CONSUMER/DISABILITY )

TELECOMMUNICATIONS ADVISORY )

COMMITTEE (CDTAC) MEETING )

 

Pages: 1 through 294

Place: Washington, D.C.

Date : August 6, 2001

Before the

FEDERAL COMMUNICATIONS COMMISSION

Washington, D.C. 20554

 

CONSUMER/DISABILITY )

TELECOMMUNICATIONS ADVISORY )

COMMITTEE (CDTAC) MEETING )

 

Commission Meeting Room

FCC Headquarters

445 12th Street, S.W.

Washington, D.C.

Monday,

August 6, 2001

 

PARTICIPANTS

SHIRLEY ROOKER, Committee Chair

From the FCC:

MARTHA CONTEE

MARGARET EGLER

SCOTT MARSHALL

KAREN PELTZ STRAUSS

Speakers:

ANITA CHENG

MICHAEL J. COPPS

MARSHA MacBRIDE

KEVIN J. MARTIN

K. DANE SNOWDEN

From Industry and other Interested Organizations:

RAYNA AYLWARD

MICHAEL BAER

BRENDA BATTAT

GIL BECKER

DANIEL BRENNER

JULIE CARROLL

ROBERT CHROSTOWSKI

 

PARTICIPANTS, Cont'd

From Industry and Other Interested Organizations:

MICHAEL DelCASINO

RICHARD ELLIS

MARICELA GALLEGOS

JOSEPH GASKINS

LARRY GOLDBERG

SUSAN GRANT

JUDITH HARKINS

DAHLIA HAYLES

JIM HOUSE

STEVE JACOBS

VERNON JAMES

MATT KALTENBACH

KAREN FULLUM KIRSCH

ANDREW LANGE

NANCI LINKE-ELLIS

MILTON LITTLE, JR.

MARIE LONG

PAUL LUDWICK

KEN McELDOWNEY

BELINDA NELSON

SHELLEY NIXON

SUSAN PALMER

DAVE PIERCE

DAVID POEHLMAN

SHIRLEY ROOKER

LAURA RUBY

PAUL SCHROEDER

BOB SEGALMAN

JIM TOBIAS

MICAELA TUCKER

JUDITH VIERA

KAREN WALLS

ANDREA WILLIAMS

 

P R O C E E D I N G S

(9:05 a.m.)

MS. ROOKER: Thank you so much for coming to Washington in this wonderful weather.

(Laughter.)

And we particularly did a good job for you this week. It's really going to be bad tomorrow, you think today's bad, especially for those of you who come from the West Coast who delight in their lovely weather, well, we're punishing you.

(Laughter.)

Actually, it's really astonishing that for a meeting in August that we have so many people attending today and we thank you.

There have been a few changes that we've had since our last meeting. Lyla Laux is no longer with Quest. We thank her for the time that she served on the committee. She's starting her own business and we wish her luck there.

Micaela Tucker is not with us today but she's joining us by conference call. Jim Tobias is going to Chair the Disability Subcommittee Meeting today in her absence.

Now I would like to tell you something. The Disabilities Subcommittee has really been busy this summer and they've made a great deal of progress in arriving at their list of priority issues for the committee, for their proposal to the committee. Now if I'm being too subtle --

(Laughter.)

-- that is a hint for the other two subcommittees that you have some work to do. So I've never been noted for subtlety.

(Laughter.)

We have two newly appointed FCC Commissioners who will be joining us this morning, Commissioners Michael Copps and Kevin Martin. Commissioner Abernathy is traveling and Chairman Powell is just back from travels and we're hoping that he'll be joining us today if he has an opportunity.

Also, we're delighted to have Dane Snowden here. This is his first meeting as a Consumer Information Bureau Chief and we're delighted to see him. He'll be spending most of the day with us unless the Chairman calls.

Now let's just -- I think if the Chairman calls he'll probably leave. Now I'd like to go around the room and let the people at the table just very briefly say your name and the organization or company that you represent. I'm Shirley Rooker and I'm the President of Call For Action.

MS. STRAUSS: Karen Peltz Strauss, Deputy Bureau Chief of the Consumer Information Bureau.

MS. EGLER: Margaret Egler, Associate Bureau Chief, Consumer Information Bureau.

MR. BRENNER: Daniel Brenner, National Cable and Telecommunications Association.

MS. AYLWARD: Rayna Alward, Executive Director of the Mitsubishi Electric America Foundation.

MR. BECKER: Gil Becker, National Association for State Relay Administration.

MR. SCHROEDER: Paul Schroeder, President of Alliance Republic Technology.

MS. NIXON: Shelley Nixon from Cabrini College.

MS. NELSON: Belinda Nelson, Gila River Telecommunications.

MS. PALMER: Susan Palmer, Cingular Wireless.

MR. TOBIAS: Jim Tobias, Inclusive Technologies, Customer Accessibility Solutions and the International Coalition of Access Engineers and Specialists.

MS. RUBY: Laura Ruby, Microsoft.

MS. CARROLL: Julie Carroll, The Information Technology Technical Assistance and Training Center.

MR. ELLIS: Rich Ellis from Verizon.

MR. JACOBS: Steve Jacobs from Ideal at NCR.

MS. WILLIAMS: Andrea Williams from CTIA.

MS. LINKE-ELLIS: Nancy Linke-Ellis from TRIPOD Captioned Films.

MR. GOLDBERG: Larry Goldberg from Media Access at WGBH.

MR. CHROSTOWSKI: Rob Chrostowski representing TIA.

MS. BATTAT: Brenda Battat from Self-Help for Hard of Hearing People.

MR. LANGE: Any Lange from CSD.

MS. KIRSCH: Hi! I'm Karen Kirsch from the National Association of Broadcasters.

MR. KALTENBACH: Matt Kaltenbach, Ericsson.

MR. SEGALMAN: Dr. Bob Segalman, Speech-To-Speech.

MR. BAKER: Chris Baker with AARP,

MS. WALLS: I'm Karen Walls with TRAC, Telecommunications Research and Action Center.

MR. McELDOWNEY: Ken McEldowney from Consumer Action.

MR. GASKINS: Joe Gaskins from ConnectBid.

MS. GRANT: Susan Grant, National Consumers League.

MR. DelCASINO: Mike DelCasino, AT&T.

MR. SNOWDEN: Dane Snowden, FCC.

MR. MARSHALL: Scott Marshall, FCC.

MS. ROOKER: Thank you and welcome.

I would like to thank some people for today's meeting, Susan Palmer and Cingular Wireless for their contribution making it possible for us to provide you a continental breakfast and lunch today.

Also thanks to Steve Jacobs and NCR Ideal because their contributions towards travel expenses for some members of our committee have made it possible for those people to attend.

Sprint also very generously contributed teleconferencing services. Their representatives are not with us today, but they made it possible for us to have several telephone calls to develop the agenda today. So if you don't like the agenda you can shoot Sprint.

The conference calls to the three subcommittee Chairs, Micaela Tucker, Andrea Williams and Ken McEldowney were very helpful in putting together today's agenda. You can also blame them.

We would also like to thank Andrea and Ken for their leadership with respect to the discussion that we're going to have today on universal service. Andrea has provided written -- some comments that she has received from members of the committee on the issue that will be passed out when we start the discussion.

We're being very ambitious for a new group in that we're trying to reach a consensus and make recommendations to the Commission on Universal Service Fund. That's the good news. The bad news is that we're going to have to do it today because of the time restraints on the Commission. I don't know whether that will be possible or not but certainly we have our work cut out for us.

So, consequently, we have a very tight agenda today. I plan on using my gavel if necessary, not to hit you but just to hit this lovely little thing in front of me. Now I would also like to thank some people who have done significant work on this committee for -- Karen Peltz Strauss, who's the Deputy Bureau Chief of CIB; Janice Wise for her marvelous work in the logistics and putting things together for us; and there's so many FCC support staffers, too many to mention, but thanks to all of you. You've done great work and made it possible for us.

I'd also like to recognize Margaret Egler, who is the Associate Bureau Chief for Policy. We are pleased that she's joining us today and, of course, my special thanks to Scott Marshall, who is such a delight for me as the Chair to work with.

Scott is going to fill us in on today's meeting.

MR. MARSHALL: Thank you very much, Shirley. Good morning and welcome to everyone.

I was given the awesome task of giving you the details about the important things about this meeting. We heard you last time and we're fully aware that there wasn't enough coffee during the morning.

So since this group obviously runs on caffeine we will have a coffee replenishment mid-morning and our box lunch, again courtesy of Cingular, at noon. Hopefully, then we'll be very much ready to go for developing recommendations on universal service this afternoon and then finishing our business late in the afternoon.

Restrooms, should you need them, are to my right out of the door, the far most right to my right door of the Commission room just straight across the hall, a few steps forward, make a left and you have both men's and women's rooms there.

Similarly, if you should need a telephone, right out that same door and make a sharp left and go down the hallway and you'll find public phones including a phone that's TTY-equipped, which I didn't test on Friday and Janice, who's my detail person, please remember to hit me over the head if I don't do that next time.

If you have any needs during the day just ask one of us. If you need any assistance with getting lunch, getting something read. As Shirley indicated, we're going to be processing a lot of information here today and we want to make sure that all of the accommodations run well and that your needs are met so that we can have a very productive meeting. Thanks a lot.

Shirley?

MS. ROOKER: Okay. Thank you, Scott.

It gives me great pleasure to introduce Dane Snowden to you. I had the pleasure of talking with Dane earlier last week and I think he impressed me greatly. He's the new Chief of the Consumer Information Bureau. He's really jumped into his job. His goal is to represent the issues of consumers.

Before joining the FCC he was Vice President of missionfish.com. He was also Vice President with America's Promise and he has a long list of impressive accomplishments, but why don't we let him speak for himself? So join me and welcome Dane Snowden.

(Applause.)

MR. SNOWDEN: Thank you, Shirley.

They told me that I was supposed to speak from here that's why I'm following my directions explicitly.

(Laughter.)

On behalf of the Commission and the Consumer Information Bureau I want to welcome you here today for the second meeting of the Consumer/Disability Telecommunications Advisory Committee.

I thank you for coming and for your time both here today and for the time you give when you are in meetings outside of our scheduled meetings here. Our heartfelt thanks are in order to Shirley, who has been the Chair of this Committee, for her continued leadership, and to Scott Marshall, who among many things has kept me in line and has also pulled together a great team of FCC staff to ensure that we have a successful meeting today. So thank you both for that.

