The National Association of State Utility Consumer Advocates
Resolution 2007- 11
OPPOSING PROPOSALS FOR THE ADOPTION OF A NUMBERS-BASED OR CONNECTIONS-BASED UNIVERSAL SERVICE CONTRIBUTION MECHANISM
WHEREAS, For more than five years, parties have been proposing that the current mechanism for determining carriers’ contribution to the federal universal service fund (“USF”) – an assessment on carriers’ interstate and international revenues – be replaced by a numbers-based or connections-based mechanism, that assesses customers’ telephone numbers or connections to the network; and
WHEREAS, the need for this change has most frequently been expressed as caused by a lack of stability in , a decline in, or a “death spiral” in, the level of interstate and international revenues; and
WHEREAS, the need for this change has also been expressed as caused by increasing difficulty in the calculation of interstate and international revenues, caused by increased bundling of services, including “all-distance” calling plans, and increased use of Internet-based service; and
Whereas, it has been argued that a switch to a numbers-based mechanism will benefit residential consumers; and
Whereas, it has been argued that the switch to a numbers-based mechanism will benefit low-income consumers because Lifeline customers would be exempt from a numbers-based assessment; and
Whereas, the level of the universal service contribution revenue base has been stable for the last five years, with only minor variations; and
Whereas, the growth in the USF contribution factor has been almost entirely caused by increases in the needs of the USF, not declines in interstate and international revenues; and
Whereas, the Federal Communications Commission (“FCC”) has before it a wide range of proposals for restraining and better focusing the USF; and
WHEREAS, the FCC has adjusted the contribution mechanism to require providers of Voice over Internet Protocol (“VoIP”) services to contribute to the USF; and
WHEREAS, the FCC has adjusted the contribution mechanism to recognize increased interstate usage by, inter alia, wireless consumers; and
WHEREAS, there are additional actions proposed to the FCC that would increase the USF revenue base; and
WHEREAS, at the current level of USF fund needs, supporters of numbers-based or connections-based mechanism have not demonstrated benefits to consumers resulting from the switch; and
WHEREAS, growth in the USF will lead to growth in customer payments under any fully-funding USF contribution mechanism unless the source of those payments continues to grow; and
WHEREAS, there have been many proposals that would exempt specific types or uses of numbers from a numbers-based mechanism, or that would reduce the amount of the assessment for those numbers; and
WHEREAS, a numbers-based mechanism that does not assess all numbers equally will require additional regulations, will create new opportunities for gaming and arbitrage, and will increase the burden on those numbers not exempted; and
WHEREAS, the change to a numbers-based or connections-based USF contribution mechanism will base customers’ contributions on access to the telecommunications network, rather than usage of the network; and
WHEREAS, the supporters of numbers-based and connection-based mechanisms have not demonstrated consumer benefits resulting from the change from the current mechanism; and
WHEREAS, the benefits resulting from exempting Lifeline customers from USF assessments can be obtained by exempting Lifeline customers under the current mechanism; and
WHEREAS, the supporters of a change to a numbers-based or connections-based mechanism have presented no estimates of the costs of moving to such a system, particularly a mixed system that does not assess all numbers equally, and neither have they committed to not recovering the cost of the change from the USF;
Now therefore be it RESOLVED, That the National Association of State Utility Consumer Advocates (“NASUCA”) calls upon the Federal Communications Commission to undertake corrections to the current revenue-based mechanism, and then evaluate the results of those corrections, before further considering the implementation of a numbers-based or connections-based USF contribution mechanism; and be it further
RESOLVED, That NASUCA calls upon the Federal Communications Commission to carefully review the costs of changing to a numbers-based or connections-based mechanism, unless it is prepared to order that those costs not be recovered through the USF; and be it further
RESOLVED, That NASUCA opposes the change to a numbers-based mechanism or a connections-based mechanism unless the need therefor is clearly shown; unless consumers are shown to benefit from the change; and unless the mechanism equitably assesses the numbers used and available; and be it further
RESOLVED, That the NASUCA Telecommunications Committee, with the authorization of the Executive Committee, should take all steps consistent with this Resolution in order to secure its implementation.