SB 785 – Requires certain telephone companies to reduce intrastate exchange access fees and dedicates funding in the Universal Service Fund to replace lost revenue

• Sponsor: Schaefer
• LR Number: 4188S.02I
• Committee: Commerce, Consumer Protection, Energy and the Environment
• Last Action: 3/2/2010 - Motion to vote bill do pass failed S Commerce, Consumer Protection, Energy and the Environment Committee
• Effective Date: August 28, 2010

Current Bill Summary

SB 785 - The act requires the Public Service Commission (PSC) to create within the Universal Service Fund (USF) a dedicated funding mechanism for high-cost service provision to be called the Missouri High-Cost Support Mechanism. Funds in the mechanism shall be used to offset the loss of revenue that will result from the act's required reduction of intrastate exchange access charges for certain incumbent local exchange providers. The PSC must determine the amount of funding necessary to be directed into the mechanism.

The act requires voice over Internet protocol (VOIP) and commercial mobile radio service providers to pay assessments into the USF. Existing law specifies the method and amount by which a PSC rate-regulated phone company can recover the cost of the USF assessments from its customers. The act removes the language specifying the method and amount and simply allows such companies to recover the full amount of the assessment from their retail customers. The act adds 2 criteria for a company to be eligible for high-cost support through the USF: the company is not charging a rate for essential services that is higher than the "benchmark" rate to be set by the PSC; and the company is in compliance with the act's high-cost support mechanism provisions.

The PSC must hold a formal proceeding to begin no later than October 1, 2010, in which it must determine which telecommunications companies are eligible to receive high-cost support payments from the mechanism.

The act requires incumbent local exchange providers with more than 25,000 access lines in Missouri on January 1, 2010, to eliminate the carrier common line portion of their intrastate exchange access rates by the time the PSC gets the mechanism established, or 30 days after the PSC's proceeding closes, whichever is later. These companies are authorized to increase their residential basic local rates in amounts specified in the act. Payments through the high-cost support mechanism to these companies must be calculated as specified.

The PSC shall review the need for the high-cost support mechanism not more than once every 5 years.

ERIKA JAQUES