I'm happy to acknowledge two of our newest Commissioners who will be joining us today, Commissioner Copps and Commissioner Martin. Their participation underscores the importance of the Committee's work in a way that little else could. Their participation also includes and indicates a strong signal that consumer issues are a central concern to them specifically and to the FCC as a whole.

During the inaugural meeting in March it became especially clear that the Commission should regularly and deliberately make information available to the community and to this committee, as well, and to the general public.

Since that meeting we have created a consumer information e-mail service for the public and have also created a special list for the Advisory Committee, to whom we now forward a variety of informational materials including announcements, articles, speeches, press releases and public notices.

To prepare for this second meeting there have been two teleconferences, as Shirley mentioned, with the subcommittee Chairs to develop the agenda, which include several items that the Committee requested back in March.

I should also mention that one of the advisory subcommittees, as Shirley said also, the Access by People With Disabilities group has already established a list of priorities to govern its discussions and activities. If I could join Shirley, I will put my pitch in to encourage the other two subcommittees to do the same.

Of course, the essence of an Advisory Committee like this one is two-way communication. We will continue to ask for your ideas and comments on significant issues before the Commission and, in turn, we will consider your recommendations when we make policy.

It will be our goal to also provide you with the flow of information you need to understand the Commission, our process, and to keep you up to date on areas requiring subject matter expertise.

On today's agenda, Anita Cheng, who is the Assistant Chief for Accounting Policy Division in the Common Carrier Bureau, will provide an overview of proposals for contributions to the Universal Service Fund or USF. It is our plan to have subject matter experts like Anita from the Commission available to provide current information on significant topics at every meeting.

In addition, Marsha MacBride, Chairman Powell's Chief of Staff, will join us to outline the Chairman's consumer policy and other challenges facing the Commission.

Finally, I want to emphasize our plans in the Consumer Information Bureau in the coming months to proactively work with a broad group of consumers not just the telecommunications professionals inside the Beltway, but the average American whom the Commission is here to serve.

We intend to broaden our reach to include all consumers, even those who up to now have only seen the letters "FCC" somewhere on their telephone bill or on the metal tag of their computers. We want everyone to know who we are, what is available to them and what we as an agency can do to serve the public interest. In other words, we want to widen our tent to connect and share important information to the consuming American public.

Right at the top of my list of things to accomplish this year is to make the abstraction of the Universal Service Fund into a concrete reality for people who are entitled to take part in the USF lifeline and link-up programs but who do not know what the programs are or how to take advantage of them. You can be assured when you make your recommendations today we'll be listening.

With the converging of so many technologies today coupled with the competitive marketplace it will be essential that the Consumer Information Bureau have an aggressive outreach focus to our colleagues within the FCC, the industry, the states and, of course, consumers themselves.

It is also important that we increase our policy focus within the Bureau. I will count on this Advisory Committee to help me in accomplishing this plan.

Before I turn the proceedings over to Commissioner Copps I want to mention that I spoke with both Chairman Powell and Commissioner Abernathy, who couldn't be here today. They send their regrets and are confident that their fellow Commissioners will convey the importance, all five Commissioners consider your contributions to the Advisory Committee.

Commissioner Michael Copps joined the Commission earlier this spring and he brings with him a wealth of experience in various areas, especially commerce. Commissioner Copps was Assistant Secretary of Commerce for Trade Development at the Department of Commerce before coming to the FCC and he has emphasized many times the value he perceives in partnerships between government and industry.

It is my pleasure to introduce Commissioner Copps.

(Applause.)

COMMISSIONER COPPS: Thank you, Dane, and good morning.

On behalf of Chairman Powell and all of the Commissioners and all of staff I want to welcome each and every one of you here to the FCC. Normally I really do prefer to sit at the table but since Shirley was threatening everybody with being physically damaged with that gavel I guess I'm happy I'm up here.

(Laughter.)

I'm looking forward to working with this group and working with the other Advisory Committees to the FCC during my tenure here. I don't say that lightly. I am a huge believer in the value of partnership, stakeholder outreach, private sector/public sector, working much more closely together.

I did have the privilege at the Department of Commerce to have responsibility for all of our 17 industry sector advisory groups there including information technologies and e-commerce. We had four industry functional advisory groups and the input of those groups was absolutely critical to the work we were doing in international trade.

I can't imagine what a North American Free Trade Agreement or an Uruguay Round or any trade agreement would look like if it was just left to government to negotiate it without the input of business, without the input of all of the stakeholders. So I think you're doing critical work and I want to be a part of that.

I hope we'll get to see the product of your deliberations as they unfold. I know you report directly I think to the Chairman but I trust that all of the Commissioners have access to whatever you're doing and full entre to what you are doing.

I guess I'd just offer one piece of advice, this is such a huge multi-faceted, multi-dimensional industry as I am finding more and more every day. Even the items of jurisdiction under this advisory group are so widespread, so multi-faceted, that you can't address them all.

So my word of advice I guess to the group and to the working groups that constitute the task force is to make sure you priorities very carefully, don't bite off too much, pick a couple of things to do each year, two or three or four or whatever it is, get them done, focus on those. Keep the spotlight on those. I think it's much more effective that way than trying to address everything and not being able to make too much progress.

I very much like the focus particularly of this advisory group. I like the outreach to non-traditional stakeholders. Non-traditional stakeholders can sometimes, very frankly, complicate the life of an advisory group, make the achievement of consensus occasionally more difficult. But in the final analysis, all Americans are stakeholders in this great telecommunications revolution. We need all of their input. We need all of their best thinking and advice and counsel.

So I'm happy to see that we have representation out here from not only traditional stakeholders but non-traditional stakeholders, as well. Frankly, the way some parts of industry wail and flail at each other I don't know that adding some non-traditional voices really complicates matters all that much.

(Laughter.)

So I'm delighted to see that. I very much like the focus on disability issues. The first speech and the first outing I made as Commissioner here about five or six weeks ago was to go to Sioux Falls, South Dakota for the telecommunications for the deaf and communications services for the deaf meetings out there.

I was tremendously impressed at what I saw and I was also kind of hit over the head when I found out that the unemployment rate among the deaf and hard of hearing was something in the order of 75 percent, which I found just about incomprehensible.

But I was tremendously impressed just at seeing the -- two things I guess impressed me; (1) was the determination and the commitment of the community to get some changes made and to make sure that all Americans were taking part in the telecommunications revolution; and (2) was the promise of the new technology that I saw out there which I think just has so much potential for improving the lives and allowing the maximum input of the talents of the deaf and hard of hearing to this country of ours. So I was really moved by that experience.

I would just note that in October I think -- isn't it Karen? October 10th?

MS. STRAUSS: Yes.

COMMISSIONER COPPS: When we're having the conference and the exposition here at the FCC. I'm sure many of you will be back for that.

What I told the folks out in South Dakota was when you come don't come alone, bring some of your community leaders with you. Come a day or two ahead of time and go up to the Hill. Write them before you come and ask your Congressman and Senators or their staff people to come down here and listen to you, to get an understanding of your problems and your issues and the solutions that you're talking about and let them see the technology, let them see what they ought to be encouraging and creating an atmosphere to encourage.

So I think that could be a red letter day, a really big day, for that particular community and for all the work you're doing in consumer outreach if we really plan that right leading up to the 10th of October and get folks down here and really publicize what we're doing.

So much of this is a question of outreach, it's how do we get the word out? How do we get the word of the problem out? How do we get the word of the solutions out? I can think of no better group to come up answers to those problems and challenges than this particular one.

We're delighted to have you here. You have a lot of people working very hard in this Commission with Karen and her group and people throughout and all of the Commissioners, too, I think who want to be of assistance. So I'm looking forward to working with you. I'm delighted you're here today and I hope I'll have the benefit of seeing you many times in the months and years ahead.

Thanks a lot.

(Applause.)

MR. SNOWDEN: Thank you, Commissioner Copps.

Right on schedule is Commissioner Martin. I should mention that Commissioner Tristani, who is very familiar to this group here, was unable to join us and she has been, as many of you all know and everyone in the Commission, a strong supporter of this advisory group in the work that this advisory group has been doing for the past couple of months. Actually before this was even an advisory group, she has been a strong supporter.

Commissioner Michael Copps has just joined us. He has joined the Commission as -- excuse me -- not Michael Copps -- Commissioner Martin has recently just joined us this past spring having recently been at the White House as a Special Assistant to the President for Economic Policy.

He is a familiar face around the FCC having served as an advisor to former Commissioner Furchgott-Roth. It is my pleasure to introduce Commissioner Martin.

(Applause.)

COMMISSIONER MARTIN: Good morning everybody.

I just wanted to really come and welcome everyone here and introduce myself and tell everyone how much I appreciate all of the work that they are doing and how important it is the role that you all play.

The issues of making sure that everyone has as much access to telecommunications as possible is one that everyone here at that Commission is committed to. I think it's important that the guidance that you all provide for us and how we can be approaching the issues is critical to our implementation of that.

I know that everyone, as I said, at the Commission is committed to it. This is one issue in which there isn't any divisions among the Commissioners, it's only a question of what things we can do to try to accomplish that.

So, again, I really just wanted to come today to make sure I had the opportunity to introduce myself and to thank you all for all of your efforts and hard work. Thank you.

(Applause.)

MR. SNOWDEN: I'm sure on behalf of the Advisory Committee we thank both of you for taking time out of your schedules. We know that you have a busy day today so we appreciate the time you have given us and we look forward to working with you throughout the coming months as time goes on.

With that, I turn the meeting back over to you, Shirley.

MS. ROOKER: Thank you, Dane. Thank you, Commissioners Copps and Martin for joining us this morning.

Let's go to our minutes. The next agenda item is the minutes of the March meeting, but before we get to that Karen Peltz Strauss will give you a brief overview of the meeting that was referred to by Commissioner Copps.

MS. STRAUSS: Thank you, Commissioner Copps and Commissioner Martin for --

MS. ROOKER: Not on mike.

MS. STRAUSS: I'm on now, okay. Thank you for your remarks and thank you, Dane.

I just wanted to let you know that on October 10th, as Commissioner Copps mentioned, we are going to be having another forum at the Commission, a sort of forum/conference/workshop/exhibition on telecommunications relay services.

The day will be devoted to talking about outreach for 711 access. As you know, that's access to relay services nationwide through the 711 digits, as well as quality issues, as well as new technologies including technology that involves the use of captioning and relay services, a kind of a joint venture.

IP relay, that's internet telephony relay. We're still exploring the different technologies that we want to look at but one of the things that we will definitely be having is an exhibition hall with 25 to 30 exhibitors with all kinds of new technologies. Not only relay service technologies, but various technologies to enhance telecommunications accessibility.

