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Western Governors' Association Calls on the Federal Communications Commission to Establish a Fully Funded National Universal Service Fund

At its 1999 winter meeting, the Western Governors' Association (WGA) urged the Federal Communications Commission to establish a fully funded National Universal Service fund to provide telecommunication service in high cost areas. The Resolution was prompted by the FCC's latest decision to shift the majority of universal service funding away from the western states. Under the latest decision, only Wyoming would receive universal service funding for high cost systems. This results in a $22 million dollar loss of universal service funding to the western states. Unless the FCC changes its decision, these states will be forced to make-up the shortfall. The Resolution is attached.

Resolution on National Universal Service Fund for all High-Cost Telecommunications Customers

December 3, 1999

SPONSORS: Governors Schafer (ND), Knowles (AK) and Geringer (WY)

A. BACKGROUND

  1. This nation has benefited greatly from policies that are fundamentally rooted in national support for infrastructure investment in critical areas, such as water resources, airports, highways and communications.
  2. Since the passage of the Communications Act of 1934, it has been a major public objective of the United States that all Americans, regardless of where they live, have access to quality local phone service at reasonable and affordable rates.
  3. Congress in the Telecommunications Act of 1996 (the "Act") continued and strengthened this commitment by giving the Federal-State Joint Board on Universal Service and the Federal Communications Commission (FCC) the authority to recommend and implement policies that ensure the preservation and advancement of universal service.
  4. The FCC's May 1997 decision raises serious questions about the future of universal telecommunications service in America and the affordability of that service for rural, high-cost customers.
  5. The FCC's decision did address some important policy issues by establishing a $2.25 billion per year fund for school and libraries; establishing a $400 million per year fund for rural and island territory health-care providers; and allowing small rural and island territory telephone companies to continue receiving federal high-cost support from the current universal service fund through 2001.
  6. In 1999, the FCC made a decision on establishing a high-cost fund for the Nation's rural and island territory customers who are served by large telecommunications companies.
  7. The federal high-cost fund, as now proposed, includes an economic cost model to determine how much universal service support money will be needed and where it will be spent. Currently, seven of the fourteen Western states receive federal universal service support monies. When the new funding mechanism is fully implemented at the end of 2003, the model would allow only Wyoming among the Western states to receive any high-cost support, and that support would be decreased by 27 percent. Overall, the Western states would suffer a loss of $22 million in high- cost universal service funds, leaving the remainder of the support to be made up by state universal service or high-cost funds.
  8. The Act requires federal universal service support mechanisms to be "specific, predictable and sufficient." Further, persons in rural, insular and high-cost areas should have access to services reasonably comparable to those in urban areas at rates reasonably comparable to those charged for similar services in urban areas.
  9. The cost to serve customers in the West is higher than anywhere else in the country and universal service for all Americans, particularly in the West, is in jeopardy unless the FCC satisfactorily addresses the need for a fully funded, national high-cost fund in a timely and equitable manner.

B. GOVERNORS' POLICY STATEMENT

  1. Western Governors strongly urge the FCC to establish (prior to any reduction or elimination of existing support) a fully funded national universal service fund accessible by eligible telecommunications companies, as defined by the Act, providing service in high-cost areas that is supported on an equitable and nondiscriminatory basis through contributions by all telecommunications providers.
  2. Western Governors strongly urge the FCC to carefully examine its proposed universal service support economic cost model and to take steps to ensure that a fair and equitable result is reached for all Americans, carrying out the clearly stated intent of the Act.

C. GOVERNORS' MANAGEMENT DIRECTIVES

  1. The Western Governors' Association (WGA) shall transmit this resolution to the chairman of the Federal Communications Commission.
  2. WGA is to continue to report to the Governors on the actions taken by the FCC related to this matter.

Historic note: This resolution was originally adopted in 1997 as WGA Policy Resolution 97 - 025. Approval of a WGA resolution requires an affirmative vote of two-thirds of the Board of the Directors present at the meeting. Dissenting votes, if any, are indicated in the resolution. The Board of Directors is comprised of the governors of Alaska, American Samoa, Arizona, California, Colorado, Guam, Hawaii, Idaho, Kansas, Montana, Nebraska, Nevada, New Mexico, North Dakota, Northern Mariana Islands, Oregon, South Dakota, Texas, Utah, Washington and Wyoming.

The WGA is a non-partisan organization of governors from 18 Western states, two Pacific-flag territories and one commonwealth. The Western Governors recognize that many vital issues and opportunities shaping the future span state lines and are shared throughout the West.

For more information on the WGA: http://www.westgov.org/

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