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Separate Statement of Commissioner Michael K. Powell

RE: Federal-State Joint Board on CC Docket No. 96-45, Universal Service, Third Order on Reconsideration

I write separately to explain the bases upon which I support the reductions in universal service contributions adopted in this Third Order on Reconsideration. Specifically, I support this order because it recognizes the importance of constantly evaluating universal service programs to ensure that government is burdening carriers that contribute to these programs no more than is necessary to satisfy statutory requirements. This order reduces the financial burden on carriers and endeavors to do so in a way that does not overly favor any particular universal service program.

The Telecommunications Act of 1996 requires that the services eligible for universal service support be "available at just, reasonable and affordable rates" in "all regions of the Nation, including low-income consumers and those in rural, insular and high cost areas." 47 U.S.C. 254(b)(1), 254(b)(3). The Commission is duty-bound to ensure that there are "specific, predictable and sufficient Federal and State mechanisms to preserve and advance universal service." 47 U.S.C. 254(b)(5).

At the same time, the Act requires that universal service contributions be collected from telecommunications carriers pursuant to section 254(d). 47 U.S.C. 254(d). I firmly believe that the benefits of the pro-competitive, deregulatory framework that Congress created when it adopted the Act can never be fully realized if contributions to universal service programs become so large that they overtax carriers' ability to bring such benefits to consumers. In particular, we must be vigilant in our efforts to limit these contributions to the amounts absolutely necessary to fulfill the universal service statutory mandate, lest carriers pass on these contributions to consumers in the form of higher prices. Thus, while the Commission must provide for adequate support of universal service, we also must take affirmative steps to minimize the financial burden on carriers imposed by this support. By this order, the Commission takes one such step.

In addition, I believe that the various recipients of universal service support are all equally entitled to benefit from such support. Section 254 of the Act provides no basis for the Commission to favor certain classes of recipients over others with respect to the level or timing of universal service support flows. See generally 47 U.S.C. 254. Thus, in addition to furthering the goal of minimizing universal service obligations where possible, the order we adopt today squares some of the incongruity that existed among programs and, consequently, helps fulfill our statutory duty to ensure that all universal service programs are treated equitably.

In his dissenting statement, Commissioner Furchtgott-Roth raises a number of sobering and extremely valid questions about our entire universal service approach. In particular, I am troubled that we are marching ahead with mechanisms and procedures that are premised on prior commission decisions that are still under reconsideration. I sincerely hope that we take the opportunities presented by future reconsideration orders and, as Commissioner Furchtgott-Roth recommends, the Stevens Report, which is due to the Congress in April of next year, to examine fully our current and future universal service efforts.