California May Resolve Text-Message Classification for USF Assessment
California utility commissioners may decide if text messaging can be assessed USF fees, perhaps making it the first state to rule on whether texting is a telecom or information service. Public Utilities Commissioners could vote as soon as June 15 to open a rulemaking on whether text messaging is a telecom service that may be included in revenue-based surcharges for CPUC’s public purpose programs (PPP), which include California LifeLine, the Advanced Services Fund and other state programs, the agency said Friday. CTIA petitioned for a ruling that texting is an information service not subject to the fees, but consumer groups urged the CPUC to classify texting as a telecom service that may be assessed.
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It’s not clear whether text messaging is a telecom or information service, said the CPUC’s proposed decision in docket P1702006. "Because the question presented is one of first impression before this Commission and because the classification of text messaging under the Act is subject to conflicting interpretations as to which reasonable persons may differ, we conclude that the proper classification of text messaging is sufficiently ambiguous as to justify granting the petition to open a rulemaking to resolve that ambiguity and determine whether we should impose PPP surcharges on text messages.”
“No other state has specifically considered the question of whether text messages should be considered ‘telecommunications’ for the purpose of determining USF contribution,” National Regulatory Research Institute Principal Sherry Lichtenberg emailed Monday. She said the closest case may be the Nebraska Public Service Commission’s current proceeding to shift USF contribution to a connections-based USF mechanism (see 1704260048). The CPUC decision may turn on the technical issue of how text messaging is provided, Lichtenberg said. “If text messaging is considered part of a company's revenue, it might increase the amount of money available to the state USF, particularly as states see intrastate revenue declining and more consumers use text messaging as their primary means of communication.”
“Everyone wants a bright-line rule,” said Greenlining Institute Senior Legal Counsel-Telecom Paul Goodman in a Monday interview. The institute joined The Utility Reform Network (TURN) and the Center for Accessible Technology in a March 29 joint response seeking a ruling that texting is a telecom service. Some wireless companies have been assessing PPP and USF fees for text messaging but others haven't, Goodman said. The CPUC ruling may not increase or decrease programs’ overall funding levels, but it would affect which customers and how many contribute to the funding, he said. Policymakers should account for changes in how people communicate, Goodman said. “People are using phone calls less and less and text messages more and more,” he said: If texting can’t be assessed, the contributions base will shrink, resulting in “a small group of people funding a lot rather than having it spread out evenly among all telecommunications users.”
California's largest public purpose program is LifeLine, serving the state's most vulnerable customers, a TURN spokeswoman emailed Monday. “This appears to us to be a craven attempt by the telcos to take advantage of the current anti-regulation atmosphere to push their longstanding agenda to be free of any and all public requirements or responsibilities.” With people texting more and calling less, “this has the potential to be pretty significant,” she said. But the possible ruling’s exact impact to the low-income fund and other programs is tough to measure, the TURN spokeswoman said: “It isn’t clear from CTIA or the Commission whether staff has been consistently collecting this revenue on text messaging to date, but some carriers have been including text messaging.”
Text messaging is an information service and “essentially a mobile version of e-mail,” CTIA said in its Feb. 27 petition. Texting involves “’storing,’ ‘processing,’ and often ‘retrieving’ or ‘making available’ content between users on different carriers or platforms and in different lengths, formats, and protocols,” the wireless association argued. CTIA said it filed the petition because CPUC staff revised its website in March 2016 with the suggestion that text messaging is subject to PPP surcharges, “a substantive change that would significantly shift the burden of collecting the PPP surcharges and user fees.” Neither the CPUC nor the FCC ever stated that text messaging is a telecom service, nor directed carriers to include text messaging revenue in PPP or USF assessments, CTIA said.
The FCC and CPUC never ruled texting is an information service, either, countered the consumer groups. “Text messaging meets the FCC’s current definition of a telecommunications service,” even though “text messaging can involve incidental data conversion and storage,” they said. It “uses ordinary customer equipment without enhanced functionality,” and messages originate and terminate on the public switched telephone network, they said: The petition ignores human benefits of PPP fees.