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FCC Report to Congress on SLC and Universal Service
May 8, 1998.
See also, Furchtgott-Roth Dissent, Michael Powell Dissent, and FCC Press Release.
Source: FCC. This version does not include footnotes in the original.  These documents have been edited for HTML, but not for content.

Before the
Federal Communications Commission
Washington, D.C. 20554

Report in Response to
Senate Bill 1768 and
Conference Report on H.R. 3579


Adopted: May 8, 1998
Released: May 8, 1998

By the Commission: Commissioner Ness issuing a statement; Commissioners Furchtgott-Roth and Powell dissenting and issuing separate statements.

1. In connection with supplemental appropriations legislation enacted on May 1,1998, Congress requested that the Commission prepare a two-part report to Congress (the Report), addressing certain issues concerning the implementation of the federal universal service support mechanisms. Section 2005(b)(2) of the Senate bill directs the proposal of a single entity to administer the support mechanisms for schools and libraries and rural heathcare providers, and further directs that the proposal be "pursuant to the findings of the GAO." In response to this directive, and based on the Commission's charge to ensure the effective delivery of universal service support to targeted recipients under the Communications Act of1934 (the Act), the Commission proposes in Part I of this Report that the Universal Service Administrative Company (USAC), the current Administrator of the high cost and low income support mechanisms, also administer the universal service support mechanisms for schools and libraries and rural health care providers. As described below, this proposal would be responsive to the Senate bill's request and preserve the goals sought by the Commission in establishing the current structure, while minimizing disruption of the on-going administrationof the universal service support mechanisms.

2. Part II of the following Report supplies information concerning funding and disbursements for the schools and libraries support mechanism. This information, as provided below, demonstrates the efficient, innovative, and effective administration of this important new support mechanism.


A.  Background

3. In the Telecommunications Act of 1996 (1996 Act), Congress directed the Commission and the states to take the steps necessary to establish universal service support mechanisms to ensure the delivery of affordable telecommunications services to all Americans. The 1996 Act codified long-standing federal rules and policies designed to make basic telephone service affordable throughout the nation. In addition, the 1996 Act included for the first time schools and libraries among the eligible beneficiaries of the federal universal service support mechanisms by providing that elementary schools, secondary schools, and libraries are entitled to receive, upon a bona fide request, any of the core universal services at discounted rates. Congress further directed the Commission to "establish competitively neutral rules . . . to enhance, to the extent technically feasible and economically reasonable, access to advanced telecommunications and information services for all public and non-profitelementary and secondary school classrooms, health care providers, and libraries."

4. On November 8, 1996, the Federal-State Joint Board on Universal Service (Joint Board) released a Recommended Decision, which included a proposal that the Commission appoint NECA as the temporary Administrator of the new universal servicesupport mechanisms. The Joint Board also recommended that, prior to appointing NECA as temporary Administrator, the "Commission permit NECA to add significant, meaningful representation" for non-incumbent local exchange carrier (LEC) interests to the NECA Board of Directors. NECA was established in 1983 as an association of incumbent LECs to administer the interstate access tariff and revenue distribution processes. NECA's responsibilities subsequently included, among other things, administering the universal servicehigh cost fund, the Lifeline Assistance program, the long term support program and the interstate Telecommunications Relay Services fund. Because of NECA's appearance of bias toward incumbent LECs based on the composition of its membership and Board of Directors, the Joint Board declined to recommend the appointment of NECA as the permanent Administrator of the universal support mechanisms, but did recommend that the Commission remove any regulatory barriers to NECA's rendering itself a neutral third party.

5. The Commission's Common Carrier Bureau issued a public notice generally seeking comment on the Joint Board's recommendations, and the Commission subsequently issued a Notice of Proposed Rulemaking and Notice of Inquiry specifically seeking comment on "how the Commission should amend its rules so that NECA can reform its Board ofDirectors in a manner that will enable it to become eligible to serve as the temporary administrator of the universal service support mechanisms." The Commission also sought guidance from the General Accounting Office (GAO) as to how to establish an appropriate administration for federal universal service.

