## December 22, 2000

# Separate Statement of 

# Joint Board Chairman Susan Ness

*Re: Federal-State Joint Board on Universal Service, Recommended
Decision,*

*CC Docket No. 96-45*

A core principle of the Telecommunications Act of 1996 is that all
Americans should have access to reasonably comparable services at
reasonably comparable rates. When the Joint Board and the FCC undertook
a thorough review of the high-cost universal service mechanism following
passage of the 1996 Act, we recognized the unique circumstances of rural
carriers and did not adopt a "one-size-fits-all" solution. Rather, we
worked with the rural carriers and their associations to convene a Rural
Task Force that brought together a diverse range of companies, consumer
advocates, and government representatives to examine the cost structures
and competitive circumstances of rural carriers.

After two years of intensive deliberations, the Rural Task Force
unanimously recommended a high-cost mechanism for rural carriers that
recognizes not only the significant differences *between* rural and
non-rural carriers, but also the vastly different cost structures
*among* rural carriers. As is the case with any consensus proposal, the
framework may not be exactly what any one entity would want.
Nevertheless, the Task Force's framework represents a good compromise --
a reasonable, but delicate balance \-- among disparate interests that
provides the certainty and stability essential for investment in rural
America.

I commend the Rural Task Force for their unwavering efforts to develop a
predictable and sufficient universal service mechanism for rural
consumers. We owe them a debt of gratitude for their hard work. I
especially want to thank the chair of the Task Force, Commissioner Bill
Gillis of the Washington Utilities and Transportation Commission. He has
worked with uncommon fortitude and patience to forge a consensus among
warring factions.

For the past ten weeks, the Joint Board has had an opportunity to review
the Report and to provide additional guidance to the FCC on the
conclusions reached, including the targeting, magnitude, and duration of
the support. Some commissioners would have preferred a vastly different
regime or a more simplified one, some a significantly shorter timeframe,
some a few points of fine-tuning to more precisely direct the funds
toward the higher cost areas, while others would have expanded the scope
of the review to include issues beyond the Rural Task Force report. In
the end, in the interest of time, and with deep appreciation of the hard
work of the Rural Task Force, the Joint Board agreed simply to forward
the Report to the FCC without recommendations.

Now that the Rural Task Force has completed its work and the Joint Board
has sent that recommendation to the Commission, I urge the Commission to
move forward as rapidly as possible to bring this process to a
successful conclusion. It is essential that we provide certainty to
rural carriers by putting in place a high-cost mechanism that makes both
economic sense and common sense. The stability offered by such a system
will allow rural carriers to plan for the future and undertake necessary
investment that benefits rural communities.

In this decision, a number of Joint Board members also request that the
Commission refer to the Joint Board the interstate universal service
aspects of an access charge reform plan recently submitted by rural
carrier associations. I would prefer to proceed concurrently with
universal service and access charge reform. The two go hand in glove.
Although I agree that the Joint Board should be actively involved in
issues that affect high-cost universal service mechanisms, I fear that a
formal referral to the Joint Board could delay the process of
implementing these reforms beyond the July 1, 2001 target date. Thus,
any referral of these issues to the Joint Board should include concrete
deadlines that would allow the Commission the ability to adopt
appropriate access charge reform on the same timetable that it
implements reform of the high-cost mechanism for rural carriers.

I look forward to continuing the dialogue with the Joint Board members
as partners in this proceeding as we continue our efforts to fulfill the
statutory requirement to preserve and advance universal service for the
benefit of all Americans.