TR Daily Input Sought on Freeing ICS Providers from USF Contribution Obligations
Friday, August 16, 2019

Input Sought on Freeing ICS Providers from USF Contribution Obligations

The FCC’s Wireline Competition Bureau solicited comment today on a petition filed by Network Communications International Corp. (NCIC) seeking forbearance from the requirement for inmate calling service (ICS) providers to contribute to the Universal Service Fund based on their interstate and international ICS revenues, as other providers of such services are generally required to do.

“Under applicable FCC regulations, ICS providers are permitted to pass through the USF contribution as an ancillary fee charged to ICS customers,” NCIC noted in a petition for forbearance filed on Aug. 9. “At the same time, a significant portion of ICS customers that are paying USF ancillary fees are otherwise eligible to receive assistance from USF programs. As a result, the payment by ICS customers of USF ancillary fees has led to the absurd result of USF-eligible recipients actually contributing to the very programs from which they receive services.”

NCIC cited several studies showing that incarcerated individuals and their families come disproportionately from low-income households, suggesting they would disproportionately be eligible for the USF Lifeline program.

NCIC argued that granting its petition would “help ensure that ICS customers pay just and reasonable rates for ICS calls. Further, a grant of the instant request will provide more protection for ICS customers than is currently present. Eliminating the USF fee for interstate and international ICS calls will encourage additional contact between inmates and loves ones, which also serves the public interest. Finally, the elimination of USF contributions derived from ICS calls will not harm the USF budget, and will have less of an impact on the USF Contribution Fee than previously approved forbearance petitions.”

Eliminating the federal USF contribution obligation would reduce the costs of the 20% of ICS calls that are estimated to be interstate or international, NCIC said. Applying that 20% estimate to total ICS revenues, and then applying the current USF contribution factor of 24.4% leads NCIC to the conclusion that ICS contributions in the third quarter of 2019 would be $58 million, or 0.5% of the USF budget for 2018. “Notably, the instant request, if granted, would be less than what the FCC previously found to be de minimis,” it said.

“Moreover, … should the FCC grant the instant petition, the loss of ICS USF contributions would lead to a difference in the contribution factor of only .15%, which also is similar to the modified contribution factor previously approved in the NTCA/US Telecom petition, ” NCIC said.

Comments on or oppositions to the petition are due Sept. 16 in WC docket 19-232. Reply comments are due Oct. 1. —Lynn Stanton, [email protected]

MainStory: FederalNews FCC UniversalServiceLifeline

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