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GTE Reaction to FCC Order

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WASHINGTON - The following should be attributed to Alan Ciamporcero, vice president federal regulatory affairs for GTE in Washington, D.C. in reaction today's universal service order issued by the Federal Communications Commission (FCC).

"With its action today, the Commission appears to recognize the importance adequate universal service support plays in high cost areas. However, we remain skeptical about the use of the FCC model and statewide averaging to calculate universal service costs. It seems improbable that only seven states in the country require high cost support.

"The 'hold harmless' provision and the increase in the fund adopted today help ensure that rates remain affordable for consumers during the transition period in the many rural states that GTE serves. Pending review of the final order, we are concerned about the eventual elimination of the hold-harmless provision.

"The action today appears to begin to rationalize the subsidy mechanism with a competitive model but it is only a first step. The FCC and the state commissions must take further action to strengthen universal service in a competitive environment. The FCC now needs to take the much bigger step and remove the implicit subsidies contained in long distance access charges as proposed by the coalition of six of America's leading local and long-distance companies. Additionally, states need to do their part to make sure adequate support is provided to high cost areas within their states.

"Continued timely reform is necessary to finally unlock the value of the Telecommunications Act of 1996 and allow consumers to reap the benefits competition will bring."

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