Footnote 1 Our universal service policy is rooted in the Communications Act of 1934, a central tenet of which is "to make available, so far as possible, to all the people of the United States a rapid, efficient, nation-wide, and world-wide wire and radio communication service with adequate facilities at reasonable charges . . . ." Section 1 of the Communications Act of 1934, as amended, 47 U.S.C. 151.

Footnote 2 The 94 percent measure of subscribership levels is derived from data collected by the Bureau of the Census. Specifically, the questions asked are: "is there a telephone in this house/apartment?" and, if the answer is "no," "is there a telephone elsewhere on which people in this household can be called?" FCC, Com. Car. Bur., Industry Analysis Div., Monitoring Report, CC Docket No. 87-339, at 12 (May 1995) (Monitoring Report). See also Section III, infra.

Footnote 3 Mississippi (88.6 percent), New Mexico (88.3 percent) and South Carolina (89.4 percent). See Monitoring Report, Table 1.2 at 27.

Footnote 4 Comments of the National Exchange Carrier Association, Inc, in NTIA Docket No. 940955-4255, Universal Service and Open Access Issues, Notice of Inquiry, Tables 1 and 2, filed December 14, 1994.

Footnote 5 In 1994, subscribership levels were 85.7 percent for African Americans, 86.0 percent for Hispanics, and 95.1 percent for Whites. Monitoring Report, Table 1.4 at 37; see also Schement, Belinfante and Povich, Telephone Penetration 1984-1994, at 12 (1994).

Footnote 6 The "Internet" is a worldwide collection of thousands of interconnected computer networks.

Footnote 7 For example, technology will soon permit voice transmission over the Internet. In addition, other technologies, including cable, wireless and video, may soon offer a similar capability.

Footnote 8 "Affordability of Telephone Service - A Survey of Customers and Non-Customers," conducted by Field Research Corporation, 1993, vol. 1, at S-7 (California Affordability Study). This study was funded by the GTE-California and Pacific Bell, and mandated by the California Public Utilities Commission. See also, Mueller and Schement, Universal Service From the Bottom Up: A Profile of Telecommunications Access in Camden, New Jersey, Rutgers University Project on Information Policy (1995) (Mueller and Schement); "The Chesapeake and Potomac Telephone Company's Submission of Telephone Penetration Studies," Formal Case No. 850, at 2, (filed Oct. 4, 1993) and attached survey reports (C & P Telephone Penetration Study).

Footnote 9 MTS and WATS Market Structure; Amendment of Part 36 of the Commission's Rules and Establishment of a Joint Board; Establishment of a Program to Monitor the Impact of Joint Board Decision, CC Docket Nos. 78-72, 80-286, 87-339, FCC 89J-3 (1989) (Second Study and Report), at 15, para. 24.

Footnote 10 In 1984, the year before its "no disconnect" rule was implemented, Pennsylvania had a subscribership level of 94.9 percent. Monitoring Report, Table 1.2 at 22. In 1994, Pennsylvania subscribership level was 97 percent. Id. at 27. Subscribership in Pennsylvania is also promoted by a telecommunications education fund that was established with monies from settlement of a fraudulent sales practice case.

Footnote 11 Schement, Belinfante and Povich, Telephone Penetration 1984-1994, Table 1, at 13, 18, 1994.

Footnote 12 Colorado, Delaware, Hawaii, Idaho, Massachusetts, Montana, Nevada, New York, North Dakota, and Wyoming. Utility Regulatory Policy in the United States and Canada, Compilation 1993-1994, National Association of Regulatory Utility Commissioners, Table 131 at 306 (1994).

