CUB Supports the Rural Telecommunications Investment Act
Posted on September 13, 2019 by Samuel Pastrick
Tags, Telecommunications
An egregious though little publicized legislative defeat during the 2019 session that ended in June was HB 2184, a CUB-supported bill championed by Representative Pam Marsh (D) that would have benefited rural communities directly by:
- Solving a long-standing fairness issue with the Oregon Universal Service Fund (OUSF); and
- Establishing a reliable funding stream for rural broadband deployment and planning grants.
Undeterred, CUB is preparing for the 2020 legislative session, which begins in February, as a chief advocate for the Rural Telecommunications Investment Act (RTIA). As HB 2184 aimed to do, this legislation will address these two policy goals.
The OUSF fairness issue reflects technological advances in the telecommunications industry since the Oregon legislature established the Fund in 1999. The Fund’s purpose was and still is to ensure safe, reliable, and affordable advanced communication services across Oregon. But 20 years ago, “advanced communication services” referred largely to traditional landline telephone or “plain old telephone service” (POTS).
The 1999 OUSF bill ensured safe, reliable, and affordable POTS in all areas of the state by applying a small surcharge on the intrastate portion (calls delivered and received within state boundaries) of customer bills to appropriately compensate telephone companies for their carrier of last resort (COLR) obligations. However, this bill exempted wireless companies. And because the Internet was still gaining popularity, voice over internet protocol (VoIP) service was not yet a competitive alternative to POTS. The Oregon Public Utility Commission (PUC) administers the OUSF, and the surcharge is currently capped at 8.5 percent.
Heading into 2020, the advanced communications landscape is radically different – particularly in that the number of wireless and VoIP lines in Oregon now far exceeds the 1999 peak for the number of POTS lines. Yet wireless and VoIP carriers continue to use the terrestrial networks built and maintained by the telephone companies without compensation for that use. This dynamic presents an obvious fairness issue for both the telephone companies, many of which are rural local exchange carriers (RLECs) that have served their communities for decades, and their customers, many of whom are older, rural, and low-income.
RTIA will solve this fairness issue by spreading a lower, 6 percent surcharge across the intrastate portion of all voice customers’ bills – including wireless and VoIP. This will stabilize the existing fund while generating approximately $5 million annually for a new broadband infrastructure and planning grants program targeting rural Oregon communities.
In preparation for the February legislation session, CUB has already started reaching out to legislators and other important stakeholders. One such recent engagement was a tour on August 20 of Monitor Telecom (MT) with Oregon Telecommunications Association and Oregon Representative, Rick Lewis, whose district includes Monitor – a small community in northeastern Marion County.
MT began in 1907 with a single telephone line and is a perfect example of an RLEC that benefits directly from OUSF support. With just over 1,000 lines today – the overwhelming majority of which are now “fiber to the home” as opposed to copper POTS – the company is also a lean and innovative provider that serves rural Oregonians with competitive and advanced communications services. MT is a replicable model for other small, rural providers to follow by leveraging OUSF support to upgrade and maintain their network for the benefit of their customers.
The second August event was the 8th Annual Oregon Coastal Caucus’ Economic Development Summit. Held this year in Florence on August 7, the Summit convened a veritable who’s-who of Oregon political power brokers, making it an ideal setting for RTIA advocacy. I joined a panel with Representative Marsh, Senator Arnie Roblan (D), and spokespeople from Link Oregon (formerly the Oregon Fiber Partnership), Charter, and Verizon to discuss broadband outcomes in Oregon, generally, and RTIA specifically.
Verizon opposed HB 2184 earlier this year and continued their opposition on the panel, but failed to offer an alternative policy solution to address digital inequality in Oregon. Instead, they claimed that RTIA would harm the homeless community. This claim is false - homeless populations either receive subsidized phones and plans or use pre-pay options which RTIA exempts.
Heading into the 2020 legislative session, RTIA is one of CUB’s top legislative priorities. We anticipate activity to heat up as the session approaches and will keep blog readers informed as developments unfold. In the meantime, we encourage folks who support fair voice and internet service in Oregon to sign onto our letter encouraging legislative action in 2020.
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09/05/22 | 0 Comments | CUB Supports the Rural Telecommunications Investment Act