Editor’s Note: A previous version of this story underestimated the amount of USF payments to the territory’s telephone service providers. Those amounts have now been corrected.
Public hearings this week on the three islands over Choice Communications’ petition to be eligible for federal Universal Service Funds were short—with no one speaking against the request—boding well for Choice’s move toward providing cell phone service later this year.
The V.I. Public Services Commission held hearings on St. Thomas and St. John Tuesday and St. Croix on Wednesday, requesting public input on a formal request from Choice to collect federal Universal Service Fund (USF) grants as an Eligible Telecommunications Carrier (ETC).
The USF is a Federal Communications Commission-controlled program designed to bring better telecommunications services to rural and insular areas. Funds must be spent on improving telecommunications service in the territory. The FCC makes the final determination but usually defers to the local regulatory recommendation, in this case, that of the PSC.
Vitelco, the territory’s land-line phone company, has had ETC status for many years. According to the FCC, the entire territory received in the neighborhood of $21.1 million in USF high-cost service subsidies in 2008, principally, if not exclusively, going to Vitelco. Precise amounts are determined by the FCC each year. In the past, funding increased to accommodate additional carriers, but two years ago, that changed, so all carriers will be sharing the same, shrinking pool of funds.
Choice Communications in the U.S. Virgin Islands and Centennial Wireless out of Puerto Rico both applied to the PSC and FCC for ETC status in 2005. Vitelco vigorously opposed granting the status at that time. The FCC traditionally defers to local authorities on this question. The PSC ruled it lacked the statutory power to make the decision.
For a while, Choice moved away from pursuing cellular communications, instead focusing upon dialup and wireless internet service. In late 2007, the V.I. Legislature clarified the territory’s law concerning cell provider eligibility, and the PSC approved USF status for Centennial for the first time in February of 2008. Centennial anticipated receiving roughly $1.3 million in annual USF subsidies, based upon the number of customers it serves.
Now Choice is again trying to enter the territory’s cellular market, and is asking the PSC to give it ETC status and to approve an interconnection agreement with Vitelco. Should it receive ETC status, it will be eligible for a share of USF funds, based upon the number of customers it serves.
PSC Commissioner M. Thomas Jackson, who is acting as hearing examiner for Choice’s requests, waited for 15 minutes each time to see if someone would appear to speak against the ETC proposal, but no one did, so the meetings were very short. On April 21, Jackson will bring the proposal and his recommendation to the full PSC for consideration. Since no one spoke against the ETC proposal, the prospects look good, Choice General Manager Tony Shepherd said Wednesday.
PSC staff has hammered out an agreement with Choice and are also recommending the PSC commissioners approve the request.
Monday evening in its St. Thomas offices, the PSC will look at Choice’s proposal for an interconnection agreement with Vitelco.
The interconnection agreement with the land-line phone provider is necessary for a cell company to function in conjunction with other phone providers.
"It is required so land-line phones can make a call to one of our cell phones without it being a long-distance call, for instance," Shepherd said.
Plans will not be finalized until after the PSC makes its decisions, Shepherd said. But should the PSC grant Choice’s requests, it plans to begin offering cell service later this year, perhaps as soon as early summer, he said.
