Coalition To Keep America Connected.

Washington, D.C., March 31, 2006 -- The Coalition to Keep America Connected supports Chairman Martin's vision of a reformed and viable universal service system. The Coalition remains committed to working with the Chairman and Congress to identify and implement realistic reforms that will ensure a firm commitment to all consumers and allow providers to meet the Nation's vitally important objective of broadband for all Americans.

The reverse-auction process ignores the real world characteristics of building and maintaining a high cost, capital intensive network. In theory, an auction process for high cost support may reduce pressure on the fund, but it will not create a favorable environment for network investment that will be needed to usher in IP video and next generation advanced services and applications. Any system that does not acknowledge or meet the long term nature of network investment will discourage investment and network upgrades.

A national commitment allowing the continued evolution of high quality networks will be the best hope for consumers in all parts of the country to receive the promise of advanced services. Universal service reform must ultimately benefit consumers and be driven by clearly stated policy goals and targeted results.

Chairman Martin has consistently and correctly recognized the absurdity of funding multiple providers in areas where it is uneconomical for even one provider to serve. His commitment to add discipline to the universal service fund disbursement process remains a core goal of any universal service fund reform.

The Coalition to Keep America Connected agrees with Chairman Martin in this regard and recommends that true universal service reform encompass the following steps:

Require that investments be made before support is awarded;
Adopt national eligibility requirements for all CETCs;
Eliminate the identical support rule and require support for all ETCs be based on their own costs and network characteristics;
Broaden the base of contributors to the fund

The Coalition to Keep America Connected today praised Congressmen Lee Terry (R-Neb.) and Rick Boucher (D-Va.) for introducing universal service reform legislation that would modernize the nations vital universal service policy. Universal service is critical to ensuring all consumers continue to have access to the latest telecommunications technologies and services at prices that are fair and affordable.

The Congressmen have once again demonstrated their commitment to maintaining the integrity of the Universal Service Fund (USF), ensuring consumers everywhere can benefit from the latest communications services, said Coalition Representative and Executive Vice President of the Western Telecommunications Alliance Kelly Worthington. We applaud their leadership and their continued efforts to elevate universal service issues to the forefront of the telecom reform debate.

The coalition is especially supportive of provisions in the bill that would expand the base of contributors to the USF, ensuring contributions are technology-neutral, and by provisions that would control growth of the fund by imposing strict requirements for competitive eligible telecommunications carriers (ETCs), which account for the majority of fund growth. The coalition also supports the Congressmens efforts to ensure that universal service dollars are being used for their intended purpose, by eliminating the identical support rule. Elimination of this rule will increase program accountability by requiring all recipients to demonstrate their actual cost of service and receive universal service support based on that cost.

Obviously the legislation has been constructed to control growth in the universal service fund in an attempt to strike the political balance that may be necessary for the bill to move forward.

Provisions in the bill aimed at controlling fund size likely render a cap unnecessary, Worthington said. This legislation has the potential to aid in the continued building and maintenance of broadband-capable network infrastructure that delivers advanced telecommunications services to all consumers, no matter where they live. We look forward to working with Reps. Boucher and Terry and the entire Congress to enact policy that ensures continued access to cutting edge telecommunications services-at affordable prices-for consumers throughout America.

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The Coalition to Keep America Connected is dedicated to ensuring that all consumers have access to affordable telecommunications services and the latest technologies-no matter where they live. The effort is organized by four rural telecom associations, whose memberships include 700 small and midsize communications companies. Together these companies serve millions of consumers and 40% of the landmass across America. Visit us at www.keepamericaconnected.org.