6. In the Universal Service Order released on May 8, 1997, the Commission appointed NECA as the temporary Administrator of the universal service support mechanisms established under section 254 of the Act, consistent with the Joint Board's recommendation, subject to NECA's agreement to make changes to its governance that would render it more representative of the interests of entities other than incumbent local exchange carriers. The Commission recognized that NECA's membership and governance, comprised of incumbent local exchange carriers, was not sufficiently representative to ensure competitively neutral administration of the support mechanisms as required by the statute. Previously, NECA had submitted formal proposals expressing its interest in administering the universal service support mechanisms. In a January 10, 1997 letter, NECA proposed the creation of a wholly-owned subsidiary, designated as the Universal Service Administrative Company (USAC), for this purpose. In an order released on July 18, 1997, the Commission determined that NECA's January 10, 1997 proposal, with some modifications, would satisfy the conditions established in the Universal Service Order. Accordingly, the Commission directed NECA, as a condition of its appointment as the temporary Administrator, to establish an independent subsidiary, USAC, to administer temporarily the high cost and low income support mechanisms and to perform billing, collection, and disbursement functions for all of the universal service support mechanisms on a temporary basis. The Commission further determined to establish a universal service advisory committee, pursuant to the Federal Advisory Committee Act, that would recommend to the Commission a neutral third party toassume these functions on a permanent basis. The Commission also directed NECA, as acondition of its appointment as the temporary Administrator, to establish two independent corporations, the Schools and Libraries Corporation (SLC) and Rural Health Care Corporation (RHCC), to administer portions of the support mechanisms for schools and libraries, and rural health care providers, respectively. These corporations would serve as permanentadministrators of those mechanisms.

7. This administrative structure was intended to accomplish three goals. First, the Commission concluded that specialized entities, comprised of individuals with particular expertise, would foster efficient and effective administration. Second, the Commissionsought both to increase accountability to the Commission for the administration of schools, libraries, and rural health care support, and to provide adequate safeguards against waste, fraud, and abuse. Finally, in directing the establishment of SLC and RHCC as permanent entities, the Commission sought continuity in the administration of the support mechanisms for schools, libraries, and rural health care providers.

B.  Discussion

8. Revised Administrative Structure. Consistent with the directive of section 2005(2)(b)(2) of the Senate bill, to which Congress has requested that we respond, we propose to merge SLC and RHCC into USAC as the single entity responsible for the administration of the universal service support mechanisms for schools, libraries, and rural health care providers. In our view, vesting the consolidated USAC with the administrative responsibilities for all of the universal service support mechanisms, as described below, may best further the goals of efficient administration and accountability, and therefore would likely be the best option in accordance with the language of section 2005 to propose a single entity to administer the schools and libraries and rural health care support mechanisms. The USAC board includes individuals with the experience and expertise necessary to understand and implement the distinct missions of the schools and libraries and rural health care support mechanisms. The majority of the members of the boards of directors for SLC and RHCC, including representatives of schools and libraries and rural health care providers, also serve on the USAC board of directors. In addition, USAC is already responsible for collecting anddisbursing funds for the schools, libraries, and rural health care support mechanisms and has put systems in place for this purpose. Accordingly, subject to the Commission adopting a plan of reorganization that satisfies the criteria for efficient and accountable administration described below, we tentatively conclude that such a unified entity would be uniquely qualified to assume responsibility for the administration of these support mechanisms. As described more fully below, to preserve the distinct missions, expertise, and integrity of the schools and libraries and rural health care support mechanisms, board committees or divisions within USAC may be appropriate.

9. The consolidated USAC will remain accountable to the Commission by virtue of the Commission's universal service rules, which provide detailed guidance on administration of the universal service support mechanisms, USAC's regular coordination with Commission staff, and its quarterly filing of projected administrative expenses and estimates of support mechanism demand. The Commission also oversees the structure and content of the annual independent audit that USAC is required to undertake. As explained to the General Accounting Office, the Commission retains ultimate authority over the operation of the support mechanisms. Parties that object to any action taken by the corporations can bring the matter to the Commission's attention and request remedial relief. As outlined in greater detail below, we also propose in this Report a procedure for administrative review of USAC's decisions by the Commission. Moreover, we believe that naming USAC as the permanent Administrator, as proposed in this Report, would provide continuity to support mechanism contributors and beneficiaries. As a permanent Administrator, USAC's development of expertise and operational success of the support mechanisms would be encouraged fully, and not undermined by the danger that its expertise would have to be rebuilt at some near date in the future. Such a midstream change could potentially be disruptive and wasteful. Finally, USAC satisfies the statutory requirement of competitively neutral administration because it includes significant industry-wide representation of both contributors and beneficiaries.

