Del. telecom customers pay $20 million plus a year in Universal Service Fund support, with the state getting back about $1.2 million in USF funding. The Missoula Plan would add another $6.7 million to Del. consumers’ costs, the PSC said.

The plan “will further burden New Jersey ratepayers by more than $300 million with little or no attendant benefits,” the N.J. Board of Public Utilities said. “If the Missoula Plan is enacted, revenue from low and middle-income urban consumers would subsidize higher income consumers and their carriers in rural states,” the board said: “There are a number of states who are ‘net payers’ into the Universal Service Fund who have, over the years, borne a great burden to support a system so that all customers in rural or urban areas are not discriminated against and receive safe, adequate and proper service. This goal has come at a high cost to New Jersey, a net payer, who has contributed significant amounts of funds to ensure universal service to all end users throughout the country, rural and urban.”

The Ohio PUC had broader concerns, saying the plan implies the FCC “has legal authority to broadly preempt state commissions” on intrastate access charges and reciprocal compensation -- and the FCC shouldn’t do that. “The legal basis for preempting intrastate originating access rates is not evident nor is the basis for distinguishing terminating access,” the state said. The Mo. PSC said the plan “moves intercarrier compensation rates to a ‘unified’ level in a manner that can only be described as ’too much too fast.'” In addition, “many areas of the plan remain vague or undeveloped,” the PSC said.

The Va. State Corp. Commission opposed the plan because “it fails to fix the system for numerous reasons,” it said. The Wis. PSC was more conciliatory, saying the Missoula Plan is “a large step forward” but “work needs to be done” on “outstanding issues that beg for resolution.” The PSC said “a modified Missoula Plan has the potential for gaining a wider base of support.”