State considering early close for telephone, internet fund

    Anchorage, Alaska (AP) - Alaska regulators are considering whether the state should continue replenishing a rural telephone and internet service fund or shut it down, a report said.

    The Alaska Universal Service Fund is losing money and has already been scheduled for closure in 2023, The Anchorage Daily News reported Thursday.

    A Regulatory Commission of Alaska meeting Wednesday included discussion of possible early closure.

    The fund was established in 1998 to distribute fees levied on phone service to companies across the state.

    The commission approved several changes to the fund last year including the end of state support for "lifeline" telephone service and a cap on the universal service fee.

    Partially because of the cap, the fund entered 2019 at a deficit. The fund is expected to collect about $1.25 million per month, but this year has paid out almost $2 million monthly.

    The fund suffered an additional blow when an unidentified cellphone provider changed its billing program in a way that further reduced revenue.

    Without revisions the fund could run dry by November and managers would have to decide which bills to pay, officials said.

    "The size of the fund has decreased over time and will likely continue to decline unless changes are made," wrote Christine O'Connor, head of the Alaska Telephone Association, the state's leading telecommunications trade group.

    The fund could reduce payouts through regulation, although officials suspect additional reductions in corporate fee payments are possible.

    Other suggestions include revising the rules dictating which areas or programs are eligible for universal service money or changing fee collection regulations, officials said.

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