**STATEMENT OF**

**COMMISSIONER LARRY S. LANDIS**

> ***In the Matter of High-Cost Universal Support, WC Docket No. 05-337;
> Federal-State Joint Board on Universal Service; CC Docket No. 96-45***

The proposals contained in today's Recommended Decision provide the
framework for significant and much-needed reform of the high cost
universal service program.  Whether the promise inherent in those
reforms is realized depends almost exclusively on what happens next, and
on how the details of the framework outlined here may be implemented. 
Those processes and mechanisms must be weighed with great care, because
in any public policy decision the odds are reasonably high that when we
get to granular implementation the end result will be to produce
outcomes which are unintended, undesired, or both.

            The level of participation among stakeholders in this
proceeding, together with the robustness of the comments and replies, as
well as the ex parte communications, has contributed materially to the
thinking leading up to today's Recommended Decision.  While it is to be
expected that the input of stakeholders will reflect their respective
interests, for the most part they were thoughtful, productive,
constructive and even imaginative, as opposed to reflecting an
entitlement mentality which has at times clouded this ongoing debate. 

            There are four sections of this Recommended Decision which I
believe warrant brief comment, because of the critical importance of
getting it right when it comes to actual execution of the
recommendations set forth here.

            The first is the discussion of issues related to current
mechanisms as they impact incumbent LECs (participants in the POLR fund,
as proposed).[^1] Competition is a reality today not only in our urban
centers, but also increasingly in the small towns, villages and rural
communities which are the population cores of rural areas across the
country.  It is essential that POLR support be matched as closely as
possible to the high cost exurban ("truly rural") areas. This requires
adoption of improved analytical and modeling techniques to examine those
costs at a far more granular level than has been heretofore been
possible.  Failure to align support with costs as closely as possible
could put rural service at risk as surely as the unmanaged ballooning of
the high cost program.

            An outgrowth of that concern is a recognition that rural is
rural, and the time for distinguishing among RLECs, midsize companies
and the largest LECs is past.  Just as telecommunications policy should
be technologically neutral, it should be neutral when it comes to
providing appropriate support to those residing in high cost areas,
regardless of the corporate logo or size of the provider delivering the
service.

            Second, great care and attention must be given to the method
by which a transition from the existing, increasingly dysfunctional
mechanisms to the proposed new Funds is effected.  In the Recommended
Decision, appropriate attention is given to the importance of effecting
the transition over time, to give providers the time required to adjust
their business models to account for shifts in emphasis and process. 
Too frequently, particularly when it has come to communications policy,
remediation has taken the form of a "flash cut" to a new and presumably
better framework. 

That said, virtually nothing is said in this recommendation about the
transition mechanism itself.  That process should be guided by the first
principle in the Hippocratic oath: "Do no harm."  Or if that is not
possible, close attention should be given to minimizing the harm which
occurs.  A great deal has been said and written, including in this
Recommended Decision, about the undesirability of continuing "subsidized
competition."  We need to recognize that the providers who have
benefited from the pathology of the existing system have done so in a
manner which is entirely legal, if less than visionary.    It is
essential that one provider not be advantaged over others as the
proposed modifications to support for competitive, especially wireless,
ETCs occur and wireless providers are transitioned to the proposed
Mobility Fund.[^2]

Third, it is time for the states to have a stake not only in policy
decisions and in the administration of the high cost universal service
program, but also to step up to at least a modest role in its funding. 
As our former colleague Billy Jack Gregg has pointed out, several states
which are among the largest net recipients (disbursements less
collections) of funds under the federal universal service program do not
have a state universal service program or any other program targeted to
address issues such as those addressed in this Recommended Decision. 

I strongly support the recommendation that state matching funds[^3]
should be a requirement for receipt of maximum funding under the
proposed Broadband fund, and further believe comment should be sought on
whether it is appropriate to structure all three funds in that manner,
perhaps consistent with ability (but independent of political will) to
pay for those states seeking to maximize the funds allocated to service
areas within their boundaries. 

Fourth, I concur in the view of my colleagues who support redefinition
of supported services to include broadband, employing a mechanism such
as that outlined in this recommendation.  It is beyond debate that there
are those areas in which buildout is sufficiently costly that no
business case can be made for buildout, regardless of the technology
under consideration, and it is to those areas I would expect the
broadband dollars would be primarily directed.

An approach which draws upon the expertise of the states and which
follows a logical progression such as is outlined in this
Recommendation,[^4] relying primarily on the private sector for
addressing unserved areas[^5] and utilizing funds from the Broadband
Fund as a "funding source of last resort" will best and most efficiently
reach the goal of ubiquitous broadband availability.  Given that many
states still do not have an accurate assessment as to precisely how
widely available broadband is, and where it is and is not available,
enthusiasm should be tempered by a degree of caution.  I support the
initially incremental approach which is contemplated by a \$300 million
initial funding level.  I hope that thereby we can avoid the temptation
to unnecessarily throw resources at a need before its scope has been
clearly and precisely defined. 

It may be appropriate to seek input into the latent barriers to
achieving more pervasive broadband use.  Those who are without
computers, whether by choice or circumstance, are still largely
precluded from robust broadband usage.  We also need to take into
consideration those who have made what, for them, is a rational decision
that broadband is not a service they need or want, no matter how widely
available and no matter what the cost. 

[^1]: See paragraphs 19-23 passim, esp. paragraph 22. 

[^2]: See esp. paragraph 27.

[^3]: See paragraphs 50-52.

[^4]: See esp. Paragraph 54

[^5]: Such as the community-based demand development program which is
    the core element of the Connect Kentucky and Connected Nation model