The Honorable Reed E. Hundt
Chairman
Federal Communications Commission
1919 M Street, N.W.
Washington, D.C. 20554
Dear Chairman Hundt,
I want to thank you and the other members of the Joint Board for inviting the
Administration to present our E-rate plan on October 17, 1996. We were pleased by the
positive comments of the Board with respect to the framework of the plan and the need to
ensure that all schools and libraries have access to a basic package of services as well as the
opportunity to obtain and use an advanced network of services on a sustained basis. We stand
ready to answer any questions that you may have about the plan and to work through the
details that would ensure its adoption and success.
In addition to the decision that you must reach on the E-rate, you are also faced with
important and complex questions concerning universal service generally. The Administration
has been and continues to be committed to the preservation and enhancement of universal
service for all Americans. In the past year, NTIA has submitted to the Commission and the
Joint Board two major pleadings discussing universal service issues and telephone
subscribership generally. To again highlight our concern with respect to these crucial issues, I
have enclosed copies of both prior pleadings, along with a separate paper summarizing the
pleadings' principal policy recommendations for your consideration.
Although the United States has made great strides in realizing the universal service
goal, there are nevertheless some 6 million households today that do not have telephone
service. There also remain significant disparities in telephone penetration among households
by income, race and ethnicity, level of education, and geography. It is thus imperative that the
Joint Board devise effective and targeted support mechanisms to ensure the affordability of
telephone service for these and other underserved segments of our society.
The Joint Board must also ensure that the universal service package to be made
available and affordable to all Americans can evolve with changing technology and consumer
demand. Voice grade service may today be sufficient to allow subscribers to communicate
among themselves and to sample the growing range of information services available to them
via the Internet and other sources. In the future, however, new capabilities and services will
likely be needed to give households a full and fair opportunity to enjoy the riches of the
Information Age. The Joint Board's polices must ensure that when such capabilities and
services become essential, they will be universally available.
Finally, as the Commission and the Joint Board facilitate the transition from a
regulated, monopoly-based industry to a competitive environment by realigning cost with
price, we must ensure that American consumers are not adversely affected. Universal service
support for low-income and high-cost areas must be preserved and any rate-shock avoided.
As the Joint Board grapples with the many important issues highlighted in this letter,
the enclosed pleadings and summary are again presented for your consideration. I would be
happy to discuss these further with you or with any of your colleagues on the Joint Board in
the coming weeks.
Sincerely,
Larry Irving
cc:
Commissioner Rachelle B. Chong
Commissioner Susan Ness
Commissioner Julia L. Johnson, Florida
Public Service Commission
Commissioner Kenneth McClure, Missouri
Public Service Commission
Commissioner Sharon L. Nelson, Washington
Utilities and Transportation Commission
Martha S. Hogerty, Public Counsel for the
State of Missouri
Commissioner Laska Schoenfelder, South Dakota
Public Utilities Commission