No. 41704 (Amendment): Section R746-360-6. Eligibility for Fund Distributions

(Amendment)

DAR File No.: 41704
Filed: 05/26/2017 12:08:25 PM

RULE ANALYSIS

Purpose of the rule or reason for the change:

The purpose of this amendment is to align Utah's affordable base rate with federal standards.

Summary of the rule or change:

This rule section establishes an affordable base rate that certain telecommunications providers are required to charge. Historically, the Public Service Commission has aligned the state affordable base rate with a base rate established by the FCC. The FCC's base rate has been scheduled to increase from $18 to $20 per line, effective 07/01/2017. However, the FCC recently voted to freeze the base rate at $18 per line, at least temporarily. Therefore, this amendment eliminates the existing language that, beginning 07/01/2017, requires affected telecommunications providers to increase their rates to at least $20 per line.

Statutory or constitutional authorization for this rule:

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

Anticipated cost or savings to:

the state budget:

The telecommunications providers that are affected by Section R746-360-6 are eligible for distributions from the Utah Universal Service Fund (UUSF). Each provider's distribution is calculated according to the provider's total income, which will no longer be expected to increase as of 07/01/2017. Therefore, the state budget for the UUSF program should not be affected by this rule amendment.

local governments:

Local governments are not required to comply with or administer Section R746-360-6. No fiscal impact to local government is anticipate.

small businesses:

Had the scheduled rate increase from $18 to $20 gone into effect, small businesses that receive distributions from the UUSF might have been required to adjust those distributions in light of their increased income. However, with this amendment, there will not be an automatic increase in income, and no immediate adjustment of UUSF distributions will be needed. Therefore, no fiscal impact to affected small businesses is anticipated.

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

Had the scheduled rate increase from $18 to $20 gone into effect, customers of affected businesses would have seen their telephone bills go up. However, with this amendment, there will not be an automatic increase in billings.

Compliance costs for affected persons:

To comply, affected persons (telecommunications providers) must continue to charge a minimum affordable base rate of $18. There are no anticipated compliance costs, as this rule amendment maintains the status quo.

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

As stated in the rule analysis, this rule amendment eliminates a scheduled increase in the Utah affordable base rate. Where affected business will not be required to change their rates, no fiscal impact is anticipated.

Thad LeVar, 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]
• Jennie Jonsson at the above address, by phone at 801-530-6763, 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:

07/17/2017

This rule may become effective on:

07/25/2017

Authorized by:

Jennie Jonsson, Administrative Law Judge

RULE TEXT

R746. Public Service Commission, Administration.

R746-360. Universal Public Telecommunications Service Support Fund.

R746-360-6. Eligibility for Fund Distributions.

A. Qualification --

1. To qualify to receive USF support funds, a telecommunications corporation shall be designated an "eligible telecommunications carrier," pursuant to 47 U.S.C. Section 214(e), and shall be in compliance with Commission orders and rules. Each telecommunications corporation receiving support shall use that support only to provide basic telecommunications service and any other services or purposes approved by the Commission.

2. Additional qualification criteria for Incumbent telephone corporations - In addition to the qualification criteria of R746-360-6A.1.,

a. Non-rate-of-return Incumbent telephone corporations, except Incumbent telephone corporations subject to pricing flexibility pursuant to 54-8b-2.3 shall make Commission approved, aggregate rate reductions for public telecommunications services, provided in the State of Utah, equal to each incremental increase in USF distribution amounts received after December 1, 1999.

b. Rate-of-return Incumbent telephone corporations shall complete a Commission review of their revenue requirement and public telecommunications services' rate structure prior to any change in their USF distribution which differs from a prior USF distribution, beginning with the USF distribution for December, 1999.

B. Rate Floor.

1. Unless a petition brought pursuant to Subsection (B)(2) is granted after adjudication, to be eligible for USF subsidization, a telecommunications corporation shall charge, at a minimum, [the following Affordable Base Rate]$18 per line for basic telecommunications service[:

a. As of July 1, 2016, $18 per line; and

b. As of July 1, 2017, $20 per line].

2.a. A telecommunications corporation may petition the Commission to deviate from the Affordable Base Rate set forth in this Subsection (B)(1).

b. A telecommunications corporation that files a petition under this Subsection (B)(2)(a) shall:

i. demonstrate that the Affordable Base Rate is not reasonable in the particular geographic area served; or

ii. impute income up to the Affordable Base Rate in calculating the telecommunications corporation's state USF subsidization.

C. Lifeline Requirement -- A telecommunications corporation may qualify to receive distributions from the fund only if it offers Lifeline service on terms and conditions prescribed by the Commission.

D. Exclusion of Resale Providers -- Only facilities-based providers, will be eligible to receive support from the fund. Where service is provided through one telecommunications corporation's resale of another telecommunications corporation's service, support may be received by the latter only.

 

KEY: affordable base rate, public utilities, telecommunications, universal service fund

Date of Enactment or Last Substantive Amendment: [October 24, 2016]2017

Notice of Continuation: November 13, 2013

Authorizing, and Implemented or Interpreted Law: 54-3-1; 54-4-1; 54-8b-15[(8)]

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