[10809] in Public-Access_Computer_Systems_Forum
JOINT BOARD ADOPTS UNIVERSAL SERVICE RECOMMENDATIONS
daemon@ATHENA.MIT.EDU (Vigdor Schreibman - FINS)
Mon Nov 11 21:04:49 1996
Date: Mon, 11 Nov 1996 19:18:06 -0600 (CST)
From: Vigdor Schreibman - FINS <fins@access.digex.net>
To: Multiple recipients of list PACS-L <PACS-L@UHUPVM1.UH.EDU>
Reply-To: Public-Access Computer Systems Forum <PACS-L@UHUPVM1.UH.EDU>
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FINS SPECIAL REPORT November 9, 1996
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JOINT BOARD ADOPTS UNIVERSAL SERVICE RECOMMENDATIONS
States to Make "Affordable Access" Determinations
Washington, DC--The Federal Communications Federal-State Joint Board took
the first major step, in a decision date Nov 7, 1996, to realize the
mandate for universal service set forth in the Telecommunications Act of
1996 [Fins-TI-17]. The 1996 Act requires the Commission and the states to
ensure that the goals of affordable service and access to advanced
telecommunications services are met by means that enhance rather than
distort competition.
The recommendations adopted by the Joint Board Thursday were "designed to
ensure that affordable quality telecommunications services are available to
all consumers, including low-income consumers, in all regions of the nation.
In addition, for the first time in history, the Act requires that all
eligible schools, libraries, and rural health care providers receive
telecommunications services at a discount." However, the Joint Board did not
adopt the "plan for an E-Rate" put forward by the Clinton Administration just
prior to the Presidential Election, Oct 10. The "E-Rate" plan called for a
package to assure "Basic Connectivity, Transmission Speed, and Internet
Access for the Nation's Schools ad Libraries." [Fins-TI-16]
The Joint Board's recommendations, included universal service support for:
1) voice grade access to the public switched network, including, at
a minimum, some usage;
2) dual-tone multi-frequency (DTMF) signalling or its equivalent;
3) single-party service;
4) access to emergency services, including access to 911, where
available;
5) access to operator services;
6) access to interexchange services; and
7) access to directory assistance.
A variety of recommendations were made to support low income consumers and
high-cost support areas. However, with regard to the key requirement of
providing assurance of "affordable access" to services, the Joint Board side
stepped the issue and recommended that "the states, in their rate-setting
roles, make the primary determination as to whether rates are affordable and
for taking any necessary actions should they determine the rates are not
affordable. The FCC will also assess affordability by continuing to monitor
subscribership levels."
While the Joint Board did not adopt the Clinton Administration's proposed
"E-Rate" for schools and libraries, the latter will, "be able to purchase at
a discount any telecommunications services, internal connections among
classrooms, and access to the Internet." The discounts available to the
eligible schools and libraries "range from 20%, for the top 3% of the schools
according to a measure of wealth, to 90% for the 16% of schools which are the
most economically disadvantaged," according to Commissioner Julia Johnson and
Joint Board Chairman Sharon L. Nelson. However, the fund for such discounts
is limited, suggesting that some type of means testing will be used. The
Joint Board recommended that, "Total expenditures for universal service
support for schools and libraries is capped at $2.25 billion per year ..."
The Joint Board recommended that universal service support for targeted
subsidy mechanisms, such as those for schools, libraries, and rural health
care providers be funded by assessing "both the intrastate and interstate
revenues of providers of interstate telecommunications services." Similar
support for low income consumers an high-cost areas, was not provided,
however. This distinction prompted criticism from Commissioner Susan Ness,
who observed in a separate statement:
Regrettably, the Joint Board has failed to address the question
whether the funding for federal programs for high-cost support -- as
well as low-income support -- will be based on both the intrastate and
interstate revenues of carriers that provide interstate
telecommunications services, or only on their interstate revenues.
This necessarily draws into question the ability of the federal fund
to support the difference between cost (proxy or embedded) and a
reasonable benchmark; an interstate-only approach inevitably leads to
a much higher benchmark.
The use of both intrastate and interstate revenues to fund the targeted
subsidies of schools and libraries was not applauded by all members of the
Joint Board. For example, two Commissioners Kenneth McClure and Laska
Schoenfelder, opposed the Joint Board recommendation relating to the
assessment of revenues for the universal service support mechanism from
intrastate funding. McClure suggested that, "Only interstate revenues should
be utilized for funding the federal universal service program, allowing
intrastate telecommunications revenues to be used for funding the
complimentary state universal service programs." Similarly, Schoenfelder
observed "I do not believe the Commission has authority to base contributions
on intrastate telecommunications revenues."
These objections do not appear to be compelling. Sections 254(d) and
254(f) of the Act, explicitly contemplate that every telecommunications
carrier providing "interstate telecommunications services" and "intrastate
telecommunications services," shall contribute to the preservation and
advancement of universal service. The Commission and the States are each
authorized to make their separate determinations both with regard to such
contributions, as well as to ensure affordable access, pursuant to sec.
254(h)(1)(B).
What the Joint Board has done is simplify the process by authorizing the
States, in their rate-setting roles, to make the primary determination as to
whether rates are affordable, and mandate payment for universal service
drawing upon both interstate and relevant intrastate funds. This process
would not appear to be precluded; provided, the intrastate contributions in
a State are not used to pay for Universal Services outside the State.
The URL for the FCC web page on Universal Service is:
http://www.fcc.gov/bureaus/common_carrier/www/universal_service/welcome.html
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