Footnote 13 For example, we found that in 1991, the Illinois Commerce Commission (ICC) repealed a 15-cent monthly surcharge levied on all telephone subscribers to fund the State's participation in the federal Lifeline Assistance program. It did so in response to a lawsuit challenging the surcharge as a discriminatory preference. Although the State legislature barred reinstitution of the surcharge, a year later, in 1992, the ICC established a voluntary contribution program for funding telephone assistance. In 1994, customers contributed over $1 million, which is used to fund up to $10 in installation assistance as part of the State's participation in the Link Up program. In the District of Columbia, subscribership dropped approximately three percent over a five-year period. To promote subscribership in the Distriction, two new services are now available. District residents may order a two-tiered service, with unlimited calling within the District for a low, flat, monthly rate, and with calls to the extended local calling area charged on a per-unit basis. In addition, a special restricted local calling service is available to customers that have been disconnected or may soon be disconnected.

Footnote 14 California Affordability Study at S-7.

Footnote 15 Of the previous subscribers, 46 percent had been involuntarily disconnected and 45 percent had stopped service voluntarily (the majority of this latter group for reasons unrelated to long-distance charges). A substantial number of the voluntary disconnects, however, occurred because of the subscriber's inability to control usage. Id. at S-7, 38.

Footnote 16 Affordability of Telephone Service, A Survey of Customers and Non-Customers, conducted by Field Research Corporation, jointly funded by GTE and Pacific Bell, mandated by California Public Utilities Commission, Presentation Pamphlet, at 5 (1995).

Footnote 17 Id. at 6.

Footnote 18 Id. at 5.

Footnote 19 Second Study and Report, supra.

Footnote 20 Mueller and Schement, supra at 9-10.

Footnote 21 Public Service Commission of Maryland, Case. No. 8462, Order 70324, January 22, 1993. Voluntary toll restriction is available in two other jurisdictions served by Bell Atlantic, in Pennsylvania for a one-time $15 charge, and in the District of Columbia for a one-time $10 charge with a $3 monthly fee.

Footnote 22 Bell Atlantic-Pennsylvania, Inc., Tariff Pa. PUC - No. 1, Sec. 22, Seventh Revised Sheet 3A, issued Nov. 30, 1984.

Footnote 23 Belinfante, A Dynamic Analysis of Telephone Penetration, Industry Analysis Division, FCC, at 7 (1990).

Footnote 24 Mueller and Schement, supra., at 12.

Footnote 25 MTS and WATS Market Structure; Amendment of Part 67 of the Commission's Rules and Establishment of a Joint Board, Report and Order, 2 FCC Rcd 2953, 2955, para. 17 (1987) (1987 Report and Order); amended, MTS and WATS Market Structure, Link-Up America, and Amendment of Part 36 of the Commission's Rules and Establishment of a Joint Board, CC Docket No. 88-341, Decision and Order, 4 FCC Rcd 3634 (1989)(Decision and Order).

Footnote 26 Id.

Footnote 27 Id. at para. 20.

Footnote 28 Monitoring Report,Table 2.2, at 57-58.

Footnote 29 Id., Table 2.2 at 58.

Footnote 30 Compare, e.g., Walter, "Assessing the Residential Rate Assistance Programs in Furthering the Goal of Universal Service," Proceedings of the Eighth Biennial Regulatory Information Conference (June 1992), with Garbacz, Assessing the Impact of FCC Lifeline and Link Up Programs on Telephone Penetration, Paper, Rutgers Advanced Workshop in Regulation and Public Utility Economics, Eighth Annual Western Conference, at 2 (July 1995)(advance copy).

Footnote 31 Lande, Reference Book: Rates, Price Indexes, and Household Expenditures for Telephone Service, Industry Analysis Division, FCC, at 5 (July 1994). Link Up assistance pays one half of the connection charges, up to a maximum of $30 in benefits. The average reduction of $25 also reflects supplemental connection assistance provided in some jurisdictions.

Footnote 32 See Section II.A.1.b., infra.

Footnote 33 47 U.S.C. 410(c).

Footnote 34 See Section II.A., supra.

Footnote 35 Detariffing of Billing and Collection Services, CC Docket No. 85-88, Report and Order, 102 FCC 2d 1150 (1986)(Detariffing Order), recon. denied, 1 FCC Rcd 445 (1986).

