[2] Telecommunications Act of 1996, [[section]]254(I).

[3] Comments of AARP, CFA and CU, p.3.

[4] NYNEX Comments, p. 9.

[5] AT&T Comments, p. 3.

[6] This important point is made by the Washington Utilities and Transportation Commission. Comments, p. 2.

[7] See the Comments of Ad Hoc Telecommunications Users Committee, p. 6.

[8] Comments of the Virginia State Corporation Commission Staff, p. 5.

[9] See, for example, Comments of the West Virginia Consumer Advocate, p. 6.

[10] We agree with several commentors that the definition of universal service must include not merely access, but also usage of the local network. We assume that the Commission intended that usage be included. While flat-rated local service is far and away the predominant service selected by residential consumers, there are some LEC service areas where measured service is widespread. For this reason, and because some LECs distinguish usage and access, even in their tariffs for flat-rated service, the FCC should explicitly include usage in the definition of universal service.

[11] Blocking services (for toll and 900 number service), are sometimes perversely priced at high rate levels by LECs, so that the blocking feature itself becomes a "profit center." Instead of subsidizing this "service" through the USF, we suggest that states require that blocking be priced at its economic cost. For low income customers, free blocking should be included within the Lifeline definition.

[12] We refer here to the Benchmark Costing Model submitted by the Joint Sponsors in CC Docket No. 80-286 (Dec.1, 1995)

[13] See, for example, Comments of NASUCA, p. 20-21.

[14] Comments, p. 6.

[15] See, for example, Comments of the Public Utility Law Project.

[16] The data supplied by GTE in its comments is very instructive in this matter, demonstrating the substantial variation between average loop cost and average retail telecommunications revenue per household. Schedule 1, attached to Comments.

[17] We note the approach taken by MCI with respect to the state/federal role. As its primary recommendation in Comments, MCI offers a economically rational, comprehensive subsidy system based on the difference between forward looking costs of local service and a nation-wide average rate. The fund is collected by the Commission, but allocated to the States as a "block grant" to be distributed to eligible customers.

[18] Missouri PSC Comments, p. 20.

[19] Comments of Florida PSC, p. 23.

[20] Texas PUC Comments, p. 17.

[21] Comments of the Texas Office of Public Utility Counsel, p. 10.

[22] Notice, footnote 32.

[23] MCI Comments, p. 15.

[24] We agree with the analysis of the Telecommunications Resellers Association, Comments, p. 6, in supporting the use of an allocator which nets out payments to other carriers. The "double counting" problem becomes "triple counting" if a reseller chooses to resell services itself.

[25] USWest Comments, page 19 and Appendix B.

[26] AT&T Comments, p. 8.

[27] E.g., Comments of Southwestern Bell Telephone Company, p. 19.

[28] E.g., Comments of Citizens for a Sound Economy Foundation, p. 19.

[29] We agree with the comments of Teleport Communications Group, p. 16, concerning the need for independence of the Administrator and the benefits of using a bidding procedure for selection.

[30] See, for example, the Comments of the Rural Telephone Coalition and the letter from Commissioner Edward Salmon.