10. USAC's Reorganization Plan. In response to the directive of section 2005 of the Senate bill, we propose that the functions, assets, employees, rights, and liabilities of SLC and RHCC be transferred to USAC by January 1, 1999. To implement the transfer, USAC, SLC and RHCC would be required jointly to prepare and submit a plan of reorganization for approval by the Commission. Prior to taking final action consistent with any proposals, public comment on such proposals will be sought. In addition, after reviewing the reorganization plan, and any comments received, the Commission contemplates ultimately effectuating the unified structure proposed herein through issuing a reconsideration order. The reorganization plan must detail how USAC proposes to structure its organization and operations pursuant to established principles and requirements of corporate law, and the language of section 2005 of the Senate bill.

11. We contemplate that the specialized knowledge and expertise of SLC and RHCC would be maintained in the unified structure. The joint proposal must be responsive to the direction of the Conference Report that "any proposed administrative structure should take into account the distinct mission of providing universal service to rural health care providers,and include recommendations as necessary to assure the successful implementation of this program." To that end, the existing SLC and RHCC boards may become subsidiaries or committees of the USAC board. In addition, the reorganization plan must delineate how the administrative systems and expertise that RHCC and SLC have developed, which differ from those required to administer the high cost and low income support mechanisms, will be preserved in USAC. The plan may also include a proposed organizational framework for staffing within USAC involving divisions or other operational units charged with discrete or specialized duties. Finally, to provide continuity to the beneficiaries and recipients of the support mechanisms during the period of reorganization, the plan must address the transfer of employees' contractual rights, benefits, and obligations of SLC and RHCC, including the assumption of contracts for services that SLC and RHCC have entered into with subcontractors in connection with the performance of their administrative responsibilities.

12. USAC's Permanence and Divestiture. Given USAC's successful administration of the support mechanisms to date, we propose that the administrative structure set forth herein be made permanent, subject to the Commission's review and determination after one year that the new structure is administering the distribution of universal service support and benefits to eligible entities in an efficient, effective, and competitively neutral manner. Providing permanence to the proposed structure will ensure USAC's ability to continue toattract and maintain qualified personnel and to ensure the continued success of the administrative operations without unnecessary disruption to contributors and beneficiaries.

13. Because we propose in this Report that USAC be named the permanent Administrator, we further propose that, pending Commission review of USAC's performance after one year, USAC be divested from NECA. This proposal is consistent with NECA's suggestion in its January 10, 1997 letter that, if USAC were selected as the permanent Administrator, USAC should be divested from its affiliation with NECA. As recognized by both commenters and the Federal-State Joint Board on Universal Service, NECA's membership and governance, which are composed primarily of incumbent local exchange carriers, may render NECA insufficiently representative of the diverse set of contributors to,and beneficiaries of, the support mechanisms either to serve as permanent Administrator or towarrant a continuing structural affiliation between NECA and USAC. Insofar as USAC will have been successfully operating for nearly two years, there will be no continuing need for USAC to remain affiliated with NECA to facilitate the sharing of resources and personnel. This proposal to divest USAC from NECA would not prevent USAC from entering into contracts with NECA for the performance of particular administrative functions.

14. USAC's Administrative Responsibilities and Accountability. In its administration of the support mechanisms for schools and libraries and rural health careproviders, we expect that USAC would apply its expertise to interpreting and applying existing decisional principles, but would not make policy or create the equivalent of new guidelines, or interpret the intent of Congress, without appropriate consultation and guidance from the Commission. Consistent with these principles, we propose to establish a procedure under which administrative decisions made by USAC would be reviewable by the Commission. Under this procedure, an administrative decision of USAC could be appealed by affected parties to the Commission. We will seek comment on exactly how this procedure should operate. In addition, the Commission would maintain the authority to review the decisions of USAC at any time on the Commission's own motion. Moreover, to foster greater accountability of the new USAC entity to Congress as well as the Commission, we propose that, in connection with its annual audit, USAC prepare and file with Congress and the Commission an annual report describing all significant aspects of its structure and operations for the preceding year.

