NARUC Wants Consumers to Have Discounted Access to the Internet

The National Association of Regulatory Utility Commissioners (NARUC) wants the Federal Communications Commission (FCC) to declare that broadband access service is eligible for Lifeline and Link-Up programs. Such a policy may have a positive impact on cable operator revenues by increasing subscribership but so far I see no support on the part of state regulators for such a policy.

The FCC’s policy on access to broadband is that all Americans should have robust and reliable products and services. Regulatory policies, according to the FCC, must promote technological neutrality, competition, investment, and innovation to ensure that broadband service providers have sufficient incentive to develop and offer such products and services. The FCC, however, has not taken any action that would implement this policy position that would make broadband access eligible for universal support.

State public utility commissions have not implemented any policies that would make broadband access eligible for programs such as Link-up and Lifeline. Link-up offers low-income consumers a discount on connection fees for telephone service while Lifeline provides low income consumers with a discount on monthly telephone charges. These programs are paid for in part out of federal and state universal service funds. Eligible telecommunications companies who contribute to a universal service funds and upon making a showing as to their costs for providing access are able to recover their costs from distributions received from the fund.

Only one state, California, promotes broadband access in unserved and underserved areas of the state through a special fund, the California Advanced Services Fund. Colorado is currently considering implementing a high-cost support fund to be used for promoting broadband access (See Docket No. 08R-476T).

If the FCC and the states were to implement universal service for broadband access, the immediate impact on cable operators would be an increase in operational expenses resulting from required contributions to such a fund. Rates may increase in order to recover the contributions and there is the possibility that some companies may recover less in distributions from a fund versus what they put into a fund.

About Alton Drew

Alton Drew brings a straight forward and insightful brand of political market intelligence. Alton Drew graduated from the Florida State University with a Bachelor of Science in economics and political science (1984); a Master of Public Administration (1993); and a Juris Doctor (1999). You can also follow Alton Drew on Twitter @altondrew.
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