We welcome you all and hope that as many of you as are here can attend and bring your friends and colleagues. Thank you.

MS. ROOKER: Thank you, Karen.

I would like to first make sure that the phone is working. We have Kathleen, David and Micaela on the phone. Are you there?

MS. TUCKER: Yes. This is Micaela.

MS. ROOKER: Hi, Micaela.

Anybody else on the phone?

(No response.)

MS. ROOKER: Not yet? Okay. We hope they'll be joining us a little bit later.

But at any rate, the next item of business is the minutes of the March meeting, which I believe they have been mailed to you and they're also in today's packet.

At this time I would entertain any suggestions, amendments, or what have you to the minutes.

Yes, Steve?

MR. JACOBS: I'm not on. Now I am. Just one minor correction. I believe in the beginning of the notes it mentions -- it refers to ADA where it should refer to Section 255.

MS. ROOKER: Okay.

MR. JACOBS: I don't have my minutes in front of me but --

MS. ROOKER: Okay.

Brenda?

MS. BATTAT: It's on page two, paragraph one, two, three, four down.

MR. JACOBS: Thank you.

MS. BATTAT: Section 255 of the ADA instead of Section 255 of the Telecom Act.

MS. ROOKER: Okay. Do we have that --

MR. JACOBS: Right. Just a minor correction. I have it.

MS. ROOKER: All right. That's been duly noted.

MR. JACOBS: That's it.

MS. ROOKER: Do we have any other comments?

A PARTICIPANT: Yes. Is there a prize for someone who finds a typo?

(Laughter.)

MS. ROOKER: Typos? My goodness! There is. We're having a competition later.

(Laughter.)

A PARTICIPANT: I believe on page six at the beginning of the first paragraph is that -- are we talking about conservation or conversation?

(Laughter.)

MS. ROOKER: Okay. Do we have any other comments on the minutes?

Yes, Susan?

MS. GRANT: I think there was some discussion about wanting some feedback from the Commissioners to the recommendations and discussions that we have at the meetings.

I note that in the minutes that we have in the meetings I note that in the minutes it refers to the possibility of having meetings with the Commissioners but in addition to that I believe that the suggestion was made that if there was some way of getting their reaction it wouldn't necessarily have to be a meeting with them to accomplish that. That it would be very helpful for us and I don't see that reflected here.

MS. ROOKER: Okay.

We have three items; a typo, a reference to the ADA Section and to the feedback from the Commissioners on Susan. I think those things probably need to be put in the form of a motion to amend the minutes.

Do I hear a motion?

A PARTICIPANT: So moved.

A PARTICIPANT: So moved.

MS. ROOKER: Second?

All right. With those amendments do we hear a motion to accept the minutes?

A PARTICIPANT: So moved.

MS. ROOKER: Okay. Seconded. All say aye.

ALL: Aye.

MS. ROOKER: Any opposed?

(No response.)

Okay. We got the minutes through. Thank you.

Now to another order of the item of business, which is the Committee membership.

You're probably aware that when this Committee was being formed that I think there were 80 some individuals and groups and companies that applied for membership on the Committee and the process ended up with 40 people becoming members. That was done some time ago.

There have been three applications for membership on the Committee. They are U.S. Telecomm Association, the League for the Hard of Hearing and Siemans. It's our responsibility -- I'm sorry --

A PARTICIPANT: Sorry.

MS. ROOKER: Oh, excuse me.

It is our responsibility to recommend to the Chair whether we -- the Chairman whether we think these applications should be accepted. There are a number of things to consider, size, the timeliness of the nominations or the applications and also keeping in mind that we're here for two years. When those two years up the Committee will be reformed.

So, at any rate, I put those things out to you but what I would like to do is open the floor for discussion to hear from the various panel members, Committee members.

Ken?

MR. KALTENBACH: Yes, Shirley. Thank you. Am I on or off?

A PARTICIPANT: You're on.

MR. KALTENBACH: I am? Okay.

Yeah, I mean I think that certainly we would benefit from sort of the comments from the folks who -- you know, who applied to be on the Committee as well as we probably would have benefitted from the 35 or 40 groups and companies that applied before who wanted to get on.

I guess what my real concern here is that I think that the Commission staff and the Commission itself went through a very lengthy process in terms of soliciting people who wanted to apply to be on the Committee and then a selection process to end up with a group that's sort of really very well -- you know, sort of reflected the various interests.

I guess I would, upon reflection, oppose adding new groups right now especially since, in essence, there's a waiting list of some 35 entities that applied by the deadline to be on this Committee. I think that to accept these three new groups without, you know, accepting the ones that are on the waiting list I think would be inappropriate.

So I think that my suggestion I guess to the Commissioner would be that we should keep the Committee membership as it is. If any vacancies occur that we could consider replacing them from folks who are on the waiting list, but certainly two years from now when it's reconstituted not only the people on the waiting list but the people who have now applied could be considered for membership.

MS. ROOKER: Okay. Thank you, Ken.

Larry?

MR. GOLDBERG: I guess I'd like to provide a counterpoint to that in that I know quite well at least two of the members who have -- two people who have asked to join the Committee and I think we know from many of us who are on such Advisory Committees a lot of the work is done by collection of five or six very energetic individuals with less occasional contributions from many others.

So the organizations that are looking to join in are also individuals who by their own histories and experiences could contribute quite a bit to the work this Committee is doing. I would actually recommend being more inclusive and opening up to those applicants having made the effort to come here, want to join in. I think they'll provide some additional energies to the work we're doing.

MS. ROOKER: Okay. Thank you.

Jim?

MR. TOBIAS: I'm going to try to split the difference between Ken and Larry and see if I can slide in there. I think I'd like to thank the Chair for recognizing the contributions that we've had electronically on the disability subcommittee.

I'd like to turn the focus away from formal membership on the Committee to the view that what we should be doing is opening up the proceedings of the Committee and the ability to contribute much more broadly and especially using electronic media to do that.

I'd like to see the existence of this Committee and its subcommittees be disseminated widely and requests for comments from the public actively solicited. You know, there are many of us who don't have the opportunity to live in the charming weather that the Washington, D.C. area affords us and they have, you know, many useful and relevant things to say.

So I would -- I guess I would speak against changing the size or the membership of the Committee,but as I think we've already seen from some of the people who are applying, more actively involve them in the activity of the subcommittees and the Committee as a whole.

MS. ROOKER: Thank you, Jim. Some interesting thoughts.

Susan?

MS. GRANT: That is an interesting idea, to include non-members of the Committee where they can be helpful to the subcommittees in their work.

I have an overall concern about the makeup of the Council even as it stands now. There are -- there's a majority of one in terms of consumer/disability versus industry. I don't mean any offense to the present or potential industry members, who I think make really valuable contributions to this council, but it is the Consumer and Disability Advisory Council.

I think that it should have a stronger majority than it even has now of consumer and disability groups, especially since it appears that we're going to be voting on policy issues. So my objection to these applicants is that it would shift the balance of the Committee.

MS. ROOKER: Okay. Thank you, Susan.

Do we have other comments? Who have we got down here?

Paul?

MR. SCHROEDER: Thanks. Paul Schroeder. I would concur with both of these comments. I would very much like to see us work to include more voices in our subcommittee deliberations and I strongly agree with Susan, that we're already -- if I were looking to rebalance the council I probably would want us to do an overall examination of that and look at what groups are adequately represented and which ones perhaps aren't.

Much as I know these individuals, at least two of them would bring a great deal to our deliberations as a council. I know they would also bring a great deal to the subcommittees, which is I think where we can most make use of them.

The reality is that in terms of people and representation those concerns are adequately represented on the council at least in numbers. Now we will decide whether those people are adequate representatives of those interests. But they're here and I think if we're going to start looking at making recommendations to the Chair and the Commission about membership in the council we should probably do it on a more deliberate basis and take a look at what groups are adequately represented.

Do we have an adequate consumer and disability representations, for starters? Then what segments of the industry are not adequately represented here?

MS. ROOKER: Thank you, Paul.

Paul brings up an interesting point because we are required to have a balance on the Committee, so that is a consideration.

Also, one thing that Scott was reminding me that I would like to point out is that the LIST SERVS are open to everyone. If you want to be a member of -- be on the LIST SERV for any of the subcommittees you can do so. I think you only have to let Scott know and he's the magician who makes it happen.

So I would invite any of you who want to -- if you're on one subcommittee and you want to participate I've been -- I'm on all three. My e-mail's very busy, especially from the disabilities community subcommittee.

But at any rate, I would invite you -- keeping that in mind, anyone, you don't have to be a member of the Committee to participate in this LIST SERVS.

All right. Let's welcome more comments.

Rich?

MR. ELLIS: I find myself very conflicted here. At first glance I thought this Committee was too big to begin with even though with the all the great people around the table it's just a lot of people to discuss things.

So my first inclination was to keep the Committee membership where it was, but on further reflection, you know, speaking from the industry point of view, I think that the USTA membership application deserves some support and some consideration. USTA represents telecom companies small and large and I think they would bring a valuable perspective to our discussions here.

I agree with Susan that we would have a good mix of consumers but I also think it's good to have industry represented fully and USTA would bring balanced representation of the industry side.

MS. ROOKER: Thank you, Rich.

Karen was just reminding me, also, that anyone can participate in the subcommittee meetings, they are open.

So -- have I got that correct?

MS. STRAUSS: Yes.

MS. ROOKER: Yeah. Okay. So I want to make certain that we understand that nothing is closed, that it is open for anyone who wants to participate, so -- but that doesn't finish the issue here before us.

Now do we have other comments?

MS. O'REILLY: This is Kathleen O'Reilly. Could you tell me where on the agenda you are at this point?

MS. ROOKER: Yes. We're at the point where we're talking about the acceptance of three new applicants for membership to the Committee and we're just going around the room getting comments on that.

The three applicants are U.S. Telecom Association, League for the Hard of Hearing and Seimans.

MS. O'REILLY: All right. I'll wait for my turn. Thank you.

MS. ROOKER: Oh. If you have a comment, Kathleen, go ahead and make it in terms of the membership.

MS. O'REILLY: Yes. In reviewing both the original charter and the FACA statute and so forth and the definition of balance.

I guess the question I have is that given the mission of what is clearly designated a consumer and disability committee I had not expressed any concerns at the first meeting about the participants who were from industry because it was really clear from their participation that they brought to the table a technological expertise on issues related to equipment and very specific disability talent that we could very well benefit from.

My experience in the subcommittee was that those industry participants by their comments and by their votes seem to understand and be committed to the more narrow consumer disability goals of the Committee.

