No. 43550 (Amendment): Section R746-8-301. Calculation and Application of UUSF Surcharge

(Amendment)

DAR File No.: 43550
Filed: 02/27/2019 11:30:53 AM

RULE ANALYSIS

Purpose of the rule or reason for the change:

This change increases the monthly Utah Universal Service Fund (UUSF) surcharge from $0.36 to $0.60 per access line. S.B. 130, Universal Service Fund Amendments (2017 General Session) (S.B. 130) expanded the scope of services eligible for disbursements from the UUSF along with other changes to the UUSF that resulted in a significant increase in disbursements from the UUSF. These increased costs result in a monthly deficit with contributions set at the extant $0.36 rate. The $0.24 increase to $0.60 is necessary to match monthly inflows with legislatively mandated outflows, and to maintain a responsible account balance consistent with legislative goals. The need for this surcharge increase to accommodate the changes from S.B. 130 has been apparent for several months, and the Public Service Commission (PSC) has actively been soliciting stakeholder input prior to filing this rule amendment. All of that stakeholder input is available at this link from the PSC website: https://psc.utah.gov/2018/10/09/docket-no-18-999-15/.

Summary of the rule or change:

This amendment increases the monthly UUSF surcharge from $0.36 to $0.60 per access line. This amendment makes only three textual edits, revising the rule's three references to the $0.36 surcharge to reflect the new $0.60 surcharge. As explained in the response above, the increase in the surcharge is necessary to match monthly contributions to the UUSF with the increased monthly disbursements stemming from changes S.B. 130 made to the UUSF program. The PSC anticipates making this rule amendment effective on 05/01/2019.

Statutory or constitutional authorization for this rule:

• Section 54-3-1
• Section 54-8b-15
• Section 54-4-1
• Section 54-8b-10

Anticipated cost or savings to:

the state budget:

Not affected except to the extent state agencies are billed for access lines and will pay the increased surcharge. The PSC and the Division of Public Utilities have been administering the UUSF for many years and have the budget to continue doing so. The change in the surcharge amount will not have a fiscal impact on the state budget.

local governments:

Not affected except to the extent local governments are billed for access lines and will pay the increased surcharge. Local governments are not required to comply with or enforce the rules through which the UUSF is funded. No fiscal impact to local governments is anticipated.

small businesses:

Affected--Small businesses that provide access lines will be required to make minor adjustments to their billing in order to collect the increased surcharge. However, such costs should be nominal insofar as such small businesses are presently collecting the monthly surcharge. That is, the mechanisms for collecting the surcharge should already be in place and this amendment should only require a simple adjustment to the amount the mechanism collects. The PSC anticipates this change will not impose a meaningful fiscal burden on such businesses. Additionally, small businesses that are billed for access lines will, like all other customers, be subject to the increased surcharge as explained in greater detail under other persons.

persons other than small businesses, businesses, or local governmental entities:

Affected--All customers who are billed for an access line presently pay $0.36 per month per access line for the UUSF surcharge. Under the new $0.60 rate, all such customers will pay $0.24 more per month per access line. Presently, an average of 3,084,787 access lines are assessed the surcharge every month. At the current rate, this results in approximately $1,110,523 being collected from such customers to fund the UUSF on a monthly basis. Under the new rate, these customers will cumulatively pay approximately $1,850,872 per month, generating approximately $740,349 more than the current rate to fund the UUSF. The PSC presently does not have access to the commercially sensitive information that would be necessary to determine what portion of the access lines paying the surcharge are small businesses, larger businesses, or individuals. However, the increase should affect all customers and customer classes equally on a per access line basis.

Compliance costs for affected persons:

To comply, affected persons must increase the amount they presently collect from their customers for the UUSF surcharge. The associated costs will vary and cannot be precisely anticipated, but the PSC expects they will be nominal because affected persons should already have mechanisms in place to collect the monthly surcharge on an access line basis. Additionally, as discussed under other persons above, all customers will incur an increased cost of $0.24 per month per access line to which they subscribe.

