Repealing Alaska USF Widely Opposed in Comments

A possible path to averting Alaska USF’s June 30 termination emerged in comments last week at the Regulatory Commission of Alaska. The Department of Law (DOL) told the RCA it would consider approving an extension on an emergency basis if the commission fixes legal defects with an earlier proposal to extend the AUSF sunset by three years. Meanwhile, telecom companies and public advocates warned of rate increases and degraded service if commissioners allow the fund to die.

The commission plans to discuss AUSF at a meeting Wednesday amid continuing fallout from a March 24 DOL memo rejecting the Feb. 7 RCA order to extend the fund by three years. At a meeting last month, multiple commissioners said they struggled to see how they could classify the looming AUSF sunset as an emergency, a procedural move that would let them expedite making new rules (see 2304120049).

"We would like to clarify our original disapproval,” DOL Regulations Attorney Rebecca Polizzotto wrote Thursday. The department disapproved the RCA order because it proposed retaining regulations that include COLR rules barred under a recent state law, she said. However, "the commission may extend the AUSF sunset date if the commission cures the defects in other regulations that affect the sunset extension.” DOL attached draft regulations that would cure the legal defects, though Polizzotto cautioned, "additional regulatory work may still need to occur." If the RCA chooses to extend the sunset, DOL is "prepared to approve the filing of such regulations on an emergency basis if needed,” she said. Emergency rules would be valid for 120 days unless made permanent under the Administrative Procedure Act.

The Alaska Telecom Association opposed repeal. Local exchange carriers in remote areas have high capital and operating costs, ATA said in comments Friday: “The AUSF program helps LECs to support crucial services while maintaining reasonable local rates.” Eliminating AUSF would increase pressure on carriers to increase local rates, affecting "residents and businesses operating in areas ... where landline telephones continue to be the primary, and most reliable, mode of communication,” said ATA.

ATA member Alaska Power & Telephone said it would need to increase monthly residential local service rates by $9.79, a 53.5% increase. It can't use nonregulated services to alleviate lost essential network support (ENS), AP&T commented: It has 11 exchanges that lack broadband and cellular services. Ketchikan Public Utilities said it “would need to implement cost-cutting measures that would negatively affect service quality and response times for outages.”

Matanuska Telecom Association would raise rates by 56%, reduce network investment and possibly reduce "operational support in the most remote areas,” it said. If the RCA has run out of time to extend, commissioners should adopt an emergency rule to give it more time to work with DOL to make a permanent three-year extension or "exercise its power under 3 AAC 53.300(c) to waive application of the sunset provision," wrote MTA: Neither option requires DOL approval.

"Terminating the AUSF is not supported by the record, is strongly contrary to public policy, and will have significant harmful impacts on Alaska’s rural voice service consumers,” said Alaska Communications. It said its Northland ILEC could hike its monthly landline rate to $59.62: "Maintaining the status quo for three years is the simplest, most conservative solution to assure continuity in affordable local voice service in rural areas over this temporary period."

"Raising rates enough to compensate for lost [ENS] will be impossible for some recipients, and any rate increases will likely drive many users away from the network,” warned GCI. “Starved of revenue, carriers will likely be forced to reduce investment, resulting in a deterioration of the network” that “will harm all users, even users of mobile wireless service who will have difficulty connecting to wireline phones."

AUSF isn’t perfect, but don’t kill it, said the Alaska Remote Carrier Coalition, representing companies that serve communities not connected by the road system. Even if the RCA concludes it can't adopt previously filed AUSF overhaul proposals or extend the existing fund three years, it still "could make a few simple changes to its AUSF regulations to continue collecting AUSF surcharges, remove the distribution mechanism that the DOL Memo deemed objectionable, pay vested claims, and escrow the remainder pending a further Commission order,” said ARCC: “Continuing the Fund in this fashion would allow vested claims to be recovered and give the participants time to seek guidance from the Alaska Legislature” or pursue transferring AUSF to another agency.

"Alaska is now at a critical point of change with millions of dollars entering the state through the Infrastructure Investment and Jobs Act (IIJA) funds,” said Alaska Public Interest Research Group and Native Movement in joint comments. “Taking away the AUSF fund that has helped maintain our existing infrastructure and basic phone service would be a step backward.” The commission’s “public process for this significant action is plainly inadequate and inaccessible to everyday Alaskans,” the advocates complained. The RCA never indicated AUSF could be abolished before seeking comment on that last month; the public notice before that talked about extending the sunset and revising support calculations, they said. "Repeal is vastly different from extend and revise -- it is the diametric opposite message."

Allowing AUSF to die may be "arbitrary and capricious,” warned the Alaska attorney general office’s Regulatory Affairs and Public Advocacy section. RCA "has made no finding that the preservation of universal service is no longer accomplished through the AUSF,” RAPA wrote April 27. “Nor has it found that the AUSF no longer promotes the efficiency, availability, and affordability of universal telephone service in Alaska." Commissioners historically supported keeping AUSF, it noted: “Changes in the Commission’s general disposition towards the continuation of the AUSF appear relatively new.”