FINAL REPORT AND RECOMMENDATION OF
THE PENNSYLVANIA UNIVERSAL SERVICE TASK FORCE
The Pennsylvania Universal Telephone Service Task Force ("Task Force") respectfully submits
its Final Report and Recommendations, in accordance with the Commission's Opinion and Order
issued January 28, 1997, as modified by its Order on Reconsideration issued July 15, 1997 at
Docket No. I-940035.
Introduction and Background
The Task Force was formed by the Commission to provide a collaborative forum in which all
interested stakeholder representatives could participate in the development of further
recommendations on universal telephone service. The Task Force was the primary vehicle to
enable this Commission to promptly consider the implementation and coordination of universal
telephone service policies at the state and federal level. The Task Force extensively considered
the Universal Service Report and Order issued by the Federal Communications Commission
("FCC") on May 8, 1997. The membership of the Task Force is set forth in Appendix _ attached
hereto.
The Task Force further organized into four subcommittees to address the various responsibilities.
The four subcommittees are: (1) Monitoring and Reporting/Subscribership; (2) Basic Universal
Service Costing Model Refinements; (3) Schools and Libraries; and (4) Health Care Facilities.
Each Subcommittee has developed a set of recommendations, which were presented, discussed
among and endorsed by the full membership of the Task Force, except where otherwise is
expressly noted.
Prior to submitting this Final Report, the Task Force submitted three Interim Reports to the Commission addressing topical issues which required more immediate action. We are pleased that the Commission adopted the recommendations set forth in each of the Interim Reports. The Interim Reports are hereby incorporated by reference. Each of the Interim Reports and the Commission action in response thereto is noted as follows:
1. Interim Report on Schools and Libraries Discount Matrix (June 2, 1997): PUC Order of June 5, 1997 adopting the federal matrix for discounts for eligible schools and libraries.
2. Interim Report on the Inclusion of Intermediate Units as Eligible Schools (July 11, 1997): PUC Order of July 31, 1997 approving the Task Force Report.
3. Interim Report on the Definition of Rural for the Schools and Libraries and Health Care Programs (July 14, 1997): PUC Petition for Waiver to the FCC on the Definition of Rural, filed July 17, 1997.
The Task Force met periodically since its inception, as follows:
April 15, 1997
May 13, 1997
June 2, 1997
June 12, 1997
July 14, 1997
August 28, 1997
September 19, 1997
Minutes of the meetings were prepared and circulated for the benefit of the membership. Special
recognition is due to Margaret Morris for recording and distributing minutes. In addition, each
of the Subcommittees held periodic meetings to discuss in further detail the various issues and to
develop recommendations to present to the full Task Force.
Procedural Recommendations
The Task Force recommends that the Commission approve this Final Report and
Recommendation and request public comment by any interested person. Based on receipt of
public comments, the Commission should determine whether any of the recommendations set
forth herein should be modified.
The Task Force also wishes to note that the Governor's Office, in conjunction with the
cooperation of the Public Utility Commission, is coordinating an on-line seminar on universal
telephone service pursuant to the request and initiative of the Information Renaissance. The
Task Force requests the opportunity to review the comments and input arising from the on-line
seminar and other public comments and make recommendations to the Commission on what, if
any of the recommendations should be modified, following the conclusion of the on-line seminar
and submission of public comments. The seminar is expected to commence on or about
September 15, 1997.
Index of Reports Contained in This Final Report and Recommendation
Final Report of the Subcommittee on BUS Costing Model Refinements
Final Report of the Subcommittee on Schools and Libraries
Final Report of the Subcommittee on Health Care Institutions
Final Report of the Subcommittee on Monitoring & Reporting/Subscribership Issues
Final Report of the Subcommittee on BUS Costing Model Refinements
The Pennsylvania Universal Telephone Service Task Force convened pursuant to the
Commission's Opinion and Order entered on January 28, 1997 at Docket No. I-940035 and was
assigned responsibilities to the Basic Universal Service ("BUS") Costing Model Refinements
Subcommittee. Specifically, the BUS Subcommittee was charged with:
Identification of further refinements to the BUS costing models. This would entail:
1. Holding workshops to explore and to examine various improvements and enhancements that continue to evaluate the various models revised by the FCC for federal funding purposes.
2. Apprising the Commission of further developments.
3. Making recommendations to the Commission.
4. Funding for public interest payphones.
Subsequent to the January 28, 1997 Opinion and Order, the Commission issued its Opinion and
Order on July 15, 1997 which addressed the various Petitions for Reconsideration. The July 15
Order indicated that the Pennsylvania Commission would submit its own costing model to the
FCC for purposes of determining federal BUS support levels. Further, the Pennsylvania
Commission notified the FCC of its intent to utilize its own cost model. A Secretarial Letter
dated August 14, 1997 was sent to the FCC as required by the FCC's May 8, 1997 Report and
Order.
In its Reconsideration Order, the Pennsylvania Commission also reopened the evidentiary record
in the Universal Service Investigation (Docket No. I-940035). The Office of Administrative Law
Judge was directed to preside over a series of technical on-the-record workshops to examine
updates to the BUS costing models and to determine an appropriate revenue benchmark for use
in calculating BUS funding levels.
As a result of the Commission's action in the Reconsideration Order issued July 15, 1997, the
BUS Subcommittee has elected to refrain from further meeting and instead elected to participate
in the workshops to be convened in the future.
With respect to the issue of public interest payphone funding, the Subcommittee concludes that
the issue is too complex to be addressed within the time allotted. Further, much of the
information that the Subcommittee needs to consider will not be available until after October 7,
1997, the date on which the regulation of payphone prices is scheduled to end. The
Subcommittee will address this issue when the requisite information becomes available, and will
submit a supplemental report to the Commission concerning this subject.
Final Report of the Subcommittee on
Schools and Libraries
Background
The Task Force on Universal Telephone Service was convened by Opinion and Order issued
January 28, 1997, by the Pennsylvania Public Utility Commission (PaPUC). Among the various
missions assigned to the Task Force was the responsibility to develop a comprehensive set of
recommendations to implement the discount rate program set forth in Section 254(h) of The
Telecommunications Act of 1996.
