[2] The NYNEX Telephone Companies are New York Telephone Company and New England Telephone and Telegraph Company.

[3] CC Docket 87-339; Monitoring Report; May 1996; Table 1.2

[4] Id.

[5] See NYNEX Comments CC Docket 80-286; October 10, 1995; page 23.

[6] The current level of explicit universal service funding has a negligible impact on competition. The 1995 total subject-to-separations revenues of the LECs that file ARMIS reports is $91 billion, and the interstate high cost assistance for the same year is $750 million; this means that interstate high cost assistance is less than 0.79% of the incumbent LECs' revenues stream. See CC Docket 87-339; Monitoring Report; May 1996; Tables 3.2 and 6.2.

[7] See NYNEX Comments in CC Docket 96-45, April 12, 1996 (hereinafter, NYNEX Comments) at p. 14.

[8] NYNEX estimates that the costs of the non-traffic sensitive portion of core universal service is about 75% of the total core universal service costs. This includes costs associated with the loop (link), the line port (non-traffic sensitive switching) and billing. The remainder of the core universal service is about 25% of the total core universal service.

[9] NYNEX Comments, p.19-20.

[10] See S. Conf. Rep. S.104-230, 104th Cong., 2nd Sess., p. 133.

[11] Under Section 254(e) of the act, only eligible telecommunications carriers, designated under section 214(e), shall be eligible to receive specific Federal universal service support for such services.

[12] NYNEX Comments, p. 22-23.

[13] See NYNEX Comments, p. 22; NYNEX Reply Comments in CC Docket 96-45, May 7, 1996 (hereinafter, NYNEX Reply Comments), p.14.

[14] See NYNEX Comments, p. 22.

[15] See NYNEX Reply Comments, p.14.

[16] It would also be inconsistent with Section 706 of the Telecommunications Act of 1996, which requires regulatory agencies to encourage the deployment of advanced telecommunications services to all Americans, in particular schools and classrooms.

[17] See NYNEX Comments, p. 22.

[18] See NYNEX Reply Comments, p. 14.

[19] See NYNEX Comments, Exhibit D, p. 2-3.

[20] See id. at p 6-7.

[21] See NYNEX Comments in CC Docket 80-286; October 10, 1995 at p 16-17.

[22] See NYNEX Reply Comments CC Docket 80-286 November 9, 1995 at p 4-5

[23] See NYNEX Comments In CC Docket 80-286, October 10, 1995 at p. 20; see also CC Docket 96-45 Report and Order; FCC 96-281 released June 26, 1996

[24] See 47 U.S.C. Sections 254(b)(5), 254(b)(4), and 254(e).

[25] See NYNEX Comments at pp. 9-10.

[26] See Sections 69.105, 69.603, and 69.502.

[27] See NYNEX Comments at pp. 23-25.

[28] See NYNEX Comments at pp. 23-25.

[29] For small LECs, which are currently outside the price cap system, their smaller study areas reduce the ability of the CLECs to target low cost customers in a study area. Therefore, the Commission should use the LEC book costs to determine support levels for non-price cap LECs. See answer to question No. 27.

[30] See Chart 1 supra.

[31] The BCM also shows that costs vary significantly even among CBGs within the same wire center. Thus, basing cost support on costs by wire center would still provide CLECs with an incentive to serve primarily the low-cost CBGs in a wire center.

[32] In a recent speech to the National Association of Regulatory Utility Commissions, Chairman Hundt stated that the cost of vertical features is about 5 cents per month. However, the State commissions have priced vertical features at several dollars per month in order to maintain affordable rates for basic telephone service.

[33] See FCC News Release, CC Docket No. 96-98, Report No. DC 96-75, released August 1, 1996.

[34] See CC Docket 94-1 released April 7, 1995 paragraph 33 ("The LEC price cap plan is mandatory for the largest LECs, the seven Regional Bell Operating Companies (RBOCs) and GTE. It is optional for other LECs. If a company elects price caps, all of its affiliated companies, with the exception of any average schedule affiliates, must also become price cap carriers. Those LECs electing price caps include United Telephone, Rochester Telephone, The Lincoln Telephone and Telegraph Company, and Southern New England Telephone.").

[35] See Section 3 (47).

[36] See NYNEX Comments CC Docket 80-286, October 10, 1995 at p 18.

[37] See NYNEX Reply Comments CC Docket 80-286, November 9, 1995 at p 9.

[38] See NYNEX Comments, Exhibit A.

[39] See NYNEX Comments, pp. i - ii.

[40] See NYNEX Comments, p. 12.

[41] See NYNEX Reply Comments, CC Docket No. 80-286, filed November 9, 1995, p. 9.

[42] See NYNEX Comments, CC Docket No. 80-286, filed October 10, 1996, pp. 27.

[43] See NYNEX Comments, CC Docket 80-286, October 10, 1995, at p. 30.

[44] See Ex Parte filing by US West and Sprint, CC Docket No. 96-45, dated July 3, 1996.

[45] See NYNEX Comments, CC Docket No. 80-286, filed October 10, 1995, p. 13.

[46] See NYNEX Comments, CC Docket No. 80-286, filed October 10, 1995, pp. 13-14.

[47] See NYNEX Comments, CC Docket No. 80-286, filed October 10, 1995, note 40.

[48] See NYNEX Comments, CC Docket No. 80-286, filed October 10, 1995, pp. 23-24.

[49] The Commission's decision in Docket 96-98 not to apply CCL charges to unbundled network elements after June 30, 1996, or earlier, will also cause a revenue shortfall that will have to be recovered through other mechanisms if the EUCL charges are not increased. See answer to question No. 29 above.