Before the
Federal Communications Commission
Washington, D.C. 20554

In the Matter of

Federal-State Joint Board on
Universal Service

CC Docket No. 96-45

COMMENTS OF THE
GOVERNOR OF GUAM

Contact:

Robert F. Kelley, Jr.
Advisor to the Governor
Office of the Governor
Post Office Box 2950
Agana, Guam 96910
Tel. +671-475-9323
Fax. +671-475-9329

or

Frank C. Torres, III
Executive Director
Washington Liaison Office
of the Governor of Guam
444 North Capital Street
Washington, D.C. 20001
Tel. (202)624-3670
Fax. (202)624-3679

Post Office Box 2950, Agana, Guam 96910

Filed by:

Carl T.C. Gutierrez
Governor of Guam

(671)472-8931 - Fax: (671)477-GUAM

TABLE  OF  CONTENTS

Summary..............................................i

I .   Introduction...................................i

II. Background.......................................4
	A.  	Application of the 1996  
		Telecommunications Act
		to Guam..............................4
	B.	The U.S. Territory of Guam...........4

III. 	Goals and Principles of
	Universal Service Support Mechanisms.........6

IV.	Support for Rural, Insular, and High
	Cost Areas and Low-Income Consumers..........9
	A.	Goals and Principles.................9
	B.	Support for Rural, Insular and
		High Cost Areas......................9
	C.	Support for Low Income
		Consumers...........................12

V.	Schools, Libraries, and Health Care
Providers...........................................13
	A.	Goals and Principles................13
	B.	Schools/Libraries...................14
	C.	Health Care Providers...............15

Conclusion..........................................18

OFFICE OF THE GOVERNOR
TERRITORY OF GUAM

SUMMARY

The implementation of Section 254 of the Telecommunications Act as amended will have an unprecedented impact for the people of Guam. By applying universal service principles to telecommunication services reaching Guam, Guamanians will have access to the vast and ever-growing array of information and services available through existing and developing technology.

In these comments, the Governor of Guam is offering specific comments on the aspects of the NPRM that impact Guam, as well as some comments those provisions that may have more general application. In particular:

* Guam fully supports total and seamless rate and service integration, domestic rate averaging and universal service support between Guam and other insular areas, and all other United States locations. Guam must have explicit and meaningful inclusion in all the benefits of Section 254 of the 1996 Act.

* Any inequities in the cost of providing service due to remoteness or distance must be offset by competitively neutral universal service support mechanisms adopted by the Commission. This will ensure that the citizens of Guam have access to interstate telecommunications and data services, as well as access to the National Information Infrastructure, at rates that are comparable to rates charged to citizens in the rest of the United States and provide a level playing field that will encourage competition among telecommunications service providers. Access to services at comparable rates is mandated by Section 254(b)(3).

* Likewise, regulations providing universal service support for schools, libraries and medical facilities must include schools, libraries and medical facilities in insular areas. Telecommunications and other data services must be offered at rates no higher than the rates charged to public institutions in the mainland United States.

Before the

Federal Communications Commission
Washington, D.C. 20554

CC Docket No. 96-45

In the Matter of

Federal-State Joint Board on
Universal Service

COMMENTS
OF THE
GOVERNOR OF GUAM

I. Introduction

The Governor of the Territory of Guam ('Guam') is pleased to Submit these comments in the above captioned proceeding of the Federal Communications Commission ("FCC" or "Commission").[1] This NPRM begins the process of implementing Section 254 of the Communications Act of 1934 as amended by the Telecommunications Act of 1996.[2]

____________________

1 Federal-State Joint Board on Universal Service, Notice of Proposed Rulemaking and Order Establishing Joint Board, FCC 96- 93, March 8, 1996 (-NPRM-).

2 Telecommunications Act of 1996, Pub. L. No. 104-104, 110 Stat. 56 (1996) ("1996 Act").

Guam is interested in the implementation of Section 254 of the Act regarding universal service because of the unprecedented impact that universal service will have for the people of Guam. Never before has there been the potential for widespread access to such vital services. Given the distance from Guam and the other insular areas, to the mainland U.S., access to telecommunications services will bridge that gap.

