IN THE MATTER OF		)
				)
Federal-State Joint Board on	)	CC Docket No. 96-45
Universal Service		)

The Office of the People's Counsel for the District of Columbia (OPC-DC) hereby submits its Comments in the above captioned proceeding pursuant to the Federal Communications Commission's (FCC or Commission) Notice of Proposed Rulemaking (Notice) released March 8, 1996. As the statutory representative of utility ratepayers in the District of Columbia, OPC-DC welcomes the opportunity to comment on the universal service issues raised in the Notice in an effort to assist the Commission and Joint Board implement the universal service mandates of the Telecommunications Act of 1996 (1996 Act).

OPC-DC's objective and interest in this proceeding is to ensure that as competitive telecommunications markets continue to evolve, District of Columbia ratepayers and consumers are provided "quality service" at just, reasonable and affordable rates, as mandated under the 1996 Act. The creation of fair and equitable universal service rules and regulations is a fundamental precept to achieving this objective.

Federal and state cooperation is vital in this effort. However, when defining which services on a local level, should be supported by universal service mechanisms, and which regulations best implement these mechanisms, each state, with its own unique demographics, demands individual attention. Guided by a strong federal universal service regulatory policy, state commissions must begin to build state-specific universal service plans that not only incorporate federal guidelines, but go further to provide enhanced support mechanisms and a wider variety of both core and advanced services to all residential consumers. OPC-DC's comments focus on the areas that most directly impact District of Columbia ratepayers.

I. Introduction

OPC-DC has limited the scope of its comments to four areas: (1) quality service; (2) affordability of rates; (3) deployment of telecommunications services to schools, health care facilities and libraries; and (4) ensuring that expenses properly attributable to carriers are not shifted to end-users and residential customers.

Consistent with its general concerns, OPC-DC offers specific recommendations:

_ prohibiting a carrier from disconnecting a telephone subscriber's local service for failure to pay long distance charges

_ providing toll blocking options to low-income customers at no or discounted costs

_ prohibiting carriers from requiring end-users to pay for expenses

incurred by the carriers to fund universal services

_ creating an effective consumer complaint process through which consumers will be informed and can address quality service issues

I. Disconnect For Non-Payment of Toll Charges and High Service Deposits (Paragraph 56)

OPC-DC agrees with the results of the studies cited by the Commission in paragraph 56 of the Notice which indicate that "disconnection for non-payment" (DNP) of toll charges, and the high deposits carriers charge to cover the cost of noncollectible charges, may be more significant barriers to universal service than the cost of local service itself."[1] With respect to DNP, OPC-DC strongly believes common carriers should be prohibited from interrupting or disconnecting a telephone subscriber's local exchange service for failure to pay long distance charges. The findings of a 1993 report completed by Bell Atlantic - Washington, D.C., Inc. (BA-DC), -- currently the monopoly provider of local exchange telecommunications service in the District of Columbia supports our position. According to the 1993 report, "[t]he primary reason that customers do not have telephone service is because they have not been able to pay the charges they have incurred for the services they have used." [2] The report concludes that "[b]y far, the largest component of the current outstanding balance for customers who are disconnected for non-payment is the level of interexchange carrier charges they have incurred for long distance services they have used."[3] The BA-DC report concedes that most of its customers who are disconnected for failure to pay outstanding charges, have not been delinquent in their payment for services provided by BA-DC, but rather have been delinquent in their payment for their long-distance charges. BA-DC's DNP policy, in effect, systematically reduces the number of telephone subscribers in the District by discontinuing customers' local telephone service for non-payment of services that BA-DC does not even provide.[4]

In light of the four criteria adopted by Congress in Section 254(c) of the Act, it seems that such payment policies, such as disconnect for non-payment of long-distance charges, are not only inconsistent with the public interest, convenience, and necessity, but result in situations that severely compromise public health and safety. No one would reasonably dispute that basic telephone service is no longer a convenience of technology but rather an essential, and often life-saving addition to modern-day social communities. Households, especially those with young children, must have access to emergency services. Elderly residents living alone or handicapped residents that may not be able to seek assistance beyond their homes, also require access to basic telephone service.

