IUSF - Broadband Study

The Indiana General Assembly has asked the Indiana Utility Regulatory Commission (“IURC” or “Commission”) to study the Indiana Universal Service Fund (“IUSF”) and broadband deployment.  See Section 13 of House Enrolled Act 1065 (“HEA 1065”), Public Law 177-2018 (“P.L. 177-2018”). 

The legislation requires:

 (c) Before October 1, 2018, the commission shall study the following topics:

(1) The types of service on which the IUSF surcharge is imposed

(2) The types of service for which disbursements from the IUSF may be used.

(3) The eligibility requirements for service providers to receive disbursements from the IUSF.

(4)  Broadband deployment (expansion and improvement of access to broadband services).

5)  Any other matter concerning universal service reform that the Commission considers appropriate.

(d) As part of its study, and notwithstanding IC 8-1-2.6-1.1, IC 8-1-2.6-13, and IC 8-1-32.5-6, the commission may request information from:

(1) service providers and customers; and

(2) any experts, stakeholders, or other interested parties;

concerning the topics outlined in subsection (c).

Comments

As allowed in Section 13(d) and pursuant to IURC General Administrative Order (GAO) 2018-3, Commission staff is seeking comments on the above topics of study from any service providers, customers, or interested stakeholders.

 

Please provide written comments by June 15, 2018, and reply comments by July 13, 2018.

 

Written comments may be submitted as follows:

 

Email: urccomments@urc.in.gov
Mail: General Counsel Beth Heline
         Re: IUSF-Broadband Study
         Indiana Utility Regulatory Commission
         101 West Washington Street, Ste. 1500 E
         Indianapolis, IN 46204

Background

 

The IUSF was established by IURC order to support small rural incumbent local exchange carriers in hopes of ensuring the continued deployment and maintenance of universal telephone service to all areas of the state at competitive rates. The IUSF is funded through a surcharge passed through to customers on intrastate retail landline and wireless telephone services. The IURC found that the fund would be competitively neutral and promote just reasonable, and affordable rates for telecommunications services. More information about the IUSF can be found here.

 

Today, access to broadband internet service at sufficient speeds is essential in many areas of daily life. Consumers are very familiar with the dramatic rise of the Internet’s importance in many areas, including education, business, retail sales, and entertainment. In order to gain access to the Internet, it is generally necessary for a customer to have some sort of broadband connection – such as wireline (DSL, cable, fiber, etc.), fixed or mobile wireless (e.g., LTE/4G), or Wi-Fi. 

 

One of the most difficult problems facing policy makers today involves finding ways to provide sufficient and appropriate incentives to entice providers to deploy broadband networks in rural and high-cost areas and to low-income customers where the economics do not support competitive delivery. The cost to deploy broadband facilities to rural and sparsely populated areas of the state is significant, and the IUSF and other sources of funds are being considered by policy makers as possible mechanisms that could act as a catalyst to spur deployment.  

 

On the federal level, the Federal Communications Commission ("FCC") determined that federal universal service funds would be used to support broadband within their high cost program beginning in 2011. That means that federal universal service fund support explicitly covers broadband as long as the provider receiving support also offers voice telephony services. Under the Connect America Fund, the FCC targets census blocks that do not have sufficient broadband and classifies each of those census blocks as “high cost” or “extremely high cost” to serve. The incumbent carrier receives a subsidy to provide broadband in high-cost census blocks. Indiana’s three largest telecommunications carriers committed to certain broadband deployment goals in such census blocks in their service areas. A competitive bidding process will be used to deploy broadband in extremely high-cost census blocks and census blocks in which incumbent carriers did not elect to take Connect America Fund support. In addition, the small rural local exchange carriers continue to have broadband deployment obligations in exchange for federal universal service support. In 2016, the federal universal service fund distributed over $125 million in support to serve high-cost areas to 45 Indiana incumbent and competitive local exchange carriers eligible for the program.