Commissioner complains to legislature about Universal Service Fund

Corporation Commissioner Bob Anthony has complained to legislative leaders about the rising Universal Service Fund costs that taxpayers are being forced to bear.

In a recent letter to them, the Commissioner said complaints are increasing because of 400 and 500% increases in telephone surcharges.

“In July 2019, the monthly OUSF fee charged on my personal phone bill jumped to $3.95 compared to just 75 cents the month before,” wrote Anthony in a letter to Senate President Pro Tempore Greg Treat as well as members of the Oklahoma legislature. “The cost of the OUSF to Oklahoma phone customers has now reached $53 million annually, with even higher surcharges soon to follow.”

Commissioner Anthony has complained in the past about the small telephone companies that are recipients of the $53 million.

“And should current members of the Oklahoma Legislature care if a few dozen Oklahoma independent phone companies, on average, receive subsidy payments of a million dollars annually without having to publicly disclose the most basic fundamentals of their business?  What if it were found that some of this $53 million annual subsidy enables $150,000+ compensation/benefit packages for numerous family members of an independent telephone company’s ownership?”

Read his letter below:

 

To:               Senator Greg Treat, President Pro Tempore

Filed July 29, 2019 in PUD 201800066

http://imaging.occeweb.com/AP/CaseFiles/occ30265588.pdf

To:               Current Members of the Oklahoma Legislature

From:           Corporation Commissioner Bob Anthony

Re:   Legislators get complaints about massive increase in telephone surcharge

Oklahoma telephone customers are beginning to notice 400-500% increases in a surcharge on landline and mobile phone bills – the OUSF, or Oklahoma Universal Service Fund, fee.  (In July 2019, the monthly OUSF fee charged on my personal phone bill jumped to $3.95 compared to just 75 cents the month before.  On another company’s bill, the OUSF fee rose from 57 cents a month to $3.26, a 472% increase.)  The cost of the OUSF to Oklahoma phone customers has now reached $53 million annually, with even higher surcharges soon to follow.

Who is getting that $53 million?  And should current members of the Oklahoma Legislature care if a few dozen Oklahoma independent phone companies, on average, receive subsidy payments of a million dollars annually without having to publicly disclose the most basic fundamentals of their business?  What if it were found that some of this $53 million annual subsidy enables $150,000+ compensation/benefit packages for numerous family members of an independent telephone company’s ownership?  (Testimony by a Corporation Commission expert in a recent OUSF case said salary expense paid to several of the “corporate officers” of one of these small telephone companies “seems exorbitant.”)  Unfortunately, if fee-paying customers or even the news media inquire, they will probably be told this kind of information is “confidential.”

Our state’s OUSF has many worthy beneficiaries, including technology for schools, libraries, rural health care and low-income households.  However, the 1997 Oklahoma Legislature also foisted a costly “make whole provision” (17 O.S. Sec. 139.106(K)) on the OUSF law whereby many independent telephone companies can demand money from the OUSF if any state or federal government actions cause any of their costs to go up or their revenues to go down.  But your constituents now see who ultimately pays – – they do!

And the worst is yet to come.  FCC reports show federal Universal Service payouts in Oklahoma of $268 million for 2017, down from $289 million in 2016.  Note not only the huge amounts but also the downward trend.  (Federal subsidy rules for telephone universal service payments have begun disallowing things like the private airplanes or office art work of subsidized companies.)  Because of Oklahoma’s statutory “make whole provision,” if these federal funds continue to decrease or get redirected to broadband rollout, our state OUSF will likely have to make up the difference.  The result will be unbelievably higher surcharges that will largely benefit the owners of a couple dozen privileged independent telephone companies who had good ol’ boy buddies in the legislature back in 1997.

 

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