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 SEPARATE  STATEMENT  OF  COMMISSIONER  JONATHAN  S.  ADELSTEIN 
 Re:  In  the  Matter  of  Multi-  Association  Group  (MAG)  Plan  for  Regulation  of  Interstate  Services  of  Non-  Price  Cap  Incumbent  Local  Exchange  Carriers  and  Interexchange 
 Carriers,  CC  Docket  No.  00-  256;  Federal-  State  Joint  Board  on  Universal  Service,  CC  Docket  No.  96-  45 


 I  am  pleased  that  we  are  modifying  the  all-  or-  nothing  rule  to  permit  a  rate-  of-  return  carrier  that  has  acquired  price  cap  lines  through  a  merger  or  acquisition  to  convert  the 
 acquired  price  cap  lines  back  to  rate-  of-  return  regulation  without  obtaining  a  waiver.  This  modification  will  help  reduce  the  administrative  burdens  associated  with  these 
 mergers  and  acquisitions,  and  ensure  that  these  unnecessary  costs  do  not  discourage  participation  by  interested  parties.  Moreover,  acquiring  carriers  can  funnel  those 
 administrative  costs  into  their  new  networks,  thereby  fueling  network  development. 
 Pricing  flexibility  is  critical  to  incumbent  companies  as  they  face  competitive  entry  in  their  service  areas.  Permitting  rate  of  return  carriers  to  deaverage  their  rates 
 geographically  for  transport  and  special  access  services  and  to  define  both  the  scope  and  number  of  zones,  pursuant  to  certain  qualifications,  will  better  equip  these  carriers  to 
 compete  on  a  more  level  playing  field  with  the  new  entrants  that  are  not  bound  by  the  same  regulatory  requirements. 


 I  look  forward  to  discussion  in  response  to  the  NPRM  regarding  the  alternative  regulation  proposals  and  that  regarding  further  relief  under  the  all-  or-  nothing  rule  to  build  upon  the 
 decision  we’ve  made  today. 
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