CONSUMER/DISABILITY )

TELECOMMUNICATIONS ADVISORY )

COMMITTEE (CDTAC) MEETING )

 

Pages: 1 through 294

Place: Washington, D.C.

Date : August 6, 2001

Before the

FEDERAL COMMUNICATIONS COMMISSION

Washington, D.C. 20554

 

CONSUMER/DISABILITY )

TELECOMMUNICATIONS ADVISORY )

COMMITTEE (CDTAC) MEETING )

 

Commission Meeting Room

FCC Headquarters

445 12th Street, S.W.

Washington, D.C.

Monday,

August 6, 2001

 

PARTICIPANTS

SHIRLEY ROOKER, Committee Chair

From the FCC:

MARTHA CONTEE

MARGARET EGLER

SCOTT MARSHALL

KAREN PELTZ STRAUSS

Speakers:

ANITA CHENG

MICHAEL J. COPPS

MARSHA MacBRIDE

KEVIN J. MARTIN

K. DANE SNOWDEN

From Industry and other Interested Organizations:

RAYNA AYLWARD

MICHAEL BAER

BRENDA BATTAT

GIL BECKER

DANIEL BRENNER

JULIE CARROLL

ROBERT CHROSTOWSKI

 

PARTICIPANTS, Cont'd

From Industry and Other Interested Organizations:

MICHAEL DelCASINO

RICHARD ELLIS

MARICELA GALLEGOS

JOSEPH GASKINS

LARRY GOLDBERG

SUSAN GRANT

JUDITH HARKINS

DAHLIA HAYLES

JIM HOUSE

STEVE JACOBS

VERNON JAMES

MATT KALTENBACH

KAREN FULLUM KIRSCH

ANDREW LANGE

NANCI LINKE-ELLIS

MILTON LITTLE, JR.

MARIE LONG

PAUL LUDWICK

KEN McELDOWNEY

BELINDA NELSON

SHELLEY NIXON

SUSAN PALMER

DAVE PIERCE

DAVID POEHLMAN

SHIRLEY ROOKER

LAURA RUBY

PAUL SCHROEDER

BOB SEGALMAN

JIM TOBIAS

MICAELA TUCKER

JUDITH VIERA

KAREN WALLS

ANDREA WILLIAMS

 

P R O C E E D I N G S

(9:05 a.m.)

MS. ROOKER: Thank you so much for coming to Washington in this wonderful weather.

(Laughter.)

And we particularly did a good job for you this week. It's really going to be bad tomorrow, you think today's bad, especially for those of you who come from the West Coast who delight in their lovely weather, well, we're punishing you.

(Laughter.)

Actually, it's really astonishing that for a meeting in August that we have so many people attending today and we thank you.

There have been a few changes that we've had since our last meeting. Lyla Laux is no longer with Quest. We thank her for the time that she served on the committee. She's starting her own business and we wish her luck there.

Micaela Tucker is not with us today but she's joining us by conference call. Jim Tobias is going to Chair the Disability Subcommittee Meeting today in her absence.

Now I would like to tell you something. The Disabilities Subcommittee has really been busy this summer and they've made a great deal of progress in arriving at their list of priority issues for the committee, for their proposal to the committee. Now if I'm being too subtle --

(Laughter.)

-- that is a hint for the other two subcommittees that you have some work to do. So I've never been noted for subtlety.

(Laughter.)

We have two newly appointed FCC Commissioners who will be joining us this morning, Commissioners Michael Copps and Kevin Martin. Commissioner Abernathy is traveling and Chairman Powell is just back from travels and we're hoping that he'll be joining us today if he has an opportunity.

Also, we're delighted to have Dane Snowden here. This is his first meeting as a Consumer Information Bureau Chief and we're delighted to see him. He'll be spending most of the day with us unless the Chairman calls.

Now let's just -- I think if the Chairman calls he'll probably leave. Now I'd like to go around the room and let the people at the table just very briefly say your name and the organization or company that you represent. I'm Shirley Rooker and I'm the President of Call For Action.

MS. STRAUSS: Karen Peltz Strauss, Deputy Bureau Chief of the Consumer Information Bureau.

MS. EGLER: Margaret Egler, Associate Bureau Chief, Consumer Information Bureau.

MR. BRENNER: Daniel Brenner, National Cable and Telecommunications Association.

MS. AYLWARD: Rayna Alward, Executive Director of the Mitsubishi Electric America Foundation.

MR. BECKER: Gil Becker, National Association for State Relay Administration.

MR. SCHROEDER: Paul Schroeder, President of Alliance Republic Technology.

MS. NIXON: Shelley Nixon from Cabrini College.

MS. NELSON: Belinda Nelson, Gila River Telecommunications.

MS. PALMER: Susan Palmer, Cingular Wireless.

MR. TOBIAS: Jim Tobias, Inclusive Technologies, Customer Accessibility Solutions and the International Coalition of Access Engineers and Specialists.

MS. RUBY: Laura Ruby, Microsoft.

MS. CARROLL: Julie Carroll, The Information Technology Technical Assistance and Training Center.

MR. ELLIS: Rich Ellis from Verizon.

MR. JACOBS: Steve Jacobs from Ideal at NCR.

MS. WILLIAMS: Andrea Williams from CTIA.

MS. LINKE-ELLIS: Nancy Linke-Ellis from TRIPOD Captioned Films.

MR. GOLDBERG: Larry Goldberg from Media Access at WGBH.

MR. CHROSTOWSKI: Rob Chrostowski representing TIA.

MS. BATTAT: Brenda Battat from Self-Help for Hard of Hearing People.

MR. LANGE: Any Lange from CSD.

MS. KIRSCH: Hi! I'm Karen Kirsch from the National Association of Broadcasters.

MR. KALTENBACH: Matt Kaltenbach, Ericsson.

MR. SEGALMAN: Dr. Bob Segalman, Speech-To-Speech.

MR. BAKER: Chris Baker with AARP,

MS. WALLS: I'm Karen Walls with TRAC, Telecommunications Research and Action Center.

MR. McELDOWNEY: Ken McEldowney from Consumer Action.

MR. GASKINS: Joe Gaskins from ConnectBid.

MS. GRANT: Susan Grant, National Consumers League.

MR. DelCASINO: Mike DelCasino, AT&T.

MR. SNOWDEN: Dane Snowden, FCC.

MR. MARSHALL: Scott Marshall, FCC.

MS. ROOKER: Thank you and welcome.

I would like to thank some people for today's meeting, Susan Palmer and Cingular Wireless for their contribution making it possible for us to provide you a continental breakfast and lunch today.

Also thanks to Steve Jacobs and NCR Ideal because their contributions towards travel expenses for some members of our committee have made it possible for those people to attend.

Sprint also very generously contributed teleconferencing services. Their representatives are not with us today, but they made it possible for us to have several telephone calls to develop the agenda today. So if you don't like the agenda you can shoot Sprint.

The conference calls to the three subcommittee Chairs, Micaela Tucker, Andrea Williams and Ken McEldowney were very helpful in putting together today's agenda. You can also blame them.

We would also like to thank Andrea and Ken for their leadership with respect to the discussion that we're going to have today on universal service. Andrea has provided written -- some comments that she has received from members of the committee on the issue that will be passed out when we start the discussion.

We're being very ambitious for a new group in that we're trying to reach a consensus and make recommendations to the Commission on Universal Service Fund. That's the good news. The bad news is that we're going to have to do it today because of the time restraints on the Commission. I don't know whether that will be possible or not but certainly we have our work cut out for us.

So, consequently, we have a very tight agenda today. I plan on using my gavel if necessary, not to hit you but just to hit this lovely little thing in front of me. Now I would also like to thank some people who have done significant work on this committee for -- Karen Peltz Strauss, who's the Deputy Bureau Chief of CIB; Janice Wise for her marvelous work in the logistics and putting things together for us; and there's so many FCC support staffers, too many to mention, but thanks to all of you. You've done great work and made it possible for us.

I'd also like to recognize Margaret Egler, who is the Associate Bureau Chief for Policy. We are pleased that she's joining us today and, of course, my special thanks to Scott Marshall, who is such a delight for me as the Chair to work with.

Scott is going to fill us in on today's meeting.

MR. MARSHALL: Thank you very much, Shirley. Good morning and welcome to everyone.

I was given the awesome task of giving you the details about the important things about this meeting. We heard you last time and we're fully aware that there wasn't enough coffee during the morning.

So since this group obviously runs on caffeine we will have a coffee replenishment mid-morning and our box lunch, again courtesy of Cingular, at noon. Hopefully, then we'll be very much ready to go for developing recommendations on universal service this afternoon and then finishing our business late in the afternoon.

Restrooms, should you need them, are to my right out of the door, the far most right to my right door of the Commission room just straight across the hall, a few steps forward, make a left and you have both men's and women's rooms there.

Similarly, if you should need a telephone, right out that same door and make a sharp left and go down the hallway and you'll find public phones including a phone that's TTY-equipped, which I didn't test on Friday and Janice, who's my detail person, please remember to hit me over the head if I don't do that next time.

If you have any needs during the day just ask one of us. If you need any assistance with getting lunch, getting something read. As Shirley indicated, we're going to be processing a lot of information here today and we want to make sure that all of the accommodations run well and that your needs are met so that we can have a very productive meeting. Thanks a lot.

Shirley?

MS. ROOKER: Okay. Thank you, Scott.

It gives me great pleasure to introduce Dane Snowden to you. I had the pleasure of talking with Dane earlier last week and I think he impressed me greatly. He's the new Chief of the Consumer Information Bureau. He's really jumped into his job. His goal is to represent the issues of consumers.

Before joining the FCC he was Vice President of missionfish.com. He was also Vice President with America's Promise and he has a long list of impressive accomplishments, but why don't we let him speak for himself? So join me and welcome Dane Snowden.

(Applause.)

MR. SNOWDEN: Thank you, Shirley.

They told me that I was supposed to speak from here that's why I'm following my directions explicitly.

(Laughter.)

On behalf of the Commission and the Consumer Information Bureau I want to welcome you here today for the second meeting of the Consumer/Disability Telecommunications Advisory Committee.

I thank you for coming and for your time both here today and for the time you give when you are in meetings outside of our scheduled meetings here. Our heartfelt thanks are in order to Shirley, who has been the Chair of this Committee, for her continued leadership, and to Scott Marshall, who among many things has kept me in line and has also pulled together a great team of FCC staff to ensure that we have a successful meeting today. So thank you both for that.

I'm happy to acknowledge two of our newest Commissioners who will be joining us today, Commissioner Copps and Commissioner Martin. Their participation underscores the importance of the Committee's work in a way that little else could. Their participation also includes and indicates a strong signal that consumer issues are a central concern to them specifically and to the FCC as a whole.

During the inaugural meeting in March it became especially clear that the Commission should regularly and deliberately make information available to the community and to this committee, as well, and to the general public.

Since that meeting we have created a consumer information e-mail service for the public and have also created a special list for the Advisory Committee, to whom we now forward a variety of informational materials including announcements, articles, speeches, press releases and public notices.

To prepare for this second meeting there have been two teleconferences, as Shirley mentioned, with the subcommittee Chairs to develop the agenda, which include several items that the Committee requested back in March.

I should also mention that one of the advisory subcommittees, as Shirley said also, the Access by People With Disabilities group has already established a list of priorities to govern its discussions and activities. If I could join Shirley, I will put my pitch in to encourage the other two subcommittees to do the same.

Of course, the essence of an Advisory Committee like this one is two-way communication. We will continue to ask for your ideas and comments on significant issues before the Commission and, in turn, we will consider your recommendations when we make policy.

