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Senate of Pennsylvania
Session of 2017 - 2018 Regular Session


Posted: May 3, 2017 12:55 PM
From: Senator Ryan P. Aument
To: All Senate members
Subject: Pennsylvania Universal Service Fund
In the near future, I will introduce legislation designed to preserve access to basic landline telephone service in rural exchanges throughout the Commonwealth and require a comprehensive review and analysis of future state support for these services.

Through Act 183 of 2004, the General Assembly addressed the universal deployment of broadband service in Pennsylvania. The act provided streamlined regulation for all incumbent local exchange carriers in exchange for universal broadband deployment across the state. Most of Pennsylvania’s rural local exchange carriers (RLECs) achieved this milestone at the end of 2008 with the larger RLECs meeting the commitment at the end of 2013.

While this extraordinary commitment was being met, regulatory, competitive and technological changes were transforming the telecommunications landscape, potentially leaving rural customers behind and creating an economic divide in the state when it comes to accessing basic landline telephone service and the network necessary to support broadband services.

The provision of basic telephone service in rural areas at reasonable rates has been a long standing policy priority, supported by the federal and state Universal Service Funds (USF) and intercarrier compensation (ICC) systems. These programs were designed to offset the higher costs of providing service in rural exchanges. Rural areas often provide technological and geographical challenges to the provision of telephone service and therefore it is more expensive to provide service to these areas than to large cities and suburbs. The PA USF was created to provide support to rural telecommunications carriers and ensure comparable basic service rates throughout the Commonwealth.

In 2011, the Federal Communications Commission (FCC) dramatically altered the USF and ICC systems; removing much of the support for basic telephone service. This loss of support will jeopardize the ability of rural telecommunications carriers to continue to provide low-cost basic service to customers in high-cost areas. The Pennsylvania USF is the only remaining support mechanism available to ensure that rates for basic service in rural areas remain affordable.

Despite its reduction of support for basic telephone service, the FCC has recognized the importance of universal service and encouraged states to supplement the loss of federal funding through state universal service funds or other mechanisms. (Connect America Fund II Order, December 11, 2014.)

My legislation maintains the current funding level of the PA USF until December 31, 2021 and requires the Public Utility Commission to undertake a full review of the program. Under the legislation, the provision of basic landline service is a condition precedent to the receipt of funding for any rural telecommunications carrier.

I encourage your co-sponsorship of this legislation.

Introduced as SB740