DAR File No. 40299

Public Service Commission, Administration

Section R746-360-6

Eligibility for Fund Distributions

Notice of Proposed Rule

(Amendment)

DAR File No.: 40299
Filed: 04/06/2016 01:38:12 PM

RULE ANALYSIS

Purpose of the rule or reason for the change:

The purpose of this amendment is to set the affordable base rate that telecommunication service providers are required to charge in order to qualify for state subsidization.

Summary of the rule or change:

The affordable base rate for the period 07/01/2016 to 06/30/2017 is set at $18 per residential line and $27.50 per business line. Beginning 07/01/2017, the affordable base rate will be set at $20 per residential line and $29.50 per business line.

State statutory or constitutional authorization for this rule:

• Subsection 54-8b-15(8)
• Section 54-3-1
• Section 54-4-1

Anticipated cost or savings to:

the state budget:

The affected companies are subsidized through a state-funded program. As the companies raise rates, the subsidy for which they qualify might change, which would result in a change to the balance of the fund.

local governments:

Local governments are not required to comply with or enforce the rules governing subsidized telecommunication service providers. No impact to local government is anticipated.

small businesses:

Small businesses that operate as telecommunication service providers and that are subsidized by the state will see revenues increase as they adopt the Public Service Commission's (Commission) affordable base rates. Consequently, the monthly subsidies currently being disbursed might have to be reduced. The Commission intends to require the Division of Public Utilities to review the finances of each affected utility in order to determine the amount of any required deduction. If the Division recommends a deduction, the affected utility will have a full opportunity to litigate the issues before the Commission.

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

The subsidy at issue is funded through a surcharge that all telecommunications customers in Utah pay. If the total amount of required funding changes, the surcharge may be increased or decreased as needed. It is possible that this rule change will reduce the amount needed to fund the account, which will result in a concomitant reduction in the surcharge.

Compliance costs for affected persons:

To comply, affected telecommunication utilities must file new rates with the Commission. As long as those rates do not exceed the Commission's affordable base rates, the costs associated with the filing will be minimal.

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

As stated in the rule analysis, business that provides subsidized telecommunication services might see a reduction in its monthly subsidy as its monthly revenues increase. The Commission will rely on the Division of Public Utilities to recommend any such reduction, which will then be subject to a full adjudication.

Thad LeVar, Commission Chair

The full text of this rule may be inspected, during regular business hours, at the Division 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:

• Jennie Jonsson at the above address, by phone at 801-530-6763, by FAX at , or by Internet E-mail at [email protected]

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:

05/31/2016

Interested persons may attend a public hearing regarding this rule:

• 05/31/2016 09:00 AM, Heber Wells Bldg, 160 E 300 S, Room 451 (Fourth Floor), Salt Lake City, UT

This rule may become effective on:

06/07/2016

Authorized by:

Jordan White, Legal Counsel

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 [Ceiling]Floor.[-- T]

1. Unless a petition brought pursuant to Subsection (B)(2) is granted, to be eligible for USF subsidization, a telecommunications corporation [may not charge retail rates in excess of the Commission determined]shall charge, at a minimum, the following Affordable Base Rates for basic telecommunications service :

a. As of July 1, 2016:

i. $18 per residential line; and

ii. $27.50 per business line.

b. As of July 1, 2017:

i. $20 per residential line; and

ii. $29.50 per business line.

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

b. A telecommunications corporation that files a petition under this Subsection (B)(2)(a) has the burden to demonstrate that the Affordable Base Rate is not reasonable in the particular geographic area served.[or vary from the terms and conditions determined by the Commission for other telecommunications services for which it receives Universal Service Fund support.]

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

Date of Enactment or Last Substantive Amendment: [July 8, 2015]2016

Notice of Continuation: November 13, 2013

Authorizing, and Implemented or Interpreted Law: 54-3-1; 54-4-1; [54-7-25; 54-7-26; 54-8b-12; 54-8b-15]54-8b-15(8)