It will be our goal to also provide you with the flow of information you need to understand the Commission, our process, and to keep you up to date on areas requiring subject matter expertise.

On today's agenda, Anita Cheng, who is the Assistant Chief for Accounting Policy Division in the Common Carrier Bureau, will provide an overview of proposals for contributions to the Universal Service Fund or USF. It is our plan to have subject matter experts like Anita from the Commission available to provide current information on significant topics at every meeting.

In addition, Marsha MacBride, Chairman Powell's Chief of Staff, will join us to outline the Chairman's consumer policy and other challenges facing the Commission.

Finally, I want to emphasize our plans in the Consumer Information Bureau in the coming months to proactively work with a broad group of consumers not just the telecommunications professionals inside the Beltway, but the average American whom the Commission is here to serve.

We intend to broaden our reach to include all consumers, even those who up to now have only seen the letters "FCC" somewhere on their telephone bill or on the metal tag of their computers. We want everyone to know who we are, what is available to them and what we as an agency can do to serve the public interest. In other words, we want to widen our tent to connect and share important information to the consuming American public.

Right at the top of my list of things to accomplish this year is to make the abstraction of the Universal Service Fund into a concrete reality for people who are entitled to take part in the USF lifeline and link-up programs but who do not know what the programs are or how to take advantage of them. You can be assured when you make your recommendations today we'll be listening.

With the converging of so many technologies today coupled with the competitive marketplace it will be essential that the Consumer Information Bureau have an aggressive outreach focus to our colleagues within the FCC, the industry, the states and, of course, consumers themselves.

It is also important that we increase our policy focus within the Bureau. I will count on this Advisory Committee to help me in accomplishing this plan.

Before I turn the proceedings over to Commissioner Copps I want to mention that I spoke with both Chairman Powell and Commissioner Abernathy, who couldn't be here today. They send their regrets and are confident that their fellow Commissioners will convey the importance, all five Commissioners consider your contributions to the Advisory Committee.

Commissioner Michael Copps joined the Commission earlier this spring and he brings with him a wealth of experience in various areas, especially commerce. Commissioner Copps was Assistant Secretary of Commerce for Trade Development at the Department of Commerce before coming to the FCC and he has emphasized many times the value he perceives in partnerships between government and industry.

It is my pleasure to introduce Commissioner Copps.

(Applause.)

COMMISSIONER COPPS: Thank you, Dane, and good morning.

On behalf of Chairman Powell and all of the Commissioners and all of staff I want to welcome each and every one of you here to the FCC. Normally I really do prefer to sit at the table but since Shirley was threatening everybody with being physically damaged with that gavel I guess I'm happy I'm up here.

(Laughter.)

I'm looking forward to working with this group and working with the other Advisory Committees to the FCC during my tenure here. I don't say that lightly. I am a huge believer in the value of partnership, stakeholder outreach, private sector/public sector, working much more closely together.

I did have the privilege at the Department of Commerce to have responsibility for all of our 17 industry sector advisory groups there including information technologies and e-commerce. We had four industry functional advisory groups and the input of those groups was absolutely critical to the work we were doing in international trade.

I can't imagine what a North American Free Trade Agreement or an Uruguay Round or any trade agreement would look like if it was just left to government to negotiate it without the input of business, without the input of all of the stakeholders. So I think you're doing critical work and I want to be a part of that.

I hope we'll get to see the product of your deliberations as they unfold. I know you report directly I think to the Chairman but I trust that all of the Commissioners have access to whatever you're doing and full entre to what you are doing.

I guess I'd just offer one piece of advice, this is such a huge multi-faceted, multi-dimensional industry as I am finding more and more every day. Even the items of jurisdiction under this advisory group are so widespread, so multi-faceted, that you can't address them all.

So my word of advice I guess to the group and to the working groups that constitute the task force is to make sure you priorities very carefully, don't bite off too much, pick a couple of things to do each year, two or three or four or whatever it is, get them done, focus on those. Keep the spotlight on those. I think it's much more effective that way than trying to address everything and not being able to make too much progress.

I very much like the focus particularly of this advisory group. I like the outreach to non-traditional stakeholders. Non-traditional stakeholders can sometimes, very frankly, complicate the life of an advisory group, make the achievement of consensus occasionally more difficult. But in the final analysis, all Americans are stakeholders in this great telecommunications revolution. We need all of their input. We need all of their best thinking and advice and counsel.

So I'm happy to see that we have representation out here from not only traditional stakeholders but non-traditional stakeholders, as well. Frankly, the way some parts of industry wail and flail at each other I don't know that adding some non-traditional voices really complicates matters all that much.

(Laughter.)

So I'm delighted to see that. I very much like the focus on disability issues. The first speech and the first outing I made as Commissioner here about five or six weeks ago was to go to Sioux Falls, South Dakota for the telecommunications for the deaf and communications services for the deaf meetings out there.

I was tremendously impressed at what I saw and I was also kind of hit over the head when I found out that the unemployment rate among the deaf and hard of hearing was something in the order of 75 percent, which I found just about incomprehensible.

But I was tremendously impressed just at seeing the -- two things I guess impressed me; (1) was the determination and the commitment of the community to get some changes made and to make sure that all Americans were taking part in the telecommunications revolution; and (2) was the promise of the new technology that I saw out there which I think just has so much potential for improving the lives and allowing the maximum input of the talents of the deaf and hard of hearing to this country of ours. So I was really moved by that experience.

I would just note that in October I think -- isn't it Karen? October 10th?

MS. STRAUSS: Yes.

COMMISSIONER COPPS: When we're having the conference and the exposition here at the FCC. I'm sure many of you will be back for that.

What I told the folks out in South Dakota was when you come don't come alone, bring some of your community leaders with you. Come a day or two ahead of time and go up to the Hill. Write them before you come and ask your Congressman and Senators or their staff people to come down here and listen to you, to get an understanding of your problems and your issues and the solutions that you're talking about and let them see the technology, let them see what they ought to be encouraging and creating an atmosphere to encourage.

So I think that could be a red letter day, a really big day, for that particular community and for all the work you're doing in consumer outreach if we really plan that right leading up to the 10th of October and get folks down here and really publicize what we're doing.

So much of this is a question of outreach, it's how do we get the word out? How do we get the word of the problem out? How do we get the word of the solutions out? I can think of no better group to come up answers to those problems and challenges than this particular one.

We're delighted to have you here. You have a lot of people working very hard in this Commission with Karen and her group and people throughout and all of the Commissioners, too, I think who want to be of assistance. So I'm looking forward to working with you. I'm delighted you're here today and I hope I'll have the benefit of seeing you many times in the months and years ahead.

Thanks a lot.

(Applause.)

MR. SNOWDEN: Thank you, Commissioner Copps.

Right on schedule is Commissioner Martin. I should mention that Commissioner Tristani, who is very familiar to this group here, was unable to join us and she has been, as many of you all know and everyone in the Commission, a strong supporter of this advisory group in the work that this advisory group has been doing for the past couple of months. Actually before this was even an advisory group, she has been a strong supporter.

Commissioner Michael Copps has just joined us. He has joined the Commission as -- excuse me -- not Michael Copps -- Commissioner Martin has recently just joined us this past spring having recently been at the White House as a Special Assistant to the President for Economic Policy.

He is a familiar face around the FCC having served as an advisor to former Commissioner Furchgott-Roth. It is my pleasure to introduce Commissioner Martin.

(Applause.)

COMMISSIONER MARTIN: Good morning everybody.

I just wanted to really come and welcome everyone here and introduce myself and tell everyone how much I appreciate all of the work that they are doing and how important it is the role that you all play.

The issues of making sure that everyone has as much access to telecommunications as possible is one that everyone here at that Commission is committed to. I think it's important that the guidance that you all provide for us and how we can be approaching the issues is critical to our implementation of that.

I know that everyone, as I said, at the Commission is committed to it. This is one issue in which there isn't any divisions among the Commissioners, it's only a question of what things we can do to try to accomplish that.

So, again, I really just wanted to come today to make sure I had the opportunity to introduce myself and to thank you all for all of your efforts and hard work. Thank you.

(Applause.)

MR. SNOWDEN: I'm sure on behalf of the Advisory Committee we thank both of you for taking time out of your schedules. We know that you have a busy day today so we appreciate the time you have given us and we look forward to working with you throughout the coming months as time goes on.

With that, I turn the meeting back over to you, Shirley.

MS. ROOKER: Thank you, Dane. Thank you, Commissioners Copps and Martin for joining us this morning.

Let's go to our minutes. The next agenda item is the minutes of the March meeting, but before we get to that Karen Peltz Strauss will give you a brief overview of the meeting that was referred to by Commissioner Copps.

MS. STRAUSS: Thank you, Commissioner Copps and Commissioner Martin for --

MS. ROOKER: Not on mike.

MS. STRAUSS: I'm on now, okay. Thank you for your remarks and thank you, Dane.

I just wanted to let you know that on October 10th, as Commissioner Copps mentioned, we are going to be having another forum at the Commission, a sort of forum/conference/workshop/exhibition on telecommunications relay services.

The day will be devoted to talking about outreach for 711 access. As you know, that's access to relay services nationwide through the 711 digits, as well as quality issues, as well as new technologies including technology that involves the use of captioning and relay services, a kind of a joint venture.

IP relay, that's internet telephony relay. We're still exploring the different technologies that we want to look at but one of the things that we will definitely be having is an exhibition hall with 25 to 30 exhibitors with all kinds of new technologies. Not only relay service technologies, but various technologies to enhance telecommunications accessibility.

We welcome you all and hope that as many of you as are here can attend and bring your friends and colleagues. Thank you.

MS. ROOKER: Thank you, Karen.

I would like to first make sure that the phone is working. We have Kathleen, David and Micaela on the phone. Are you there?

MS. TUCKER: Yes. This is Micaela.

MS. ROOKER: Hi, Micaela.

Anybody else on the phone?

(No response.)

MS. ROOKER: Not yet? Okay. We hope they'll be joining us a little bit later.

But at any rate, the next item of business is the minutes of the March meeting, which I believe they have been mailed to you and they're also in today's packet.

At this time I would entertain any suggestions, amendments, or what have you to the minutes.

Yes, Steve?

MR. JACOBS: I'm not on. Now I am. Just one minor correction. I believe in the beginning of the notes it mentions -- it refers to ADA where it should refer to Section 255.

MS. ROOKER: Okay.

MR. JACOBS: I don't have my minutes in front of me but --

MS. ROOKER: Okay.

Brenda?

MS. BATTAT: It's on page two, paragraph one, two, three, four down.

MR. JACOBS: Thank you.

MS. BATTAT: Section 255 of the ADA instead of Section 255 of the Telecom Act.

MS. ROOKER: Okay. Do we have that --

MR. JACOBS: Right. Just a minor correction. I have it.

MS. ROOKER: All right. That's been duly noted.

MR. JACOBS: That's it.

MS. ROOKER: Do we have any other comments?

A PARTICIPANT: Yes. Is there a prize for someone who finds a typo?

(Laughter.)

MS. ROOKER: Typos? My goodness! There is. We're having a competition later.

(Laughter.)

A PARTICIPANT: I believe on page six at the beginning of the first paragraph is that -- are we talking about conservation or conversation?

(Laughter.)

MS. ROOKER: Okay. Do we have any other comments on the minutes?

Yes, Susan?

MS. GRANT: I think there was some discussion about wanting some feedback from the Commissioners to the recommendations and discussions that we have at the meetings.

I note that in the minutes that we have in the meetings I note that in the minutes it refers to the possibility of having meetings with the Commissioners but in addition to that I believe that the suggestion was made that if there was some way of getting their reaction it wouldn't necessarily have to be a meeting with them to accomplish that. That it would be very helpful for us and I don't see that reflected here.

