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 STATEMENT  OF  CHAIRMAN  MICHAEL  K.  POWELL 
 Re:  AT&  T  Corp.  Petition  for  Declaratory  Ruling  Regarding  Enhanced  Prepaid  Calling  Card  Services,  WC  Docket  No.  03-  133;  Regulation  of  Prepaid  Calling  Card  Services, 
 WC  Docket  No.  05-  68. 


 Companies  cannot  engage  in  misdirection  or  word  games  to  avoid  their  universal  service  obligations.  And  they  certainly  cannot  unilaterally  decide  when  and  where  they  pay  their 
 universal  service  charges.  These  payments  are  the  law  of  land  –  and  they  apply  to  all  calling  cards  that  offer  telecommunications  services.  Today  we  reject  any  ambiguity  created  by  these 
 companies’  efforts  to  duck  their  universal  service  responsibilities. 
 The  original  calling  card  service  described  in  the  petition  is  a  telecommunications  service  and  therefore  the  provider  must  pay  universal  service  fees.  Recent  filings  with  the  Securities  and 
 Exchange  Commission  indicate  that  one  company  alone  has  withheld  approximately  $160  million  from  the  Fund.  That  amount  would  subsidize  telephone  service  for  over  6  million  low  income 
 consumers  for  an  entire  quarter.  Or  provide  enough  resources  for  the  first  four  years  of  the  rural  telemedicine  program.  One  carrier’s  failure  to  comply  with  its  universal  service  obligations 
 means  that  other  carriers  and  their  customers  pay  more  for  service,  and  the  burden  is  shifted  from  one  group  to  another  –  unfairly. 


 AT&  T  has  engaged  in  a  campaign  to  suggest  that  consumer  rates  would  rise  20  percent  or  more  if  carriers  are  required  to  pay  their  fair  share.  They  have  gone  so  far  as  to  take  the 
 extraordinary  step  of  conscripting  consumers  into  a  lobbying  effort  directed  at  this  Commission  and  members  of  Congress.  Shamelessly,  they  trumpet  the  impact  of  this  decision  on  our  soldiers 
 serving  in  Iraq.  What  is  remarkable  about  this  allegation  is  that  other  carriers  are  offering  comparable  rates  to  people  serving  in  the  military  –  some  have  even  offered  to  donate  free  service 
 -  without  taking  funds  from  our  rural  universal  service  program  or  programs  designed  to  help  low-  income  individuals.  The  FCC  must  be  and  is  concerned  about  the  impact  of  our  rulings  on 
 servicemen  and  their  families.  However  some  companies’  advocacy  on  this  issue  is  better  seen  as  an  attempt  to  distract  the  public  from  companies’  underlying  effort  to  evade  their  regulatory 
 responsibilities  to  the  Universal  Service  Fund.  Today  we  level  the  playing  field  so  that  all  calling  card  carriers  pay  their  fair  share. 
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