Imposing USF Fee on Telematics Could Deal Fatal Blow to Service, APCO and NENA Warn
Adoption of numbers-based system as part of Universal Service Fund reform would have a negative effect on “important emergency communications services” if the fee is imposed on vehicle telematics services, such as OnStar or ATX, APCO and the National Emergency Number Association warned the FCC. Telematics companies were also at the FCC for recent meetings to ask the FCC not to impose the fee on their lines, a step proposed in all three rulemakings on USF reform now before commissioners.
Sign up for a free preview to unlock the rest of this article
If your job depends on informed compliance, you need International Trade Today. Delivered every business day and available any time online, only International Trade Today helps you stay current on the increasingly complex international trade regulatory environment.
“We are very concerned that one result of this change could impose a fatal blow to critically important telematics emergency communications systems that provide life-saving services such as automatic crash notification and in-vehicle emergency button calls,” the public safety groups said in a Tuesday letter. The groups said they have been working with telematics providers for more than a decade to better tie emergency calls from vehicles into 911 trunk lines.
“The telematics industry informs us that a switch from revenue-based to connections-based approach could impose universal service fees that far exceed the cost of delivering the telematics service to the customer,” APCO and NENA said. “According to the industry, such a dramatic increase in the cost of providing the service could lead to the service itself being shut down and automakers abandoning the planned expansion of these emergency services for future vehicles. This seems contrary to the Commission’s goal of ubiquitous, location-based emergency response and ultimately to the safety of individuals in vehicles.”
A wireless industry official said the public safety letter “raises the stakes” as the FCC examines whether to make telematics subject to a per-connection USF fee. “If you're using this for emergencies or once in a while for getting the door unlocked… this is not a service that gets used very much,” the official said. “The average minutes per month is two minutes or less, as compared to the average wireless post-paid plan which has 826 minutes use per month.” The average telematics customer uses about 20 cents per month worth of airtime. A $1 USF fee would be equivalent to a 500 percent tax, the official said.
Representatives of OnStar, ATX, HUGHES Telematics and Toyota, which is developing its own service, met with Commissioner Jonathan Adelstein, and staff for Chairman Kevin Martin and Commissioner Robert McDowell last week to raise concerns about imposing USF fees on telematics lines, they said in a filing.
The FCC has always differentiated telematics service from standard phone service, the companies told the FCC. “The Commission has ruled that telematics is not a commercial mobile radio service, is not comparable to or substitutable for wireless telecommunications service, does not enable users to place calls to or receive calls from the public switched telephone network, and is exempt from E-911 requirements,” they said. “Telematics is not and never has been regulated by the FCC as a form of telecommunications.”
Imposing a fee of 85 cents or $1 on each line as expected would deter sale of telematics services with new vehicles, the companies said. “A cost increase of this magnitude would significantly reduce the usage of these lifesaving emergency response services, due to consumers’ price elasticity of demand for these services, and would deter automakers from offering these important services on future vehicles.” Volvo Group North America and its wholly owned Telematics Service Provider, WirelessCar, raised similar concerns in a letter sent this week to the commission.