SUMMARY OF INTERSTATE ACCESS UNIVERSAL<BR> SERVICE SUPPORT MECHANISM

SUMMARY OF INTERSTATE ACCESS UNIVERSAL
SERVICE SUPPORT MECHANISM Purpose of the Support:

This Order identifies $650 million of annual universal service support that is implicit in our access charge regime, and establishes an explicit universal service support mechanism to replace such implicit support.
This is a new universal service mechanism (i.e., separate from the current high cost universal service mechanism).
Interstate access universal service support is designed to be sufficient to ensure that consumers in all regions of the nation have access to telecommunications services at affordable and reasonably comparable rates.
Creation of an interstate access universal service support mechanism is a necessary corollary to the reductions made to interstate access charges.

Size of the fund:

Support is fixed at an annual amount of $650 million.
$650 million is within the range of estimates of the amount of universal service support implicit in interstate access charges.

Methodology for distributing support:

Support is targeted to the density zones and study areas that have the greatest need for it based on the difference between permitted common line revenues and a SLC benchmark based on the new SLC caps.

Portability:

Support is provided on a portable, per-line basis. If a competitor serves a customer in an area receiving support, the competitor will get the per-line support for that customer.
Support is available on a competitively neutral basis to any eligible telecommunications carrier serving a supported customer, regardless of the technology used by that carrier.

Collection of interstate access universal service support:

The amount required to fund the interstate access universal service mechanism will be added to the amounts collected for the other universal service mechanisms and added to the quarterly contribution factor.
The increase in universal service support will be collected from all telecommunications carriers.
As of July 1, 2000, price cap LECs will establish a separate rate element (i.e., line item) to recover all contributions to the universal service support mechanisms.

Additional Lifeline Support:

Support under the Commission’s universal service Lifeline Assistance program for low-income consumers is increased to cover the increase in the residential SLC.
Lifeline support will increase to approximately $60 million in the first year of the plan and will gradually increase to approximately $125 million in the fifth year of the plan.