Neb. PSC Receives Pushback in Sweeping USF Review

Telecom companies raised concerns about adding state USF goals on service quality and other issues in comments posted Monday at the Nebraska Public Service Commission. And as the PSC considers sweeping Nebraska USF (NUSF) changes, Charter Communications warned that it might be unlawful to support broadband with a fund designed for telecom services. Small rural companies said the fund should support ongoing costs that make networks expensive in remote areas even after they are deployed.

The Nebraska PSC received comments on NUSF goals, updating the strategic plan, investment incentives for carriers, a transitional mechanism to support deployed broadband networks and oversight to prevent duplicative or excessive support (docket NUSF-139). The commission opened the state USF rulemaking Aug. 29 and received comments on short-term issues Sept. 29 (see 2308290044 and 2310020062). Comments are due Dec. 22 on revising the portable support mechanism for competitive providers, enhancing consumer protections for accessing providers of last resort and quality services, ensuring affordable rates in rural areas that reasonably compare to urban places, and simplifying regulatory accounting and eligible telecom carrier recertification (see 2310130007).

“The question ... should be what role is appropriate for the NUSF,” Charter said in its comments. The cable company recommended minimizing the NUSF surcharge, one of the highest in the U.S., since it's paid only by intrastate landline services and because other state and federal programs will soon bring “hundreds of millions of dollars” into the state for broadband. "If a location is shown on the FCC’s map as served, then the NUSF should not be used to support broadband service at that location. Once a location is served, universal service has been achieved and there is no need for, and no public benefit to, a transition of support." Supporting broadband might be illegal, it added. “Quite possibly, supporting broadband with money collected from telephone service changes the NUSF into an unlawful tax under Nebraska law.”

Charter opposed adding NUSF goals. "Adding programs, expenses, and investment to the NUSF requires a higher surcharge, and makes telephone service -- the very thing the NUSF was designed to make affordable and accessible -- less affordable." Federal Lifeline and the affordable connectivity program make an NUSF affordability goal unnecessary, said Charter. “Should those programs end or be modified in the future, this question could be revisited.” The PSC should detect a problem before it adds broadband service quality metrics, it said.

Cox cautioned the PSC not to exceed its regulatory authority over broadband. “Setting goals regarding affordability and sustainability is not unreasonable; however, regulating achievement and measuring performance likely exceeds the Commission’s authority unless statutorily authorized and/or expressly allowed under federal law.” However, Cox thanked the PSC "for questioning the ongoing purpose of the NUSF and its goals considering the availability of funding from new sources." Entities getting funding elsewhere shouldn't get NUSF funding, too, it said. Operational support may be needed in "some extremely populated areas of Nebraska," said Cox, but don't "assume a provider cannot recover costs from its customers" or that "NUSF is the sole source to fill that void.”

Lumen supported a sustainability goal but rejected the possible affordability goal. “A competitive market is more effective and efficient at setting affordable prices than regulation,” said the telco. Adding a service quality goal might conflict with future FCC rules resulting from the federal agency's NPRM on reclassifying broadband as a Title II telecom service, Lumen said. “Additional or conflicting regulation could create uncertainty and confusion, which could lead to increased costs and decreased investment in broadband infrastructure or lead to a patchwork of regulations across different states making it difficult to provide consistent service across the country.”

The Nebraska Rural Broadband Alliance supported an affordability goal. "Rates that are reasonably comparable to rates charged for similar services in urban areas should be required.” But rather than add a service quality goal, the PSC should “zealously enforce” current requirements, NRBA said. The PSC should add sustainability as a goal so that the fund supports ongoing high costs of providing broadband in rural areas, it said.

NUSF should stop funding deployment, said NRBA. Its focus "should be on the ongoing expenses of the network, particularly because assets depreciate, get damaged, or become obsolete over time," and "the costs of labor, construction, and materials also generally increase over time,” the rural group said. “Relying on customer revenues to cover these expenses is not feasible in high-cost, low customer density environments.” Ending deployment support would moot concerns about duplicating other broadband deployment programs, it added.

NUSF should support fiber, ongoing expenses and cybersecurity costs, said Nebraska Rural Independent Companies (RIC). The rural telco group supported adding goals for broadband affordability and sustainability. Changing the NUSF contribution method to a connections-based mechanism in 2019 stabilized surcharge collections, RIC noted.

CTIA urged the state commission to phase out support for legacy copper networks and avoid duplicating federal funding. NUSF should fund all broadband technologies, the wireless group said. For the broadest possible contribution base, the legislature should fund NUSF with general revenue rather than a monthly surcharge on telecom bills, added CTIA.

Pennsylvania is also weighing broad USF changes. Comments are due Feb. 9, with replies due March 11, on the Pennsylvania Public Utility Commission’s advance notice of proposed rulemaking (docket L-2023-3040646), a PUC spokesperson said Monday. The advance notice, adopted Aug. 24, appeared in the Nov. 11 issue of the Pennsylvania Bulletin. The commission plans to consider contribution and distribution issues, and how to update the program to account for technology changes, Chairman Stephen DeFrank said in an interview last week (see 2311140035).

Arizona Corporation Commission staff recommended increasing state USF charges Monday. Comments are due Nov. 30 and commissioners may decide at their Dec. 5 meeting, said a staff memo (docket RT-00000H-97-0137). For basic local exchange and wireless service providers that interconnect with the public switched network, staff recommended increasing the monthly surcharge to 3 cents per access line, up from 2 cents, and to 31 cents per interconnecting trunk line, up from 20 cents. For intrastate toll service providers, Arizona commission staff recommended increasing the monthly surcharge to 57.4% of revenue, up from 34.1%. The proposed increase is due to fewer reported access lines and interconnecting trunk lines, a decrease in intrastate revenue and the commission not increasing rates in 2023, staff said. Frontier Communications is the only company receiving Arizona USF high-cost support, staff noted.