The Task Force established Subcommittees in order that work on its various missions could proceed in a timely manner. The Subcommittee on Schools and Libraries was charged with the following, specific responsibilities:
1. Identification of the range of services to be provided to schools and libraries per section 254. (Order, p. 133)
2. Identification of the level of discounts to providers of services to schools and libraries per section 254 (c)(1)(B). (Order, p.133)
3. Identification of the need for changes to the definition of universal service in the future, relative to schools and libraries. (Order, p. 135)
4. Identification of ways to encourage prompt infrastructure modernization in Pennsylvania, including compliance with Chapter 30's alternative regulation and infrastructure modernization requirements. (Order, p. 135)
Scope of this Report
The Subcommittee on Schools and Libraries has previously produced, and the Task Force has adopted, three Interim Reports dealing with various aspects of these responsibilities. These reports are:
The Subcommittee now submits its final report, including discussion and recommendations, to
address our remaining issues. To organize this work, a number of issues have been developed as
separate statements. The following report identifies each issue; describes the background for each
issue; and sets forth recommendations regarding each issue.
The issues will be listed in order, then the remainder of the document will consist of a section devoted to the description, background, and recommendations specific to each issue. These issues are:
A. Level of Discounts
B . Identify ways to encourage prompt infrastructure modernization in Pennsylvania, including compliance with Chapter 30's alternative regulation and infrastructure modernization requirements.
C. Identify the basic information that must be submitted by the School/Library to the Administrator's subcontractor.
D. Identify any aspect of the process that could place undue financial or administrative burden on Schools/Libraries and recommend alternatives.
E. Potential for future complaints; PUC role in prevention of complaints.
F. Define/Identify pre-discount rates or Lowest Corresponding Price: how that is to be derived and the PaPUC's role in determining LCP for regulated and non-regulated services; PaPUC's role in complaint resolution.
Issue A: Level of Discounts.
Background
One of the main charges of the Subcommittee is the Identification of the Level of Discounts to
providers of services to schools and libraries per Section 254(c)(1)(B). (Commission Order, p
133)
On June 16, 1997, the PaPUC entered an Order adopting the FCC's discount matrix for eligible
schools and libraries. The Commission adopted the Task Force's recommendation to approve for
use in Pennsylvania the definition of qualified services and the discount matrix and levels
finally adopted by the FCC in its May 8, 1997 Order, for the provision of qualified intrastate
services to eligible schools and libraries. The discount matrix and discount levels are set forth in
the Interim Report of this Task Force dated June 2, 1997. Eligibility has been defined in the FCC
Order and as modified by the PaPUC in its Order of July 31, 1997, which accepted the
recommendation of this Task Force to include Intermediate Units as eligible (report dated July
11, 1991).
To this point, the Task Force has focused on developing strategies and policies to assure
Pennsylvania schools, libraries, and rural health care facilities will benefit to the greatest extent
possible from the federal universal service program. The Task Force has not studied the
feasibility of establishing a state universal service fund to extend the federal program nor has it
considered any specific proposals to create such a fund because there is neither the experience
with the program nor the data to conduct such a study at this time.
The Task Force believes, however, that the most desirable outcome would be that the federal
program, both in size and in implementation, is adequate to meet the needs of Pennsylvania, and
the intent of the Telecommunications Act of 1996, without the need to extend the program with a
state fund. Accordingly, the Subcommittee on Schools and Libraries has prepared separate
recommendations, presented below, for the monitoring and review of the success of the Schools
and Libraries discount program in Pennsylvania. Further, we make these additional
recommendations relative to consideration of the need for a state universal service fund.
Recommendations
1. That consideration of whether or not a state universal service fund is necessary or feasible
should be made only after the below recommended review of the federal program is conducted
at the end of year one.
2. That the PaPUC remain open to the potential need to extend the federal program with the
establishment of a state universal service fund should the on-going performance review of the
federal program indicate that the federal program is inadequate to meet the critical needs of
Pennsylvania's schools, libraries, and rural health care facilities.
3. We recommend that the PaPUC needs to monitor the adequacy of the federal fund's
performance in Pennsylvania and are inclined to make recommendations on the following items:
criteria for evaluations; methods by which to monitor; and time frame for performance review.
4. The Task Force recommends a periodic evaluation of the Universal Service Discount Program for Schools and Libraries (also know as E-rate) in Pennsylvania. This evaluation should monitor the annual financial impact to schools and libraries and the effectiveness of the infrastructure build-out in Pennsylvania. Such evaluation should include an analysis that considers the following:
The Subcommittee does not suggest that PaPUC require the schools and libraries to report E-rate
savings and benefits, but that it should request such information on an annual basis from the
federal fund administrator. The PaPUC may wish to conduct a voluntary survey of schools and
libraries that participated in the program, or request that a state education and library association
(such as PA School Boards Association and PA Library Association) or EdLiNC PA conduct the
voluntary surveys.
The Subcommittee believes that, in order to monitor the effectiveness of the infrastructure
build-out in Pennsylvania, the PaPUC may wish to compare surveys from more than one source.
For this purpose, we suggest using the annual Link-to-Learn surveys, or such other surveys as
designated by the Pennsylvania Department of Education, with the voluntary survey suggested
above. In addition, those conducting such surveys should be encouraged to ask participants
whether the E-rate plan was a key factor in their purchase of technology.
5. Suggested criteria for evaluations should include:
6. Suggested Methods by which to monitor:
7. Suggested time frame for performance review:
The Subcommittee recommends annual reviews that coincide with the calendar year, at least in the first two years of the program. We also suggest an annual review of the federal fund administrator.
8. Auditing and Additional Accountability:
The FCC's Order permits the state commission or state departments of education to appoint an
auditor to conduct random audits of schools and libraries. The Subcommittee also suggests that
there should be some accountability on the part of carriers regarding their annual requirement to
notify the state education and library associations and the state Department of Education of the
availability of discounted services.
Conclusion
The Subcommittee on Schools and Libraries recommends that the Pennsylvania Public Utility
Commission adopt the above referenced suggestions for reviewing and monitoring the success of
the Schools and Libraries discount program. We have considered whether these review and
monitoring procedures should be reassigned to the Monitoring and Reporting Subcommittee of
our Task Force. We believe, however, that the Monitoring and Reporting Subcommittee's
present responsibilities are so great that this responsibility should stay with the Subcommittee on
Schools and Libraries, or such other appropriate body as may be appointed by the Commission to
carry on this work.
Therefore, we recommend that the Pennsylvania Public Utility Commission establish a standing
subcommittee, or other body, to further develop the above suggested policy with regard to the
review and monitoring of the success of the Schools and Libraries discount program. We
suggest that the standing committee use the above suggestions as a starting point for the
appropriate standards for monitoring and review. Further, we recommend that a report should be
filed with the Commission twelve months from the start of the program, and we suggest that the
process start with the first applications that are filed by the schools and libraries with the federal
fund administrator.
