PROVIDED COURTESY OF THE NATIONAL EXCHANGE CARRIER ASSOCIATION, INC.
www.neca.org
Universal Service Update
United States Telephone Association (USTA) President and CEO Roy Neel stated
that USTA will "fight to the end" to ensure that recently added language to
an appropriations bill passed earlier this week does not require the Federal
Communications Commission to fund the new universal service schools,
libraries and rural health care programs with money freed up from reductions
in interstate access charges exclusively. Mr. Neel's remarks were given
during a press conference yesterday in Washington. The language, introduced
by Senator Ted Stevens, would require the FCC to make an estimate of
expected reductions in access charges, predict rates-of-return for various
incumbent local exchange carriers (ILECs), and to provide a "complete
explanation and accounting for any headroom claimed to be available to an
ILEC whose actual rate of return is greater than 11.25%."
Neel said he "does not think that is a reasonable way to fund the subsidy
program for schools and libraries." Senate staffers told Neel that it is
"just a study," but Neel said USTA was "working hard to reeducate Congress"
against funding the programs through reductions in access charges.
Also, NECA was kind enough to inform Headlines staff about an incorrect
posting on March 18.
Title: Senate Appropriations Approves Bill Changing Universal Service
Source: Telecom AM
http://www.telecommunications.com/am/
Issue: Universal Service
Description: The Senate Appropriations Committee approved a bill yesterday
that "would require the FCC to propose by May 8 a revised administration for
its new universal
service programs and explain and justify their funding mechanisms. Citing the
General Accounting Office's finding that the FCC overstepped its legal
authority in creating the current structure, the bill would require the
Commission to
replace the three universal service organizations -- the Universal
Service Administrative Company (USAC) and its subsidiaries, the Rural Health
Care
Corporation and the SLC -- with a single entity." The bill also would require a
report detailing how the programs will be paid for.
NECA informs us that the legislation would fold the Rural Health Care
Corporation and the Schools and Libraries Corporation into one entity, but
USAC would remain separate.
The legislation in question is S.1768 -- the 1998 Emergency Supplemental
Appropriations Act for Recovery From Natural Disasters, and for Overseas
Peacekeeping Efforts. Section 2004 of the bill appears below:
SEC. 2004.
PROVISIONS RELATING TO UNIVERSAL SERVICE SUPPORT FOR PUBLIC
INSTITUTIONAL TELECOMMUNICATIONS USERS. (a) NO INFERENCE REGARDING EXISTING
UNIVERSAL SERVICE ADMINISTRATIVE MECHANISM- Nothing in this section may be
considered as
expressing the approval of the Congress of the action of the Federal
Communications Commission in establishing, or causing to be
established, one or more corporations to administer the schools and
libraries program and the rural health care provider program under section
254(h) of the Communications Act of 1934 (47 U.S.C.254(h)), or the approval
of any provision of such programs.
(b) FCC to Report to the Congress-
(1) REPORT DUE DATE- Pursuant to the findings of the General Accounting
Office (B-278820) dated February 10, 1998, the Federal Communications
Commission shall, by May 8, 1998, submit a 2-part report to the Congress
under this section.
(2) REVISED STRUCTURE- The report shall propose a revised structure for
the administration of the programs established under section 254(h) of the
Communications Act of 1934 (47 U.S.C. 254(h)). The revised structure shall
consist of a single entity.
(A) LIMITATION ON ADMINISTRATION OF PROGRAMS- The entity proposed by the
Commission to administer the programs--
(i) is limited exclusively to the ministerial acts of processing the
applications necessary to determine eligibility for discounts under section
254(h) of the Communications Act of 1934 (47 U.S.C.254(h)) as determined by
the Commission;
(ii) may not administer the programs in any manner that requires that
entity to interpret the intent of the Congress in establishing the programs
or interpret any rule promulgated by the Commission in carrying out the
programs.
(B) APA REQUIREMENTS WAIVED- In preparing the report required by this
section, the Commission shall find that good cause exists to waive the
requirements of section 553 of title 5, United States Code, to the extent
necessary to enable the Commission to submit the report to the Congress by
May 8, 1998.
(3) REPORT ON FUNDING OF SCHOOLS AND LIBRARIES PROGRAM AND RURAL HEALTH
CARE PROGRAM- The report required by this section shall also provide the
following information about the contributions to, and requests for funding
from, the schools and libraries subsidy program:
(A) An estimate of the expected reductions in interstate access
charges anticipated on July 1, 1998, including individual estimates of--
(i) the value of the current price cap formula, excluding the `g'
(growth) component;
(ii) the value of the `g' (growth) component;
(iii) the value of the exogenous cost component;
(iv) the amount of available headroom; and
(v) the amount of reductions for incumbent local exchange carriers
still subject to rate-of-return regulation.
