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October 22, 1998


Re: Federal-State Joint Board on Universal Service; (CC Docket Nos. 96-45) .

I dissent in part from this Order and Further Notice of Proposed Rulemaking because I fear that it is a missed opportunity to simplify the universal service contribution scheme for wireless carriers and to experiment with the adoption of a flat federally mandated universal service fee. Under our regulations, wireless carriers must allocate their revenues, and thus their wireless calls, between the interstate and intrastate jurisdictions for purposes of calculating the appropriate revenues for their universal service contribution. But wireless calls are difficult to classify as interstate or intrastate, and wireless carriers' books are not traditionally kept in that fashion. Thus, wireless carriers have adopted a variety of different methodologies for calculating such revenues, resulting in widely divergent estimates by wireless companies serving the same MTA.

I support the Commission's decision to revisit this issue, and agree that some form of safe harbor should be adopted so that no carrier that is honestly estimating its interstate revenues is placed at a competitive disadvantage. I would have preferred, however, to either adopt an interim fixed federal charge for wireless carriers, or to have adopted an interim percentage safe-harbor but to have also expressly indicated the Commission's intent to adopt a fixed federal charge as the ultimate solution. I do not support the Commission's decision to continue to seek comment on the ultimate methodology that should be used by wireless carriers to estimate interstate revenues.

I believe that the Commission must begin moving to fixed explicit federal charges for the recovery of universal service contributions. Such charges have the benefit of being competitively neutral, of not discouraging use of the underlying service (not being usage-sensitive charges), and of being easily portable. As one commentator argued, "[b]y permitting more competitively neutral and fair administration than the existing process, and ensuring greater certainty, a fixed charge would promote the continued development of competition in wireless markets."(1) Instead of adopting an interim safe-harbor while the Commission expends additional resources on determining the appropriate method of approximating the number of wireless service calls or revenues that are "interstate," I would have preferred to adopt a flat fixed federal fee per wireless "line" or equivalent, at least as an interim solution if not the ultimate resolution.

I appreciate the majority's inclusion of this proposal as one of the possible contribution methodologies, and I encourage carriers to comment on the benefits of such an approach and on the easiest method of determining the amount of such a charge. In addition, I encourage parties to comment on the appropriateness of this Commission versus the relevant state commission establishing a minimum local use package that must be offered at a specific price to qualify for universal service support.

1. February 23, 1998 letter from James R. Coltharp, Comcast Corporation, to Magalie Salas.