Issue B: Identify ways to encourage prompt infrastructure modernization in Pennsylvania,
including compliance with Chapter 30's alternative regulation and infrastructure
modernization requirements.
Background
The following discussion and recommendations are not intended to slow the process of
establishing the program. The program's establishment should be Pennsylvania's first priority.
The recommendations are offered as guidelines to further discussions either within the PUC or
within the continued framework of the Universal Service Task Force. The discussion and
recommendations also highlight an inherent difficulty of consortia building in a regulated
environment
While full competition and deregulation will promote infrastructure modernization, customer
demand is the key influencing factor to infrastructure investment. In recognition of this,
Pennsylvania's technology initiative for education, Link-to-Learn, advocates development of
community networking as the basis for an enhanced education network. Schools and libraries can
stimulate demand by creating an increased interest in new services beyond their environs, and by
aggregating demand for a new service within the community. Under the Order, aggregation can
include private businesses, but with problematic limitations.
This report addresses three related issues that have a bearing on infrastructure development:
(1)suggested principles to follow during the application process which could foster infrastructure
development; (2) consortia, and; (3) the potential impact of regulatory activity on the schools
and libraries program.
1. Guiding Principles for the Development of Requests for Service
Recommendation: To promote new services and infrastructure development, the work group
recommends that schools and libraries be advised to formulate their request for service according
to the following principles:
1.1 Whenever possible, requests for service should articulate a need for a service rather than a
specific technology or facility.
1.2 Whenever possible and when advantageous to the schools and libraries, the request for
service should state that public switched network services are preferred to private dedicated
networks.
2. Consortia
While the FCC's Universal Service Order is referenced below, we understand that the underlying philosophy regarding nondiscriminatory pricing has a long history, and it is supported, at least implicitly, in the Telecommunications Act.
We believe, however, that the FCC Order's discussion and final rules on the role of aggregation and consortia contain contradictions that may hinder infrastructure development.(1)
In effect, it limits aggregation and shared resources, and limits the ability to demonstrate demand. Specifically, the Order prevents schools and libraries from receiving lower than tariff rates as the pre-discount rate, or Lowest Corresponding Price (LCP), if they are part of a mixed consortia containing ineligible entities.
The Order thereby seeks to avoid violating long standing policy on non-discriminatory pricing. However, the Order's method to avoid the dilemma of non-discriminatory pricing is not without problems.
a. The limitation on access to below-tariff LCP for eligible members of mixed consortia diminishes the value of an extraordinary new tool that can be used to demonstrate demand and, therefore, foster infrastructure development. This tool is the opportunity to advertise a broader need for an advanced service when a bid is posted by the Administrator on the Web.
b. It creates new regulation that specifically imposes additional rules on how the consumer (whether "eligible" or "ineligible") can procure goods and services. We agree that only schools and libraries should be eligible for discounts. However, the ability to partner to share resources or to aggregate demand should be left to the willingness of the consumer and the provider.
c. It weakens the incentive to aggregate within a community when there is the opportunity to do so. The provision encourages a take-what-is-there attitude rather than fostering the pursuit of enhanced services and potential infrastructure development in a community.
d. It may undermine the positive effects of the competitive bid process, if tariff prices are all that is possible.
Recommendation
We recommend further research to determine the best means or mechanism that can take
advantage of a common, single source to advertise aggregated demand. This mechanism could
be implemented at the state level; however, it would be far more effective at the federal level,
through the bid advertising web site to be established by the Fund Administrator. Such a
mechanism can encourage competition and new service deployment if providers can see a
potential for demand beyond eligible consortia participants.
3. Potential Impact of Regulatory Activity on the Schools and Libraries Program
As a result of the Telecommunications Act, PaPUC activity and decisions will continue their
vigorous pace for some time. Resulting orders could have some level of impact on the delivery of
the program. An example of this is the recent petition of small and rural local exchange
companies to be protected from competition.
Recommendation
We strongly recommend that the PaPUC make every effort to identify the portions of its orders
which could have an impact on a school's or a library's ability to receive competitive bids for
specific services. Such portions of any ruling, with their anticipated affects, should be clearly
outlined. We further recommend that a channel of communication be established whereby the
PaPUC can proactively and routinely direct this information to the Pennsylvania Department of
Education, or other agreed upon entities, which can effectively disseminate this information to
those most likely to be affected under this program.
4. Note on Chapter 30
We have examined the Schools and Libraries portion of the FCC's Universal Service Order to
determine what might further contribute to infrastructure development in PA, either
independently or in conjunction with the objectives of Chapter 30. The work group attempted to
address ways in which to capitalize on Chapter 30 and Universal Service existing
simultaneously. Our conclusion, however, is that the topic is too complex to address within the
required deadline. This conclusion is at least partly due to the pre-existence of commitments
made by various carriers under Chapter 30, as written.
Issue C: Identify the basic information that must be submitted by the School/Library to the
Administrator's subcontractor; possible uses of technology to assist the PUC.
Background
The basic information that must be submitted will be set forth in the various forms that eligible
schools and libraries will be required to fill out. The forms will be developed by either the FCC
and/or the fund administrator, known as "School Corporation." The FCC's May 8th Order sets
forth the basic information that schools/libraries will have to submit, such as a technology
assessment and request for services. The technology assessment requires information concerning
the available computer equipment and/or modems; internal connections; computer software;
experience of and training received by staff on the use of the equipment to be connected to the
telecommunications network; maintenance of computers and electrical system capabilities to
handle simultaneous uses. The request for services requires that the various services that the
school/library is interested in procuring be described.
The Order also sets forth various requirements that schools and libraries will be required to
certify that they are in compliance with, such as: (1) the school or library is an eligible entity
pursuant to Section 254(h) of The Telecommunications Act; (2) the services requested will be
used purely for educational purposes; (3) the services will not be sold, resold or transferred in
consideration for money or any other thing of value; (4) if the services are being purchased as
part of an aggregated purchase with other entities, the identities of all co-purchasers and the
services or portion of the services being purchased by the school or library; (5) all of the
necessary funding in the current funding year has been budgeted and will have been approved to
pay for the "non-discount" portion of requested connections and services as well as any necessary
hardware; software, and to undertake the necessary staff training required in time to use the
services effectively; and (6) they have complied, and will continue to comply, with all applicable
state and local procurement processes.
Because the application forms and other forms will be developed at the federal level, we do not
offer any recommendations concerning the precise information that the schools/libraries will be
required to submit to the fund administrator. Our recommendation focuses on identifying
important inputs to assisting the schools, libraries and service providers in their negotiations.
