PSC rule changes seek to add broadband to USF offering, but jurisdiction questioned by providers

  

JEFFERSON CITY, Mo. – In this day and age, access has become everything. Broadband has gone from being a luxury to a necessity in both our economy and social lives. There’s been a push at the federal level for years to expand broadband, as well as a statewide effort.

In fact, the search to give affordable internet services to all corners of the state has become a high priority for those in the executive branch. But that goal is proving to be somewhat difficult; instead, it’s becoming a confusing and muddied topic among providers and regulators.

Right now in the Missouri Public Service Commission, as part of Governor Eric Greitens’ executive order on rule reviews, the staff is looking to change the rules regarding the usage of the Missouri Universal Service Fund (USF).

The Missouri USF provides funding for the Lifeline and Disabled programs. The Lifeline program is a national program designed to provide discounted phone service to qualified low-income consumers.

The Disabled program is a unique Missouri program providing discounted phone service to qualified disabled consumers.

The PSC oversees the Disabled program, while the Lifeline program is overseen by a partnership arrangement between state commissions and the Federal Communications Commission (FCC).  Since the inception of the Missouri USF in 1996, the Disabled program hasn’t changed much. The Lifeline program, however, has at the national level, which is leading to questions here in the Show-Me State. The number of participants in programs supported by the Missouri USF has declined over the years, primarily attributed to a shift in consumer preferences to wireless service.

The change that is being looked at now would add broadband to the list of services the USF would be used for, in an effort to expand broadband services across the state and make it more readily available and affordable for low-income citizens.

In 2016, the federal government made a similar move by modernizing the Lifeline Program. The FCC announced their plan to refocus Lifeline support on broadband in March of last year, with Lifeline now supporting standalone broadband service and bundled voice and data packages.

The PSC here in Missouri is seeking to do the same with the USF and has worked on amending the rule as part of the No Mo Red Tape Initiative. But the issue here lies in the jurisdiction.

Seeking comments from the providers in the state at least twice now on the matter, it has been made clear by several companies that it’s unclear as to whether the PSC can even move forward with their attempt.

MCTA (Missouri Cable Telecommunications Association) maintains its position that the Commission has no jurisdiction to expand the Missouri USF support to a broadband-only service. • There is no legal authority for the Commission to use the Missouri USF to support any broadband service—whether “broadband-only” or as part of the services supported by the Missouri USF. This is because Missouri law prohibits the Commission from regulating broadband. • Both federal and Missouri law prohibits this Commission from regulating interstate services, which include broadband service.”

From AT&T:

The proposal to expand the Missouri USF to support a broadband-only service could lead to higher participation levels than Staff projects. While the magnitude of the potential increase remains uncertain, expansion of the Lifeline and Disabled programs to include the additional supported service could result in undue and increased financial pressures on the fund because of the mismatch between contributing services (i.e., services subject to USF assessments) and supported services (i.e., services receiving subsidies). Currently, assessments fall solely on the state’s diminishing customer base of wireline voice services, the only services for which state law authorizes support. The Commission has no jurisdiction to impose such assessments on wireless service. And the FCC has preemptively barred states from imposing any USF contribution requirement on broadband.”

And from Centurylink:

“There is insufficient information to complete the analysis requested. It is CenturyLink’s belief that its Lifeline subscribers will decline more rapidly than the current rate when the Federal Lifeline discount decreases to voice services begin. Customers looking for a low cost broadband solution will find qualifying speed requirements for Lifeline will require them to subscribe to a broadband product with a higher price just to qualify for the Federal Lifeline discount. This may act as a deterrent for pursuing Lifeline benefits.”

In short, the question is whether the PSC can regulate broadband, which the providers have pointed out. As for the question of whether the commission can appropriate the funds or direct how they are used, they also question whether that is a matter best left to the legislature, who initially directed how the funds were to be utilized when the fund was first formed.

Still, the PSC staff has continued moving forward, apparently at the direction of the Governor, who has been pushing for increasing broadband.

In the latest request for comments, providers and interested parties have given until October 23 to submit comments or suggestions, which they argue is not enough time. They asked for an extension of time on Thursday, Oct. 19, which was denied the next day:

The Commission understands the concerns expressed by the stakeholders, but will not grant the requested extensions. The short time allowed for these initial comments is merely the first step in a more extensive review process. Staff requested quick responses to allow for the possibility of stakeholder input before the suggested rule revisions are presented to the Commission and then to the Governor’s Office for a more detailed review in accordance with time-frames requested by the Governor’s Office. Stakeholders will have additional opportunities to offer comments and suggestions during that informal review process. Ultimately, any proposed changes to the rules will be reviewed by the Commission and, if appropriate, promulgated through the statutory rulemaking process, which will afford stakeholders further opportunity to be heard.”

More than a few are taking notice of the line mentioning “time-frames requested by the Governor’s Office”, wondering about the motives from the executive branch.

Still, the issue of broadband has been one of discussion in recent months, with Lt. Gov. Mike Parson pushing for it as well.

But, whether this addition of broadband under the PSC rules will or should be allowed is still up for debate. The proposed rules head to the Governor’s Office next week, and once reviewed there, it returns to the commission, who will have the option of voting the changes down or approving them and sending them to JCAR.