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Federal Communications Commission
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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).

June 12, 1998


By Proceeding Today, The Commission Ignores The Express Will Of Congressional Leaders That It Reconsider the Universal Service Program In Its Entirety

Today, the Federal Communications Commission adopts the 1998 and the first half of 1999 collection amounts for universal service, and the Common Carrier Bureau releases a Public Notice announcing the universal service contribution factors for the third quarter of 1998. I dissent from that Order and object to that Notice.

Before stating some of my reasons for objecting, let me make clear that I support the implementation of Section 254 in its entirety, including the schools and library provisions, within the parameters of the law. I am also confident that all of my fellow Commissioners have labored earnestly in attempting to implement these provisions. But sound intentions are not always enough. I am fearful that, by today's actions, this Commission has jeopardized not only the schools and libraries program, but the entire universal service mandate, and perhaps more.

With these actions, the Commission defies the bi-partisan Congressional directive that this agency "suspend further collection of funding for its schools and libraries program, and proceed with a rulemaking that implements all universal service programs in a manner that reflects the priorities established by Congress in the telecommunications Act of 1996."(1) Most Senators at Wednesday's hearing encouraged the Commission at least to freeze temporarily this program while the Commission revisits both the substance and the ramp-up period of these new universal service programs. Indeed, in response to Sen. Wyden's (D-Ore.) suggestion that FCC take 6-8 weeks to fix the universal service program, I stated that I would welcome the opportunity. I had hoped that the Commission would follow Sen. Wyden's counsel to suspend the program and make a public commitment to address the entire universal service dilemma -- including the rural, high-cost issues -- in the next 6-8 weeks. I have been disappointed.

I recognize that some will argue that we must proceed now. But I am not convinced that a minor 6-8 week delay in a new program will cause great harm. Indeed, we have already collected enough money to fund almost all of the demand for telecommunications services for this entire year. As I have written in detail before, I believe there is no statutory basis in Section 254 for federal discounts for internal connections. And, as I have often stated, the primary purpose of Section 254 is to provide support for high-cost, rural areas of America, an issue that has yet to be fully addressed by the Commission.

Moreover, recent reports indicate that many schools will not even be able to spend the money allocated for inside wiring in 1998, even if the discounts were legal. Internal connections create substantial disruption to students, and schools typically have the work done during vacation periods. Because funding commitments cannot be made until sometime in June or July, many schools have realized that they cannot finish the installation of inside wiring before this summer ends. Thus, to minimize disruption, many schools would wait until the spring/summer of 1999 to provide internal connections in any event.

Congressional leaders have demanded that the Commission suspend the schools and libraries program until all aspects of universal service are resolved. It would be irresponsible to issue funding commitments, allow public money to be distributed, or to raise consumers rates -- which is undeniably necessary at least with respect to wireless rates if not overall -- to pay for these programs before Congressional concerns can be fully addressed. The American consumer will be left to pay the bill with rates that are not as low as possible.

1. Letter from The Honorable John McCain, Chairman, Senate Committee on Commerce; The Honorable Ernest F. Hollings, Ranking Minority Member, Senate Committee on Commerce; The Honorable Tom Bliley, Chairman, House Committee on Commerce; The Honorable John D. Dingell, Ranking Minority Member, House Committee on Commerce; to The Honorable William Kennard, Chairman, Federal Communications Commission, June 4, 1998.