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 STATEMENT  OF  COMMISSIONER  KEVIN  J.  MARTIN 
 Approving  in  Part,  Concurring  in  Part,  Dissenting  in  Part 
 Re:  Federal-  State  Joint  Board  on  Universal  Service,  CC  Docket  No.  96-  45 
 Today’s  decision  addresses  various  pending  petitions  for  reconsideration  filed  in  response  to  the  Commission’s  1997  Universal  Service  decision  and  certain  subsequent 
 orders. 
 As  I  have  stated  previously,  I  am  increasingly  concerned  by  the  recent  decision  to  revisit  whether  the  Commission  should  adopt  a  universal  service  support  mechanism  for 
 rural  carriers  based  on  hypothetical  forward-  looking  economic  costs.  1  Today’s  decision  raises  similar  concerns  regarding  the  Commission’s  characterization  of  how  to  address 
 universal  service  high  cost  support  in  rural  areas.  I  continue  to  have  concerns  with  this  approach  and  believe  that  we  could  better  achieve  sufficient  universal  service  support  and 
 comparability  of  rates  if  we  base  our  universal  service  support  system  on  actual  rather  than  forward  looking  costs.  Accordingly,  I  concur  in  the  result  of  this  part  of  the  Order. 


 The  Commission  also  rejects  the  Puerto  Rico  Telephone  Company’s  (“  PRTC”)  proposal  to  treat  non-  rural  carriers  serving  Alaska  or  insular  areas  as  rural  carriers  for 
 purposes  of  calculating  and  distributing  high-  cost  support.  The  decision  also  fails  to  address  the  PRTC’s  separate  request—  which  has  been  pending  for  more  than  one  year-  - 
 that  the  Commission  create  a  separate  category  of  “non-  rural  insular”  carriers  for  purposes  of  intrastate  high-  cost  support.  2  As  a  result  of  the  Commission’s  modification 
 of  its  universal  service  program,  the  PRTC  lost  all  of  its  high-  cost  loop  support  within  in  a  four  year  period.  The  record  demonstrates  the  unique  challenges  facing  insular  areas, 
 such  as  Puerto  Rico,  that  have  exceedingly  low  subscribership  rates  and  unusually  high  costs  to  deploy  and  maintain  affordable  service  to  underserved  rural  areas.  Based  on  this 
 evidence,  I  believe  that  the  Commission  could  have  moved  forward  to  grant  the  PRTC’s  proposal.  Accordingly,  I  dissent  to  this  part  of  the  Order. 


 1  See  Statement  of  Commissioner  Kevin  J.  Martin,  Federal-  State  Joint  Board  on  Universal  Service, 
 Order,  CC  Docket  No.  96-  45,  FCC  04-  125  (rel.  June  28,  2004).  2  Ex  Parte  of  Puerto  Rico  Telephone  Company,  Inc.,  from  Greg  J.  Vogt,  Counsel  for  Puerto  Rico 


 Telephone  Company,  Inc.,  CC  Docket  Nos.  00-  256,  96-  45,  98-  77,  98-  166  (February  28,  2003). 
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