Re: Universal Service, Third Order on Reconsideration

Today, we are just weeks away from implementing one of the seminal achievements of the 104th Congress, one that was wisely crafted to prepare our Nation for the challenges and opportunities of a new century. Beginning January 1, 1998, the Snowe-Rockefeller-Exon-Kerrey provisions of the Telecommunications Act of 1996 will go into effect, and discounts for communications services will thereafter be made available to schools, libraries, and public and non-profit rural health care facilities from Alaska to Florida. At the same time, we will also strengthen and expand the program which enables low-income consumers to obtain communications services, and we will renew our efforts to make support for services delivered in high-cost areas compatible with the increased competition we are working so diligently to promote.

Our society, our culture, and our economy will be stronger as a result.

Twenty-one months ago, as required by Congress, this Commission established a federal-state Joint Board to implement the universal service provisions of the Telecommunications Act of 1996. That Joint Board recommended, and this Commission adopted, detailed rules to provide universal service support for low-income consumers, for consumers in high-cost areas, and for schools, libraries, and public and non-profit rural health care facilities.

Over the course of these many months, innumerable questions have arisen, been debated robustly on a public record, and been successfully resolved. In virtually every instance, the answers were unanimous. Four state and three federal regulators, as well as a consumer advocate, Republican and Democratic alike, worked to achieve consensus on virtually every detail regarding the collection, distribution, and administration of universal service funding. The universal service mechanisms that resulted were designed to be enormously beneficial, fiscally responsible, compatible with competition, and consistent with legislative intent.

Today's order is not the occasion for a comprehensive review of those decisions, though I am confident that they will withstand close scrutiny. Today's order presents only a narrow issue: whether to use the "spigot" we created so that funds are not collected in excess of reasonably anticipated demand.

Congress was right to be enthusiastic about the benefits that would flow, throughout our nation, by increasing the opportunity for classrooms, libraries, and rural health care facilities to be connected to the information superhighway. But Congress has also been clear about its hope that these new responsibilities could be accommodated in a way that would avoid rate increases for residential ratepayers. As one who has been actively involved throughout the Joint Board's and Commission's deliberations, I can attest that we have taken pains, at every turn, to fulfill all of Congress's objectives.

As I said in my separate statement when we adopted the rules last May, we are committed to ensuring "a smooth take-off that will avoid creating unsustainable financial burdens on carriers or consumers, allowing competition and growth and declining prices -- rather than rate increases -- to supply the necessary funds." Our action today is fully consistent with that vision.