Okies might notice a slight increase in their phone bills soon, as the Oklahoma Corporation Commission recently increased the assessment of funds that go into the Oklahoma Universal Service Fund.
The OUSF is used to help sustain rural telephone service, and it also provides funding for Oklahoma schools, libraries and health care facilities. The Oklahoma State Supreme Court spurred the change in funding rate - from 1.28 percent to 6.28 percent - when it reversed the OCC's previous decision to deny a request by Dobson Telephone Co. and Medicine Park Telephone Co. for reimbursements from the universal service fund.
The increase in OUSF charges will take affect July 1. Lake Region Electric Cooperative officials said this would increase OUSF fees on an average residential phone bill $2.30. The company will work with schools and libraries to fulfill their needs and possibly access some OUSF funds. It is already providing internet service for Norwood and Lowery Schools.
Commissioner Bob Anthony filed a separate opinion with the commission, in which he said Oklahomans will soon pay a surcharge of more than five times than what existed in 2018, and that the increased assessment rate - which all phone companies are required to pay - will generate $53 million new fiscal year.
"Oklahomans should pay more attention to the obscure, yet ever-increasing OUSF charges on their phone bills," wrote Anthony. "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."
Technically, the Supreme Court did not rule on whether the increase in assessment had to occur, but it ruled that claims made by a number of rural telephone companies had to be paid. So in order for the commission to ensure it has enough funds for the claim payments, it had to raised the assessment from 1.28 percent to 6.28 percent.
"Basically, the OUSF is established by state law, not commission rule, and it was established at a time when the telecommunications world was very, very, very different," said Matt Skinner, public information manager at the OCC. "The idea was to preserve rural phone service and for rural customers to be able to get telephone service that was on par with what was in urban areas."
The commission is required by law to make sure the OUSF has enough money to pay for pending and approved claims from rural telephone companies. So the assessment increase was necessary in order to meet the claims, said Skinner.
The OUSF statute also includes a "make whole provision," which gives independent telephone companies a chance to receive money from the OUSF if state or federal government actions cause their revenues to go down, or their costs to go up. Anthony wrote in his opinion that independent phone companies have not been receiving the same amount of money from the federal Universal Service Fund, requiring the Oklahoma Universal Service Fund to pick up the bill.
"As various federal subsidy programs have been cut back and abuses disallowed, some Oklahoma independent phone companies are already annually receiving OUSY monies to be 'made whole' for what the feds have stopped giving them," wrote Anthony. "Without a monetary cap and other needed restrictions, more massive OUSF assessment increases are likely to hit Oklahoma ratepayers thanks to the dubious "make whole provision."
The service fee is for cell phones and land lines. It is also up to the phone company's discretion as to whether or not it will pass on the charge to its customers. Skinner said in the past, many people probably didn't even notice the OUSF charge on their bill, as large companies would often eat the cost. However, he also said is it to be expected that companies will pass on some of the new charge to its customers.
"OUSF charges are sometimes confusing to a retail customer, because the charge is for subsidies, and the money might go to a telephone company who is not serving the confused customers and might be serving customers in a distant telephone exchange," wrote Anthony. "The Legislature set up the OUSF program by statue in 1997 to provide subsidies, without direct taxation, for primary universal service and free services for schools, libraries, hospitals that provide telemedicine, and county governments. Since 1997, the program has expanded to subsidize intrastate long distance service and even certain costs of highway relocations by city or state government."
Media inquiries were sent to AT&T and Verizon, regarding the impact the change in assessment could have on its customers. Representatives from neither company commented on whether the increased fee would be passed on to its customers.