[Congressional Record Volume 143, Number 41 (Wednesday, April 9, 1997)]
[Senate]
[Page S2949]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                    UNIVERSAL SERVICE IMPLEMENTATION

 Mr. McCain. Mr. President, I have read the report in the Wall 
Street Journal that Federal Communications Commission Chairman Reed E. 
Hundt proposes to implement only a portion of the new universal service 
fund rules by the statutory deadline of May 8. Specifically, he 
suggests delaying the adoption of rules assuring reasonable rates for 
telephone subscribers in rural and high-cost areas, although he would 
proceed to implement a new $3 billion yearly fund to wire schools, 
libraries, and health care facilities through an unspecified tax on 
telephone company revenues.
  Last January I wrote to Chairman Hundt about his apparent desire to 
implement these provisions prior to implementing the remainder of the 
universal service provisions of the statute. At that time, I stated 
that sound implementation of the Telecommunications Act requires that 
the Commission resolve all the related issues involved in universal 
service carefully and contemporaneously.
  Apparently Chairman Hundt has not changed his view, Mr. President, 
but neither have I.
  Implementing universal service funding in separate stages would be 
incompatible with the law. The Telecommunications Act of 1996 states 
clearly and unambiguously that the FCC ``shall initiate a single 
proceeding to implement the recommendations from the Joint Board . . . 
and shall complete such proceeding'' by May 8, 1997.
  It would be consistent with this unequivocal statutory requirement 
for the FCC to adopt specific new rules on May 8 and have them take 
effect in the future. It would also be consistent with the statute for 
the FCC to adopt general outlines of new rules on May 8, and fill in 
specific details by subsequent order. The FCC can, and in my judgment 
should, avail itself of these courses of action if it finds, for 
whatever reason, that it cannot adopt final rules on all aspects of 
universal service on May 8. But one thing the FCC cannot do by law is 
pick and choose some statutory requirements to put into effect on May 
8, and delay the rest till later.
  Let me be clear. I can understand the possible problem Chairman Hundt 
faces: too much proposed subsidy, and not enough revenue to handle it 
without raising rates for telephone service. I emphatically am not 
suggesting that he simply proceed to adopt final universal service fund 
rules and thereby raise telephone rates on May 8. But if, after 
studying universal service as extensively as it has, the FCC has 
concluded that it cannot implement the universal service provisions of 
the statute without increasing telephone rates or incurring similar 
unacceptable outcomes, it must defer from implementing any universal 
service rules until it can satisfactorily demonstrate to both the 
Congress and the public that any rate increases that would result are 
inevitable in fact and appropriate in amount.
  Unless and until the FCC can do that, the Commission should take no 
final action on universal service. To try and evade the issue by 
implementing the parts of universal service that may be politically 
desirable while dodging the rest because it appears politically 
unpalatable would be a dereliction of the Commission's duty under 
law.

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