Alaska USF May Live if Commissioners Choose: Governor's Office

Alaska USF’s possible June 30 termination is raising concerns and producing much discussion among industry and consumer advocates in the state. A spokesperson for Gov. Mike Dunleavy (R) told us the Regulatory Commission of Alaska (RCA) may decide the fate of AUSF, which was established to keep phone rates low in high-cost rural areas. If those dollars go away, “somebody has to pay those costs, and the somebody is most likely going to be those rural ratepayers,” said Alaska Chief Assistant Attorney General Jeff Waller in an interview Friday.

The Alaska Universal Service Administrative Co. is preparing for its own dissolution due to a March 24 Department of Law memo rejecting the RCA’s Feb. 7 order to extend the fund by three years, an AUSAC official said at an RCA meeting last week (see 2304050059). One concern raised by the department was that the current AUSF distribution method provides more AUSF support to carriers of last resort, but a 2019 state law eliminated COLR requirements and consequently removed the distinction. “Though we realize that these regulations have been a bone of contention for the regulated telecommunications utilities, we nonetheless disagree with an approach” that ignores regulatory inconsistencies, the department said.

"The AUSF can continue at the discretion of the” RCA, as indicated by the department memo, a Dunleavy spokesperson emailed Monday: “The only issue in the prior proposed regulations was that the disbursement was tied to repealed statutes on” COLR. “Essentially the RCA decided to extend now defunct regulations, instead of establishing a new disbursement methodology.”

AUSAC and others plan to discuss the sunset more at an RCA meeting Wednesday. The commission asked for written comments by May 5 on a proposal last week to repeal AUSF rules (docket R-21-001). The commission can't comment on open rulemakings, an RCA spokesperson said Tuesday.

The Alaska AG's Regulatory Affairs & Public Advocacy (RAPA) section “consistently stated that the AUSF should continue,” and will say so again in comments, said Waller, who advocates for the public interest and doesn’t provide legal advice to the RCA. “If there is an issue that makes the current method of distribution violate the law, that’s not the same as whether we should have the fund,” said Waller. “You don’t throw out the baby with the bathwater. You keep the fund and you fix the way you distribute it so it complies with the law.” Asking the legislature to change the law is one option, though RAPA believes the state commission still has jurisdiction to administer AUSF despite 2019 statutory changes to its telecom authority, he said.

At last week’s RCA meeting, Commissioner Robert Pickett said it would take a miracle to save AUSF. Waller said “it would be great if he agreed with us, but … we can have a difference of opinion [and it] doesn’t change our position” that the fund should continue.

“People were not expecting this,” said VantagePoint Vice President-Public Policy Jeff Smith in an interview. “There’s a lot of interested dialog going on,” with “a lot of lines going in a lot of directions.” Smith represents the Alaska Remote Carrier Coalition, which has members in parts of Alaska not connected by roads.

Smith hopes for more information at Wednesday’s meeting. “I’m up to my hips” trying to find out if there are any options to keep the fund alive, he said. “You’ll always have the potential of a legislative solution,” but “I can’t definitively say that is the answer.” ARCC agrees with Pickett's past calls for legislative clarification on RCA authority.

Ending the fund would have a “painful impact” on companies, said Smith: ARCC is assessing possible alternative revenue streams. “A lot of companies are going to have to look at how much they may have to shift back to … end user customers.” That may be the “obvious” choice, but “it’s not practical to put that whole burden on the end user customer,” he said. “That was why there was an AUSF in the first place.” Smith doesn’t have an estimate of how much rates could rise but said customers would certainly “notice it on their bills” if their telco shifts costs to them.

The Alaska Telecom Association “is very concerned about the negative impacts of a sunset of the AUSF,” emailed ATA Executive Director Christine O’Connor. “We are hopeful a resolution which avoids a sunset can be found.”

“AUSF is an important component to keeping rural Alaskans connected affordably,” said an Alaska Communications spokesperson. “We are concerned about the potential impact this could have on Alaska’s most vulnerable communities.”

Alaska AG Treg Taylor (R) urged the RCA to clarify its public notice for non-lawyers, in comments Monday. Lay people might not “understand that the effect … will be to remove the mechanisms by which the AUSF operates and thereby dissolve the fund in its entirety, effective June 30, 2023,” said the AG: No previous notice or order said the commission planned to end AUSF.