Several states, including the District of Columbia have implemented low-income and economy services designed to improve and maintain penetration levels. The effectiveness of the services is substantially reduced, if local carriers are permitted to disconnect customers' local service for failure to pay long-distance charges. OPC-DC believes there is a correlation between DNP and lower penetration levels. For example, despite revisions to low-income offerings, the District of Columbia has suffered declining penetration rates since 1988. Following a precipitous drop in the District of Columbia's penetration rate in 1992, the District of Columbia Public Service Commission (DCPSC) revised its Economy II service, a low-income, limited-call message rate service, to allow all low-income residents access to the service at a rate of $1.00 per month with no restrictions on the number of calls. In 1994, the DCPSC approved the implementation of Message Rate "B" service, a toll restriction service that permits more liberal payment arrangements on arrearages. While Message Rate "B" service is helpful in addressing the District's low penetration levels, it is only available to those customers whose service has been denied for non-payment or whose service has been threatened.

Even with these improved economy services, the District of Columbia's penetration level is still well below the national average. In 1995, the District of Columbia's average penetration level was only 90.9%.[5] Clearly, the existence of economy services alone, does not adequately address the District's low subscribership, especially when local monopoly providers continue to disconnect customers for failure to pay toll charges. However, well advertised, economy service coupled with a prohibition on disconnect for non-payment, would likely improve the District's penetration levels. Policies can be implemented to segregate long and long distance bills.

For instance, payment plans that separates customers' total amount due into separate categories have been adopted by some states. Multiple Balance Billing, for example, is a means of ensuring that customers who are pay local service bills continue to receive basic service. Multiple Balance Billing is a computerized method of segregating charges into groups such as basic service, discretionary services, and toll charges. Utilities implementing Multiple Balance Billing track customers' payments according to the individual baskets designated in the billing statement in an effort to decrease basic service arrearages. Payments are applied to basic service arrearages first, ensuring that customers who may not be able to pay their entire bill at once, will at the very least, retain a dialtone and not be disconnected from the network. In that way, payment plans such as Multiple Balance Billing are critical in supporting federal initiatives to promote universal service and improve penetration levels.

Local telecommunication providers benefit from segregated payment plans by keeping local customers connected to the network. By requiring the local provider to itemize services, the provider will have an advantage in the upcoming competitive marketplace when unbundling becomes a necessity. For these reasons, OPC-DC strongly urges the Commission to adopt, and the Joint Board to recommend, federal regulations that prohibit local carriers from discontinuing a customer's local telephone service for failure to pay long-distance charges.

II. Toll Limitation Services Should Be Offered to Low-Income Subscribers Without Charge Or At A Discount (Paragraph 54)

In addition to supporting a policy that prohibits disconnect for non-payment, OPC-DC recommends that toll limitation services should be offered without charge or at a discount for low-income subscribers. Toll limitation service helps low-income subscribers avoid involuntary termination from the public switched network for nonpayment of toll calls. Services provided at no-charge or at a discounted rate lessens the financial burden of toll calls for customers and enhances customer ability to pay for other telephone services which, in turn, increases the likelihood of customers remaining on the network. In the District, BA-DC has two toll restriction services: Long Distances Message Restriction (LMDR) and Message "B" service. These services were designed with the specific needs of District ratepayers in mind. OPC-DC believes that the individual states should determine if such services are available and whether those services should be provided to low-income customers at a discount.

III. Defining "Quality Services" and "Affordable Rates"(Paragraph 4)

Paragraph 4 of the Commission's Notice seeks comment on how to assess whether "quality" services are being made available and how to ensure that these services are available at "just, reasonable, and affordable" rates. The terms "quality services" and "affordable rates," however, are left undefined by the 1996 Act. Therefore, in order to respond to the Commission's inquiry regarding "quality services" and "affordable rates," it is first necessary to give meaning to these terms.

