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À ?        ? ? ?      ?    8?       ? ? ~  ?  ? ?  ? ?  ?    ?  ? ??  ?   ?   ? ??  ?   ?  ? ? ? ? ? ? ? ? ?  ? ?   ?   ?   ?  ?  ? ?? ? ? ??? ~?   ? ? ? ?? ? ??  ? ? ??  ?  ?  ?À? ? ?? ?? ?? ? ? ? ?? ?? ??? ? ?? ?? ? ? ?? ? ?? ??  ??  ???  ?  ?  ? ?? ??  ?  ?  >?  ?  ?? - ?: 9 4ǀ? ?4 4 4? 4 4 4 4 5? 5 4 ?4 ?4 5 5 5 ?1? ?1 ?1 ?1 ?0 1x 1 / /? ?/π / / / .? ??.? ?. <. - - - --,,?,,-?----?+?* ??* ?+,>,,,?,?,?,--.?.?.?.%?À%%%%%%?%%?%?%?%&&'''?'?'?''?'())))x)?)?)?))*+++ǀX? π? ? ??? ##?&#&#? %#0%#x?%#?x%#?|%#?%#?%#?%#?%#%#%#%# ?%# $# ?$#?$# $# ?$# $#$#$#$#$#$#$#$###??####?##?##?#$ ?#$'$?'$'*'*'+'++XC d X    XX  ddZd  Figure 1  Figure 1 #` 2pPG;J` # U 1  1 y!HHX@Uddfcclogo.wpgHHy$XX%%%%!$\!d ddhd  eAL#I2PG;P#News media information 202 / 4180500 ?FaxOnDemand 202 / 4182830 Q[Internet: http://www.fcc.gov tftp.fcc.gov\!PUBLIC NOTICE#Xm2PG;jXP# ,%%A!!%,  P*-$*XX!%$X` hp x (#%'0*,.8135@8:to schools, libraries, and health care providers? Describe the programs, including the measurable outcomes and the associated costs.  d7#i19. Should an additional discount be given to schools and libraries located in rural, insular,  d7#highcost and economically disadvantaged areas? What percentage of telecommunications  d7#services (e.g., Internet services) used by schools and libraries in such areas are or require toll calls?  d7#20. Should the Commission use some existing model to determine the degree to which a school  d7#is disadvantaged (e.g., Title I or the national school lunch program)? Which one? What, if any, modifications should the Commission make to that model?  d7#21. Should the Commission use a sliding scale approach (i.e., along a continuum of need) or  d7#a step approach (e.g., the Lifeline assistance program or the national school lunch program) to  d7# allocate any additional consideration given to schools and libraries located in rural, insular, highcost, and economically disadvantaged areas?  d7#22. Should separate funding mechanisms be established for schools and libraries and for rural"),**XX +" health care providers?  d7#K23. Are the cost estimates contained in the McKinsey Report and NII KickStart Initiative an  d7#accurate funding estimate for the discount provisions for schools and libraries, assuming that tariffed rates are used as the base prices?  d7#24. Are there other cost estimates available that can serve as the basis for establishing a funding  d7#estimate for the discount provisions applicable to schools and libraries and to rural health care providers?  d7#25. Are there any specific cost estimates that address the discount funding estimates for eligible private schools?  Y -[[High Cost Fund  Y -General Questions  d7#26. If the existing highcost support mechanism remains in place (on either a permanent or  d7#temporary basis), what modifications, if any, are required to comply with the Telecommunications Act of 1996?  d7#27. If the highcost support system is kept in place for rural areas, how should it be modified to target the fund better and consistently with the Telecommunications Act of 1996?  d7#28. What are the potential advantages and disadvantages of basing the payments to competitive  d7#carriers on the book costs of the incumbent local exchange carrier operating in the same service area?  d7#29. Should price cap companies be eligible for highcost support, and if not, how would the  d7#exclusion of price cap carriers be consistent with the provisions of section 214(e) of the  d7#JCommunications Act? In the alternative, should highcost support be structured differently for price cap carriers than for other carriers?  d7#30. If price cap companies are not eligible for support or receive highcost support on a  d7#different basis than other carriers, what should be the definition of a "price cap" company?  d7#hWould companies participating in a state, but not a federal, price cap plan be deemed price cap  d7#companies? Should there be a distinction between carriers operating under price caps and  d7#carriers that have agreed, for a specified period of time, to limit increases in some or all rates as part of a "social contract" regulatory approach?  d7#31. If a bifurcated plan that would allow the use of book costs (instead of proxy costs) were used for rural companies, how should rural companies be defined?  