In 1999, the Oregon Legislature created the Oregon Universal Service Fund (OUSF) to support and provide targeted investments for telecommunications service in rural areas of the state. OUSF receives revenue from a surcharge on landlines only. In its first operational year (2000), the surcharge brought in $12.6 million. The tax rate on landlines was 2.35 percent in the initial year, and because the use of landlines steadily declined while wireless technology use surged, the surcharge continued to increase and hit its statutory 8.5 percent cap. By 2017, the overall revenue plummeted to less than 60 percent of what was brought in the first year.
In order to bridge the devastating gap in funding caused by user decline and provide adequate infrastructure needs to the state, Representative Pam Marsh (D-Ashland) introduced House Bill 2184. The bill seeks to expand the surcharge to cell phone providers and voice over internet protocol (VOIP) to create an equitable and broad surcharge base reflective of today’s telecommunications usage. When OUSF was created, cell phones were new to the market, and providers were granted an exemption, even while cell phone providers use landline networks to complete calls and text messages. Today, cell phones lead the market and still exempted from the surcharge.
In addition to the continued need for support with telecommunications services, there also exists a growing need for broadband services across the state. The bill would create a fund specific to broadband to assist communities in developing broadband networks that would reach across the state to serve all Oregonians.
The House Committee on Revenue held a public hearing on the bill on April 2. Association of Oregon Counties (AOC) supports HB 2184 and efforts to bridge the funding gap to provide critical components for community infrastructure. AOC Legislative Affairs Manager Patrick Sieng testified in favor of the bill on behalf of AOC at the public hearing. To watch the AOC testimony, click here.
Contributed by: Megan Chuinard | Public Affairs Associate