I'm, on the other hand, quite concerned about this application from USTA because I think it really challenges us to take a different look at what balance is intended to be and how we would navigate conflict of interest concerns because I would ask that at a minimum the USTA member or any other industry member who is not there merely because of their technological expertise on disability issues help us understand how they would be able to vote on issues where it may be in the interest of the consumer community -- you know, community or the disability community to take a particular position.

But that would be a position very much at odds with their own employer. So that is one approach to it.

Another approach is in my view the balance identified in the Telecom Act and balance is often interpreted by NIH committees and Justice Department committees is looking more for balance within the participation of that committee.

So, for example, this being a consumer and disability telecommunications committee I would say that the balance being strived for is a balance of consumer points of view and disability points of view to make sure all of the various disabilities are included and that the various consumer sectors.

So I would argue that at the front end it's questionable whether industry should have been brought into this Committee at all. But again, based on my very positive experience on that front from the first meeting my concern now is more narrow and I think it's something that is going to represent a real challenge to the Committee if we intend to be and hope to be effective.

MS. ROOKER: Thank you, Kathleen.

Yes, Bob Segalman?

MR. SEGALMAN: I want to echo Kathleen. I'm very concerned that the overrepresentation of industry on the Committee --

MS. ROOKER: You're not on the mike. I'm sorry. Let's see if we can get that fixed. It just went out. It was humming. Okay. Thank you.

MR. SEGALMAN: I'd like to echo Kathleen, that I'm very concerned about the overrepresentation of industry on the Committee.

MS. O'REILLY: I'm sorry. Who is speaking?

MR. SEGALMAN: Because it puts a big burden on the consumers and the disability people. We have to speak much more often and much louder to make sure that there is a balance. If we had more disability people it would be easier on those disability people. Thank you.

MS. ROOKER: Thank you, Bob.

Do we have other comments?

Susan Palmer?

MS. PALMER: I just -- okay. Am I up? Okay. Great.

I just wanted to approach this as a pragmatist. I do have concerns that the Committee is very large now. I also believe that the people who are applying are great individuals, they have a lot of background and I think that their work in a subcommittee would be fantastic.

In terms of consumer representation, I don't know a wimp among this group. So I'm hoping that people feel perfectly comfortable.

I would rather spend more time moving forward on issues. I'm concerned that if every meeting we're trying to add new people and we're trying to rebalance it it could become a powerplay and I don't want to be in that situation because I think we have good representatives who are committed to the issues here.

I do, however, want to echo Jim's encouragement for outside participants in the subcommittee. We know that that's where the majority of the work is done, but I don't want to come back every meeting and say, "Okay. How can we balance this in one favor or another?" I don't think that this is what this group wants to deal with.

So if we could -- you know, my suggestion is we keep the larger group as it is, that we keep the subcommittees as open. If people have concerns that they're not being balanced or there's too much push one way or another that we take responsibility for addressing that and raising the level of awareness for whatever group we're representing or on whatever side of an issue we have and move on.

MS. ROOKER: Thank you, Susan. Very provocative.

Andrea?

MS. WILLIAMS: I have been quietly sitting here listening to comments in terms of whether we should broaden the Committee, Advisory Committee; whether we should have one type of committee members more than the other.

I agree with Susan in terms of the purpose of this Committee is to advise. It is not a situation I don't believe where there would be powerplay. I decided to be on this Committee because I thought and CTI thought that this was going to be a Committee where there would be sharing of information.

It's a little -- I find it a little disconcerting to think that we can sit here around this table and discuss telecom issues and not have telecom industry representatives on the Committee in terms of the balance.

You know, for the last let's say 25 years it has been an us versus them, consumers versus industry. I think one of the things that we have found in the wireless industry is it doesn't have to be that way. It doesn't have to be us versus them. It can be a partnership that can work very, very effectively. Yes, we may not always agree, but there are areas that we can agree on and those are the areas that we should push forward as an advisory committee.

I know this afternoon when we talk about Universal Service Fund there may be areas where we're so diametrically opposed and in those areas we may never come to consensus. To be perfectly honest with you, I wouldn't want to waste the Committee's valuable time and efforts on that area where we are diametrically opposed.

But let's do spend the time on areas where we can come together with some consensus because at the end of the day what the Commission wants is advice, not just from consumers, not just from industry, but from all of the stakeholders.

For those areas where there can be consensus it makes the Commission's job that much easier that they only have to deal with the really, really tough issues.

In terms of rebalancing the advisory committee, I, too, agree right now. I had some concerns because this Committee is very large. I suggest that in terms of subcommittees that that, as everyone has noted, is where the work gets done and that those who have applied for membership consider being participants, active participants, on the subcommittees. Thank you.

MS. ROOKER: Thank you, Andrea.

Brenda?

MS. BATTAT: I also --

MS. ROOKER: It will turn on. Just --

MS. BATTAT: Is that working?

MS. ROOKER: Yes.

MS. BATTAT: I also support work on the subcommittee, particularly the three groups that have applied. The industry person has a tremendous amount of background in the whole Section 255 area and that's a very good example of where consumers and industry work together and learned a lot from one another. I really hope that that particular person will participate in the subcommittee because he can bring a lot of the background.

The other -- the league is a consumer stakeholder that maybe we don't have represented here, which is a service provider. I think most of the other consumer groups here are consumer grassroots organizations, but we don't have a service provider represented and the league would bring that perspective.

So I very much hope -- and USTA, of course, brings another perspective from the smaller industry telephone companies. So I really hope that they will actively participate. I don't see how we can get anybody else around this table if you decide to expand the Committee. Can you give us a little more --

(Laughter.)

-- a little more space?

MS. ROOKER: Yes.

Just a minute , Karen has a comment.

MS. STRAUSS: I just wanted to clarify that there actually are service providers on the Committee, the caption centered WGBH, and Maryland Relay. I might be missing any other -- any others, but there are at least those two.

A PARTICIPANT: National --

MS. STRAUSS: And Tripod Caption Films is also --

A PARTICIPANT: Yeah.

MS. STRAUSS: And CERT Communications Services for the Deaf.

MS. ROOKER: Matt?

MR. KALTENBACH: Matt Kaltenbach., Ericsson.

My comments primarily revolve around the process and the procedure I think this committee should be following to achieve its goals which is going to be to create an inclusive process for everyone.

My own personal feelings in terms of the numbers are that I don't see how this Committee could get any larger, at least from a steering committee perspective. I think that the existing number is adequate to accomplish its work goals and that the mission at hand is for us to all forge together as a steering and management committee to enact a process where we can include all of the others in this process.

I think that the structure, however, does need some flexibility and maybe that does occur more at the subcommittee level, as Andrea had pointed out.

Over two or three years of time there's going to be some form of a process we're going to create which is going to result in a productive environment where we generate our Committee's work. It's only in the process and the procedures that we're going to be able to document the methodologies we want to use, approve and manage those processes and move forward.

So I'd like to propose that the issues that we're bringing up here in terms of membership, the issues in terms of the participation, the roles and the rights of the people in both subcommittee and in the central committee should be -- would be best handled in a subcommittee, which is more administrative in context.

By taking those types of issues off-line, isolating them and giving them a separate authority then we could be more productive by not necessarily having to gel or consolidate those ideas or balances, but by simply reading the recommendations of that subcommittee we would be able to not just handle new admissions but also new procedural and process changes so that the Committee over a factor of two or three years could evolve in its precision and its effectiveness and its productivity.

MS. ROOKER: Okay. Thank you, Matt.

Ken?

MR. McELDOWNEY: Yeah. I guess it seems like we're moving toward a consensus here. I think I would -- I guess we move and make motions and things. I guess I would move that we recommend to Commissioner Powell that these three applications be denied, but noting that both they and the other entities on the waiting list are encouraged to take part on the subcommittee level through the LIST SERVS.

MS. ROOKER: We have a motion on the floor that we deny the membership, but encourage these applicants to participate in the subcommittee process on the LIST SERVS and so on.

I guess I need to recognize that motion and ask if that's -- there's a second to it.

A PARTICIPANT: Second.

A PARTICIPANT: Second.

MS. ROOKER: Okay. Then I think we'll put the motion to a vote.

MS. O'REILLY: Could I raise a question before you put that to a vote? I was not aware that there was a motion on the floor.

MS. ROOKER: Okay.

MS. O'REILLY: Has there been any discussion about the distinction between voting and non-voting at the subcommittee versus the full committee level?

My confusion is that if the subcommittees are going to be bringing recommendations to the full committee is that somewhat a distinction without a difference then?

MS. ROOKER: I can't answer that question.

MS. STRAUSS: I think I can answer it.

MS. ROOKER: Karen will answer that.

MS. STRAUSS: At least I can take a stab at it. The way it works is that the subcommittees within the subcommittees can decide, as you just said, to bring an issue to the full committee. However, if you're not a member of the full committee then you do not have a vote.

So, in other words, the subcommittees can bring any suggestions or recommendations to be final to the full committee but then you have to be an actual member, appointed member or designated member, of the full committee in order to have a vote. Does that answer your question?

MS. O'REILLY: It does and it satisfies me. Thank you, Karen.

MS. ROOKER: Okay. Matt, you have a follow-up comment?

MR. KALTENBACH: As a point of order I think before we vote on this motion we should open the floor up for discussions on the motion.

MS. ROOKER: Okay. You're absolutely right.

Who would like to discuss the motion? Who do we have?

Rayna?

MS. AYLWARD: I'm not sure this is directly related to the motion itself, but I did want to make sure that a certain point of view that came out in this discussion was addressed and that I think is something I've heard in many different fora from the view of the disability community versus -- and I say the word "versus" industry.

I'm speaking from the point of view of sort of straddling both fields because I represent a foundation, a charitable foundation, that works in the disability field, but it's also sponsored by a corporation in the telecommunications field.

I would think that we need to keep in mind that what we are about here is what is achievable? We may have ideals and goals and we may share them, but we're also dealing in the reality of a market economy and companies that need to be able to stay alive. So I don't think it's necessarily an us versus them in that there's a definite viewpoint on the part of any industry group in saying, "You know, we want to get away with the least possible."

But just to keep in mind that whatever we come up with here, the FCC in its strongest mandates can only go so far in making change. What we want to do is to really encourage more than just strict compliance with the law, we want to encourage an openness and an actual proactive attitude on the part of industry which I think this gives us a unique forum to be able to discuss.

So I would hope that there is not -- that the disability representatives here do not feel that they're sitting at all on the other side of the table from the industry. I think my industry colleagues would agree with that.

