[2] Unless otherwise noted, references to AT&T's Comments and Reply Comments are those filed April 12, 1996 and May 7, 1996, respectively, in CC Docket 96-45. Statutory section cites are to the Telecommunications Act of 1996, unless otherwise indicated.

[3] Even when a wireless carrier provides core residential local service, it should be exempted from the requirement that it maintain the customer's same telephone number when switching carriers until mid-1999, the time specified by the Commission for mandatory nationwide wireless number portability implementation. See Telephone Number Portability, CC Docket 95-116, FCC 96-286, para. 166, released July 2, 1996.

[4] The subsidy should not apply to other than conventional residential services. Because payphones are already widely deployed, there is no need to establish community phone banks. (AT&T Comments at 13 n.16).

[5] FCC Report on Telephone SubscribershipSubcribership in the United States, released June 1996.

[6] See Connecticut Office of Consumer Counsel v. AT&T Communications, 4 FCC Rcd. 8130, 8132 (1989), aff'd sub nom. Connecticut Office of Consumer Counsel v. FCC, 915 F.2d 75 (2d Cir. 1990), cert. denied, 499 U.S. 920 (1991) (surcharge collected by AT&T to recover expense of gross receipts tax was a "reasonable method of preventing states from singling out telecommunications for taxation in order to transfer a portion of their tax burden to non-residents via rates for interstate telephone service"). Of course, as AT&T explained in its Comments (at 14-15), a state would be free to provide additional subsidies to LECs beyond federal universal service support if such subsidies were funded by intrastate purchasers and not ratepayers in other jurisdictions. (AT&T Reply Comments at 20 n.37).

[7] See 47 U.S.C. Sections 153(a)(48) and 153(a)(51) for a definition of telecommunications service.

[8] See 47 U.S.C. Section 153(a)(41).

[9] Maryland, New Jersey and New York are among the states with initiatives to help schools address their need for other products and services such as inside wiring, customer premises equipment, computer software/hardware and training.

[10] It is not a simple matter to develop architecture and associated costs for inside wiring, customer premises equipment, and computer hardware/software without a complete picture of a technology plan for the school. A study by McKinsey and Company, completed for the National Information Infrastructure Advisory Council (NIIAC), is an excellent reference for inside wiring, customer premises equipment and computer hardware/software. AT&T is aware that the study has been provided to the Commission and to the Joint Board. The study also addresses the choices that each school and district will need to make about how much investment in technology is required to achieve its educational goals, and how fast it wishes to deploy the technology infrastructure. In making these decisions, the school or district will also need to identify adequate funding from public as well as private sources both for installing the technology infrastructure and for supporting it going forward.

[11] AT&T interpreted the Commission's questions on the "High Cost Fund" as relating to support for high cost areas, not the existing High Cost Fund and DEM Weighting mechanisms. AT&T has recommended significant modifications to both of these subsidy mechanisms in its Comments and Reply Comments in CC Docket Nos. 96-45 and 80-286. A summary of those recommendations is contained in Attachment A.

[12] Because, unlike customers of other services, wireless customers pay for both placing and receiving calls, the surcharge on bills to wireless customers should apply only to basic service and revenues associated with originating calls.

[13] Although AT&T believes interexchange services should not be included in the definition of core services entitled to universal service support, to the extent that telecommunications carriers, as a result of rate averaging and integration rules, provide interexchange services that are below cost either to low-income consumers or for calls to or from high cost areas, they should be permitted to recover from the NUSF the difference between the price charged to the end user and the TSLRIC. (AT&T Comments at n.15).

[14] The Joint Board should define what constitutes a "nationwide affordable rate." In making that determination, the "nationwide affordable rate" should be the weighted average current local rate for consumers in all areas served by non-rural LECs (i.e., those LECs not entitled to exemption from interconnection under Section 251(f)(1) of the Act) including the $3.50 SLC. (There may be no need for an additional SLC increase due to subsidies removed from access because in many areas, under a TSLRIC standard, local service rates are already fully compensatory.)

[15] Implementation of the Local Comptetition Provisions in the Telecommunications Act of 1996, CC Docket 96-98, FCC 96-182, released April 19, 1996, para. 124 (Section 251 NPRM).

[16] Toll restrictions, such as blocking, should not be included in the definition of core services entitled to NUSF support, because they improperly focus on one set of services on which consumers are as (or more) likely to spend beyond their means, while ignoring others (e.g., CLASS services). As a matter of business judgment, reduced deposits should be available to low-income consumers, who voluntarily sign up for toll restrictions because they will then pose a lesser potential credit risk and justify a lower deposit. However, subsidies should not be provided to fund the deposit. (AT&T Comments at 13 n.16).