*Pages 1--1 from  Microsoft Word - 48107.doc*
 STATEMENT  OF  COMMISSIONER  JONATHAN  S.  ADELSTEIN 
 Re:  Federal-  State  Joint  Board  on  Universal  Service,  CC  Docket  No.  96-  45  (FCC  05-  46). 
 Through  this  Order,  the  Commission  acts  on  the  recommendations  of  the  Federal-  State  Joint  Board  on  Universal  Service  concerning  the  designation  of  eligible  telecommunications  carriers  (ETCs).  I 
 support  this  Order  because  it  largely  reflects  the  consensus  of  the  Joint  Board,  which  worked  hard  to  establish  useful  guidelines  for  the  designation  of  multiple  ETCs  in  high  cost  areas. 


 I  am  pleased  that  this  item  recognizes,  as  Congress  did  in  the  Telecommunications  Act  of  1996,  that  the  FCC  and  State  commissions  must  take  greater  care  in  examining  the  public  interest  to  determine 
 the  wisdom  of  multiple  ETCs  in  rural,  high  cost  areas.  Establishing  a  more  substantive  public  interest  test  and  providing  meaningful  guidance  on  ETC  designations  will  help  ensure  that  federal  universal  service 
 funding  is  available  only  to  those  providers  who  are  committed  to  serving  rural  communities.  For  example,  this  Order  adopts  the  Joint  Board’s  recommendation  that  State  commissions  have  flexibility  to 
 harmonize  existing  carrier-  of-  last-  resort  and  line  extension  obligations  when  designating  additional  ETCs.  The  Order  also  establishes  more  rigorous  certification  and  reporting  requirements  for  FCC-  designated 
 ETCs,  and  encourages  State  commissions  to  take  similar  approaches. 
 While  establishing  a  more  meaningful  public  interest  test  is  a  necessary  step  in  our  efforts  to  manage  responsibly  the  growth  of  the  universal  service  fund,  there  may  be  some  missed  opportunities 
 here.  Commenters  argued  that  the  Commission  should  adopt  specific  tools  to  enable  or  incent  the  FCC  and  State  commissions  to  consider  the  impact  of  additional  designations  on  the  overall  size  of  the  fund,  a 
 growth  dynamic  that  this  Order  lightly  acknowledges  and  does  not  adequately  attempt  to  forecast.  I  believe  that  we  could  have  done  more  to  explore  frameworks  to  identify  those  very  high-  cost  areas  where 
 it  may  be  prohibitive  to  fund  more  than  one  ETC.  This  Order  declines  to  adopt  a  specific  national  benchmark  based  on  this  record,  but  I  am  pleased  that  it  gives  State  commissions  the  flexibility  to 
 consider  whether  the  dilution  of  support  caused  by  additional  designations  would  undermine  the  ability  of  carriers  to  offer  comparable  service  at  comparable  rates. 


 It  also  bears  emphasis  that  the  FCC  must  lead  by  example  in  applying  these  designation  criteria  and  a  rigorous  public  interest  standard.  Commenters  have  raised  concerns  about  the  Commission’s  past 
 application  of  the  existing  ETC  designation  standards  and  I  take  these  concerns  seriously.  Even  if  some  of  the  tools  available  to  the  FCC  for  our  designations  lack  the  nuance  or  sophistication  of  the  tools 
 available  to  State  commissions,  our  FCC  designation  criteria  should  not  be  applied  in  a  rote  or  mechanical  fashion.  Rather,  our  designation  decisions  must  involve  careful  consideration  of  the  facts  before  us  and 
 the  unique  nature  of  individual  circumstances,  in  order  to  satisfy  our  obligations  as  stewards  of  the  universal  service  fund. 


 Although  I  would  have  considered  additional  measures  to  strengthen  FCC  designation  of  ETCs  and  to  address  the  impact  of  ETC  designations  on  the  universal  service  fund,,  I  find  that  this  Order  is 
 largely  faithful  to  the  recommendations  of  my  colleagues  on  the  Joint  Board,  whose  contributions  and  efforts  I  value  highly,  and  that  it  marks  a  measurable  improvement  in  the  level  of  guidance  that  the  FCC 
 previously  provided  to  State  commissions  and  ETC  applicants,  alike.  The  Order  also  includes  a  firm  commitment  to  revisit  these  issues  again,  which  will  provide  an  opportunity  to  assess  the  effectiveness  of 
 the  measures  we  adopt  today.  For  these  reasons,  I  support  this  item. 
1