[2] Common Carrier Bureau Seeks Further Comment on Specific Questions in Universal Service Notice of Proposed Rulemaking, CC Docket 96-45, Public Notice (July 3, 1996)

[3] In re Federal-State Joint Board on Universal Service, Notice of Proposed Rulemaking and Order Establishing Joint Board, CC Docket 96-45, FCC 96-93 (April 1, 1996)("Notice").

[4] In its Comments, the Commonwealth reported that it was likely to become a member of the North American Numbering Plan ("NANP"). Comments of the Commonwealth of the Northern Mariana Islands to the Notice in CC Docket 96-45, note 8 (April 12, 1996)("Initial Comments"). The North American Numbering Plan Administrator ("NANPA") has recently issued area codes to both Guam and the Commonwealth and cleared the way for their entry into the NANP effective July, 1997. Letter from Alfred Gaechter, Jr., NANPA, to Froilan C. Tenorio, Commonwealth Governor (April 14, 1996). This development reinforces the position of the Commonwealth that it is entitled to the full benefits of universal service support.

[5] Initial Comments at 1-4, 7-8.

[6] Id. at 3-4, note 10. It is also relevant that the carrier access charges assessed in the Commonwealth are some of the highest in the nation, and contribute significantly to consumer costs for telecommunications. Id. at 10, note 22.

[7] Id. at 9-11.

[8] Id. at 9-10. Statistics developed by the Commonwealth government placed the subscription rate at only 66.8% of the population in 1990. Id. at note 25. In a 1994 letter to the Commonwealth Governor's Office, Micronesian Telecommunications Corporation ("MTC"), the local exchange carrier ("LEC") that serves the Commonwealth, made the even lower estimate that only 27.6% of the Commonwealth's residents had access to a telephone. Id. at note 26. Such figures lag far behind the penetration rate in the U.S. states, which the Commission estimated to be approximately 90%. Id. at note 27.

[9] Id. at 11-14.

[10] Id. at 13-14.

[11] Id. at 14-16.

[12] Id. at 16.

[13] Id. at 16-18. For this reason, the Commonwealth took strong exception to the Benchmark Cost Model, discussed infra at 10-11.

[14] The two other U.S. points without rate integration, Guam and American Samoa, are also U.S. Pacific territories. By contrast, the Commonwealth of Puerto Rico, the U.S. Virgin Islands, Alaska and Hawaii have all been incorporated into the domestic U.S. rate plan.

[15] Initial Comments at 3-4, 9-11.

[16] Id. at 3-4, 9-11.

[17] Id.

[18] Id.

[19] Id.

[20] The conference report to the 1996 Act states that the reference to "insular areas" in Section 254(b)(3) includes the "Pacific Island Territories" such as the Commonwealth. Joint Explanatory Statement of the Committee of Conference, H.R. Conf. Rep. 104-558, 104th Cong., 2nd Sess., at 132-133 (1996).

[21] Notice at para. 6.

[22] Initial Comments at 16-18.

[23] See Amendment of Part 36 of the Commission's Rules and Establishment of a Joint Board, Notice of Proposed Rulemaking and Notice of Inquiry, 10 FCC Rcd. 12309, para. 55 (1995); see also Comments of Tele-Communications, Inc. to the Notice, at 2-4 (April 12, 1996)(noting dangers of oversubsidization of LECs); Comments of Time Warner Communications Holdings, Inc. to the Notice, at 8-9 (April 12, 1996)(distributing high cost assistance on the basis of the LECs reported costs provides no incentive to reduce costs and perpetuates inefficiencies).

[24] Initial Comments at 11-14.

[25] Only a few companies and services have been willing to include the Commonwealth in their calling area to date, due to the high cost of the international calls. As a result, only the portion of the call within the contiguous U.S. is generally toll-free. See MTC Saipan - Tinian - Rota Telephone Directory, Call Guide 16 (1995).