d7#32. If such a bifurcated approach is used, should those carriers initially allowed to use book  d7#ycosts eventually transition to a proxy system or a system of competitive bidding? If these  d7#companies are transitioned from book costs, how long should the transition be? What would be  d7#;the basis for highcost assistance to competitors under a bifurcated approach, both initially and"),**XX +" during a transition period?  d7#33. If a proxy model is used, should carriers serving areas with subscription below a certain  d7#ylevel continue to receive assistance at levels currently produced under the HCF and DEM weighting subsidies?  Yv-Proxy Models  d7#h34. What, if any, programs (in addition to those aimed at highcost areas) are needed to ensure that insular areas have affordable telecommunications service?  d7# 35. US West has stated that an industry task force "could develop a final model process utilizing  d7#consensus model assumptions and input data," US West comments at 10. Comment on US  d7#West's statement, discussing potential legal issues and practical considerations in light of the  d7#requirement under the 1996 Act that the Commission take final action in this proceeding within six months of the Joint's Board's recommended decision.  d7#.36. What proposals, if any, have been considered by interested parties to harmonize the differences among the various proxy cost proposals? What results have been achieved?  d7#,37. How does a proxy model determine costs for providing only the defined universal service core services?  d7#38. How should a proxy model evolve to account for changes in the definition of core services or in the technical capabilities of various types of facilities?  d7#39. Should a proxy model account for the cost of access to advanced telecommunications and information services, as referenced in section 254(b) of the Act? If so, how should this occur?  d7#i40. If a proxy model is used, what, if any, measures are necessary to assure that urban rates  d7#and rates in rural, insular, and highcost areas are reasonably comparable, as required in Section 254(b)(3) of the 1996 Act.  d7#41. How should support be calculated for those areas (e.g., insular areas and Alaska) that are not included under the proxy model?  d7#42. Will support calculated using a proxy model provide sufficient incentive to support infrastructure development and maintain quality service?  d7#Y43. Should there be recourse for companies whose book costs are substantially above the costs  d7#projected for them under a proxy model? If so, under what conditions (for example, at what  d7#cost levels above the proxy amount) should carriers be granted a waiver allowing alternative treatment? What standards should be used when considering such requests? 44. How can a proxy model be modified to accommodate technological neutrality?  d7#K45. Is it appropriate for a proxy model adopted by the Commission in this proceeding to be"),**XX +" subject to proprietary restrictions, or must such a model be a public document?  d7#46. Should a proxy model be adopted if it is based on proprietary data that may not be available for public review?  d7#i47. If it is determined that proprietary data should not be employed in the proxy model, are  d7#there adequate data publicly available on current book costs to develop a proxy model? If so, identify the source(s) of such data.  d7#48. Should the materiality and potential importance of proprietary information be considered in evaluating the various models?  Y -Competitive Bidding  d7#49. How would highcost payments be determined under a system of competitive bidding in areas with no competition?  d7#50. How should a bidding system be structured in order to provide incentives for carriers to compete to submit the low bid for universal service support?  d7#51. What, if any, safeguards should be adopted to ensure that large companies do not bid excessively low to drive out competition?  d7#52. What safeguards should be adopted to ensure adequate quality of service under a system of competitive bidding? 53. How is collusion avoided when using a competitive bid? 54. Should the structure of the auction differ if there are few bidders? If so, how?  d7#J55. How should the Commission determine the size of the areas within which eligible carriers  d7#bid for universal service support? What is the optimal basis for determining the size of those  d7#Zareas, in order to avoid unfair advantage for either the incumbent local exchange carriers or competitive carriers?  