Granting Hawaiian USF Waiver Petition Could Spur ‘Me Too’ Requests

The FCC averages Hawaiian’s line costs statewide because it deems the telecom company a non-rural local incumbent. But Hawaii’s unusual geography -- including its remote location, isolation and archipelagic structure -- justifies measuring line costs by wire center, the company said. The change would send more USF money to Hawaiian, creating “numerous public interest benefits,” it said.

But granting the petition also would “create an extremely dangerous precedent,” opening the flood gates for other non-rural ILECs and CLECs to follow Hawaiian’s example and seek similar waivers to get more USF money, NTCA said. The group’s rural incumbent local carrier members’ costs are measured by study areas within state borders. Hawaiian said the argument was “ridiculous.” Granting the petition would give the company about $6 million a year, increasing the high-cost fund only 0.1 percent, it said. The FCC won’t be able to grant “me too” requests because “there is no other carrier that can make the same compelling showing,” it said.

NTCA questioned whether Hawaiian deserves such treatment. It noted that state regulators in Maine, Nebraska, South Dakota, Vermont and West Virginia have said that the company hasn’t shown its situation is tougher than other carriers’. Hawaiian disagreed, citing geographic and climatic eccentricities, the state’s “strategic importance and consequent vulnerability to foreign attack,” a highly dispersed population outside Honolulu, and lack of alternate funding.

The Florida Public Service Commission is “sympathetic” to Hawaiian’s concern that USF support won’t cover its costs, it said. But the carrier shouldn’t be surprised, it said: “HT knew, or should have known, the need for network improvements when it purchased the network from Verizon and how much federal universal service support would be available.” The FCC shouldn’t grant the petition because it “only focuses on granting [HT] additional support,” the PSC said. The FCC should instead “revisit and adjust those inputs or engineering assumptions that do not accurately reflect the environment faced by the petitioner,” the PSC said.

Hawaiian can seek relief elsewhere, the PSC added. The petition doesn’t “account for the complementary responsibility of the state to promote and advance universal service,” said Florida. The Hawaii Public Utilities Commission has authority to govern intrastate USF support, but “no funds have been collected or distributed using this mechanism,” it said. “Given the expertise, experience, and proximity of the [Hawaii PUC], HT should first look to the state commission to address intrastate remedies before looking to the FCC for additional support.” HT also could as its parent company for more money, the PSC said.

Opponents “have provided no evidence” that Hawaiian Telecom doesn’t need federal USF help, the company said. Besides, “none of the ‘alternatives’ presented are viable, and none is sufficient” to ensure national USF goals, it said. The carrier can’t get state support, because “many issues” keep the Hawaii PUC from using its USF power. And Hawaiian can’t take on more debt without violating “numerous covenants,” it said.

If USF cost measurements need revising, the FCC should change them under its three pending notices of proposed rulemaking, NTCA said. The Florida PSC agreed, joining five other states who commented previously. But the Hawaiian petition and USF NPRMs are “not mutually exclusive,” the carrier said.