Telecommunications fund reallocation requested

The Transportation and Telecommunications Committee heard testimony March 19 on a bill that would amend the Nebraska Telecommunications Universal Service Fund Act.

Currently, 6.95 percent of every telephone bill is deposited into the Nebraska Universal Fund. The fund is distributed by the Public Service Commission to companies to offset the costs of ensuring comparable access to telecommunications services.

Columbus Sen. Paul Schumacher introduced LB617, which would change the fund’s allocation provisions. Telecommunication companies receive roughly $50 million annually from the fund, he said, but some rural communities still receive poor telecommunications services and pay high costs for them.

Since significant advancements in technology have been made and broadband service has become more affordable since the fund’s creation in 1997, he said, it is time to either phase out the fund or determine how to use it more effectively.

The bill would reduce the current 6.95 percent assessment to 3.5 percent by Jan. 1, 2021, and reallocate the funds to:
• promote private competition by allowing competitors to use the fund and requiring competitive access to facilities;
• identify fiber optic and wireless infrastructures;
• encourage the aggregation of community broadband demand over local area networks;
• provide affordable acquisition of access to tier one network providers;
• reinforce federal bans on the practice of implicit subsidization of local phone companies; and
• emphasize broadband communications using Internet protocols.

Great Plains Communications CEO Todd Foje testified in opposition to the bill, saying the funds enable companies to provide telecommunication services in high-cost areas. Many telecommunications companies would not be able to continue supporting rural areas without such funds, he said.

Curt Bromm, representing Verizon Communications, also testified in opposition, saying the Federal Communications Commission currently is discussing how to provide universal broadband coverage through federal policies. Furthermore, he said, companies already offer sufficient telecommunications services in the state.

“I think the reforms and the modernization are going to come about and be generated through what has begun on the federal level and will have more of a significant impact over time,” Bromm said.

No one testified in support of the bill and the committee took no immediate action on it.