A. Quality Services

Any discussion of universal service, must include the right to quality service. Quality service, i.e., the availability of basic high quality service that allows consumers' access to the telecommunications network, assures prompt and adequate repair services, and a viable complaint and resolution process, is critical.

OPC-DC respectfully suggests that Congress intended the term "quality services" to mean those services that are essential in nature. Such services, in the context of a discussion of universal service, are those that allow consumers access to the telecommunications network while providing the basic services necessary to make and receive telephone calls. A comprehensive list of core "quality services" is discussed later in OPC-DC's comments.

B. Affordable Rates

With respect to "affordable rates," in the context of universal service, OPC-DC respectfully submits that Congress intended to restrict, rather than broaden the range of acceptable rates. "Just and reasonable" was not replaced by "affordable." Rather, the term "affordable" was added to the standard of "just and reasonable," suggesting that in addition to finding rates merely "just and reasonable," the Commission would now be required to also find rates "affordable." As the Commission correctly points out in footnote 12 of the Notice, one definition of the word "afford" is to "bear the cost of without serious inconvenience." OPC-DC believes that this definition of "afford" most accurately reflects the intent of Congress when it added the term "affordable" to the existing standard for determining "just and reasonable" rates. The definition of "afford" in footnote 12 of the Notice embodies the concern that rates for universal service must not in any way be a burden to potential customers. A fundamental goal of the 1996 Act is the advancement and preservation of universal service. It, therefore, makes intuitive sense to interpret the term "affordable rates" to mean rates that do not impose a financial hardship or a serious inconvenience on consumers.

IV. Support For Low Income Consumers (paragraph 50)

The Notice requests comments on the Commission's overall responsibilities with regard to low-income consumers. Specifically, the Notice asks whether there are any particular services, technical capabilities, or features that would be of benefit to low-income consumers.

OPC-DC believes that the definition of universal service should include within its meaning that every citizen should have access to the actual connection to the public switched network with a defined minimum set of quality basic service offerings coupled with access to advanced telecommunications. OPC-DC supports the position that every citizen, regardless of their socio-economic background, is entitled to receive basic telephone service which is both affordable and accessible. OPC-DC urges the Commission and Joint Board to balance the needs of all consumers and implement a universal service policy that places the burden of expense on the carriers and not on the subscribers of basic telephone service.

OPC-DC believes that the following basic telecommunications services should receive universal support: (1) voice grade access to public switched network, with the ability to place and receive calls; (2) touch-tone dialing; (3) single party service; (4) access to emergency services; (5) access to operator services; (6) Telecommunications Relay Service; (7) Free access to the customer's local service provider; and (8) Free blocking of toll services. In the District, these services are offered on both a flat and measured rate to all ratepayers. However, consumers receiving these subsidized services have been given a limited number of service options available strictly through measured rate charges. OPC-DC believes that low-income consumers, like all other consumers, should have the option of selecting flat rate service with usage charges eliminated for local calls.

V. Free Access to Telephone Service Providers Should Be Included In Universal Service Support (Paragraph 53)

OPC-DC supports the Commission's proposal that free access to telephone service providers for low-income customers should be included within the group of services receiving universal service support. In the District of Columbia, BA-DC currently provides free access to information regarding telephone service activation, bill inquiries, repairs and other BA-DC provided services. BA-DC also provides two mechanisms for customers to have free access to information regarding BA-DC provided services including dialing 611 and BA-DC operated pay phones.

VI. Additional Principles Relevant to the Choice of Services That Should Receive Universal Support (Paragraph 8)

In paragraph 8, the Commission seeks comment regarding additional universal service principles relevant to the choice of services that should receive universal support. Paragraph 8 also asks for comments concerning whether the means of distributing universal support should be competitively-neutral and whether concerns for low income consumers, et al, should be considered when determining if a particular service is consistent with the public interest, convenience, and necessity under Section 254(c)(1)(D).

