[2] E.g., Comments of NECA, dated April 12, 1996, at 5-15 ("NECA Comments").

[3] United States Virgin Island per capita income in 1989 was $11,052. The World Almanac & Book of Facts 1996 at 683 (World Almanac Books 1995). That year, United States per capita income was $21,289. Statistical Abstract of the United States 1995 at 456, Table No. 706.

[4] As explained more fully infra, the extraordinary cost of outside plant construction within the Virgin Islands is attributable to a combination of factors that are unlikely to be captured by any industry cost proxies. See pp. 4 - 6, infra. Among these factors are a generally mountainous and rocky terrain and climatic conditions that feature intense sun, salt water corrosion, frequent tropical storms and hurricanes.

[5] E.g., letter of the Virgin Islands Public Services Commission to Secretary Caton, dated October 12, 1995 (filed in CC Docket No. 80-286).

[6] Network externalities occur where the overall value of the network is enhanced by increasing the number of persons who have access to the network. Thus a telephone network with only a handful of subscribers is likely to be of only limited value to each subscriber, but as the number of subscribers increase, its value to each subscriber will also increase. This is because an increase in subscribers obviously means that one can reach more people by phone.

[7] See Comments of AT&T, April 12, 1996, at 7 ("AT&T Comments"). See also id. at 16.

[8] See MCI Comments, dated April 12, 1996 at 13, 14-15 ("MCI Comments").

[9] See, e.g., NECA Comments at 6.

[10] Id.

[11] See NPRM at [[paragraph]]4. See also Section 254(i) ("The Commission and the States should ensure that universal service is available at rates that are just, reasonable, and affordable.").

[12] See Comments of Puerto Rico Telephone Company, dated April 12, 1996, at 11 ("PRTC Comments").

[13] In its NPRM, the Commission specifically requests comment on "how we should determine rate levels that would be `affordable' and `reasonably comparable' for services identified as requiring universal service support." NPRM at [[paragraph]]25. In so doing, the Commission recognizes that the 1996 Act establishes two different standards: Section 254(b)(1) requires the establishment of "reasonable" rates, while Section 254(b)(3) requires the establishment of rural rates that are "reasonably comparable" to rates charged in urban areas. Vitelco notes that "reasonably comparable" rates alone are insufficient to meet the requirements of the 1996 Act. In Vitelco's experience, merely establishing rates that are comparable to those charged in mainland urban centers -- where per capita income is substantially higher -- will still place basic telephone service beyond the reach of many Virgin Islands residents. In order to promote universal service levels in the Virgin Islands that approximate those on the mainland, and in order to meet the "affordability" standard mandated in Section 254(b)(1), the Commission must take differences in per capita income into account when calculating universal service subsidy requirements.

[14] Comments of the United States Telephone Association, dated April 12, 1996, at 4 ("USTA Comments").

[15] Id.

[16] Comments of Frontier Corporation, dated April 11, 1996, at 6-8.

[17] See NPRM at [[paragraph]][[paragraph]]127-131.