[Federal Register Volume 61, Number 51 (Thursday, March 14, 1996)]
[Proposed Rules]
[Pages 10499-10522]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-6156]



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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Parts 36 and 69

[CC Docket No. 96-45; FCC 96-93]


Federal-State Joint Board on Universal Service

AGENCY: Federal Communications Commission.

ACTION: Notice of proposed rulemaking.

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SUMMARY: On March 8, 1996, the Federal Communications Commission 
(``Commission'') adopted a Notice of Proposed Rulemaking and Order 
Establishing Joint Board. The Commission initiates this rulemaking: to 
define the services that will be supported by Federal universal service 
support mechanisms; to define those support mechanisms; and to 
otherwise recommend changes to our regulations to implement the 
universal service directives of the Telecommunications Act of 1996.

DATES: Comments must be filed on or before April 8, 1996, and reply 
comments must be filed on or before May 3, 1996.

ADDRESSES: Comments should be addressed to Office of the Secretary, 
Federal Communications Commission, 1919 M Street, NW., Washington, DC 
20554.

FOR FURTHER INFORMATION CONTACT: Deborah A. Dupont, Senior Attorney, 
202-418-0850, Accounting and Audits Division, Common Carrier Bureau.

SUPPLEMENTARY INFORMATION:

                                                                        
                      Table of contents                        Paragraph
                                                                        
I. Introduction..............................................         1 
II. Goals and Principles of Universal Service Support                   
 Mechanisms..................................................         3 
III. Support for Rural, Insular, and High-Cost Areas and Low-           
 Income Consumers............................................           
  A. Goals and Principles....................................        13 
  B. Support for Rural, Insular, and High Cost Areas.........           
    1. What Services to Support..............................        15 
    2. How to Implement......................................        24 
    3. Who Is Eligible for Support...........................        41 
  C. Support for Low-Income Consumers........................           
    1. What Services to Support..............................        50 
    2. How to Implement and Who Is Eligible for Support......        59 
  D. Ensuring that Supported Services for Rural, Insular, and           
   High-Cost Areas and Low-Income Consumers Evolve...........        66 
IV. Schools, Libraries, and Health Care Providers                       
  A. Goals and Principles....................................        71 
  B. Schools and Libraries...................................           
    1. What Services to Support..............................        77 
    2. How to Implement......................................        82 
    3. Who Is Eligible for Support...........................        87 
  C. Health Care Providers...................................           
    1. What Services to Support..............................        89 
    2. How to Implement......................................        95 
    3. Who Is Eligible for Support...........................       104 
V. Enhancing Access to Advanced Services for Schools,                   
 Libraries, and Health Care Providers                                   
  A. Goals and Principles....................................       107 
  B. How to Implement........................................       109 
  C. Who Is Eligible for Support.............................       111 
VI. Other Universal Service Support Mechanisms...............       112 
VII. Administration of Support Mechanisms....................           
  A. Goals and Principles....................................       116 
  B. Administration                                                     
    1. Who Should Contribute.................................       118 
    2. How Should Contributions Be Assessed..................       121 
    3. Who Should Administer.................................       127 
VIII Composition of the Joint Board..........................       132 
IX. Procedural Matters                                                  
  A. Ex Parte................................................       134 
  B. Regulatory Flexibility Analysis.........................       135 
  C. Comment Dates...........................................       143 
X. Ordering Clauses..........................................       145 
Attachment: Service List                                                
                                                                        


[[Page 10500]]


I. Introduction

    1. This Notice of Proposed Rulemaking and Order Establishing Joint 
Board (Notice) implements, in part, the Congressional directives set 
out in Section 254 of the Communications Act of 1934, as added by the 
Telecommunications Act of 1996 (1996 Act).1 As required by Section 
254(a)(1), we initiate this rulemaking to do the following: (1) Define 
the services that will be supported by Federal universal service 
support mechanisms; (2) define those support mechanisms; and (3) 
otherwise recommend changes to our regulations to implement the 
universal service directives of the 1996 Act.2 We seek comment on 
all the matters discussed in this Notice. Also, pursuant to Section 
254(a)(1), we order that a Federal-State Joint Board be convened in 
this docket, we appoint the individual members of the Federal-State 
Joint Board, and we refer the issues raised in this Notice to that 
Joint Board for the preparation of a Recommended Decision on these 
matters by November 8, 1996.3

    \1\ Telecommunications Act of 1996, Pub. L. No. 104-104, 110 
Stat. 56 (1996) (to be codified at 47 U.S.C. 151 et seq.). For 
clarity, we refer to provisions of the 1996 Act using the sections 
at which they will be codified.
    \2\ 1996 Act sec. 101(a), Section 254(a)(1).
    \3\ S. Conf. Rep. No. 104-230, 104th Cong., 2d Sess. 131 (1996).
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    2. We intend that our undertaking in this Notice be consistent with 
the language of the 1996 Act and the underlying Congressional intent. 
We are further guided by our past experience in addressing universal 
service issues, but only to the extent that experience can assist us in 
interpreting and effectuating our new statutory mandate. This Notice 
reflects our newly articulated statutory obligation to ensure that the 
definition of services supported by universal service support 
mechanisms and those mechanisms themselves evolve as advances in 
telecommunications and information technologies continue to present 
consumers with an ever increasing array of telecommunications and 
information services.4 In accordance with Section 254(c)(2) of the 
1996 Act, and as described below, we will periodically review, after 
obtaining further Joint Board recommendations, the definition of 
services supported by universal service mechanisms that we adopt in 
this proceeding, as well as the regulations adopted to implement the 
universal service mandates of the 1996 Act.5

    \4\ 1996 Act sec. 101(a), Sec. 254(c)(1).
    \5\ Id. Sec. 254(c)(2).
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II. Goals and Principles of Universal Service Support Mechanisms

    3. Section 254(a)(1) of the Communications Act, as amended, 
requires the Commission to ``institute and refer to a Federal-State 
Joint Board under section 410(c) a proceeding to recommend changes to 
any of its regulations in order to implement sections 214(e) and 
[Section 254], including the definition of the services that are 
supported by Federal universal service support mechanisms and a 
specific timetable for completion of such recommendations.'' 6 
Section 254(b) requires that:

    \6\ Id. Sec. 254(a)(1).
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    [T]he Joint Board and the Commission shall base policies for the 
preservation and advancement of universal service on the following 
principles:

    (1) QUALITY AND RATES.--Quality services should be available at 
just, reasonable, and affordable rates.
    (2) ACCESS TO ADVANCED SERVICES.--Access to advanced 
telecommunications and information services should be provided in 
all regions of the Nation.
    (3) ACCESS IN RURAL AND HIGH COST AREAS.--Consumers in all 
regions of the Nation, including low-income consumers and those in 
rural, insular, and high cost areas, should have access to 
telecommunications and information services, including interexchange 
services and advanced telecommunications and information services, 
that are reasonably comparable to those services provided in urban 
areas and that are available at rates that are reasonably comparable 
to rates charged for similar services in urban areas.
    (4) EQUITABLE AND NONDISCRIMINATORY CONTRIBUTIONS.--All 
providers of telecommunications services should make an equitable 
and nondiscriminatory contribution to the preservation and 
advancement of universal service.
    (5) SPECIFIC AND PREDICTABLE SUPPORT MECHANISMS.--There should 
be specific, predictable and sufficient Federal and State mechanisms 
to preserve and advance universal service.
    (6) ACCESS TO ADVANCED TELECOMMUNICATIONS SERVICES FOR SCHOOLS, 
HEALTH CARE, AND LIBRARIES.--Elementary and secondary schools and 
classrooms, health care providers, and libraries should have access 
to advanced telecommunications services as described in subsection 
(h).
    (7) ADDITIONAL PRINCIPLES.--Such other principles as the Joint 
Board and the Commission determine are necessary and appropriate for 
the protection of the public interest, convenience, and necessity 
and are consistent with this Act.7

    \7\ Id. 254(b).
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    Prior to the 1996 Act, the Commission relied on Section 1 of the 
Communications Act of 1934 8 as the touchstone for virtually all 
major universal service policy discussions. The principles in Section 
254(b) particularize and supplement our responsibility under that 
section of the Communications Act, as amended by the 1996 Act, ``to 
make available, so far as possible, to all the people of the United 
States without discrimination on the basis of race, color, religion, 
national origin, or sex a rapid, efficient, Nation-wide, and world-wide 
wire and radio communication service with adequate facilities at 
reasonable charges. * * *'' 9

    \8\ 47 U.S.C. 151.
    \9\ 47 U.S.C. 151, as amended by 1996 Act sec. 104, 151 (new 
language emphasized).
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    4. We solicit comment on how each of the seven principles 
enunciated in Section 254(b) should influence our policies on universal 
service. For example, the first principle introduces the concept of 
``quality services.'' 10 We seek comment on how we can assess 
whether quality services are being made available. In particular, we 
seek comment on the utility of performance-based measurements to 
evaluate our success in reaching that Congressional objective. The 
first principle also directs us to ensure that quality service be 
available at ``just, reasonable, and affordable rates.'' 11 While 
the Commission has often determined ``just and reasonable'' rates, we 
have not generally grappled with the notion of ``affordable'' 12 
in the context of universal service. We seek comment on whether there 
are appropriate measures that could help us assess whether 
``affordable'' service is being provided to all Americans.13

    \10\ 1996 Act sec. 101(a), Sec. 254(b)(1).
    \11\ Id.
    \12\ Webster's New World Dictionary defines the term ``afford'' 
as follows: ``to have enough or the means for; bear the cost of 
without serious inconvenience.'' Webster's New World Dictionary at 
23 (William Collins, Second College ed. 1980).
    \13\ For example, one such measure might be the level of 
telecommunications service subscribership among targeted 
populations.
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    5. As to the second principle, we seek comment on how to design our 
policies to foster access to advanced telecommunications and 
information services for ``all regions of the Nation.'' 14 While 
in the past, the Commission has focused on bringing basic 
telecommunications services to as many American homes as possible, this 
principle instructs us to focus specifically on advanced 
telecommunications and information services. We seek comment on which 
advanced telecommunications and information services should be 
provided, and how to provide access effectively to Americans in various

[[Page 10501]]
geographic regions. We also seek comment on the cost of providing such 
access.

    \14\ 1996 Act Sec. 101(a), Sec. 254(b)(2).
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    6. The third principle stresses that consumers in ``rural, insular, 
and high-cost areas'' and ``low-income consumers'' should have access 
to ``telecommunications and information services'' that are 
``reasonably comparable to those services provided in urban areas.'' 
15 In light of the further legislative intent to ``accelerate 
rapidly private sector deployment of advanced services to all 
Americans,'' 16 we believe that our goal should be to ensure that 
consumers ``in all regions of the Nation'' 17 and at all income 
levels, including low-income consumers, enjoy affordable access to the 
range of services available to urban consumers generally. We recognize, 
however, that the range of services is not likely to be identical for 
all urban areas, and may, as a practical matter, vary according to the 
demographic characteristics of consumers located in a given urban area. 
We seek comment on how best to incorporate that variation in our use of 
urban area service as a benchmark for comparative purposes.

    \15\ Id. Sec. 254(b)(3). ``Insular'' areas refer to areas such 
as the Pacific Island territories. S. Conf. Rep. No. 104-230, 104th 
Cong., 2d Sess. at 131.
    \16\ S. Conf. Rep. No. 104-230, 104th Cong. 2d Sess 1 (1996).
    \17\ Id. Sec. 254(b)(2).
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    7. The fourth and fifth principles refer to support mechanisms for 
universal service and will guide our efforts to establish those 
mechanisms through which funding essential to realizing our universal 
service goals will be collected and distributed. The fourth principle 
calls for ``equitable and non-discriminatory contributions: from ``all 
providers of telecommunications services,'' 18 while the fifth 
principle directs that the ``Federal and State mechanisms'' be 
``specific, predictable and sufficient.'' 19 The sixth principle 
that will shape our deliberations states that ``elementary and 
secondary schools and classrooms, health care providers, and libraries 
should have access to advanced telecommunications services. * * *'' 
20 We discuss these principles in Sections V and VI, below.

    \18\ Id. Sec. 254(b)(4).
    \19\ Id. Sec. 254(b)(5).
    \20\ Id. Sec. 254(b)(6).
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    8. The final principle listed in Section 254 of the new legislation 
authorizes the Commission and the Federal-State Joint Board to base 
universal service policies on ``[s]uch other principles as [they] 
determine are necessary and appropriate for the protection of the 
public interest, convenience, and necessity and are consistent with 
this Act.'' 21 We invite interested parties to propose additional 
principles relevant to the choice of services that should receive 
universal service support. We note, for example, a fundamental 
underlying principle of the 1996 Act is the Congressional desire ``to 
provide for a pro-competitive, de-regulatory national policy framework 
designed to accelerate rapidly private sector deployment of advanced 
telecommunications and information technologies to all Americans.'' 
22 In that context, we seek comment on whether we should ensure 
that the means of distributing universal service support should be 
competitively-neutral,23 and the least regulatory possible, 
consistent with our statutory obligations. In addition, we specifically 
ask that commenters address whether and to what extent concerns for low 
income consumers or those in rural, insular, or high cost areas can or 
should be articulated as additional universal service principles 
pursuant to Section 254(b)(7) or should be considered in determining 
whether a particular service is ``consistent with the public interest, 
convenience, and necessity under Section 254(c)(1)(D).'' 24 We 
request the Joint Board's recommendations regarding all of these 
general policy issues raised by Section 254(b).

    \21\ Id. Sec. 254(b)(7).
    \22\ S. Conf. Rep. No. 104-230, 104th Cong., 2d Sess. 1 (1996).
    \23\ The contribution mechanism is expressly required to be 
``equitable and non-discriminatory.'' 1996 Act sec. 101(a), 
Sec. 254(d).
    \24\ Id. Sec. 254(b)(7).
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    9. Section 254(c)(1) of the Act directs that:

    [T]he Joint Board in recommending, and the Commission in 
establishing, the definition of the services that are supported by 
Federal universal service support mechanisms shall consider the 
extent to which such telecommunications services--
    (A) are essential to education, public health, or public safety;
    (B) have, through the operation of market choices by customers, 
been subscribed to by a substantial majority of residential 
customers;
    (C) are being deployed in public telecommunications networks by 
telecommunications carriers; and
    (D) are consistent with the public interest, convenience, and 
necessity.25

    \25\ Id. Sec. 254(c)(1).
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    We interpret the statutory language of Section 254(c)(1) as 
manifesting Congressional intent that the Joint Board and the 
Commission consider all four criteria when deciding what services to 
support through Federal universal service. We interpret this language, 
however,--particularly the use of the word ``consider''--to allow the 
Joint Board and the Commission to include services that do not 
necessarily meet all of the four criteria. We seek comment and the 
Joint Board's recommendation on this interpretation. We also ask how we 
should evaluate whether a service or feature is ``essential to 
education, public health, or public safety.'' 26

    \26\ See Id. Sec. 254(c)(1)(A).
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    10. The fourth principle dictates that we must collect the revenues 
required to fund the universal service support mechanisms discussed 
here in an equitable and non-discriminatory manner. We seek detailed 
comments on the implications of this directive with respect to the 
mechanisms that will be employed to collect universal service 
contributions, below. Here, however, we seek comment on what standards 
we might use to help determine which, if any, ``providers of 
telecommunications services'' might be treated differently than others 
for ``equitable'' reasons.
    11. The 1996 Act provides universal service support for two primary 
categories of services, each of which has two separate subcategories of 
intended beneficiaries: (1) A ``core'' group of services, the provision 
of which is to be supported for consumers with low incomes or in rural, 
insular, and high cost areas; and (2) additional services, including 
advanced telecommunications and information services, for providers of 
health care or educational services, as described in Sections 254(b)(6) 
and 254(h). As we interpret the 1996 Act, our first responsibility is 
to identify what core group of services should be supported by Federal 
universal support mechanisms, to enable the first group of 
beneficiaries to purchase those services at just, reasonable, and 
affordable rates. As to the second category of services, advanced 
telecommunications services for schools, libraries, and health care 
providers, Section 254(c)(3) authorizes the Commission ``to designate a 
separate definition of universal service applicable only to public 
institutional telecommunications users.'' 27 We note that, in 
regard to this provision, ``the conferees expect the Commission and the 
Joint Board to take into account the particular needs of hospitals, K-
12 schools and libraries.'' 28 In Section 254(h), the Act created 
two distinct mechanisms for assuring the availability of these 
additional services to schools, libraries and health care providers. 
Section 254(h)(1) contemplates that there will be Federal support

[[Page 10502]]
mechanisms to enable eligible health care providers in rural areas, 
schools and libraries to obtain access to these additional services, as 
well as the core services discussed above. In addition, the second 
mechanism, found in Section 254(h)(2), directs the Commission to adopt 
competitively neutral rules to enhance for all eligible health care 
providers,29 libraries and schools access to advanced 
telecommunications and information services to the extent technically 
feasible and economically reasonable. In this Notice, we will address 
both of these definitions and their respective potential support 
mechanisms separately.

