WASHINGTON-The Texas Court of Appeals Thursday said a lower state court erred when it said Western Wireless Corp. is not eligible to receive universal-service subsidies.
The Texas Telephone Association and Texas Statewide Telephone Cooperative Inc. sued after the Texas Public Utility Commission rejected their reasons for denying Western Wireless eligible telecommunications carrier status, a necessary designation to receive subsidies at both the state and federal levels.
In a lengthy opinion, Texas Judge David Puryear detailed why the lower court erred and why the lower court should be reversed.
“Texas Telephone asserts the Texas PUC misconstrued the public-interest standard. Specifically, Texas Telephone alleges that the public-interest analysis must include an analysis of the impact of an additional carrier on the incumbent rural carrier because they argue, the addition of a second carrier might adversely impact existing services in rural areas, and therefore, customers in rural areas might be negatively impacted,” wrote Puryear. “When considering the impact on incumbents, the Texas PUC also considered that monetary assistance is available to incumbents to ameliorate the effects of Western Wireless being designated as an eligible carrier and provider. The Texas PUC did all that it was required to do: It weighed the potential benefits and the potential harms of granting Western Wireless’ eligibility application. Further, the Texas PUC has wide discretion when determining if an action is in the public interest.”
To get over the disparity in economic potential between rural and urban America, the universal-service fund was created to allow rural Americans to have comparable services at comparable rates to those paid by people living in cities.
With passage of the Telecommunications Act of 1996, wireless carriers were allowed access to universal-service subsidies.
Western Wireless has led the fight for wireless carriers to receive access to the universal-service fund.
Allowing wireless carriers to receive USF subsidies has increased the cost of the fund and worried many rural wireline carriers that believe wireless carriers were granted ETC status because regulators wanted to spur competition in areas where competition is not viable. Recently, The Federal Communications Commission adopted additional criteria for ETC designation, even for carriers that have already been granted ETC status. States are also encouraged to use the new standards.
The battle over ETC status is but one piece of the universal-service fight that is expected to move to Congress this year as the FCC continues to struggle with the contribution factor, the amount carriers must pay into the fund.