Footnote 36 Detariffing Order, 102 FCC 2d at 1176.

Footnote 37 "LATA" refers to local access transport area. See United States v. AT&T, 569 F. Supp. 990, 993-94 (D.D.C. 1983).

Footnote 38 Detariffing Order, 102 FCC 2d at 1165-66.

Footnote 39 Action by eleven States to bar disconnection of local service for nonpayment of interstate long-distance charges provides additional evidence of the feasibility of our proposal. See note 11, supra, and accompanying text.

Footnote 40 Under Chapter 64 of the Pennsylvania Public Utilities Code, charges for basic local exchange service, non-basic services (such as call-waiting), and inter-exchange service must be billed separately. A customer's failure to pay charges for either non-basic service or inter-exchange service may not be a basis for temporary suspension or termination of local exchange service. As long as a customer keeps current on charges for basic local exchange service, that service may not be cut-off. 52 Pa. Code 64.1 et seq.

Footnote 41 See Section II.A., supra.

Footnote 42 47 U.S.C. 151, 152(a), 153(a).

Footnote 43 See Louisiana Public Service Commission v. FCC, 476 U.S. 355 (1986); Maryland PSC v. FCC, 909 F.2d 1510, 1516 (D.C. Cir. 1990).

Footnote 44 Public Service Commission of Maryland, Memorandum Opinion and Order, 4 FCC Rcd 4000 (1989).

Footnote 45 Id. at 4006.

Footnote 46 47 U.S.C. 152(a).

Footnote 47 47 U.S.C. 153(a).

Footnote 48 47 U.S.C. 151.

Footnote 49 MTS and WATS Market Structure; Amendment of Parts 67 and 69 of the Commission's Rules and Establishment of a Joint Board, Decision and Order, 50 Fed. Reg. 939, para. 6 (1985) (Lifeline Order).

Footnote 50 Monitoring Report at 49.

Footnote 51 MTS and WATS Market Structure; Amendment of Part 69 of the Commission's Rules and Establishment of a Joint Board, Decision and Order, 51 Fed. Reg. 1371, paras. 4-6 (Dec. 1986) (Second Lifeline Decision).

Footnote 52 Monitoring Report, Table 2.3, at 59-60.

Footnote 53 Id.

Footnote 54 See, e.g., California Affordability Study, supra; Second Study and Report, supra.

Footnote 55 California Affordability Study, supra. at S-2.

Footnote 56 Voice mailboxes may be an effective tool to enable highly mobile individuals to take advantage of employment opportunities. For example, during a job search a voice mailbox could provide the subscriber with many of the benefits of telephone service, i.e., a phone number and the ability to receive messages.

Footnote 57 PINs allow users to access certain services or private accounts on an individual basis.

Footnote 58 "Haven for Ship Workers Offers Comforts of Home," Miami Herald, Broward Edition, Feb. 20, 1995; "Sailors' Support of Call," Sun Sentinel (Fort Lauderdale, Fla.), Feb. 17, 1995.

Footnote 59 See Basic Exchange Telecommunications Radio Service, CC Docket No. 86-495, Report and Order, 3 FCC Rcd 214 (1988).

Footnote 60 Id.

Footnote 61 Monitoring Report, at 12.

Footnote 62 Id. at S-14, S-16, 70 and 93.

Footnote 63

Id. at S-16, S-17, 106 and 117.

Footnote 64 A recent study commissioned by the California PUC estimated that only 20 percent of eligible households are not currently receiving Lifeline service. The same study found that 9.2 percent of those receiving assistance failed to meet one or more of the eligibility criteria. SRI International, A Study to Assess Customer Eligibility and Recommend Outreach Activities for the Universal Lifeline Telephone Service, Final Report, Executive Summary at ES-1, ES-2 (November 1993).

Footnote 65 47 C.F.R. 1.415 and 1.419.