    \27\ S. Conf. Rep. No. 104-230, 104th Conf., 2d Sess. 133 
(1996).
    \28\ Id. 
    \29\ Section 254(h)(5)(B) defines ``health care provider'' to 
mean:
    (i) post-secondary educational institutions offering health care 
instruction, teaching hospitals, and medical schools;
    (ii) community health centers or health centers providing health 
care to migrants;
    (iii) local health departments or agencies;
    (iv) community mental health centers;
    (v) not-for-profit hospitals;
    (vi) rural health clinics; and
    (vii) consortia of health care providers consisting of one or 
more entities described in clauses (i) through (vi).
    1996 Act sec. 101(a), 254(h)(5)(B).
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    12. We do not address Sections 254(f), 254(g), or the last sentence 
in Section 254(k) in this Notice, nor do we refer issues relating to 
them to the Federal-State Joint Board convened by this Order. Section 
254(f) is directed to the states and to what they may or may not do to 
advance universal service goals. Section 254(g) has an explicit 
timetable separate and distinct from that in Section 254(a),\30\ and we 
believe these separate timetables, which are not reconcilable, indicate 
that Section 254(g) does not need Joint Board consideration. The last 
sentence in Section 254(k) states that ``[t]he Commission, with respect 
to interstate services, and the States, with respect to intrastate 
services, shall establish any necessary cost allocation rules, 
accounting safeguards, and guidelines to ensure that the services 
included in the definition of universal service bear no more than a 
reasonable share of the joint and common costs of facilities used to 
provide those services.'' \31\ The explicit use of the language ``the 
Commission, with respect to interstate services, and the States, with 
respect to intrastate services,'' indicates that Congress intended to 
give the separate jurisdictions the flexibility to review these issues 
separately.\32\

    \30\ Section 254(a) requires the Joint Board to make its 
recommendation to the Commission nine months after the date of 
enactment of the 1996 Act and requires the Commission to complete 
its proceedings within 15 months of the date of enactment. Id. 
Sec. 254(a). Section 254(g), however, requires the Commission to 
adopt rules ``within 6 months after the date of enactment'' of the 
1996 Act ``to require that the rates charged by providers of 
interexchange telecommunications services to subscribers in rural 
and high cost areas shall be no higher than the rates charged by 
each such provider to its subscribers in urban areas.'' Id. 
Sec. 254(g).
    \31\ Id. Sec. 254(k).
    \32\ We are planning to commence a rulemaking shortly to 
implement the provision in Section 254(k) calling for the Commission 
``with respect to interstate services * * * [to] establish any 
necessary cost allocation rules, accounting safeguards, and 
guidelines to ensure that services included in the definition of 
universal service bear no more than a reasonable share of the joint 
and common costs of facilities used to provide those services.'' Id. 
Sec. 254(k). This proceeding will be a vehicle for all interested 
parties, including State regulators and consumer advocates, to 
address issues of common concern and interest relating to 
development of accounting safeguards for universal service support 
mechanisms.
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III. Support for Rural, Insular, and High-Cost Areas and Low-Income 
Consumers

A. Goals and Principles

    13. In this section, we seek to answer several basic questions 
concerning the design and operation of the support mechanisms for 
rural, insular, and high cost areas as well as for low-income 
consumers. In our search, we are guided by the principles in Section 
254 relating to our obligations toward rural, insular, and high-cost 
areas and low-income consumers.
    14. The first universal service principle relevant to consumers in 
rural, insular, and high-cost areas set forth in the 1996 Act is that 
``[q]uality services should be available at just, reasonable, and 
affordable rates.'' \33\ Prior to the 1996 Act, the Communications Act 
of 1934 required that rates for telephone services subject to our 
jurisdiction be just and reasonable, without unjust or unreasonable 
discrimination,\34\ but did not expressly require that the rates be 
affordable to the average telephone subscriber or to any designated 
group of subscribers. The 1996 Act makes explicit that our universal 
service policies should promote affordability of quality 
telecommunications services. We seek comment proposing standards for 
evaluating the affordability of telecommunications services. We note 
that the Act specifically provides that telecommunications services--
not just the narrow category of telephone exchange service--be 
affordable.\35\ The second relevant principle is that ``[a]ccess to 
advanced telecommunications and information services should be provided 
in all regions of the Nation.'' \36\ We seek comment on whether the Act 
requires that all regions of the country must have access to all 
telecommunications and information services, and if so, how this can 
best be effectuated in a ``pro-competitive, de-regulatory 
environment.'' \37\ The third principle we address here is that 
``[c]onsumers in all regions of the Nation, including low-income 
consumers and those in rural, insular, and high-cost areas, should have 
access to telecommunications and information services, including 
interexchange services and advanced telecommunications and information 
services'' reasonably comparable to those provided in urban areas and 
at reasonably comparable rates.\38\ This principle directs us to go 
beyond the purpose and approach of the current Universal Service Fund 
(USF) program \39\ by focusing on the comparability of access to 
services available throughout the country, as well as on the 
comparability of rates.\40\

    \33\ Id. Sec. 254(b)(1).
    \34\ See 47 U.S.C. 201-202.
    \35\ See 1996 Act sec. 101(a), Sec. 254 (c), (i). The 1996 Act 
defines ``telecommunications service'' as ``the offering of 
telecommunications for a fee directly to the public, or to such 
classes of users as to be effectively available directly to the 
public, regardless of the facilities used.'' Id. Sec. 153(51).
    \36\ 1996 Act sec. 101(a), Sec. 254(b)(2).
    \37\ S. Conf. Rep. No. 104-230, 104th Cong., 2d Sess. 1 (1996).
    \38\ 1996 Act sec. 101(a), Sec. 254(b)(3).
    \39\ The current USF program is designed to ``preserve universal 
service by enabling high cost companies to establish local exchange 
rates that do not substantially exceed rates charged by other 
companies.'' MTS and WATS Market Structure, Third Report and Order, 
93 FCC 2d 241 (1983).
    \40\ By means other than through the USF, the Commission has 
also sought to ensure service to rural areas. For example, in Basic 
Exchange Telecommunications Radio Service, Report and Order, 3 FCC 
Rcd 214 (1988), we acknowledged that many rural households do not 
have standard telephone service because the cost of wiring remote 
locations is prohibitive. In response, the Commission established 
the Basic Exchange Telephone Radio Systems (BETRS) to allow access 
by LECs to shared frequencies to provide wireless local loops. More 
recently, in amending our rules for competitive bidding for Personal 
Communications Systems (PCS) licenses, we permitted rural telephone 
companies to obtain broadband PCS licenses that are geographically 
partitioned from larger PCS service areas (through a partial license 
transfer) in an effort to ensure that rural areas receive broadband 
PCS. Implementation of Section 309(j) of the Communications Act--
Competitive Bidding, Fifth Report and Order, 9 FCC Rcd 5532 (1994).
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B. Support for Rural, Insular, and High Cost Areas

1. What Services to Support
    15. In this section, we discuss specific telecommunications 
services we propose to include among the services that, with respect to 
rural, insular, and high cost areas, should receive universal service 
support. As to each of these ``core'' services, we seek comment on our 
proposal to designate the service for

[[Page 10503]]
universal service support. We also ask commenters to discuss the extent 
to which each of the proposed services is in accordance with the 
principles and criteria in Sections 254(b) and 254(c)(1), discussed 
above. In accordance with the principle of the 1996 Act that support 
mechanisms should be ``specific, predictable, and sufficient,'' \41\ we 
also ask the commenters to identify the total amount currently required 
for each included service.

    \41\ 1996 Act sec. 101(a), Sec. 254(b)(5).
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    16. We seek comment regarding whether the following services should 
be included among those core services receiving universal service 
support: (1) Voice grade access to the public switched network, with 
the ability to place and receive calls; (2) touch-tone; (3) single 
party service; (4) access to emergency services (911); and (5) access 
to operator services.
    17. We invite commenters to identify additional services that meet 
the statutory criteria of Section 254(c)(1) and therefore should be 
among the services that should receive universal service 
support.42 Commenters should discuss the extent to which each of 
the proposed services specifically meet those statutory criteria and 
further the principles established in Section 254(b). In addition, 
given that the 1996 Act specifies that common carriers ``shall * * * 
offer the services that are supported by Federal universal service 
support mechanisms'' in order to be designated as eligible 
telecommunications carriers and thus eligible for universal service 
support,43 and that the Joint Statement stresses the importance of 
``opening all telecommunications markets to competition,'' 44 we 
seek comment regarding the competitive effect of our proposed 
definition. Specifically, we ask whether providing universal service 
support for each proposed service could serve as a barrier to entry by 
new competitors or favor one technology over another, perhaps more 
efficient, technology. Our goal is to adopt universal service rules 
that are competitively and technologically neutral so that our rules do 
not unreasonably advantage one particular technology or class of 
service provider over another technology or service provider.45

    \42\ We have expressly not included Telecommunications Relay 
Services (TRS) within the list of services proposed for universal 
service support, because those services are already served by the 
existing TRS support mechanism, established pursuant to Section 401 
of the Americans with Disabilities Act, 47 U.S.C. 225.
    \43\ 1996 Act sec. 102(a), Sec. 214(e)(1).
    \44\ See S. Conf. Rep. No. 104-230, 104th Cong., 2d Sess. 1 
(1996).
    \45\ See, e.g., 1996 Act sec. 101(a), Sec. 254(h)(2) (directing 
Commission to ``establish competitively neutral rules--to enhance * 
* * access to advanced * * * services for * * * school classrooms, 
health care providers, and libraries'') (emphasis added).
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    18. Voice Grade Access to the Public Switched Telecommunications 
Network. We believe that voice grade service, whether provided by 
wireline or wireless technologies,46 should be considered 
indispensable because it enables direct calling into the network, is 
provided throughout public telecommunications networks,47 and is 
subscribed to by a substantial majority of residential 
customers.48 Because it enables consumers to reach schools, 
emergency medical assistance, doctors, law enforcement authorities, and 
fire departments, it appears to be essential to education, public 
health, and public safety.49 Including voice grade service among 
the services that should receive universal service support would also 
appear to be consistent with the public interest, convenience, and 
necessity. We seek comment as to whether, and at what performance 
level, voice grade service should be included among the services that 
should receive universal service support.

    \46\ We recognize that all voice grade services may not have 
identical transmission characteristics and, in particular, that 
there may in some cases be differences in the capacity of wireline 
and wireless services.
    \47\ 1996 Act sec. 101(a), Section 254(c)(1)(C).
    \48\ Id. Sec. 254(c)(1)(B).
    \49\ Id. Sec. 254(c)(1)(A).
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    19. Touch-tone. Touch-tone is a generic term for technology that 
involves the use of a push-button telephone set that transmits, and a 
local switch that receives, a dual-tone multifrequency signal (DTMF). 
Touch-tone is widely deployed throughout public telecommunications 
networks, and consumers widely subscribe to it.50 We note that 
touch-tone is becoming increasingly indispensable for subscribers in 
order for them to interact with automated information systems, and thus 
may be essential for effective use of educational services. It also 
increases the speed at which subscribers are able to reach emergency 
service providers, and thus appears essential for public health and 
safety.51 Including touch-tone service among the services that 
should receive universal service support would also appear to be 
consistent with the public interest, convenience and necessity.52 
We seek comment as to whether touch-tone service should be included 
among those supported services. We also request that interested parties 
provide information regarding any service other than touch-tone that 
would serve the same general function as touch-tone service.53 In 
addition, we ask whether the provision of such services should be 
treated the same as the provision of touch-tone service for purposes of 
determining a carrier's designation as an eligible carrier.54

    \50\ Id. Sec. 254(c)(1) (B)-(C).
    \51\ Id. Sec. 254(c)(1)(A).
    \52\ Id. Sec. 254(c)(1)(D).
    \53\ Push button telephone sets are used with ISDN lines but 
signalling typically is accomplished through the transmission of 
digital signals instead of DTMF signals. Bellcore's BOC Notes on the 
LEC Networks, 1994, Section 14. These digital signals provide all of 
the functionalities available with DTMF signals.
    \54\ See 1996 Act sec. 102(a), Sec. 214(e)(1)(A).
---------------------------------------------------------------------------

    20. Single Party Service. Single party service is also generally 
available throughout the public telecommunications network and is 
subscribed to by a majority of residential customers.55 Single 
party service helps ensure that subscribers will be able to reach 
emergency service and health care providers without delay and may 
therefore be essential to public health and public safety.56 In 
addition to affording subscribers privacy, single party service 
facilitates access to many information technologies. Many residential 
subscribers use modems to access advanced services like home banking, 
the Internet and commercial computing services. Because modems 
currently are required for computer users to have access to those 
services, single party service may be becoming even more important to 
residential computer users in the future, and requiring it may 
therefore be consistent with the public interest, convenience, and 
necessity. We seek comment as to whether single party service should be 
included among the services that should receive universal service 
support.

    \55\ Id. Sec. 254(c)(1) (B)-(C). Single party service occurs 
when exactly one subscriber may use a local loop to originate or 
terminate calls.
    \56\ Id. Sec. 254(c)(1) (A), (D).
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    21. Access to Emergency Services. Access to emergency services, 
including 911 service, is essential to public health or public safety 
and, as such, consistent with the public interest, convenience, and 
necessity.57 Additionally, such services are widely deployed 
throughout public telecommunications networks and, though generally 
provided as part of residential service without any customer 
intervention, are available to a substantial majority of residential 
customers.58 In much of the nation, 911 service merely connects 
subscribers with an emergency service that includes local police and 
fire

[[Page 10504]]
departments. Enhanced 911 service adds capabilities, such as automatic 
number identification and automatic location information,59 to the 
basic 911 service. These additional capabilities ``are being deployed 
in public telecommunications networks by telecommunications carriers'' 
60 and appear ``consistent with the public interest, convenience, 
and necessity.'' 61 They also may be ``essential to ``public 
health[] or public safety,'' 62 and, in the future, provided to a 
substantial majority of residential subscribers.63 To ensure a 
complete record on this issue, we invite comment on whether we should 
include access to enhanced 911 service among the services that should 
receive universal service support in the event we include basic 911 
service in that group.

    \57\ Id.
    \58\ Id. Sec. 254(c)(1)(B)-(C).
    \59\ Automatic number identification provides the called party 
with the telephone number from which the call was placed. Automatic 
location information allows the called party to use that telephone 
number to determine the address or other location from which the 
call was placed.
    \60\ 1996 Act sec. 101(a), Sec. 254(c)(1)(C).
    \61\ Id. Sec. 254(c)(1)(D).
    \62\ Id. Sec. 254(c)(1)(A).
    \63\ See id. Sec. 254(c)(1)(B).
---------------------------------------------------------------------------

    22. Access to Operator Services. Similarly, access to operator 
services would appear indispensable for both at-home and away-from-home 
users in public health or public safety emergencies and, as such, would 
appear to be consistent with the public interest, convenience, and 
necessity.64 Operator services are available throughout the public 
switched network and are used by at least a substantial majority of 
residential customers, even though customers are often charged for 
using those services.65 We seek comment as to whether access to 
operator services should be included among the services that should 
receive universal service support.

    \64\ Id. Sec. 254(c)(1)(A), (D).
    \65\ Id. Sec. 254(c)(1)(D).
---------------------------------------------------------------------------

    23. We also invite commenters to identify services other than those 
listed above that should be included among the services that should 
receive universal service support, based on the four criteria specified 
in Section 254(c)(1). For instance, interested parties may wish to 
address the inclusion of relay services, directory listings, and equal 
access, to the extent that such a requirement would be consistent with 
the Act.66 In particular, because of the directive in Section 
254(b)(3) relating to ``access to * * * interexchange services,'' 
67 we seek comment on whether access to interexchange services 
should also be included among those services receiving universal 
service support. Finally, we invite parties to discuss advanced 
services that may warrant inclusion, now or in the future, in the list 
of services that are supported by universal service support mechanisms. 
For example, within the context of the criteria discussed in Section 
254(c)(1),68 commenters may wish to discuss Internet access 
availability, data transmission capability, optional Signalling System 
Seven features or blocking of such features, enhanced services, and 
broadband services.

    \66\ We note, for example, that Section 705 of the 1996 Act 
leaves, for a future Commission proceeding, the issue of whether 
commercial mobile service providers should be required to provide 
equal access. Any proposal to include unblocked access as an element 
of universal service obligation for commercial mobile service 
providers thus would be premature. 1996 Act sec. 705.
    \67\ Id. Sec. 254(b)(3).
    \68\ Id. Sec. 254(c)(1).
---------------------------------------------------------------------------

2. How to Implement
    24. With respect to each support mechanism, we must determine the 
beneficiaries of the support. For example, we ask parties to address 
whether support for rural, insular, and high-cost areas should be 
limited to residential users or residential and single-line business 
users, or should be provided to all users in such areas. We also seek 
comment on the method for calculating support amounts. We ask parties 
to address whether support should be calculated based on inputs (for 
example, facility costs would determine subsidy amounts) or based on 
outputs (the price of services would determine support levels). In 
answering these questions, commenters should consider all applicable 
provisions of the 1996 Act, especially the three general principles 
enumerated in the Act applicable to support for rural, insular and 
high-cost areas and for low-income consumers.69 We seek comment on 
how assistance for rural, insular, and high cost areas should be 
calculated and distributed, and request that the Federal-State Joint 
Board prepare recommendations in this regard.

    \69\ See part III.B.1, supra.
---------------------------------------------------------------------------

    a. How to Determine ``Affordable'' and ``Reasonably Comparable''.
    25. Section 254(b)(3) states that rates for services in rural, 
insular, and high cost areas should be reasonably comparable to rates 
charged for similar services in urban areas of the country.'' 70 
Section 254(i) charges this Commission and the States with 
responsibility for assuring that the service rates throughout this 
country should be ``just, reasonable and affordable.'' 71 We seek 
comment on how we should determine rate levels that would be 
``affordable'' and ``reasonably comparable'' for services identified as 
requiring universal service support. We ask commenters to identify the 
criteria or principles that should guide this determination, the 
methods we should use to evaluate the required rate levels, and whether 
there should be procedures to recalibrate these rate levels to reflect 
changes in inflation or other factors that may make such recalibration 
periodically necessary.

    \70\ 1996 Act sec. 101(a), Sec. 254(b)(3).
    \71\ Id. Sec. 254(i).
---------------------------------------------------------------------------

    26. We seek comment on, for example, whether support should be 
based on achieving specific end-user prices. We also seek comment on 
how we should determine the level of prices for designated 
telecommunications services that are ``comparable to rates charged for 
similar services in urban areas.'' 72 In addition, we ask whether 
prices should vary depending on whether the customer is a non-business 
subscriber, a single-line business subscriber, or a multi-line business 
subscriber. Finally, we seek comment on the extent to which a subsidy 
should be provided to assure affordable and reasonably comparable rates 
for services using other than a primary line to a principal residence. 
We refer these issues to the Joint Board for its recommendation.

    \72\ Id. Sec. 254(b)(3).
---------------------------------------------------------------------------

    b. How to Calculate the Subsidy.
    27. We also seek comment to identify methods for determining the 
level of support required to assure that carriers are financially able 
to provide the services identified for inclusion among those to be 
supported by universal service funds in rural, insular, and high-cost 
areas. The method we ultimately adopt should be as simple to administer 
as possible, technology-neutral, and designed to identify the minimum 
subsidy required to achieve the statutory goal of affordable and 
reasonably comparable rates throughout the country. It should be 
equitable and non-discriminatory in the burden that it imposes upon 
contributors, and its distribution procedures should be direct, 
explicit, and specific.
    28. The existing universal fund mechanism operates through our Part 
36 rules. The subpart that concerns the universal service fund allows 
LECs with above-average costs to recover a designated portion of those 
above-average costs from the interstate jurisdiction and, in 
particular, from the universal service fund, to which only some 
interexchange carriers must contribute. This frees the LEC recipients

[[Page 10505]]
from the need to recover all of their costs from their own customers 
and in so doing is intended to moderate local rate levels. The existing 
mechanism may, however, give recipients of assistance, currently 
limited to incumbent LECs, a substantial advantage over competitors who 
must recover all of their costs from their customers. It may also not 
be the sort of ``explicit'' support mechanism contemplated in Section 
254(e).73

    \73\ Id. Sec. 254(e).
---------------------------------------------------------------------------

    29. The dial equipment minute (DEM) weighting assistance program is 
based on the theory that smaller telephone companies have higher local 
switching costs than larger LECs have, because the smaller companies 
cannot take advantage of certain economies of scale.74 Our 
jurisdictional separations rules allow LECs with fewer than 50,000 
access lines to allocate to the interstate jurisdiction a greater 
proportion of these local switching costs than larger LECs may 
allocate. For these small LECs, the actual DEM is weighted (i.e. 
multiplied by a factor) to shift some intrastate costs to the 
interstate jurisdiction. DEM weighting is specifically provided outside 
of, and unrelated to, the USF program. Unlike the USF, DEM weighting 
applies only to small LECs, and to all small LECs, regardless of their 
actual costs.