By applying the universal service principles to telecommunication services reaching Guam, Guamanians will have access to the vast and ever-growing array of information and services available through existing and developing technology. 'From proposals for a "virtual university" to advances in telemedicine, provision of these and similar services to rural and insular areas, such as Guam, makes this NPRM that much more compelling.

I am offering specific comments on the aspects of the NPRM that impact Guam, as well as some comments on those provisions that may have more general application. In particular:

* Guam fully supports total and seamless rate and service integration, domestic rate averaging and universal service support between Guam and other insular areas, and all other United States locations. Guam must have explicit and meaningful inclusion in all the benefits of Section 254 of the 1996 Act.

* Any inequities in the cost of providing service due to remoteness or distance must be offset by competitively neutral universal service support mechanisms adopted by the Commission. This will ensure that the citizens of Guam have access to interstate telecommunications and data services, as well as access to the National Information Infrastructure, at rates that are comparable to rates charged to citizens in the rest of the United States and provide a level playing field that will encourage competition among telecommunications service providers. Access to services at comparable rates is mandated by Section 254 (b) (3)

* Likewise, any regulations providing universal service support mechanisms for schools, libraries and medical facilities should include schools, libraries and medical facilities in insular areas. Telecommunications and other data services must be offered at rates no higher than the rates charged to public institutions in the mainland United States.

II. Background

A. Application of the 1996 Act to Guam

Section 254(b)(3) of the 1996 Act requires that:

Consumers in all regions of the Nation, including low income consumers and those in rural, insular, and high cost areas, should have access to telecommunications and information services, including interexchange services and advanced telecommunications services, that are reasonably comparable to those services provided in urban areas and that are available at rates that are reasonably comparable to rates charged for similar services in urban areas.[3]

B. The U.S. Territory of Guam

Those participating in this proceeding may be interested to know that Guam is a small island 6,000 miles from San Francisco, 3,700 miles from Honolulu and 1,550 miles from Tokyo. Guam is 30 miles long and between 4 and 8 miles wide, covering an area of about 212 square miles. Today, Guam's population is about 140,000.

____________________

3 Section 254(b)(3) of the 1996 Act (emphasis added).

4 Joint Explanatory Statement of the Committee of Conference, Conference Report 104-458, 104th Congress, 2nd Session, Page 131.

Guam lies at the crossroads of the Pacific and is the social, political and economic hub of Micronesia. Guam is an unincorporated U.S. Territory that was ceded by Spain to the United States after the Spanish American War. Guam is governed by the U.S. Congress under the Territorial Clause of the Constitution. Initially, Guam was administered by the U.S. Navy, and the indigenous population of the island was classified as 'nationals' of the United States". The Commander of the Naval Station also served as the island's governor.

In 1950, Congress passed the Organic Act of Guam ('Organic Act") which established the Government of Guam, granted citizenship to the indigenous population, and transferred administration from the Department of Defense to the Department of -Interior. Amendments to the Act in the 1960's and early 1970's provided for a locally elected Governor and a non-voting delegate to the U.S. Congress.

Guam is not unlike many rural areas in the continental United States in terms of how access to affordable telecommunications services will bring certain benefits. Unlike other rural areas, however, Guam is located many miles away from neighboring urban centers. Moreover, Guam is "isolated" as an island. Guam's need for access to affordable service, therefore, is all the more compelling.

III. Goals and Principles of Universal Service Support Mechanisms

Guam concurs that the Commission should carefully consider each enumerated principle in its consideration of services receiving universal service support for the areas designated in the 1996 Act.[5] (para 3) As required by the 1996 Act, each of the principles should be applied to appropriate services for insular areas.

With respect to Guam and the other insular areas, the services to be supported should include those affected by distance. Distance must be eliminated as the determining factor in the availability of services for insular areas. This is needed if Section 254(b)(3) is to be implemented as intended by the 1996 -Act, thereby ensuring Guam consumers access to telecommunications and information services, including interexchange services and advanced telecommunications and information services, at rates that are reasonably comparable to rates charged for similar services in urban areas in the continental United States.

