Last week I went to a Minnesota PUC (Public Utilities Commission) meeting; that’s not something I do everyday so I enjoyed the process as much as the topic of discussion. Also while she may not have been official yet, Ellen Anderson was sitting in her new seat as the PUC Chair. The meeting was held at the request of the Minnesota Telecom Alliance. MTA wanted to talk to the PUC members about Universal Service Funds and Intercarrier Compensation. You can see the meeting archived online.
The MTA wanted to have the meeting to let the PUC know what they thought of the potential changes with the Universal Service Funds (USF) and the Intercarrier Compensation (ICC) and how the National Broadband Plan might have an impact on rural broadband providers and rural consumers.
The meeting started with a lawyer going over the USF and ICC for the PUC members. It was a lot of great info with a lot of detail. I tried to keep up with notes – but failed. I was feeling slow – but Commissioner O’Brien made me feel better when he stopped the presentation to say that he too wasn’t quite keeping up – except that he recognized that USF and ICC are issues for the FCC, not the state PUC. He stopped for a reality check with the MTA to ask about the purpose of the meeting.
I think it was a good heads up – and I know I learned a ton from O’Brien’s question. He pointed out that the PUC Commissioners are there to make decisions but they are really informed and kept abreast of issues from their top staff members – and that super detailed information is best sent to the senior staff. The presentation went on – abridged. (For folks who are looking for detailed opinions on ICC and USF, you might check out the comments sent to the FCC as culled by Cassandra Heyne of Rural Telecommentary.)
The reps from the MTA (lawyer Glen Brown and David Bickett of Park Region and Otter Tail Telecom) continued focusing their comments on how changes recommended by the National Broadband Plan could have an impact on rural providers, consumers and communities. Specifically how reducing funds to existing broadband providers to potentially encourage new providers to enter a market would not serve the best interests of that market. They wanted to make the PUC aware of these changes – and the potential impact on the PUC, who might be responsible for making and upholding decisions based on what the FCC is deciding now.
Here are some of the numbers/prices from the presentation based on Mr. Bickett’s business. I thought they were particularly enlightening:
Park Region Companies (ILEC, CLEC and Non-regulated entity)
Local calling scope
Revenue from end user $18.60
Interstate Access Revenue – $3.60
State Access Revenue $9.85
USF $20.44
$18 out of $52 comes from customer
Cable is similar except that there’s content charges as well. Those charges seem to be skewed against too.
What is the cost of providing intrastate access?
There is a reasonable rate – but some is subsidy. It is set by FCC. The extra charges on MN fees might be called support.
Broadband availability is 100% for speeds of 1 Mbps up and 4 Mbps down. Broadband penetration is currently at 43%. The capex grows as demand grows.
Currently they have 13 companies. Eliminating or reducing USF and Access will likely result in more than double costs or losing 4 people.
Valley Telephone
Customer Revenue 18.73
Interstate access Revenue 16.47
State Access Revenue $17.44
Federal USF 46.99
99.33