15. Congressional Authorization. We understand that the Senate bill's directive to propose a revised administrative structure was sparked in part by the GAO's letter concerning the establishment of SLC and RHCC. We welcome action by Congress to resolve the issues raised by the GAO's letter. At the same time, we believe, contrary to the GAO's analysis, that the Commission acted lawfully in directing that NECA establish SLC and RHCC as a condition of its appointment as temporary Administrator. In response to the direction in section 2005(b)(2) of the Senate bill, that the unified structure we propose be "pursuant to the findings of the GAO," we respectfully request from Congress specific statutory authority, similar to that provided in connection with numbering administration, to create or designate, on or before January 1, 1999, one or more entities, such as the Universal Service Administrative Company, to administer the federal universal service support mechanisms. Such authorization would eliminate any question concerning the Commission's authority generally, and under the Government Corporation Control Act, to vest administrative responsibilities for the schools and libraries and rural health care support mechanisms in USAC and provide certainty to universal service contributors and beneficiaries. Similarly, we request that Congress enact legislation authorizing NECA to perform the administrative functions currently assigned to it under the Commission's rules. Finally, we ask that Congress specify that the body selected by the Commission, as well as NECA, would not be considered governmental agencies, government owned corporations, or government controlled corporations, subject to the requirements of federal laws governing the conduct and operations of federal agencies.


16. To ensure that the benefits of the Telecommunications Act of 1996 extend to all Americans, Congress expanded universal service under the Act to provide, among other things, support to eligible schools and libraries. In so doing, Congress recognized that, by facilitating the deployment of advanced technologies to America's classrooms, the schools and libraries support mechanism represents a direct and vital investment in the community. As described more fully below, consistent with Congress' mandate, the Commission has taken steps to assure both that the schools and libraries support mechanism is adequately funded and that the expenditures made on behalf of eligible schools and libraries are delivered effectively and efficiently.

A. Funds Collected for Schools and Libraries Support Mechanism.

17. The Senate bill directs three inquiries concerning contributions to the schools and libraries support mechanism. Explanations are requested, first, for the contribution mechanisms for schools and libraries support and as to whether any direct end-user charges on consumers are appropriate; and second, for the interstate and intrastate basis for such contributions consistent with section 254(d). Third, an accounting is requested of the contributions available for use to support schools and libraries for the second quarter of 1998, in total and as broken down by contributing entity.

18. Contribution Mechanism. The Commission concluded in the Universal Service Order that contributions to the universal service support mechanisms should be based on end-user telecommunications revenues. The Commission found that assessing contributions based on telecommunications revenues derived from end users is competitively neutral and relatively easy to administer. The Commission also found that this approach satisfied the statutory requirement that support be explicit, because carriers will know exactly how much they are contributing to the support mechanisms. The Commission did not mandate in the Universal Service Order that carriers recover contributions through an end-user surcharge, but did not prohibit such surcharges, and we reaffirm that conclusion herein. The Commission further stated that, in declining to mandate an end-user surcharge, it sought to allow carriers the flexibility to decide how they should recover their contributions.

19. The Commission emphasized in the Universal Service Order, however, that to the extent that carriers pass all or part of their contributions on to their customers on customer bills, carriers should include complete and truthful information regarding the contribution amount. Such carriers, the Commission made clear, "must be careful to convey information in a manner that does not mislead by omitting important information that indicates that the contributor has chosen to pass through the contribution or part of the contribution to its customers and that accurately describes the nature of the charge." The Commission noted that, unlike the subscriber line charge, the universal service contribution is not a federally mandated direct end-user surcharge. The Commission observed that it would be misleading for a carrier to characterize its contribution as a surcharge, because carriers retain the flexibility to structure their recovery of the costs of universal service in many ways, including creating new pricing plans subject to monthly fees. The Commission also pointed out that, as competition intensifies in the markets for local and interexchange services, it will likely lessen the ability of carriers and other providers of telecommunications to increase rates to customers.

20. We recognize that, in the near term, consumers' bills will undergo some change as companies adjust to the pro-competitive mandates of the Act. The Commission anticipates that consumers should benefit from these adjustments in that rates should continue to fall, all Americans will continue to have affordable access to telephone service, and the costs of providing telephone service will be recovered in a manner that is more straightforward than that used in the monopoly era. We continue to be concerned that carriers provide clear and accurate information to subscribers. We intend to seek comment on the extent to which carriers that pass on to their customers all or part of their universal service contribution obligation are not including complete and truthful information regarding the contribution amount. We will also seek comment on actions the Commission may take to reduce any confusion that consumers may experience with regard to universal service surcharges on their bills.