    \74\ Dial equipment minutes are the minutes of holding time of 
originating and terminating local dial switching equipment. The 
jurisdictional separations rules allocate local switching equipment 
costs between the interstate and intrastate jurisdictions on the 
basis of each jurisdiction's relative number of dial equipment 
minutes of use.
---------------------------------------------------------------------------

    30. We seek comment on whether continuing to use the Commission's 
jurisdictional separations rules to subsidize LECs with above-average 
loop costs, or the local switching costs of small LECs, is consistent 
with Congress's intent ``to provide for a pro-competitive, de-
regulatory national policy framework * * * opening all 
telecommunications markets to competition,'' 75 or with its intent 
relating to the characteristics of universal service support mechanisms 
to be adopted pursuant to Section 254. Many entities, among them non-
wireline and non-dominant carriers, that might be designated ``eligible 
telecommunications carrier[s]'' by the appropriate State commission, 
are not now subject to our separations rules, which apply only to 
LECs.76 We also seek comment in this connection regarding the 
statutory requirement ``that any support mechanisms continued or 
created under new section 254 should be explicit,'' 77 and we 
request the Joint Board to address this principle in its 
recommendation.

    \75\ See S. Conf. Rep. No. 104-230, 104th Cong., 2d Sess. 1 
(1996).
    \76\ 1996 Act sec. 102(a), Sec. 214(e).
    \77\ Id. Sec. 254(e).
---------------------------------------------------------------------------

    31. We also request comment regarding a specific proxy model 
submitted to this Commission by several telecommunications carriers 
(Joint Sponsors), which we specifically incorporate by reference into 
this proceeding.78 Once we determine what constitutes affordable 
rates for services designated for universal service support, this model 
might be used to determine the level of subsidy required to bring 
services priced at affordable levels to consumers in high-cost, rural, 
and insular areas. We seek comment on how this objective could be 
achieved. The Joint Sponsors collaborated during the past year to 
develop a Benchmark Costing Model (Model) for calculating a 
``benchmark'' cost, or standard assumed level of expense, for the 
provision of local telecommunications access in every census block 
group 79 in the United States, excluding Alaska and the 
territories, if service is provided by a wireline carrier.80

    \78\ MCI Communications Inc., NYNEX Corporation, Sprint/United 
Management Co., and US West, Inc., Benchmark Costing Model: A Joint 
Submission, Copyright 1995, CC Docket No. 80-286 (Dec. 1, 1995) 
(Joint Submission). The Joint Sponsors are US West, Nynex, MCI, and 
Sprint.
    \79\ A census block group is a geographic unit defined by the 
Bureau of the Census. Each census block group contains approximately 
400 households.
    \80\ See Joint Submission.
---------------------------------------------------------------------------

    32. The purpose of the Model is to identify areas where the cost of 
service can reasonably be expected to be so high as to require explicit 
high-cost support for the preservation of universal service. The Model 
produces a benchmark cost range for a defined set of residential 
telecommunications services assuming efficient wireline engineering and 
design, and using current technology. It is not based upon the costs 
reported by any company, nor the embedded cost to a company of 
providing service today. The Model bases projected costs on the least-
cost wireline technology to serve a particular area, given that area's 
geographic and population characteristics. As a threshold inquiry, we 
ask whether the model should be made technology neutral, in order to 
provide for non-wireline service where such service would be 
economical. In addition, we ask whether, in addressing the Model 
specifically or these issues generally, we should base our 
determinations on embedded costs or forward-looking costs, to the 
extent that costs are relevant to the support mechanisms for rural, 
insular, and high-cost areas.
    33. We also solicit comment regarding a proxy model that 
incorporates data showing the location of actual residential and 
business customers.81 The party offering this model claims it can 
be adapted for use by wire center, or even by specific consumer, as 
well as by census block group, but also acknowledges that, as currently 
designed, it relies on proprietary information that cannot be reviewed 
by other interested parties. We seek comment regarding the merits of 
this proxy model. Specifically, we ask whether using an incumbent LEC's 
wire centers as the geographic unit for calculating universal service 
support accords with our policy of competitive and technological 
neutrality.

    \81\ See ex parte submission in CC Docket No. 80-286 by Gina 
Harrison, Director, Federal Regulatory Relations, Pacific Telesis 
Group (February 29, 1996).
---------------------------------------------------------------------------

    34. In addition, we ask whether census block groups are the best 
geographic units for developing a proxy model, or whether alternative 
units would be more accurate or easier to administer. We invite comment 
regarding the Model's assumptions about the likely distribution of 
subscribers within a census block group. For example, we seek comment 
whether the assumption of uniform population distribution adequately 
reflects the possibility that in some rural areas, despite the 
theoretical sparsity, all lines are clustered near a single location. 
The Model also excludes business lines from its analysis.82 We 
invite comment as to whether the Model might therefore show unduly high 
residential costs in some census block groups, in that the exclusion of 
business lines could produce an overstated calculation of the projected 
cost per line. We also ask whether a model that included business lines 
might be more accurate. We also seek comment regarding the engineering 
assumptions on which the Joint Sponsors rely, and whether the Model 
could be improved by the addition of other variables, such as climate 
or slope. Conversely, we seek comment on whether the Model contains any 
redundant or superfluous variables.

    \82\ Joint Submission at I-2.
---------------------------------------------------------------------------

    35. We also solicit comment on whether relying on a competitive 
bidding process to set the level of subsidies required in rural, 
insular, and high-cost areas would be consistent with Section 214(e), 
which addresses the circumstances under which telecommunications 
carriers are eligible

[[Page 10506]]
to receive universal service support.83 Carriers offering all of 
the services supported by universal service mechanisms would bid on the 
level of assistance per line that they would need to provide all 
supported services. Such an approach would attempt to harness 
competitive forces to minimize the level of high-cost assistance needed 
to implement our statutory mandate in areas where competition has 
developed.84

    \83\ Amendment of Part 36 of the Commission's Rules and 
Establishment of a Joint Board, Notice of Proposed Rulemaking and 
Notice of Inquiry, 10 FCC Rcd 12309 (1995). We discuss Section 
214(e) in part III.B.3., infra.
    \84\ We acknowledge that, at present, there may be only one 
eligible carrier in some rural, insular, or high cost areas. Bidding 
to set the level of support payments cannot take place until 
competitors enter the market.
---------------------------------------------------------------------------

    36. In such areas, competing carriers would bid to set the level of 
assistance per line that any carrier serving a specified area would 
receive, with the lowest bid winning. Although the low bidder would 
determine the amount of support per line served that eligible carriers 
would receive, any authorized carrier would be able to receive 
assistance at that level. The low bidder, however, would receive an 
additional ``incentive bonus.'' The bonus would be necessary to induce 
competitors to underbid one another, rather than merely accepting the 
established level of assistance.
    37. We acknowledge that market conditions may not warrant the 
introduction of this plan at present. Nevertheless, we believe 
competitive local exchange markets may develop even in high-cost areas, 
and therefore request comment regarding distributing high-cost 
assistance on the basis of competitive bids.
    38. We request that the Federal-State Joint Board prepare 
recommendations regarding the best means of establishing a new 
universal service support mechanism for rural, insular, and high-cost 
areas. In preparing its recommendation, we ask the Joint Board to give 
the greatest weight to effective implementation of the 
Telecommunications Act of 1996, enabling us to carry out the 
requirements of the Act in the manner most consistent with the 
principles and intentions expressed in the Act itself.
    39. The legislative history of the 1996 Act makes clear that we are 
to take a new approach in designing support mechanisms for universal 
service, and that the proceeding in CC Docket No. 80-286 is not an 
appropriate foundation on which to base this proceeding.85 We 
wish, however, to preserve the relevant portion of the record that 
would be consistent with the principles of the 1996 Act. To avoid 
unnecessary duplication of efforts by interested parties and 
regulators, we are incorporating by reference that portion of the CC 
Docket No. 80-286 record that relates to changing the support 
mechanisms in our jurisdictional separations rules into this 
proceeding.86 With respect to the proposals raised in that 
proceeding, we request that interested parties specifically comment on 
which, if any, of those proposals are consistent with the requirements 
and intent of the 1996 Act.

    \85\ S. Conf. Rep. No. 104-230, 104th Cong., 2d Sess. 131 
(1996).
    \86\ Amendment of Part 36 of the Commission's Rules and 
Establishment of a Joint Board, Notice of Inquiry, 9 FCC Rcd 7404 
(1994), and comments, reply comments, and ex parte submissions 
responsive thereto; Amendment of Part 36 of the Commission's Rules 
and Establishment of a Joint Board, Order, 9 FCC Rcd 7962 (1994) 
(Data Request) and responses thereto; and Amendment of Part 36 of 
the Commission's Rules and Establishment of a Joint Board, Notice of 
Proposed Rulemaking and Notice of Inquiry, 10 FCC Rcd 12309 (1995), 
and comments, reply comments, and ex parte submissions responsive 
thereto.
---------------------------------------------------------------------------

    c. Transition Issues.
    40. At present, LECs with loop costs more than 115 percent above 
the national average receive support from the Universal Service Fund 
described in part II.B.2.b., above. At present, there is a cap on the 
rate at which the fund may grow. That cap is scheduled to expire on 
July 1, 1996. We seek comment on whether we should extend the cap until 
the completion of the Joint Board's and our deliberations in this 
proceeding. We also seek comment on whether the principles governing 
our deliberation would permit, or even require, a transition period for 
carriers, particularly recipients of subsidies achieved through our 
separations rules (e.g., the USF and DEM weighting rules), to adjust to 
operating the statutory framework erected by the Telecommunications Act 
of 1996.
3. Who Is Eligible for Support
    41. In addition to instructing us to define which 
telecommunications services carriers receiving support must provide, 
the 1996 Act also specifies the eligibility requirements carriers must 
satisfy in order to receive universal service support. Under Section 
214(e), support is available only to ``common carrier[s]'' designated 
as ``eligible telecommunications carrier[s]'' by the appropriate State 
commissions.87 Section 254(e) also requires that ``[a]ny carrier 
that receives support shall use that support only for the provision, 
maintenance, and upgrading of facilities and services for which the 
support is intended.'' We request comment, and a corresponding 
recommendation from the Joint Board, regarding the need for any 
measures to ensure that support is used for its intended purpose. 
Similarly, we ask for comment regarding the need for additional 
measures to ensure that ``telecommunications carrier[s]'' do not ``use 
services that are not competitive to subsidize services that are 
subject to competition.'' 88 We also invite commenters to propose 
means to ensure that all eligible carriers--and no ineligible 
carriers--receive the appropriate amount of universal service support.

    \87\ 1996 Act sec. 102(a), Sec. 214(e).
    \88\ Id. Sec. 254(k).
---------------------------------------------------------------------------

    42. In areas served by a ``rural telephone company,'' as defined by 
Section 3 of the 1996 Act,89 the State commission may choose to 
designate ``more than one common carrier as an eligible 
telecommunications carrier for a service area designated by the State 
commission'' if that commission finds ``that the designation is in the 
public interest.'' 90 In other areas, the State commission must 
upon request designate as an ``eligible carrier'' any common carrier 
meeting the universal service requirements specified in Section 
214(e)(1).

    \89\ Id. Sec. 153(47).
    \90\ Id. Sec. 214(e)(2).
---------------------------------------------------------------------------

    43. Section 214(e)(1) requires an eligible carrier to offer ``the 
services that are supported by Federal universal service support 
mechanisms under Section 254(c), either using its own facilities or a 
combination of its own facilities and resale of another carrier's 
services.'' 91 Each eligible carrier must also ``advertise the 
availability of such services'' and the charges for those services 
``using media of general distribution.'' 92 We seek comment 
regarding, and ask the Joint Board to recommend, standards for 
compliance with these requirements.

    \91\ Id.
    \92\ Id. Sec. 214(e)(1)(B).
---------------------------------------------------------------------------

    44. Each State commission may specify the ``service area'' within 
which a common carrier is classified as an ``eligible carrier.'' The 
1996 Act defines ``the term `service area' [to mean] a geographic area 
established by a State commission for the purpose of determining 
universal service obligations and support mechanisms.'' 93 With 
respect to rural telephone companies, ``service area'' means a 
company's study area,94 ``unless and

[[Page 10507]]
until the Commission and the States, taking into account the 
recommendations of a Federal-State Joint Board instituted under Section 
410(c), establish a different definition of service area for such a 
company.'' 95 The 1996 Act defines ``rural telephone company'' as 
a ``local exchange carrier operating entity to the extent that such 
entity--(A) Provides common carrier service to any local exchange 
carrier study area that does not include either--(i) Any incorporated 
place of 10,000 inhabitants or more, or any part thereof, based on the 
most recently available population statistics of the Bureau of the 
Census; or (ii) any territory, incorporated or unincorporated, included 
in an urbanized area, as defined by the Bureau of the Census as of 
August 10, 1993; (B) provides telephone exchange service, including 
exchange access, to fewer than 50,000 access lines; (C) provides 
telephone exchange service to any local exchange carrier study area 
with fewer than 100,000 access lines; or (D) has less than 15 percent 
of its access lines in communities of more than 50,000 on the date of 
enactment of the Telecommunications Act of 1996.'' 96

    \93\ Id. Sec. 214(e)(5).
    \94\ ``Each study area'' is generally a LEC's service area in a 
given State. The study area boundaries are fixed as of November 15, 
1984. MTS and WATS Market Structure; Amendment of Part 67 of the 
Commission's Rules and Establishment of a Joint Board, Decision and 
Order, 50 FR 939 (1985) (1985 Lifeline Order) (adopting, with minor 
modifications the Joint Board recommendations issued in MTS and WATS 
Market Structure; Amendment of the Commission's Rules and 
Establishment of a Joint Board, Recommended Decision and Order, 49 
FR 28325 (1984)) (1984 Recommended Decision).
    \95\ 1996 Act sec. 102(a), Sec. 214(e)(5).
    \96\ Id. Sec. 153(47).
---------------------------------------------------------------------------

    45. We solicit comment on how to define ``study area'' in the way 
that best comports with the Congress's expressed objective ``to provide 
for a pro-competitive, de-regulatory national policy framework'' for 
the ``rapid[ ] private sector deployment of advanced telecommunications 
and information technologies.'' 97 Currently, a wireline LEC's 
study area generally includes all the territory of a single state 
within which that carrier operates. We ask that interested parties 
propose an appropriate basis for defining the ``service area'' of a 
``rural telephone company,'' taking into account the likely possible 
effect on competition of a ``service area'' definition for rural 
telephone companies. In conjunction with this issue, we request comment 
on whether we should amend our rules to revise existing study area 
boundaries. In the context of implementing a ``pro-competitive, de-
regulatory national policy framework,'' 98 as required by the 1996 
Act, we ask that the Joint Board prepare recommendations regarding the 
appropriate ``service area'' boundaries of areas served by a ``rural 
telephone company.''

    \97\ See S. Conf. Rep. No. 104-230, 104th Cong., 2d Sess. 1 
(1996).
    \98\ Id.
---------------------------------------------------------------------------

    46. The Act also requires ``eligible telecommunications 
carrier[s]'' to ``advertise the availability of such services and the 
charges therefore using media of general distribution.'' 99 The 
Joint Explanatory Statement adds that ``such services must be 
advertised generally throughout'' the service area.100 To avoid 
future disputes, we believe it may be useful for us to adopt guidelines 
defining the steps that would be sufficient to advertise the 
availability of, and charges for, services. We ask interested persons 
to comment on this approach and suggest appropriate guidelines.

    \99\ 1996 Act sec. 102(a), Sec. 214(e)(1)(B).
    \100\ See S. Conf. Rep. No. 104-230, 104th Cong., 2d Sess. 141 
(1996).
---------------------------------------------------------------------------

    47. Section 214(e)(3) permits any unserved community--an area or a 
portion of a defined service area in which ``no common carrier will 
provide the services that are supported by Federal universal service 
support mechanisms''--to request the Commission (for interstate 
services) and State commission (for intrastate services) to designate 
an eligible telecommunications carrier.101 Upon such request, the 
Commission or State commission shall order a common carrier or carriers 
to provide service to the requesting community.102 Pursuant to 
Section 214(e)(3) of the 1996 Act, such carriers shall be designated as 
an eligible telecommunications carrier. We ask commenters to address 
how we should implement our responsibilities under Section 214(e)(3), 
and whether we and the State commissioners should develop a cooperative 
program to ensure that all areas receive each of the services supported 
by Federal universal service support mechanisms.

    \101\ 1996 Act sec. 102(a), Sec. 214(e)(3).
    \102\ Id.
---------------------------------------------------------------------------

    48. Section 214(e)(4) provides procedures for a carrier to 
relinquish its designation as an eligible telecommunications carrier. 
States must permit this to occur if the requesting carrier gives 
advance notice to the State and if there is more than one eligible 
telecommunications carrier serving the area. The State commission must 
require the remaining telecommunications carrier or carriers in the 
area to ensure that all of the relinquishing carrier's customers will 
continue to be served. The State commission must also require 
sufficient notice to permit the purchase or construction of adequate 
facilities by any remaining telecommunications carrier. Section 
214(e)(4) requires that the State commission must establish a time, not 
to exceed one year from the date of approval of relinquishment, for the 
purchase or construction of adequate facilities.103

    \103\ Id. Sec. 214(e)(4).
---------------------------------------------------------------------------

    49. Section 214(e)(2) and (e)(4) reserve consideration of requests 
for relinquishment of the designation of eligible telecommunications 
carriers to the States.104 We must amend any of our regulations 
that would be inconsistent with that reservation, and we invite 
commenters to identify any such regulations.105 We refer these 
issues, and all of the issues raised above with respect to support for 
rural and high-cost areas, to the Joint Board for its recommendation.

    \104\ Id. Sec. 214(e)(2), (4).
    \105\ Id. Sec. 254(a).
---------------------------------------------------------------------------

C. Support for Low-Income Consumers

1. What Services To Support
    50. In Part III.B.1 of this Notice, supra, we discuss the services 
that may be included among the services to consumers in rural, insular, 
and high-cost areas that should receive support.106 We propose 
that these services should also be services supported by Federal 
universal service support mechanisms with respect to low-income 
consumers. In this part of our Notice, we seek comment on whether 
designation of additional services that would be specifically 
appropriate for low-income users. We note that the Joint Explanatory 
Statement added persons with low-income ``to the list of consumers to 
whom access to telecommunications and information services should be 
provided.'' 107 Through the Commission's monitoring of 
subscribership levels and census data, we know that subscribership 
levels for low-income individuals fall substantially below the national 
average.108 We request comment regarding the Commission's overall 
responsibilities under Sections 1 and 254 with regard to low-income 
consumers. We invite the commenters to address whether there are any 
particular services, technical capabilities, or features that would be 
of benefit to low-income consumers and that meet one or more of the 
criteria for inclusion among the services that should receive universal 
service support. Consistent with the Act's

[[Page 10508]]
principle that support mechanisms should be ``specific, predictable, 
and sufficient,'' 109 we ask commenters to address potential costs 
associated with such support. We request a recommendation from the 
Federal-State Joint Board convened in this proceeding regarding all of 
the matters discussed in this part of the Notice.

