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<classification authority="sudocs">GA 1.13:GAO-02-187</classification>
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 <subject>Customer service</subject>
 <subject>Information technology</subject>
 <subject>Regulation</subject>
 <subject>Telecommunication</subject>
 <subject>Telecommunication industry</subject>
 <subject>Telephone</subject>
 <subject>Utility rates</subject>
 <subject>Interstate Telecommunications Relay</subject>
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 <title>Telecommunications: Federal and State Universal Service Programs and Challenges to Funding</title>
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<abstract>&quot;Universal service&quot; means providing residential customers with
affordable, nationwide access to basic phone service. The	 
Telecommunications Act of 1996 extended support for universal	 
service to eligible schools, libraries, and rural health care	 
providers. Universal service programs are generally funded by	 
mandatory contributions from telecommunications companies. New	 
technologies, however, are putting this funding source in	 
jeopardy. The Federal Communications Commission (FCC) has issued 
many orders designed to implement the act&apos;s universal service	 
reforms. The Universal Service Administration Company runs the	 
day-to-day operations of federal universal service programs on	 
FCC&apos;s behalf, although FCC retains responsibility for oversight  
and ensuring compliance with its rules. At the state level,	 
public utility commissions generally regulate rates for local and
long-distance phone service and implement universal service	 
programs. Public utility commissions subsidize local phone	 
service from the rates set for urban and business phone service  
and for &quot;vertical&quot; services, such as caller ID and call waiting. 
Although the use of digital technologies and internet protocol	 
networks for communications has risen rapidly during the past	 
decade, the providers of these services are not required to	 
contribute to the universal service fund. As these new voice	 
services gain in popularity, funding for universal service may	 
begin to decline. Considerable debate has arisen over whether the
current regulatory framework for funding universal service--which
relies on interstate telecommunications revenue--should be	 
revised in light of digital communications.</abstract>
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<identifier type="preferred citation">GAO-02-187</identifier>
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 <topic>Information technology</topic>
 <topic>Regulation</topic>
 <topic>Telecommunication</topic>
 <topic>Telecommunication industry</topic>
 <topic>Telephone</topic>
 <topic>Utility rates</topic>
 <topic>Interstate Telecommunications Relay</topic>
 <topic>Services Fund</topic>
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