STATEMENT OF
COMMISSIONER ROBERT M. McDOWELL
Re:  High-Cost Universal Service Support, Federal-State Joint Board on Universal Service, Alltel 
Communications, Inc., et al. Petitions for Designation as Eligible Telecommunications Carriers, RCC 
Minnesota, Inc. and RCC Atlantic, Inc. New Hampshire ETC Designation Amendment, WC Docket 
No. 05-337, CC Docket No. 96-45.
I support this Order imposing an interim cap on the Universal Service High Cost Fund.  Since 
becoming a commissioner, I have maintained that controlling the growth of the fund should be the 
Commission’s first priority.  Like an unabated fever, expenditures from this fund continue to spike out of 
control.  Ultimately, it is consumers who pay for these unbridled escalations.  While the Commission 
works toward broader and permanent reform, it is our duty to enact a temporary measure to instill fiscal 
discipline.  
For a time, it appeared as though the runaway growth of the fund was slowing.  After a spike in 
the contribution factor to 11.7 percent for the second quarter of 2007, the factor declined steadily to 10.2 
percent for the first quarter of 2008.  However, the contribution factor is on the increase again, to 11.3 
percent for the second quarter of 2008, as announced by the Commission’s Office of Managing Director 
on March 14.  Funding for competitive eligible telecommunications carriers (CETCs) is increasing at a 
rate of roughly $150 million per year, and some estimate that the CETC funding level could reach as high 
as $1.4 billion by 2009, if left unchecked.  Moreover, this estimate does not even take into account the 
additional potential increase in demand for CETC funding to build out AWS and 700 MHz spectrum 
when services on those frequencies come on line.  
As a result of our order, the fund is frozen at March 2008 levels.  Additionally, I support an 
exception for all of the providers serving tribal lands across the country, and Alaska Native lands – some 
of the most under-served parts of America.  This limited exception will ensure that companies operating 
in these remote areas will continue to receive high-cost support to provide their services while we move 
toward a permanent solution.  Furthermore, these terms do not favor any specific provider.  
I look forward to pursuing comprehensive reform of the Universal Service system as quickly as 
possible.  The Commission has a rare opportunity to enact permanent reform this year, and I am 
encouraged by the Chairman’s pledge to forge ahead.  As always, I will work closely with my colleagues, 
Congress, industry, and consumers toward this end.