    \106\ Id. Sec. 254(b)(3).
    \107\ S. Conf. Rep. No. 104-230, 104th Cong., 2d Sess. 131 
(1996).
    \108\ See Subscribership Notice at 13003-4.
    \109\ 1996 Act sec. 101(a), Sec. 254(b)(5).
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    51. Free Access to Telephone Service Information. In an Interim 
Opinion regarding universal service,110 the California Public 
Utilities Commission tentatively concluded that free telephone access 
by subscribers to the telephone company central office, for purposes 
such as reporting the need for repairs and inquiring about bills or 
eligibility for special programs, is an essential telephone 
service.111 Such free telephone access to the telephone company 
central office would be of primary significance for measured rate 
subscribers, who are charged for each local call they make on either a 
per call or per minute basis, because subscribers with flat rate local 
service generally may make routine service inquiries without incurring 
extra charges.

    \110\ Rulemaking on the Commission's Own Motion into Universal 
Service and to Comply with the Mandates of Assembly Bill 3643, R.95-
01-020; and Investigation on the Commission's Own Motion into 
Universal Service and to Comply with the Mandates of Assembly Bill 
3643, I.95-01-020, Interim Opinion (Cal. Pub. Utils. Comm'n, filed 
Jan. 24, 1995) (CPUC Interim Opinion).
    \111\ Id. at 18.
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    52. Many measured rate subscribers choose that service as a less 
expensive alternative to the flat rate, and thus would be expected to 
be especially sensitive to charges for service inquiries. Similarly, it 
appears likely that potential Lifeline and Link Up customers could 
benefit significantly from free access to information regarding those 
subsidy programs.\112\ Indeed, such access may be needed to if we are 
to fulfill our statutory mandate to ensure that universal service is 
available at affordable rates.\113\

    \112\ We describe those programs in part III.C.2., infra.
    \113\ 1996 Act sec. 101(a), Sec. 254(i).
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    53. We seek comment on whether free access to the telephone service 
provider for low-income customers should be included within the group 
of services receiving universal service support, in order to allow 
those customers to receive information about telephone service 
activation, termination, repair, and information regarding subsidy 
programs.\114\ Because access by subscribers to certain basic 
information concerning their telephone service may be a prerequisite to 
maintaining their service, we seek comment on whether, like access to 
the loop itself, access to that information is essential to public 
health and safety and is otherwise consistent with the public interest, 
convenience, and necessity.\115\ Commenters should also address the 
applicability of the criteria set forth in both Sections 254(c)(1)(B) 
and (C) to this service. We invite interested parties to provide 
information regarding the current availability of free access to 
information regarding telephone service activation and termination, 
repairs, and telephone subsidy programs.

    \114\ Id. Sec. 254(c)(1)(B), (C).
    \115\ See id. Sec. 254(c)(1)(A), (D).
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    54. Toll Limitation Services. In discussing toll limitation 
services, we consider both toll blocking and toll control services. 
Some LECs offer a service that limits only long-distance calls for 
which the subscribers would be charged (a form of toll blocking) or 
limits the toll charges a subscriber can incur during a billing period 
(a toll call control service). To the extent that toll blocking or 
limiting services allow low-income customers to avoid involuntary 
termination of their access to telecommunications services, we seek 
comment on whether such services are ``essential to education, public 
health, or public safety'' and ``consistent with the public interest, 
convenience, and necessity.'' \116\ Moreover, many LECs apparently 
offer toll limiting services to their subscribers at tariffed 
rates,\117\ indicating that toll limiting service is ``being deployed 
in public telecommunications networks by telecommunications carriers.'' 
\118\ We seek comment regarding the remaining criterion for including 
services in the definition of ``universal service,'' the issue of 
whether toll limiting has, ``through the operation of market choices by 
customers, been subscribed to by a substantial majority of residential 
customers.'' \119\ We seek comment on whether, where such services are 
available, they should be offered to low-income subscribers without 
charge or at a discount and what criteria we should use to determine 
the support for which a carrier offering such services would be 
eligible.\120\

    \116\ Id.
    \117\ For example, the Bell Atlantic Telephone Companies offer 
voluntary toll restriction services in Maryland, the District of 
Columbia and Pennsylvania; Pacific Bell offers voluntary toll 
restriction service in California.
    \118\ 1996 Act sec. 101(a), Sec. 254(c)(1)(C).
    \119\ Id. Sec. 254(c)(1)(B).
    \120\ We recognize that there is potential tension between 
affording consumers the ability to receive toll limitation services 
and the principle set forth in the Act that consumers should have 
access to ``telecommunications and information services, including 
interexchange services.'' 1996 Act sec. 101(a), Sec. 254(b)(3).
---------------------------------------------------------------------------

    55. We recognize that various methods may exist to advance Section 
254(b)(3)'s statutory principle that the Commission ensure that ``low-
income consumers * * * have access to * * * interexchange services.'' 
\121\ We also note that, in the context of the Commission's regulation 
of the interstate interexchange marketplace, one interexchange carrier 
has voluntarily committed to institute an optional calling plan for 
low-income consumers in order to mitigate the impact of recent 
increases in basic schedule interstate long-distance rates in the 
marketplace.\122\ For example, under the calling plan, low-income 
residential customers can place one hour of interstate direct dial 
service, during a one-month period, at a rate frozen at 15 percent 
below current basic schedule rates.\123\ We solicit comment on whether 
and how we should encourage domestic interstate interexchange carriers 
to provide optional calling plans for low-income consumers to promote 
the statutory principles enumerated in Section 254(b)(3). We also seek 
comment on the potential impact of such plans upon subscribership to 
telecommunications services.

    \121\ Id.
    \122\ Motion of AT&T Corp. to be Reclassified as a Non-dominant 
Carrier, FCC 95-427 (rel. Oct. 23, 1995).
    \123\ Id. at para. 84.
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    56. Reduced Service Deposit. Recent studies indicate that 
disconnection for non-payment of toll charges, and the high deposits 
carriers charge to cover the cost of noncollectible charges, may be 
more significant barriers to universal service than the cost of local 
service itself.\124\ In our Subscribership Notice, we noted that LECs 
generally require deposits before connecting subscribers, and that, for 
many low-income subscribers, these deposits present a formidable 
obstacle to initiating service.\125\ The availability of affordable 
toll limiting service, along with the lower deposits carriers would 
impose on customers who have limited the toll charges they can incur, 
appears likely to determine whether many low-income consumers have 
``affordable'' access to any public telecommunications services.\126\ 
Moreover, some states which require affordable voluntary toll limiting 
service have subscribership rates that are above the national average, 
suggesting that the means to control toll usage is an important 
component of

[[Page 10509]]
universal service, particularly for low-income households. We ask 
interested parties to present a reasoned analysis of whether, based on 
consideration of all four criteria in Section 254(c)(1), we should 
require discounted toll limiting service and reduced deposits for low-
income consumers, and we request that the Federal-State Joint Board 
present recommendations on this proposal.

    \124\ Subscribership Notice at 13005-06.
    \125\ Id. at 13003-05.
    \126\ 1996 Act sec. 101(a), Sec. 254(i).
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    57. Services Other Than Conventional Residential Services. In the 
past, the Commission's universal service policies focused on the cost 
of traditional residential service. Nevertheless, we recognize that 
some individuals with low incomes do not have access to residential 
service.\127\ For some individuals who move frequently or have no 
residence, access to conventional residential telecommunications 
service may not be practical. We therefore seek comment on specific 
services which may enable such low-income customers to gain access to 
the telecommunications network. We seek comment from parties to 
identify any historically underserved segments of the population and 
potential services and features \128\ that the Joint Board may consider 
in addressing the provision of telecommunications services to these 
highly mobile groups. To determine whether these services should be 
included in our list of supported services, we seek comment on: whether 
these services are essential to the public health and public safety; 
whether a substantial majority of residential customers have subscribed 
to the services; the extent to which telecommunications carriers 
deploy, or plan to deploy, them in public networks; and, generally, how 
offering these service as part of universal service is consistent with 
the public interest, convenience, and necessity.\129\ We also seek 
comment on how best to measure the extent to which low-income 
populations that are unable to maintain traditional residential service 
have access to facilities for making and receiving calls. We invite 
parties to address the potential for provision of these services by 
wireless carriers.

    \127\ Seasonal workers and homeless individuals, for example, 
are unlikely to subscribe to residential telephone service.
    \128\ For example, these may include services like community 
phone banks, availability of public interest payphones, community 
access centers, special discounted service plans for short-term 
subscribers, or low-cost voice mailboxes, which may provide a viable 
alternative for providing telecommunications service to the highly 
mobile populations. We note that we will not address public interest 
payphones in this proceeding because they will be addressed in a 
separate proceeding, as required under Section 276(b)(2) of the 1996 
Act. See 1996 Act sec. 151(a), Sec. 276(b)(2).
    \129\ 1996 Act sec. 101(a), Secs. 254(c)(1) (A)-(D).
---------------------------------------------------------------------------

    58. Other Services For Low-Income Subscribers. We seek comment on 
whether there are other services that, with respect to low-income 
consumers, should be included in universal service support mechanisms. 
We note that low-income subscribers have significantly lower telephone 
subscribership rates than other subscribers,\130\ and seek comment on 
the reasons underlying this disparity. Any commenter proposing 
inclusion of an additional service within the definition of services to 
be supported by federal universal service support mechanisms should 
discuss the extent to which the proposed service meets each of the 
criteria enumerated in Section 254(c)(1), and how inclusion of the 
proposed service would promote access by low-income consumers to 
telecommunications and information services.

    \130\ For example, according to Census Bureau statistics, 98 
percent of households with annual income above $30,000--the median 
income--have a telephone in the home, while only 84 percent of 
households with annual income under $12,000--the poverty level for a 
family of three--have a telephone in the home.
---------------------------------------------------------------------------

2. How To Implement and Who Is Eligible for Support
    59. New Support Mechanisms. We generally seek comment on how to 
determine the subsidy that would be necessary to make the services 
identified as the ``core services'' eligible for universal service 
support available to low-income consumers. We pose the same question 
with respect to any additional services specifically targeted to low-
income users discussed above. As a threshold matter, we seek comment 
and a Joint Board recommendation on how to define eligible low-income 
customers. We seek comment on whether we should require a discount on 
all supported services and the amount of that discount. Parties 
endorsing specific services for low-income users, such as free toll 
limitation services, should propose specific mechanisms to define and 
distribute support for those offerings. For example, parties asserting 
that the support should be cost-based should describe how those costs 
should be determined. We intend to implement Section 254(k) consistent 
with the expressed Congressional intent ``to provide for a pro-
competitive, de-regulatory national policy framework.'' 131 We 
therefore seek comment on support methodologies involving the least 
regulatory methods.

    \131\ S. Conf. Rep. No. 104-230, 104th Cong., 2d Sess. 1 (1996).
---------------------------------------------------------------------------

    60. We seek specific comment on how our proposed support mechanisms 
should apply to the services discussed in this part of our Notice. We 
are particularly interested in comment on how support should be 
calculated and paid if the provider of the service is not the local 
telephone company. We ask the Joint Board to address these issues in 
its recommended decision.
    61. Existing Support Mechanisms. Currently we have two support 
mechanisms targeted to low-income consumers: the Lifeline Assistance 
Plan and Link Up America. States may choose to participate in either of 
two Lifeline Assistance plans. Plan 1 provides for a reduction in a 
subscriber's monthly telephone bill equal to the $3.50 federal 
subscriber line charge (SLC) for residential subscribers.132 Half 
of the reduction comes from a 50 percent waiver of the charge; the 
other half comes from the participating state, which matches the 
federal contribution by an equal reduction in the local rate. Under 
this plan, subscribers who satisfy a state-determined means test may 
receive assistance for a single telephone line in their principal 
residence. Of the 38 states and territories participating in Lifeline, 
only California still offers a Lifeline program under Plan 1.133

    \132\ 1985 Lifeline Order.
    \133\ Indus. Analysis Div., FCC, Monitoring Report May 1995 CC 
Docket No. 87-339, at tbl. 2.1 (1995) (Monitoring Report).
---------------------------------------------------------------------------

    62. Under Plan 2, which expands Plan 1 to provide for waiver of the 
entire residential SLC (up to the amount matched by the state), a 
subscriber's bill may be reduced by twice the SLC (or more, if the 
state more than matches the value of the federal waiver).134 The 
state contribution may come from any intrastate source, including state 
assistance for basic local telephone service, connection charges, or 
customer deposit requirements. Companies in 37 states or territories 
reported subscribers receiving Plan 2 Lifeline assistance as of April 
1995.135 In 1994, about 4.4 million households received $123 
million in federal Lifeline assistance through full or partial waiver 
of the SLC.136 Under both plans, the interstate portion of 
Lifeline Assistance is billed to interexchange carriers by the National 
Exchange Carrier Association, Inc. (NECA).

    \134\ MTS and WATS Market Structure; Amendment of Part 67 of the 
Commission's Rules and Establishment of a Joint Board, Decision and 
Order, 51 FR 1371, paras. 4-6 (1986).
    \135\ Monitoring Report, tbl. 2.3.
    \136\ Id.
---------------------------------------------------------------------------

    63. The 1996 Act states that ``[n]othing in this section shall 
affect the

[[Page 10510]]
collection, distribution, or administration of the Lifeline Assistance 
Program provided for by the Commission under regulations set forth in 
section 69.117 of title 47, Code of Federal Regulations, and other 
related sections of such title.'' 137 Section 69.117 addresses the 
conditions and mechanisms for waiver of subscriber line 
charges.138

    \137\ 1996 Act sec. 101(a), Sec. 254(j).
    \138\ See 47 CFR 69.117.
---------------------------------------------------------------------------

    64. The Link Up program helps low-income subscribers begin 
telephone service by paying half of the first $60 of connection 
charges.139 Where a LEC has a deferred payment plan, Link Up will 
also pay the interest on any balance up to $200, for up to one 
year.140 To be eligible, subscribers must meet a state-established 
means test, and may not, unless over 60 years old, be a dependent for 
federal income tax purposes.141 Link Up is available in all but 
two states (California and Delaware) and in the District of 
Columbia.142 The 1996 Act does not directly address our rules 
relating to the Link Up program. Nonetheless, like the universal 
service fund, the Link Up support is a function of jurisdictional 
separations.143 The Link Up program's support comes, in part, 
through shifting LEC costs that would otherwise be recovered through 
rates for intrastate services to the interstate jurisdiction. 
Consistent with the Act's requirement that support mechanisms be 
explicit, propose to amend our rules to remove the Link Up provisions 
from our jurisdictional separations rules. We further propose that the 
support mechanism for Link Up be the same as that developed to support 
other services that receive Federal universal service support.

    \139\ MTS and WATS Market Structure; Amendment of Part 67 of the 
Commission's Rules and Establishment of a Joint Board, Report and 
Order, 2 FCC Rcd 2953, 2955, (1987) (1987 Report and Order); MTS and 
WATS Market Structure Link-Up America, and Amendment of Part 36 of 
the Commission's Rules and Establishment of a Joint Board, Decision 
and Order, 4 FCC Rcd 3634 (1989).
    \140\ 1987 Report and Order at 2955.
    \141\ Id. at 2956.
    \142\ Monitoring Report, tbl. 2.2.
    \143\ See 47 CFR 36.711-741.
---------------------------------------------------------------------------

    65. We also seek comment on whether changes to the level of support 
or other changes to our Lifeline and Link Up programs should be made as 
part of an overall mechanism to ensure that quality services are 
available at just, reasonable, and affordable rates for low-income 
subscribers. Interested parties may, however, propose changes to the 
level of support. Parties suggesting changes to the level of support 
should provide evidence of the need for such changes and should address 
how the proposed changes further the principle of universal service as 
stated in the 1996 Act, and should identify the effect of their 
suggested change on the level of subsidy required to fund these 
programs.

D. Ensuring That Supported Services for Rural, Insular, and High-Cost 
Areas and Low-Income Consumers Evolve

    66. The 1996 Act states that ``[u]niversal service is an evolving 
level of ____ telecommunications services'' and requires that the 
Commission periodically establish the definition, ``taking into account 
advances in telecommunications and information technologies and 
services.'' 144 Thus, our list of services receiving universal 
service support should continue to evolve, as changes in technology and 
subscriber needs and preferences affect both the availability and 
subscribership patterns of various telecommunications services. That 
evolution should, however, be achieved in the context of regulatory 
objectives that include promoting competition and reducing regulation 
in a manner that is technology-neutral.145 We, therefore, seek 
comment on how and with what frequency we should evaluate our initial 
list of services adopted in this proceeding in accordance with the 
Congressional recognition that universal service is an evolving level 
of telecommunications services.

    \144\ 1996 Act sec. 101(a), 254(c)(1).
    \145\ Id.
---------------------------------------------------------------------------

    67. Parties in a California Public Utilities Commission proceeding 
have suggested that any universal service definition should be 
revisited at fixed intervals, such as every three or five 
years.146 Whether we decide to revisit the topic even sooner 
depends on the information we collect in the proceeding on advanced 
services mandated in Section 706 of the Act.147 Moreover, although 
periodic review could help to ensure that the definition does not 
remain static, it could also entail the expenditure of resources on 
unnecessary proceedings. To apply the definitional criteria that 
Congress has set forth in Section 254(c)(1), we shall need to gather 
relevant facts, including the extent to which particular services ``are 
being deployed in public telecommunications networks'' and ``have been 
subscribed to * * * by a substantial majority of residential 
customers.'' 148 At the same time, we fully recognize that it 
could be unduly burdensome to impose extensive information collection 
requirements relating to those criteria. Since the list of services 
that should receive universal service support is partially defined by 
consideration of what services are widely subscribed to by residential 
customers,149 it may be that we can rely on the marketplace to 
register its preferences without soliciting those preferences 
indirectly through burdensome data collection activities. We propose, 
instead, to rely on information sources that already exist, and to 
initiate additional information collection efforts only if that 
information proves inadequate and only when we contemplate changes in 
the list of services that should receive universal service support. 
Should it appear advisable to collect additional information, we would 
first conduct a cost/benefit analysis to ensure that the burden of 
collection would not outweigh the value of the information we would 
request. We seek comment on this proposal and, in addition, we ask that 
interested parties identify specific sources of information relevant to 
this list of services in accordance with the criteria set forth in 
Section 254(c)(1), including information sources available at State 
commissions and procedures for obtaining such information.

    \146\ CPUC Interim Opinion at 20.
    \147\ 1996 Act sec. 706, Sec. 706(b). Section 706 requires the 
Commission to ``initiate a notice of inquiry concerning the 
availability of advanced telecommunications to all Americans 
(including, in particular, elementary and secondary schools and 
classrooms) * * *.''
    \148\ Id. Sec. 254(c)(1)(B)-(C).
    \149\ See id. Sec. 254(c)(1)(B).
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    68. The 1996 Act also states that ``[q]uality services should be 
available at just, reasonable, and affordable rates.'' 150 As to 
the technical parameters of specific telecommunications services, we do 
not intend, in implementing Section 254, to prescribe technical 
standards for telecommunications carriers or other service providers. 
This Commission, historically, has let affected entities (IXCs, LECs, 
equipment manufacturers, and customers) develop technical standards and 
performance standards,151 and implement those standards without 
our direct intervention, except as necessary. At present, there are 
several industry bodies that address standards for various aspects of 
communications networks.152 Our preference, in implementing 
section 254, is to

[[Page 10511]]
encourage existing standard-setting bodies to discuss and establish 
relevant technical standards.

