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Federal Communications Commission
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Internet: http://www.fcc.gov

This is an unofficial announcement of Commission action. Release of the full text of a Commission order constitutes official action. See MCI v. FCC. 515 F 2d 385 (D.C. Circ 1974).

February 9, 1998


FCC Chairman William E. Kennard, in a speech today before the National Association of State Utility Consumer Advocates, urged his audience to help promote fair competition in telecommunications through consumer education and enforcement. Marking the second anniversary of passage of the Telecommunications Act of 1996, Kennard said that the Act "has successfully moved us in the right direction -- towards greater competition." Kennard also outlined eight principals to guide implementation of universal service in rural and high cost areas.

Kennard stressed the need for greater consumer education to match the increase in competition, noting that many basic long distance customers could begin saving money immediately by simply placing a phone call to their current carrier and signing up for a service plan that better suits their needs.

While stating that competition is not yet as broad or as deep as he would like, Chairman Kennard noted that there are now over 100 competitive local exchange carriers that have installed 132 switches and signed about 2,400 interconnection agreements with incumbents. Kennard also noted steady declines in the rates for wireless and long distance services.

Kennard said that number one on his To Do list is delivering more choice in communications; number two is ensuring affordable rates and comparable services for all Americans; and number three is providing consumer protection, particularly against "slamming," "cramming," and unreasonably priced operator service calls.

He told the state consumer advocates that the FCC is guided by a consumer Bill of Rights. This includes the rights to choose providers, to move from one provider to another, to change carriers without changing telephone numbers, to have the same convenient dialing regardless of whether the consumer chooses a new entrant or the incumbent, and to change carriers without paying unnecessary fees.

Kennard noted that this year the FCC will finish implementing a mechanism for sustainable universal service support to rural and high cost areas. "We cannot allow our country to be plagued by an ever-widening gulf between 'haves' and 'have-nots,'" he declared.

To help move the discussion forward, Kennard proposed a set of eight principles which he presented as a balanced package to be taken as a whole - with no picking and choosing. They are:

"1. Universal service reform should not reduce the amount of explicit support that the state receives from the interstate jurisdiction. By this, I mean that costs that previously had been borne by the interstate jurisdiction because of the old high cost fund should continue to be borne by federal universal service mechanisms.

2. States have an obligation to take all reasonable steps as promptly as possible to reform existing intrastate universal service support mechanisms to make them compatible with competitive local markets by making the subsidies explicit and portable.

3. States should continue to collect as much of what is currently intrastate universal service support (whether implicit or explicit) from within their own state.

4. Where a state has fully reformed its own universal service mechanisms and would be collecting as much of what is currently intrastate universal service support as is possible, additional federal universal service support should be provided to any high cost areas where state mechanisms in combination with baseline federal support, are not sufficient to maintain rates at affordable levels.

5. Federal universal service support should be the minimum necessary to achieve statutory goals.

6. Federal and state universal support mechanisms should collect contributions in a competitively neutral manner.

7. Federal and state universal service support mechanisms should encourage efficient investment in new plants and technologies by all eligible telecommunications carriers.

8. Federal and state universal service support mechanisms should promote service to historically underserved areas -- Native American nations, for example."

Kennard added, "I believe that if guided by these principles, we can reform our existing universal service system for the competitive age."

- FCC -