WASHINGTON-Telematics providers have come out against FCC Chairman Kevin Martin’s numbers-based approach to financing the universal-service fund . Those providers noted that because telematics is not connected to the public-switched telephone network Martin’s plan would significantly add to the cost of automatic crash-notification systems.
In separate presentations recently at the Federal Communications Commission, ATX Group Inc. and OnStar Corp. each urged that telematics companies be exempted from USF contributions if those contributions are based on the telephone numbers they use to notify their call centers of a problem with telematics-equipped vehicle.
Martin has advocated a numbers-based approach since the late 1990s, when he was the wireline legal adviser to former FCC Commissioner Harold Furchtgott-Roth.
The universal-service fund contribution base has been depleted by long-distance calls made using mobile phones or Voice over Internet Protocol technology.
ATX told the FCC that the increased fee would discourage low-end vehicles from being equipped with telematics.
“The increased fee provides a disincentive to transition telematics beyond the premium model level into the more price-sensitive mass-market vehicle platforms. As envisioned, the market may likely be served with a low cost that entails only automatic collision notification service in which airtime is used only in the event of a collision. Under the proposed USF numbers plan, consumers opting for a $99 plan would be saddled with an additional 12-percent fee for a service that is likely never to result in an interstate call,” said John Logan, ATX’s outside counsel. “The important public-safety contribution telematics-equipped vehicles make will be lost, thereby diminishing rather than pursuing the stated objective of the FCC and the federal Department of Transportation.”
OnStar is also concerned about its “Hands-Free Calling” service, which allows customers to have a prepaid phone service installed in their vehicles. OnStar does not keep track of usage and does not require the service to be refreshed so assessing a monthly USF fee would be difficult, if not impossible. OnStar suggests instead that prepaid calling be assessed a ratio similar to what has been used in several states for enhanced 911 assessments. Under this equivalency ratio, contributions would be adjusted based on either revenues or usage. For example, Ohio requires that postpaid customers pay 32 cents per month for E-911, but prepaid customers pay 32 cents for every $50 credit on their service plan.
CTIA recently said it supported a numbers or connections-based mechanism for USF contributions, but it too wants discounts for certain customers. For prepaid customers, the wireless association suggests a 50-percent discount off the postpaid assessment. This is the same discount CTIA proposes for the additional lines in family plans.
In addition to telematics, the Martin plan has received considerable static from the Keep USF Fair Coalition. The Keep USF Fair Coalition says that changing from the current system, which assesses contributions based on long-distance and international revenues, to one that assesses a flat rate on every telephone number would “tax” 43 million Americans as much as $700 million. Since wireless carriers have a difficult time dividing long-distance and local revenues, they typically estimate the long-distance portion at about 28.5 percent of total revenues. The Keep USF Fair Coalition favors the Fair Share Plan, which would assess contributions on all long-distance telecommunications including VoIP calls.
The universal-service system was set up in the 1930s to bring telecommunications services to high-cost areas by using long-distance revenues. Universal-service support is distributed to rural wireline companies and other carriers, including wireless, that serve customers in rural-wireline territories. RCR