This type of background information may be very useful to schools/libraries in preparing their
applications, especially if the information is easy to access and easy to understand. Efforts to
compile such information have already been undertaken on a somewhat ad hoc basis. For
example, members of Universal Telephone Service Task Force consulted with the Center for
Rural Pennsylvania and other public entities, and the Center for Rural Pennsylvania computed
each school district's and library's discount using the FCC's discount matrix (which was adopted
by the Pennsylvania PUC for intrastate services).
The Link to Learn data base contains various information that may be useful for schools and
libraries in the preparation of their E-rate applications. For example, the data base identifies the
various service providers and areas in which they provide service. Schools and libraries could
make use of this information by consulting with potential service providers while developing
their requests for services. The data base also contains information regarding infrastructure and
available technologies within various geographic regions of the state.
Recommendations
1. State governmental entities and interested stakeholder groups should continue to work together
to facilitate electronic access to information regarding service providers and technology
availability as well as information concerning the discount calculations for each school and/or
library. The information should be available for each school district or library. The Pennsylvania
PUC should offer assistance in this undertaking by assisting in the identification of, and
collection of, useful information. Further, the Pennsylvania PUC and the Pennsylvania
Department of Education should encourage those entities each deals with in their official
capacities to maintain the integrity of this information through, at least, annual updates.
A web site should be established for this purpose, and the Pennsylvania PUC should recommend
that the Office of Administration (OA/OIT) and the Pennsylvania Department of Education
should organize this activity.
2. The Pennsylvania PUC's efforts to facilitate Internet access to various telecommunications
providers' tariffs should be publicized to the schools and libraries to enable them to more readily
access such information.
Issue D: Identify any aspect of the process that could place undue financial or administrative
burden on Schools/Libraries and recommend alternatives.
Background
Time and resources must be and have been expended to learn about and to undertake preparatory measures to participate in the E-rate program. The Task Force has served as a forum to bring together public and private resources in an effort to efficiently and effectively undertake this effort. For example, the Pennsylvania Department of Education has developed a comprehensive informational pamphlet setting forth basic information about the E-rate program and is posting this information to its web site, along with periodic updates. The PDE has also set up an Internet home page dedicated to transmitting timely information about the E-Rate Program. The address for the home page is www.state.us or www.case.psu.edu./pde.html. Rapid dissemination of up-to-date information about the E-rate program will conserve and stretch resources.
The E-rate program attempts to defray a portion of, but not nearly all of, the costs of an
end-to-end deployment of technology in schools and libraries. Software, hardware and teacher
training are three key cost centers that are not included within the framework of the E-rate
program. Yet, the E-rate program anticipates that such facilities and services are in place to
enable the school or library to benefit meaningfully from the E-rate discounts.
Each school or library must have a technology plan which has been reviewed and approved at the
state level, preferably by the state department of education. No standard of review has been set
forth by the FCC to govern review and approval of technology plans. No process for such
reviews has yet been articulated by the FCC. Yet, as described in the FCC's May 8th Order, the
technology plan review is a prerequisite to submitting an application.
Recommendations
1. The Pennsylvania PUC should consider allocating some resources to facilitate ongoing
education and outreach efforts regarding the E-rate Program. For example, when the program
applications are finalized and made available, the Pennsylvania PUC should coordinate outreach
efforts with the Pennsylvania Department of Education (PDE) and the Office of Administration,
Office for Information Technology (OA/OIT), to assure that all eligible schools and libraries
have access to these program materials and accurate information concerning the program
administration and operation.
2. PDE should be encouraged to implement a process for review and approval of technology
plans that comply with the E-rate program requirements and which would also cover the
eligibility criteria for other federal and state technology grants and loans. The procedure and
time table for departmental review and approval of the technology plans should be disseminated
and posted electronically to PDE's website and through PennLink. The contents of the
technology plan and explanation of how to prepare a technology plan should be made available
to eligible schools and libraries.
Pending development of the comprehensive technology plan requirements, PDE should rely on
existing federal standards for technology plans such as those set forth in Title III of Improving
America's Schools Act, Section 3135.
The process for review and approval of technology plans should strive to be cost-effective and
consensus building. One way in which to meet these objectives is to consider a peer review
process, which would call on education technology experts to assist in the evaluation of
technology plans. The process should be consultative by encouraging the participation and
cooperation of other governmental agencies with appropriate expertise,
3. All existing sources of funds for technology for schools and libraries should be evaluated for
their use in facilitating schools and libraries' compliance with the other requisites of the E-rate
program. For example, schools and libraries are required to conduct a technology assessment;
develop a request for services; certify that they have a plan for using the technology; certify that
they have adequate hardware, software and staff training to use the services effectively. Existing
technology funding sources should be tapped to enable schools and libraries to meet these E-rate
program requirements. Information about these resources should be made electronically
accessible via the Internet under the leadership of PDE.
4. Schools and libraries should be encouraged to identify funding sources to supplement existing
resources to assure that such an infrastructure is in place so that they may make the certifications
required as prerequisites to participating in the E-rate program. Such funding sources may be
available from other technology grant or loan programs administered either at the federal or state
level or through their local budgeting process.
Issue E: Potential for future complaints; PUC Role in Prevention of Complaints.
Background
In a complex program with such high stakes, there are bound to be controversial issues or
interpretations of policy. With respect to the Schools and Libraries program, an example is the
determination of eligibility for a lowest corresponding price below tariff.
The pre-discount price will be determined through a competitive bidding process. The school or
library will submit a request for services which will be posted electronically to the fund
administrator's web site for a four week period. Any qualified service provider may submit a bid
in response, and the school or library must choose the most cost effective bid. In those instances
where only the incumbent local exchange company may offer the requested service, the lowest
corresponding price is the price offered to similarly situated non-residential customers for
similarly situated services. In those situations where the school or library is part of a consortium
comprised of both eligible and ineligible entities, then the lowest price that an incumbent local
exchange company may offer in response to a request for services is the company's tariff prices
for interstate services. State regulatory policy will govern whether a similar restriction ought to
be placed on bids relating to intrastate services.
Recommendations
1. The Pennsylvania PUC should set forth standards to govern the definition of "similarly
situated non-residential customers for similarly situated services" for purposes of evaluating the
lowest corresponding price. Such standards should include: (a) type of service; (b) physical
proximity of school/library and other customers; (c) number of connections for school/library
and other customers; (d) volume of usage for school/library and other customers. No hard and
fast rule can be adopted that will govern all situations, but the identification of various criteria
may assist the customers and providers in their negotiations. The Pennsylvania PUC should
develop the standard after providing interested parties opportunity for comment.