Comments by the department head on the fiscal impact the rule may have on businesses:

Small businesses that collect from their customers and remit to the PSC a monthly per-connection UUSF surcharge will need to adjust the amount they presently collect, which should have a nominal fiscal impact because the mechanisms to collect the surcharge are already required under the existing rule. Small businesses that pay for access lines will, like all customers, pay $0.24 more per month per access line. While the PSC has projected the total increased costs this will impose on customers who pay for access lines to be approximately $740,349 per month, the PSC cannot presently determine what portion of this total will be paid by small businesses as opposed to individual customers, non-small businesses, or other forms of organization. The change will affect all customers equally on a per access line basis, but the PSC does not know what portion of the total access lines paying the surcharge are subscribed by small businesses. The need for this surcharge increase to accommodate the changes from S.B. 130 has been apparent for several months, and the PSC has actively been soliciting stakeholder input prior to filing this rule amendment. All of that stakeholder input is available at this link from the PSC website: https://psc.utah.gov/2018/10/09/docket-no-18-999-15/.

Thad LeVar, Commission Chair

The full text of this rule may be inspected, during regular business hours, at the Office of Administrative Rules, or at:

Public Service Commission
Administration
HEBER M WELLS BLDG
160 E 300 S
SALT LAKE CITY, UT 84111-2316

Direct questions regarding this rule to:

• Sheri Bintz at the above address, by phone at 801-530-6714, by FAX at 801-530-6796, or by Internet E-mail at [e-mail]
• Michael Hammer at the above address, by phone at 801-530-6729, by FAX at , or by Internet E-mail at [e-mail]

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

04/15/2019

This rule may become effective on:

04/22/2019

Authorized by:

Michael Hammer, Administrative Law Judge

RULE TEXT

Appendix 1: Regulatory Impact Summary Table*

Fiscal Costs

FY 2019

FY 2020

FY 2021

State Government

Unknown

Unknown

Unknown

Local Government

Unknown

Unknown

Unknown

Small Businesses

Unknown

Unknown

Unknown

Non-Small Businesses

Unknown

Unknown

Unknown

Other Person

Unknown

Unknown

Unknown

Total Fiscal Costs:

$9,143.997

$9,293.958

$9,446,379

Fiscal Benefits

State Government

$0

$0

$0

Local Government

$0

$0

$0

Small Businesses

$0

$0

$0

Non-Small Businesses

$0

$0

$0

Other Persons

$0

$0

$0

Total Fiscal Benefits:

$0

$0

$0

Net Fiscal Benefits:

Unknown

Unknown

Unknown

 

*This table only includes fiscal impacts that could be measured. If there are inestimable fiscal impacts, they will not be included in this table. Inestimable impacts for State Government, Local Government, Small Businesses and Other Persons are described above. Inestimable impacts for Non - Small Businesses are described below.

 

Appendix 2: Regulatory Impact to Non - Small Businesses

The Public Service Commission (PSC) does not have access to information on surcharge collections by level of government, business type, or by residential versus non-residential classification. While the PSC knows the total number of telephone lines for which the surcharge is remitted, the telephone providers have no legal obligation to provide to the PSC the commercially sensitive data related to which lines are residential, commercial, governmental, etc. The PSC has assumed that the surcharge collections on connections will increase in direct proportion to typical population growth (currently estimated to be 1.64% per year). The proposed rule change increases the per connection surcharge by 24 cents per month for each telephone line or connection.

The amounts under Total Fiscal Costs are calculated by multiplying 24 cents times the total expected number of telephone lines, based on recent historical UUSF surcharge collections. The need for this change is to keep the Utah Universal Service Fund solvent, now that the PSC has made other changes to Fund distributions as required by S.B. 130 (2017). The benefits from those changes, primarily increased distributions to Utah's rural telephone providers, have already been implemented through administrative proceedings, and this surcharge increase is necessary to allow the Fund to continue making those monthly distributions. All surcharges and distributions must support the purposes of Section 54-8b-15.

