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 STATEMENT  OF  COMMISSIONER  KEVIN  J.  MARTIN 
 Today’s  public  notice  seeks  comment  on  issues  referred  to  the  Federal-  State  Joint  Board  on  Universal  Service  relating  to  the  high-  cost  universal  service  support  mechanisms  for  rural 
 carriers  and  the  appropriate  rural  mechanism  to  succeed  the  five-  year  plan  adopted  in  the  Rural  Task  Force  Order.  The  Commission  specifically  asked  the  Joint  Board  to  “consider  whether  the 
 current  forward-  looking  economic  cost  model,  used  in  calculating  high-  cost  support  for  non-  rural  telephone  companies,  is  appropriate  for  some  or  all  rural  telephone  companies,  or  if  some  other 
 method  for  estimating  forward-  looking  economic  costs  would  be  better  suited  for  some  or  all  rural  telephone  companies.”  1  I  am  increasingly  concerned  by  the  decision  to  revisit  whether  the 
 Commission  should  adopt  a  universal  service  support  mechanism  for  rural  carriers  based  on  hypothetical  forward-  looking  economic  costs.  2 


 In  establishing  a  universal  service  support  mechanism  based  on  actual  costs,  the  Commission  recognized  that  the  forward-  looking  economic  cost  model  support  mechanism 
 adopted  for  non-  rural  companies  may  not  be  appropriate  for  rural  companies.  The  Rural  Task  Force  made  clear  that  the  one  of  the  cornerstone  concepts  of  their  recommendation  “was  the 
 decision  to  recommend  the  continued  use  of  embedded  cost  methods  rather  than  the  Commission’s  forward-  looking  cost  model  for  sizing  universal  service  support  for  rural 
 carriers.”  3  I  questioned  the  Commission’s  use  of  forward-  looking  costs  as  the  basis  for  distributing  universal  service  support  for  non-  rural  telephone  companies  and  would  have  even 
 greater  concerns  if  such  an  approach  would  be  used  to  distribute  support  to  rural  companies.  4  I  continue  to  believe  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. 


 1  Federal-  State  Joint  Board  on  Universal  Service,  Order,  CC  Docket  No.  96-  45,  FCC  04-  125  (rel.  June  28, 
 2004),  at  para.  9. 
 2  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) 
 3  Reply  Comments  of  the  Rural  Task  Force  on  the  Rural  Task  Force  Recommendation,  Federal-  State  Joint 
 Board  on  Universal  Service,  CC  Docket  No.  96-  45,  FCC  01-  08  (March  12,  2001). 
 4  See,  Statement  of  Commissioner  Kevin  J.  Martin,  Federal-  State  Joint  Board  on  Universal  Service,  CC 
 Docket  96-  45,  Joint  Board  Recommendation  (adopted,  Oct.  16,  2003) 
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