Guam recognizes that other rural and high cost areas may

____________________

5 The principles are: (1) Quality and Rates; (2) Access to Advanced Services; (3) Access in Rural and High Cost Areas; (4) Equitable and Non-Discriminatory Contributors; (5) Specific and Predictable Support Mechanisms; (6) Access to Advanced Telecommunications Services for Schools, Health Care, and Libraries; (7) Additional Principles as Determined by the Commission and the Joint Board. Section 254(b)(l)-(7) of the 1996 Act.

require other techniques to achieve the goal of "reasonable comparability." Because of Guam's unique geographic situation, however, eliminating the distance factor is a necessary component in achieving the goals of the 1996 Act.

Guam agrees with the Commission's interpretation of Congressional intent that the Commission consider the four criteria outlined in Section 254(c)(1) when deciding what services to support through Federal universal service.[6 ]We concur that the Commission can include services that do not necessarily meet all of the four criteria. We believe that Congress intended the criteria to provide guidance to the Commission in determining the basic services that the Commission must consider, but does not limit the types of services that the Commission can consider. (para 9)

Implementation of regulations on Section 254 should encourage competition and efficiency among service providers. For rural and insular areas it would be appropriate for the Commission to designate at least one carrier as "essential" and require the use of either integrated rates, and/or rates supported by universal

____________________

6 The criteria for determining the services to be supported by universal support mechanisms are the extent to which those services: (1) are essential to education, public health, or public safety; (2) have, through the operation of market choices by customers, ben subscribed to by a substantial majority of residential customers; (3) are being deployed in public telecommunications carriers; and (4) are consistent with the public interest, convenience, and necessity. Section 254(c)(1) of the 1996 Act.

service support mechanisms, thereby achieving price parity with existing interstate tariffs in the rest of the United States, thereby mitigating the distance factor. These same types of price supports should be provided to any other service providers who wish to provide service on an equivalent basis. Such a structure will ensure that service is provided, yet allow for a level playing field for all carriers wishing to enter the marketplace.

Guam recognizes that a separate NPRM on Interexchange Service which implements Section 254(g) proposes to require that Guam be treated as a state, and that rate averaging be implemented.[7] Guam believes that the proceedings to implement Sections 254(b) and 254(g) are interrelated as Section 254(b)(3) specifically recognizes that consumers in insular areas need access to interexchange and advanced telecommunications and information services that are reasonably comparable to those services provided in other areas of the United States.

____________________

7 Section 254(g) of the 1996 Act provides that:

Within 6 months after the date of enactment of the Telecommunications Act of 1996, the Commission shall adopt rules to require that the rates charged by providers of rural and high cost areas shall be no higher than the rates charged by each such provider to its subscribers in urban areas. Such rules shall also require that a provider of interstate interexchange telecommunications services shall provide such services to its subscribers in each State at rates no higher than the rates charged to its subscribers in any other State.

IV. Support for Rural, Insular, and High-Cost Areas and Low-Income Consumers

A. Goals and Principles

Generally, Guam believes that the Commission should ensure that potential subscribers can "afford" the services. Webster's Dictionary defines "afford" as "'to have the means for without serious inconvenience." Guam believes that it is vital that the Commission develop standards for determining affordability. Those standards may depend on an analysis of current rates for services with the determination of cost of a new service factoring in the cost of existing services. (para 13-14)

One of the core principles of the 1996 Act is that all regions of the country, including insular areas, have access to all telecommunications and information services. (para 14) A key element is meeting that goal is to ensure that consumers can afford those services.

