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Vap: Lawsuit would result from Universal Service Fund transfer
A bill introduced in the Nebraska Legislature eventually could lead to an increase of $300 on telephone bills for some Nebraskan.
The measure, introduced by Sen. Mike Foley of Lincoln, calls for all but $20 million of Nebraska's Universal Service Fund to be placed in the state's general fund one year after the bill is enacted.
If that happens, Public Service Commission Chairman Jerry Vap told the Gazette, it would most likely prove a case being heard by the Nebraska Supreme Court which claims that the surcharge placed on phone bills is an illegal tax.
The lawsuit claims that the Nebraska Legislature transferred taxation authority to the Public Service Commission by allowing it to set the rate of the surcharge.
Phone customers throughout the state are charged a 6.95 percent surcharge for the Universal Service Fund. That money is used to finance three programs: a telephone assistance program which helps pay for phone service in rural communities; the Tele Health program, which connects medical specialists and records to the medical community throughout the state; and assistance for low income individuals needing assistance with phone service.
Vap said the surcharge hasn't changed since the Universal Service Fund was implemented in 1999. Vap said the PSC will begin looking at reducing the Universal Service Fund surcharge this year.
"We've been working with the Universal Service Fund during my three years with the commission," Vap said. "Once we're done reviewing the fund, we'll know exactly what's going out and what's coming in and we will probably be able to reduce the surcharge to a much smaller figure within a year."
Vap said he is strongly opposed to the idea of turning over any excess funds to the state's general fund. That excess should be returned to the rate payer, he said.
Vap said he doesn't believe LB751 will get out of committee and onto the legislative floor, "it's just an opportunity to get the issue on the table," he said.
Vap also discussed the requests being made by cellular phone companies to access federal Universal Service Fund monies.
Vap said the only way he could support giving the companies access to the fund would be if they presented a business plan that included expansion of wireless service in the rural areas of Nebraska. Two-thirds of the state of Nebraska has limited or no cellular service.
The companies that have approached the commission have presented plans that show only plans for towers east of Grand Island along the I-80 corridor. "If they aren't willing to develop systems in the rural areas, they don't need to come to me for my vote," he said.
Vap said he believes there's good reason for the two newest Alltel towers in McCook and near Trenton. "You have a state senator living in Trenton and the chairman of the Public Service Commission living in Mc-Cook," he quipped.
Vap explained that the equipment is very expensive to erect, but with the rural terrain, it will be necessary to place a tower every 10 to 20 miles to provide adequate coverage.
"Sen. Baker and I are going to continue to twist arms to get things done," he said.