Whippany, NJ - August 9, 2004 - The National Exchange Carrier Association  (NECA) has filed comments with the Federal Communications Commission suggesting that the Federal-State Joint Board proposal to limit universal service support to one “primary connection” per customer may make universal service support mechanisms insufficient and may destabilize related access tariff cost recovery mechanisms. Further, the primary connection proposal is likely to be unworkable. NECA recommends, however, that the FCC adopt and consider strengthening the Joint Board’s recommendations regarding ETC designation and monitoring, for example, by making the proposed guidelines mandatory.

NECA’s filing explains that the Joint Board’s “primary connection” proposal could raise rural local exchange carrier (LEC) access charge and end user rates, and impede its ability to collect accurate high cost loop data pursuant to Part 36 of the Commission’s rules.  Because the plan focuses on individual network connections rather than networks, it may also make universal service insufficient, unstable and unpredictable as well, in contradiction of the goals set forth in section 254 of the Communications Act mandating that consumers in rural areas have access to services that are reasonably comparable to the services provided in urban areas at comparable rates.

Under the Joint Board’s proposed plan universal service funding, one of the main bases of support for rural networks, will be provided for only one line per household instead of all lines, as is now the case.

If only one primary connection were to be subsidized other necessary connections such as fax and Internet lines could lose support.  Additionally, rural businesses with multiple lines would suffer a competitive disadvantage if only their primary connection would receive universal service support. 
 
Based on experienced gained as administrator of a presubscribed line-based universal service collection mechanism in the 1990’s, NECA suggests that the primary connection proposal would likely provoke a myriad of definitional, tracking, administration and dispute resolution problems that would require substantial industry and regulatory resources to resolve.  The proposal also can be expected to cause substantial consumer confusion and may provide incentive to carriers and consumers alike to attempt to “game the system” by misreporting data.