21. Revenue Base. The Commission also explained in the Universal Service Order that contributions to fund the schools and libraries support mechanism would be based on both interstate as well as intrastate revenues, consistent with the provisions of section 254(d). More recently, in the Report to Congress submitted by the Commission on April 10, 1998, we examined certain Commission decisions regarding the revenue base on which contributors' universal service contributions are assessed. After analyzing the Commission's conclusions regarding the jurisdictional parameters placed on the Commission and on states, we concluded that we have the authority to assess universal service contributions on telecommunicationsproviders' interstate and intrastate revenues. The April 10th Report concluded that the Commission's decision to base contributions to the high cost and low-income support mechanisms solely on interstate revenues and to base contributions to the schools, libraries, and rural health care support mechanisms on intrastate and interstate revenues was consistent with section 254 of the Act. For convenience, we append the relevant portions of the April10th Report, as Attachment A hereto.

22. Contributions for Schools and Libraries. As reflected in the May 8, 1998 letter from USAC, appended hereto as Attachment B, we estimate that approximately $619 million will be available for use to fund the schools and libraries support mechanism through the end of the second quarter of 1998. Also reflected in Attachment B, the following represent the total estimated contributions for each category of contributors for the first and second quarters of 1998 that will be available to fund the schools and libraries support mechanism for the second quarter of 1998: (i) incumbent local exchange carriers will contribute approximately $179 million; (ii) interexchange carriers will directly contribute approximately $266 million; (iii) information service providers, which are not obligated by the statute to contribute, will make no direct contribution; information service providers, however, will contribute significant amounts indirectly, as high-volume purchasers of telecommunications, as explained in the Commission's April 10th Report; (iv) commercial mobile radio service providers will contribute approximately $87 million; and (v) other providers (e.g., competitive local exchange providers, private carriers) will contribute approximately $92.5 million.

B. Disbursements for Schools and Libraries Support.

23. Pursuant to Congress' mandate to establish adequate funding for the schools and libraries support mechanism, the Commission in the Universal Service Order set an annual cap for schools and libraries funding, basing its decision on the recommendations of the Joint Board and a record consisting of more than 100,000 pages of comments, expert testimony, and other submissions. Because of the effective administration of the support mechanism, and the public's corresponding interest, the schools and libraries support will likely reach thousands of schools and libraries, and thereby offer meaningful, vital access to these communities. Indeed, the response and interest in the schools and libraries support mechanism attests to its tremendous success. During the initial 75-day window for filing applications, more than 30,000 completed applications were received from schools and libraries in every state in the union. As of May 1, 1998, SLC projected that $2.02 billion in discounts have been requested by applicants who have filed through April 28, 1998.

24. The Senate bill directs three specific inquiries concerning disbursements for schools and libraries support. First, an estimate is requested of the costs of providing schools and libraries support, based on the applications for funding received as of April 15, disaggregated by the eligible services and facilities. Second, a justification is sought of the amount, if any, by which the total requested disbursements from the fund may exceed the amount of available contributions for the second quarter. Finally, an estimate is requested for the amount of contributions that will be required for the program in the third and fourth quarters of 1998.

25. In response, the costs, disaggregated by eligible services and facilities are reflected in SLC's May 7, 1998 letter appended hereto as Attachment D. Although the total requested disbursements from the fund described above exceed the amount of available contributions described in Attachment B, the explanation for this difference is that the disbursements reflect the amount requested for a twelve month period, while the contributions reported cover only a six month period. The contributions required in the third and fourth quarter will be determined after soliciting public comment in public notices that will be released early next week. In particular, we intend to seek comment on whether the amount collected for universal service support for schools and libraries in 1998 should equal the demand reported by SLC or be limited to an amount that does not cause long distance rates to increase.

C. Access Charge Reductions.

26. The Senate bill also seeks information relating to access charges. Specifically, it directs that an "estimate of the expected reductions in interstate access charges anticipatedon July 1, 1998" be provided, as well as "an explanation as to whether access charge reductions should be passed through on a dollar-for-dollar basis to each customer class on aproportionate basis." Although the local exchange carriers will not file their access tariffs until June 16, 1998, based on preliminary information provided by the local exchange carriers, we estimate that the July 1, 1998 access charge reductions will be approximately $700 million below current levels. Given this projected access charge reduction, we estimate that the quarterly collection rate for schools and libraries could rise from $325 million (the second quarter collection rate) to approximately $524 million without increasing total access anduniversal service payments by long distance carriers. Accordingly, schools and libraries could be funded at approximately $1.67 billion for the 1998 calendar year without increasing total access and universal service payment by long distance carriers.

