Arizona Universal Service Fund

Docket Number
Assigned Staff
Dan Pozefsky, Chief Counsel
Ben Johnson Ph.D. (Ben Johnson Associates)


Case Information:

This case involves a generic docket (RT-00000H-97-0137) that was opened by the Arizona Corporation Commission (“ACC” or “Commission”) in 1997.  Recently, the Commission consolidated this docket with another generic access charge docket (T-00000D-00-0672) for the purpose of determining whether or not the subjects of these two dockets need reform. 

The Arizona Universal Service Fund (“AUSF”) was established to maintain statewide average rates and the availability of basic telephone service to the greatest extent reasonably possible. RUCO has taken the position that the Commission should investigate opportunities to reduce intrastate access charges (i.e. intercarrier compensation – what one carrier pays to another) without substantially increasing basic local exchange rates.  One way the Commission could do this is by restructuring and expanding the AUSF.  If the AUSF is restructured, it could help ensure that universal service is advanced and customers are protected against unreasonable increases in basic local exchange rates. 

RUCO has several concerns regarding these generic dockets.  RUCO’s paramount concern is that changes to access rates for individual carriers requires a finding of fair value since it will take place outside of a rate case. Another concern is assurance that there is not too large a shift of revenues from the access charges to the AUSF surcharges or residential basic rates. 

After the parties to the case filed several rounds of comments, a “straw man“ proposal was circulated to see if a consensus concerning reform could be reached.  RUCO filed comments on January 7, 2008.

After the filing of the “straw man” proposal and an issues matrix, the parties met on several other occasions and were unable to reach a resolution.  As a result of this impasse, an evidentiary hearing was scheduled by the Administrative Law Judge ("ALJ") assigned to the matter.

Direct testimony was filed on January 6, 2010.  Rejoinder testimony was filed on Friday March 5, 2010.

Per the ALJ's Procedural Order, issued on Tuesday, September 29, 2009, the hearing on the matter began as scheduled at 10:00 a.m. on Tuesday, March 16, 2010 at 400 W. Congress in Tucson and was concluded on Thursday, March 18, 2010 at approximately 7:00 p.m.

Initial closing legal briefs were filed on Friday, July 9, 2010.  Per a Procedural Order(link is external)issued on Wednesday, August 25, 2010, reply briefs were filed on Tuesday, September, 14, 2010.

On Friday, November 25, 2011, the ALJ assigned to the matter issued a Procedural Order(link is external)scheduling a procedural conference for 10:00 a.m. on Friday, December 16, 2011, for the purpose of discussing a long-awaited Federal Communications Commission's ("FCC") Order (filed on October 29, 2011, after the conclusion of the evidentiary hearing and the filing of legal briefs) which addresses the federal Universal Service Fund and Intercarrier Compensation ("CAF Order").  The FCC's  CAF Order addresses many of the issues raised in these dockets.

On Wednesday, December 13, RUCO docketed a filing(link is external) that supported AT&T's December 9, 2011 request(link is external) to reschedule the December 16, 2011 procedural conference in order to have more time to study the FCC's CAF Order.

On Wednesday December 15, 2011, the ALJ granted AT&T's request and issued a Procedural Order(link is external) that continued the procedural conference for 1:30 p.m. on Monday, February 6, 2012, at 400 W. Congress in Tucson.

On Monday, February 6, 2012, the scheduled procedural conference convened in Tucson.  While they disagreed slightly on the timing, the Commission’s Utilities Division (“ACC Staff ’) and AT&T Communications of the Mountain States, Inc. and TCG Phoenix (“AT&T”) recommended that the Commission elicit written comments from the parties about the impact of the CAF Order on these dockets.  ACC Staff was particularly interested in the impact of the FCC’s Order on rate of return carriers.  All other parties participating in the February 6, 2012, procedural conference recommended either closing these dockets, or holding them in abeyance, because they claim that the FCC’s Order settles the issues, or that until the result of the appeals known, the Commission’s options are limited.

On Wednesday, March 21, 2012, the ALJ assigned to the matter issued a Procedural Order(link is external) that requested initial and reply comments concerning the impact of the CAF Order on Docket Nos. RT-00000H-97-0137 and T-00000D-00-0672.

On Wednesday, May 16, 2012, the ALJ issued a Procedural Order(link is external) that granted ACC Staff's request for an extension of time to file responses and reply comments containing recommendations on a number of items associated with the CAF Order.

On Friday, June 15, 2012, ACC Staff and other interested parties filed their initial comments  on the impact of the CAF Order.

Reply comments were filed on Monday, July 2, 2012.

After the filing of legal briefs, the ALJ will weigh all of the evidence presented during the proceeding (including public comments and correspondence from concerned ratepayers) and will issue a Recommended Opinion and Order ("ROO") that will be voted on by the five sitting ACC Commissioners. The Commissioners can either accept, reject or amend the ROO during a noticed Open Meeting.