Consortia

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I am interested in the information referenced by Dave Farley concerning
the CA PUC ruling on consortia and the filing before the Wisconsin PUC
concerning community networks.

The FCC's consortia rules bind those states which have concurred with
the FCC discount matrix, in order to obtain the discount funding from
the federal program.  If the state does not follow the FCC rules, then
the applicants are not going to be eligible for discounts.  The
incentives for consortia and aggregation of demand are diminished only
with respect to procurement of interstate services from incumbent local
exchange providers.  The PA Task Force firmly recommends that the PAPUC
continue its existing policy of allowing individual case basis contracts
which are below tariff pricing for intrastate services.  This means that
there would be no limitation on consortia comprised of "eligible" and
ineligible" entities for purposes of aggregating demand and negotiating
advantageous "pre discount" prices.  The discounts themselves, cannot be
claimed by the ineligible entities.

With respect to what services are interstate and intrastate, the
distinction does not solely relate to the service provider, in my
opinion.  It depends on whether the service crosses interstate lines or
not:  local service, a call originating and terminating within a state's
borders is intrastate.  Internet service is not regulated as a
telecommunications service.  Its jurisdictional character, therefore, is
less clear.  The PAPUC does not regulate Internet service.  Neither does
the FCC.  There is a big policy issue currently pending with respect to
Internet revenues and expenses incurred by carriers and whether those
revenues and expenses are considered to be interstate or intrastate.  It
is true that most Internet expenses are currently categorized as
intrastate expenses.  I respectfully disagree, however, that this means
that the PUC has complete leeway in setting discount schedules and
eligibility on such items.  If the PAPUC deviates from the federal
rules,  then the schools and libraries in PA will not qualify to receive
federal funding from the federal program.   And that means that the
PAPUC would have to develop an independent funding source.  To my
knowledge, there is no interest in pursuing this approach at this time;
the focus is on obtaining the maximum draw from the federal fund for
PA's schools and libraries.  Please let me know if I have misunderstood
the issue that you framed in your earlier dialogue between Dave Farley
and Bob Carlitz.

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