MS. ROOKER: Okay.

We have three items; a typo, a reference to the ADA Section and to the feedback from the Commissioners on Susan. I think those things probably need to be put in the form of a motion to amend the minutes.

Do I hear a motion?

A PARTICIPANT: So moved.

A PARTICIPANT: So moved.

MS. ROOKER: Second?

All right. With those amendments do we hear a motion to accept the minutes?

A PARTICIPANT: So moved.

MS. ROOKER: Okay. Seconded. All say aye.

ALL: Aye.

MS. ROOKER: Any opposed?

(No response.)

Okay. We got the minutes through. Thank you.

Now to another order of the item of business, which is the Committee membership.

You're probably aware that when this Committee was being formed that I think there were 80 some individuals and groups and companies that applied for membership on the Committee and the process ended up with 40 people becoming members. That was done some time ago.

There have been three applications for membership on the Committee. They are U.S. Telecomm Association, the League for the Hard of Hearing and Siemans. It's our responsibility -- I'm sorry --

A PARTICIPANT: Sorry.

MS. ROOKER: Oh, excuse me.

It is our responsibility to recommend to the Chair whether we -- the Chairman whether we think these applications should be accepted. There are a number of things to consider, size, the timeliness of the nominations or the applications and also keeping in mind that we're here for two years. When those two years up the Committee will be reformed.

So, at any rate, I put those things out to you but what I would like to do is open the floor for discussion to hear from the various panel members, Committee members.

Ken?

MR. KALTENBACH: Yes, Shirley. Thank you. Am I on or off?

A PARTICIPANT: You're on.

MR. KALTENBACH: I am? Okay.

Yeah, I mean I think that certainly we would benefit from sort of the comments from the folks who -- you know, who applied to be on the Committee as well as we probably would have benefitted from the 35 or 40 groups and companies that applied before who wanted to get on.

I guess what my real concern here is that I think that the Commission staff and the Commission itself went through a very lengthy process in terms of soliciting people who wanted to apply to be on the Committee and then a selection process to end up with a group that's sort of really very well -- you know, sort of reflected the various interests.

I guess I would, upon reflection, oppose adding new groups right now especially since, in essence, there's a waiting list of some 35 entities that applied by the deadline to be on this Committee. I think that to accept these three new groups without, you know, accepting the ones that are on the waiting list I think would be inappropriate.

So I think that my suggestion I guess to the Commissioner would be that we should keep the Committee membership as it is. If any vacancies occur that we could consider replacing them from folks who are on the waiting list, but certainly two years from now when it's reconstituted not only the people on the waiting list but the people who have now applied could be considered for membership.

MS. ROOKER: Okay. Thank you, Ken.

Larry?

MR. GOLDBERG: I guess I'd like to provide a counterpoint to that in that I know quite well at least two of the members who have -- two people who have asked to join the Committee and I think we know from many of us who are on such Advisory Committees a lot of the work is done by collection of five or six very energetic individuals with less occasional contributions from many others.

So the organizations that are looking to join in are also individuals who by their own histories and experiences could contribute quite a bit to the work this Committee is doing. I would actually recommend being more inclusive and opening up to those applicants having made the effort to come here, want to join in. I think they'll provide some additional energies to the work we're doing.

MS. ROOKER: Okay. Thank you.

Jim?

MR. TOBIAS: I'm going to try to split the difference between Ken and Larry and see if I can slide in there. I think I'd like to thank the Chair for recognizing the contributions that we've had electronically on the disability subcommittee.

I'd like to turn the focus away from formal membership on the Committee to the view that what we should be doing is opening up the proceedings of the Committee and the ability to contribute much more broadly and especially using electronic media to do that.

I'd like to see the existence of this Committee and its subcommittees be disseminated widely and requests for comments from the public actively solicited. You know, there are many of us who don't have the opportunity to live in the charming weather that the Washington, D.C. area affords us and they have, you know, many useful and relevant things to say.

So I would -- I guess I would speak against changing the size or the membership of the Committee,but as I think we've already seen from some of the people who are applying, more actively involve them in the activity of the subcommittees and the Committee as a whole.

MS. ROOKER: Thank you, Jim. Some interesting thoughts.

Susan?

MS. GRANT: That is an interesting idea, to include non-members of the Committee where they can be helpful to the subcommittees in their work.

I have an overall concern about the makeup of the Council even as it stands now. There are -- there's a majority of one in terms of consumer/disability versus industry. I don't mean any offense to the present or potential industry members, who I think make really valuable contributions to this council, but it is the Consumer and Disability Advisory Council.

I think that it should have a stronger majority than it even has now of consumer and disability groups, especially since it appears that we're going to be voting on policy issues. So my objection to these applicants is that it would shift the balance of the Committee.

MS. ROOKER: Okay. Thank you, Susan.

Do we have other comments? Who have we got down here?

Paul?

MR. SCHROEDER: Thanks. Paul Schroeder. I would concur with both of these comments. I would very much like to see us work to include more voices in our subcommittee deliberations and I strongly agree with Susan, that we're already -- if I were looking to rebalance the council I probably would want us to do an overall examination of that and look at what groups are adequately represented and which ones perhaps aren't.

Much as I know these individuals, at least two of them would bring a great deal to our deliberations as a council. I know they would also bring a great deal to the subcommittees, which is I think where we can most make use of them.

The reality is that in terms of people and representation those concerns are adequately represented on the council at least in numbers. Now we will decide whether those people are adequate representatives of those interests. But they're here and I think if we're going to start looking at making recommendations to the Chair and the Commission about membership in the council we should probably do it on a more deliberate basis and take a look at what groups are adequately represented.

Do we have an adequate consumer and disability representations, for starters? Then what segments of the industry are not adequately represented here?

MS. ROOKER: Thank you, Paul.

Paul brings up an interesting point because we are required to have a balance on the Committee, so that is a consideration.

Also, one thing that Scott was reminding me that I would like to point out is that the LIST SERVS are open to everyone. If you want to be a member of -- be on the LIST SERV for any of the subcommittees you can do so. I think you only have to let Scott know and he's the magician who makes it happen.

So I would invite any of you who want to -- if you're on one subcommittee and you want to participate I've been -- I'm on all three. My e-mail's very busy, especially from the disabilities community subcommittee.

But at any rate, I would invite you -- keeping that in mind, anyone, you don't have to be a member of the Committee to participate in this LIST SERVS.

All right. Let's welcome more comments.

Rich?

MR. ELLIS: I find myself very conflicted here. At first glance I thought this Committee was too big to begin with even though with the all the great people around the table it's just a lot of people to discuss things.

So my first inclination was to keep the Committee membership where it was, but on further reflection, you know, speaking from the industry point of view, I think that the USTA membership application deserves some support and some consideration. USTA represents telecom companies small and large and I think they would bring a valuable perspective to our discussions here.

I agree with Susan that we would have a good mix of consumers but I also think it's good to have industry represented fully and USTA would bring balanced representation of the industry side.

MS. ROOKER: Thank you, Rich.

Karen was just reminding me, also, that anyone can participate in the subcommittee meetings, they are open.

So -- have I got that correct?

MS. STRAUSS: Yes.

MS. ROOKER: Yeah. Okay. So I want to make certain that we understand that nothing is closed, that it is open for anyone who wants to participate, so -- but that doesn't finish the issue here before us.

Now do we have other comments?

MS. O'REILLY: This is Kathleen O'Reilly. Could you tell me where on the agenda you are at this point?

MS. ROOKER: Yes. We're at the point where we're talking about the acceptance of three new applicants for membership to the Committee and we're just going around the room getting comments on that.

The three applicants are U.S. Telecom Association, League for the Hard of Hearing and Seimans.

MS. O'REILLY: All right. I'll wait for my turn. Thank you.

MS. ROOKER: Oh. If you have a comment, Kathleen, go ahead and make it in terms of the membership.

MS. O'REILLY: Yes. In reviewing both the original charter and the FACA statute and so forth and the definition of balance.

I guess the question I have is that given the mission of what is clearly designated a consumer and disability committee I had not expressed any concerns at the first meeting about the participants who were from industry because it was really clear from their participation that they brought to the table a technological expertise on issues related to equipment and very specific disability talent that we could very well benefit from.

My experience in the subcommittee was that those industry participants by their comments and by their votes seem to understand and be committed to the more narrow consumer disability goals of the Committee.

I'm, on the other hand, quite concerned about this application from USTA because I think it really challenges us to take a different look at what balance is intended to be and how we would navigate conflict of interest concerns because I would ask that at a minimum the USTA member or any other industry member who is not there merely because of their technological expertise on disability issues help us understand how they would be able to vote on issues where it may be in the interest of the consumer community -- you know, community or the disability community to take a particular position.

But that would be a position very much at odds with their own employer. So that is one approach to it.

Another approach is in my view the balance identified in the Telecom Act and balance is often interpreted by NIH committees and Justice Department committees is looking more for balance within the participation of that committee.

So, for example, this being a consumer and disability telecommunications committee I would say that the balance being strived for is a balance of consumer points of view and disability points of view to make sure all of the various disabilities are included and that the various consumer sectors.

So I would argue that at the front end it's questionable whether industry should have been brought into this Committee at all. But again, based on my very positive experience on that front from the first meeting my concern now is more narrow and I think it's something that is going to represent a real challenge to the Committee if we intend to be and hope to be effective.

MS. ROOKER: Thank you, Kathleen.

Yes, Bob Segalman?

MR. SEGALMAN: I want to echo Kathleen. I'm very concerned that the overrepresentation of industry on the Committee --

MS. ROOKER: You're not on the mike. I'm sorry. Let's see if we can get that fixed. It just went out. It was humming. Okay. Thank you.

MR. SEGALMAN: I'd like to echo Kathleen, that I'm very concerned about the overrepresentation of industry on the Committee.

MS. O'REILLY: I'm sorry. Who is speaking?

MR. SEGALMAN: Because it puts a big burden on the consumers and the disability people. We have to speak much more often and much louder to make sure that there is a balance. If we had more disability people it would be easier on those disability people. Thank you.

MS. ROOKER: Thank you, Bob.

Do we have other comments?

Susan Palmer?

MS. PALMER: I just -- okay. Am I up? Okay. Great.

I just wanted to approach this as a pragmatist. I do have concerns that the Committee is very large now. I also believe that the people who are applying are great individuals, they have a lot of background and I think that their work in a subcommittee would be fantastic.

In terms of consumer representation, I don't know a wimp among this group. So I'm hoping that people feel perfectly comfortable.

I would rather spend more time moving forward on issues. I'm concerned that if every meeting we're trying to add new people and we're trying to rebalance it it could become a powerplay and I don't want to be in that situation because I think we have good representatives who are committed to the issues here.

I do, however, want to echo Jim's encouragement for outside participants in the subcommittee. We know that that's where the majority of the work is done, but I don't want to come back every meeting and say, "Okay. How can we balance this in one favor or another?" I don't think that this is what this group wants to deal with.

So if we could -- you know, my suggestion is we keep the larger group as it is, that we keep the subcommittees as open. If people have concerns that they're not being balanced or there's too much push one way or another that we take responsibility for addressing that and raising the level of awareness for whatever group we're representing or on whatever side of an issue we have and move on.

MS. ROOKER: Thank you, Susan. Very provocative.

Andrea?

MS. WILLIAMS: I have been quietly sitting here listening to comments in terms of whether we should broaden the Committee, Advisory Committee; whether we should have one type of committee members more than the other.

