Mr. Chairman, Senators, I am honored today to appear before this Committee.

Less than seven months ago, I was a nominee before this Committee; today I am a Commissioner of the Federal Communications Commission. I thank you for that honor and privilege.

The Commission has enormous responsibilities under the Communications Act. You see before you five Commissioners who have worked hard and always with the best of intentions of implementing the Act. We have, from time to time, disagreed on specific Commission decisions. But I believe that we share a commitment to implementing the Act faithfully as written, to implement all of its parts and not just a selective few, and not to go beyond the letter of Act.

Commission Successes

Under Chairman Kennard's brief tenure, we have made great progress in many areas including, to name just a few: implementation of the World Trade Organization agreement, the transition to digital television, the implementation of Section 255 for access to telecommunications service for persons with disabilities, E911 services, enforcement of anti-piracy and anti-slamming regulations, and the initial implementation of Section 11 on regulatory reform.

This list is not exhaustive. Nor have these issues been easy. But we have worked together as a Commission, resolved to find the best answer under the law and in the consumer interest. Perhaps we have issues resolved better than others. I am confident that the Commission has the openness to improve our decisions and regulations when better answers are found.

For all of the accomplishments of the past six months, much remains to be done at the Commission. It is a busy place. We have numerous petitions from companies and private parties to take specific actions. We have countless complaints and comments from the public on specific issues.

Universal Service

Perhaps no single issue has received more attention than universal service, one of the cornerstones of the Telecommunications Act of 1996, embodied in Section 254 of the Act. The implementation of Section 254 has not been easy for the Commission. A great deal of effort by many well-intentioned people have been absorbed by the implementation of Section 254. Sadly, we appear to be far away from final implementation.

One of the difficulties of implementation has been the language of Section 254 itself. It is demanding and exacting in many respects. The language of the Section is narrow in many areas; in those areas, the Commission has little flexibility in interpretation. The Commission can and must implement all aspects of universal service, including discounts to schools and libraries for telecommunications services as provided by statute.

To date, the Commission has not fully implemented all parts of this section. I raised several concerns about this fractured implementation and about the Commission's promulgation of rules that appear to be inconsistent with the statute in some of my recent comments on Commission reports to Congress regarding universal service.⁽¹⁾

Commerce Committee Priorities

Another difficulty in the implementation of Section 254 has been the Commission's responsiveness to Congressional intent. It is in the realm of priorities, of Congressional intent, that I particularly seek guidance from this Committee.

Nearly three years ago, I sat in this room for endless hours, and days, and weeks, and months as a Congressional staffer during the Conference on the Telecommunications Act of 1996. I learned a lot in conference, not just about the specific details of the law, but also about the Senate, about this Committee, about how it works, and about its priorities.

As a House staffer, I had instructions to make sure that the law was good for consumers: lower prices, more innovation, greater choice through competition. The Senate Commerce Committee, however, had additional concerns, and in particular concerns that rural America not be left behind.

The views of what was affectionately known as the Senate Commerce Committee Farm Team were unmistakable: Section 254 on universal service was of the People, by the People, and for the People of high-cost, rural America. There were, to be sure, other important components of universal service: low-income, telemedicine, and schools and libraries. But these other elements were dwarfed in both the language and the intent of Section 254.

It seems that time and time again, the importance of high-cost, rural America to this Congress and this Committee is reinforced. Just last week, Congressional leaders sent me a letter stating: "our nation's core universal service program -- i.e. support for high-cost and rural America -- goes unattended by the Commission."

Priorities Matter

As I stated only a month ago in this Commission's last report to Congress: priorities matter.⁽²⁾ I remain convinced that rural, high-cost universal service is not just one of many objectives of Section 254; it should be the highest priority. The federal government has had universal service programs for rural, high-cost areas and for low-income Americans for many years. Section 254 embodied these ideals and set forth goals that emphasize rural, high-cost support as well as low-income support and other objectives.

I was very disturbed that, at yesterday's en banc meeting, the Commission suggested referring some aspects of the high-cost program back to the joint board, precipitating a need to miss the January 1, 1999 implementation date, while at the same time advocating full steam ahead on other new universal service programs. Make no mistake: the Commission is not converging on a solution to the high-cost universal service issue, and we should not rush to judgment to find a quick solution to a complicated problem just because promises about timing have been made to an important constituency. I fully support referral to the States who alone may be in a position to find the best answers to the high-cost issues.

Yet quick, although perhaps not fully vetted, answers have been found for other components of universal service. Indeed, despite repeated Congressional requests to suspend further collections and "proceed with a rulemaking that implements all universal service programs in a manner that reflects the priorities established by Congress . . . ," the Commission seems poised to proceed with some universal service programs while at the same time delaying higher priority issues.

Rural, high-cost universal service issues should not be resolved and implemented in some dim and distant future after all other universal service issues have been resolved; rural, high-cost universal service issues should be resolved and implemented first. Rural, high-cost universal service should not be viewed as the residual after enormous amounts for other federal universal service obligations have been promised; rural, high-cost universal service should receive the lion's share of any increase in the federal universal service fund.

Universal Service Should Not Burden Consumers

I am also concerned that rates for many Americans may soon rise, ironically, all in the name of universal service. The Commission may soon vote to increase rates to support funds for certain universal service programs. To be sure, there will be some offsetting reductions in access charges for some consumers, but not for all. And there will be no offsetting reduction in access charges whatsoever for wireless customers who will simply have to pay higher rates. I am willing to defend rate increases that are necessary to meet statutory requirements and Congressional priorities; I am not willing to defend rate increases that are necessary for neither.

A Future for Universal Service

Universal service is a difficult issue. That is precisely why Congress placed it in statute rather than continuing to rely on chance outcomes of regulations. I am committed to having the Commission follow the Communications Act as it is written. I believe that, if faithfully followed, Section 254 can meet all of its goals of universal service for all Americans. If we do not follow the statutory language, we are hopeless lost. It is a difficult challenge, but one which this Commission is capable of meeting.

I am sure that I speak for all of us in saying that we look forward to guidance from this Committee.

2. Dissenting Statement of Commissioner Harold Furchtgott-Roth Regarding the Report to Congress in Response to Senate Bill 1768 and Conference Report on H.R. 3579, rel. May 8, 1998.