Telecom Industry Sounds Alarm as Oregon Mulls VoIP Contribution to USF
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.
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The PUC would treat interconnected VoIP service as a telecom service under proposed revised rules. Like other telecom providers, VoIP providers would have to calculate intrastate revenue and contribute a percentage to the Oregon USF. The proceeding is in an “extremely preliminary phase,” said Oregon Assistant Attorney General Elizabeth Uzelac at the workshop. The next step is to issue an NPRM and take comments, then an administrative law judge will work on rules for a commission vote, she said.
Industry urged addressing jurisdiction first. Cable sees VoIP as an information service, meaning Oregon is pre-empted from assessing VoIP, said Davis Wright’s Mark Trinchero, representing the Oregon Cable Telecommunications Association. Finding VoIP is a telecom service would inadvertently apply many other regulations unrelated to USF, inconsistent with PUC longstanding practice, he added. AT&T doesn’t oppose assessing interconnected VoIP in principle, but Oregon lacks such statutory authority, said AT&T General Attorney Cindy Manheim. She noted the 8th Circuit found VoIP is an information service because of net protocol conversion.
Meanwhile, the Nebraska Public Service Commission is hearing about possible issues implementing a shift in January to a connections-based contribution mechanism for residential wireline, postpaid wireless and interconnected VoIP services and a 6.95 percent revenue-based surcharge for business and other services (see 1808080022). At a late September workshop, some “carriers expressed some concern about being able to modify billing systems, etc. to comply with the proposed” Jan. 1 date for the new contribution method, a spokesperson emailed. “We are evaluating how we are going to handle that.”
Wireless carriers want the PSC to preserve revenue-based contribution for prepaid services, CTIA said earlier this month in docket NUSF-113. Nebraska law "plainly and obviously requires" the PSC to set a revenue-based rate for prepaid wireless, said CTIA, noting that a state bill set a revenue-based formula for such service. "The Commission has authority over carriers only as provided by law,” and given that the PSC allowed business lines to continue being charged based on a percentage of revenue, “there is no apparent necessity” to move prepaid wireless to a flat fee, the association said.
Prepaid wireless is a telecom service by statute, so the PSC has authority to move it to connections, countered Nebraska Rural Independent Companies. The law requires that all telecom providers, including prepaid wireless, make equitable and nondiscriminatory contributions to USF, said the Rural Telecommunications Coalition of Nebraska.
A connections-based mechanism is “still working well” in Utah, which shifted to a 36 cents per connection fee in January (see 1804260067), Utah PSC Telecom Manager Bill Duncan emailed. “The fund has stabilized on the contribution side.” The commission has proceedings open that likely will expand distributions and cause an increase in the surcharge, he noted.
The District of Columbia PSC seeks comments by Oct. 15 and replies by Oct. 25 on a proposed USF surcharge of 0.0656 percent of revenue for 2019, slightly below the 0.0679 percent rate in 2018, the PSC said last week. The D.C. USF administrator also recommended a 2019 budget of $508,345, about 2 percent less than this year.