REPLY COMMENTS OF CONSUMERS UNION,
CONSUMER FEDERATION OF AMERICA,
FREE PRESS,
AND
NEW AMERICA FOUNDATION

Free Press, Consumers Union, Consumer Federation of America, and New America Foundation submit these comments in response to the Federal-State Joint Board on Universal Service’s request for input into the issue of long-term, comprehensive highcost universal service reform.

We approach this proceeding with a sharp focus on the principles of universal service as embodied in the 1996 Telecommunications Act. Our analysis is guided by these principles, which though 12 years old, establish a reasonable and relevant framework for USF modernization.

In moving this proceeding to a conclusion, the Commission should be influenced only by concerns of adhering to the principles of the Act, and not swayed by arguments made by narrow business interests with a stake in maintaining the status quo. In short, the Commission must develop and implement a USF reform plan that modernizes the fund to reflect the realities of the 21st century Internet marketplace, and do so in a manner that is consistent with the public interest. We suggest that the Commission’s deliberations begin by establishing criteria for evaluating USF reform plan based primarily on the principles in Section 254. In these reply comments, we do just that. Our consideration of these principles and criteria leads us towards a basic conclusion: Universal service funds should be used to fund next-generation broadband networks in those areas that are currently unserved. Furthermore, these networks should be operated under open access policy, in order to ensure the consumers reap the benefits of competition in an efficient manner.