PSC urged to extend phone fees to wireless customers

If South Carolina mobile phone users are forced to contribute to the state’s universal service fund, their monthly cellphone bills would likely rise less than 1 percent, state regulators were told Wednesday.

The South Carolina Public Service Commission, wrapping up two days of testimony, must decide whether the fee should be applied equally to both landline telephone companies and wireless telephone carriers. Currently, only landline customers may pay the fee.

The state law creating the universal service fund was passed in 1996 to increase access to affordable phone service in rural areas where it’s costly to extend and maintain the lines. The phone industry has undergone a revolution of changes since that time, with a majority of S.C. phone users now subscribing to wireless carriers.

That means the pool of landline users dropped by nearly half between 2003-2013, expert witnesses told the state commissioners, while the number of wireless users rose by nearly an identical percentage during the same period.

The seven-member commission did not set a date to decide the long-brewing battle between traditional phone carriers and the now-dominant wireless industry. Specifically, the PSC is being asked to decide if the mobile phone industry provides competition to traditional landline businesses. Under state law, if the commission answers yes, the fee must be charged to mobile phone customers.

“We think evidence provided says that competition (for phone customers) exists (between landline companies and wireless carriers), and no evidence has been presented to contradict that,” said Christopher J. Rozycki, telecommunications director for the South Carolina Office of Regulatory Staff.

Rozycki, a 30-year state telecommunications expert, told the commission the fee would likely amount to a 0.81 percent increase to South Carolina cellphone carriers, which would amount to about a 38-cent increase on monthly individual cellphone bills.

Rozycki said he calculated the monthly bill increase based on figures supplied to the Public Service Commission by the wireless industry. Initial projections by mobile phone carriers were that the state’s 4.5 million mobile phone users could see their monthly bills rise by between 1 percent to 2 percent if the universal service fund is applied to their service.

Landline users pay a 2.65 percent monthly fee on their phone bills for the universal service fund. If cellphone users were brought into the universal service fund pool, landline customers would pay 1.65 percent or less, according to projections.

Michelle Robinson, a Verizon Wireless vice president, told The State the company had asked the PSC a few months ago to review the universal service fund rather than rule on extending the fees to wireless customers. But the commission declined.

“In our view the problem with this fund is there is no transparency. A consumer of a landline service in the state of South Carolina has no idea whether the money they are contributing to this fund is being used appropriately and for its intended purpose. No idea.”

Rozycki said the Office of Regulatory Staff, which is supposed to represent the public’s interest in front of state regulated utilities, has turned up no evidence the fees are being misused by the landline companies.

This story was originally published November 4, 2015 at 7:34 PM.