I agree with Susan in terms of the purpose of this Committee is to advise. It is not a situation I don't believe where there would be powerplay. I decided to be on this Committee because I thought and CTI thought that this was going to be a Committee where there would be sharing of information.

It's a little -- I find it a little disconcerting to think that we can sit here around this table and discuss telecom issues and not have telecom industry representatives on the Committee in terms of the balance.

You know, for the last let's say 25 years it has been an us versus them, consumers versus industry. I think one of the things that we have found in the wireless industry is it doesn't have to be that way. It doesn't have to be us versus them. It can be a partnership that can work very, very effectively. Yes, we may not always agree, but there are areas that we can agree on and those are the areas that we should push forward as an advisory committee.

I know this afternoon when we talk about Universal Service Fund there may be areas where we're so diametrically opposed and in those areas we may never come to consensus. To be perfectly honest with you, I wouldn't want to waste the Committee's valuable time and efforts on that area where we are diametrically opposed.

But let's do spend the time on areas where we can come together with some consensus because at the end of the day what the Commission wants is advice, not just from consumers, not just from industry, but from all of the stakeholders.

For those areas where there can be consensus it makes the Commission's job that much easier that they only have to deal with the really, really tough issues.

In terms of rebalancing the advisory committee, I, too, agree right now. I had some concerns because this Committee is very large. I suggest that in terms of subcommittees that that, as everyone has noted, is where the work gets done and that those who have applied for membership consider being participants, active participants, on the subcommittees. Thank you.

MS. ROOKER: Thank you, Andrea.

Brenda?

MS. BATTAT: I also --

MS. ROOKER: It will turn on. Just --

MS. BATTAT: Is that working?

MS. ROOKER: Yes.

MS. BATTAT: I also support work on the subcommittee, particularly the three groups that have applied. The industry person has a tremendous amount of background in the whole Section 255 area and that's a very good example of where consumers and industry work together and learned a lot from one another. I really hope that that particular person will participate in the subcommittee because he can bring a lot of the background.

The other -- the league is a consumer stakeholder that maybe we don't have represented here, which is a service provider. I think most of the other consumer groups here are consumer grassroots organizations, but we don't have a service provider represented and the league would bring that perspective.

So I very much hope -- and USTA, of course, brings another perspective from the smaller industry telephone companies. So I really hope that they will actively participate. I don't see how we can get anybody else around this table if you decide to expand the Committee. Can you give us a little more --

(Laughter.)

-- a little more space?

MS. ROOKER: Yes.

Just a minute , Karen has a comment.

MS. STRAUSS: I just wanted to clarify that there actually are service providers on the Committee, the caption centered WGBH, and Maryland Relay. I might be missing any other -- any others, but there are at least those two.

A PARTICIPANT: National --

MS. STRAUSS: And Tripod Caption Films is also --

A PARTICIPANT: Yeah.

MS. STRAUSS: And CERT Communications Services for the Deaf.

MS. ROOKER: Matt?

MR. KALTENBACH: Matt Kaltenbach., Ericsson.

My comments primarily revolve around the process and the procedure I think this committee should be following to achieve its goals which is going to be to create an inclusive process for everyone.

My own personal feelings in terms of the numbers are that I don't see how this Committee could get any larger, at least from a steering committee perspective. I think that the existing number is adequate to accomplish its work goals and that the mission at hand is for us to all forge together as a steering and management committee to enact a process where we can include all of the others in this process.

I think that the structure, however, does need some flexibility and maybe that does occur more at the subcommittee level, as Andrea had pointed out.

Over two or three years of time there's going to be some form of a process we're going to create which is going to result in a productive environment where we generate our Committee's work. It's only in the process and the procedures that we're going to be able to document the methodologies we want to use, approve and manage those processes and move forward.

So I'd like to propose that the issues that we're bringing up here in terms of membership, the issues in terms of the participation, the roles and the rights of the people in both subcommittee and in the central committee should be -- would be best handled in a subcommittee, which is more administrative in context.

By taking those types of issues off-line, isolating them and giving them a separate authority then we could be more productive by not necessarily having to gel or consolidate those ideas or balances, but by simply reading the recommendations of that subcommittee we would be able to not just handle new admissions but also new procedural and process changes so that the Committee over a factor of two or three years could evolve in its precision and its effectiveness and its productivity.

MS. ROOKER: Okay. Thank you, Matt.

Ken?

MR. McELDOWNEY: Yeah. I guess it seems like we're moving toward a consensus here. I think I would -- I guess we move and make motions and things. I guess I would move that we recommend to Commissioner Powell that these three applications be denied, but noting that both they and the other entities on the waiting list are encouraged to take part on the subcommittee level through the LIST SERVS.

MS. ROOKER: We have a motion on the floor that we deny the membership, but encourage these applicants to participate in the subcommittee process on the LIST SERVS and so on.

I guess I need to recognize that motion and ask if that's -- there's a second to it.

A PARTICIPANT: Second.

A PARTICIPANT: Second.

MS. ROOKER: Okay. Then I think we'll put the motion to a vote.

MS. O'REILLY: Could I raise a question before you put that to a vote? I was not aware that there was a motion on the floor.

MS. ROOKER: Okay.

MS. O'REILLY: Has there been any discussion about the distinction between voting and non-voting at the subcommittee versus the full committee level?

My confusion is that if the subcommittees are going to be bringing recommendations to the full committee is that somewhat a distinction without a difference then?

MS. ROOKER: I can't answer that question.

MS. STRAUSS: I think I can answer it.

MS. ROOKER: Karen will answer that.

MS. STRAUSS: At least I can take a stab at it. The way it works is that the subcommittees within the subcommittees can decide, as you just said, to bring an issue to the full committee. However, if you're not a member of the full committee then you do not have a vote.

So, in other words, the subcommittees can bring any suggestions or recommendations to be final to the full committee but then you have to be an actual member, appointed member or designated member, of the full committee in order to have a vote. Does that answer your question?

MS. O'REILLY: It does and it satisfies me. Thank you, Karen.

MS. ROOKER: Okay. Matt, you have a follow-up comment?

MR. KALTENBACH: As a point of order I think before we vote on this motion we should open the floor up for discussions on the motion.

MS. ROOKER: Okay. You're absolutely right.

Who would like to discuss the motion? Who do we have?

Rayna?

MS. AYLWARD: I'm not sure this is directly related to the motion itself, but I did want to make sure that a certain point of view that came out in this discussion was addressed and that I think is something I've heard in many different fora from the view of the disability community versus -- and I say the word "versus" industry.

I'm speaking from the point of view of sort of straddling both fields because I represent a foundation, a charitable foundation, that works in the disability field, but it's also sponsored by a corporation in the telecommunications field.

I would think that we need to keep in mind that what we are about here is what is achievable? We may have ideals and goals and we may share them, but we're also dealing in the reality of a market economy and companies that need to be able to stay alive. So I don't think it's necessarily an us versus them in that there's a definite viewpoint on the part of any industry group in saying, "You know, we want to get away with the least possible."

But just to keep in mind that whatever we come up with here, the FCC in its strongest mandates can only go so far in making change. What we want to do is to really encourage more than just strict compliance with the law, we want to encourage an openness and an actual proactive attitude on the part of industry which I think this gives us a unique forum to be able to discuss.

So I would hope that there is not -- that the disability representatives here do not feel that they're sitting at all on the other side of the table from the industry. I think my industry colleagues would agree with that.

By the way, there are people around the table that are not just representing their companies but are individuals very committed to what we're talking about and they are in the position to be leaders in the field.

MS. ROOKER: Thank you. Do we have other comments on the motion? Vernon?

MR. JAMES: Yeah. I've got a concern regarding subcommittees and its makeup. I'm looking at a subcommittee that may be --

A PARTICIPANT: I'm sorry. Can people --

A PARTICIPANT: Who are you?

MS. ROOKER: Vernon James.

A PARTICIPANT: Vernon James.

MR. JAMES: I didn't realize I needed a mike.

(Laughter.)

Good morning. My name is Vernon James and I;m with the San Carlos Apache Tribe. I represent the Health and Human Services Department for the tribe. I'm the Executive Director there. I also Chaired the San Carlos Apache Telecommunications Utilities, Incorporation.

My concern is with the subcommittee and a comment made about having telecommunication representatives from the industry at this subcommittee. I'm a little concerned that there may be too many representatives at that subcommittee and may be overpowering those of us who represent the disability consumer viewpoint. I'm a little -- again, a little concerned. When -- I don't know -- maybe there shouldn't be that concern but I needed to reflect that, I needed to say this. Thank you.

MS. ROOKER: Thank you very much. Further comments?

MR. KALTENBACH: In terms of comments made to the -- this is Matt Kaltenbach, Ericsson. I'm sorry.

In terms of comments on the motion on the floor, I'm in favor of actually denying the motion in lieu of creating a secondary motion which would push this into an administrative subcommittee which, of course, would require the creation of an administrative subcommittee.

(Laughter.)

MS. ROOKER: Okay.

MR. KALTENBACH: But I think that the fact that this committee at this juncture in its foundling stages maybe shouldn't be taking such actions in terms of inclusiveness or exclusiveness, but more in terms of procedures and points of order to make the process start to function and work.

By delegating these issues to a subcommittee we would have a process where we could handle these issues, take them off the plate and focus more on telecommunications issues.

MS. ROOKER: I believe that we'll have to take a vote on that motion before we can consider yours. Am I correct, procedurally?

MR. KALTENBACH; And I think that was going to be my second motion. My second motion was basically to set up an administrative thing that I had an idea for but let's --

MS. ROOKER: Okay.

MR. KALTENBACH: -- let's get this one out of the way.

MS. ROOKER: We had another comment.

Belinda has a comment. We're going to have to come to some resolution here shortly.

MS. NELSON: Right.

MS. ROOKER: Belinda, your comment will be the last comment.

MS. NELSON: Thank you, Shirley. This is Belinda Nelson from Gila River Telecommunications in Arizona.

I am sitting on a fence I guess, so to speak, because I do represent the unserved and the undeserved population of America, but also as a general manager for a telephone company.

Many times at my local level I'm both trying to educate the consumer, my subscribership and also explain, you know, the issues that a telecommunications company faces in serving these consumers.

So what I see here happening at that meeting happens at my home many times, but I do know that USTA has represented subscribers very well. In fact, they did a campaign and inquiry and survey on enhanced lifeline among their membership and they're very proactive from a subscriber standpoint. So I do have to say that on behalf of USTA. Thank you.

MS. ROOKER: That you cannot vote both ways.

(Laughter.)

All right. All right. I think we have a motion on the floor which has been discussed, that motion is to vote to not accept these applications but to make the recommendation rather to the Chair -- the Commissioner that these applications not be accepted but that they participate in the subcommittee process. Am I -- is that stated accurately?

A PARTICIPANT: Yes.

MS. ROOKER: All right.

A PARTICIPANT: Wait a minute. Wait a minute. They don't have votes.

MS. ROOKER: And they don't have votes.

A PARTICIPANT: On the full committee.

MS. ROOKER: On the full committee. But they will have full input and access to LIST SERV. Okay. That is the motion that has been made. I believe it has been seconded, is that correct?

A PARTICIPANT: Right.

MS. ROOKER: All right. So now we're going to put a vote. I would ask for a show of hands for all people who are members or the alternates representing the Board. If you're an alternate or the member, one vote for each membership.

We will count it and -- so now we will have the vote for those in favor of the motion to deny membership, which is it? Okay. We're going to have somebody help me count.

MS. GRANT: And, Shirley, you're going to have to ask on the phone, as well.

MS. ROOKER: Yes. And Kathleen and Micaela?

MS. O'REILLY: Mm-hmm.

MS. ROOKER: You all are there? Which way do you want to vote?

