Ariz. USF Could Soon Run Out of Cash

Arizona Corporation Commission staff warned Tuesday that the Arizona Universal Service Fund (AUSF) could exhaust its money unless the commission increases contribution rates. Commissioners could vote March 12 on a staff-proposed order to raise fees. AUSF administrator Solix told commission staff “that although there were enough funds collected to fund the AUSF for January, February and March 2024, Solix has calculated that it's anticipated, by the end of April, the AUSF fund balance would be depleted and that the fund will not be able to pay the Commission-approved and contractual obligations to [Frontier Communications] and Solix, respectively, beginning in May 2024,” said a Tuesday (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 3.4 cents per access line, up from 2 cents, and to 34 cents per interconnecting trunk line, up from 20 cents. For intrastate toll service providers, Arizona commission staff recommended increasing the monthly surcharge to 45% of revenue, up from 34.1%. The new rates would start April 1 and would result in a $200,000 fund balance by year-end, a “reasonable level” that would “potentially eliminate the need to revise the AUSF surcharge rates again for 2024,” staff said. Arizona commissioners declined raising AUSF contribution rates in December (see 2312050032). Frontier is the only company receiving AUSF high-cost support.