One of the goals of the 1996 Act is to achieve universal service within a pro-competitive and deregulated environment. Pending approval of a Settlement Agreement by the DCPSC, OPC-DC is hopeful that the District of Columbia will join other jurisdictions in preparation for local competition and deregulation by adopting a price cap plan for its local exchange carrier, BA-DC.[6] The Settlement Agreement and price cap plan was proposed as the most efficient means of regulating BA-DC during the transition from a monopoly to a competitive market.

OPC-DC believes the following principles should receive consideration when developing a national universal service policy. First, basic rates to customers should not increase as a result of any regulations implemented by the Commission or state utility regulators to enhance universal service. Consumers should not risk telephone subscribership as a result of universal service obligations imposed on local carriers. Second, and implicit in the first principle, is that end users should not be responsible for funding universal service. If carriers are allowed to pass through the cost of universal service funding to customers, the development of a universal service fund would amount to an overall rate increase for captive customers. Third, consumers must continue to have access to an adequate forum for resolving their utility concerns. The increase in the number of providers, combined with the growing number of services and choices consumers will be forced to make in the future, will undoubtedly, increase the potential of abuse by providers of telecommunications services. Fourth, OPC-DC supports the overriding principle of maintaining high service quality. If these principles are emphasized in the creation of a new universal service policy, the risk to consumers associated with the changes in the telecommunications marketplace should be minimized.

OPC-DC agrees that the means of distributing universal service support should be competitively-neutral. Section 254 (d) of the Act explicitly states that "[e]very telecommunications carrier that provides interstate telecommunications services shall contribute, on an equitable and nondiscriminatory basis, to the...mechanisms...to preserve and advance universal service." In Section 254 (f), the Act further imposes carrier funding requirements on state-created universal service funds. By requiring equity in contribution, carriers will have an incentive to ensure that the program operates efficiently.

In addition, OPC-DC believes that concern for low-income consumers or those in rural insular, or high cost areas must be considered in determining whether a particular service is consistent with the public interest, convenience and necessity under Section 254(c)(1)(D). If universal service is to be achieved, those segments of society that have traditionally been casualties of network fall-off must be central in the discussion of what services should be supported.

VII. Services Other Than Conventional Residential Services (Paragraph 57)

In response to paragraph 57, OPC-DC believes the FCC's universal service policies should be expanded to focus on low-income populations without telephone service, which include those segments of the population that are stationary, highly transient, homebound, disabled or otherwise cut off from telecommunications infrastructure. These groups could be targeted by local telecommunications providers, in the same way Enterprise Zones are targeted by the U.S. Department of Housing and Urban Development, and offered such services and Customer Premise Equipment that are conducive to their needs. Consideration should be given to offering voice mail, E-mail, wireless voice, data and two-way paging services on a time-sensitive, geographically-limited basis and perhaps even a service limited basis.

For some, especially the homebound, the above services and technologies are essential in addressing public health and public safety matters by allowing, at the very least, access to emergency resources. Facilitating such access achieves positive social goals and therefore contributes to the public health and public safety of all consumers of utility services.

VIII. Reason Why Low-Income Subscribers Have Lower Subscribership Rates (Paragraph 58)

In paragraph 58 of the Notice, the Commission notes that low-income subscribers have significantly lower telephone subscribership rates than other subscribers. The Commission also notes that it seeks comment on the reasons underlying this disparity. Because the District of Columbia is so small, its demographic identity mimics the demographic identity of a city rather than a state. There are no "rural" areas in the District. With respect to universal service, OPC-