MS. O'REILLY: I'm in favor of the motion.

MS. ROOKER: You're in favor? Kathleen's in favor of the motion. Micaela, how about you?

MS. TUCKER: I'm in favor of the motion.

MS. ROOKER: Okay. So that's two that are on the phone. All right. And we're counting here.

(Pause.)

I count 25.

MS. GRANT: Plus the two on the phone.

MS. ROOKER: Plus the two on the phone.

MS. GRANT: That's what I got.

MS. ROOKER: Which is 27.

MS. GRANT: Right.

MS. ROOKER: Okay. And those opposed?

(Pause.)

Okay. The motion is accepted by a vote of the Committee. Consequently, the recommendation will be made to the Commissioner that these memberships not be accepted but that they participate at the subcommittee level.

Are we here?

MR. ELLIS: For point of order.

MS. ROOKER: Yes, Rich?

MR. ELLIS: Just to make sure everybody knows the full scale, could you please announce the votes pro and con on all issues?

MS. ROOKER: Yes. There were 27 votes for the motion and five against it.

A PARTICIPANT: And were there any abstains?

MS. ROOKER: And any abstains? One abstain. No. Okay.

MR. McELDOWNEY: Shirley?

MS. ROOKER: Yes, Ken?

MR. McELDOWNEY: I guess I'd like to move that we establish the administrative committee that would be the committee Chairs plus Shirley to handle sort of administrative items like this and other things so that the body itself can handle more policy issues.

MR. KALTENBACH: I send the motion.

MS. ROOKER: Okay. Matt, do you have a comment?

MR. KALTENBACH: No. I seconded the motion.

MS. ROOKER: Oh, I'm sorry. Okay.

MS. ROOKER: The motion --

MS. O'REILLY: This is Kathleen O'Reilly. I'm not sure, Ken, what you mean by handle. Does that mean resolve or bring a recommendation to the Committee?

I think some of the administrative issues go to the heart of our mission, our priorities. I'm reluctant to have those decisions made by others.

MS. ROOKER: That's a good point. Other discussion?

MS. TUCKER: This is Micaela. I agree with Kathleen.

MS. ROOKER: Yes. Paul Schroeder?

MR. SCHROEDER: Yeah. I would concur and I don't know that the subcommittee Chairs -- I'm not sure that that's representative of the Committee as whole, in particular.

MS. ROOKER: Okay. Larry?

MR. GOLDBERG: Just to add in another negative, I think we probably have enough subcommittees, taskforce, working groups and bureaucracy here. Another one might not really be needed.

(Laughter.)

MS. ROOKER: And, Shelley, do you have a comment?

MS. NIXON: I want to make a motion that all future applications or just go through some really -- vacancy.

MS. ROOKER: Okay. Unless there's a vacancy that all applications simply go to that they can be a member of the subcommittee Chair. Now where are we? Can somebody tell me?

MS. STRAUSS: We have a motion on the table.

MS. ROOKER: We have a motion on the table from Ken to establish an extra Committee that was seconded. I'd like to have the vote on that, please. All in favor of that motion?

MS. CARROLL: Point of order.

MS. ROOKER: Yes.

MS. CARROLL: Madame Chairman --

MS. ROOKER: Hi, Julie!

MS. CARROLL: -- I think questions were raised for point of clarification that weren't clarified.

MS. ROOKER: Okay.

MS. CARROLL: What is the intention of the role of this Committee?

MS. ROOKER: Good point. Ken?

MR. McELDOWNEY: Well, it's very confusing. It's because we've been meeting, for example, you know things about the agenda the committee Chairs and Shirley are already handling.

So I guess I was thinking of it being Shirley's sort of administrative stuff and not policy-related. I like Shelley's, you know, subsequent motion in terms of sending all the ones, you know, just basically denying them up front.

I just think there's some almost housekeeping type things that, you know, probably can be, you know, dealt with separately outside of the Committee, but I think I would sort of leave it up to Shirley to determine the ones that were sort of policy that needed to be brought to the full committee.

MS. ROOKER: Okay. So we've got a motion that we establish an administrative subcommittee. We need to take a vote on that. All in favor say aye? Raise your hand.

(Pause.)

Okay. Against?

(Pause.)

I do believe the motion has been defeated. Okay. Do we have --

MS. O'REILLY: I'm against, just for the record.

MS. ROOKER: Yes.

I'm sorry. Kathleen and Micaela, what are your votes?

MS. O'REILLY: Against.

MS. ROOKER: Against. Okay. And Micaela.

MS. TUCKER: This is Micaela. Against.

MS. ROOKER: Yes.

MS. O'REILLY: And for the future, as a point of order, before a vote is taken could we at least entertain a motion to close discussion so we know that that's the end?

MS. ROOKER: Sure. Sure. Somebody remind me to do that. That would be great. Thank you, Kathleen.

MS. O'REILLY: Mm-hmm.

MS. ROOKER: Now we have another motion. What is the other motion that's on the floor? That is Shelley's motion which had not been seconded.

Do we have a second to Shelley's motion that future applications for membership go directly to the Chairman with the recommendation of the Committee?

A PARTICIPANT: The subcommittee.

MS. ROOKER: That they go to the subcommittees and that our recommendation would be to the Chairman that we not include them as voting members? Is that correct?

MS. PALMER: I think there is also a statement about whether that if there is a vacancy that would be the exception.

MS. ROOKER: Yes, that is correct. If there's a vacancy that would be an exception and that would constitute a member being accepted onto the Board -- the Committee.

Rich?

MR. ELLIS: Well, in discussion I'm not clear how the Committee is structured. If I were to leave tomorrow does that create a vacancy for anyone or does that create a vacancy for Verizon to fill again?

MS. ROOKER: That's a good question.

MR. MARSHALL; I can speak to that.

MS. ROOKER: Scott will --

MR. MARSHALL: Yes. If you were to -- you're representing Verizon, which -- and we're actually facing the situation right now with Quest, whose representative is no longer working for Quest. Quest is continuing on the Committee and needs to designate its representative.

We do have provisions in the operating protocols right now about vacancies. I think they address the issue of making recommendations to the Chairman with respect to filling a vacancy. Let me see if I can find the provision here.

(Pause.)

Go ahead. I'll --

MS. ROOKER: I would like to also say, Kathleen, thank you for your recommendations to our operating protocols. They are going to be distributed to the Committee members and we would like to discuss them, review them and bring them up at the November meeting if that's okay with you, Kathleen?

MS. O'REILLY: Yes. I had assumed that we would be taking up a variety of protocol issues at the November meeting and not today.

MS. ROOKER: Okay. Thank you so much. We appreciate your work. Those will be distributed to you.

Okay. Now where are we? We're at the point where we need -- yes, Bob?

MR. CHROSTOWSKI: Bob Chrostowski.

I'd like to make an amendment to that motion. The amendment is that the applications be reviewed by the subcommittee who then make their recommendations for the full committee and their vote.

MS. ROOKER: The applications be reviewed by subcommittee --

MR. CHROSTOWSKI: The motion, as I understand it, was that any application for membership to the full Committee be sent to the subcommittee.

A PARTICIPANT: No.

MS. ROOKER: No. That's not accurate.

MR. CHROSTOWSKI: Then can I have --

MS. ROOKER: No. The subcommittee was not going to make a recommendation on membership. These people were going to be invited to join the appropriate subcommittee --

MR. CHROSTOWSKI: Oh, I'm sorry. I misunderstood --

MS. ROOKER: -- or subcommittees.

MR. CHROSTOWSKI; -- I misunderstood because --

A PARTICIPANT: I did, too.

MR. CHROSTOWSKI: -- maybe -- can we have a reading again of what the actual motion was?

MS. ROOKER: Shame on you, Bob, for reading. Thank you very much.

MR. CHROSTOWSKI: Okay.

MS. ROOKER: Shelley made the motion that future members of applications for membership be referred to ask that they be -- that the indication be made, that they could serve on subcommittees, on LIST SERVS, etcetera, but they would not be voting members of the Committee. Is that accurate?

MS. ROOKER: Okay. All right.

MS. NIXON: Shirley?

MS. ROOKER: Now we need to table this motion and move on because our speaker is here and we've got to get into the Universal Service issues.

We need to take a vote on Shelley's motion. Has that been seconded? Did someone second it?

A PARTICIPANT: Yes.

MS. ROOKER: Yes. And it has been seconded. All in favor of Shelley's motion -- we need to move to close the discussion.

A PARTICIPANT: Exactly.

MS. ROOKER: Can we take a vote?

MS. O'REILLY: I move to close the discussion.

MS. ROOKER: Thank you, Kathleen.

A PARTICIPANT: I second.

MS. ROOKER: Accepted? Yes.

All right. We're going to take a vote. Are you in favor of Shelley's motion? All in favor?

A PARTICIPANT: Aye.

MS. ROOKER: I think there's confusion about the motion.

A PARTICIPANT: Can you restate the motion?

MS. ROOKER: All right.

If I'm stating this incorrectly, Shelley, please forgive me. The statement was is that when there are future applications to the Committee, that instead of being accepted as membership to the Committee that they be referred to subcommittees where they can participate, their voices can be heard, they can serve on one or more subcommittees and they can be on the LIST SERVS, but they would not be recommended as members. All right.

MS. STRAUSS: Unless there's a vacancy.

MS. ROOKER: Unless there's a vacancy. In the vacancy's case that would be the person from the corporation would be replaced by another member from that corporation or association, etcetera. Now I mean Shelley needs to speak for herself. Thank you.

MS. NIXON: I really don't care whether we motion pass or -- is just kind of discussions -- where we stand approximately and that our -- over -- this type of stuff.

MS. ROOKER: Yes, I understand that. Thank you, Shelley.

All right. We have the motion on the floor. It's been seconded.

MS. STRAUSS: The motion for discussion -- MS. ROOKER: Yes. The motion for discussion to close it has passed. We need to vote. May I see a show of hands who accept Shelley's motion and put them up high, please, so we can count them.

(Pause.)

I think that's the majority. Could we see those opposed?

(Pause.)

Opposed? Abstentions? Okay. Shelley's motion has been --

Kathleen and Micaela, how about you guys?

MS. O'REILLY; I'm in favor of the motion.

MS. ROOKER: You favor it?

MS. TUCKER; Micaela Tucker's in favor of the motion.

MS. ROOKER: Okay. Thank you very much. The motion is accepted as approved. Thank you very much. Now we need to move on.

(Pause.)

The FCC's notice of proposed rulemaking on financing Universal Service Fund is our topic of conversation. Andrea Williams has put together for us the comments that she has gotten from a number of members of the Committee and that is being passed out to you I believe as we speak.

Anita Cheng is with us today. She's the Assistant Division Chief of the FCC's Account Policy Division which oversees the Universal Service Fund. She also has two of her colleagues with her.

Ms. Cheng has been with the FCC since 1995. Her two colleagues are joining her today. They will be available for -- to fill in questions. Please join me in welcoming Anita Cheng.

(Applause.)

MS. CHENG: Thank you. I should point out that I only have one of my colleagues here today. This is Greg Guice over to my left. Paul Garnett is actually stuck somewhere in Boston this morning. So he won't be joining us unless he gets lucky with a flight.

As I said, I'm Anita Cheng. I'm the Assistant Chief of the Accounting Policy Division in the Common Carrier Bureau of the FCC. In short, I'm one of the people that works on the Universal Service Fund.

Today I'm going to talk to you about the Universal Service Fund, what it is, what it does, where the money comes from and why we at the FCC think that the system may need to be changed.

The Universal Service Fund is a fund that helps to promote telephone and telecommunications service to all of the people in America including those people that live in rural areas or that have low incomes.

