20180425CenturyLink Reply Comments.pdf

ldaho Public Utilities Commission
Office of the SecretaryRECEIVED
APR 2 5 2018
AT74
TrrY
CENTURYLINK
1 600 7th Avenue, Room 1 506
seattle, washington 98191 Boise,ldaho Centurylink'
[phone]
[e-mail]
Lisa A. Anderl
Senior Associate General Counsel
Regulatory Law
April25,2018
Via Email and overnight delivery
Diane Hanian, Secretary
Idaho Public Utilities Commission
472West Washington
Boise, Idaho 837 02-5983
Re: Case No. GNR-T-I7-05
Idaho Universal Service Fund (IUSF)
Centurylink and Level3 Reply Comments
Dear Ms. Hanian:
Attached are Centurylink and Level 3 Reply Comments in the above-referenced docket. Paper
copies will be forwarded by overnight mail.
Sincerely,
i-i*'r-;
F7i t
Lisa A. Anderl
LANjga
Attachments
www.centu rylink.com
CENTURYLINK AND LEVEL 3 - Reply Comments
IDAHO UNIVERSAL SERVICE FUND (IUSF)
CASE NO. GNR-T-I7-05
April25,2018
Background:
On January 3l,2Ol8 various parties filed position papers in this proceeding.r On April 4,2018,
the Idaho Public Utilities Commission (IPUC) Staff provided its Summary and Report.
CenturyLink commends Staff in putting together a comprehensive report to help the IPUC
address very difficult issues, especially considering the various recommended solutions
advocated by the parties in this proceeding. CenturyLink generally agrees with the Staff report.
However, Centurylink respectfully submits reply comments, providing clarification and making
recommendations for an interim solution until the legislature has time to act and long term
solutions can be implemented.
The one area of agreement among the various parties in the position papers is that the Idaho
legislature needs to determine the long term/permanent solution addressing the problems with the
Idaho Universal Service Fund (IUSF).
Interim solutions:
In its report, Staff stated the following
"Vfrhile Staffagrees in principle that the surcharge rate should befrozen at the curuent rates
established in Commission Order No. 33851 on August 22, 2017, the IUSF statutes provide no
mechanismfor capping, sun setting, or otherwise changing the assessment and distribution
methodologies. "2
"Staff Option I : Leave the IUSF as is, cap the Fund based upon projected surcharge revenue
collected each year, and adjust the distribution to the current recipients accordingly. This
option would be hard to execute, because Fund assessment and distribution methodologies are
codified in the Telecommunications Act of 1988 and, therefore, the Commission may be in
conflict with statute. "s
CenturyLink understands this possible concern, since the statute does not specifically state that
the IPUC may cap the surcharge amount. However, there are other provisions of the statute that
1 PUC Website link to Case No. GNR-T-17-04: http://www.ouc.idaho.eov/fileroom/cases/summarv/GNRT1705.html
2 Page 2 of the Staff Summary and Report in this proceeding.
3 Page 11 of the Staff Summary and Report in this proceeding.
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the IPUC needs to consider in determining what to do on an interim basis until the legislature has
time to act.
The IUSF statute states:
"The purpose of this act is to authorize the Idaho public utilities commission to establish a
competitively and technologically neutralfunding mechanism which will operate in coordination
w i th fe de r al univ e r s al s e rv i c e support m e c hani sm. " 4
The existing IUSF funding mechanism is not competitively and technology neutral, because
wireless and Voice over Internet Protocol (VoIP) providers are not required to pay into the IUSF.
Increasing the existing surcharge before this problem can be fixed by the legislature will only
exacerbate the existing discriminatory surcharge assessed on residential and business local
exchange voice services and not assessed on VoIP and wireless voice services. Because an
increase to the existing surcharge would violate the mandate that the surcharge be
technologically neutral (i.e., non-discriminatory), the IPUC should not take action to make that
situation even worse. CenturyLink believes that the funding mechanism not being competitively
and technologically neutral provides greater public interest harm than capping the surcharge at
current levels, and that the IPUC necessarily has the authority to decline to take further action in
contravention of the statutory mandate.
"The commission shall provide by order, for not less thqn seventy-five percent (75%o) nor more
than one hundred percent (100%o) of the residual revenue requirement of the individual eligible
telecommunications carrier to be funded by the universal service fund. "6
It is Centurylink's understanding that it has been many years since any analysis has been done
demonstrating that each of the 8 rural telecommunications companies that receive ongoing IUSF
support are within the75%o - 100% residual revenue requirement range outlined in statute.
Instead of continuing to raise the surcharge to keep the IUSF funding at current levels, the IPUC
could determine the level of funding that will happen at the current surcharge level and adjust
each of the 8 rural telecommunications companies' ongoing support downward accordingly. If
any of the 8 companies object to this, the IPUC could then require all 8 companies to provide
evidence demonstrating where they are in comparison to the range. After an evidentiary hearing,
once the actual evidence has been approved by IPUC order, the level of ongoing support would
be adjusted and the surcharge would be modified to achieve the required level of funding based
upon the IPUC finding.
4ldaho Statute 62-610A: https:/llesislature.idaho.eov/statutesrules/idstat/Title62/T62CH6/5ECT62-610A/
s ldaho Statute 62-6!0 (2): https://leeislature.idaho.eovlstatutesrules/idstat/Title62lT62CH6/5ECT62-610/
s ldaho Statute 62-6Lo (4): https://leeislature.idaho.sov/statutesrules/idstat/Title62/T62cH6/sECT62-610/
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Another option would be for the IPUC to move forward and adopt/implement the transition
described in 62-610F of the Idaho statute.T ln the example discussed in the paragraph above, if
any of the 8 companies object to having their ongoing draws from the IUSF lowered, the IPUC
could move forward with a proceeding to implement this statute by requiring various interested
parties to propose the appropriate forward-looking cost methodology that the IPUC should utilize
to determine ongoing support. At that time the IPUC could also expand the collection of
surcharges consistent with the provisions of this statute which require that a surcharge "be
imposed on end users of all retail telecommunication services originating and terminating within
the state of Idaho and collected by the telecommunications carrier providing telecommunication
services to such end users."8 As defined in 62-610 B (Definitions) of the statute, wireless
Telecommunication Carriers would be required to start collecting and paying the IUSF
surcharge. Having wireless Telecommunications Carriers also pay will significantly increase the
contribution base, which most likely would allow the IPUC to significantly lower the IUSF
surcharges unless there was a significant increase in ongoing draws from the fund.
CenturyLink believes it is critical for the IPUC to take the appropriate action in the interim to
prevent increasing the disparity and discrimination with the IUSF surcharge mechanism.
Long Term Solution:
CenturyLink agrees with Option 2 recommended by Staff that interested parties need to seek
statutory revisions. Because of the diverse options/solutions recommended by the various parties
in their position papers, IUSF reform is going to be a difficult task for the Idaho Legislature.
Conclusion:
As discussed above, the IPUC should decline to increase the IUSF surcharge, pending a long
term legislative solution.
Respectfully submitted this 25th day of April 201 8
CENTURYLINK
& /{e/
Lisa A. Anderl (WSBA # 13236)
Senior Associate General Counsel
1600 - 7th Ave., Room 1506
Seattle, WA 981 9l [e-mail]
T ldaho statute 62-610F: https://lesislature.idaho.sov/statutesrules/idstat/Title62/T62CH6/5ECT62-610F/
8 ldaho statute 62-6LOF(2lr: https://leeislature.idaho.eov/statutesrules/idstat/Title62/T62CH6/5ECT62-610F/
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