2. The Pennsylvania PUC should require that carriers offer prices to schools and libraries which
are being offered via individual case basis contracts to similarly situated non-residential
customers for similarly situated services. Procedures should be implemented to preserve the
confidentiality of competitively sensitive information relating to such contracts.
3. The Pennsylvania PUC should continue to adhere to its historic practice of requiring prices for
intrastate services to be set no lower than incremental cost. The PUC should reject the FCC's
limitation on the prices available to consortia relating to the provision of intrastate services.
Issue F: Define/Identify pre-discount rates or Lowest Corresponding Price: how that is to be
derived and the PaPUC's role in determining LCP for regulated and non-regulated services;
PaPUC's role in complaint resolution.
Background
The FCC's May 8th Order states that if there is a dispute over the lowest corresponding price for
intrastate services, service providers and/or schools/libraries may seek recourse at the state
regulatory commission. The state commission must then evaluate whether the lowest
corresponding price is fair. The Pennsylvania PUC should consider what procedures should be
implemented to promptly address such concerns that may arise from time to time.
Recommendations
1. The process for seeking recourse to the Pennsylvania PUC for intrastate service complaints
regarding the lowest corresponding price should be handled initially through mediation. If
mediation does not satisfactorily address the parties' concerns, then either party should have the
option of filing a Formal Complaint with the Pennsylvania PUC.
The mediation process enables an experienced mediator to preside over an informal mediation
session attended by representatives of the service provider and school/library. During the
mediation session, the parties may raise their concerns and the mediator will attempt to facilitate
a resolution. The parties need not be represented by counsel in the mediation sessions. The
mediator will issue a report following the conclusion of the mediation session. If the parties do
not resolve their dispute through mediation, then either party may elect to proceed to arbitration,
with an administrative law judge presiding as the arbitrator. Following the issuance of the
arbitrator's decision, the case should be reviewed by the Commission if either party files
exceptions.
Final Report of the Subcommittee on Health Care Institutions
Introduction
The Subcommittee on Health Care Facilities was assigned the following issues for development
of recommendations:
1. Identification of the range of services to providers of services and health care institutions;
2. Identification of the level of discounts to providers of services to health care institutions;
3. Identification of ways to encourage prompt infrastructure modernization in Pennsylvania
including compliance with Chapter 30's alternative regulation and infrastructure modernization
requirements.
Scope of this Report
The Subcommittee on Health Care Facilities previously developed and the Task Force previously
adopted an Interim Report Concerning the Definition of Rural Areas, in conjunction with the
Subcommittee on Schools and Libraries. The Report was filed with the PUC on July 15 1997,
and recommended that the Pennsylvania PUC submit a petition for waiver, or in the alternative,
reconsideration of the rural definition to permit an additional nine counties to be classified as
rural. The Pennsylvania PUC adopted this recommendation and filed a Petition for Waiver with
the FCC on July 17, 1997. The Subcommittee hereby incorporates by reference its Interim
Report Concerning the Definition of Rural Areas, and the Pennsylvania PUC's Petition for
Waiver.
Issue 1: Identification of the range of services to providers of services and health care
institutions.
Background
In order to implement universal telephone service for health care providers, the Federal
Communications Commission ("FCC") adopted a $400 million program comprised of three
components: (1) all public and non-profit health care providers that are located in rural areas and
meet the statutory eligibility criteria may obtain universal service support for
telecommunications services up to and including a bandwidth of 1.544 Mbps by obtaining a price
for service that is comparable to the price charged to urban health care providers; (2) rural health
care providers may obtain a reduction to the distance charges incurred, compared to the distance
charges incurred by urban health care providers; and (3) all health care providers--both urban and
rural--may obtain support for toll-free access to an Internet service provider.
It is important to note that the federal program will fund the rate reduction identified above for
both interstate and intrastate services. Accordingly, the Task Force concurs with the scope of the
services identified in the FCC's May 8 Order on Universal Service and does not recommend that
supplemental services be identified at this time. The Task Force has not studied the feasibility of
establishing a state universal service program to extend the federal program nor has it considered
any specific proposals to create such a fund because there is neither the experience nor the data
available to conduct such a study at this time.
Recommendations
1. The Task Force recommends that the Pennsylvania PUC concur with the range of services
identified in the federal program for purposes of providing rate reductions to qualified health care
institutions pursuant to The Telecommunications Act of 1996.
2. The Task Force recommends that its efforts and attention be focused on developing
educational and informative materials to publish and distribute to qualified health care
institutions and service providers in order to insure that the federal program provides a maximum
benefit to Pennsylvanians.
3. The Task Force recommends that it be directed to monitor the implementation of the federal
program for rural health care facilities so as to assure the timely transmittal of updated
information concerning the federal program is disseminated throughout Pennsylvania to qualified
health care institutions and to service providers.
4. The Task Force recommends that a cost effective and efficient procedure be developed for
measuring the advantages of the federal program which inure to the citizens of Pennsylvania.
The procedure should be developed as partnership of public and private entities and resources.
The results of the measurement program should be publicly reported within 24 months of the
date of the start-up of the federal program.
Issue 2: Identification of the level of discounts to providers of services to health care
institutions.
Background
The principal aim of the federal program is focused on health care providers located in rural
areas. The FCC adopted a definition of rural area to mean a nonmetropolitan county or county
equivalent, as defined by OMB and identifiable from the most recent Metropolitan Statistical
Area ("MSA") released by OMB or any census tract or block numbered area, or contiguous group
of such tracts or areas, within an MSA-listed metropolitan county identified in the most recent
Goldsmith Modification published by the Office of Rural Health Policy/Health and Human
Services ("ORHP/HHS").
Pennsylvania is home to 3.7 million residents that live in rural areas according to the definition of rural used by the Bureau of the Census--the most in the nation. Although typically not thought of as a state with a large rural constituency, the statistics reveal just the opposite. Consequently, the definition of rural area is of great importance to our state, so that we can be assured that the benefits of the universal service programs are made available to as many rural entities as possible. It should be noted that the FCC adopted the same definition of rural areas for purposes of administering the schools and libraries discount program. Thus, this issue relates to both the rural health care program and the schools and libraries program.
