May 8, 1998

As we continue to implement and streamline the universal service mechanisms, there are certain fundamental rules of priority we must follow. First and foremost, we must place poor and rural communities at the front of the line. Funding will go first to schools in poorer communities, whether they are in sparsely populated rural areas or inner city school districts. These are the schools and school kids with the greatest needs and they must be our first priority.

We also must ensure that extending the reach of universal service to schools and libraries and rural health care providers does not unduly increase costs for other users of the network.

For many decades universal service has guaranteed that residents of rural and high cost areas have the same affordable access to quality phone service as urban residents. We have honored this commitment, and will continue to do so, even as we undertake certain reforms to it and begin to implement new support mechanisms established pursuant to the Telecommunications Act of 1996.

In addition, we must take into account the distinct mission of the rural health care mechanism and thereby ensure that rural health care providers are able to afford the telecommunications services they need to deliver quality care to the communities they serve.

With these priorities in mind, I am happy to provide Congress with our proposal for changes to the way these mechanisms are administered. The Schools and Libraries Corporation and the Rural Health Care Corporation deserve high marks for their efforts to date. The small staff of the Schools and Libraries Corporation has alone processed over 45,000 applications for funding to help students learn with today's technology. While I am therefore very proud of the efficient and effective manner in which these groups have begun to implement these mechanisms, I am mindful of Congress' concern that we further streamline the process.

Today's report is a major step in that direction.

We face many challenges. Among other things, we must deal with the naysayers who seem to believe that the full promise of universal service is beyond our grasp, and who are simply opposed to the fundamental principles of universal service. I believe that fulfilling the promise of universal service is not only achievable, but is imperative as a matter of good public policy and as a matter of law. My duty as Chairman is to improve upon the historical success of universal service as we reform it in the manner dictated by the 1996 Act. And with the help of Congress, the states, and my colleagues at the Commission, I intend to do just that.