WASHINGTON-CTIA-The Wireless Association warned that universal-service contributions could increase by 40 percent if the Federal Communications Commission accepts the projections of the Universal Service Administrative Co.
USAC is a quasi-governmental organization created by the FCC to administer universal-service subsidies. USAC told the FCC that it projects it will need $29.2 million for the first quarter of 2005. Due to a recent decision by the FCC that requires USAC to make sure it has cash on hand before obligating funds, CTIA is worried that significant increases will be required.
“This increase is primarily due to the application of arcane U.S. government accounting rules, the Anti-Deficiency Act and the Miscellaneous Receipts Act to the universal-service fund,” said CTIA.
CTIA is also concerned because it said the wireless industry finances 27 percent of the fund, while it withdraws only 3 percent.
“Further increasing the burden on wireless consumers makes no sense. Given what they get back, they’re already paying significantly more than their fair share of universal-service costs,” said CTIA President Steve Largent.
The FCC’s Wireline Competition Bureau said it will be at least a month before the FCC rules on the first-quarter contribution amount because it still has to get the final numbers from USAC and then determine the appropriate increase.
“Forty percent sounds huge but what it means on the actual bill is roughly 92 cents,” said Mark Wigfield, spokesman for the wireline bureau, noting the average contribution is currently $2.30.
The National Telecommunications Cooperative Association’s predictions were not so dire, predicting only a 25-percent increase. But NTCA warned Congress it should consider legislative changes when it comes back to wrap up its business for the year.
Four plans are on the table to reform how telecom carriers charge for access, ranging from radical reformation to little change. Proponents of each of the plans said the others had fatal flaws, could not be adopted without legislative changes or could not be adopted given the political bent of the FCC.
Today carriers pay each other to carry traffic using reciprocal compensation. However, incumbent local exchange carriers, particularly the regional Bell operating companies, have complained that with the Internet, some competitive carriers are gaming the system because more traffic goes out than comes in, so the Bells have to pay.
Last week, the Expanded Portland Group filed details of its plan to reform payments. The EPG plan proposes to move to a set of unified rates charged by carriers to each other carry traffic.
EPG joins plans presented by the Intercarrier Compensation Forum and the Alliance for Rational Intercarrier Compensation. Details of a fourth plan supported by the cable industry and competitive local exchange carriers has yet to be released, but Rich Rindle, who appeared last week on a panel sponsored by the Federal Communications Bar Association, said it would make the fewest changes to the current regime while moving toward a bill-and-keep system.