 

There are no measurable potential impacts on specific categories of businesses from this rule amendment that increases the Utah Universal Service Fund surcharge from $0.36 per month to $0.60 per month. The monthly surcharge is imposed on each telephone access line or connection, regardless of whether the line or connection is for residential, business, or governmental use.

 

PSC Chair Thad LeVar has reviewed and approved this fiscal analysis.

 

 

R746. Public Service Commission, Administration.

R746-8. Utah Universal Public Telecommunications Service Support Fund (UUSF).

R746-8-301. Calculation and Application of UUSF Surcharge.

(1) The Utah Universal Public Telecommunications Service Support Fund (UUSF) shall be funded as follows:

(a) Unless Subsection R746-8-301(3) applies, providers shall remit to the Commission $0.[36]60 per month per access line that, as of the last calendar day of each month, has a place of primary use in Utah in accordance with the Mobile Telecommunications Sourcing Act, 4 U.S.C. Sec. 116 et seq.

(b)(i) "Place of primary use" means the street address representative of where the customer's use of the telecommunications service primarily occurs.

(ii) A provider of mobile telecommunications service shall consider the customer's place of primary use to be the customer's residential street address or primary business street address.

(iii) A provider of non-mobile telecommunications service shall consider the customer's place of primary use to be:

(A) the customer's residential street address or primary business street address; or

(B) the customer's registered location for 911 purposes.

(c) A provider may collect the surcharge:

(i) as an explicit charge to each end-user; or

(ii) through inclusion of the surcharge within the end-user's rate plan.

(d) A provider that offers a multi-line service shall apply the surcharge to each concurrent real-time voice communication call session that an end-user can place to or receive from the public switched telephone network.

(e)(i) A provider that offers prepaid access lines or connections that permit access to the public telephone network shall remit to the Commission $0.[36]60 per month per access line for such service (new access lines or connections, or recharges for existing lines or connections) purchased on or after January 1, 2018.

(ii) Subsection R746-8-301(1)(e)(i) operates in lieu of Subsection R746-8-301(1)(a) in that a provider who is required to make a remittance for an access line under Subsection R746-8-301(1)(e)(i) is not required to make an additional remittance for the same access line under Subsection R746-8-301(1)(a).

(iii)(A) Multiple recharges of a single prepaid access line during a single month do not trigger multiple remittance requirements.

(B) $0.[36]60 per month is both the maximum and minimum amount of remittance necessary for any single access line.

(2)(a) A provider shall remit to the Commission no less than 98.69 percent of its total monthly surcharge collections.

(b) A provider may retain a maximum of 1.31 percent of its total monthly surcharge collections to offset the costs of administering this rule.

(3)(a) Subject to Subsection R746-8-301(3)(b), a provider may omit the UUSF surcharge with respect to an access line that is described in Subsection R746-8-301(1), and:

(i) generates revenue that is subject to a universal service fund surcharge in a state other than Utah for the relevant month for which the provider omits the UUSF surcharge;

(ii) for the relevant month for which the provider omits the UUSF surcharge, was not used to access Utah intrastate telecommunications services; or

(iii) subject to R746-8-403(5), receives subsidization through a federal Lifeline program approved by the FCC.

(b) A provider that omits any UUSF surcharge pursuant to Subsection R746-8-301(3)(a) shall:

(i) maintain documentation for at least 36 months that the omission complied with Subsection R746-8-301(3)(a); and

(ii) consent to any audit of the documentation requested by the:

(A) Commission; or

(B) Division of Public Utilities.

(c) A provider who omits any UUSF surcharge pursuant to Subsection R746-8-301(3)(a) shall report monthly to the Division of Public Utilities, using a method approved by the Division, the number of omissions claimed pursuant to each Subsection R746-8-301(3)(a)(i) and R746-8-301(3)(a)(ii).

 

KEY: Utah universal service fund, surcharges and disbursements, speech/hearing challenges, assistive devices and technology

Date of Enactment or Last Substantive Amendment: [December 24, 2018]2019

Authorizing, and Implemented or Interpreted Law: 54-3-1; 54-4-1; 54-8b-15; 54-8b-10

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