Under the FCC's approach, metropolitan counties are considered urban and non-metropolitan
counties are considered rural. The Census Bureau defines a metropolitan area as one or more
contiguous counties surrounding a central city of 50,000 or more. Outlying, contiguous counties
are included in a metropolitan area based on their population density, growth rate, commuting
patterns, and other factors. All counties not identified as part of a metropolitan area are
considered non-metropolitan.
The Subcommittee on Health Care Facilities was assigned the responsibility of analyzing the
FCC's definition of rural areas to determine whether the definition was consistent with the
Commonwealth's needs and objectives. The advice of numerous experts on rural issues was
solicited: the Pennsylvania Rural Development Council (a sitting member on the PUC's Task
Force); the Center for Rural Pennsylvania; the Pennsylvania Office of Rural Health; the
Commonwealth's Department of Health, the Hospital and Health Systems of Pennsylvania; the
American Association of Retired Persons. These rural specialists comprehensively analyzed the
FCC's definition and concluded that it did not meet its intended objectives. An alternative
method of classifying rural areas is proposed in order to assure that all of Pennsylvania's rural
health care facilities may be eligible to benefit from the federal universal service program.
Application of the FCC's definition to Pennsylvania's 67 counties results in the exclusion of nine counties which are typically considered to be rural. The Interim Report sets forth a comprehensive explanation of the Task Force's concern that the FCC's definition of rural areas is too narrow to adequately meets our state's concerns.
The nine counties at issue are: (1) Butler; (2) Carbon; (3) Columbia; (4) Fayette; (5) Lebanon; (6)
Perry; (7) Pike; (8) Somerset; and (9) Wyoming. Each of these counties is classified as an urban
area under the FCC's definition. Yet, according to the rural experts' consensus opinion, these
nine counties share more in common with their non-metropolitan counterparts than with the other
metropolitan counties, and have a rural rather than urban character. Consequently, the Task
Force was pleased that the Pennsylvania PUC filed the Petition for Waiver of the Rural
Definition with the FCC on July 17, 1997.
In anticipation of the PUC's filing of the Petition, representatives of the Task Force met with
FCC officials and staff to provide background information and an overview of the concern
leading up to the filing of the Petition for Waiver. The meetings occurred on July 15, 1997.
Informal attempts to monitor the status of the Petition have indicated that the Petition has not yet
been assigned to the FCC staff for development of a recommendation.
The Subcommittee on Health Care Facilities has not actively considered the feasibility or the
need to establish a state universal service fund to provide supplementary rate discounts to
qualified health care institutions. The Subcommittee makes no recommendation regarding the
development of a state universal service fund for this purpose at this time.
Recommendations
1. The Task Force should monitor the Pennsylvania PUC's Petition for Waiver of the Rural
Definition and determine whether there is any supplemental information that the FCC staff
would like to obtain regarding the Petition.
2. The Task Force should review the results of the procedure for measuring the benefits of the
federal program for Pennsylvanians, and make recommendations as to what, if any, additional
measures the state should consider undertaking to further the provision of universal telephone
service to health care institutions.
Issue 3: Identification of ways to encourage prompt infrastructure modernization in
Pennsylvania including compliance with Chapter 30's alternative regulation and
infrastructure modernization requirements.
The Subcommittee on Health Care Institutions concurs with the discussion and recommendations
of the Subcommittee on Schools and Libraries set forth in that Subcommittee's Final Report,
Issue B.
Final Report of the Subcommittee on
Monitoring & Reporting/Subscribership Issues
The Monitoring & Reporting/Subscribership Subcommittee of the Universal Service Task Force
was delegated with the following responsibilities:
1. Identification of monitoring and reporting requirements that provide an adequate range of
information necessary for the Commission to effectively monitor universal service in
Pennsylvania in the future (Universal Service Order of January 28, 1997, Docket No.
I-00940035, p. 135).
2. Identification of the special needs of low income customers in Pennsylvania (Universal
Service Order entered January 28, 1997, Docket No. I-00940035, p. 135).
3. Identification of the need for changes to the definition of universal service in the future
(Universal Service Order entered January 28, 1997, Docket No. I-00940035, p. 135).
4. Identification of ways to encourage prompt infrastructure modernization in Pennsylvania
including compliance with Chapter 30's alternative regulation and infrastructure modernization
requirements (along with the other subcommittees) (Universal Service Order entered January 28,
1997, Docket No. I-00940035, p. 135).
5. Identification of recommendations concerning extended area service policies for a competitive
local exchange market (PUC Order entered April 15, 1997, Docket No. P-00961130, pp. 11 and
13).
Issue 1: Monitoring & Reporting.
The Monitoring & Reporting/Subscribership Subcommittee ("Subcommittee") believes that it is very important to establish a basis on which to determine whether or not Universal Service is meeting its goals that the Commission has established.(2)
Penetration rates will never actually reach 100% because of individuals who exercise their choice
not to obtain telephone service because of religious or other reasons. However, the
subcommittee notes that, in the context of a Universal Service Program, the purpose of
monitoring and reporting of penetration rates is to ensure that those residence and business
customers who want telephone service are able to receive it at affordable rates. This is
particularly true of low-income households who should be able to connect to and maintain
affordable in-home telephone service.
The Subcommittee does not support the creation of additional burdensome monitoring reports and recommends that additional tracking reports only be required in instances where existing statistical information is not available. However, it is important to consider the impact that Lifeline and Link-Up programs will have on telephone penetration. It is especially important to monitor the impact that these programs will have on the low-income penetration rate, as well as on specific sub-groups such as black, Hispanic, rural household, and tenant.
The Subcommittee has reviewed the possible methods by which an accurate population base
could be determined that would represent the total number of all existing telephone customers
and potential telephone customers. This base, when compared to just those who subscribe to
telephone service, would be the most accurate for monitoring universal service progress. The
Subcommittee is uncertain as to whether it is practical and economical to create a base
independent of the existing data published by the FCC and other related data that is maintained
by various state agencies.
The monitoring reports should determine the penetration levels of low-income households in
Pennsylvania as well as the penetration levels for specific sub-group populations such as black,
Hispanic, rural household, and tenant. Where specific Pennsylvania information is not available
through the FCC or other means, it must be obtained independently, unless it can be
demonstrated to the Commission that it is impractical or uneconomical.
The Subcommittee believes that monitoring information relating to the success of the Universal
Service Program in Pennsylvania can, at a minimum, begin with the FCC's Common Carrier
Bureau's annual penetration report entitled "Telephone Subscribership in the United States" (see
Attachment A). This information provides the annual average percentage of households with
telephone service broken down by state. Although these penetration rates are annual averages,
the Subcommittee believes that this information coupled with additional information which will
be discussed below will be useful in determining whether the goals of Universal Service are
being met. Therefore, the Subcommittee recommends that the PUC use the FCC's 1996
penetration rate of 96.9% as a starting point to begin monitoring subscribership in Pennsylvania.