    \150\ Id. Sec. 254(b)(1) (emphasis added).
    \151\ For example, a ``technical standard'' would apply to the 
electrical and signaling parameters at the interface between 
carriers. A ``performance standard'' would apply to the speed, 
accuracy, dependability, availability, and survivability of the 
transmission/switching path.
    \152\ Those include the American National Standards Institute 
Committee T-1, Electronic Industry Association, and 
Telecommunications Industry Association.
---------------------------------------------------------------------------

    69. The 1996 Act requires the Commission to ensure that 
``[c]onsumers in all regions of the Nation, * * * have access to 
telecommunications and information services * * * that are reasonably 
comparable to those services provided in urban areas.'' 153 As 
stated above, the 1996 Act also requires that the Commission ensure 
that ``[q]uality services should be available.'' 154 We seek 
comment on whether it would be useful to collect and publish certain 
basic information regarding technical performance levels of carriers 
subject to our jurisdiction. Information on service quality that would 
enable comparisons between the performance levels of various 
telecommunications carriers would potentially create a market-based 
incentive for carriers to provide quality services. By providing 
consumers with easy access to publicly available data on the 
performance level of various carriers, we could potentially spur 
carriers to compete for customers, among other things, on the basis of 
service quality in an increasingly competitive telecommunications 
marketplace.155 We note, however, that because competition will 
probably not develop in a uniform fashion throughout the Nation, we 
seek comment on whether it may be necessary to obtain data that could 
be used by the public, regulators, and regulated entities, to monitor 
service quality performance from carriers, particularly those serving 
in rural areas, that are not currently subject to our existing service 
quality monitoring program.156 In proposing to collect and publish 
this information, we wish to impose the least possible cost on the 
companies involved. We, therefore, solicit comment on whether industry 
organizations or State commissions already collect the information that 
should be contained in these performance reports, and whether it would 
be reasonable to rely upon such information rather than extending our 
existing requirements to all carriers. We also ask that the commenters 
attempt to estimate the potential costs associated with these 
alternatives, in accordance with the principles stated in Section 
254(b)(5) that support mechanisms should be ``specific, predictable, 
and sufficient.'' 157

    \153\ 1996 Act sec. 101(a), Sec. 254(b)(3).
    \154\ Id. Sec. 254(b)(1).
    \155\ Airline on-time information is published in ``Air Travel 
Consumer Report,''Aviation Consumer Protection Div., Dep't of 
Transp. (issued monthly).
    \156\ See 47 CFR 43.21-22. Information reported by LECs 
includes, inter alia, service installation and repair intervals, 
trunk blockage rates and switch outage information. These are 
reported on Automated Reporting and Management Information System 
(ARMIS) Report Nos. 43-05, 43-06 and 43-07.
    \157\ 1996 Act sec. 101(a), Sec. 254(b)(5).
---------------------------------------------------------------------------

    70. Finally, we recognize that such reports may not, in the near 
future, be necessary for many urban and suburban areas, as local 
service competition develops and the technical characteristics of 
competitors' respective services are determined in response to market 
demands. We therefore ask whether we should take action at some fixed 
date to evaluate the need for continuing the performance reports, 
covering services offered to all or some areas of the nation. We 
request that the Joint Board prepare a recommended decision addressing 
all of the issues raised in this Notice with respect to monitoring of 
telecommunications services.

IV. Schools, Libraries, and Health Care Providers

A. Goals and Principles

    71. Among the seven universal service principles established in the 
1996 Act is the principle that ``elementary and secondary schools and 
classrooms, health care providers, and libraries should have access to 
advanced telecommunications services.'' 158 The Act allows the 
Commission to designate additional, special services for universal 
service support for eligible schools, libraries and health care 
providers.159 In this section we propose to implement Sections 
254(c)(3) (allowing the Commission to designate additional services for 
such support mechanisms for schools, libraries, and health care 
providers) and 254(h)(1) (providing guidance on rates and discounts for 
rural health care providers and educational providers and libraries). 
As to Section (h)(1), we discuss and seek comment on what services, in 
addition to the core services discussed in Section III, should be made 
available to schools, libraries and rural health care providers at a 
discount.160 We also seek comment on issues relating to the 
implementation of Section 254(h)(1) relating to support mechanisms that 
would enable eligible schools, libraries, and rural health care 
providers to receive both the core and advanced telecommunications 
services included among those eligible for universal service 
support.161

    \158\ Id. Sec. 254(b)(6).
    \159\ Id. Sec. 254(c)(3). We note that Section 254(h)(4) denies 
eligibility for discounts to any school or library that ``operates 
as a for-profit business.'' Id. Sec. 254(h)(4). In addition, the 
discounts are not available to any elementary and secondary school 
having an ``endowment of more than $50,000,000'' or library that is 
``not eligible for participation in State-based'' applications for 
library services and technology funds under Title III of the Library 
Services and Construction Act. Id. Sec. 254(h)(A). See further 
discussion infra at part V.B.3.
    \160\ 1996 Act Sec. 254(h)(1).
    \161\ We note that the statutory scheme of Section 254 
distinguishes between eligible health care providers generally and 
rural health care providers. The support mechanisms created by 
Section 254(h)(1) would extend only to rural health care providers. 
Section 254(h)(2), which we discuss in part V., embraces all 
eligible health care providers as defined in Section 254(h)(5)(B) 
and not just those operating in rural areas.
---------------------------------------------------------------------------

    72. Access to telecommunications services is important to schools, 
classrooms, libraries and rural health care providers for a number of 
reasons. Congress explicitly recognized the importance of 
telecommunications to these educational institutions and rural health 
care providers in enacting this legislation:

    The ability of K-12 [kindergarten to 12th grade] classrooms, 
libraries and rural health care providers to obtain access to 
advanced telecommunications services is critical to ensuring that 
these services are available on a universal basis. The provisions of 
subsection (h) will help open new worlds of knowledge, learning and 
education to all Americans rich and poor, rural and urban. They are 
intended, for example, to provide the ability to browse library 
collections, review the collections of museums, or find new 
information on the treatment of illness, to Americans everywhere via 
schools and libraries. This universal access will assure that no one 
is barred from benefiting from the power of the Information 
Age.162

    \162\ S. Conf. Rep. No. 104-230, 104th Cong., 2d Sess. 132-33 
(1996).
---------------------------------------------------------------------------

Modern two-way, interactive capabilities will not only enable users at 
schools, libraries and rural health care facilities to access 
information, but also give students the ability to participate in 
educational activities at other schools, including universities; allow 
students, teachers, librarians and rural health care providers to 
consult with colleagues or experts at other institutions; may allow 
parents to participate more easily in their children's education by 
communicating with the school's telecommunications system; and may 
facilitate the transmission of data for the practice of telemedicine. 
Finally, as advanced telecommunications services become ubiquitous, 
technological literacy will become even more important to our economy. 
Exposure to telecommunications services for our nation's school 
children will provide them with skills needed for jobs in a 
technologically advanced society.
    73. In this section, we focus on three tasks that are essential to 
the implementation of the provisions of the 1996 Act discussed in the 
foregoing paragraph. First, we seek to identify the

[[Page 10512]]
services to be supported by federal universal service support 
mechanisms for schools, libraries and rural health care 
providers.163 For schools and libraries, the Act requires that 
services provided by telecommunications carriers receiving universal 
service support be ``for educational purposes.'' 164 For rural 
health care providers, services provided by telecommunications carriers 
supported by universal service support mechanisms must be those that 
are ``necessary for the provision of health care services in a State.'' 
165

    \163\ 1996 Act sec. 101(a), Secs. 254(h)(1) & 254(C)(3).
    \164\ 1996 Act sec. 101(a), Sec. 254(h)(1)(B).
    \165\ Id. Sec. 254(h)(1)(A).
---------------------------------------------------------------------------

    74. Next, we consider ways to implement the support mechanisms for 
schools, libraries and rural health care providers. For schools and 
libraries, we seek comment on how to formulate discount methodologies 
that ensure that each discount is ``an amount that * * * is appropriate 
and necessary to ensure affordable access to and use of such services 
by such entities.'' 166 For rural health care providers, this task 
includes, inter alia, determination of the method to be used by each 
carrier in calculating the ``amount equal to the difference, if any, 
between the rates for services provided to health care providers for 
rural areas in a State and the rates for similar services provided to 
other customers in comparable rural areas in that State,'' for purposes 
of defining the offset or reimbursement due the carrier under our 
universal service support rules.167

    \166\ Id. Sec. 254(h)(1)(B).
    \167\ Id. Sec. 254(h)(1)(A).
---------------------------------------------------------------------------

    75. We also seek to determine the terms and conditions for the 
provision of interstate support to telecommunications carriers serving 
schools and libraries and rural health care providers. We discuss the 
identification of the health care providers that serve ``persons who 
reside in rural areas,'' and, correspondingly, the ``urban areas in 
that State.'' 168 Finally, we discuss which telecommunications 
carriers may receive universal support pursuant to Section 254.

    \168\ Id.
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    76. In addition to seeking comment on the approach to the 
implementation of Section 254(h)(1)(A) discussed below, we seek comment 
on additional measures that may be necessary to implement this section. 
We also refer all these issues to the Joint Board for its 
recommendation.

B. Schools and Libraries

1. What Services To Support
    77. Section 254(h)(1)(B) of the Act states:

    All telecommunications carriers serving a geographic area shall, 
upon bona fide request for any of its services that are within the 
definition of universal service under subsection (c)(3), provide 
such services to elementary schools, secondary schools, and 
libraries for educational purposes at rates less than the amounts 
charged for similar services to other parties. The discount shall be 
an amount that the Commission, with respect to interstate services, 
and the States, with respect to intrastate services, determine is 
appropriate and necessary to ensure affordable access to and use of 
such services by such entities.

Section 254(c)(3), in turn, states that ``[i]n addition to the services 
included in the definition of universal service under paragraph (1), 
the Commission may designate additional services for such support 
mechanisms for schools [and] libraries * * * for the purposes of 
subsection (h).'' We propose that the set of services designated for 
federal universal service support pursuant to Section 254(c)(1) and any 
other services designated for support pursuant to Section 254(c)(3) be 
made available to schools and libraries pursuant to the discount to be 
considered in this proceeding.
    78. We seek comment and Joint Board recommendation on the 
additional services that carriers must make available to schools and 
libraries under Section 254(h)(1)(B). As the legislative history makes 
clear, Congress ``expect[ed] the Commission and the Joint Board to take 
into account the particular needs of * * * K-12 [kindergarten to 12th 
grade] schools and libraries'' in determining which services should be 
provided at a discount.169

    \169\ S. Conf. Rep. No. 104-230, 104th Cong., 2d Sess. 133 
(1996).
---------------------------------------------------------------------------

    79. A February 1996 study, Advanced Telecommunications in U.S. 
Public Elementary and Secondary Schools, 1995, commissioned by the 
National Center for Education Statistics, part of the United States 
Department of Education, observes that these services are not yet 
widely available in classrooms. Only 9 percent of all instructional 
rooms (classrooms, labs, and library media centers) are currently 
connected to the Internet.170 Schools with large proportions of 
students from poor families are half as likely to provide Internet 
access as schools with small proportions of such students.171 
Funding and inadequate telecommunications links were the most 
frequently cited barriers to acquiring or using advanced 
telecommunications services in public schools.172

    \170\ National Ctr. for Educ. Statistics, U.S. Dep't of Educ., 
Advanced Telecommunications in U.S. Public Elementary and Secondary 
Schools 1995, (Feb. 1996).
    \171\ Id.
    \172\ Id. at 3. In the survey instrument used for the study, 
public schools were asked which services they now make available to 
their students, including: (1) Computers connected to a local area 
network; (2) computers with connection or access to a wide area 
network; and (3) computers connected to the Internet. With respect 
to Internet access, the survey asked which Internet resources or 
capabilities a school has access to, including: (1) Electronic-mail; 
(2) news groups; (3) resource locations services; and (4) World Wide 
Web access. Id. at app. G.
---------------------------------------------------------------------------

    80. In determining which telecommunications services to support 
through universal service mechanisms, our goal is to help elementary 
and secondary schools and classrooms and libraries to have access to 
advanced telecommunications services 173 and to help minimize the 
barriers which exist to provision of telecommunications services to 
schools and libraries. We seek comment on what functionalities should 
be supported through universal service mechanisms for schools and 
libraries and what facilities are required to provide those 
functionalities.174 In this regard, we seek guidance on how to 
determine which services will be provided to schools and libraries at a 
discount pursuant to Section 254(h)(1)(B), without prescribing a 
specific technical standard for each funded service. We also seek 
comment on how we should define ``geographic area'' for purposes of 
Section 254(h)(1)(B).

    \173\ 1996 Act sec. 101(a), Sec. 254(b)(6).
    \174\ For example, we note that many of the basic voice grade 
loops that would be available to schools and libraries at discounted 
prices as part of the basic package of services would permit them to 
connect to the Internet at the full 28.8 kilobyte per second (kbps) 
speed of the current fastest popular computer modems. If schools and 
libraries find it important to have instantaneous transmissions or 
to handle multiple connections simultaneously, they are likely to 
require higher capacity, higher speed links. Schools that desire 
video links to permit teleconferencing will generally find 1.5 Mbps 
T1 links quite adequate for the ``talking head'' lecture style of 
presentations that most teachers present. Yet others may note that 
to provide high-quality full-motion video in real time today may 
require a 45 Mbps DS3 link. Technical Personnel Bellcore and Bell 
Operating Companies, Telecommunications Transmission Engineering 363 
(1990).
---------------------------------------------------------------------------

    81. In addition, we seek comment on whether wireless technologies 
may provide a more efficient way of delivering any of the services 
designated for support. Finally, we also invite comment on how our 
special definition of services for schools and libraries should reflect 
future ``advances in telecommunications and information

[[Page 10513]]
technologies and services.'' 175 We seek comment and Joint Board 
recommendation on all of these issues.

    \175\ 1996 Act sec. 101(a), Sec. 254(c)(1).
---------------------------------------------------------------------------

2. How To Implement
    a. Establishment of the Interstate Discount for Schools and 
Libraries.
    82. As discussed above,176 we interpret Section 254(h)(1)(B) 
of the new Act to entitle schools and libraries to receive discounts on 
all services falling either within our list of services under Section 
254(c)(1) that should receive universal service support, or our list of 
services for schools and libraries under Section 254(c)(3). Each 
discount must produce a ``rate[] less than the amounts charged for 
similar services to other parties'' and be ``an amount that * * * is 
appropriate and necessary to ensure affordable access to and use of 
such services by such entities.'' 177 The 1996 Act gives the 
Commission the responsibility to establish the discounts on interstate 
services, while the States are charged with establishing the discounts 
on intrastate universal services.178

    \176\ See Section V.B.1., supra.
    \177\ 1996 Act sec. 101(a), Sec. 254(h)(1)(B).
    \178\ Id.
---------------------------------------------------------------------------

    83. We seek comment and Joint Board recommendation on the factors 
to be used in formulating a discount methodology for universal service 
support for schools and libraries. The methodology could reflect 
whether the services used are tariffed or whether the charges are for 
capital investments or recurring expenses. The methodology could also 
be based on the incremental costs of providing services rather than 
retail prices. We also seek comment on the estimated costs associated 
with each discount methodology, and how each methodology would comport 
with the Act's principle of providing ``specific, predictable and 
sufficient Federal and State mechanisms to preserve and advance 
universal service.'' 179 Overall, we seek comment and a Joint 
Board recommendation on how the respective State and Federal discount 
methodologies can be harmonized to ensure that we fulfill Congress's 
goal that, throughout the nation, elementary and secondary schools, 
classrooms and libraries have access to advanced telecommunications 
services.

    \179\ Id. Sec. 254(b)(5).
---------------------------------------------------------------------------

    b. Terms and Conditions of Interstate Support for 
Telecommunications Carriers Providing Discounted Universal Services to 
Schools and Libraries.
    84. Section 254(h)(1)(B) specifies that schools and libraries are 
entitled to a discount on telecommunications services only if the 
requested services will be used ``for educational purposes.'' 180 
We invite comment on what steps we should take to ensure that this 
requirement is met. One possible approach would be to have the school 
or library provide the carrier with a written certification that the 
requested services will be used for educational purposes and will not 
be ``sold, resold, or otherwise transferred by such user in 
consideration for money or any other thing of value.'' 181 We 
invite comment and Joint Board recommendation on this proposal. To 
ensure that schools and libraries have a meaningful opportunity to 
benefit from the discounts, we propose to require each carrier to 
inform annually each school and library within its geographic serving 
area of the available discounts.

    \180\ Id. Sec. 254(h)(1)(B).
    \181\ Id. Sec. 254(h)(3).
---------------------------------------------------------------------------

    85. Under the 1996 Act, each ``telecommunications carrier[] serving 
a geographic area shall, upon bona fide request for any of its services 
that are within the definition of universal service'' provide such 
service to schools and libraries ``for educational purposes.'' 182 
We propose that any person qualified under State or local law to order 
telecommunications services for schools or libraries be deemed capable 
of making a ``bona fide request'' for service. We ask for comment and 
Joint Board recommendation on how to determine with as much precision 
as possible whether such a request is ``bona fide.''

    \182\ Id. Sec. 254(h)(1)(B).
---------------------------------------------------------------------------

    86. The Act instructs that ``telecommunications services and 
network capacity'' provided to schools and libraries through universal 
service support mechanisms ``may not be sold, resold, or otherwise 
transferred by such user in consideration for money or any other thing 
of value.'' 183 We ask commenters and the Joint Board to address 
whether this provision will affect the ability of schools and libraries 
to receive universal service support if they are sharing a network with 
parties who are not eligible to receive support and what mechanisms 
could ensure that this provision does not discourage partnerships 
between schools and libraries and their communities.

    \183\ Id. Sec. 254(h)(3).
---------------------------------------------------------------------------

3. Who Is Eligible for Support
    87. The term ``elementary and secondary schools'' is defined for 
purposes of Section 254 by reference to the definition found in the 
Elementary and Secondary Education Act of 1965.184 The term 
``elementary school'' is defined there to be ``a nonprofit 
institutional day or residential school that provides elementary 
education, as determined under State law.'' 185 The term secondary 
school means ``a nonprofit institutional day or residential school that 
provides secondary education, as determined under State law, except 
that such term does not include any education beyond grade 12.'' 
186 Consortia of educational institutions providing distance 
learning to elementary and secondary schools are considered as 
educational providers eligible for universal service support.187 
Section 254(h)(4) denies eligibility for discounts to any school or 
library that ``operates as a for-profit business.'' In addition, the 
discounts are not available to any elementary and secondary school 
having an ``endowment of more than $50,000,000'' or library that is 
``not eligible for participation in State-based'' applications for 
library services and technology funds under Title III of the Library 
Services and Construction Act.188 To help ensure that these 
conditions are met, we propose to require that any certification 
address these eligibility requirements.

