[T]he telecom bill’s main sponsor introduced an amendment that would stop the state from using the universal service charge to hire new employees who regulate broadband Internet service providers.
The House Committee on Commerce and Economic Development passed the amendment to H.117, and the Committee on Ways and Means voted the amended bill out of committee on Friday afternoon. The bill now moves to the House Committee on Government Operations for additional markup.
Rep. Sam Young, D-Glover, wrote the amendment to H.117, which expands the Department of Public Service’s telecommunications division into a Division of Telecommunications and Connectivity that would would regulate broadband Internet service providers in a similar way that the department has regulated landline telephone companies for decades.
The amendment lets the department take about $271,000 in fiscal year 2016 out of the universal service fund to hire up to three new non-union workers in the telecommunications and connectivity division.
The Commissioner of Public Service would then need to submit a study by Jan. 1, 2016 saying whether revenue from the telecommunications gross receipts tax would be enough to pay for those three new workers in the division.
If the revenue from the gross receipts tax is not enough, the amendment directs the commissioner to recommend an increase to the rate, which is currently 0.5 percent for telephone companies.
Young said he introduced the amendment because the department has been using money from the universal service charge instead of the Legislature’s general fund for hiring personnel.
Public Service Commissioner Chris Recchia said Thursday that he proposed funding the positions through the universal service charge in order to relieve some of the budget burden facing the Legislature this year.
“My goal is not to institutionalize that,” Young said. “My goal here was just to keep the (connectivity) fund whole and get as much money in the fund as possible.”
Jim Porter, telecommunications director for the Department of Public Service, said Friday that he worked with Young to come up with amendment language that the department is happy with.
“The department preferred the original H.117 that came out of House Commerce,” Porter said. “That said, Rep. Young did work with us on the amendment to make it a better amendment.”
The Vermont universal service fee is a 2 percent tax charged on cell phone and landline bills. The Legislature raised the fee from 1.8 percent to 2 percent in 2014 in order to put the extra 0.2 percent toward connectivity, or Internet access, initiatives.
Under the current version of H.117, that small fraction of the universal service charge is then divided roughly in half — 45-percent and 55-percent — between the High-Cost Program and the Connectivity initiative.
That works out to just under $1 million each to maintaining universal broadband Internet access in Vermont, and making sure sure available Internet speeds are no lower than 10 Mbps (megabits per second) for downloading and 1 Mbps for uploading.
The move to get high-speed Internet service into homes and regulate broadband Internet services under the wing of the Department of Public Service is reflective of the national move toward regulating broadband under telecommunications laws.
On Thursday, the FCC voted in favor of net neutrality rules and to classify broadband Internet as a telecommunications service under Title II of the Telecommunications Act of 1996, the New York Times reported.
Recchia, the public service commissioner, told the House Committee on Ways and Means on Thursday that regulating telecommunications and connectivity together is a logical move based on federal telecommunications laws and an efficient choice in a tough budget year.
The H.117 legislation would also repeal a law passed to create a six-person Division of Connectivity within the Agency of Administration, meaning the state would need about half as much money for personnel.
The Vermont Telecommunications Authority currently has handled broadband Internet services since 2007, but that authority will disband later this year.
