Opinion ID: 165579
Heading Depth: 2
Heading Rank: 1

Heading: The Full Extent of Federal Support

Text: In Qwest I, we noted our inability to properly assess the sufficiency of federal support for universal service in the absence of a comprehensive description of the support mechanisms envisioned by the FCC. 258 F.3d at 1204. At the time, the FCC had reserved the possibility of utilizing a different funding mechanism for rural carriers and was still engaged in the process of reforming implicit federal support. Id. at 1204-05. Nevertheless, we did not require the FCC to finally resolve all relevant issues in its subsequent order. Id. at 1205. The FCC’s response aptly demonstrates the complexity of current mechanisms employed to support universal service. Federal support to non-rural high-cost carriers currently represents but a small percentage of comprehensive federal high-cost support allocations–only 13.7% of high-cost support allocated in 2002. Order on Remand ¶ 102. In the past several years, the FCC has sought to institute significant changes in its system of support for non-rural carriers, including the mechanisms at issue in the Ninth Order and the Order on Remand. At the same time, the Commission has proceeded far more cautiously with respect to rural carriers. Id. ¶ 99. In 2001, the FCC chose not to tie intrastate high-cost support for rural carriers to a forward-looking cost model, the same 14 model applied to non-rural carriers. Id. ¶ 100. Instead, the Commission adopted a fiveyear, modified embedded cost mechanism. Id. Prior to the conclusion of this period, the FCC intends to develop a long-term universal service plan that recognizes distinctions between and among rural carriers and non-rural carriers and better targets support to rural carriers in the highest cost areas. Id. The Commission believes that the present system has “proved sufficient to preserve and advance universal service,” pointing to high subscribership rates and its conclusion that rural and high-cost rates are reasonably comparable to urban rates under a Government Accounting Office (“GAO”) Report.3 Id. ¶ 105. We recognize the evolving nature of the system of supports employed by the FCC. While a comprehensive picture of those supports is necessarily obscured at this juncture, the description provided by the Commission in the Order on Remand informs our analysis.