What the Telecommunications Act says:
The 1996 Act directs the Joint Board to base the preservation and advancement of universal service on six general principles and allows the Joint Board to consider additional principles in making its recommendations. The principles are:
- Quality and rates. Quality services should be available at affordable rates.
- Access to advanced services. Access to advanced telecommunications and information services should be provided in all regions of the nation.
- Access in rural and highÐcost areas. Consumers in every region should have access to telecommunications and information services at costs reasonably comparable to rates charged in urban areas.
- Equitable and nondiscriminatory contributions by providers to the preservation and advancement of universal service. All providers of telecommunications services should make contributions to universal service.
- Specific and predictable support mechanisms. There should be specific, predictable, and sufficient federal and state mechanisms to preserve and advance universal service.
- Access to advanced telecommunications services for schools, health care facilities, and libraries. Elementary and secondary schools and classrooms, health care providers, and libraries should have access to advanced telecommunications services.
- Additional Principles. Such other principles as the Joint Board and the FCC determine are necessary and appropriate for the protection of the public interest, convenience, and necessity and are consistent with the Telecommunications Act.
What the Joint Board recommends:
We recommend that the Commission [read "the Commission" to be the FCC] also establish "competitive neutrality" as an additional principle upon which it shall base policies for the preservation and advancement of universal service, pursuant to section 254(b)(7) [read all references to "section" as a section of the 1996 Act]. We ask that the Commission define the principle in the context of determining universal service support, as:
"COMPETITIVE NEUTRALITY -- Universal service support mechanisms and rules should be applied in a competitively neutral manner."
We believe this recommendation is consistent with the concept of competitive neutral contribution embodied in section 254(b)(4) and the explicit requirement of equitable and nondiscriminatory contributions in section 254(d), where Congress clearly articulated that all providers of interstate telecommunications shall contribute on an "equitable and nondiscriminatory" basis to universal service support mechanisms. We also note that section 254(h)(2) requires the Commission to establish competitively neutral rules relating to access to advanced telecommunications and information services for schools, health care providers and libraries. Competitive neutrality is also embodied in section 254(e)'s requirement that universal service support be explicit, section 254(f)'s requirement that state universal service contributions be equitable and nondiscriminatory and section 214(e)'s requirement that any carrier can be an eligible telecommunications carrier provided that it meets certain statutory criteria. We also believe that the principle of competitive neutrality encompasses the concept of technological neutrality by allowing the marketplace to direct the development and growth of technology and avoiding endorsement of potentially obsolete services. In recognizing the concept of technological neutrality, we are not guaranteeing the success of any technology for all purposes supported through universal service support mechanisms but merely stating that universal service support should not be biased toward any particular technologies. We further believe that the principle of competitive neutrality should be applied to each and every recipient and contributor to the universal service support mechanisms, regardless of size, status or geographic location. We find that the competitively neutral collection and distribution of funds and determination of eligibility in the universal service support mechanism is consistent with congressional intent "to provide for a pro-competitive, de-regulatory national policy framework."1
What public interest advocates recommend:
The "Additional Principles" provision allows for the public to offer, and for the Joint Board and the FCC to adopt any number of precepts that should be considered in determining whether a particular service is "consistent with the public interest, convenience, and necessity."
The Benton Foundation ("Benton") offered five additional principles to be considered:
- Externality Costs. The policy should recognize the cost of not getting all citizens connected. The value of a network Ð any network, phone or computer Ð diminishes as fewer and fewer people have access to it. This decreased value should be weighed against arguments that universal service is too costly.
- Usage. The new universal service policy should allow users to block and/or prepay toll charges that could otherwise cause disconnection. The policy should also discourage or prohibit local telecommunications providers from disconnecting subscribers for failure to pay for long distance charges.
(The Joint Board addresses usage as part of the basic "universal service" package. See section III of this report.)- Personal Choice. If all Americans are to enjoy a communication service with adequate facilities, the Commission should allow users to identify the set of services that enables the user to be so served. (The Joint Board addresses personal choice in recommendations for support for low-income consumers. See section V of this report.)
- Equipment. Along with quality services available at just, reasonable, and affordable rates, citizens will need affordable, quality machines such as phones, modems and computers.
- Consumer Education. As a form of consumer protection, the public will need ongoing consumer education so that individuals and organizations are aware of the options available to them, are able to make informed decisions about these options, understand the pricing of the services, and know how to get assistance if they have difficulties with service reliability, bills, privacy, and/or other problems.
AARP et al. offer three additional principles to ensure that the expansion of universal service meets broad public needs and does not raise the cost of universal service excessively:
- The service must be a communications service which connects each to all.
- The service must be a "mass market" service, which is most economical when sold in large volume.
- The needs and preferences of all users must have been considered in an open, public forum.
The Association of The Bar of the City of New York Administrative Law Committee (Bar of New York) also offers one additional principle:
ACCESS TO INTERACTIVE SERVICES. -- Individuals in all regions of the Nation, including low income individuals and those in rural, insular, and high cost areas, should have access to interactive information services2 that allow them to be publishers as well as recipients of information. The definition of interactive information services "should evolve and relate directly to the services available to businesses and middle and upper income Americans dwelling in urban centers."
The Joint Board addresses this proposal with the following:
"In particular, we disagree with the Bar of New York's proposal that universal service definition be altered to include access to interactive services as a principle. We recommend that this concept should not become a principle. Section 254(c)(1)(A)-(D) set forth the specific principles that Congress intends this Joint Board and the Commission to take into consideration when defining universal service and we believe the definition we recommend herein is consistent with these standards."La Raza suggests that allowing community-based organizations providing educational, health, and literary services to receive the same full and equal access to advanced services as libraries and schools should be a principle that stems from either section 254(b)(6) or 254(b)(7) of the 1996 Act.The Joint Board addresses this proposal with the following:
"We do not agree with La Raza that community-oriented organizations that provide services similar to those provided by schools and libraries should receive the discounts and benefits statutorily accorded to schools and libraries. The 1996 Act specifically defines the categories of institutions that are eligible for discounted telecommunications and information services, and we find no evidence that Congress intended this Joint Board or the Commission to supplement the 1996 Act's definition."3
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