    \184\ Id. 254(h)(5)(A).
    \185\ 20 U.S.C. 8801(14).
    \186\ Id. 8801(25).
    \187\ S. Conf. Rep. No. 104-230, 104th Cong., 2d Sess. 134 
(1996).
    \188\ 1996 Act sec. 101(a), Sec. 254(h)(4); see also 20 U.S.C. 
353.
---------------------------------------------------------------------------

    88. Each telecommunications carrier providing discounted service to 
schools and libraries is permitted either to have ``the discount 
treated as an offset to its obligation to contribute to the mechanisms 
to preserve and advance universal service'' or ``receive reimbursement 
utilizing the support mechanisms to preserve and advance universal 
service.'' 189 Unlike all other universal service support, which 
is to be restricted to ``eligible telecommunications carriers'' under 
the terms of Section 214(e) of the Act,190 the offset or 
reimbursement provided under Section 254(h)(1)(B), pertaining to 
schools and libraries, must be given to ``all telecommunications 
carriers serving a geographic area.'' We ask for comment and Joint 
Board recommendation on how to implement these provisions. Section 
254(h)(1)(B) specifies that all discounts shall apply to ``the amounts 
charged for similar services to other parties.'' 191 We invite 
comment and Joint Board recommendation on how we might determine those 
amounts.

    \189\ 1996 Act sec. 101(a), Sec. 254(h)(1)(B).
    \190\ Id. 214(e).
    \191\ Id. Sec. 254(h)(1)(B).
    
[[Page 10514]]


C. Health Care Providers

1. What Services to Support
    89. Section 254(h)(1)(A) requires telecommunications carriers 
``upon receiving a bona fide request, [to] provide telecommunications 
services which are necessary for the provision of health care services 
in a State, including instruction relating to such services, to any 
public or nonprofit health care provider that serves persons who reside 
in rural areas in that State at rates that are reasonably comparable to 
rates charged for similar services in urban areas in that State.'' 
192 According to the Joint Statement, Section 254(h) ``is intended 
to ensure that health care providers for rural areas * * * have 
affordable access to modern telecommunications services that will 
enable them to provide medical * * * services to all parts of the 
Nation.'' 193 The Section is also intended to ensure that ``rural 
health care provider[s] receive an affordable rate for the 
[telecommunications] services necessary for the purposes of 
telemedicine and instruction relating to such services.'' 194

    \192\ Id. Sec. 254(h)(1)(A).
    \193\ S. Conf. Rep. No. 104-230, 104th Cong., 2d Sess. 132 
(1996).
    \194\ Id. at 133.
---------------------------------------------------------------------------

    90. Section 254(c)(3) authorizes the Commission to designate 
support for ``additional services'' that are not included in the list 
of services that should receive universal service support under the 
four definitional criteria of Section 254(c)(1), when those services 
are provided to ``health care providers for the purposes of 
[S]ubsection [254](h).'' 195 Pursuant to Sections 254(c)(3) and 
254(h), we propose to ``designate additional services'' provided to 
rural health service providers for support. We propose to designate for 
support these additional telecommunications services to the extent 
``necessary for the provision of [rural] health care services in a 
State.'' 196 We ask interested parties to propose descriptions of 
the kinds of telecommunications services that are ``necessary for the 
provision of [rural] health care services.'' 197

    \195\ 1996 Act sec. 101(a), Sec. 254(c)(3).
    \196\ Id. Sec. 254(h)(1)(A).
    \197\ See id. Sec. 254(h)(1)(A).
---------------------------------------------------------------------------

    91. Current applications of telemedicine include storage and 
dissemination of patient records for diagnostic purposes, image 
compression for efficient storage and retrieval of image data, image-
processing for diagnostic purposes, digital transmission of large two-
dimensional and three-dimensional medical images, and computerized 
remote-control of medical equipment.198 They may also include the 
ability to gain easy and rapid access to medical databases, such as 
those of transplant candidates. Emerging telemedical applications 
include real-time transmission of video images (i.e., for physician-to-
physician and physician-to-patient consultations); direct transmission 
of medical data to hospitals from medical devices to patients at home; 
and ``data mining'' of large databases of patient records for use in 
medical education and diagnostics.199 In transmitting medical 
information, some aspects of telemedicine may require 
telecommunications services meeting high technical standards, such as 
standards for quality of visual resolutions.200

    \198\ Peter A. Ensminger, Telemedicine, Northeast Parallel 
Architectures Center (1996).
    \199\ Id.
    \200\ See American College of Radiology Standard for 
Teleradiology, Res. 21 (1994) (available from the American College 
of Radiology).
---------------------------------------------------------------------------

    92. Many of the telemedical applications discussed above require 
high-speed telecommunications capability. Asynchronous transfer mode 
(ATM) and integrated systems digital network (ISDN) technologies may 
provide the most promising choices for transfer of telemedicine 
data.201 In describing telecommunications services that they 
believe ``necessary for the provision of [rural] health care 
services,'' commenters should discuss the number of simultaneous use 
transmission paths and the speed of transmission required by 
telemedicine practitioners. To the extent that specific 
telecommunications services constitute ``advanced telecommunications 
and information services,'' as described in Section 254(h)(2)(A), we 
request that commenters evaluate the extent to which providing health 
care providers with access to those services is ``technically feasible 
and economically reasonable.'' 202

    \201\ Ensminger, supra. n. 194. Because they have capacity to 
transmit large quantities of data quickly, ATM and ISDN would 
facilitate the high-speed transfer of telemedicine data.
    \202\ 1996 Act sec. 101(a), Sec. 254(h)(2).
---------------------------------------------------------------------------

    93. We seek comment on what ``additional services'' 203 are 
necessary ``for the provision of [rural] health care services in a 
state.'' 204 In addition, we seek comment on the nature of the 
``instruction relating to such [health care] services'' 
telecommunications carriers provide their subscribers.205

    \203\ Id. Sec. 254(c)(3).
    \204\ Id. Sec. 254(h)(1)(A).
    \205\ Id.
---------------------------------------------------------------------------

    94. We seek technology-neutral descriptions of the 
telecommunications functionalities that health care providers require 
as well as the names of the current technologies they are using to 
provide these functionalities. We also request comment on whether 
limiting discounts to outgoing services would be sufficient to meet the 
needs of rural health care providers or whether incoming services 
should also be discounted. We ask the Joint Board convened herein to 
prepare a recommended decision regarding these issues.
2. How to Implement
    95. To implement Sections 254(h)(1)(A) of the 1996 Act, we must 
designate areas as either urban or rural. This is necessary to 
determine whether a particular health care provider ``serves persons 
who reside in rural areas'' and to identify the ``urban areas in that 
State,'' for purposes of establishing ``reasonably comparable'' rates 
for ``telecommunications services which are necessary for the provision 
of health care services in a State.'' For these purposes, we seek a 
methodology that is based on publicly available data, is neither under-
inclusive nor over-inclusive, and that is easily administered.206

    \206\ See S. Conf. Rep. No. 104-230, 104th Cong., 2nd Sess. 1 
(1996) (expressing a congressional intent to create a ``pro-
competitive, de-regulatory national policy framework'').
---------------------------------------------------------------------------

    96. One alternative could be to adopt the existing classification 
system developed by the Office of Rural Health Policy of the Health 
Resources and Services Administration (HRSA) for its Rural Health 
Services Outreach Grant Program.207 The HRSA classifications are 
based initially on Metropolitan Statistical Areas (MSAs) designated by 
the Office of Management and Budget (OMB). MSAs divide the nation into 
metropolitan and nonmetropolitan counties, which we would treat as 
urban and rural areas, respectively. The HRSA criteria, however, 
recognize that some MSAs are extremely large and contain some very 
rural areas.

    \207\ See Health Resources and Servs. Admin., Dep't of Health 
and Human Servs., Notice of Availability of Funds, 60 FR 64168, 
64169 (1995).
---------------------------------------------------------------------------

    97. Another approach would use data prepared by the United States 
Department of Agriculture's Economic Research Service.208 The 
Economic Research Service divides nonmetropolitan areas into six 
categories, depending on whether or not they are adjacent to a 
metropolitan county and whether the population of the county is a) less 
than 2,500, b) between 2,500 and 20,000, or c) greater than 
20,000.209 Because these data do

[[Page 10515]]
not define urban and rural areas, we invite the commenters to suggest 
ways we could use them to determine whether areas should be considered 
urban or rural.

    \208\ See U.S. Congress, Office of Technology Assessment, Rural 
America at the Crossroads: Networking for the Future 36-38 (1991).
    \209\ Id. at 38.
---------------------------------------------------------------------------

    98. We ask interested parties to comment on these methods for 
defining rural areas in a state for the purposes of the sections of the 
Act pertaining to rural health care providers. We also invite comment 
on alternative methodologies for delineating urban and rural areas for 
these purposes. We ask commenters to discuss whether each proposed 
methodology is based on publicly available data, is neither under-
inclusive nor over-inclusive, and could be easily administered. In 
addition, we seek comment on use of these evaluative criteria and on 
the costs associated with these proposals pursuant to Section 
254(b)(5), which requires universal service support mechanisms to be 
``specific, predictable and sufficient.''
    99. Section 254(h)(1)(A) requires telecommunications carriers to 
provide rural health care providers with the services that we define as 
necessary ``at rates that are reasonably comparable to rates charged 
for similar services in urban areas in [their] State.'' 210 We 
believe that fulfillment of our responsibilities under Sections 
254(h)(1)(A) and 254(h)(2) may require that we adopt guidelines for 
telecommunications carriers to follow in establishing such rates. We 
ask commenters to address whether compliance with those guidelines 
should be a condition of eligibility for telecommunications carriers to 
receive interstate support for telecommunications services provided to 
rural health care providers under Section 254(h).

    \210\ 1996 Act sec. 101(a), Sec. 254(h)(1)(A).
---------------------------------------------------------------------------

    100. In establishing an appropriate methodology for ensuring 
``reasonably comparable'' rates, we wish to minimize, to the extent 
consistent with Section 254, the administrative burden on regulators 
and carriers. It could, for example, prove unduly burdensome to require 
the submission of information necessary to calculate weighted averages 
of the rates in all urban areas in order that the telecommunications 
services which are ``necessary'' for the provision of health care to be 
provided to rural health care providers are priced at reasonably 
comparable rates.211 We interpret the ``reasonably comparable'' 
requirement as requiring less than absolute precision in determining 
the appropriate rates for rural health care providers under these 
provisions of the new Act. Accordingly, we request comment on how 
carriers should derive the rates applicable to rural health care 
providers to ensure they are priced at a reasonably comparable rate.

    \211\ Id.
---------------------------------------------------------------------------

    101. In addition, the amount of credit or reimbursement to carriers 
from the health care support mechanism is based on the difference 
between the price actually charged to eligible health care providers 
and the rates for similar, if not identical, services provided to 
``other customers'' in rural areas in that State.212 We invite 
comments on how to determine the rate for rural non-health care 
providers and the rate for urban health care providers necessary to 
calculate the amount of credit. Commenters should discuss whether 
average rates should be computed or whether some other method would be 
more appropriate.

    \212\ Id.
---------------------------------------------------------------------------

    102. While it may be difficult for carriers to establish the rates 
for similar services provided to rural areas in a State if identical 
services are not provided, it is likely that similar services will 
generally be available. We seek comment, however, on whether there is a 
need to define when services are comparable and, if so, how we might do 
so.
    103. We also ask that interested parties address the appropriate 
safeguards to ensure that telecommunications carriers providing service 
pursuant to Section 254(h)(1)(A) are, in fact, responding to the 
receipt of a ``bona fide request'' for ``telecommunications services 
which are necessary for the provision of [rural] health care services 
in a State.'' 213 We seek comment on whether we might require 
certification from rural health care providers requesting 
telecommunications services under Section 254(h)(1)(A) or from 
telecommunications carriers that provide such services. One approach to 
such certification would be to require each telecommunications carrier 
providing telecommunications services to rural health care providers 
under this provision to obtain written certification that the services 
are necessary for the provision of health care services. We seek 
comment on this approach, as well as suggestions for alternative or 
additional measures to ensure that universal service support provided 
to telecommunications carriers under Section (h)(1)(A) is used for its 
intended purpose.

    \213\ Id.
---------------------------------------------------------------------------

3. Who Is Eligible for Support
    104. In order to receive support under the universal service 
support mechanisms for service to rural health care providers, a 
telecommunications carrier must meet two criteria. First, it must 
provide service to a ``health care provider'' as defined by Section 
254(h)(5)(B). Section 254(h)(5)(B) defines ``health care provider'' to 
mean:
    (i) post-secondary educational institutions offering health care 
instruction, teaching hospitals, and medical schools;
    (ii) community health centers or health centers providing health 
care to migrants;
    (iii) local health departments or agencies;
    (iv) community mental health centers;
    (v) not-for-profit hospitals;
    (vi) rural health clinics; and
    (vii) consortia of health care providers consisting of one or 
more entities described in clauses (i) through (vi).214

    \214\ Id. Sec. 254(h)(5)(B).

    Second, a telecommunications carrier must provide service to 
``persons who reside in rural areas'' in the state in which the health 
care services proposal for support are provided under Section 
254(h)(1)(A).215

    \215\ Id. Sec. 254(h)(1)(A).
---------------------------------------------------------------------------

    105. Section 254(h)(1)(A) states that a ``telecommunications 
carrier'' providing service under this paragraph ``shall be entitled to 
have an amount equal to the difference, if any, between the rates for 
services provided to health care providers for rural areas in a State 
and the rates for similar services provided to other customers in 
comparable rural areas in that State treated as a service obligation as 
a part of its obligation to participate in the mechanisms to preserve 
and advance universal service.'' 216 This language differs from 
that of Section 254(h)(1)(B), which explicitly permits ``[a]ll 
telecommunications carriers serving a geographic area'' providing 
designated services to schools and libraries to be reimbursed for 
services, either through ``an offset to its obligation to contribute to 
the mechanisms to preserve and advance universal service,'' or through 
``reimbursement utilizing the support mechanisms to preserve and 
advance universal service.'' 217

    \216\ Id.
    \217\ Id. Sec. 254(h)(1)(B).
---------------------------------------------------------------------------

    106. In view of the differences described in the foregoing 
paragraph, we request comment on whether any statutory or policy 
rationale requires treating telecommunications carriers providing 
service under Section 254(h)(1)(A) differently than telecommunications 
carriers providing service under Section 254(h)(1)(B) for reimbursement 
purposes. We invite commenters to address whether Section 254(h)(1)(A) 
provides for an offset to contributions, and whether it prohibits 
direct compensation payments. Finally,

[[Page 10516]]
we request comment addressing the desirability of using the same offset 
or reimbursement alternatives set forth in Section 254(h)(1)(B). We 
request the Joint Board's recommendation regarding the appropriate 
resolution of the issues described in this section.

V. Enhancing Access to Advanced Services for Schools, Libraries, 
and Health Care Providers

A. Goals and Principles

    107. Section 254(b)(6) directs the Commission and the Joint Board 
to adopt policies designed to assure ``elementary and secondary schools 
and classrooms, health care providers, and libraries * * * access to 
advanced telecommunications services.'' 218 Section 254(c)(3) 
enables the Commission to designate additional, special services for 
universal service support for eligible schools, libraries and health 
care providers.

    \218\ Id. Sec. 254(b)(6).
---------------------------------------------------------------------------

    108. Section 254(h)(2) directs the Commission to establish 
``competitively neutral rules * * * to enhance, to the extent 
technically feasible and economically reasonable, access to advanced 
telecommunications and information services for all public and 
nonprofit elementary and secondary school classrooms, health care 
providers, and libraries.'' 219 As the Joint Statement explains 
with respect to advanced services:

    \219\ Id. Sec. 254(h)(2)(A).
---------------------------------------------------------------------------

    New subsection (h)(2) requires the Commission to establish rules 
to enhance the availability of advanced telecommunications and 
information services to public institutional telecommunications 
users. For example, the Commission could determine that 
telecommunications and information services that constitute 
universal service for classrooms and libraries shall include 
dedicated data links and the ability to obtain access to educational 
materials, research information, statistics, information on 
Government services, reports developed by Federal, State, and local 
governments, and information services which can be carried over the 
Internet.220

    \220\ S. Conf. Rep. No. 104-230, 104th Cong., 2d Sess. 133 
(1996).
---------------------------------------------------------------------------

    The Commission is further directed to ``define the circumstances 
under which a telecommunications carrier may be required to connect its 
network to such public institutional telecommunications users.'' 
221

    \221\ 1996 Act sec. 101(a), Sec. 254(h)(2)(B). ``Public 
institutional telecommunications user'' is defined as an elementary 
or secondary school, a library or health care provider as defined in 
Section 254 (h)(5)(C). Id. Sec. 254(h)(5)(C).
---------------------------------------------------------------------------

B. How to Implement

    109. In Section IV, we sought to identify a set of 
telecommunications services to be supported by Federal universal 
service support mechanisms for schools, libraries and rural health care 
providers. We now seek to identify those advanced telecommunications 
and information services that carriers should make available to all 
eligible health care providers, libraries and school classrooms to the 
extent technically feasible and economically reasonable. We ask 
commenters to identify such services and to identify the features and 
functionalities required to give eligible health care providers, 
libraries and school classrooms access to those services. We also ask 
commenters to suggest competitively neutral rules that we could adopt 
``to enhance, to the extent technically feasible and economically 
reasonable, access to advanced telecommunications and information 
services for all public and nonprofit elementary and secondary school 
classrooms, health care providers, and libraries.'' Specifically, we 
ask whether the ``advanced telecommunications and information 
services'' addressed in Section 254(h)(2) should be a broader, 
narrower, or identical group to those supported under Section 
254(h)(1). Further, we request suggestions as to any additional 
measures, other than discounts and financial support, that would 
promote deployment of advanced services to school classrooms, libraries 
and health care providers.
    110. For each measure, we ask commenters to address: whether it 
would be competitively neutral for carriers, telecommunications 
providers, and any other affected entities, and whether it complies 
with the Act's requirement that ``telecommunications services and 
network capacity'' provided to public institutional telecommunications 
users ``may not be sold, resold, or otherwise transferred by such user 
in consideration for money or any other thing of value.'' 222 We 
seek comment on how we should assess whether particular services that 
provide access to advanced telecommunications and information services 
are ``technically feasible and economically reasonable.'' 223 We 
also ask that the commenters attempt to estimate the potential costs 
associated with such measures, pursuant to the principle stated in 
Section 254(b)(5) that support mechanisms should be ``specific, 
predictable and sufficient.'' 224 Similarly, we request proposals 
to implement our responsibility, under Section 254(h)(2)(B), ``to 
define the circumstances under which a telecommunications carrier may 
be required to connect its network to such public institutional 
telecommunications users.'' 225 We also refer these issues to the 
Joint Board for its recommendation.

    \222\ Id. Sec. 254(h)(3).
    \223\ Id. Sec. 254(h)(2)(A).
    \224\ Id. Sec. 254(b)(5).
    \225\ Id. Sec. 254(h)(2)(B).
---------------------------------------------------------------------------

C. Who Is Eligible for Support

    111. For purposes of Section 254(h)(2), schools and libraries have 
definitions identical to those in Section 254(h)(1), discussed at part 
V.B.3., above. Congress also intended to benefit ``all * * * health 
care providers,'' as defined in Section 254(h)(5)(B),226 not just 
rural health care providers. We invite interested parties to comment 
and ask the Joint Board's recommendation regarding this interpretation.

