Montana Universal Service Funds

Although the proceeding sparked an exchange of political rhetoric among some of its members, the Montana Public Service Commission has certified 20 telecommunications companies and affiliates as eligible telecommunication carriers (ETCs), securing over $100 million in federal funds to support the buildout of broadband and voice networks in high-cost areas across Montana.

While the decision to certify the 20 carriers as ETCs was unanimous, not all of the commissioners were uniformly supportive of the acceptance of the federal subsidies. On one side, Commissioner Bob Lake praised the action, stating that the funding is essential for providing broadband service in areas where it would otherwise be cost-prohibitive.

On the other side, Commissioner Roger Koopman said he hopes a separate inquiry the commission has launched will focus on what he called the “negative consequences of federal support, versus relying on free market solutions.” Commissioner Koopman added that the USF, like any subsidy, can have unintended consequences and can “crowd out private investment, stifle innovation, and transfer wealth from one group of citizens to another.” The inquiry alluded to by Commissioner Koopman refers to the commission’s decision to initiate a process to review its role in the ETC recertification process and associated Universal Service programs.

The commission explained that the monies each ETC is eligible to receive come from the Federal Communications Commission’s Universal Service Fund (USF) and are to be used to improve communication infrastructure in unserved and underserved areas across the country. In a statement accompanying its findings, the commission pointed out that from 1998 to 2016, carriers in Montana received approximately $1.5 billion in USF support. In contrast, Montanans contributed just over $220 million to the fund over that same period. The money is collected through an assessment on interstate and international enduser revenues of telecommunication providers. (Docket No. N2017.4.34)