fgoldstein
join:2003-01-21
Newton Highlands, MA
 ·RCN CABLE
| reply to batterup
said by batterup  :Before divestiture The Phone Company didn't use the USF. Uh, sure it did. Just not as an explicit federal tax.
Before divestiture, Ma Bell and the Independents had a kludgey system called Separations and Settlements, in which toll revenues were divided between AT&T Long Lines and the LECs at either end of a call based upon a complex set of formulas. The last ones used were called the Ozark Plan, which based the LECs' share upon relative investment in plant. Plus it weighted interstate calls at (eventually) about 3.2 times a local call, when determining what share of the local loop's usage was interstate. That share (PIU) times the multiple (SPF) was compared with the local usage, and the LD share of common, fixed costs was covered out of toll revenues. The bottom line was that a high-cost rural telco could collect more than 100% of the toll charge, just for its end of the call.
This didn't work with LD competition so the system of Switched Access Charges was ordered as a replacement. Divestiture happened to occur around then, so the effective date was set to be the same. That was actually a coincidence.
TA96 says that subsidies (USF) are supposed to be explicit and portable, but that's often honored in the breach. |