By the way, there are people around the table that are not just representing their companies but are individuals very committed to what we're talking about and they are in the position to be leaders in the field.

MS. ROOKER: Thank you. Do we have other comments on the motion? Vernon?

MR. JAMES: Yeah. I've got a concern regarding subcommittees and its makeup. I'm looking at a subcommittee that may be --

A PARTICIPANT: I'm sorry. Can people --

A PARTICIPANT: Who are you?

MS. ROOKER: Vernon James.

A PARTICIPANT: Vernon James.

MR. JAMES: I didn't realize I needed a mike.

(Laughter.)

Good morning. My name is Vernon James and I;m with the San Carlos Apache Tribe. I represent the Health and Human Services Department for the tribe. I'm the Executive Director there. I also Chaired the San Carlos Apache Telecommunications Utilities, Incorporation.

My concern is with the subcommittee and a comment made about having telecommunication representatives from the industry at this subcommittee. I'm a little concerned that there may be too many representatives at that subcommittee and may be overpowering those of us who represent the disability consumer viewpoint. I'm a little -- again, a little concerned. When -- I don't know -- maybe there shouldn't be that concern but I needed to reflect that, I needed to say this. Thank you.

MS. ROOKER: Thank you very much. Further comments?

MR. KALTENBACH: In terms of comments made to the -- this is Matt Kaltenbach, Ericsson. I'm sorry.

In terms of comments on the motion on the floor, I'm in favor of actually denying the motion in lieu of creating a secondary motion which would push this into an administrative subcommittee which, of course, would require the creation of an administrative subcommittee.

(Laughter.)

MS. ROOKER: Okay.

MR. KALTENBACH: But I think that the fact that this committee at this juncture in its foundling stages maybe shouldn't be taking such actions in terms of inclusiveness or exclusiveness, but more in terms of procedures and points of order to make the process start to function and work.

By delegating these issues to a subcommittee we would have a process where we could handle these issues, take them off the plate and focus more on telecommunications issues.

MS. ROOKER: I believe that we'll have to take a vote on that motion before we can consider yours. Am I correct, procedurally?

MR. KALTENBACH; And I think that was going to be my second motion. My second motion was basically to set up an administrative thing that I had an idea for but let's --

MS. ROOKER: Okay.

MR. KALTENBACH: -- let's get this one out of the way.

MS. ROOKER: We had another comment.

Belinda has a comment. We're going to have to come to some resolution here shortly.

MS. NELSON: Right.

MS. ROOKER: Belinda, your comment will be the last comment.

MS. NELSON: Thank you, Shirley. This is Belinda Nelson from Gila River Telecommunications in Arizona.

I am sitting on a fence I guess, so to speak, because I do represent the unserved and the undeserved population of America, but also as a general manager for a telephone company.

Many times at my local level I'm both trying to educate the consumer, my subscribership and also explain, you know, the issues that a telecommunications company faces in serving these consumers.

So what I see here happening at that meeting happens at my home many times, but I do know that USTA has represented subscribers very well. In fact, they did a campaign and inquiry and survey on enhanced lifeline among their membership and they're very proactive from a subscriber standpoint. So I do have to say that on behalf of USTA. Thank you.

MS. ROOKER: That you cannot vote both ways.

(Laughter.)

All right. All right. I think we have a motion on the floor which has been discussed, that motion is to vote to not accept these applications but to make the recommendation rather to the Chair -- the Commissioner that these applications not be accepted but that they participate in the subcommittee process. Am I -- is that stated accurately?

A PARTICIPANT: Yes.

MS. ROOKER: All right.

A PARTICIPANT: Wait a minute. Wait a minute. They don't have votes.

MS. ROOKER: And they don't have votes.

A PARTICIPANT: On the full committee.

MS. ROOKER: On the full committee. But they will have full input and access to LIST SERV. Okay. That is the motion that has been made. I believe it has been seconded, is that correct?

A PARTICIPANT: Right.

MS. ROOKER: All right. So now we're going to put a vote. I would ask for a show of hands for all people who are members or the alternates representing the Board. If you're an alternate or the member, one vote for each membership.

We will count it and -- so now we will have the vote for those in favor of the motion to deny membership, which is it? Okay. We're going to have somebody help me count.

MS. GRANT: And, Shirley, you're going to have to ask on the phone, as well.

MS. ROOKER: Yes. And Kathleen and Micaela?

MS. O'REILLY: Mm-hmm.

MS. ROOKER: You all are there? Which way do you want to vote?

MS. O'REILLY: I'm in favor of the motion.

MS. ROOKER: You're in favor? Kathleen's in favor of the motion. Micaela, how about you?

MS. TUCKER: I'm in favor of the motion.

MS. ROOKER: Okay. So that's two that are on the phone. All right. And we're counting here.

(Pause.)

I count 25.

MS. GRANT: Plus the two on the phone.

MS. ROOKER: Plus the two on the phone.

MS. GRANT: That's what I got.

MS. ROOKER: Which is 27.

MS. GRANT: Right.

MS. ROOKER: Okay. And those opposed?

(Pause.)

Okay. The motion is accepted by a vote of the Committee. Consequently, the recommendation will be made to the Commissioner that these memberships not be accepted but that they participate at the subcommittee level.

Are we here?

MR. ELLIS: For point of order.

MS. ROOKER: Yes, Rich?

MR. ELLIS: Just to make sure everybody knows the full scale, could you please announce the votes pro and con on all issues?

MS. ROOKER: Yes. There were 27 votes for the motion and five against it.

A PARTICIPANT: And were there any abstains?

MS. ROOKER: And any abstains? One abstain. No. Okay.

MR. McELDOWNEY: Shirley?

MS. ROOKER: Yes, Ken?

MR. McELDOWNEY: I guess I'd like to move that we establish the administrative committee that would be the committee Chairs plus Shirley to handle sort of administrative items like this and other things so that the body itself can handle more policy issues.

MR. KALTENBACH: I send the motion.

MS. ROOKER: Okay. Matt, do you have a comment?

MR. KALTENBACH: No. I seconded the motion.

MS. ROOKER: Oh, I'm sorry. Okay.

MS. ROOKER: The motion --

MS. O'REILLY: This is Kathleen O'Reilly. I'm not sure, Ken, what you mean by handle. Does that mean resolve or bring a recommendation to the Committee?

I think some of the administrative issues go to the heart of our mission, our priorities. I'm reluctant to have those decisions made by others.

MS. ROOKER: That's a good point. Other discussion?

MS. TUCKER: This is Micaela. I agree with Kathleen.

MS. ROOKER: Yes. Paul Schroeder?

MR. SCHROEDER: Yeah. I would concur and I don't know that the subcommittee Chairs -- I'm not sure that that's representative of the Committee as whole, in particular.

MS. ROOKER: Okay. Larry?

MR. GOLDBERG: Just to add in another negative, I think we probably have enough subcommittees, taskforce, working groups and bureaucracy here. Another one might not really be needed.

(Laughter.)

MS. ROOKER: And, Shelley, do you have a comment?

MS. NIXON: I want to make a motion that all future applications or just go through some really -- vacancy.

MS. ROOKER: Okay. Unless there's a vacancy that all applications simply go to that they can be a member of the subcommittee Chair. Now where are we? Can somebody tell me?

MS. STRAUSS: We have a motion on the table.

MS. ROOKER: We have a motion on the table from Ken to establish an extra Committee that was seconded. I'd like to have the vote on that, please. All in favor of that motion?

MS. CARROLL: Point of order.

MS. ROOKER: Yes.

MS. CARROLL: Madame Chairman --

MS. ROOKER: Hi, Julie!

MS. CARROLL: -- I think questions were raised for point of clarification that weren't clarified.

MS. ROOKER: Okay.

MS. CARROLL: What is the intention of the role of this Committee?

MS. ROOKER: Good point. Ken?

MR. McELDOWNEY: Well, it's very confusing. It's because we've been meeting, for example, you know things about the agenda the committee Chairs and Shirley are already handling.

So I guess I was thinking of it being Shirley's sort of administrative stuff and not policy-related. I like Shelley's, you know, subsequent motion in terms of sending all the ones, you know, just basically denying them up front.

I just think there's some almost housekeeping type things that, you know, probably can be, you know, dealt with separately outside of the Committee, but I think I would sort of leave it up to Shirley to determine the ones that were sort of policy that needed to be brought to the full committee.

MS. ROOKER: Okay. So we've got a motion that we establish an administrative subcommittee. We need to take a vote on that. All in favor say aye? Raise your hand.

(Pause.)

Okay. Against?

(Pause.)

I do believe the motion has been defeated. Okay. Do we have --

MS. O'REILLY: I'm against, just for the record.

MS. ROOKER: Yes.

I'm sorry. Kathleen and Micaela, what are your votes?

MS. O'REILLY: Against.

MS. ROOKER: Against. Okay. And Micaela.

MS. TUCKER: This is Micaela. Against.

MS. ROOKER: Yes.

MS. O'REILLY: And for the future, as a point of order, before a vote is taken could we at least entertain a motion to close discussion so we know that that's the end?

MS. ROOKER: Sure. Sure. Somebody remind me to do that. That would be great. Thank you, Kathleen.

MS. O'REILLY: Mm-hmm.

MS. ROOKER: Now we have another motion. What is the other motion that's on the floor? That is Shelley's motion which had not been seconded.

Do we have a second to Shelley's motion that future applications for membership go directly to the Chairman with the recommendation of the Committee?

A PARTICIPANT: The subcommittee.

MS. ROOKER: That they go to the subcommittees and that our recommendation would be to the Chairman that we not include them as voting members? Is that correct?

MS. PALMER: I think there is also a statement about whether that if there is a vacancy that would be the exception.

MS. ROOKER: Yes, that is correct. If there's a vacancy that would be an exception and that would constitute a member being accepted onto the Board -- the Committee.

Rich?

MR. ELLIS: Well, in discussion I'm not clear how the Committee is structured. If I were to leave tomorrow does that create a vacancy for anyone or does that create a vacancy for Verizon to fill again?

MS. ROOKER: That's a good question.

MR. MARSHALL; I can speak to that.

MS. ROOKER: Scott will --

MR. MARSHALL: Yes. If you were to -- you're representing Verizon, which -- and we're actually facing the situation right now with Quest, whose representative is no longer working for Quest. Quest is continuing on the Committee and needs to designate its representative.

We do have provisions in the operating protocols right now about vacancies. I think they address the issue of making recommendations to the Chairman with respect to filling a vacancy. Let me see if I can find the provision here.

(Pause.)

