Okla. Commissioners Debate Capping USF Surcharge

Whether Oklahoma should cap its state USF surcharge divided Corporation Commission members at a livestreamed meeting Tuesday. Commissioners weighed a draft bill, distributed last week, to update Oklahoma USF (OUSF) policy in the 1997 Oklahoma Telecommunications Act. A commission rulemaking might be a better option than legislation to strengthen OUSF accountability, said Commissioner Todd Hiett (R).

The draft would require the Oklahoma commission to set a $3 “cap on the total per connection assessment amount for all OUSF supported services, administrative costs, and annual independent audits.” The commission implemented a connections-based contribution method last November while stakeholders worked on drafting recommendations for the legislature (see 2112010014). OUSF stakeholders last month supported a $1.85 per-connection surcharge for funding year 2022-23 (see 2210040043).

Hiett raised concerns. "I've always found caps to be arbitrary,” he said. After one sets a cap, “there's this inclination to just go to the cap,” added Hiett: State policymakers should determine "what the actual need is and have transparency and accountability to ensure we're being good stewards of those dollars."

Cap might not be the “right word,” replied Chairman Dana Murphy (R), but “I just don't think it can be unlimited." The cost to the regular telephone customer matters, she stressed. “There's got to be a balance. … There's a lot of need across the state, but how are we going to charge the regular telephone customers to pay for all that?” Oklahomans will elect a replacement for Murphy Nov. 8 (see 2210210034).

With the connections-based funding mechanism, “we're seeing very good stability on the revenue side,” said OUSF Administrator Mark Argenbright. Murphy responded, “We stopped the bleeding, but we don’t have the treatment really right yet.” Commissioner Bob Anthony (R) was absent from the meeting.

In setting the proposed $3 cap, the commission “shall identify the amount of OUSF support necessary to meet the demand associated with the provision of Primary Universal Services based on the areas, criteria, and conditions established by the Commission for consideration in determining support for these services as well as the portion of the assessment factor that is specific to this purpose,” the draft said. “This amount is to be combined with the projected funding requirements for cost of administration, the annual independent audit, and funding requests associated with Special Universal Services in setting the capped assessment amount.” The draft would set a prioritization framework in case the cap means not enough money to pay all OUSF funding requests.

The draft would remove the revenue-based contribution method from the 1997 statute. Funding would instead be based on a contribution method established by the commission “after notice and hearing,” it said. The draft would define connection as “an access line that provides wireline telephone service, wireless telephone service, or VoIP service that allows end users to originate and/or terminate intrastate calls on the public switched telephone network.”

The OCC would have to update distribution rules, including “conditions and criteria to be applied in allocating the limited amount of OUSF support,” said another proposed change. Also, the draft bill would strike from the statute the state Lifeline program, which currently gives customers two cents per month.