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of the "MAG proposal" within the next few months. It will be one of my
top priorities to make significant progress on rural access reform as
soon as logistically possible.In closing, I would like to extend my
deepest gratitude to my state colleagues and staff, as well as my fellow
commissioners and staff, for their invaluable contributions to this
reform effort. The Rural Task Force and the Joint Board on Universal
Service are especially commended for their insight and vigor in
developing this interim support
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based on forward-looking costs or another appropriate measure of costs,
by which we can ensure that the rural high-cost loop fund grows no
larger than is truly necessary to accomplish its purpose. As I have
stated repeatedly, we must guard against allowing universal service
programs to grow too large, lest we collect so much from carriers that
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3333Arial3§3333Times New Roman3SEPARATE STATEMENT OF CHAIRMAN MICHAEL K.
POWELL Re: Fourteenth Report and Order and Twenty-First Order on
Reconsideration, Federal-State Joint Board on Universal Service and
Multi-Association Group (MAG) Plan for Regulation of Interstate Services
of Non-Price Cap Incumbent Local Exchange Carriers and Interexchange
Carriers (CC Dkt. Nos. 96-45, 00-256).I am pleased to support this Order
because, today, the Commission finally takes action to fill in the third
piece of the four-part universal service puzzle: high-cost loop support
for rural carriers. The Commission filled in the first piece of this
difficult puzzle in 1999 when it reformed high-cost loop support for
non-rural carriers based on a forward-looking cost model. We moved the
second piece of the puzzle into place in 2000 with the adoption of
access reform and interstate access support for price cap carriers in
the CALLS Order. Today's action on the third piece of the puzzle, rural
high-cost loop support - and the pending proceeding on the puzzle's
fourth piece, rural access reform - are two of the most important
actions the Commission will take this year. Viewed as a whole, this
comprehensive package of access and universal service reforms will
ensure that consumers in all areas of the country, especially those
living in high-cost rural areas, have access to telecommunications
services at affordable rates.A number of innovative rural carriers have
begun to meet the challenge of ensuring that their customers benefit
from the same twenty-first century telephone infrastructure that other
Americans are starting to enjoy. Many others, however, have been less
able to meet this challenge. In particular, in many cases, the costs of
serving far-flung customers has outstripped rural carriers' financial
resources. This has, in some cases, hindered these carriers from making
much-needed improvements and upgrades to their networks to provide basic
supported services.With this Order, we adjust rural high-cost loop
support to address a facet of this pressing problem. The increases to
rural high-cost loop support will begin relatively modestly (roughly
\$126 million total support for Year 1) and then ramp up to a total
price tag over the five year term of the plan of over \$1 billion.
Together with our other existing universal service programs, our total
support for rural carriers during this five year period is projected to
be well over \$9 billion - before we address rural access
reform.Although I vigorously support the Commission taking this
important action, I acknowledge that there are limitations to this plan.
As the Order emphasizes, this is an interim five-year plan, reflecting
the fact that we have more work to do in this area. Specifically, I
believe it is important that we develop a permanent support mechanism,
based on forward-looking costs or another appropriate measure of costs,
by which we can ensure that the rural high-cost loop fund grows no
larger than is truly necessary to accomplish its purpose. As I have
stated repeatedly, we must guard against allowing universal service
programs to grow too large, lest we collect so much from carriers that
they are hindered in their ability to compete and bring consumers new
and better products and services.If we could address this concern and
adopt a permanent solution today, I would be the first to support it.
But these issues are exceedingly complex and will take more time to
develop. At the same time, further delay is not an option in my view.
The Commission has taken simply too long to address rural carrier issues
in its implementation of the Act's universal service requirements.I
would re-emphasize that this is only one piece of the puzzle for rural
carriers. The Bureau intends to prepare a formal recommendation
regarding rural access reform, including