WASHINGTON-Whether a recent appeals court ruling on universal service will have a positive or negative impact on wireless carriers depends on how you interpret a footnote in the decision.
Footnote 31 of the decision from the U.S. Court of Appeals for the Fifth Circuit in New Orleans reads: “To be sure, if a state commission imposed such onerous eligibility requirements that no otherwise eligible carrier could receive designation, that state commission would probably run afoul of [the Telecommunications Act of 1996’s] mandate to `designate’ a carrier or `designate more than one carrier’.”
Western Wireless Corp. has been working feverishly at the Federal Communications Commission to be granted eligible telecommunications carrier status in several states, including Kansas and South Dakota. ETC status would allow Western to collect the same universal service subsidies that the incumbent local exchange carriers collect for serving the same class of customers.
The court’s decision said the FCC could not prohibit states from imposing additional requirements for ETC status.
Michele Farquhar, outside counsel for Western Wireless, said the footnote means nothing has changed for the prospects of Western’s petitions.
The Personal Communications Industry Association said there “was good language in Footnote 31.” Responding to questions about whether footnotes hold as much weight as the language in the body of a decision, Angela Giancarlo, PCIA director of federal regulatory affairs, said, “I have cited footnotes before. It is there. It is in writing. You have to acknowledge it … it is still relevant.”
The Cellular Telecommunications Industry Association said the language in the body of the decision was troublesome, notwithstanding the wording of Footnote 31. “States are given the leading role and they are allowed to add additional requirements … that is not a positive outcome for us,” said Randall S. Coleman, CTIA vice president for regulatory policy and law.
The fifth circuit ruled on July 30 in a widely-watched case involving the administration of the universal service program.
The court denied in part and granted in part the appeal brought by several states and the industry. The case could potentially have a big impact on the administration of the often-controversial universal service program.
The FCC was upheld on many parts of its administration of the universal service program, but there were areas such as ETC designation where the FCC was overturned.
Both PCIA and CTIA agreed another area where the FCC’s rules were overturned, that may be temporarily helpful, is the ruling that the FCC cannot use intrastate funds to finance universal service.
It will only amount to interim relief because “it is like a tube of toothpaste. You can squeeze it from the top or the bottom but it is still going to come out,” said Giancarlo.
“The FCC will still have to come up with the money … that would seem to lead to raising the percentage … we are going to be hit a little harder … It is going to be disproportionally bad for wireless carriers … We are going to try to convince [the FCC] to come up with a way that is not as discriminatory toward wireless carriers,” said Coleman.
CTIA said the ruling could have serious negative impacts on wireless-to-wireline competition. “This harms not only the consumer but most importantly it harms the [FCC’s] and Congress’ goal of competition … What will be the impact on how much carriers pay into the universal service fund and how that will impact competition?” asked Brian Fontes, CTIA senior vice president for policy and administration.
