Separate Statement 
                               of
                    Commissioner Susan Ness



Re:  Report in Response to Senate Bill 1768 and Conference Report on H.R. 3579

I welcome today's opportunity for the Commission to respond to concerns that have been expressed by Congress. 
We have no greater responsibility, or challenge, than to implement successfully the Telecommunications Act of
1996.  An active and continuing dialogue between the FCC and Congress is important to keeping implementation
on track.  We do our best to follow the statute as Congress wrote it, but, to the extent that we receive additional
congressional guidance on ways in which our implementation decisions can be improved, I am happy to be
responsive.

In particular, there have been significant congressional concerns about the administrative structures that were
established to administer various universal service support mechanisms.  Although I firmly believe that the
structures previously established were suited to the goals of efficiency and accountability, and consistent with our
statutory authority, it is clear that Congress believes the job can be done better if, at a minimum, the Schools and
Library Corporation and the Rural Health Care Corporation are combined in a single entity.  I believe we should
follow this guidance and that the best way to do so probably is to fold both SLC and RHCC into the Universal
Service Administrative Corporation.  

A final decision, of course, should await the development of a specific proposal, the opportunity for deliberations
by the Commission and the state members of the Federal-State Joint Board on universal service, and confirmation
from Congress that the revised structure will meet with approval.  It is my sincere hope that this approach will not
only receive congressional support but also meet the needs of the intended beneficiaries of the universal service
provisions of the Telecommunications Act.  

Similarly, if Congress has concerns about the salaries paid to the senior employees of SLC, RHCC, USAC, or
NECA, then it is our responsibility to take responsive action.  Funds used for administration of the high-cost, low-
income, or school, library, and rural health support mechanisms necessarily diminish, to some degree, the funds
that will be available for the beneficiaries of the programs.  Although these corporations require capable
administrators, and the boards of directors of each of these associations have made independent decisions about the
salaries they pay their executives, the unambiguous wishes of Congress must be respected -- and followed.

This report also provides valuable information about the manner in which universal service support is being
collected.  The key point this report demonstrates is that universal service funding for schools, libraries, and rural
health care is being collected without necessitating increases in the costs of services to telecommunications
consumers.  Access charge reductions, in particular, coupled with growth in the industry, declining costs, increased
competition, and the elimination of deadweight losses, enable the new universal service support mechanisms to be
initiated -- and the low-income and high-cost programs to be maintained -- while aggregate prices to consumers
continue to decline.  There is, to be sure, a growing amount of confusion about various line-items that are
appearing on consumers' bills, and I believe we should be forceful in acting to ensure that these charges are not
misleading or inappropriate.  But the line on the bill that matters most is the bottom line, and that's the line we are
working hardest to reduce.

I want to work with Congress to ensure that the Telecommunications Act is a resounding success.  I strongly
believe that Congress acted wisely in deciding to expand the traditional notion of universal service by supporting
the connection of classrooms and libraries to the information superhighway.  I will continue to work to ensure that
this vision -- which is so crucial to our success as a nation in the 21st century -- is successfully implemented, with
congressional guidance and support.