Y-Benchmark Cost Model (BCM)  d7#56. How do the book costs of incumbent local exchange carriers compare with the calculated proxy costs of the Benchmark Cost Model (BCM) for the same areas?  d7#57. Should the BCM be modified to include nonwireline services? If wireless technology  d7#proves less costly than wireline facilities, should projected costs be capped at the level predicted for use of wireless technology?  d7#58. What are the advantages and disadvantages of using a wire center instead of a Census Block Group as the appropriate geographic area in projecting costs? "),**XX +"Ԍ d7#59. The Maine PUC and several other State commmissions proposed inclusion in the BCM of  d7# the costs of connecting exchanges to the public switched network through the use of microwave,  d7#trunk, or satellite technologies. Those commenters also proposed the use an additional extra d7#highcost variable for remote areas not accessible by road. What is the feasibility and the advisability of incorporating these changes into the BCM?  d7#60. The National Cable Television Association proposed a number of modifications to the BCM  d7#related to switching cost, fill factors, digital loop carrier subscriber equipment, penetration  d7#yassumptions, deployment of fiber versus copper technology assumptions, and service area  d7#interface costs. Which, if any, of these changes would be feasible and advisable to incorporate into the BCM?  d7#61. Should the support calculated using the Benchmark Cost Model also reflect subscriber income levels, as suggested by the Puerto Rico Telephone Company in its comments?  d7#i62. The BCM appears to compare unseparated costs, calculated using a proxy methodology,  d7#with a nationwide local benchmark rate. Does use of the BCM suggest that the costs calculated  d7#Jby the model would be recovered only through services included in the benchmark rate? Does  d7#the BCM require changes to existing separations and access charge rules? Is the model designed  d7#xto change as those rules are changed? Does the comparison of model costs with a local rate  d7#affordability benchmark create an opportunity for overrecovery from universal service support mechanisms?  d7#-63. Is it feasible and/or advisable to integrate the grid cell structure used in the Cost Proxy  d7#Model (CPM) proposed by Pacific Telesis into the BCM for identifying terrain and population in areas where population density is low?  Y-Cost Proxy Model Proposed by Pacific Telesis  d7#64. Can the grid cell structure used in the CPM reasonably identify population distribution in sparselypopulated areas? 65. Can the CPM be modified to identify terrain and soil type by grid cell?  d7#66. Can the CPM be used on a nationwide basis to estimate the cost of providing basic residential service?  d7#67. Using the CPM, what costs would be calculated by Census Block Group and by wire center for serving a rural, highcost state (e.g., Arkansas)?  d7#68. Is the CPM a selfcontained model, or does it rely on on other models, and if so, to what extent?  Y#'- hSLC/CCLCă  d7#69. If a portion of the CCL charge represents a subsidy to support universal service, what is  d7#Lthe total amount of the subsidy? Please provide supporting evidence to substantiate such"),**XX +"  d7#estimates. Supporting evidence should indicate the cost methodology used to estimate the magnitude of the subsidy (e.g., longrun incremental, shortrun incremental, fullydistributed).  d7#70. If a portion of the CCL charge represents a contribution to the recovery of loop costs,  d7#please identify and discuss alternatives to the CCL charge for recovery of those costs from all interstate telecommunications service providers (e.g., bulk billing, flat rate/perline charge).  Y_-DLowIncome Consumersă  d7#71. Should the new universal service fund provide support for the Lifeline and Linkup  d7#xprograms, in order to make those subsidies technologically and competitively neutral? If so,  d7#should the amount of the lifeline subsidy still be tied, as it is now, to the amount of the subscriber line charge?  