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SEPARATE STATEMENT OF 
COMMISSIONER KEVIN J . MARTIN

Re:	Multi-Association Group (MAG) Plan for Regulation of Interstate Services of 
Non-Price Cap Incumbent Local Exchange Carriers and Interexchange Carriers, 
Second Report and Order and Further Notice of Proposed Rulemaking, CC 
Docket No. 00-256

	I write separately to explain my reservations with this Order and why I 
nevertheless join in approving it.  I am sympathetic to the calls of many rural carriers to 
seek more comment before moving forward on this item.  Having seen the Commission 
fail to reach these issues for years despite the pleas of the carriers, it seems somewhat 
ironic that the Commission feels it necessary to do so now, when the carriers would like 
the Commission to wait.

	Nevertheless, after careful consideration, I am convinced that growing disparities 
between the access rates of rural, rate-of-return and other, price-cap carriers should be 
addressed sooner rather than later.  These disparities can create problems in conjunction 
with our rate averaging and rate integration policies, which require IXCs to charge rates 
in rural and high cost areas that are no higher than rates they charge in urban areas and to 
charge comparable rates in each State.  See 47 U.S.C.  254(g); Policy and Rules 
Concerning the Interstate, Interexchange Marketplace, Report and Order, 11 FCC Rcd 
9564,  9, 20, 52.  As a result, IXCs that serve rural and high cost areas must charge 
higher rates to all of their customers than IXCs that do not serve such areas.  As rate 
disparities grow, the pressure for IXCs to stop serving rural and high cost areas also 
grows; IXCs will either lose money serving these rural areas or will be forced to charge 
higher rates in low cost areas than their competitors.  Without Commission action, I fear 
that these rate disparities may lead IXCs to exit rural and high cost markets altogether, 
causing great harm to rural America.  This Order, in reforming the access rate structure of 
largely rural rate-of-return carriers, reduces these growing disparities and begins to 
address this problem.

	I also note that I have some concerns with the Commission's policy - adopted 
long before this Order - of using universal support as a means of creating "competition" 
in high cost areas.  I am hesitant to subsidize multiple competitors to serve areas in which 
costs are prohibitively expensive for even one carrier.  This policy may make it difficult 
for any one carrier to achieve the economies of scale necessary to serve all of the 
customers in a rural area, leading to inefficient and/or stranded investment and a 
ballooning universal service fund.  It is thus with real pause that I sign on to an Order that 
may further this policy.

	I will continue to examine these issues as well as the other concerns raised 
regarding the impact that our policies may have on rural America.  And, in that vein, I am 
committed to evaluating these issues and remain receptive to making significant changes 
as we move forward.