The Universal Service Fund is one central fund that pays out to four mechanisms or programs, the high-cost program; the low-income program; the schools and libraries program, which is also called E-Rate, and the rural healthcare program.

The high-cost program provides discounts to telephone companies who provide service in areas of the country where the cost of providing service is very high. The low-income program provides discounts to consumers with low incomes who might otherwise be able to afford telephone service. The E-Rate program enables schools and libraries to get discounts on telephone service, internet access and internal wiring for these services.

Finally, the rural healthcare program enables healthcare providers in rural areas to have access to such things as telemedicine for the same costs as their counterparts in urban areas.

We've seen a lot of success with the Universal Service Fund. For example, when we started the E-Rate program in 1997 less than 20 percent of the nation's poorest schools were connected to the internet. As of the year 2000, however, over 60 percent of these poorest schools are connected to the internet.

As another example, our Native American population is grossly underserved. Of the nationwide penetration rate is well above 90 -- well, a little bit above 94 percent. Only about 47 percent of our Native Americans have telephone service. On the Navajo Reservation, which is the largest reservation in the United States, only 22 percent of households have telephone service.

To address this problem, in July 2000 the Commission adopted a special enhanced, low-income program geared towards promoting telephone service on tribal lands. In the six months after the enhanced program started, the new enhanced link-up program, which provides a substantial discount off of telephone installation, generated over 4,700 new subscribers on tribal lands.

As you can imagine, it takes quite a bit of money to do all of these good things. So now I'll talk about where the money comes from.

In 1996 Congress mandated that all carriers that provide interstate telecommunications shall contribute to Universal Service. In 1997 the Commission did two things. First, it created the Universal Service Administrative Company. I can't read that sign. Speak slower?

MR. JACOBS: Speak a little bit slower.

MS. CHENG: Okay. That's always my problem. So I guessed it even though I couldn't read your sign.

(Laughter.)

Okay. In 1997 the Commission created the Universal Service Administrative Company. It's also called USAC and they administer the Universal Service Fund. This means that USAC collects contributions, pays out money through the various programs.

Second, the Commission adopted a plan that requires carriors to contribute a percentage of the revenues that they earn from providing interstate and international telecommunications service. That's generally revenues from basic phone service and it doesn't include revenues from stuff like internet access.

This percentage that the carriers contribute is also called the contribution factor. It's calculated each quarter by comparing carrier revenues with an estimate of how much money the Universal Service Administrative Company will need in the upcoming quarter.

The Commission recalculates this contribution factor each quarter to ensure that we collect just enough money for the fund's needs; not too much and not too little.

Carriers are permitted to recover their contribution costs from their customers and most of them do that, do just that. They put a lot -- a lot of carriers put a line item on the telephone bill sometimes called a Federal Universal Service Fee or something similar to that.

The system that the Commission adopted in 1997 based contributions on carrier revenues that were billed from the prior year. Just this past March the Commission modified the system slightly so that contributions can be based on more current revenues, revenues from the prior six months instead of the prior year.

However, there is still much to fix about our Universal Service contribution system and here's why.

First, we have a lot of limitations on how we can fund the Universal Service Fund. In the 1996 Act, Congress placed specific limitations on the Commission.

Even though the bulk of Universal Service support goes towards connecting people to local telephone service, Congress has mandated that contributions can only come from carriers who provide interstate telecommunications service, which is for the most part long distance. This is problematic because at this time there's a lot of traditional long distance companies that are suffering a decline in revenues. Second, the contribution factor is pretty high.

The Universal Service support programs have grown tremendously. In 1999, for example, USAC paid out about $3.6 billion in support. In 2001 USAC estimates that it will pay out almost $6 billion in support. The problem is that the growth in the contribution revenue base has not kept pace with the program growth. This makes the contribution factor increase. For example, at the end of 1999, the contribution factor was 5.9 percent. Right now the contribution factor is 6.9 percent.

Third, carrier recovery practices vary very widely. This results in quite a bit of consumer confusion. Some carriers impose line items only on certain end users. For example, carriers will impose line items on their presubscribed customers, which is the customers that have the long distance service at their homes but not on their dial around customers, and that's customers that use the 1010 321 services.

Line items amounts also vary widely. Even though the contribution factor for the second quarter of 2001 was 6.9 percent, one carrier was charging 12 percent for a time. Just so you know, that carrier has since dropped its line item back down to 10 percent, but still this is a problem.

Finally, the telecommunications marketplace is changing. Contribution amounts are a percentage of interstate and international telecom revenues that were earned six months prior. This means that new long distance carriers like the big local telephone companies who are just beginning to offer long distance service don't have to contribute for the first six months after they have started in the long distance business.

There are also established long distance carriers who have declining long distance revenues. This means that they end up contributing based on revenues that are higher than the revenues that they currently earn.

Carriers are also marketing their products differently. For example, some carriers now offer long distance and local service packages for one price. They also offer telecommunications services along with non-telecommunications services, also for a single price.

Bundling services like this makes it very difficult to determine how to assess contributions on only the interstate telecommunications part of a carrier's earned revenue.

These are reasons why the Commission issued a notice of proposed rulemaking in May. We want to determine the scope of the problem and we want to fix it. So we've sought comment on several proposals including (1) whether carriers should continue to contribute based on a percentage, or whether we should move to a flat fee such as a per line charge; (2) whether the Commission should limit the way carriers can recover their contribution costs; and (3) whether carriers should title their line items all in the same way. All of these proposals if adopted would have very far-reaching effects.

Currently carriers contribute based on a percentage of revenues that were billed to its customer six months ago. There's two key concepts here that might be significant.

First, basing the contribution on reported historical revenues means that carriers have to report their revenue information to the Commission on a fairly frequent basis. This also means that contributions may not reflect current marketplace trends because it's based on old revenue information.

Accordingly, the Commission has sought comment on ways to get revenue information -- on different ways to get revenue information, such as allowing carriers to submit projected revenues and letting carriers true up their contributions by submitting actual revenue information, say once a year.

A second concern we have is that basing contributions on billed revenues rather than on revenues that were actually collected means that carriers have to pay contributions on revenues that they are unable -- that they may be unable to collect from subscribers. As we know, not all subscribers pay their bills. This means that a carrier who chooses to recover using a line item has to bump up that line item a little bit to account for uncollectables.

So, for example, if the contribution factors 6.9 percent the carrier may have to collect a little bit more than 6.9 percent from its subscribers to account for the fact that a certain percentage of subscribers will not pay their bill. So the Commission has proposed collect -- having carriers submit information on collected revenues rather than their billed revenues.

Alternatively, the Commission has sought comment on collecting contributions based on a flat fee rather than on a percentage. For example, carriers may pay $1 -- might have to contribute $1 per line. Although this seems like it might be really simple it may or may not be. There are all kinds of lines, residential lines, secondary residential lines, business lines. We've sought comment on whether there should be at the same flat fee for all these kinds of lines or, if not, how this fee structure should be.

There's also the problem of carrier recovery. If a carrier is allowed to recover its flat fee costs from its subscribers, then each subscriber pays the same flat fee regardless of how much that subscriber uses his phone. That means that it's possible that a disproportionate share of contributions might be shifted to low-volume users.

Then again if you think about it, a flat fee concept might be great for consumers in that there might be a lot less consumer confusion. Every consumer could compare costs across the board because every carrier would be charging the same amount for universal service.

Concern about consumer confusion is the basis for the next Commission proposal, which is to limit the way carriers can recover contributions -- contribution costs from its consumers.

Under the Commission's proposal carriers could recover contributions either through their rates or through a line item that is no higher than the actual amount that the carrier pays for contribution costs. In this way consumers would be better able to compare rates because the universal service cost would be the same across carriers. Equally important, this proposal might prevent carriers from recovering other non-related costs through the Universal Service line item.

One more thing about changing the basis for contribution. If the Commission were to change the basis for contribution say from the percentage that it is now to a percentage of collected revenues or to a flat fee, then carriers would have to change the way that they report information to us.

The problem here is that this may have implications beyond Universal Service. This is because carriers currently report their billed revenues to the Commission not just for purposes of Universal Service but also for other program such as the Telecommunications Relay Service, North American Numbering Program Plan, Local Number Portability and regulatory fees.

Therefore, we really need to consider the needs of these other programs and whether any changes in the information submitted would be inconsistent with these non-universal service programs.

What I've given you today is really just a very general and high-level overview of this proceeding that we have before us. I'm sure that you can tell that this is quite a task that the Commission has. The Universal Service Fund, it's a great program and we really all want to make it work. We welcome your questions and look forward to your recommendations. Thank you.

MS. ROOKER: Thank you, Anita.

(Applause.)

MS. CHENG: I will bring up now Greg Guice and our colleague, who made in from Boston, Paul Garnett. They're going to help me answer questions. Paul and Greg are the primary authors of this item that's coming up and they're your guys to answer questions.

MR. SCHROEDER: Shirley?

MS. ROOKER: Yes. I think if you can recognize him -- who's down here? Paul Schroeder.

MR. SCHROEDER: Yeah. I wonder if -- one of the things that was very confusing in the notice and hard to understand is the way things are currently handled in the wireless area and what would be changed in the proposed rule.

MS. CHENG: I'll explain what's going on with the wireless area. Most carriers -- carriers generally contribute a percentage of their interstate telecommunications revenues.

However, with wireless carriers because it may be difficult to separate interstate from intrastate service on the wireless phone because a lot of, you know, carriers -- a lot of wireless carriers bundle their local and long distance all into one package and they charge one rate for it we adopted what we call an interim safe harbor, which means that wireless carriers currently contribute only based on -- contribute a percentage of their telecom -- interstate telecom revenues.

We assume -- the safe harbor is that we assume that 15 percent of their revenues are interstate in nature. So what we sought comment on is whether realistically in this, you know, three years later if, indeed, interstate telecom revenues for wireless carriers are still only at 15 percent or whether that might be higher now since so many people have wireless phones and have the -- you know, the one rate package and may be using their wireless phones for more long distance calls.

MR. SCHROEDER: Just to clarify and follow-up.

MS. CHENG: Oh.

MR. SCHROEDER: And so you're not proposing a change in the 15 percent structure? You're looking at -- essentially it's an inquiry?

MS. CHENG: We're seeking comments on -- we haven't proposed anything specific and we certainly don't have another number out there, but we're seeking comment on if this number should change. If it should, then what?

MR. SCHROEDER: And there hasn't been a study? I mean it seems like that would be a knowable number, a knowable item to know what percent of revenue is coming from interstate.

MS. ROOKER: Andrea?

MR. GUICE: Actually, wireless carriers --

MS. ROOKER: I'm sorry.

MR. GUICE: I'm sorry. Let me just answer that real quick. Okay.

MS. WILLIAMS: This is Andrea Williams with CTI and we represent the wireless industry.

With respect to Universal Service Fund why we do not break out interstate, you have to understand that wireless -- we were built on a different regulatory structure than wire line, particularly in terms about boundaries. Many wireless companies, we don't respect what I would call the geopolitical boundary state lines. Our areas cover in some instances multiple states because of the licensing scheme that the FCC has decided to use for wireless.

You may have very wide geographical areas under what we call the MTA's and BTA's which may -- which may overlap states. Because of that structure, the wireless industry has it's very -- we do not break out in terms of interstate revenue. It's very difficult to do, it's very costly. So what many wireless carriers have done is use the interim safe harbor.

Now the way the FCC came up with that number was using a number that NECA, is what we call DEMS, the dial equipment minutes waiting program and NECA for wire line. That number came out to 15 percent. Currently, NECA has revised that DEMS estimate down to 13.25 percent. So that is, you know, one of the things that we need to look at and we will be discussing in the proposal.

