Palau National Communications Corporation is NOT exempted from paying the Universal Service Access Levy (USAL), rather its payment of the United States RUS loan will be deducted from the 15% USAL during the remaining term of the loan. 

The earlier report from Island Times was in error when it stated that PNCC will be exempted from paying the Universal Service Levy under HB 10-116-11,HD1,SD1, corrected Senator Rukebai Inabo, Chairman of the Senate Committee on Public Utilities, Communication & Housing Development.

The bill proposes that instead of requiring PNCC to pay the full universal access levy to the Bureau of Communications (BOC), it will pay its RUS loan directly and deduct the amount from its assessed universal service access levy. 

PNCC Act of 2017mandated all telecom providers including PNCC to pay gross receipt tax and pay 15% Universal Service Access Levy.

PNCC which obtained the $39 million RUS loan in 1994 at 4.9% interest pays $2.3 million annually for the loan. This in additional to new mandate on universal service access levy and gross receipt tax strains PNCC’s finances “too thin” affecting quality and delivery of its services.

The bill also proposes to extend the moratorium on acceptance of new telecom businesses and issuance of frequency licenses for another 10 years.  The Committee report said that the 3 local telcos requested extension of moratorium due to the pandemic.  The 3 existing businesses requested more time to recover and “rebuild their businesses to the point that they can fairly compete with any new providers, particularly outside entities.”

The industry cites nearly 25% decline in revenue due to lack of tourism arrivals.

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