[1] The Western Alliance is a consortium of the Western Rural Telephone Association and the Rocky Mountain Telecommunications Association, representing approximately 300 exchange carriers serving the 23 states west of the Mississippi River and the island territories of the Pacific Rim. The Alliance's membership consists almost entirely of small carriers, many serving fewer than 1,000 customers dispersed over large, remote service areas.

[2] 47 U.S.C. Sec. 153(37). In this connection, the Western Alliance notes Chairman Hundt's recent suggestion that new approaches to calculation of the fund might be applied exclusively -- or at least initially -- to the "95% of Americans served by large carriers." Speech of Reed Hundt, Chairman, Federal Communications Commission to the Joint Meeting of the Great Lakes Conference of Public Utilities Commissioners and Mid-Atlantic Conference of Regulatory Commissioners, July 8, 1996 (prepared text at 9). By the Western Alliance's calculation, if one begins with the smallest local telephone company in the United States -- measured in numbers of access lines in use -- and adds the access lines served by that company to the number of access lines served by the next smallest company, and continues the process until 5% of the access lines in the U.S. are accounted for, the largest company in this group serves fewer than 50,000 access lines. In other words, the Western Alliance's proposed, 50,000 access line threshold comports closely with Chairman Hundt's view that revised universal service rules might apply, at least initially, to the "large carriers" that serve 95% of the nation's ratepayers.

[3] As to the appropriateness of competitive bidding, see Responses to Questions 49 and 51-55, infra.

[4] 47 U.S.C. Sec. 214(e)(2).

[5] See, e.g., Comments of NYNEX at 10 ("The [Benchmark Cost Model] should only be used to calculate support amounts for price cap (i.e. large) LECs [because] such a model may not accurately portray the costs of a carrier that serves only a limited or smaller area, and thus could cause financial harm to small carriers.") See also MCI Comments at 11; Comments of US West, Inc. at 9; Comments of US West Communications, Inc. in CC Docket 80-286 at 26.

[6] See, e.g., Comments of NYNEX, supra at 10.

[7] See Reply Comments of the Rural Telephone Coalition, n. 33 at 10.

[8] Comments of Southwestern Bell Telephone Company at 14-16.

[9] MCI's estimates, using the Hatfield Model, give this figure. Preliminary NECA calculations under the BCM2 Model, however, yield an expense adjustment at the Census Block Group level of $6.963 billion.