Go ahead. I'll --

MS. ROOKER: I would like to also say, Kathleen, thank you for your recommendations to our operating protocols. They are going to be distributed to the Committee members and we would like to discuss them, review them and bring them up at the November meeting if that's okay with you, Kathleen?

MS. O'REILLY: Yes. I had assumed that we would be taking up a variety of protocol issues at the November meeting and not today.

MS. ROOKER: Okay. Thank you so much. We appreciate your work. Those will be distributed to you.

Okay. Now where are we? We're at the point where we need -- yes, Bob?

MR. CHROSTOWSKI: Bob Chrostowski.

I'd like to make an amendment to that motion. The amendment is that the applications be reviewed by the subcommittee who then make their recommendations for the full committee and their vote.

MS. ROOKER: The applications be reviewed by subcommittee --

MR. CHROSTOWSKI: The motion, as I understand it, was that any application for membership to the full Committee be sent to the subcommittee.

A PARTICIPANT: No.

MS. ROOKER: No. That's not accurate.

MR. CHROSTOWSKI: Then can I have --

MS. ROOKER: No. The subcommittee was not going to make a recommendation on membership. These people were going to be invited to join the appropriate subcommittee --

MR. CHROSTOWSKI: Oh, I'm sorry. I misunderstood --

MS. ROOKER: -- or subcommittees.

MR. CHROSTOWSKI; -- I misunderstood because --

A PARTICIPANT: I did, too.

MR. CHROSTOWSKI: -- maybe -- can we have a reading again of what the actual motion was?

MS. ROOKER: Shame on you, Bob, for reading. Thank you very much.

MR. CHROSTOWSKI: Okay.

MS. ROOKER: Shelley made the motion that future members of applications for membership be referred to ask that they be -- that the indication be made, that they could serve on subcommittees, on LIST SERVS, etcetera, but they would not be voting members of the Committee. Is that accurate?

MS. ROOKER: Okay. All right.

MS. NIXON: Shirley?

MS. ROOKER: Now we need to table this motion and move on because our speaker is here and we've got to get into the Universal Service issues.

We need to take a vote on Shelley's motion. Has that been seconded? Did someone second it?

A PARTICIPANT: Yes.

MS. ROOKER: Yes. And it has been seconded. All in favor of Shelley's motion -- we need to move to close the discussion.

A PARTICIPANT: Exactly.

MS. ROOKER: Can we take a vote?

MS. O'REILLY: I move to close the discussion.

MS. ROOKER: Thank you, Kathleen.

A PARTICIPANT: I second.

MS. ROOKER: Accepted? Yes.

All right. We're going to take a vote. Are you in favor of Shelley's motion? All in favor?

A PARTICIPANT: Aye.

MS. ROOKER: I think there's confusion about the motion.

A PARTICIPANT: Can you restate the motion?

MS. ROOKER: All right.

If I'm stating this incorrectly, Shelley, please forgive me. The statement was is that when there are future applications to the Committee, that instead of being accepted as membership to the Committee that they be referred to subcommittees where they can participate, their voices can be heard, they can serve on one or more subcommittees and they can be on the LIST SERVS, but they would not be recommended as members. All right.

MS. STRAUSS: Unless there's a vacancy.

MS. ROOKER: Unless there's a vacancy. In the vacancy's case that would be the person from the corporation would be replaced by another member from that corporation or association, etcetera. Now I mean Shelley needs to speak for herself. Thank you.

MS. NIXON: I really don't care whether we motion pass or -- is just kind of discussions -- where we stand approximately and that our -- over -- this type of stuff.

MS. ROOKER: Yes, I understand that. Thank you, Shelley.

All right. We have the motion on the floor. It's been seconded.

MS. STRAUSS: The motion for discussion -- MS. ROOKER: Yes. The motion for discussion to close it has passed. We need to vote. May I see a show of hands who accept Shelley's motion and put them up high, please, so we can count them.

(Pause.)

I think that's the majority. Could we see those opposed?

(Pause.)

Opposed? Abstentions? Okay. Shelley's motion has been --

Kathleen and Micaela, how about you guys?

MS. O'REILLY; I'm in favor of the motion.

MS. ROOKER: You favor it?

MS. TUCKER; Micaela Tucker's in favor of the motion.

MS. ROOKER: Okay. Thank you very much. The motion is accepted as approved. Thank you very much. Now we need to move on.

(Pause.)

The FCC's notice of proposed rulemaking on financing Universal Service Fund is our topic of conversation. Andrea Williams has put together for us the comments that she has gotten from a number of members of the Committee and that is being passed out to you I believe as we speak.

Anita Cheng is with us today. She's the Assistant Division Chief of the FCC's Account Policy Division which oversees the Universal Service Fund. She also has two of her colleagues with her.

Ms. Cheng has been with the FCC since 1995. Her two colleagues are joining her today. They will be available for -- to fill in questions. Please join me in welcoming Anita Cheng.

(Applause.)

MS. CHENG: Thank you. I should point out that I only have one of my colleagues here today. This is Greg Guice over to my left. Paul Garnett is actually stuck somewhere in Boston this morning. So he won't be joining us unless he gets lucky with a flight.

As I said, I'm Anita Cheng. I'm the Assistant Chief of the Accounting Policy Division in the Common Carrier Bureau of the FCC. In short, I'm one of the people that works on the Universal Service Fund.

Today I'm going to talk to you about the Universal Service Fund, what it is, what it does, where the money comes from and why we at the FCC think that the system may need to be changed.

The Universal Service Fund is a fund that helps to promote telephone and telecommunications service to all of the people in America including those people that live in rural areas or that have low incomes.

The Universal Service Fund is one central fund that pays out to four mechanisms or programs, the high-cost program; the low-income program; the schools and libraries program, which is also called E-Rate, and the rural healthcare program.

The high-cost program provides discounts to telephone companies who provide service in areas of the country where the cost of providing service is very high. The low-income program provides discounts to consumers with low incomes who might otherwise be able to afford telephone service. The E-Rate program enables schools and libraries to get discounts on telephone service, internet access and internal wiring for these services.

Finally, the rural healthcare program enables healthcare providers in rural areas to have access to such things as telemedicine for the same costs as their counterparts in urban areas.

We've seen a lot of success with the Universal Service Fund. For example, when we started the E-Rate program in 1997 less than 20 percent of the nation's poorest schools were connected to the internet. As of the year 2000, however, over 60 percent of these poorest schools are connected to the internet.

As another example, our Native American population is grossly underserved. Of the nationwide penetration rate is well above 90 -- well, a little bit above 94 percent. Only about 47 percent of our Native Americans have telephone service. On the Navajo Reservation, which is the largest reservation in the United States, only 22 percent of households have telephone service.

To address this problem, in July 2000 the Commission adopted a special enhanced, low-income program geared towards promoting telephone service on tribal lands. In the six months after the enhanced program started, the new enhanced link-up program, which provides a substantial discount off of telephone installation, generated over 4,700 new subscribers on tribal lands.

As you can imagine, it takes quite a bit of money to do all of these good things. So now I'll talk about where the money comes from.

In 1996 Congress mandated that all carriers that provide interstate telecommunications shall contribute to Universal Service. In 1997 the Commission did two things. First, it created the Universal Service Administrative Company. I can't read that sign. Speak slower?

MR. JACOBS: Speak a little bit slower.

MS. CHENG: Okay. That's always my problem. So I guessed it even though I couldn't read your sign.

(Laughter.)

Okay. In 1997 the Commission created the Universal Service Administrative Company. It's also called USAC and they administer the Universal Service Fund. This means that USAC collects contributions, pays out money through the various programs.

Second, the Commission adopted a plan that requires carriors to contribute a percentage of the revenues that they earn from providing interstate and international telecommunications service. That's generally revenues from basic phone service and it doesn't include revenues from stuff like internet access.

This percentage that the carriers contribute is also called the contribution factor. It's calculated each quarter by comparing carrier revenues with an estimate of how much money the Universal Service Administrative Company will need in the upcoming quarter.

The Commission recalculates this contribution factor each quarter to ensure that we collect just enough money for the fund's needs; not too much and not too little.

Carriers are permitted to recover their contribution costs from their customers and most of them do that, do just that. They put a lot -- a lot of carriers put a line item on the telephone bill sometimes called a Federal Universal Service Fee or something similar to that.

The system that the Commission adopted in 1997 based contributions on carrier revenues that were billed from the prior year. Just this past March the Commission modified the system slightly so that contributions can be based on more current revenues, revenues from the prior six months instead of the prior year.

However, there is still much to fix about our Universal Service contribution system and here's why.

First, we have a lot of limitations on how we can fund the Universal Service Fund. In the 1996 Act, Congress placed specific limitations on the Commission.

Even though the bulk of Universal Service support goes towards connecting people to local telephone service, Congress has mandated that contributions can only come from carriers who provide interstate telecommunications service, which is for the most part long distance. This is problematic because at this time there's a lot of traditional long distance companies that are suffering a decline in revenues. Second, the contribution factor is pretty high.

The Universal Service support programs have grown tremendously. In 1999, for example, USAC paid out about $3.6 billion in support. In 2001 USAC estimates that it will pay out almost $6 billion in support. The problem is that the growth in the contribution revenue base has not kept pace with the program growth. This makes the contribution factor increase. For example, at the end of 1999, the contribution factor was 5.9 percent. Right now the contribution factor is 6.9 percent.

Third, carrier recovery practices vary very widely. This results in quite a bit of consumer confusion. Some carriers impose line items only on certain end users. For example, carriers will impose line items on their presubscribed customers, which is the customers that have the long distance service at their homes but not on their dial around customers, and that's customers that use the 1010 321 services.

Line items amounts also vary widely. Even though the contribution factor for the second quarter of 2001 was 6.9 percent, one carrier was charging 12 percent for a time. Just so you know, that carrier has since dropped its line item back down to 10 percent, but still this is a problem.

Finally, the telecommunications marketplace is changing. Contribution amounts are a percentage of interstate and international telecom revenues that were earned six months prior. This means that new long distance carriers like the big local telephone companies who are just beginning to offer long distance service don't have to contribute for the first six months after they have started in the long distance business.

There are also established long distance carriers who have declining long distance revenues. This means that they end up contributing based on revenues that are higher than the revenues that they currently earn.

Carriers are also marketing their products differently. For example, some carriers now offer long distance and local service packages for one price. They also offer telecommunications services along with non-telecommunications services, also for a single price.

Bundling services like this makes it very difficult to determine how to assess contributions on only the interstate telecommunications part of a carrier's earned revenue.

