STATEMENT  OF  COMMISSIONER  MICHAEL  J.  COPPS,  DISSENTING 


 Re:  Cost  Review  Proceeding  for  Residential  and  Single-  Line  
Business  Subscriber  Line  Charge  (SLC)  Caps 


 I  am  troubled  that  consumers  will  face  an  increase  in  the  
line  charge  on  their  local  bill  without  the  Commission  
undertaking  a  thorough  analysis  of  forward-  looking  cost  data.  
In  2000, when  the  Commission  adopted  access  charge  reform  for  
price  cap  carriers,  the  Commission  pledged  that  it  would  
initiate  and  complete  before  July  1,  2002  a  cost  review  
proceeding  to ensure  that  consumers  are  not  overpaying  for  
telecommunications  services.  This  has  not  been  done.  Carriers  
were  required  to  provide,  and  the  Commission  stated  that  it  
would  examine, forward-  looking  cost  data.  A  significant  number  
of  carriers,  however,  submitted  summary  data  without  disclosing  
the  inputs  used,  cost  models  that  were  not  transparent,  or  in  
some  cases, models  that  have  been  rejected  by  the  state  
commissions.  NASUCA,  the  association  of  state  consumer  advocates  
filed  its  data  purporting  to  show  that  the  cap  should  not  
increase,  but  it  used  a  model  that  the  Commission  has  
cautioned  may  have  limits  in  establishing  costs.  The  Commission  
then  failed  to  conduct  its  own  independent  analysis  of  the  
cost  data.  By  failing  to undertake  the  thorough  analysis  of  
cost  data  that  was  promised  in  the  access  reform  order,  we  
are  neglecting  our  obligation  to  consumers. 


 I  suspect  there  is  a  case  to  be  made  for  proceeding  with  
an  increase  in  the  cap.  Indeed,  in  all  probability,  there  are  
many  areas  of  the  country  in  which  forward-  looking  costs  
exceed  $5.  But  as  the  courts  have  recently  been  at  pains  to  
tell  the  Commission,  we  need  to  obtain  the  data  and  conduct  
our  analysis  before  we  act.  Without  such  data,  I  am  unable  
to  support  an  increase  in the  line  charges  on  consumers’  
bills. I  also  remain  concerned  about  the  line  charges  imposed  
on  rural  consumers.  As  the  cap  increases,  it  is  highly  likely  
that  the  disparity  in  line  charges  between  rural  consumers  and  
urban ones  will  increase.  For  example,  as  the  Order  points  
out,  those  living  in  Washington,  DC,  will  pay  less  than  $4  
per  month  whereas  those  in  most  rural  areas  will  soon  pay  
over  $6  for  this  one charge  on  their  bills.  In  2000,  the  
Commission  determined  that  this  line  charge  was  not  subject  to  
the  rate  integration  and  rate  averaging  directives  in  the  
statute.  Although a  reexamination  of that  issue  is  not  before  
us  in  this  proceeding,  before  allowing  further  increases  in  
the  line  charge,  I  would  urge  the  Commission  to  consider  this  
disparity  and  whether  it  runs  afoul  of  section 
 254(  g)  or  the  Congressional  mandate  that  the  rates  paid  by  
those  living  in  high-  cost  areas  are  reasonably  comparable  to  
those  paid  by  consumers  in  urban  areas.