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Federal Communications Commission
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Washington, D.C. 20554
News media information 202 / 418-0500
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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).

Report No. CC 97-61COMMON CARRIER ACTIONDecember 30, 1997

Commission Addresses Universal Services Issues Raised by Petitioners
(CC Docket Nos. 96-45, 96-262, 94-1, 91-213, and 95-72)

The Commission today released an Order [ Word Perfect format | Zip format ] addressing various issues raised in petitions for reconsideration and/or clarification of its May 8, 1997 and July 10, 1997 and July 18, 1997 Orders on universal service. In its May 8, 1997 Report and Order, the Commission implemented section 254 of the Communications Act by establishing explicit federal universal service support mechanisms that will ensure the delivery of affordable telecommunications service to all Americans, including low-income consumers, consumers in rural, insular and high cost areas, eligible schools and libraries, and rural health care providers. The May 8, 1997 Report and Order identified who must contribute to the new universal service support mechanisms, determined who may receive universal service support or universal service discounts, and provided methods for determining levels of universal service support and processes for administering the new support mechanisms. On July 10, 1997, the Commission, on its own motion, released an Order that, among other things, clarified issues concerning existing contracts for services to schools and libraries, recovery of corporate operations expense from high loop cost support mechanisms, and coordination between Commission and Joint Board staff. In an Order released July 18, 1997, the Commission directed the National Exchange Carrier Association to establish the Universal Service Administrative Company and to create the Schools and Libraries Corporation and Rural Health Care Corporation to perform functions associated with administering the schools and libraries and rural health care programs, respectively.

In today's Order, the Commission addresses issues raised in petitions for reconsideration of these universal service orders that were important to be resolved before the new universal service program begins on January 1, 1998. Among the conclusions reached in today's Order, the Commission:

  • concludes that a state commission that is unable to designate an eligible telecommunications carrier by January 1, 1998, may, once it has designated such carrier, file a petition with the Commission requesting support for that carrier retroactive to January 1, 1998;

  • clarifies that eligible telecommunications carriers must provide at least one type of toll limitation service, and must offer low income consumers the choice of tollblocking and toll control if able to do so;

  • establishes true-up mechanisms for DEM weighting and Long Term Support (LTS);

  • increases to $300,000 the annual cap on corporate operations expenses for the smallest carriers;

  • finds that non-profit schools, colleges, universities, libraries and health care providers are not required to contribute to universal service;

  • finds that broadcasters and systems integrators that derive from telecommunications less than five percent of their total revenues derived from systems integration are not required to contribute to universal service;

  • finds that, to the extent that states, schools, or libraries build or purchase wide area networks, the costs are not eligible for universal service discounts.
The Commission stated it will address in one or more subsequent reconsideration Orders the issues raised by petitioners that were not addressed in the reconsideration Order released today.

Action by the Commission December 30, 1997, by Fourth Order on Reconsideration (FCC 97-420). Chairman Kennard, Commissioners Ness, Powell, and Tristani. With Commissioners Ness and Powell issuing separate statements; Commissioner Furchtgott-Roth dissenting and issuing a statement.

News media contacts: Meribeth McCarrick at (202) 418-0256 or
Rochelle Cohen at (202) 418-0253.
Common Carrier Bureau contact: Lori Wright at (202) 418-7391.