Another report that the Subcommittee recommends be used in monitoring telephone penetration
is the U.S. Census Bureau's Percent Occupied Housing Without Telephones (see Attachment B).
This report contains, by county, the number of occupied housing units without telephones, the
percent occupied units without telephones, the percent owner-occupied units without telephones
and the percent owner-renter units without telephones. Although this information is only
provided on a decennial basis, the Subcommittee believes it would be beneficial to review the
Census-2000 information to determine which counties could be targeted for education programs
on universal service availability.
In addition to monitoring just basic local exchange service for residence and business customers,
the Subcommittee believes that it is important to obtain information relating to the success of the
Universal Service Program for health care institutions, schools and libraries. Therefore, the
Subcommittee recommends that the monitoring process should also separately track the effects
of universal service on health care institutions, schools, and libraries.
We also recommend that the federal and state Universal Service Fund Administrators may be
reliable sources for obtaining tracking information. However, the subcommittee recommends
that the PUC wait until such time that the Fund Administrators are actually selected before
determining what information can be gleaned from the Fund Administrators' records. It is
expected that, at the very least, information regarding the amounts received by health care
institutions, schools and libraries can be obtained from the Fund Administrator. This
information will show how much these institutions have received to implement technological
improvements from Universal Service which might not have otherwise occurred.
In addition, the Subcommittee recommends that the Commission prepare an annual summary of
basic one-party flat-rated residence and business local service rates, by area by Company, in
order to determine where local competition actually exists in both the residential and business
markets, and the effects that local service competition may have on rates. This information can
provide assistance in reviewing the need for, or the type of, any EAS regulations that may be
required. The Subcommittee is aware that comparison of rates of different companies will not
always be compared on an "apples to apples" basis, especially as it pertains to local calling areas,
rate groups, and applicable mileage charges applied to basic service. However, the
Subcommittee is of the opinion that some rate and local service monitoring is better than none.
Issue 2: Special Needs of Low-Income Customers (i.e. Lifeline and Link-Up).
The Subcommittee agrees with the Commission that all telephone companies be required to file
at a minimum, a Lifeline Plan. Currently all incumbent local exchange companies in
Pennsylvania have Link-Up in their tariffs. The Subcommittee recommends that all CLECs that
do not have Link-Up provisions in their tariffs be directed to do so.
With regard to Lifeline, the Subcommittee recommends that all LECs file a Lifeline Tariff that will achieve the goals of the FCC and Commission's Universal Service Order, as well as comply with the mandate of Chapter 30 to ensure that low-income households are able to connect to and maintain in-home telephone service. The Subcommittee also recommends that all LECs and CLECs be directed to use, as a minimum, Bell's Lifeline Service tariff (see Attachment C) as an illustrative guide to develop Lifeline Service tariffs which all ILECs and CLECs would be required to file as part of their Lifeline Plans.(3)
We do note, however, that Bell's Lifeline Service includes its Budget Usage and Standard Usage
local service options and many of the incumbent LECs today only offer flat rate service pricing.
Therefore, it should be recognized that the rate structure and actual local service offerings of a
specific LEC's Lifeline plan may vary from company to company.
In addition, the Subcommittee recommends that the Commission undertake the necessary action
to formulate a public relations or communications plan to educated subscribers as well as
non-subscribers about the options that are available under Universal Service, Lifeline, and
Link-Up. It is also recommended that some consideration be given to informing the illiterate, as
well as those who speak a different language other than English. The Commission's Bureau of
Public Liaison and the TEF could ideally perform this function. The Subcommittee also
recommends that the PUC enlist individuals from other state agencies or interest groups, to assist
in "getting the word out." Schools, libraries and health care institutions that benefit under
Universal Service could also assist in informing the public about the availability of the options.
The Subcommittee notes that it is recognized that the providers of telephone services have the greatest ability to inform the public about their Lifeline, Link-Up and Universal Telephone Assistance Program ("UTAP") (4)
universal service programs. The LECs, ILECs and CLECs, on a competitively neutral basis,
should provide information to the general public through public service announcements, or other
forms of advertising, as well as directly to customers by bill stuffers and contacts with customer
service representatives. Prospective customers, payment- troubled customers, and customers
receiving disconnection or termination notices should be targeted to receive this information.
Issue 3: Universal Service Definition Changes.
The Commission's Universal Service Order charged the Universal Service Task Force with the
responsibility of determining "the need for changes to the definition of universal service in the
future." The Commission's current definition of universal service which was formally adopted
by the January 28, 1997 Universal Service Order at Docket No. I-00940035, is as follows:
a) single party, voice grade, incoming and outgoing access to the public switched network and usage within a local calling area;
b) touch tone capacity;
c) annual local directory;
d) access to operator services;
e) access to directory assistance;
f) access to telecommunications relay service and other services designed for persons with disabilities; and
g) access to emergency services.
h) unlimited local calling throughout the established local calling area.
Since the time from the date that the PUC's Universal Service Order was originally entered on
January 28, 1997, the FCC released its Universal Service Report and Order at CC Docket No.
96-45 on May 8, 1997. The FCC definition of Universal Service as stated in the FCC's May 8,
1997 Report and Order is currently stated as follows:
Based on the principles embodied in section 254, and guided by the recommendation of the Joint Board, we define the "core" or "designated" services that will receive universal service support as: single-party service; voice grade access to the public switched network; Dual Tone Multifrequency (DTMF") [footnote omitted] signaling or its functional equivalent; access to emergency services including, in some circumstances, access to 911 and Enhanced 911 ("E911") [footnote omitted]; access to operator services; access to interexchange service; access to directory assistance; and toll limitation services for qualifying low-income consumers, as described in Section VIII. In order to receive universal service support, eligible carriers must offer each of the designated services. A carrier that currently is unable to provide single-party service may petition its state commission to permit the carrier to receive universal service support for a designated period of time while the carrier completes the network upgrades needed to offer single-party service. In addition, carriers currently incapable of providing access to E911 service and toll limitation services may, for a specified period of time, also receive universal service support while completing network upgrades required for them to offer these services.
With regard to future revision of the universal service definition, the FCC stated that it "will
convene a Federal-State Joint Board to review the definition of universal service on or before
January 1, 2001."