(B) The 1997 interstate rate of return for each incumbent local
exchange carrier subject to price cap regulation;
(C) Based on the information in subparagraphs (A) and (B), a complete
explanation and accounting for any headroom claimed to be available to an
incumbent local exchange carrier whose actual rate of return is greater than
11.25 percent.
(D) An accounting of the total contributions to the universal service
fund that are available for use to support the schools and libraries program
under section 254(h) of the Communications Act of 1934 (47 U.S.C. 254(h))
for the second quarter of 1998.
(E) An accounting of the amount of the contribution described in
subparagraph (D) that the Commission expects to receive from--
(i) incumbent local exchange carriers;
(ii) interexchange carriers;
(iii) information service providers;
(iv) commercial mobile radio service providers; and
(v) any other provider.
(F) With regard to incumbent local exchange carriers--
(i) the amount of the contribution for universal services under
section 254 of the Communications Act of 1934 (47 U.S.C. 254) that will be
recovered from subscribers; and
(ii) the amount that will be passed on to interexchange carriers
in the form of increased access charges, the access and end-user rate
elements in which any increase in incumbent local exchange carrier
contributions will be reflected, and an explanation of why this method of
cost recovery is consistent with the goal of competitive neutrality set
forth in section 254(d) of that Act (47 U.S.C. 254(d)).
(G) Based on the applications for funding under section 254(h) of
the Communications Act of 1934 (47 U.S.C. 254(h)) received as of April 15,
1998, an estimate of the costs of providing universal service support to
schools and libraries under that section disaggregated by eligible services
and facilities as set forth in the eligibility list of the Schools and
Libraries Corporation, including--
(i) the amounts requested for costs associated with
telecommunications services;
(ii) the amounts requested for costs described in clause (i)
plus the costs of internal connections under the program; and
(iii) the amounts requested for the costs described in clause
(ii), plus the cost of internet access.
(H) A justification for the amount, if any, by which the total
requested disbursements from the fund described in subparagraph (G) exceeds
the amount of available contributions described in subparagraph (D).
(I) Based on the amount described in subparagraph (G), an
estimate of the amount of contributions that will be required for the
schools and libraries program in the third and fourth quarters of 1998, and,
to the extent these estimated contributions for the third and fourth quarter
exceed the current second-quarter contribution, the Commission shall provide
an estimate of the amount of support that will be needed for each of the
eligible services and facilities as set forth in the eligibility list of the
Schools and Libraries Corporation, and disaggregated as specified in
subparagraph (G).
(J) An explanation of why restricting the basis of
telecommunications carriers' contributions to universal service under
254(a)(3) of the Communications Act of 1934 (47 U.S.C. 254(a)(3)) to
interstate revenues, while requiring that contributions to universal service
under section 254(h) of that Act (47 U.S.C. 254(h)) be based on both
interstate as well as intrastate revenues, is consistent with the provisions
of section 254(d) of that Act (47 U.S.C. 254(d)).
(K) An explanation as to whether access charge reductions should
be passed through on a dollar-for-dollar basis to each customer class on a
proportionate basis.
(c) SCHOOLS AND LIBRARIES PROGRAM ASSISTANCE CRITERIA- In carrying out
the schools and libraries program under paragraphs (1)(B) and (2) of section
254(h) of the Communications Act of 1934 (47 U.S.C. 254(h)), the Commission
shall prioritize assistance on the basis of need. In determining need under
this section, the Commission shall make funds available for distance
delivery education programs where advanced learning technologies are not
otherwise available at affordable rates.
(d) IMPOSITION OF CAP ON COMPENSATION OF INDIVIDUALS EMPLOYED TO CARRY
OUT THE PROGRAMS- No officer or employee of the entity to be proposed to be
established under subsection (b)(2) of this section may be compensated at an
annual rate of pay, including any non-regular, extraordinary, or unexpected
payment based on specific determinations of exceptionally meritorious
service or otherwise, bonuses, or any other compensation (either monetary or
in-kind), which exceeds the rate of basic pay in effect from time to time
for level I of the Executive Schedule under section 5312 of title 5, United
States Code.
(e) SECOND-HALF 1998 CONTRIBUTIONS- Before June 1, 1998, the Federal
Communications Commission may not--
(1) adjust the contribution factors for telecommunications carriers
under section 254; or
(2) collect any such contribution due for the third or fourth
quarter of calendar year 1998.
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