DC's primary concern, therefore, is to ensure that urban low-income residents have access to the network. In this capacity, OPC-DC has examined the District of Columbia's low-income communities and encouraged the DCPSC to adopt economy services that best meet the needs of such communities. These services, such as Economy II and Message Rate "B" service are addressed earlier in the comments. Nonetheless, as noted above the District of Columbia continues to experience declining penetration rates. OPC-DC believes that the reason for this continued decline in subscribership is largely the result of policies administered contrary to the needs of low-income communities. As mentioned earlier, local providers should not participate in any payment plan that discontinues a customer's service for failure to pay toll charges. This type of policy only contributes to the penetration problem in the District and does nothing to address the declining subscribership levels. In addition, installation charges often cause significant if not prohibitive barriers to connection. OPC-DC supports a policy to discontinue deposit requirements or at the very least, provide discounted installation charges to low-income customers.

In addition, such programs must be vigorously promoted by the provider so that potential customers are aware of the programs when they contact the provider for initial service connection. Finally, local providers in predominantly urban areas should be required to make special services available to low-income populations that are highly mobile. Low cost services targeted to meet the needs of those with low incomes or non-permanent living arrangements, such as prepaid calling cards and voice mailboxes in homeless shelters, will greatly improve the low subscribership levels in these communities.

IX. Evaluation of Universal Services Adopted Should Be Three Years (Paragraph 66)

Paragraph 66 seeks comment regarding how and with what frequency the Commission should evaluate its initial list of services adopted in this proceeding. OPC-DC believes that a timely review and evaluation is required, given the new competitive environment. OPC-DC recommends that a review and evaluation should occur three years after the services have been adopted. A review and evaluation that commences three years after the implementation of these services will provide the Commission with a reasonable opportunity to analyze data. Additionally, this would give the interested parties sufficient time to recommend modifications.

X. The Commission Should Monitor, Collect and Make Available Information On Service Quality (Paragraph 69)

OPC-DC encourages the Commission to collect and publish information regarding the technical performance levels of those carriers subject to FCC jurisdiction. Because the transition to a competitive environment does not guarantee the level of service quality or the pace of development, it is imperative that information on service quality be made available to consumers. OPC-DC believes that if the Commission monitors and provides access to the technical performance levels of carriers, incentives will be in place to provide quality service and promote competition.

XI. Schools, Libraries and Rural Health Care Providers Should Be Supported by Universal Service Mechanisms to Receive Both Core and Advanced Telecommunications Services (Paragraph 71)

OPC-DC believes that all advanced services should be made available to schools, libraries, and rural health care providers at a discount if other means of financing are unavailable. In the District of Columbia, the public schools and the public libraries are experiencing tremendous financial hardship. In the case of the public school system, students are consistently testing below the national average when it comes to academic aptitude. Some public schools lack basic supplies and public school teachers have been furloughed and are anticipating further cutbacks. Similarly, public libraries have been forced to cut back on their hours and library staff have been furloughed. Given this type of atmosphere, it is imperative that these public institutions receive services at a discount in order to provide these services to the community.

There are a number of different funding mechanisms that would enable eligible schools, libraries, and rural health care providers to receive both the core and advanced telecommunications services. Many school districts have already begun to provide their students and faculties access to advanced telecommunications systems. Some have achieved this goal with governmental funding. Others have entered into private-public partnerships . Several states have instituted special tariffs for or projects with schools and community centers. In addition, various federal government agencies have grants available for states and cities. One such grant is funded by the National Telecommunications and Information Agency (NTIA) in the Department of Commerce. Furthermore, other federal agencies, such as the Department of Health and Human Services' National Library of Medicine have funds earmarked for telecommunications projects.