    \226\ Id. Sec. 254(h)(2)(A). See discussion supra at part V.C.3.
---------------------------------------------------------------------------

VI. Other Universal Service Support Mechanisms

    112. The 1996 Act states that any federal universal service support 
provided to eligible carriers ``should be explicit'' and should be 
recovered from all telecommunications carriers that provide interstate 
telecommunications service ``on an equitable and nondiscriminatory 
basis.'' 227 Currently, approximately 25 percent of the 
unseparated cost of incumbent LECs' subscriber loops (the lines 
connecting subscribers to local telephone company central offices) is 
allocated to the interstate jurisdiction. These carriers recover a 
significant portion of their loop costs allocated to the interstate 
jurisdiction directly from subscribers through flat monthly subscriber 
line charges (SLCs), but the Commission's rules impose caps on the SLC 
rate at $3.50 per month for residential and single-line business users 
and $6.00 per month for multi-line business users.228 The 
incumbent LECs' remaining interstate allocated loop costs are currently 
recovered through a per-minute carrier common line (CCL) charge paid by 
IXCs, and ultimately by subscribers in the form of increased interstate 
long distance rates.

    \227\ 1996 Act sec. 101(a), Sec. 254 (d), (e).
    \228\ 47 CFR 69.104(c)-(e), 69.203(a). If the interstate 
allocation of common line costs in a study area is lower than the 
SLC cap, the lower number is used.
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    113. Many interested persons have argued that all costs associated 
with facilities dedicated to the use of a single subscriber should be 
recovered through

[[Page 10517]]
a flat, non-traffic sensitive charge assessed on end users.229 
They contend that the existing CCL charge artificially raises rates for 
interstate long distance usage and distorts competitive incentives in 
the local exchange marketplace. Moreover, the imposition of per-minute 
charges on one class of service--interstate interexchange long 
distance--to reduce flat rates for end users (with the goal of 
increasing telephone subscribership) appears to constitute a universal 
service support flow. High-volume interstate long distance customers 
contribute more than the full cost of their subscriber lines, while 
low-volume customers contribute less. The Federal-State Joint Board 
that recommended a mandatory cap on the SLCs emphasized that this 
limitation was designed to support universal service.230 The 
current CCL charge appears to be inconsistent with the directives of 
the 1996 Act that universal service support flows ``be explicit'' and 
be recovered on a ``nondiscriminatory basis'' from all 
telecommunications carriers providing interstate telecommunications 
service.231 The Commission and a Federal-State Joint Board have 
found, in the past, that increased flat rate recovery of LECs' 
subscriber loop costs has substantially stimulated demand for 
interstate switched services, and has produced major economic 
efficiency gains with minimal impact on subscribership.232 At the 
same time, recovery of the full interstate allocation of common line 
costs directly from end-users might cause the flat monthly rates paid 
by certain subscribers to exceed acceptable levels, and could have an 
adverse impact on telephone subscribership.

    \229\ See Com. Car. Bur., FCC, Preparation for Addressing 
Universal Service Issues: A Review of Current Interstate Support 
Mechanisms 90-97 (1996); cf. Interconnection between Local Exchange 
Carriers and Commercial Mobile Radio Service Providers; Equal Access 
and Interconnection Obligations Pertaining to Commercial Mobile 
Radio Service Providers, Notice of Proposed Rulemaking, CC Docket 
Nos. 95-185, 94-54, FCC 95-505, para. 43 (rel. Jan. 11, 1996), 
summarized in 61 FR 3644 (1996).
    \230\ MTS and WATS Market Structure; Amendment of Part 67 of the 
Commission's Rules and Establishment of a Joint Board, Recommended 
Decision and Order, 2 FCC Rcd 2324 (1987) (1987 Recommended 
Decision); 1984 Recommended Decision.
    \231\ 1996 Act sec. 101(a), Sec. 254 (d), (e).
    \232\ 1987 Report and Order, at 2954, 2957; see also Jerry 
Hausman et al., The Effects of the Breakup of AT&T on Telephone 
Penetration in the United States, 83 Am. Econ. Ass'n Papers & Proc. 
178, 183 (1993).
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    114. In the mid-1980s, we referred to a Federal-State Joint Board 
questions relating to the recovery of interstate-allocated subscriber 
loop costs.233 We do so again here. We now seek comment on whether 
to continue the existing subsidy so as to preserve reduced end user 
common line charges, or to eliminate or reduce the subscriber loop 
portion of the interstate CCL charge and, instead, permit LECs to 
recover these costs from end users.234 We invite parties to 
comment on whether the existing method for recovery of common line 
costs allocated to the interstate jurisdiction comports with economic 
efficiency and the specific mandates of the 1996 Act. We also seek 
comment on the extent to which increases in SLCs would reduce telephone 
subscribership, if at all, and the effect on subscribership across 
different income levels and telecommunications consumption patterns. We 
seek comment on the level of explicit universal service support that 
would be required to avoid unacceptable harm to subscribership under 
such a scenario, and the extent to which such support could be provided 
through the targeted support mechanisms to low-income customers and 
customers in rural, insular, or high-cost areas discussed 
above.235 In the alternative, we seek comment on whether all or a 
portion of the current level of support for subscriber loop rates 
should be retained but restructured, consistent with the mandate of the 
1996 Act, to ``be explicit'' and to be funded in a 
``nondiscriminatory'' manner.236 A combination of these approaches 
is also possible: For example, the caps on interstate SLCs could be 
increased gradually but not eliminated, with the balance recovered from 
the universal service support fund proposed below. We also seek comment 
on whether eligibility for these support mechanisms must, or should, be 
limited to state-certified eligible carriers, under the 1996 Act.

    \233\ See 1985 Lifeline Order (adopting, with minor 
modifications, the Joint Board recommendations issued in 1984 
Recommended Decision); 1987 Report and Order (adopting, with minor 
modifications, the Joint Board recommendations issued in 1987 
Recommended Decision).
    \234\ The LECs' interstate CCL charge currently also recovers 
revenues associated with the provision of payphone service. Pursuant 
to the 1996 Act, within nine months after the date of its enactment, 
the Commission will initiate a proceeding to discontinue this 
element of the CCL charge and replace it with a per-call 
compensation system for recovering payphone costs. 1996 Act sec. 
151(a), Sec. 276(b)(1)(A), (B). The CCL charge also recovers common 
line long-term support (LTS) payments, which are discussed in the 
following paragraph.
    \235\ See supra part III.B., C.
    \236\ 1996 Act sec 101(a), Sec. 254(d), (e).
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    115. The CCL charge assessed by larger incumbent LECs also recovers 
revenues associated with long-term support (LTS) payments remitted to 
the National Exchange Carrier Association, Inc. (NECA).237 Until 
1989, the Commission's rules required all LECs to participate in a 
nationwide averaged common line pool. That mandatory pooling 
arrangement was replaced in 1989 by the current system, which permits 
LECs to leave the pool and set their CCL rates based on their own 
interstate separated costs of subscriber loops. The LECs that withdrew 
from the common line pool are required to remit LTS payments to NECA, 
which distributes the LTS payments to LECs remaining in the nationwide 
common line pool. With the introduction of price cap regulation, the 
uniform CCL rate assessed by LECs remaining in the pool is based on the 
average CCL rate charged by price cap LECs.238 LTS payments, which 
directly increase interstate access charges assessed by some LECs so as 
to reduce charges assessed by other LECs, are an identifiable support 
flow in the existing interstate access charge system. We propose to 
eliminate the recovery of LTS revenues through incumbent LECs' 
interstate CCL charges, and we seek comment on whether the LTS system 
should be eliminated or restructured in an explicit and 
nondiscriminatory manner, consistent with the universal service support 
mechanisms described elsewhere in this Notice and with the principles 
espoused in the 1996 Act. We also seek comment on whether the 
principles governing our deliberations in this proceeding permit, or 
even require, a transition period for carriers that receive LTS to 
adjust to any changes in the LTS system or rate structure for 
recovering loop costs allocated to the interstate jurisdiction. We seek 
a Joint Board recommendation on all of these issues.

    \237\ 47 CFR 69.603(e), 69.612.
    \238\ Com. Car. Bur., FCC, Preparation for Addressing Universal 
Service Issues: A Review of Current Interstate Support Mechanisms 
71-77 (1996).
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VII. Administration of Support Mechanisms

A. Goals and Principles

    116. The 1996 Act states that ``[a]ll providers of 
telecommunications services should make an equitable and 
nondiscriminatory contribution to the preservation and advancement of 
universal service'' 239 through ``specific, predictable and 
sufficient Federal and State mechanisms.'' 240 To accomplish this, 
the Act stipulates that ``[e]very telecommunications carrier that 
provides interstate telecommunications services shall contribute, on an

[[Page 10518]]
equitable and nondiscriminatory basis, to the specific, predictable, 
and sufficient mechanisms established by the Commission to preserve and 
advance universal service.'' 241 It further stipulates that 
``[e]very telecommunications carrier that provides intrastate 
telecommunications services shall contribute, on an equitable and 
nondiscriminatory basis, in a manner determined by the State to the 
preservation and advancement of universal service in that State.'' 
242

    \239\ 1996 Act sec. 101(a), Sec. 254(b)(4).
    \240\ Id. Sec. 254(b)(5).
    \241\ Id. Sec. 254(d).
    \242\ Id. Sec. 254(f).
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    117. In view of these provisions, we seek comment on how financial 
responsibility should be divided between interstate telecommunications 
carriers and intrastate telecommunications carriers for the costs 
associated with the universal service support mechanisms authorized 
under Section 254. We invite commenters to discuss possible approaches 
for allocating this financial obligation, detailing the advantages and 
disadvantages of each approach. We ask, in particular, that interested 
parties address the question of whether passage of the 1996 Act should 
change existing assumptions about the sources of universal service 
support. Finally, we request that the Joint Board in this proceeding 
recommend an appropriate basis, with reference to the 1996 Act, upon 
which to assign responsibility between the interstate and intrastate 
jurisdictions for contributions needed to fund support for universal 
service.

B. Administration

1. Who Should Contribute
    118. Under the 1996 Act, we must ensure that telecommunications 
carriers' contributions that fund universal service support are 
collected ``on an equitable and nondiscriminatory basis'' using 
``specific, predictable, and sufficient mechanisms.'' 243 The Act 
states that ``[a]ll providers of telecommunications services should 
make an equitable and nondiscriminatory contribution to the 
preservation and advancement of universal service.'' 244 To 
fulfill this obligation, Section 254(d) requires that ``[e]very 
telecommunications carrier that provides interstate telecommunications 
services'' 245 contribute to ``preserve and advance universal 
service'' 246 and that ``[a]ny other provider of interstate 
telecommunications may be required to contribute to the preservation 
and advancement of universal service if the public interest so 
requires.'' 247 The Act defines the term ``telecommunications 
carrier'' as ``any provider of telecommunications services,'' and the 
term ``telecommunications service'' as ``the offering of 
telecommunications for a fee directly to the public, or to such classes 
of users as to be effectively available directly to the public, 
regardless of the facilities used.'' 248 In addition, the Act 
defines ``telecommunications'' as ``the transmission, between or among 
points specified by the user, of information of the user's choosing, 
without change in the form or content of the information as sent and 
received.'' 249

    \243\ Id. Sec. 254(d).
    \244\ Id. Sec. 254(b)(4).
    \245\ Id. Sec. 254(d).
    \246\ Id.
    \247\ Id.
    \248\ Id. Sec. 153(49), (51) (emphasis added).
    \249\ Id. Sec. 153(48). For example, the switched message and 
private line services offered by LECs and IXCs provide 
``telecommunications'' to end users.
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    119. We seek comments that identify which service providers fall 
within the scope of the term ``telecommunications carrier[s] that 
provide[] interstate telecommunications services.'' 250 We also 
seek comment on whether support obligations associated with universal 
service mechanisms should extend only to telecommunications carriers 
providing interstate telecommunications services, or whether we should 
impose universal service support obligations more broadly, as Section 
254(d) of the Act authorizes us to do. Under Section 254(d), universal 
service support obligations could be imposed upon ``other provider[s] 
of interstate telecommunications,'' which, pursuant to the definition 
of ``telecommunications'' in Section 3 of the 1996 Act, would include 
entities that provide interstate ``transmission, between or among 
points specified by the user, of information of the user's choosing, 
without change in the form or content of the information as sent and 
received.'' 251 We seek comment and Joint Board recommendations on 
whether ``the public interest * * * requires'' that we extend support 
obligations to ``[a]ny other provider[s] of interstate 
telecommunications,'' 252 and, if so, what categories of 
providers, other than telecommunications carriers, should be so 
obligated.

    \250\ See id. Sec. 254(d).
    \251\ Id.
    \252\ Id. Sec. 254(d).
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    120. Section 254(d) authorizes the Commission to ``exempt a carrier 
or class of carriers from [the obligation to make contributions] if the 
carrier's telecommunications activities are limited to such an extent 
that the level of such carrier's contribution to the preservation and 
advancement of universal service would be de minimis.'' 253 The 
Joint Explanatory Statement of the Committee of Conference clarifies 
that such exemption should be given ``only * * * in cases where the 
administrative cost of collecting contributions from a carrier or 
carriers would exceed the contribution that carrier would otherwise 
have to make under the formula for contributions selected by the 
Commission.'' 254 We seek comment on whether we should establish 
rules of general applicability for exempting very small 
telecommunications providers, and if so, what the basis should be for 
determining that the administrative cost of collecting support would 
exceed a carrier's potential contribution. Within those parameters, we 
also specifically seek comment on measures to avoid significant 
economic harm to small business entities, as defined by Section 601(3) 
of the Regulatory Flexibility Act.255 In its Recommended Decision, 
we request that the Joint Board consider all of these issues related to 
defining the contributors to universal service support.

    \253\ Id.
    \254\ S. Conf. Rep. No. 104-230, 104th Cong., 2d Sess. 131 
(1996).
    \255\ 5 U.S.C. 601(3).
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2. How Should Contributions Be Assessed
    121. Section 254(d) requires that ``[e]very telecommunications 
carrier that provides interstate telecommunications services shall 
contribute, on an equitable and nondiscriminatory basis, to the 
specific, predictable, and sufficient mechanisms established by the 
Commission to preserve and advance universal service.'' 256 
Furthermore, in evaluating different approaches to collecting 
contributions, we must ensure that ``[a]ll providers of 
telecommunications services make an equitable and nondiscriminatory 
contribution to the preservation and advancement of universal 
service.'' 257

    \256\ 1996 Act sec. 101(a), Sec. 254(d).
    \257\ Id. Sec. 254(b)(4).
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    122. Contributions Based on Gross Revenues. One potential approach 
might be to adopt the mechanism used for the approximately $30 million-
per-year Telecommunications Relay Services (TRS) program. TRS provides 
``a telephone transmission service that allows persons with hearing or 
speech disabilities to communicate by telephone in a manner 
functionally equivalent to the ability of persons without such 
disabilities.'' 258 Each

[[Page 10519]]
contributor's TRS payment is based on a pro rata share of its gross 
interstate revenues.259

    \258\ 47 U.S.C. 225(a)(3). TRS facilities have specialized 
equipment and staff who relay conversations between persons using 
text telephones and persons using traditional telephones.
    \259\ Telecommunications Relay Services, and the Americans with 
Disabilities Act of 1990, Third Report and Order, 8 FCC Rcd 5300 
(1993).
---------------------------------------------------------------------------

    123. Contributions Based on Revenues Net of Payments to Other 
Carriers. Alternatively, we could consider the mechanism employed for 
the assessment and collection of regulatory fees to recover part of the 
cost of the Commission's regulatory activities. This mechanism was 
established in our Regulatory Fees Order,260 where we evaluated 
the advantages and disadvantages of alternative mechanisms for 
collecting Commission fees on a per line, per minute of use, and per 
dollars of revenue basis. That Order directed that fees be assessed 
based on gross interstate revenues net of payments made to other 
telecommunications carriers.

    \260\ Assessment and Collection of Regulatory Fees for Fiscal 
Year 1995, Price Cap Treatment of Regulatory Fees Imposed by Section 
9 of the Act, Report and Order, 10 FCC Rcd 13512 (1995) (Regulatory 
Fees Order).
---------------------------------------------------------------------------

    124. Contributions Based on Per-Line or Per-Minute Units. We also 
could adopt a mechanism based on per-line or per-minute charges. These 
approaches, however, would require the Commission to adopt and 
administer ``equivalency ratios'' for calculating the contributions 
owed by providers of services that were not sold on a per-line or per-
minute basis into their respective per-line or per-minute units. In 
addition, these approaches may favor certain services or service 
providers over others.
    125. We invite comment on the relative merits of these approaches 
and the extent to which they do or do not satisfy the requirements of 
the Act..261 We seek comment on whether, for purposes of funding 
federal universal service support mechanisms, we should base 
contributions from interstate carriers (and, possibly, from other 
interstate service providers) on both their interstate and intrastate 
revenues or on their interstate revenues only. If commenters propose 
that contributions should be based on interstate revenues only, we ask 
for proposals on how to determine the interstate revenues for the many 
and varied telecommunications carriers and telecommunications service 
providers that are not subject to our jurisdictional separations rules 
and, in some cases, may not have a clear basis for delineating 
interstate and intrastate services. In particular, we ask for comment 
on the practicality of the approach used for the TRS fund.262

    \261\ In using the TRS program and our Regulatory Fees Order as 
potential models, we are only proposing their methodologies. We are 
not suggesting that the range of contributors providing universal 
support should be limited to the contributors to those programs. 
Questions regarding who should contribute to universal fund support 
are discussed above in part VIII.B.1. of this Notice.
    \262\ The TRS work sheet instructs carriers to, wherever 
possible, calculate the percentage of total revenues that are 
interstate by using information from their books of accounts and 
other internal data reporting systems. Carriers that cannot 
calculate a percentage from their books or from internal data may 
elect to rely on special studies to determine interstate 
percentages.
---------------------------------------------------------------------------

    126. We also invite commenters to suggest alternative methodologies 
for calculating a carrier's or service provider's contribution to 
universal service support. The comments should address which method 
would be the most easily administered and competitively neutral in its 
effect upon contributing carriers and service providers. In addition, 
commenters should address how these methods could be adapted if we were 
to require non-carrier providers of telecommunications services to make 
contributions to the universal service funds. We ask the Joint Board to 
address these issues in its Recommended Decision.
3. Who Should Administer
    127. Section 254(b)(4) of the 1996 Act states that ``[a]ll 
providers of telecommunications services should make an equitable and 
nondiscriminatory contribution to the preservation and advancement of 
universal service.'' 263 Moreover, Section 254(d) requires that 
``[e]very telecommunications carrier that provides interstate 
telecommunications services shall contribute, on an equitable and 
nondiscriminatory basis, to the specific, predictable, and sufficient 
mechanisms established by the Commission to preserve and advance 
universal service.'' 264 The rules for assessing support 
obligations discussed above not only must conform to these provisions, 
but also must be administered fairly, consistently, and efficiently. We 
seek comment on the best approach to administer the universal service 
mechanisms fairly, consistently, and efficiently.

