FACT SHEET

December 12, 2007

Coalition to Keep America Connected Responds to
Recommended Decision of the Federal-State Joint Board
on Universal Service

Interim Cap on Wireless CETCs

The Coalition to Keep America Connected (CKAC) applauds the Joint Board s recommendation of an interim cap on Universal Service Fund (USF) support for competitive eligible telecommunications carriers (CETCs) and urges the FCC to act on this matter immediately. The cap is a sensible remedy to explosive growth in USF support to CETCs. Failure to make these improvements will threaten the achievements and sustainability of a program crucial to consumers and our nation s future economic competitiveness.

Identical Support Rule

The Coalition to Keep America Connected (CKAC) supports the Joint Board s recommendation to eliminate the identical support rule. The identical support rule unnecessarily compensates competitive eligible telecommunications carriers (CETCs) on the basis of costs those carriers did not incur. The CKAC supports USF mechanisms that are based on a carrier s own costs. The identical support rule has contributed to excessive USF growth, and its replacement with an own costs approach will restore confidence in the USF.

Broadband

The Coalition to Keep America Connected (CKAC) strongly supports ensuring all Americans have access to the latest technologies, including broadband. The Coalition agrees with the Joint Board that more broadband deployment must occur so that more Americans can enjoy access. The Coalition also appreciates the Joint Board s recognition that rural carriers are doing a commendable job in delivering broadband to some of America s most difficult areas to reach.

Overall Cap

While the Joint Board s approach to reforming USF is admirable, the proposed rigid cap on the high-cost portion conflicts with the Act s principle that support be specific, predictable and sufficient in order to preserve and advance universal service. The U.S. Court of Appeals for the 10th Circuit has twice found that the FCC has yet to demonstrate that rural consumers served by non-rural ILECs are receiving sufficient universal service support. The overall cap also serves to lock-out updates to the underlying wireline infrastructure that are expected across the industry. While the ILECs have operated under a cap for many years, this new definition would eliminate the chance for system development that will be essential for other segment growth, including wireless and broadband. In the future, the nation s telecommunications system will depend upon the underlying network even more and for this reason, CKAC cannot support this misguided approach.

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