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 SEPARATE  STATEMENT  OF  COMMISSIONER  KATHLEEN  Q.  ABERNATHY 
 Re:  Federal-  State  Joint  Board  on  Universal  Service;  Virginia  Cellular,  LLC,  Petition  for  Designation  as  an  Eligible  Telecommunications  Carrier  in  the  Commonwealth 
 of  Virginia. 
 In  this  Order,  the  Commission  has  taken  an  important  (albeit  incremental)  step  toward  establishing  a  more  rigorous  framework  for  evaluating  ETC  applications.  When 
 the  Commission  initially  exercised  its  authority  to  grant  ETC  status  in  areas  where  state  commissions  lack  jurisdiction,  it  appeared  to  regard  entry  by  any  new  competitor  as  per 
 se  consistent  with  the  public  interest.  While  promoting  competition  is  undoubtedly  a  core  goal  under  the  Telecommunications  Act  of  1996,  the  use  of  universal  service  funding  to 
 engender  competition  where  market  forces  alone  cannot  support  it  presents  a  more  complex  question.  Particularly  in  rural  study  areas,  where  the  cost  of  providing  service 
 typically  far  exceeds  retail  rates,  regulators  must  carefully  consider  whether  subsidizing  the  operations  of  an  additional  ETC  promotes  the  public  interest. 


 The  Joint  Board  is  developing  comprehensive  recommendations  on  the  ETC  designation  process  and  the  appropriate  scope  of  support,  and  this  isolated  case  is  not  an 
 appropriate  proceeding  in  which  to  make  any  fundamental  changes.  Nevertheless,  to  qualify  for  support  even  under  our  existing  rules,  I  believe  that  an  ETC  must  be  prepared 
 to  serve  all  customers  upon  reasonable  request,  and  it  must  offer  high-  quality  services  at  affordable  rates  throughout  the  designated  service  area.  State  commissions  exercising 
 their  authority  under  section  214(  e)(  2),  and  this  Commission  acting  pursuant  to  section  214(  e)(  6),  therefore  should  make  certain  that  an  applicant  for  ETC  status  is  ready, 
 willing,  and  able  to  serve  as  a  carrier  of  last  resort  and  is  otherwise  prepared  to  fulfill  the  goals  set  forth  in  section  254  of  the  Act. 


 To  this  end,  I  am  pleased  that  the  Commission  has  required  Virginia  Cellular  to  submit  build-  out  plans  to  document  its  proposed  use  of  federal  universal  service  funding  for 
 infrastructure  investment.  I  also  support  the  Commissions  insistence  on  appropriate  service-  quality  commitments.  Moreover,  the  Commission  is  right  to  consider  the 
 increasing  demands  on  the  universal  service  fund:  While  at  one  point  the  cost  of  granting  ETC  status  to  new  entrants  may  have  appeared  trifling,  the  dramatic  rate  of  growth  in  the 
 flow  of  funds  to  competitive  ETCs  compels  us  to  consider  the  overall  impact  of  new  ETC  designations  on  the  stability  and  sustainability  of  universal  service.  Finally,  I  strongly 
 support  our  efforts  to  beef  up  regulatory  oversight  by  imposing  reporting  requirements  on  Virginia  Cellular  and  by  reserving  the  right  to  conduct  audits  and  revoke  this  ETC 
 designation  in  the  event  of  a  failure  to  fulfill  the  requirements  of  the  statute  and  this  Order.  All  of  these  requirements  are  consistent  with  the  statutory  framework.  The  Joint 
 Board  may  soon  recommend  that  this  Commission  and  state  commissions  impose  additional  requirements,  and  I  eagerly  await  the  outcome  of  that  proceeding. 
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