WASHINGTON-A Kansas state law creating the Kansas Universal Service Fund discriminates against wireless carriers and should be pre-empted, the wireless industry told the Federal Communications Commission earlier this month.
For example, Omnipoint Communications Inc. said rules established by the Kansas Corporation Commission “effectively precluded residents of high-cost rural areas from choosing among competing providers of local service.”
Universal-service support is paid to carriers offering service to low-income and high-cost rural customers. In June, Western Wireless Corp. urged the FCC to overturn the rules implementing the KUSF. Without these subsidies, wireless service-as a true competitor to local exchange service-would be prohibitively expensive, wireless carriers argue. There also is a federal universal-service fund Western Wireless did not contest in its pre-emption petition.
Not surprisingly, the incumbent LECs in Kansas and the KCC filed comments opposing the Western Wireless effort.
Comments filed by the State Independent Alliance, a group of independent local telephone exchange companies in Kansas, claimed Western Wireless does not have the standing to receive universal-service subsidies because these subsidies are only paid to eligible telecommunications carriers.
Western Wireless recently filed for ETC status in Kansas and 11 other states, according to Western Wireless’ Washington Counsel Michele C. Farquhar. Getting this designation may be harder than it looks because as John Stanton, CEO of Western Wireless, said, “We have concerns that the independent phone companies are too politically powerful,” and that these companies are blocking competition. Indeed, the Western Wireless pre-emption petition, filed June 20, was the first step in the process of gaining universal-service subsidies in Kansas. The ETC application was the second.
The Telecommunications Act of 1996 allows for states to decide whether it will designate more than one company as an ETC in rural areas. States do not have this option in non-rural areas and are required to designate more than one company so that competition can occur.
Southwestern Bell, the largest ILEC in Kansas, refuted other wireless carrier arguments that KCC rules violate the 1996 telecom act. “The Kansas regime is entirely consistent with the requirements of federal law. The KUSF is a state regulation intended to preserve and advance universal service within the state of Kansas that neither relies on nor burdens federal universal-support mechanisms,” Southwestern Bell said.
