In the Matter of

Federal State Joint Board on
Universal Service

CC Docket 96-45

Reply Comments of the Iowa Telephone Association

The Iowa Telephone Association (ITA), an association including 153 local exchange telephone companies in the State of Iowa, offers the following comments in reply to the Comments of the Iowa Utilities Board (IUB Comments) and the Comments of the Iowa Communications Network (ICN Comments) filed with the Commission on April 12, 1996 The Iowa Communications Network (ICN) is described in the ICN Comments as "... a state of Iowa agency dedicated to the integration of telecommunications and technology into education and public services within Iowa." [1] The IUB comments indicate that the legislature authorizes specific users to the network, [2] and that currently these users include educational users, state-government federal government users, and telemedicine users. 3 The first three groups of users can use the network for video, high-speed data, and voice services while the telemedicine users are restricted from using the network's voice services.[4] As indicated in these comments, rates for users

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1 ICN Comments, Page 1.

2 IUB Comments, Page 4.

3 IUB Comments, Attachment A, Page 10.

4 Ibid. footnote. See also the second page of Attachment A.

are restricted by the legislature to the "ongoing operational costs of the network only."[5] These rates specifically exclude capital costs and depreciation expenses. Rates for health care providers for full-motion video transmission services are indicated to be $40.00 per hour while schools receive the same service for only $5.00 per hour. [6] The difference between the $40.00 "benchmark rate" and the $5.00 rate for educational users is paid through the Iowa Telecommunications and Technology Commission video subsidization fund, established by the Iowa General Assembly. [7]

The ICN Comments specifically request the Commission to, " ... adopt rules broadly enough to include, in the definition of "telecommunications carrier", those non-traditional special purpose carriers. such as the ICN......" so that they can receive reimbursement for the discounts they provide to educational institutions.[8] The IUB comments make a similar request.[9]

While the goals of the ICN may be laudable and the General Assembly of Iowa has generously provided by paying the capital costs of the ICN network and through the aforementioned Iowa Telecommunications and Technology Commission video subsidization fund, substantial incentives for developing distance learning and telemedicine applications, the Commission is bound by the statute in its definition of "telecommunications carrier." As pointed out in the ITA's Comments filed earlier in this docket a telecommunications carrier, as defined by the Telecommunications Act of 1996 (the Act), must provide "telecommunications service" as

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5 IUB Comments, Page 4

6 Ibid.

7 IUB Comments, Attachment A, second page of the Attachment (page number unreadable).

8 ICN Comments, page 2.

9 IUB Comments, page 3.

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defined in the Act.[10] The definition of telecommunications service requires the offering of "...telecommunications for a fee directly to the public, or to such classes of users as to be effectively available directly to the public,......"

The ITA contends that in spite of its activities providing discounted services to educational and telemedicine providers, that the ICN does not fit the definition of a telecommunications carrier providing telecommunications service as defined in the Act. The ICN is a state-government network built for and limited in use by the General Assembly of Iowa to providing services to a limited number of users, primarily Government agencies. It does not fit the definition of offering service to the public or to "be effectively available directly to the public." [emphasis added] Furthermore, the State of Iowa has made public policy decisions to devote a portion of its financial resources to support its educational system through building a subsidizing the operation of this network. There is little need for the federal government to add to these subsidies or to support this subsidization of this special purpose, limited use state network.

Respectfully Submitted,

J. Kent Jerome
Secretary-Treasurer
Iowa Telephone Association
1601 - 22 Street, Suite 290
West Des Moines, Iowa 50266
515-225-2091

May 7, 1996

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10 Comments of the Iowa Telephone Association, page 4.

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