1
STATEMENT OF
COMMISSIONER MEREDITH ATTWELL BAKER
Re: Connect America Fund, WC Docket No. 10-90, A National Broadband Plan for Our 
Future, GN Docket No. 09-51, Establishing Just and Reasonable Rates for Local 
Exchange Carriers, WC Docket No. 07-135, High-Cost Universal Service Support, WC 
Docket No. 05-337, Developing an Unified Intercarrier Compensation Regime, CC 
Docket No. 01-92, Federal-State Joint Board on Universal Service, CC Docket No. 96-
45, Lifeline and Link-Up, WC Docket No. 03-109
It is far from newsworthy that our universal service and intercarrier compensation 
regimes are unsustainable as currently structured and overdue for a significant overhaul.  The 
Commission has struggled for the past decade with how to reform these regimes and shift their 
focus to tomorrow’s networks and challenges.  It is also self-evident how critical these regimes 
have been for carriers—small, mid-sized, and large—to deliver telephone service nationwide, as 
well as deploy much of today’s broadband infrastructure.  I support the Notice’s comprehensive 
approach to reform universal service and intercarrier compensation.  
In this proceeding, we must resolve the intractable issues that have frustrated prior 
Commission reform efforts and put these programs on a path to long-term sustainability with a 
clear focus on a new national challenge, universal broadband availability.  Newly configured and 
purpose-built programs will be necessary so that all Americans, particularly those in rural 
America, have a clear path for a bright broadband future.   
Many providers are justifiably concerned about how reform could affect their network 
investments, service to customers, and even their financial viability.  We need to move quickly to 
provide clarity to all providers as to future shape of these regimes, and to take full advantage of 
this limited window of opportunity for real reform.  We have to acknowledge that the uncertainty 
surrounding the future of existing revenue streams has consequences on consumers today, 
inhibiting the ability of providers to justify network investment, slowing broadband deployment.  
In moving ahead with reform, we must embrace an IP-based broadband future without depriving 
providers overnight of existing revenues critical to private investment in our broadband 
infrastructure.  I support the Notice’s focus on this long-term objective with clear recognition of 
the need to avoid flash cuts in existing support.  
I also support the sensible approach in the Notice to design new funding mechanisms for 
broadband.  We should resist the urge to simply layer broadband funding on to the top of today’s 
fractured system or to start offering duplicative broadband support in addition to existing voice-
based support.  We need a fresh approach that drives our telecommunications infrastructure from 
voice to broadband and from circuit-switched to IP.  It is more fiscally responsible and prudent to 
craft broadband-specific programs that can better ensure accountability, efficiency, and adequate 
funding in areas where market forces are not sufficient to drive broadband services to America’s 
consumers. 
I also appreciate the Notice’s overall focus on the need for cost-containment.  The total 
universal service fund has grown from $2.3 billion in 1998 to nearly $9 billion today. The high-
cost fund alone has increased from $1.7 billion in 1998 to $4.4 billion today.  Consumers pay for 
this. The universal service contribution factor this quarter is at an all-time high of 15.5 percent. 
This is real money from real people. It is our obligation to ensure that money is spent wisely to 
achieve the goals set out by Congress.  Taking affirmative steps to stop runaway growth in all 
2
parts of the universal service program is crucial, but it is not—standing-alone—sufficient reform.  
Simply shifting the billions spent on voice subsidies to broadband subsidies would forfeit a 
unique opportunity to ensure that funding is properly targeted and directed at only those 
communities that require ongoing support, and that the billions collected from consumers is 
expended in a fiscally responsible manner.
There are significant and difficult decisions ahead, and it will be important for all of us to 
work together to redefine universal service and intercarrier compensation for the broadband age.