WASHINGTON—A federal court in Colorado told state regulators there that they cannot require Alltel Corp. to file rate statements and agree to certain service-quality standards in order to receive eligible telecommunications carrier status—a necessary designation to receive universal-service subsidies.
“The Colorado Public Utilities Commission has not only failed to follow the prescribed procedures but also arbitrarily and capriciously imposed an ‘affordability’ review without setting forth any standards or criteria for its determinations. The CPUC’s conditions constitute rate regulation contrary to the Communications Act. It has no authority to do so,” wrote Senior District Judge Richard Matsch. “Because interstate and intrastate services are not separable by wireless service carriers in the competitive markets they serve, the commission’s position that it is not regulating interstate services is not tenable.”
The case goes back to when Western Wireless Corp., which Alltel acquired last year, was leading the efforts by wireless carriers to obtain ETC designation. Western had made some concessions with the CPUC for ETC designation in other parts of Colorado but balked when the CPUC wanted to extend those concessions.
Rural local exchange carriers have been fighting against wireless carriers for universal-service support since both the amount of subsidies and the number of carriers receiving support have increased.
The universal-service system was set up in the 1930s to bring telecommunications services to high-cost areas by using long-distance revenues.
The Federal Communications Commission is looking at ways to reform the universal-service system and the Senate Commerce Committee has held three hearings on the issue.
