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Oklahoma Corporation Commission approves universal service fund assessment increase on phone bills

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Photo by Ehimetalor Unuabona on Unsplash
Photo by Ehimetalor Unuabona on Unsplash

Oklahoma Corporation Commissioners on Wednesday voted unanimously to increase by more than 500% a fee charged on phone service in Oklahoma.

The change affects how much the agency collects from phone companies’ revenues paid by customers for in-state phone services to supply dollars to the Oklahoma Universal Service Fund (OUSF).

Brandy Wreath, fund administrator and director of the commission’s Public Utility Division, sought to raise that assessment from 1.2% to 6.28%.

The approved increase will take effect July 1 and is expected to raise about $54 million to meet anticipated reimbursement requests during the coming fiscal year.

Wreath initially requested increasing the percentage the fund receives to 5.03%. However, that earlier estimate didn’t include payments the Oklahoma Supreme Court earlier this month required the fund to make to two rural service phone providers in cases involving requests the commission previously denied.

“Approving the 6.28% option would be the preferred way to go for administrative efficiency,” Wreath told commissioners Wednesday.

Wreath added he might soon request yet another increase, given that numerous pending requests from companies to tap the fund this fiscal year are still making their way through administrative and legal reviews and could increase the fund’s liabilities.

Universal service fund dollars are collected by both Oklahoma and the federal government, which collects its own assessment that is triple the size of the state’s (even after the authorized increase) for the Federal Universal Service Fund.

The percentage-calculated assessments are collected from revenues companies collect from customers for landline, wireless and Voice over Internet Protocol phone services.

In turn, the programs make those dollars available to companies that provide telephone services in remote and rural areas to help them keep those services affordable for customers.

Universal Service Fund dollars also are provided to libraries, schools and nonprofit hospitals to help them defer costs to provide internet services to those they serve.

All requests for payments from the Oklahoma fund are paid only after extensive reviews by the Public Utility Division’s staff and commission approvals.

As for the assessments, all phone companies are required to pay those dollars into the Oklahoma and federal funds. However, not all phone companies pass along those charges to customers on their bills, officials said.

Corporation Commission Chairman Todd Hiett and Commissioner Bob Anthony on Wednesday continued to express concerns they’ve held about the program for some time, but said the Oklahoma Supreme Court rulings, based on state statute, gave them little choice in the matter.

“We have exhausted all avenues that we have,” Hiett said.

The new state rate, combined with the assessment collected for the Federal Universal Service Fund, boosts total assessments on phone companies’ revenues to greater than 28% (the federal government assessment is 22%), Anthony noted, adding it mostly impacts customers of AT&T, Verizon, Cox and Sprint.

“Oklahomans should pay more attention to the obscure, yet ever-increasing OUSF charges on their phone bills,” Anthony wrote in a separate opinion on the request he issued Wednesday.

“Although previously, most OUSF annual payouts provided support of internet service for schools, libraries and hospitals, the new higher amounts will now principally go to independent telephone companies and/or their owners,” he wrote.

Anthony wrote he takes issue with language in Oklahoma’s statute that enables independent telephone companies to tap the fund for reimbursement when an action by the state or federal government increases their costs or reduces their revenues, adding the recent supreme court decisions ignored Corporation Commission rules that require companies to seek dollars from alternative sources before tapping the fund.

“Without a monetary cap and other needed restrictions, more massive OUSF assessment increases are likely to hit Oklahoma ratepayers,” he wrote.

Jack Money

Jack Money has worked for The Oklahoman for more than 20 years. During that time, he has worked for the paper’s city, state, metro and business news desks, including serving for a while as an assistant city editor. Money has won state and regional... Read more ›

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