B. Support for Rural, Insular, and High Cost Areas

1. What Services to Support

Guam concurs with the Commission's proposed list of core services. (para 16) Given the rapid pace of change in the telecommunications industry, we believe that in addition to the core services listed, and any additional core services that may be identified during the rulemaking process, the Commission should provide a mechanism to consider future potential services to be identified as core for purposes of these regulations, including advanced services that may warrant inclusion, now or in the future. (para 23)

In addition to other services identified by commenters on the NPRM, access to the National Information Infrastructure, as called for in the 'Agenda for Action," should be considered as a "'core" service for application of universal service support mechanisms.[8] (para 17) Guam believes that access to an interstate transport of Integrated Service Digital Network (ISDN) services should also be considered as "core." Universal service support should be provided for each service ,identified by the Commission or the Joint Board.(para 17) If the

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8 The "Agenda for Action" for the National Information Infrastructure calls for all Americans -- without exception -- have access to the Nation's telecommunications and information infrastructure. The Agenda for Action states:

As a matter of fundamental fairness, this nation cannot accept a division of our people among telecommunications or information "haves" and "have-nots." The Administration is committed to developing a broad, modern concept of Universal Service -- one that would emphasize giving all Americans who desire it easy, affordable access to advanced communications and information services, regardless of income, disability, or location. [emphasis added]

See, 58 Fed. Reg. 49025 (Sept. 21, 1993).

Commission apply these support mechanisms broadly, it will lessen the potential for creation of barriers to entry or the favoring of one technology over another. Ultimately, the marketplace will prevail if universal service support is applied evenly.

Furthermore, Guam supports the application of universal service support mechanisms to access to interexchange services for insular areas. (para23) At a minimum, public institutions, such as schools, libraries, and health care providers should receive local service at rates at least comparable to residential service rates for cost of service, and should be exempt from having to pay subscriber line charges (SLCs), in addition to, or as part of, .universal service support mechanisms.

2. How to Implement

Guam believes that universal service support should be provided to all users in rural, insular, and high-cost areas. The Act does not limit or distinguish between the type of consumer who should be covered by the support. There are many businesses in Guam that would benefit from this action. Given the great distances, and current costs, support for comparable services at an affordable cost will put Guam businesses on the same playing field as other U.S. Mainland businesses in obtaining access to telecommunication and information services.

In determining what is affordable" and "'reasonably comparable" to rates in urban areas, the Commission will have to evaluate current rates for urban areas. Subsequent supports be based on end-user prices since services subject to universal service support should be affordable. Likewise, in calculating the subsidy, the Commission will have to have more input from potential providers of the services. Guam, to the fullest extent possible, will work with the Commission to develop needed data.

3. Who is Eligible for Support

Guam recommends that the Commission establish a certification procedure to ensure that the universal service support is used for its intended purpose. The process could also require periodic review by state and territorial regulatory agencies. (para 41)

Guam supports the development of standards for alerting consumers of the availability of services by service providers. We recommend establishing a minimum level of consumer education through advertisements in local media outlets.

C. Support for Low-Income Consumers

Guam believes that special provisions should be made for low income consumers residing in insular areas, whose situation is unique compared to other similarly situated persons. On Guam, low income consumers may get access to interexchange and advanced services "reasonably comparable" to services provided elsewhere, but those services may not be affordable. A universal support mechanism may be required to assure affordable interexchange and advanced services are provided to low income consumers in Guam. (para 50)

V. Schools, Libraries, and Health Care Providers

A. Goals and Principles

The 1996 Act provides that schools and libraries and health care providers are to get basic "core" services as defined in Section 254(c)(1) and 254(c)(3). In addition to those "'core" services, the Commission has the discretion to identify what other services should be included as universal service.

Because of the great benefit access to telecommunications and information services will give to Guam's schools, libraries, and health care providers, Guam believes that the regulations should be broadly construed.

B. Schools/Libraries

Guam believes that all telecommunication and information services, across the board, should be subject to universal service support mechanisms when used by schools and libraries for educational purposes. Such broad application will enable schools and libraries to subscribe to a multitude of services, that will likely be self-limiting in that schools and libraries will subscribe to those services that will further their educational goals. This will also avoid forcing eligible schools and libraries from having to cherry-pick services, when other services might be more applicable to their needs. Moreover, it will reduce the burden on the regulators and service providers in trying to determine what services should be supported under the universal service regulations.