Y -  Administration of Universal Service Supportă  d7#Z72. Section 254(d) of the 1996 Act provides that the Commission may exempt carriers from  d7# contributing to the support of universal service if their contribution would be "de minimis." The  d7#conference report indicates that "[t]he conferees intend that this authority would only be used  d7#+ in cases where the administrative cost of collecting contributions from a carrier or carriers would  d7#[exceed the contribution that carrier would otherwise have to make under the formula for  d7#contributions selected by the Commission." What levels of administrative costs should be  d7#expected per carrier under the various methods that have been proposed for funding (e.g., gross revenues, revenues net of payments to other carriers, retail revenues, etc.)? " ,**XXp"  X- Attachment 2: Service List  The Honorable Reed E. Hundt, Chairman Federal Communications Commission 1919 M Street, N.W. Room 814 Washington, D.C. 20554 The Honorable Rachelle B. Chong, Commissioner Federal Communications Commission 1919 M Street, N.W. Room 844 Washington, D.C. 20554 The Honorable Susan Ness, Commissioner Federal Communications Commission 1919 M Street, N.W. Room 832 Washington, D.C. 20554 The Honorable Julia Johnson, Commissioner Florida Public Service Commission Capital Circle Office Center 2540 Shumard Oak Blvd. Tallahassee, FL 323990850 The Honorable Kenneth McClure, Vice Chairman Missouri Public Service Commission 301 W. High Street, Suite 530 Jefferson City, MO 65102 The Honorable Sharon L. Nelson, Chairman Washington Utilities and Transportation Commission P.O. Box 47250 Olympia, WA 985047250 The Honorable Laska Schoenfelder, Commissioner South Dakota Public Utilities Commission 500 E. Capital Avenue Pierre, SD 57501 Martha S. Hogerty Public Counsel for the State of Missouri P.O. Box 7800 Harry S. Truman Building, Room 250 Jefferson City, MO 65102" ( ,**XX@)" Deborah Dupont, Federal Staff Chair Federal Communications Commission 2000 L Street, N.W., Suite 257 Washington, D.C. 20036  Y- Paul E. Pederson, State Staff Chair Missouri Public Service Commission P.O. Box 360 Truman State Office Building Jefferson City, MO 65102 Eileen Benner Idaho Public Utilities Commission P.O. Box 83720 Boise, ID 837200074  Y- Charles Bolle South Dakota Public Utilities Commission State Capital, 500 E. Capital Avenue Pierre, SD 575015070  Lorraine Kenyon Alaska Public Utilities Commission 1016 West Sixth Avenue, Suite 400 Anchorage, AK 99501 Debra M. Kriete Pennsylvania Public Utilities Commission P.O. Box 3265 Harrisburg, PA 171053265  Y7- Mark Long hhC Florida Public Service Commission 2540 Shumard Oak Blvd. Gerald Gunter Building Tallahassee, FL 323990850 Samuel Loudenslager Arkansas Public Service Commission P.O. Box 400 Little Rock, AR 722030400 XSandra Makeeff4# Iowa Utilities Board Lucas State Office Building Des Moines, IA 50319 ") ,**XX +"ԌPhilip F. McClelland Pennsylvania Office of Consumer Advocate 1425 Strawberry Square Harrisburg, Pennsylvania 17120 Michael A. McRae D.C. Office of the People's Counsel 1133 15th Street, N.W. Suite 500 Washington, D.C. 20005 Terry Monroe New York Public Service Commission Three Empire Plaza Albany, NY 12223 Mark Nadel Federal Communications Commission 1919 M Street, N.W., Room 542 Washington, D.C. 20554 Lee Palagyi Washington Utilities and Transportation Commission P.O. Box 47250 Olympia, WA 985047250 Jeanine Poltronieri Federal Communications Commission 2000 L Street, N.W., Suite 257 Washington, D.C. 20036 James Bradford Ramsay National Association of Regulatory Utility Commissioners 1201 Constitution Avenue, N.W. Washington, D.C. 20423 Jonathan Reel Federal Communications Commission 2000 L Street, N.W., Suite 257 Washington, D.C. 20036 Brian Roberts California Public Utilities Commission 505 Van Ness Avenue San Francisco, CA 941023298 ") ,**XX +"ԌGary Seigel Federal Communications Commission 2000 L Street, N.W., Suite 812 Washington, D.C. 20036 Pamela Szymczak Federal Communications Commission 2000 L Street, N.W., Suite 257 Washington, D.C. 20036 Whiting Thayer Federal Communications Commission 2000 L Street, N.W., Suite 812 Washington, D.C. 20036  Alex Belinfante Federal Communications Commission 1919 M Street, N.W. Washington, D.C. 20554 Larry Povich Federal Communications Commission 1919 M Street, N.W. Washington, D.C. 20554