27. In January 1998, the Commission began the process of removing funding for universal service from access charges. Instead of this implicit funding, we began funding universal service through explicit contributions from a broader array of telecommunications providers. In addition, in January 1998, the Commission implemented access charge reductions, and began collection of contributions for the schools and libraries and rural health care mechanisms. We have found that changes in universal service support that were implemented January 1, 1998 did not increase the overall costs of long-distance carriers or the costs that local telephone companies need to collect in local rates. For CMRS customers, we are finding that consumers have been seeing, and are continuing to see, significant reductions in prices even though the 1996 Act required for the first time that wireless carriers contribute to the support of universal service.

28. Access charges have been a significant portion of the total cost of providing long-distance service for all facilities-based long distance carriers. The Commission has previously found that the interstate long distance market is substantially competitive. Because past experience indicates that long distance carriers tend to compete on the basis of per-minute rates, among other things, this competition creates strong incentives for carriers to reflect reductions in their costs through lower rates. Therefore, we would expect long distance companies to pass through access charge reductions, and especially reductions in per-minute access charges, to their customers.


29. The interest in and success of the schools and libraries and rural health care support mechanisms to date attests to Congress' vision in extending universal service support to these important missions. This Report responds to the directives of the Senate bill. It proposes a revised structure for the administration of schools and libraries and rural health care support, and additionally provides documentation of the funding and disbursements for the schools and libraries mechanism, in particular. As described above, this Report seeks Congress' support and continuing partnership in discharging our obligations under the Act, and bringing the full benefits of a free and open telecommunications marketplace to all Americans.


Magalie Roman Salas Secretary

Separate Statement of Commissioner Susan Ness

Re: Report in Response to Senate Bill 1768 and Conference Report on H.R. 3579

I welcome today's opportunity for the Commission to respond to concerns that have been expressed by Congress. We have no greater responsibility, or challenge, than to implementsuccessfully the Telecommunications Act of 1996. An active and continuing dialogue between the FCC and Congress is important to keeping implementation on track. We do our best to follow the statute as Congress wrote it, but, to the extent that we receive additional congressional guidance on ways in which our implementation decisions can be improved, I amhappy to be responsive. In particular, there have been significant congressional concerns about the administrativestructures that were established to administer various universal service support mechanisms. Although I firmly believe that the structures previously established were suited to the goals ofefficiency and accountability, and consistent with our statutory authority, it is clear that Congress believes the job can be done better if, at a minimum, the Schools and Library Corporation and the Rural Health Care Corporation are combined in a single entity. I believewe should follow this guidance and that the best way to do so probably is to fold both SLC and RHCC into the Universal Service Administrative Corporation. A final decision, of course, should await the development of a specific proposal, the opportunity for deliberations by the Commission and the state members of the Federal-State Joint Board on universal service, and confirmation from Congress that the revised structure will meet with approval. It is my sincere hope that this approach will not only receive congressional support but also meet the needs of the intended beneficiaries of the universal service provisions of the Telecommunications Act. Similarly, if Congress has concerns about the salaries paid to the senior employees of SLC, RHCC, USAC, or NECA, then it is our responsibility to take responsive action. Funds used for administration of the high-cost, low-income, or school, library, and rural health support mechanisms necessarily diminish, to some degree, the funds that will be available for the beneficiaries of the programs. Although these corporations require capable administrators, and the boards of directors of each of these associations have made independent decisions about the salaries they pay their executives, the unambiguous wishes of Congress must be respected -- and followed. This report also provides valuable information about the manner in which universal service support is being collected. The key point this report demonstrates is that universal service funding for schools, libraries, and rural health care is being collected without necessitating increases in the costs of services to telecommunications consumers. Access charge reductions, in particular, coupled with growth in the industry, declining costs, increased competition, and the elimination of deadweight losses, enable the new universal service support mechanisms to be initiated -- and the low-income and high-cost programs to be maintained -- while aggregate prices to consumers continue to decline. There is, to be sure, a growing amount of confusion about various line-items that are appearing on consumers' bills, and I believe we should be forceful in acting to ensure that these charges are not misleading or inappropriate. But the line on the bill that matters most is the bottom line, and that's the line we are working hardest to reduce. I want to work with Congress to ensure that the Telecommunications Act is a resounding success. I strongly believe that Congress acted wisely in deciding to expand the traditional notion of universal service by supporting the connection of classrooms and libraries to the information superhighway. I will continue to work to ensure that this vision -- which is so crucial to our success as a nation in the 21st century -- is successfully implemented, with congressional guidance and support.


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