These are reasons why the Commission issued a notice of proposed rulemaking in May. We want to determine the scope of the problem and we want to fix it. So we've sought comment on several proposals including (1) whether carriers should continue to contribute based on a percentage, or whether we should move to a flat fee such as a per line charge; (2) whether the Commission should limit the way carriers can recover their contribution costs; and (3) whether carriers should title their line items all in the same way. All of these proposals if adopted would have very far-reaching effects.

Currently carriers contribute based on a percentage of revenues that were billed to its customer six months ago. There's two key concepts here that might be significant.

First, basing the contribution on reported historical revenues means that carriers have to report their revenue information to the Commission on a fairly frequent basis. This also means that contributions may not reflect current marketplace trends because it's based on old revenue information.

Accordingly, the Commission has sought comment on ways to get revenue information -- on different ways to get revenue information, such as allowing carriers to submit projected revenues and letting carriers true up their contributions by submitting actual revenue information, say once a year.

A second concern we have is that basing contributions on billed revenues rather than on revenues that were actually collected means that carriers have to pay contributions on revenues that they are unable -- that they may be unable to collect from subscribers. As we know, not all subscribers pay their bills. This means that a carrier who chooses to recover using a line item has to bump up that line item a little bit to account for uncollectables.

So, for example, if the contribution factors 6.9 percent the carrier may have to collect a little bit more than 6.9 percent from its subscribers to account for the fact that a certain percentage of subscribers will not pay their bill. So the Commission has proposed collect -- having carriers submit information on collected revenues rather than their billed revenues.

Alternatively, the Commission has sought comment on collecting contributions based on a flat fee rather than on a percentage. For example, carriers may pay $1 -- might have to contribute $1 per line. Although this seems like it might be really simple it may or may not be. There are all kinds of lines, residential lines, secondary residential lines, business lines. We've sought comment on whether there should be at the same flat fee for all these kinds of lines or, if not, how this fee structure should be.

There's also the problem of carrier recovery. If a carrier is allowed to recover its flat fee costs from its subscribers, then each subscriber pays the same flat fee regardless of how much that subscriber uses his phone. That means that it's possible that a disproportionate share of contributions might be shifted to low-volume users.

Then again if you think about it, a flat fee concept might be great for consumers in that there might be a lot less consumer confusion. Every consumer could compare costs across the board because every carrier would be charging the same amount for universal service.

Concern about consumer confusion is the basis for the next Commission proposal, which is to limit the way carriers can recover contributions -- contribution costs from its consumers.

Under the Commission's proposal carriers could recover contributions either through their rates or through a line item that is no higher than the actual amount that the carrier pays for contribution costs. In this way consumers would be better able to compare rates because the universal service cost would be the same across carriers. Equally important, this proposal might prevent carriers from recovering other non-related costs through the Universal Service line item.

One more thing about changing the basis for contribution. If the Commission were to change the basis for contribution say from the percentage that it is now to a percentage of collected revenues or to a flat fee, then carriers would have to change the way that they report information to us.

The problem here is that this may have implications beyond Universal Service. This is because carriers currently report their billed revenues to the Commission not just for purposes of Universal Service but also for other program such as the Telecommunications Relay Service, North American Numbering Program Plan, Local Number Portability and regulatory fees.

Therefore, we really need to consider the needs of these other programs and whether any changes in the information submitted would be inconsistent with these non-universal service programs.

What I've given you today is really just a very general and high-level overview of this proceeding that we have before us. I'm sure that you can tell that this is quite a task that the Commission has. The Universal Service Fund, it's a great program and we really all want to make it work. We welcome your questions and look forward to your recommendations. Thank you.

MS. ROOKER: Thank you, Anita.

(Applause.)

MS. CHENG: I will bring up now Greg Guice and our colleague, who made in from Boston, Paul Garnett. They're going to help me answer questions. Paul and Greg are the primary authors of this item that's coming up and they're your guys to answer questions.

MR. SCHROEDER: Shirley?

MS. ROOKER: Yes. I think if you can recognize him -- who's down here? Paul Schroeder.

MR. SCHROEDER: Yeah. I wonder if -- one of the things that was very confusing in the notice and hard to understand is the way things are currently handled in the wireless area and what would be changed in the proposed rule.

MS. CHENG: I'll explain what's going on with the wireless area. Most carriers -- carriers generally contribute a percentage of their interstate telecommunications revenues.

However, with wireless carriers because it may be difficult to separate interstate from intrastate service on the wireless phone because a lot of, you know, carriers -- a lot of wireless carriers bundle their local and long distance all into one package and they charge one rate for it we adopted what we call an interim safe harbor, which means that wireless carriers currently contribute only based on -- contribute a percentage of their telecom -- interstate telecom revenues.

We assume -- the safe harbor is that we assume that 15 percent of their revenues are interstate in nature. So what we sought comment on is whether realistically in this, you know, three years later if, indeed, interstate telecom revenues for wireless carriers are still only at 15 percent or whether that might be higher now since so many people have wireless phones and have the -- you know, the one rate package and may be using their wireless phones for more long distance calls.

MR. SCHROEDER: Just to clarify and follow-up.

MS. CHENG: Oh.

MR. SCHROEDER: And so you're not proposing a change in the 15 percent structure? You're looking at -- essentially it's an inquiry?

MS. CHENG: We're seeking comments on -- we haven't proposed anything specific and we certainly don't have another number out there, but we're seeking comment on if this number should change. If it should, then what?

MR. SCHROEDER: And there hasn't been a study? I mean it seems like that would be a knowable number, a knowable item to know what percent of revenue is coming from interstate.

MS. ROOKER: Andrea?

MR. GUICE: Actually, wireless carriers --

MS. ROOKER: I'm sorry.

MR. GUICE: I'm sorry. Let me just answer that real quick. Okay.

MS. WILLIAMS: This is Andrea Williams with CTI and we represent the wireless industry.

With respect to Universal Service Fund why we do not break out interstate, you have to understand that wireless -- we were built on a different regulatory structure than wire line, particularly in terms about boundaries. Many wireless companies, we don't respect what I would call the geopolitical boundary state lines. Our areas cover in some instances multiple states because of the licensing scheme that the FCC has decided to use for wireless.

You may have very wide geographical areas under what we call the MTA's and BTA's which may -- which may overlap states. Because of that structure, the wireless industry has it's very -- we do not break out in terms of interstate revenue. It's very difficult to do, it's very costly. So what many wireless carriers have done is use the interim safe harbor.

Now the way the FCC came up with that number was using a number that NECA, is what we call DEMS, the dial equipment minutes waiting program and NECA for wire line. That number came out to 15 percent. Currently, NECA has revised that DEMS estimate down to 13.25 percent. So that is, you know, one of the things that we need to look at and we will be discussing in the proposal.

Because there were commentors from the consumers groups that I received that asked that same question in terms of they really needed additional information in terms of why wireless is treated differently than wire line.

Many of the industry commentors I would say took the time to explain the process of how we operate in the wireless industry.

MS. ROOKER: Thank you, Andrea. Paul or Greg, do you have anything to add to that? That will be the last comment before we take a break because we're going to continue discussing this after our break.

MR. GUICE: That's fine.

MS. ROOKER: Is that okay? Okay. What we're going to do is we're going to take a break. Paul and Greg will be joining us for the subsequent discussion after the break. We have a 10 minute break.

We'll be coming back in and I just wanted to say that during the break for those who need it, there's a braille copy here of Andrea Williams' comments that she received on the proposed rulemaking and that will be available and will be read by Arlene to anyone who needs it. Julie, if you want it and anybody else, it is available. Where do we want them to go, Scott?

MR. MARSHALL: I think if they just huddle out in the hall --

MS. ROOKER: Huddle out in the hall.

MR. MARSHALL: -- or in the corner of the room here.

MS. ROOKER: Or somewhere here that's convenient. Where's Arlene?

A PARTICIPANT: She's outside.

MS. ROOKER: Okay. She's outside. Will she find Julie?

A PARTICIPANT: Yeah.

MS. ROOKER: Okay. Thank you.

Ten minute recess.

(Off the record at 10:41 a.m.)

(On the record at 11:00 a.m.)

MS. ROOKER: We need to start our discussion on Universal Service Fund, please.

A PARTICIPANT: Okay.

(Pause.)

MS. ROOKER: I'm sorry to be a nag but we really need to get back to our table.

(Pause.)

Okay. I'll nag.

(Laughter.)

(Pause.)

Somebody says I'm going to use the gavel.

A PARTICIPANT: Yeah, use it. Go ahead.

MS. ROOKER: Does it work?

(Pause.)

It's power here, the power.

MR. MARSHALL: Just make sure that we're reconnected on the phone, Shirley.

MS. ROOKER: Okay.

MR. MARSHALL; You might just make sure and all that sort of --

MS. ROOKER: Micaela and Kathleen, are you there?

MS. TUCKER: I'm here.

A PARTICIPANT: Somebody's there.

MS. ROOKER: Our phone folks, are they there?

Micaela?

MS. TUCKER: Yes, Micaela's here.

MS. ROOKER: Kathleen?

MS. O'REILLY; Yes. I'm here.

MS. ROOKER: Good. Thank you.

All right. If we could get everyone back to your places at the table, please, so we can continue our discussion on the Universal Service Funding.

A PARTICIPANT: Dane will be back. The Chairman called.

MS. ROOKER: Okay. Dane had to leave us briefly. The Chairman called. We tried to convince him he shouldn't go but he said, "No."

(Laughter.)

But he will be rejoining us shortly. Now we are going to continue our discussion and I think Greg and Paul are with us. Yes, they are here.

Ken McEldowney and then Andrea Williams have been doing a considerable amount of work collecting information from you and getting your thoughts and comments on many of the issues involved in the Universal Service.

I'm going to turn the floor over to the two of them and let them guide our discussion this morning. Ken? Andrea?

MR. McELDOWNEY: Yeah. What we did was sort of take the -- sort of jumped off from some of the initial e-mail that came up from Scott that sort of outlined some questions that he thought that the Commission would be interested in getting feedback from us on.

Andrea then expanded on that with some additional questions that she and her committee thought would be important to be addressed.

We had sent those out on all three LIST SERVS and Andrea was kind enough to sort of consolidate those comments and that's what you see in front of you today.

I think what we pretty much think would make sense to do in a sense that for us this is sort of trying to ride a bicycle with training wheels. It's sort of the first time that this Committee has tried to come up with some recommendations. So I think it's going to be sort of a learning experience for us all.

I think what we've decided to do is to look at sort of three main areas, (1) would be the areas where it appears from the comments that there is a consensus, (2) areas where with perhaps further discussion and refinement there could be consensus; and (3) areas where there is so much dissent, so much opposition, that probably it doesn't make sense to spend time today trying to reach some sort on consensus on it.