Because there were commentors from the consumers groups that I received that asked that same question in terms of they really needed additional information in terms of why wireless is treated differently than wire line.

Many of the industry commentors I would say took the time to explain the process of how we operate in the wireless industry.

MS. ROOKER: Thank you, Andrea. Paul or Greg, do you have anything to add to that? That will be the last comment before we take a break because we're going to continue discussing this after our break.

MR. GUICE: That's fine.

MS. ROOKER: Is that okay? Okay. What we're going to do is we're going to take a break. Paul and Greg will be joining us for the subsequent discussion after the break. We have a 10 minute break.

We'll be coming back in and I just wanted to say that during the break for those who need it, there's a braille copy here of Andrea Williams' comments that she received on the proposed rulemaking and that will be available and will be read by Arlene to anyone who needs it. Julie, if you want it and anybody else, it is available. Where do we want them to go, Scott?

MR. MARSHALL: I think if they just huddle out in the hall --

MS. ROOKER: Huddle out in the hall.

MR. MARSHALL: -- or in the corner of the room here.

MS. ROOKER: Or somewhere here that's convenient. Where's Arlene?

A PARTICIPANT: She's outside.

MS. ROOKER: Okay. She's outside. Will she find Julie?

A PARTICIPANT: Yeah.

MS. ROOKER: Okay. Thank you.

Ten minute recess.

(Off the record at 10:41 a.m.)

(On the record at 11:00 a.m.)

MS. ROOKER: We need to start our discussion on Universal Service Fund, please.

A PARTICIPANT: Okay.

(Pause.)

MS. ROOKER: I'm sorry to be a nag but we really need to get back to our table.

(Pause.)

Okay. I'll nag.

(Laughter.)

(Pause.)

Somebody says I'm going to use the gavel.

A PARTICIPANT: Yeah, use it. Go ahead.

MS. ROOKER: Does it work?

(Pause.)

It's power here, the power.

MR. MARSHALL: Just make sure that we're reconnected on the phone, Shirley.

MS. ROOKER: Okay.

MR. MARSHALL; You might just make sure and all that sort of --

MS. ROOKER: Micaela and Kathleen, are you there?

MS. TUCKER: I'm here.

A PARTICIPANT: Somebody's there.

MS. ROOKER: Our phone folks, are they there?

Micaela?

MS. TUCKER: Yes, Micaela's here.

MS. ROOKER: Kathleen?

MS. O'REILLY; Yes. I'm here.

MS. ROOKER: Good. Thank you.

All right. If we could get everyone back to your places at the table, please, so we can continue our discussion on the Universal Service Funding.

A PARTICIPANT: Dane will be back. The Chairman called.

MS. ROOKER: Okay. Dane had to leave us briefly. The Chairman called. We tried to convince him he shouldn't go but he said, "No."

(Laughter.)

But he will be rejoining us shortly. Now we are going to continue our discussion and I think Greg and Paul are with us. Yes, they are here.

Ken McEldowney and then Andrea Williams have been doing a considerable amount of work collecting information from you and getting your thoughts and comments on many of the issues involved in the Universal Service.

I'm going to turn the floor over to the two of them and let them guide our discussion this morning. Ken? Andrea?

MR. McELDOWNEY: Yeah. What we did was sort of take the -- sort of jumped off from some of the initial e-mail that came up from Scott that sort of outlined some questions that he thought that the Commission would be interested in getting feedback from us on.

Andrea then expanded on that with some additional questions that she and her committee thought would be important to be addressed.

We had sent those out on all three LIST SERVS and Andrea was kind enough to sort of consolidate those comments and that's what you see in front of you today.

I think what we pretty much think would make sense to do in a sense that for us this is sort of trying to ride a bicycle with training wheels. It's sort of the first time that this Committee has tried to come up with some recommendations. So I think it's going to be sort of a learning experience for us all.

I think what we've decided to do is to look at sort of three main areas, (1) would be the areas where it appears from the comments that there is a consensus, (2) areas where with perhaps further discussion and refinement there could be consensus; and (3) areas where there is so much dissent, so much opposition, that probably it doesn't make sense to spend time today trying to reach some sort on consensus on it.

So I'm going to toss this now to Andrea to sort of start with the first ones in terms of where she thinks there's already consensus or consensus could be gained fairly quickly.

MS. WILLIAMS: What I did was when I took the comments and the issues sort of -- there are three basic categories where the issues dealing with the Universal Service Funding mechanism. One was the mechanisms for carrier contributions to the Universal Service Fund. The second one was the issue was cost recovery from end users, and the third big issue was what I call truth in billing and Universal Service Fund charges.

Basically, under the mechanisms for carriers contributions to Universal Service Fund -- first of all, let me thank those who participated and provided me with their comments. They were very, very helpful. Secondly, please stop me if I use acronyms that folks are not familiar with. Sometimes being in Washington you use a lot of letters and we just need to be reminded that not everyone knows what those letters mean.

(Laughter.)

Under the mechanisms for carrier contributions there were basically three areas where issues where we -- subissues that we were looking at, whether carriers should contribute based on a percentage of collected revenues or billed revenues, whether carriers should be assessed based on current or projected revenues, and whether the different treatment for wireless carriers should continue. And that meaning the currently wireless carriers may use FCC's 15 percent safe harbor which allows wireless carriers to use 15 percent of their interstate revenues as a base for Universal Service Fund contributions.

Under that title I found that almost -- well, it was unanimous among all the commentors, industry commentors, as well as consumers, that the assessment for Universal Service contributions be based on current revenues.

Many of the commentors felt that trying to do projected revenues would be almost virtually impossible to be accurate because the marketplace is changing dramatically every day and trying to keep up with those changes would just be pretty much impossible.

There was also comments that were made in terms of that the FCC recently had revised its rule governing carrier reporting obligations and, as Anita pointed out, they're now every six months -- that the assessment is based on the preceding six months worth of collected revenues.

Many of the industry commentors and I believe one of the industry commentors noted that before the FCC changed that report requirement again -- my understanding is it's been changed a number of times -- that they look and review the effectiveness of the process that they have put in place before we change it again.

So I think most of the consensus was that to support a recommendation that the CDTAC would support assessment of Universal Service contributions based on current revenues for the reasons that are described here in this document.

MR. McELDOWNEY: I guess one question here is just in terms of -- to get one thing out of the way, is just in terms of are there folks who did not comment or would not sort of believe that that is something that they would, you know, believe. Is that really a consensus?

MS. ROOKER: Susan?

MS. GRANT: I was on vacation. But I think there were so few comments because probably a lot of other people were on vacation that I don't think that we should just assume any consensus.

MR. McELDOWNEY: That's what I was asking.

MS. GRANT: Right. Right.

MR. McELDOWNEY: Whether there is a consensus.

MS. GRANT: Right.

MR. McELDOWNEY: So people -- you know, if people -- when Andrea says there seemed to be a consensus on this, I guess what I want then to do is to find out whether or not there is a consensus or whether or not there's disagreement with that.

MS. WILLIAMS: Let me also explain to you that in terms of the recommendations that you see here that, first of all, the summary of comments are just a summary of those who sent me their comments. It's not all the comments in the docket.

Secondly, the recommendations here are really just to facilitate discussion and open up a discussion if there's not a consensus. I'm only going on what I received and where I perceived that there may be some consensus. As Ken mentioned, if there isn't this is the time where we need to discuss that.

MS. O'REILLY: This is Kathleen O'Reilly. I guess I have a broader timing question. Am I correct that the actual formal comment period is completed as well as the reply comments. So that is it assumed that what we're talking about is a potential ex parte opinion from the Advisory Committee? If so, what is the current timing of this entire docket as to when the Commission is expected to take it up and, therefore, when the gate will close on ex parte?

MS. STRAUSS: Kathleen, this is Karen. Is my mike working? I think I can answer that. Okay. There it goes. This is Karen Strauss and I think I can answer that.

You are correct. This would be an ex parte document or a late filed comment document. The docket is still very much open though, and we've been told that the recommendations from this Advisory Committee will be taken into consideration.

There is no formal closing date for ex partes or for late filed comments. The goal, however, as we understand it is to move fairly quickly with respect to the final recommendations to the Commissioners in the form of a final order.

So the goal is to get some kind of consensus and recommendation from this meeting because the Bureau does want to work on -- the Common Carrier Bureau does want to try to complete this in the next few months.

MS. O'REILLY: My concern is given the way that this has sort of been approached, I was not aware that we were being solicited to actually comment on every issue. it was never really clear to me how these comments started circulating around, how they were necessarily going to be used.

If we cannot agree on all the basic points at today's meeting, I'm not sure what process we have available to us to achieve that outside of this meeting.

I feel handicapped in only understanding some of the comments submitted by those who have been circulating them and was not able to access on the FCC website all of the comments that have already been filed in any current ex partes.

So I'm concerned about what we're doing and why we're doing it and how much we can practically achieve. Even the framework of the very first question posed to all of us seemed to implicitly assume that the issue was whether or not the charge would be, you know, across the Board for all customers, whether it would be a percentage or whether it would be a stated amount, and that the option of not having it included as a line item at all was not really hinted at in the way it was posed to us, although that's an option that's part of the NPRM.

It's not even an option that I necessary espouse. But it just seems to me that the issues as they were raised to our Committee sort of already started steering us down certain paths that are more narrow than what are potentially possible under the NPRM.

MS. WILLIAMS: Kathleen, this is Andrea. In terms of what I tried to do was to focus on particular issues keeping in mind what Commissioner Copp stated this morning that there are a number of issues and that we're trying to focus on those issues that we can really provide some discussion, is helpful to the Commissioners.

We don't want to bite off more than we can chew, as he pointed out. What we tried to do was to prioritize those issues from the NPRM, and took into account all the comments that were provided to me. Some were from industry, some were from consumers.

In fact, I think the one that -- the e-mail that I got from you recommended that I look at the National -- what was it? National Association of State --

MS. O'REILLY: Utility Advocates.

MS. WILLIAMS; Yes. And I went and with that recommendation that you provided I went to those comments and pulled out from those comments where they addressed some of the issues that we are focused on here.

It is not the intent that we are going to go through the entire NPRM and go point by point for every single issue.

MS. O'REILLY; I understand. I'm just asking a question that to me is just sort of a practical trying to understand the scope of what's feasible for our Committee given that the timing of this meeting -- the ultimate decision.

Did this get on the agenda because the FCC is soliciting our Committee's opinion or because someone on the Committee wanted it discussed? How did this get to our plate?

MR. McELDOWNEY: Kathleen, I guess I'm a little confused because it was talked about at the last meeting in terms of this being something that it was felt -- my understanding both internally and externally -- is this was a good place for us as a Committee to make some initial recommendations to the Commission.

MS. O'REILLY; Yeah. I'm just -- but that was in the timeframe -- I guess the practical question, Ken, is do we have a process as a Committee beyond today's meeting?

MR. McELDOWNEY: No. I mean again --

MS. O'REILLY; Okay.

MR. McELDOWNEY: -- what we're trying to do and I think what Andrea is trying to do is come up -- basically there are a number of different issues. What we're trying to do is come up with certain issues where there can be a consensus, and pull a statement around that recognizing that in a perfect world we might be able to thrash out much more. But we're under a time deadline and we're trying to just focus on those that we think we can reach a consensus on as a Committee. The intent here is for this to be the comments of the Committee as opposed to some broader universe.

MS. O'REILLY: I just don't know that I feel comfortable being able to vote on whether I'm part of or not part of a consensus on a variety of issues since some of them are so inseparable from each other. And I still feel handicapped in not having been able to read the entire record.

