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Federal Communications Commission
1919 - M Street, N.W.
Washington, D.C. 20554
News media information 202 / 418-0500
Fax-On-Demand 202 / 418-2830
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).

October 5, 1998


Competition for the provision of access services is growing, a fact we recognized last year when we began to implement a market-based approach to access charge reform. As we move closer to the deregulatory competitive environment that is our destination, we must ensure that the safeguards we have in place to promote competition and protect consumers are still necessary and adequate to serve those goals. We want competition -- not prescriptive regulation -- to be the driving force that carriers must heed when setting access charges.

At the same time, our pursuit of this goal must be tempered by evidence that the growth in competition among access providers has been sporadic and uneven. Balancing our long-term goals against the reality of today's marketplace requires of us a degree of agility and responsiveness that perhaps was not so vital in the days of regulated monopolies.

It is in this vein that today we seek to re-examine several aspects of access charge reform. First, we must consider the X-factor, the measure of productivity that pushes access charges lower. Some say the current X-factor of 6.5% is too low, others say it is too high. With the help of commenters, we will decide who's right and make any necessary adjustment. Second, we are examining several proposals that would give incumbent local exchange carriers pricing flexibility to respond to competitive pressures from other access providers. Pricing flexibility is the right answer where competition has taken root. I urge commenters to remember that we need a strong record in order to determine when and where pricing flexibility is appropriate. Finally, we have before us petitions from several parties urging significant modifications to our overall approach to access charge reform. I look forward to working quickly with my colleagues and our dedicated and talented FCC staff on these crucial issues.

Today we also take steps to ensure that access charge reform proceeds in a manner that is consistent and coincident with the implementation in the universal service proceeding of new high cost support mechanisms for non-rural companies. In this way, we can fulfill our promise of bringing to consumers the benefits of competition in the form of more choices and lower rates.

- FCC -