    \263\ 1996 Act sec. 101(a), Sec. 254 (b)(4).
    \264\ Id. Sec. 254(d).
---------------------------------------------------------------------------

    128. One way to administer the fund would be through a non-
governmental fund administrator. We believe the fund should be 
administered by the candidate who can administer it in the most 
efficient, fair, and competitively neutral manner. In addition, 
considering the large number of potential contributors and recipients 
of universal service funds under Section 254, it would appear that 
administration of the funds will require large-scale information 
processing and data base capabilities. Moreover, the administrator 
should have the ability to apply eligibility criteria consistently, 
ensuring that all carriers eligible for support, but no ineligible 
carriers, are properly compensated by the support mechanisms. Finally, 
the administrator should assure that all entities required to 
contribute to the fund do so, and in the appropriate amounts.
    129. We ask that commenters discuss these criteria and any others 
we might use to assess qualifications of any candidates to administer 
the funds, for how long an administrator should be appointed, and any 
other matters related to the selection and appointment of a fund 
administrator. We also invite parties to suggest the most efficient and 
least costly methods to accomplish the administrative tasks associated 
with fund administration.
    130. Rather than appoint a non-governmental fund administrator, we 
could have the funds collected and distributed by state public utility 
commissions. Under this approach, individual state commissions or 
groups of state commissions would be responsible for administering the 
funds' collection and distribution, operating under plans approved by 
the Commission. They might delegate the administration of the fund to a 
governing board composed of representatives from the state commissions, 
the fund contributors, and the fund recipients. This board could also 
function as a central clearinghouse to the extent collection and 
distribution issues extended beyond the boundaries of individual 
states. We request comment on this alternative approach and on what 
provisions should be incorporated in any plan that the Commission 
approves for administering the funds under this option. We also invite 
proposals for other means of administering support mechanisms.
    131. Pursuant to the 1996 Act's principle that support for 
universal service should be ``predictable,'' 265 we seek comment 
estimating the cost of administration estimating the cost of 
administration using either of the two approaches that we have 
discussed. Commenters proposing an alternative method should also 
identify the costs of administration associated with their suggested 
method. Finally, we request that the Joint Board address these issues

[[Page 10520]]
regarding fund administration in its Recommended Decision.

    \265\ Id. Sec. 254(b)(5).
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VIII. Composition of the Joint Board

    132. Under Section 254(a) of the 1996 Act, the Joint Board in this 
proceeding must consist of eight members: three Commissioners from this 
Commission; four State Commissioners nominated by the National 
Association of Regulatory Utility Commissioners (NARUC); and one State-
appointed utility consumer advocate nominated by the National 
Association of State Utility Commissioners.266 Section 410(c) also 
specifies that ``the Chairman of the Commission, or another 
Commissioner designated by the Commission, shall serve as Chairman of 
the Joint Board.'' 267

    \266\ Id. Sec. 254(a).
    \267\ 47 U.S.C. Sec. 410(c).
---------------------------------------------------------------------------

    133. In accordance with these provisions, the three Commissioners 
from this Commission are the Honorable Reed E. Hundt, the Honorable 
Andrew C. Barrett, and the Honorable Susan Ness. The four Commissioner 
nominated by NARUC are the Honorable the Honorable Julia L. Johnson of 
the Florida Public Service Commission, the Honorable Kenneth McClure of 
the Missouri Public Service Commission, the Honorable Sharon L. Nelson 
of the Washington Utilities and Transportation Commission, and the 
Honorable Laska Schoenfelder of the South Dakota Public Utilities 
Commission,268 The utility consumer advocate nominated by NASUCA 
is Martha S. Hogerty, Public Counsel for the State of Missouri.269 
The Honorable Reed E. Hundt shall serve as Chairman of the Joint Board.

    \268\ The National Association of Regulatory Utility 
Commissioners (NARUC) nominated Ms. Johnson, Mr. McClure, Ms. 
Nelson, and Ms. Schoenfelder to serve on the Federal-State Joint 
Board. Letter from James Bradford Ramsay, Deputy Assistant General 
Counsel, NARUC, to Mr. William F. Caton, Secretary, Federal 
Communications Commission, February 28, 1996.
    \269\ Nominated pursuant to 1996 Act sec. 101, Sec. 254(a)(1), 
by the National Association of State Utility Consumer Advocates 
(NASUCA). Letter from Debra Berlyn, Executive Director, NASUCA, to 
The Honorable Reed E. Hundt, Chairman, Federal Communications 
Commission, February 26, 1996.
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IX. Procedural Matters

A. Ex Parte

    134. This is a non-restricted notice and comment rulemaking 
proceeding. Ex parte presentations are permitted, except during the 
Sunshine Agenda period, provided they are disclosed as provided in the 
Commission's rules.270

    \270\ See generally 47 CFR 1.1202, 1.1203, 1.1206(a).
---------------------------------------------------------------------------

B. Regulatory Flexibility Analysis

    135. Pursuant to Section 603 of the Regulatory Flexibility Act, the 
Commission has prepared the following regulatory flexibility analysis 
(IRFA) of the expected impact of these proposed policies and rules on 
small entities. Written public comments are requested on the IRFA. 
These comments must be filed in accordance with the same filing 
deadlines as comments on the rest of the Notice, but they must have a 
separate and distinct heading designating them as responses to the 
regulatory flexibility analysis. The Secretary shall cause a copy of 
the Notice, including the initial regulatory flexibility analysis, to 
be sent to the Chief Counsel for Advocacy of the Small Business 
Administration in accordance with Section 603(a) of the Regulatory 
Flexibility Act, Pub. L. No. 96-354, 94 Stat. 1164, 5 U.S.C. Sec. 601 
et seq. (1981).
    136. Reason for Action. The Telecommunications Act of 1996 requires 
the Commission to initiate a rulemaking to define the services 
generally supported by Federal universal service support mechanisms. 
This Notice addresses issues of the services that should receive 
universal service support with respect to elementary and secondary 
schools and classrooms, libraries, health care providers, as well as 
universal support service mechanisms. Issues raised in this Notice will 
be referred to a Federal-State Joint Board.
    137. Objectives. To propose rules to implement Sections 101 and 102 
of the Telecommunications Act of 1996. We also desire to adopt rules 
that will be easily interpreted and readily applicable and, whenever 
possible, minimize the regulatory burden on affected parties.
    138. Legal Basis. Action as proposed for this rulemaking is 
contained in Sections 101 and 102 of the Telecommunications Act of 1996 
(to be codified at 47 U.S.C. 254 and 214(e), respectively).
    139. Description, potential impact and number of small entities 
affected. Until we receive more data, we are unable to estimate the 
number of small telecommunications service providers that would be 
affected by any of the proposals discussed in the Notice. We have, 
however, attempted to reduce the administrative burdens and cost of 
compliance for small telecommunications service providers.
    140. Reporting, record keeping and other compliance requirements. 
The proposals under consideration in this Notice do not include the 
reporting and record keeping requirements of telecommunications service 
providers.
    141. Federal rules which overlap, duplicate, or conflict with this 
rule. None.
    142. Any significant alternatives minimizing impact on small 
entities and consistent with stated objectives. Wherever possible, the 
Notice proposes general rules, or alternative rules to reduce the 
administrative burden and cost of compliance for small 
telecommunications service providers. In addition, the Notice invites 
comment on exemptions from the proposed rules for small 
telecommunications companies. Finally, the Notice seeks comment on 
measures to avoid significant economic impact on small business 
entities, as defined by Section 601(3) of the Regulatory Flexibility 
Act.

C. Comment Dates

    143. We invite comment on the issues and questions set forth above. 
Pursuant to applicable procedures set forth in Sections 1.415 and 1.419 
of the Commission's Rules,271 interested parties may file comments 
on or before April 8, 1996, and reply comments on or before May 3, 
1996. Comments and Reply Comments will be limited to 25 pages apiece, 
not including appendices of factual material. To file formally in this 
proceeding, interested parties must file an original and four copies of 
all comments, reply comments, and supporting comments. Interested 
parties should send comments and reply comments to Office of the 
Secretary, Federal Communications Commission, Washington, D.C. 20554. 
Parties must also serve comments on the Federal-State Joint Board in 
accordance with the service list. Parties should send one copy of any 
documents filed in this docket to the Commission's copy contractor, 
International Transcription Service, Room 640, 1990 M Street, N.W., 
Washington, D.C. 20036. Comments and reply comments will be available 
for public inspection during regular business hours in the FCC 
Reference Center, Room 239, 1919 M Street, N.W., Washington, D.C. 
20554.

    \271\ 47 CFR 1.415, 1.419.
---------------------------------------------------------------------------

    144. Parties are also asked to submit comments and reply comments 
on diskette. Such diskette submissions would be in addition to and not 
a substitute for the formal filing requirements addressed above. 
Parties submitting diskettes should submit them to Ernestine Creech, 
Common Carrier Bureau, Accounting and Audits Division, 2000 L Street, 
N.W., Suite 257, Washington, D.C. 20554. Such a submission should be on 
a 3.5 inch diskette formatted in an IBM compatible form using 
WordPerfect 5.1 for

[[Page 10521]]
Windows software. The diskette should be submitted in ``read only'' 
mode. The diskette should be clearly labelled with the party's name, 
proceeding, type of pleading (comment or reply comment) and date of 
submission. The diskette should be accompanied by a cover letter.

X. Ordering Clauses

    145. Accordingly, it is ordered That, pursuant to Sections 1, 4(i), 
4(j), and 403, of the Communications Act of 1934, as amended, 47 U.S.C. 
151, 154(i), 154(j), and 403, and Sections 101 and 102 of the 
Telecommunications Act of 1996, Public Law 104-104, 110 Stat. 56 (1996) 
(to be codified at 47 U.S.C. 254 and 47 U.S.C. 214(e), respectively), 
that notice is hereby given of proposed amendments to Parts 36 and 69 
of the Commission's Rules, 47 CFR Parts 36 and 69, as described in this 
Notice of Proposed Rulemaking.
    146. It is further ordered That, pursuant to Section 410(c) of the 
Communications Act of 1934, 47 U.S.C. 410(c), and Sections 101 of the 
Telecommunications Act of 1996, Public Law 104-104, 110 Stat. 56 (1996) 
(to be codified at 47 U.S.C. 254), that the Federal-State Joint Board 
on Universal Service be convened.
    147. It is further ordered That, pursuant to Section 410(c) of the 
Communications Act of 1934, 47 U.S.C. 410(c), and Sections 101 and 102 
of the Telecommunications Act of 1996, Public Law 104-104, 110 Stat. 56 
(1996) (to be codified at 47 U.S.C. 254 and 47 U.S.C. 214(e), 
respectively), the proposals set forth in the Notice of Proposed 
Rulemaking are hereby referred to the Federal-State Joint Board 
established in this proceeding for the preparation of a recommended 
decision within nine months from enactment of the Telecommunications 
Act of 1996.
    148. It is further ordered, pursuant to Section 410(c) of the 
Communications Act of 1934, 47 U.S.C. 410(c), and Sections 101 and 102 
of the Telecommunications Act of 1996, Public Law 104-104, 110 Stat. 56 
(1996) (to be codified at 47 U.S.C. 254 and 47 U.S.C. 214(e), 
respectively), that the Honorable Reed E. Hundt, the Honorable Andrew 
C. Barrett, the Honorable Susan Ness, the Honorable Julia L. Johnson of 
the Florida Public Service Commission, the Honorable Kenneth McClure of 
the Missouri Public Service Commission, the Honorable Sharon L. Nelson 
of the Washington Utilities and Transportation Commission, and the 
Honorable Laska Schoenfelder of the South Dakota Public Utilities 
Commission,272 and Martha S. Hogerty,273 Public Counsel for 
the State of Missouri are appointed to, and the Honorable Reed E. Hundt 
shall serve as Chairman of, the Federal-State Joint Board.

    \272\ The National Association of Regulatory Utility 
Commissioners (NARUC) nominated Ms. Johnson, Mr. McClure, Ms. 
Nelson, and Ms. Schoenfelder to serve on the Federal-State Joint 
Board. Letter from James Bradford Ramsay, Deputy Assistant General 
Counsel, NARUC, to Mr. William F. Caton, Secretary, Federal 
Communications Commission, February 28, 1996.
    \273\ Nominated pursuant to 1996 Act sec. 101, Sec. 254(a)(1), 
by the National Association of State Utility Consumer Advocates 
(NASUCA). Letter from Debra Berlyn, Executive Director, NASUCA, to 
The Honorable Reed E. Hundt, Chairman, Federal Communications 
Commission, February 26, 1996.
---------------------------------------------------------------------------

    149. It is further ordered, That a copy of all filings in this 
proceeding shall be served on each of the appointees and staff 
personnel on the attached service list.
    150. It is further ordered That, pursuant to Sections 410(c), 
154(i) and 154(j) of the Communications Act of 1934, 47 U.S.C. 410(c), 
154(i) and 154(j), and Sections 101 and 102 of the Telecommunications 
Act of 1996, Public Law No. 104-104, 110 Stat. 56 (1996) (to be 
codified at 47 U.S.C. 254 and 47 U.S.C. 214(e), respectively), the 
material described in part III.B. of this Notice of Proposed Rulemaking 
and Order Establishing a Joint Board is incorporated into the record in 
this proceeding.
    151. It is further ordered That, the Secretary shall send a copy of 
this notice of proposed rulemaking, including the regulatory 
flexibility certification, to the Chief Counsel for Advocacy of the 
Small Business Administration, in accordance with paragraph 603(a) of 
the Regulatory Flexibility Act, 5 U.S.C. 601 et seq. (1981).

List of Subjects

47 CFR Part 36

    Communications common carriers, Reporting and recordkeeping 
requirements, Telephone, Uniform System of Accounts.

47 CFR Part 69

    Communications common carriers, Reporting and recordkeeping 
requirements, Telephone.

Federal Communications Commission.
William F. Caton,
Acting Secretary.

Attachment: Service List

The Honorable Reed E. Hundt, Chairman, Federal Communications 
Commission, 1919 M Street NW.--Room 814, Washington, D.C. 20554
The Honorable Andrew C. Barrett, Commissioner, Federal Communications 
Commission, 1919 M Street NW.--Room 826, Washington, D.C. 20554
The Honorable Susan Ness, Commissioner, Federal Communications 
Commission, 1919 M Street NW.--Room 832, Washington, D.C. 20554
The Honorable Julia Johnson, Commissioner, Florida Public Service 
Commission, Capital Circle Office Center, 2540 Shumard Oak Blvd., 
Tallahassee, FL 32399-0850
The Honorable Kenneth McClure, Vice Chairman, Missouri Public Service 
Commission, 301 W. High Street, Suite 530, Jefferson City, MO 65102
The Honorable Sharon L. Nelson, Chairman, Washington Utilities and 
Transportation Commission, P.O. Box 47250, Olympia, WA 98504-7250
The Honorable Laska Schoenfelder, Commissioner, South Dakota Public 
Utilities Commission, 500 E. Capital Avenue, Pierre, SD 57501
Martha S. Hogerty, Public Counsel for the State of Missouri, P.O. Box 
7800, Harry S. Truman Building, Room 250, Jefferson City, MO 65102
Deborah Dupont, Federal Staff Chair, Federal Communications Commission, 
2000 L Street NW., Suite 257, Washington, D.C. 20036
Paul E. Pederson, State Staff Chair, Missouri Public Service 
Commission, P.O. Box 360, Truman State Office Building, Jefferson City, 
MO 65102
Eileen Benner, Idaho Public Utilities Commission, P.O. Box 83720, 
Boise, ID 83720-0074
Charles Bolle, South Dakota Public Utilities Commission, State Capital, 
500 E. Capital Avenue, Pierre, SD 57501-5070
William Howden, Federal Communications Commission, 2000 L Street NW., 
Suite 812, Washington, D.C. 20036
Lorraine Kenyon, Alaska Public Utilities Commission, 1016 West Sixth 
Avenue, Suite 400, Anchorage, AK 99501
Debra M. Kriete, Pennsylvania Public Utilities Commission, P.O. Box 
3265, Harrisburg, PA 17105-3265
Clara Kuehn, Federal Communications Commission, 2000 L Street NW., 
Suite 257, Washington, D.C. 20036
Mark Long, Florida Public Service Commission, 2540 Shumard Oak Blvd., 
Gerald Gunter Building, Tallahassee, FL 32399-0850
Samuel Loudenslager, Arkansas Public Service Commission, P.O. Box 400, 
Little Rock, AR 72203-0400
Sandra Makeeff, Iowa Utilities Board, Lucas State Office Building, Des 
Moines, IA 50319

[[Page 10522]]

Philip McClelland, Pennsylvania Office of Consumer Advocate, 1425 
Strawberry Square, Harrisburg, PA 17120
Michael A. McRae, D.C. Office of the People's Counsel, 1133 15th Street 
NW.--Suite 500, Washington, D.C. 20005
Rafi Mohammed, Federal Communications Commission, 2000 L Street NW., 
Suite 812, Washington, D.C. 20036
Terry Monroe, New York Public Service Commission, Three Empire Plaza, 
Albany, NY 12223
Andrew Mulitz, Federal Communications Commission, 2000 L Street NW., 
Suite 257, Washington, D.C. 20036
Mark Nadel, Federal Communications Commission, 1919 M Street NW., Room 
542, Washington, D.C. 20554
Gary Oddi, Federal Communications Commission, 2000 L Street NW., Suite 
257, Washington, D.C. 20036
Teresa Pitts, Washington Utilities and Transportation Commission, P.O. 
Box 47250, Olympia, WA 98504-7250
Jeanine Poltronieri, Federal Communications Commission, 2000 L Street 
NW., Suite 257, Washington, D.C. 20036
James Bradford Ramsay, National Association of Regulatory Utility 
Commissioners, 1201 Constitution Avenue NW., Washington, D.C. 20423
Jonathan Reel, Federal Communications Commission, 2000 L Street NW., 
Suite 257, Washington, D.C. 20036
Brian Roberts, California Public Utilities Commission, 505 Van Ness 
Avenue, San Francisco, CA 94102-3298
Gary Seigel, Federal Communications Commission, 2000 L Street NW., 
Suite 812, Washington, D.C. 20036
Pamela Szymczak, Federal Communications Commission, 2000 L Street NW., 
Suite 257, Washington, D.C. 20036
Whiting Thayer, Federal Communications Commission, 2000 L Street NW., 
Suite 812, Washington, D.C. 20036
Deborah S. Waldbaum, Colorado Office of Consumer Counsel, 1580 Logan 
Street, Suite 610, Denver, Colorado 80203
Alex Belinfante, Federal Communications Commission, 1919 M Street NW., 
Washington, D.C. 20554
Larry Povich, Federal Communications Commission, 1919 M Street NW., 
Washington, D.C. 20554.

[FR Doc. 96-6156 Filed 3-11-96; 4:11 pm]
BILLING CODE 6712-01-P