WASHINGTON—A telematics provider warned the Federal Communications Commission Wednesday that FCC Chairman Kevin Martin’s numbers-based approach to finance the universal-service fund would not survive a court challenge and it used language from a previous appeals court decision on USF to bolster its claims.
ATX Group Inc. said the proposed $1 per month fee on every assigned telephone number would have a “devastating effect” on the rollout of low-end telematics services.
“The fee would violate the law’s requirement that universal-service contributions be ‘equitable and nondiscriminatory’ and halt the broader rollout of telematics-based safety and security to mass-market vehicles,” said Gary Wallace, ATX vice president for corporate relations.
Wallace told the FCC that the U.S. Court of Appeals for the Fifth Circuit has already ruled that “a wide disparity between users means that each cannot be assessed the same fee. … The proposed phone-number assessment structure does not comprehend that while automotive telematics is assigned a large number of phone numbers, the extent and frequency of use of the network is extremely confined.”
ATX and OnStar Corp. have each been waging war against Martin’s numbers-based USF financing approach. 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.
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, but ATX says that is still too much for telematics vehicles.
“Even under the 50-percent discount proposed by the cellular carriers for their ‘buckets of minutes’ customers, where several numbers are assigned yet only one bill is rendered, the proposed USF fee to core telematics vehicles is still enormous. Such an assessment will disrupt a market that today is delivering an important public-safety feature—the ability to locate expeditiously and dispatch aid to individuals involved in an in-vehicle emergency or collision—ubiquitously and without limitation to the technical capabilities of local public-safety answering points,” said Wallace in a letter to Thomas Navin, chief of the FCC’s Wireline Competition Bureau, which is examining how best to finance USF.
Earlier this year, Navin told state regulators that a numbers-based approach was being seriously considered.
ATX’s telematics service does not allow for communications with anyone besides the ATX call center, but to make that communication possible a telephone number is assigned, said Wallace.
“Whether by call or automatic-crash notification signal, a vehicle’s transmission is only to the call center and only the call center may place a call to the vehicle,” said Wallace. “The presence of a phone number reflects neither network use nor the ability to communicate outside the call center and vehicle.”
While ATX does not offer ancillary call options, OnStar does and has expressed concern about the impact the numbers-based USF assessment would have on that service.
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.
