All 3 alternative universal service contribution systems proposed by the FCC in Dec. (CD Dec 16 p1) would disadvantage consumers, the Institute for Public Representation (IPR) said in comments. It said the Commission should retain the present revenue-based system, which the FCC Wireline Bureau’s study (CD Feb 28 p7) showed to be “sustainable for the foreseeable future.” IPR said the study underestimated the total costs of the proposals “by failing to consider their respective administrative costs.” It said low-volume consumers who were “least able” to afford increases in their phone rates would pay “substantially” more under all 3 proposals: “This result cannot be reconciled with the Commission’s statutory mandate to ensure that consumers receive ‘quality service… at just, reasonable and affordable rates.'” The IPR said concerns over bundling and IP telephony were “not significant enough” to justify replacing the current assessment system, “especially since these problems can be addressed by directly assessing IP telephony and modifying the bundling safe harbor.” It said when and if the present system no longer were sustainable, the Commission would have authority to implement an all- revenue assessment system that “would greatly expand the pool of carriers obligated to contribute to the USF [universal service fund], and would ensure that carrier and consumer USF obligations remained equitably based upon their actual usage of telecommunications services.” In a separate comment, Beacon Telecom Advisors urged the Commission to consider the current revenue-based approach as the “most viable alternative in maintaining and supporting the universal service support funding mechanism in the future.” It criticized a connection-based approach, saying that “while connections may not be relevant to certain interstate services, revenues are relevant to all interstate services and will” better meet the requirements of Sec. 254 that all providers of interstate telecom services contribute on a nondiscriminatory basis.
If there’s to be a universal service fund (USF) summit, then industry groups should be included, several rural telephone associations said in a letter to Senate Communications Subcommittee Chmn. Burns (R-Mont.) In an April 2 hearing on USF, Burns suggested a summit involving the FCC, Congress and the Federal-State Joint Board on Universal Service (CD April 3 p1). In the letter, dated April 15, the groups said industry also should be part of any meeting. The letter was signed by the Independent Telephone & Telecom Alliance, National Rural Telecom Assn., NTCA, OPASTCO and Western Alliance. “We believe it would be important to have industry representation at such a summit, which would speed the effort of identifying the best possible solution for ensuring the future of the program,” the letter said. In the hearing, Burns had expressed concerns about the length of time needed for the FCC to review USF. He suggested a summit as a method in which vested parties could discuss the issue and determine where potential legislation might be needed.
Comments to the FCC on the “definition” of universal service, one of the several universal service proceedings now under way, turned into a debate on whether wireless rural competitors should be required to offer equal access in order to get universal service support. “The debate is not really about equal access,” Western Wireless said in its comments: “The real debate here is about whether universal service support can coexist with intermodal competition.” Equal access was a 1980s requirement that local telephone companies had to provide connections to any long distance companies -- in other words, giving customers the ability to preselect long distance companies to handle their calls automatically.
Correction: It was Robert Orent, pres. of Hiawatha Communications in Mich., who told a Senate universal service fund hearing that state PUCs were viewing eligible telecom carrier (ETC) status as welfare, weren’t taking into account the public needs of USF and didn’t fully understand the USF system (CD April 2 p1).
Legislation introduced Thurs. by Rep. Terry (R-Neb.) would distribute more universal service support to states west of the Mississippi River by changing the distribution formula for a portion of the universal service fund (USF). The bill, which is co-sponsored by Rep. Stupak (D-Mich.), would change the distribution formula for the so-called “nonrural” USF so that more states would get funding from it.
The American Assn. of Paging Carriers (AAPC) said the FCC shouldn’t adopt proposals on alternative universal service contribution methodologies (CD Feb 28 p7). It said neither of the proposals had been “shown to be an improvement over the existing system for the paging industry.” AAPC said an FCC study, which attempted to project the financial impact of the 3 contribution methodologies over the next several years, demonstrated “the hazards involved in changing the current system in the absence of a clear understanding of what the impact will be on different industry segments.” For example, AAPC said, the paging contribution under the first connection-based and 3rd number-based proposals was projected to decline compared with the current system. However, it said, “it is not possible to determine whether the projections represent real declines in the contribution levels, or whether they are artificial ones that are the product of flawed assumptions underlying the projections of current levels.” In a separate comment, the Mo. PSC suggested the FCC revise its current philosophy “to mandate that all contributors treat the recovery of the USF [universal service fund] assessment in a consistent manner, whether it is through implicit innovative pricing options or through an explicit surcharge on end-users.” The PSC expressed concern that the current mechanism was confusing for consumers. Since contributors are allowed to choose whether to recover the assessment through a line-item assessment, include the recovery in rates and bundles or use a blended recovery approach, “it becomes difficult for the consumer to effectively compare pricing among competitors,” it said.
Expressing frustration at the FCC’s pace of developing solutions to problems facing the universal service program, Senate Commerce Communications Subcommittee Chmn. Burns (R- Mont.) said he would like to see a summit involving members of Congress, the FCC and the Federal-State Board on Universal Service. “This horse [the FCC] isn’t going to run any faster unless we put the spurs on,” Burns told reporters after a hearing Wed. on universal service. He said such a summit would help members determine whether legislation was needed in any areas and, if so, whether Congress could begin work on a bill this year.
USTA announced a 5-part universal service platform Thurs. that it said was the result of several months of discussions among board members who represented various-sized companies. USTA Pres. Walter McCormick said USTA would use the 5 “principles” as a basis for lobbying for reform on Capitol Hill and at the FCC.
FCC legal advisers said Wed. they were aware of concerns by rural ILECs that universal service money was shrinking while requests for it were growing with the arrival of competitive carriers in rural areas. But they also told members of the National Telecom Co-op Assn. (NTCA) that those were very difficult problems to solve because the Telecom Act encouraged competition as well as universal service. The advisers told NTCA that numerous universal service issues were teed up at the Commission, including what services should be funded and how the support money should be raised, and they wouldn’t be easy to solve. NTCA members were in town for their annual Legislative & Policy Conference.
State regulators are eyeing wireless best practices as a potential way to avert the need for service quality regulation, at the same time as industry is drafting voluntary guidelines, officials said. Neb. PSC Comr. Anne Boyle told us she had circulated proposed best practices at last month’s National Assn. of Regulatory Utility Comrs. (NARUC) winter meeting for review. Boyle said the issue was teed up for an upcoming NARUC meeting in Denver, with hopes that industry, FCC and the National Assn. of State Utility Consumer Advocates (NASUCA) would participate, she said. Meanwhile, the Mo. attorney general is in negotiations with Sprint PCS and Nextel on a lawsuit filed in Dec. over billing practices.