So I'll take it on a point by point basis, but it's a very piecemeal approach that I'm not sure that we can accomplish much but I'll -- that's my point of view.

MR. McELDOWNEY: Okay. I mean again -- I mean, Kathleen, if, in fact, we come up with something that you don't feel comfortable with I would urge you to vote not to support it.

But I think I mean given the time pressures I think we should move ahead with basically the procedure that Andrea and I have come up with.

MS. O'REILLY: Is it possible or helpful to as part of this discussion determine whether we as a Committee want to today for even on an ad hoc basis develop a post-meeting procedure for this narrow issue so that people could potentially take a reasonable although short period of time to reflect on what's recommended and then to either weigh in or -- with a support or opposition to certain points?

MR. MARSHALL: This is Scott, Kathleen. It is certainly possible if someone has a dissenting point of view that they can attach that dissenting point of view to whatever recommendations the Committee comes up with.

As Ken has said, we're really operating on a very tight timeline. If we were to have a second meeting, that would have to be noticed in the Federal Register. I actually raised this with our Office of General Counsel about whether we could even have a teleconference meeting to further discuss this matter after this meeting.

Even that's problematic. It can be done. It does raise some access issues for some of us, but in addition to that, it would still have to be noticed in the Federal Register. There would have to be a mechanism for public comment and so forth.

Again, just to be clear, I think Ken and Andrea are saying that they haven't looked at the record, either. I mean these are comments that were received through the LIST SERV from this Committee or members that commented that were part of the LIST SERV.

MR. McELDOWNEY: Kathleen, I guess the other thing I would add is I know that you and I have sort of had this discussion before on a previous thing in terms of trying to reach consensus on a statement.

I think that one of the things that's important is for this Committee to come up with a statement on behalf of the Committee that probably given the nature of this NPRM is going to be relatively short and relatively general. But there's nothing to prohibit individual members of this Committee filing their own more comprehensive comments.

I guess that's something I would encourage you to do, Kathleen, is --

MS. O'REILLY: Oh, I'm definitely not going to do that. I don't have the time and I don't have the -- there's no practical way for me to do that. I'm just --

MR. McELDOWNEY: Kathleen --

MS. O'REILLY: I'll do the best I can under the timeframe then.

MR. McELDOWNEY: Okay. Kathleen?

MS. O'REILLY: Mm-hmm.

MR. McELDOWNEY: Could --

MS. ROOKER: This is Shirley Rooker, Kathleen --

MR. McELDOWNEY: Could we move ahead with this.

MS. O'REILLY: Yes. I just --

MS. ROOKER: I would suggest that we move ahead.

MR. McELDOWNEY: I think we really have to.

MS. ROOKER: I appreciate and I've heard your concerns but I think we've got -- we have a very short time today, if you don't mind, so that we could move on with their discussion.

MS. O'REILLY: Sure.

MR. McELDOWNEY; Okay. Let's go back to this thing in terms of -- I've even forgotten what it was but --

(Laughter.)

Andrea, could you restate what you felt was the first consensus and we could --

MS. WILLIAMS: Yes. The first --

MR. McELDOWNEY: -- go around the room to see whether or not people agree with it.

MS. WILLIAMS: The first consensus was whether carriers should contribute based on a percentage of collected revenues or billed revenues? I'm sorry. It should be whether carriers should be -- carriers should be assessed based on current or projected revenues.

The industry and consumer commentors that I received unanimously agreed that carriers should be assessed on current rather than projected revenues because it is virtually impossible, as they noted, to accurately predict future revenues, particularly in today's changing marketplace.

It was also brought up that the FCC recently revised its rules governing carriers reporting obligations with respect to the USF contributions. And the FCC rules now mandate that carrier revenue assessments --

MR. McELDOWNEY; Andrea, let's stop on that one because I think there's disagreement on that one.

MS. WILLIAMS; Okay.

MR. McELDOWNEY; I think let's just focus -- let's just focus in terms of current --

MS. WILLIAMS: No. That was the reasoning they gave that before you go changing the mechanism at least evaluate the effectiveness of the current rule.

MR. McELDOWNEY: Right. I guess consumer action at AARP thought it should be the previous month or previous quarter.

MS. WILLIAMS: Right.

MR. McELDOWNEY: So let's just talk right now in terms of --

MS. WILLIAMS: Okay.

MR. McELDOWNEY: -- versus projected.

MS. WILLIAMS: And --

MR. McELDOWNEY: Susan?

MS. WILLIAMS: -- what the recommendation was is that CDAC supported a statement that the assessment of Universal Service contributions be based on current revenues. Simple as that.

MR. McELDOWNEY: Susan?

MS. GRANT: That makes sense. I just have a question. And that is about the new entrants and the fact that it appears that they wouldn't be making any contribution to the funds for the first six months. I'm wondering if in the case of new entrants, their contribution shouldn't be on a projected basis.

Surely they have some projections that they're operating on the basis of and getting into the marketplace. It strikes me as only fair that they should have to contribute something in that first six months. So I'm wondering if that's feasible?

MR. McELDOWNEY: Susan, I guess in California with the Lifeline program what basically happens is that people do it basically -- the surcharges are based on the previous month in which they bill their customers. I think that ends up being the most accurate way of doing it. Then if, in fact, in the future there are uncollectables, they can then true it up but it appears to be much simpler administratively.

Whether or not we go ahead with the previous month, the previous quarter, is a separate issue but I think that that would be something that at least a couple of consumer groups would support.

MS. ROOKER: Mike?

MR. DelCASINO: This is Mike DelCasino. All of this discussion focuses around the fact that the contribution being made based on revenue. I guess I would like to put on the table the possibility -- and I think that Anita and I think that the NPRM opened that up that contribution be made on other then a revenue basis.

The Universal Service Fund has very specific things that it is attempting to accomplish. It seems to me that generating the fund to -- generating the dollars to support that fund on a usage basis that's one way to do it, clearly. By the way, I think I would argue that if you were going to do that that it be on a current revenue basis.

But there's also the option of assessing it on a per line basis so that once the Commission or the Fund Manager determines how much money is required to do the work that the Universal Service Fund needs to do then that can simply be recovered directly from consumers as a pass through from the companies. I guess I'd like to have that option kicked around a little bit.

MR. McELDOWNEY: How would the -- I guess one of the concerns I have with that is that with the growing amount of folks using 1010 dial around, how would the dial around folks pay into the fund?

MR. DelCASINO: That's -- you know, I don't know how to answer that, Ken.

MR. McELDOWNEY: Okay.

MR. DelCASINO: I don't know how to answer that. I think there's a lot -- there are so many different kinds of service offerings, even the wireless service offerings. I personally can't speak to that. By the way, that's one of the reasons -- I kind of sympathize with some of the earlier discussion.

This is such a complex subject that it seems -- I know for myself, I certainly can't speak to all aspects of dial around and wireless and wire line services and what not, so --

MS. ROOKER: Matt and then Bob?

MR. KALTENBACH: This is -- hello? This is Matt Kaltenbach, Ericsson.

I'd like to concur with Michael's assessment that the existing mechanism doesn't recognize the difference between circuit switch and packet switch technologies.

Because I thought the goal was universal access, not just to circuit switch but to information. That the only mechanism that would be inherently universal would be one that was account-based and one that recognized that there would be a metric let's say subscriber month and that by the fact that all carriers and utilities and providers have to keep an account of the number of accounts they have active. This mechanism would be inherently extremely simple to administer, easier to account for and lower the cost structure of the administration to the point where a flat fee per account could be achievable.

This could be achievable cross technology and cross access mechanism. So unless we actually address those fundamental changes which I think are at the core of the reason for this NPRM, we haven't addressed the issue.

MS. ROOKER: Bob?

MR. McELDOWNEY: What, Shirley?

MS. ROOKER: Bob?

MR. McELDOWNEY: Yes. You can see people better than I can.

MS. ROOKER: Okay. All right.

MR. SEGALMAN: What would the advantage be to doing it in on an on-line basis as opposed to on a revenue basis?

MR. DelCASINO: I guess I'll take a stab at that. Matt indicated that at least one example, and that is that it would be I believe also very simple to administer the requirement of determining the revenues upon which the percentages would be based would be virtually eliminated in this case.

The issues associated with -- and I think Anita pointed some of these out -- associated with discrepancies between companies with declining revenues rather than companies with increasing revenues would be eliminated. The notion that companies have the ability to vary the percentage rate for things like uncollectables, vary the percentage rate based on who they choose and what services they choose to recover the money from their consumers.

All of those things would be eliminated and, therefore, the whole process I believe would be a whole lot simpler.

MR. McELDOWNEY: So you're basically saying that any company, any customer, regardless of whether it was wireless or dial one, there would be a per line charge regardless of the volume of their calls? So it would be wireless plus dial one presubscribed?

MR. DelCASINO: If I could just back off of the wireless piece.

MR. McELDOWNEY: Yes. Well, I think that's a key one.

MR. DelCASINO: Yeah.

MR. McELDOWNEY: Because if you don't -- that would be the only reason why I would even consider that because otherwise the low-volume customers get basically screwed.

MR. DelCASINO: I guess let me say that -- to answer your question I think I would say yes.

MR. McELDOWNEY: Okay.

MR. DelCASINO: Yes.

MR. McELDOWNEY: It sounds like it's time -- yeah.

MR. DelCASINO: Universally applied to all lines, but I have to temper that with my caution.

MR. McELDOWNEY: Okay.

MR. DelCASINO: The low-volume customer, obviously, is always an issue. To me if you think about what the Universal Service Fund is addressing, you kind of have to ask yourself the general question about what does usage have to do with it?

If my children are all over the country and I make $100 a month in long distance calls and you have one person that you call in Maryland and your bill is $20, what is it about that situation that says that I should be contributing five times what you contribute for universal service.

It seems to me that --

MS. O'REILLY: This is Kathleen O'Reilly. I would like --

MR. DelCASINO: -- that --

MS. O'REILLY: -- to address that.

MR. McELDOWNEY: Kathleen?

MS. O'REILLY: Okay.

MR. McELDOWNEY: Susan Palmer's been waiting to talk.

MS. O'REILLY: Okay. Just tell me when I'm next in line.

MR. McELDOWNEY: Huh?

MS. O'REILLY: Just let me know when I'm next in line.

MR. McELDOWNEY: Okay. I know. You're fourth.

MS. O'REILLY: Okay.

MR. McELDOWNEY: Susan, Jim, Joseph and then Kathleen.

MS. PALMER: One of the things that a per line charge does is that you contribute -- you don't contribute if you're a long distance carrier.

Another thing that happens is what happens in a situation where you have hearing carry over or voice carry over, you have two lines? Then you're paying double automatically even though the usage may not be the same. That doesn't make sense to me.

You know, I think that there are some serious challenges. I really strongly feel the way that we're doing now is more equitable. I'm not saying that because I'm a wireless carrier or that, just from a practical standpoint. I think you can simplify it but you can simplify and be unfair.

MR. TOBIAS: Well, let's see. I'd like to start off first by demystifying this microphone technology.

(Laughter.)

Is someone potting this up as we begin to speak or is it automatically adjusting? Can anyone in this room answer that question?

MR. McELDOWNEY: If they like you then your microphone is turned on.

(Laughter.)

MR. TOBIAS: No. I'm serious about that question.

MS. ROOKER: Jim, identify yourself.

MR. TOBIAS: Jim Tobias.

MS. ROOKER: Thank you.

MR. TOBIAS: Well, we'll get an answer later.

MS. ROOKER: We're going to get the answer.

MR. TOBIAS: Okay. Well, if there's no one -- is there someone in the