House Bill 2184 C, a bill to bridge the current gap in funding in the Oregon Universal Service Fund (OUSF) and better provide access to broadband and telecommunications to Oregon residents passed the House floor on a vote of 37-22 on June 24.
Telecommunications regulation began in the Federal Communications Act of 1934. This Act established the concept of universal service, the idea that all Americans should have access to communications services at reasonable costs. Many states, in response to eventual deregulation of telecommunications, created carrier of last resort policies, requiring services to be provided to all persons within a service territory. In response to the non-recoupable high costs associated with the policy, the Oregon Legislature created the OUSF to provide targeted investments for telecommunications service in rural areas of the state. Over time, and through new use of telecommunications service technologies, revenues of the fund have declined.
As she carried the bill on the House floor, Representative Pam Marsh (D- Ashland) articulated, “by expanding the universal service fund to include cell and voice over internet protocol (VOIP) providers, we can lower the existing surcharge and still meet our obligations to rural users and the infrastructure that we depend upon. The concept of universal service was one established nearly 80 years ago in this country and the Oregon Universal Service Fund continues to promote that effort. This is good public policy.”
The fund receives revenues from a surcharge placed on landlines. As cell phones were new to the market at inception of this program, cell phones and providers were not included in the revenue base source, even while landline networks were and are used to complete calls and text messages by all users. Today, cell phones lead the market and are still exempted from the surcharge. OUSF revenues have plummeted. Overall revenues in the fund are 60 percent of what was brought in in the first operational year, even while rate has increased from 2.35 percent to the statutory cap of 8.5 percent.
In addition to expanding the surcharge base to create an equitable and broad revenue stream reflective of today’s telecommunications usage, the bill also creates a broadband assistance fund to aid communities in developing broadband networks serve all Oregonians.
Representative Greg Barreto (R-Cove) spoke against the bill citing high costs to cell phone providers and consumers, “funding is available. Oregon simply needs to access more federal dollars.”
Association of Oregon Counties (AOC) supports HB 2184 C and efforts to bridge the funding gap to provide critical components for community infrastructure to rural Oregon.
The bill, having been moved directly out of the joint committee on ways and means has only one more hurdle before the governor’s desk. It must pass the Senate floor.
For questions, please contact AOC Legislative Affairs Manager, Patrick Sieng.
Contributed by: Megan Chuinard | Public Affairs Associate