Guam’s regulatory agencies can assist service providers in assessing and/or certifying eligible recipients. Moreover, Guam could provide a list of schools and libraries that would be eligible under the universal service regulations.

It is also imperative that future advances in telecommunications and information services be subject to universal service support to ensure that schools and libraries have continued access to the latest technologies.

C. Health Care Providers

Guam supports all efforts to bring telecommunications and information services to health care providers in hospitals and clinics, both public and private. Additionally, many state and territorial governments offer health care services to their constituents. All those service providers will benefit greatly through access to affordable telecommunications service. In Guam the local hospital is part of the Government of Guam. The military also maintains a hospital at a naval facility on Guam. There are several privately owned clinics, typically providing service as part of health care plans offered to businesses. Guam's Department of Public Health operates several clinics that provide health care to a segment of Guam's population. Many times, if particular care is not provided on Guam, patients will be evacuated to hospitals in Hawaii or elsewhere on the U.S. Mainland. Moreover, people living in rural areas have limited access to basic health care because access is limited by geographic isolation, the relative scarcity of specialized physicians, and, often, the high cost of travel.

Access to telecommunications and information services for health care providers ("telemedicine") will greatly enhance medical treatment for those living not only in Guam, but in rural areas around the U.S. Telemedicine will allow a physician or other health Professional to examine a patient in Guam while linked by video or other means to an expert consultant at a distant medical center. Specialists can review medical images transmitted over telephone lines. Without telemedicine, these specialized services would require the patient to travel, or would simply not be available at all. Telemedicine can also be used for training health care providers. It can also be used to assist local citizens' organizations to improve the overall health of their communities by supporting accident prevention, prenatal care, and other public information programs.

Guam is committed to helping provide an adequate information infrastructure and to coordinate infrastructure planning for telemedicine purposes. The cost burden of these services, particularly to rural areas, will be significantly reduced by the application of universal services support mechanisms.

It is our understanding, for example, that limited competition for telecommunications services in rural areas result in prohibitively high costs from transmission services needed to support high bandwidth applications like interactive video. In many communities there is no local access to the Internet. The universal service support should provide incentive prices for telemedicine users to lower the currently high telecommunications cost for such applications. At a minimum, universal service support mechanisms may enable rural telemedicine networks to better negotiate favorable rates and service from telecommunications providers.

Guam strongly encourages the Commission to seek input on telemedicine from organizations, such as the Western Governors' Association, who have taken a leading role in examining these services. Such coordination may be useful because of the other elements that are needed to make the provision of telemedicine and similar services a success.

CONCLUSION

In conclusion, the Governor of Guam supports the Commission, s efforts to implement Section 254 of the 1996 Telecommunications Act. Guam appreciates the inclusion of insular areas, as mandated by the Act, as areas designated for universal service support for telecommunications and information services. Towards that end:

* Guam fully supports total and seamless rate and service integration, domestic rate averaging and universal service support between Guam, other insular areas, and all other United States locations. Guam should be explicitly and meaningfully included in all the benefits of Section 254 of the 1996 Act.

* Any inequities in the cost of providing service due to remoteness or distance should be offset by competitively neutral universal service support mechanisms adopted by the Commission. This will ensure that the citizens of Guam and the CNMI have access to interstate telecommunications and data services, as well as access to the National Information Infrastructure, at rates that are comparable to rates charged to citizens in the rest of the United States and provide a level playing field that will encourage competition among telecommunications service providers. Access to services at comparable rates is mandated by Section 254(b)(3).

* Likewise, regulations providing universal service support for Schools, libraries and medical facilities must include schools, libraries and medical facilities in insular areas.. Telecommunications and other data services must be offered at rates no higher than the rates charged to public institutions in the mainland United States.

Guam remains committed to working with the Commission through participation in these and similar proceedings to ensure appropriate implementation of the 1996 Act and its application to Guam. Thank you for allowing me the opportunity to comment on this Notice.

Respectfully Submitted,

Carl T.C. Gutierrez
Governor of Guam