At least one successful public/private partnership exists in the District of Columbia. In February 1996, the Foundation for Education Innovation opened the Technical Learning Center at Roper Middle School. The Center is a partnership between BA-DC, JASON Foundation for Education, Eastman Kodak Company, District of Columbia Public Schools, Ventana Corporation/University of Arizona, Novell, Inc., U.S. Department of Commerce, NTIA, and Giant Food, Inc. The Technical Learning Center will provide new opportunities for students to take virtual field trips through the JASON Project, talk to experts in various fields of study through video and teleconferencing, and do research on the Internet. The Center will serve as a national model for technology-based education. It is the first project of its kind and is expected to foster educational reforms through its use of state-of-the-art computer technology systems. Roper is the first of three District of Columbia public schools slated for a new technology center.

In addition, OPC-DC, BA-DC and the other parties to a proposed Joint Settlement Agreement pending before the DCPSC, agreed to the creation of a Community Trust for Telecommunications Infrastructure. Among other things, the Trust would provide Internet access and create distance learning applications at community-based sites throughout the District. Initially, the Trust would be funded by a $1 million Subscriber Plant Factor refund previously approved by the DCPSC. BA-DC has committed to provide a substantial contribution to the Trust once it is approved.

OPC-DC believes that public schools and libraries should have the ability to easily and efficiently interact with other schools, libraries and other institutions. The benefits of advanced telecommunications should be available to all communities. In order to do this, network systems will have to be upgraded and updated hardware and software will need to be purchased and integrated into the system. In addition, personnel will need to be trained to use the advanced services.

Nonetheless, it is incumbent upon the Commission to structure a funding mechanism that will not result in an increase in basic service rates. OPC-DC recommends that the Commission explore a variety of less traditional funding mechanisms to minimize the impact on basic rates. For example, the Commission could consider broadening the base number of contributors to the universal service fund to include not only providers of telephone service, but providers of services accessed by telephone service such as on-line information services.

XII. The Commission Should Not Reduce End User Line Charges, or Eliminate or Reduce Subscriber Loop Portion of the interstate CCL charge (Paragraph 114)

OPC-DC strongly urges the Commission to reject any proposal that would reduce end user common line charges, or eliminate or reduce the subscriber loop portion of the interstate CCL charge, and instead, permit LECs to recover these costs from end users. Such a policy change would effectively increase the cost of basic telephone service while making basic residential telephone service unaffordable for many households. Additionally, such a policy change would permit long distance customers "free" access to the local exchange loop. Unlike subscribers to the local public switched network, long distance telephone users' rates would not reflect any costs associated with access to the local exchange loop. It is a mistake to assume that the loop is a direct cost of local service. Rather, the local exchange loop represents the joint costs of all services, including long-distance. Customers subscribing to local service only should not be responsible for paying for expenses associated with long-distance service.

WHEREFORE, OPC-DC respectfully requests that the Commission favorably consider the above recommendations in adopting policy that will address universal service goals of the 1996 Act. While OPC-DC strongly supports the Commission's initiative to enhance universal service, we oppose a federal mandate that will limit individual states from tailoring specific universal service programs to meet specific state needs. In addition, OPC-DC respectfully submits that the Commission implement a universal service policy that does not affect the rates for basic telephone service.

Respectfully Submitted

_____________________
Elizabeth A. Noel, Esq.
People's Counsel
D.C. Bar No. 288965

Sandra Mattavous-Frye
Associate People's Counsel
D.C. Bar No. 375833

Lynn Janis
Assistant People's Counsel
D.C. Bar No. 443298

Janice Jamison
Assistant People's Counsel

OFFICE OF THE PEOPLE'S COUNSEL
OF THE DISTRICT OF COLUMBIA
1133 15th Street, N.W., Suite 500
Washington, D.C. 20005
(202) 727-3071

Date: April 12, 1996

[2] The Chesapeake and Potomac Telephone Company's Submission of Telephone Penetration Studies, submitted in DCPSC Formal Case No. 850, at p. 2 (October 1, 1993).

[3] Id. at 3.

[4] In the District of Columbia, BA-DC acts as a billing and collection agent for long distance carriers. It does not provide long-distance service.

[5] February 1996 Penetration Data released by the FCC.