The Subcommittee notes that although the PUC's definition of universal service is similar to the
FCC's definition, there is a difference. The FCC's definition includes the availability of "toll
limitation services" for qualifying low-income consumers, while the PUC's definition does not.
Since it would initially be administratively easier to use similar definitions for universal service,
the Subcommittee recommends that the PUC also include "toll limitation services" in its
definition of universal service with the same caveats as those contained in the FCC's definition
(i.e. a carriers that are incapable of providing toll limitation services may, for a specific period of
time, also receive universal service support while completing network upgrades required for
them to offer these services).
Furthermore, with regard to the frequency of universal service definition changes, the
subcommittee recommends that for the first review, the PUC wait until the FCC finalizes its
definition changes based on the recommendation of the Federal-State Joint Board. The
Subcommittee further recommends that the PUC then act within the first six months after the
FCC adopts its revised universal service definition to modify the state's universal service
definition. The Subcommittee believes that this will enable the Universal Service Task Force to
build upon the experience of the Federal-State Joint Board in its development of an updated
definition. Furthermore, this methodology will ensure that Pennsylvania's definition continues to
at least meet the minimum guidelines and would allow the PUC to make any further refinements
it believes would be necessary.
Issue 4: Ways to Encourage Prompt Infrastructure Modernization in Pennsylvania
The Subcommittee on Monitoring and Reporting/Subscribership Issues concurs with the
discussion and recommendations of the Subcommittee on Schools and Libraries set forth in that
Subcommittee's Final Report at Issue B.
Issue 5: EAS Revisions in a Competitive Environment
In developing a recommendation with regard to EAS revisions in a competitive environment, the
Subcommittee reviewed the existing EAS regulations and the Commission's April 15, 1997
Opinion and Order at Docket No. P-00961130 with regard to the Pennsylvania Telephone
Association's Petition for a waiver of the Commission's EAS regulations until October 1, 1999.
In that order, the Commission denied PTA's request for waiver of the EAS regulations and
required all LECs to file EAS traffic usage studies in 1997. However, the Commission also
acknowledged that it is almost certain that the EAS regulations will not be practical for the 1999
traffic usage studies and that it would be necessary to resolve outstanding 911 policy issues in a
competitive environment. As a result, the Commission stated the following in its April 15, 1997
Order:
The recently convened Universal Service Task Force provides such an opportunity [to establish an EAS policy based on an open exchange of ideas and views among various stakeholder groups]. Toward that end, we determine that the mission of the task force should include consideration of this issue and the submission of recommendations concerning extended area service.
The Subcommittee has encountered much difficulty in developing its recommendation with
regard to this issue. There are two major concerns in this regard. The first concern is determining
whether there are sufficient carriers and local optional calling services in all areas of the state to
warrant total discontinuation of EAS regulations. The second concern is how to modify the
existing EAS regulations in such a fashion that would not be administratively burdensome on
telephone companies and the Commission in compiling such information.
The Subcommittee notes that the Commission's EAS regulations have been in place since 1989 and that the total number of qualifying EAS routes have been declining since that time. Therefore, the Subcommittee believes that before making an official recommendation, it would be best to wait until the next round of biennial EAS traffic usage studies are filed(5)
to determine whether the number of qualifying routes would justify the need to continue the
traffic studies in 1999. Therefore, the Subcommittee recommends that, before making a final
determination on how the EAS regulations should be revised, the Commission should review the
results of the 1997 traffic usage studies to determine the number of routes that qualify for EAS
and Optional Calling Plans ("OCP"). If it is determined that the number of qualifying EAS
routes are significant to the point that EAS requirements should be maintained to some degree,
the Subcommittee recommends that the Monitoring & Reporting/Subscribership Subcommittee
be directed to reconvene with other interested parties, no later than July 1, 1998, to review the
EAS regulations in detail and make a final recommendation to the Commission. In the
meantime, competition will have had another year to develop and we will have a better idea of
the urgency of maintaining any EAS requirements. It is also hoped that intraLATA
presubscription will begin making more toll options available throughout the state and this may
alleviate the need for the optional toll calling plan requirements of our EAS regulations.
Conclusion
The Task Force urges the Commission to accept and to take action on the specific
recommendations contained in this Report. Further, the Task Force recommends that the
Commission define a limited, but continuing, role for this or a similar Task Force to address
issues that may arise from time to time during the first year or two of the Universal Service
Program.
The Task Force members wish to thank the members of the PaPUC staff who have provided
invaluable assistance to the Task Force in carrying out its assignments. The Task Force members
further wish to thank the Commissioners for the opportunity to provide comment and input into
this process and for the opportunity to serve the Commonwealth of Pennsylvania and its citizens.
Footnotes
1.
(475) "...In a competitive marketplace, schools and libraries will have both the opportunity and
the incentive to secure the lowest price charged to similarly situated non-residential customers
for similar services..."(i.e.: tariffed pricing and volume-discounted tariffed pricing.)
(476) "...we should encourage schools and libraries to aggregate their demand with others to
create a consortium with sufficient demand to attract competitors and thereby negotiate lower
rates..."
(479) "We agree with the Joint Board that, ideally, eligible schools and libraries will take full
advantage of the competitive market place...We anticipate that competition to serve eligible
schools and libraries will be vigorous in most markets."
(480) "We, therefore, adopt the Joint Board's finding that fiscal responsibility compels us to
require that eligible schools and libraries seek competitive bids for all services eligible..."
(477) "We are concerned that permitting large private sector firms [to join eligible schools and
libraries] to seek below tariff prices could compromise federal and state policies of
non-discriminatory pricing."
(478) [therefore] "Eligible schools and libraries participating in consortia that include ineligible
private sector members will not be eligible to receive universal service discounts unless the
pre-discount prices of any interstate services that such consortia receive from ILECs are
generally tariffed rates."
(478) "We recognize that state laws may differ ... with respect to non-discriminatory pricing
requirements. We also recognize, however, that should states so chose, they may impose the
same structure as detailed herein..."
(483) "ILECs abilities to offer intrastate services in competitive bidding situations will be
governed by the relevant state public utility commission policies."
(483) A More specifically, they [ILECs] will be free under section 201 (b) of the Act, to offer
different rates to consortia that consist solely of [eligible entities]. Thus, we hereby designate
communications to organizations, such as schools and libraries, and eligible health care
providers, eligible for preferential rates under section 254 as a class of communications eligible
for different rates, not withstanding the non-discrimination requirements of 202 (a).
2. 3. 4. 5.