*Pages 1--2 from  Microsoft Word - 23722.doc*
 particular,  the  FCC  seeks  comment  on  additional  modifications  to  the  revenue-  based  system  and  on  the  following  three  connection-  based  contribution  systems  as  long-  term 
 solutions: 
 1.  A  proposed  contribution  methodology  that  would  impose  a  minimum  contribution  obligation  on  all  interstate  telecommunications  carriers  and  a  flat 
 charge  for  each  end-  user  connection  depending  on  the  nature  or  capacity  of  the  connection. 


 2.  A  proposal  to  assess  all  connections  based  purely  on  capacity.  Under  this  proposal,  the  contribution  obligation  for  each  end-  user  connection  would  be 
 shared  between  access  and  transport  providers. 
 3.  A  proposal  to  assess  providers  of  switched  connections  based  on  their  working  telephone  numbers. 


 Background  on  USF  The  USF  is  the  support  mechanism  to  ensure  that  high  quality,  affordable 
 telecommunications  service  is  available  to  all  Americans.  The  USF  provides  support  and  discounts  for:  1)  telecommunications  services  for  consumers  who  live  in  high-  cost  and 
 rural  areas;  2)  telecommunications  services  for  low-  income  consumers;  3)  telecommunications  services,  Internet  access  and  internal  connections  for  schools  and 
 libraries;  and  4)  telecommunications  services  for  rural  health  care  providers. 
 Under  the  current  universal  service  rules,  carriers’  contributions  are  assessed  as  a  percentage  of  their  interstate  and  international  end-  user  telecommunications  revenues. 
 Currently,  wireline  long  distance  companies  contribute  63%  of  the  universal  service  fund,  with  the  remainder  coming  from  local  exchange  companies  and  wireless  companies. 


 -FCC- 
 CC  Docket  Nos.:  96-  45,  98-  171,  90-  571,  92-  237,  99-  200,  95-  116,  and  98-  170. 
 Action  by  the  Commission  December  12,  2002  by  Report  and  Order  and  Second  Further  Notice  of  Proposed  Rulemaking  (FCC  02-  329).  Chairman  Powell  and 
 Commissioners,  Abernathy,  Copps,  and  Martin  issuing  separate  statements;  Commissioner  Adelstein  not  participating. 


 Wireline  Competition  Bureau  Staff  Contact:  Diane  Hsu  Law  at  202-  418-  7400. 
 News  about  the  Federal  Communications  Commission  can  also  be  found  on  the  Commission’s  web  site  www.  fcc.  gov. 
2