So I'm going to toss this now to Andrea to sort of start with the first ones in terms of where she thinks there's already consensus or consensus could be gained fairly quickly.

MS. WILLIAMS: What I did was when I took the comments and the issues sort of -- there are three basic categories where the issues dealing with the Universal Service Funding mechanism. One was the mechanisms for carrier contributions to the Universal Service Fund. The second one was the issue was cost recovery from end users, and the third big issue was what I call truth in billing and Universal Service Fund charges.

Basically, under the mechanisms for carriers contributions to Universal Service Fund -- first of all, let me thank those who participated and provided me with their comments. They were very, very helpful. Secondly, please stop me if I use acronyms that folks are not familiar with. Sometimes being in Washington you use a lot of letters and we just need to be reminded that not everyone knows what those letters mean.

(Laughter.)

Under the mechanisms for carrier contributions there were basically three areas where issues where we -- subissues that we were looking at, whether carriers should contribute based on a percentage of collected revenues or billed revenues, whether carriers should be assessed based on current or projected revenues, and whether the different treatment for wireless carriers should continue. And that meaning the currently wireless carriers may use FCC's 15 percent safe harbor which allows wireless carriers to use 15 percent of their interstate revenues as a base for Universal Service Fund contributions.

Under that title I found that almost -- well, it was unanimous among all the commentors, industry commentors, as well as consumers, that the assessment for Universal Service contributions be based on current revenues.

Many of the commentors felt that trying to do projected revenues would be almost virtually impossible to be accurate because the marketplace is changing dramatically every day and trying to keep up with those changes would just be pretty much impossible.

There was also comments that were made in terms of that the FCC recently had revised its rule governing carrier reporting obligations and, as Anita pointed out, they're now every six months -- that the assessment is based on the preceding six months worth of collected revenues.

Many of the industry commentors and I believe one of the industry commentors noted that before the FCC changed that report requirement again -- my understanding is it's been changed a number of times -- that they look and review the effectiveness of the process that they have put in place before we change it again.

So I think most of the consensus was that to support a recommendation that the CDTAC would support assessment of Universal Service contributions based on current revenues for the reasons that are described here in this document.

MR. McELDOWNEY: I guess one question here is just in terms of -- to get one thing out of the way, is just in terms of are there folks who did not comment or would not sort of believe that that is something that they would, you know, believe. Is that really a consensus?

MS. ROOKER: Susan?

MS. GRANT: I was on vacation. But I think there were so few comments because probably a lot of other people were on vacation that I don't think that we should just assume any consensus.

MR. McELDOWNEY: That's what I was asking.

MS. GRANT: Right. Right.

MR. McELDOWNEY: Whether there is a consensus.

MS. GRANT: Right.

MR. McELDOWNEY: So people -- you know, if people -- when Andrea says there seemed to be a consensus on this, I guess what I want then to do is to find out whether or not there is a consensus or whether or not there's disagreement with that.

MS. WILLIAMS: Let me also explain to you that in terms of the recommendations that you see here that, first of all, the summary of comments are just a summary of those who sent me their comments. It's not all the comments in the docket.

Secondly, the recommendations here are really just to facilitate discussion and open up a discussion if there's not a consensus. I'm only going on what I received and where I perceived that there may be some consensus. As Ken mentioned, if there isn't this is the time where we need to discuss that.

MS. O'REILLY: This is Kathleen O'Reilly. I guess I have a broader timing question. Am I correct that the actual formal comment period is completed as well as the reply comments. So that is it assumed that what we're talking about is a potential ex parte opinion from the Advisory Committee? If so, what is the current timing of this entire docket as to when the Commission is expected to take it up and, therefore, when the gate will close on ex parte?

MS. STRAUSS: Kathleen, this is Karen. Is my mike working? I think I can answer that. Okay. There it goes. This is Karen Strauss and I think I can answer that.

You are correct. This would be an ex parte document or a late filed comment document. The docket is still very much open though, and we've been told that the recommendations from this Advisory Committee will be taken into consideration.

There is no formal closing date for ex partes or for late filed comments. The goal, however, as we understand it is to move fairly quickly with respect to the final recommendations to the Commissioners in the form of a final order.

So the goal is to get some kind of consensus and recommendation from this meeting because the Bureau does want to work on -- the Common Carrier Bureau does want to try to complete this in the next few months.

MS. O'REILLY: My concern is given the way that this has sort of been approached, I was not aware that we were being solicited to actually comment on every issue. it was never really clear to me how these comments started circulating around, how they were necessarily going to be used.

If we cannot agree on all the basic points at today's meeting, I'm not sure what process we have available to us to achieve that outside of this meeting.

I feel handicapped in only understanding some of the comments submitted by those who have been circulating them and was not able to access on the FCC website all of the comments that have already been filed in any current ex partes.

So I'm concerned about what we're doing and why we're doing it and how much we can practically achieve. Even the framework of the very first question posed to all of us seemed to implicitly assume that the issue was whether or not the charge would be, you know, across the Board for all customers, whether it would be a percentage or whether it would be a stated amount, and that the option of not having it included as a line item at all was not really hinted at in the way it was posed to us, although that's an option that's part of the NPRM.

It's not even an option that I necessary espouse. But it just seems to me that the issues as they were raised to our Committee sort of already started steering us down certain paths that are more narrow than what are potentially possible under the NPRM.

MS. WILLIAMS: Kathleen, this is Andrea. In terms of what I tried to do was to focus on particular issues keeping in mind what Commissioner Copp stated this morning that there are a number of issues and that we're trying to focus on those issues that we can really provide some discussion, is helpful to the Commissioners.

We don't want to bite off more than we can chew, as he pointed out. What we tried to do was to prioritize those issues from the NPRM, and took into account all the comments that were provided to me. Some were from industry, some were from consumers.

In fact, I think the one that -- the e-mail that I got from you recommended that I look at the National -- what was it? National Association of State --

MS. O'REILLY: Utility Advocates.

MS. WILLIAMS; Yes. And I went and with that recommendation that you provided I went to those comments and pulled out from those comments where they addressed some of the issues that we are focused on here.

It is not the intent that we are going to go through the entire NPRM and go point by point for every single issue.

MS. O'REILLY; I understand. I'm just asking a question that to me is just sort of a practical trying to understand the scope of what's feasible for our Committee given that the timing of this meeting -- the ultimate decision.

Did this get on the agenda because the FCC is soliciting our Committee's opinion or because someone on the Committee wanted it discussed? How did this get to our plate?

MR. McELDOWNEY: Kathleen, I guess I'm a little confused because it was talked about at the last meeting in terms of this being something that it was felt -- my understanding both internally and externally -- is this was a good place for us as a Committee to make some initial recommendations to the Commission.

MS. O'REILLY; Yeah. I'm just -- but that was in the timeframe -- I guess the practical question, Ken, is do we have a process as a Committee beyond today's meeting?

MR. McELDOWNEY: No. I mean again --

MS. O'REILLY; Okay.

MR. McELDOWNEY: -- what we're trying to do and I think what Andrea is trying to do is come up -- basically there are a number of different issues. What we're trying to do is come up with certain issues where there can be a consensus, and pull a statement around that recognizing that in a perfect world we might be able to thrash out much more. But we're under a time deadline and we're trying to just focus on those that we think we can reach a consensus on as a Committee. The intent here is for this to be the comments of the Committee as opposed to some broader universe.

MS. O'REILLY: I just don't know that I feel comfortable being able to vote on whether I'm part of or not part of a consensus on a variety of issues since some of them are so inseparable from each other. And I still feel handicapped in not having been able to read the entire record.

So I'll take it on a point by point basis, but it's a very piecemeal approach that I'm not sure that we can accomplish much but I'll -- that's my point of view.

MR. McELDOWNEY: Okay. I mean again -- I mean, Kathleen, if, in fact, we come up with something that you don't feel comfortable with I would urge you to vote not to support it.

But I think I mean given the time pressures I think we should move ahead with basically the procedure that Andrea and I have come up with.

MS. O'REILLY: Is it possible or helpful to as part of this discussion determine whether we as a Committee want to today for even on an ad hoc basis develop a post-meeting procedure for this narrow issue so that people could potentially take a reasonable although short period of time to reflect on what's recommended and then to either weigh in or -- with a support or opposition to certain points?

MR. MARSHALL: This is Scott, Kathleen. It is certainly possible if someone has a dissenting point of view that they can attach that dissenting point of view to whatever recommendations the Committee comes up with.

As Ken has said, we're really operating on a very tight timeline. If we were to have a second meeting, that would have to be noticed in the Federal Register. I actually raised this with our Office of General Counsel about whether we could even have a teleconference meeting to further discuss this matter after this meeting.

Even that's problematic. It can be done. It does raise some access issues for some of us, but in addition to that, it would still have to be noticed in the Federal Register. There would have to be a mechanism for public comment and so forth.

Again, just to be clear, I think Ken and Andrea are saying that they haven't looked at the record, either. I mean these are comments that were received through the LIST SERV from this Committee or members that commented that were part of the LIST SERV.

MR. McELDOWNEY: Kathleen, I guess the other thing I would add is I know that you and I have sort of had this discussion before on a previous thing in terms of trying to reach consensus on a statement.

I think that one of the things that's important is for this Committee to come up with a statement on behalf of the Committee that probably given the nature of this NPRM is going to be relatively short and relatively general. But there's nothing to prohibit individual members of this Committee filing their own more comprehensive comments.

I guess that's something I would encourage you to do, Kathleen, is --

MS. O'REILLY: Oh, I'm definitely not going to do that. I don't have the time and I don't have the -- there's no practical way for me to do that. I'm just --

MR. McELDOWNEY: Kathleen --

MS. O'REILLY: I'll do the best I can under the timeframe then.

MR. McELDOWNEY: Okay. Kathleen?

MS. O'REILLY: Mm-hmm.

MR. McELDOWNEY: Could --

MS. ROOKER: This is Shirley Rooker, Kathleen --

MR. McELDOWNEY: Could we move ahead with this.

MS. O'REILLY: Yes. I just --

MS. ROOKER: I would suggest that we move ahead.

MR. McELDOWNEY: I think we really have to.

MS. ROOKER: I appreciate and I've heard your concerns but I think we've got -- we have a very short time today, if you don't mind, so that we could move on with their discussion.

MS. O'REILLY: Sure.

MR. McELDOWNEY; Okay. Let's go back to this thing in terms of -- I've even forgotten what it was but --

(Laughter.)

Andrea, could you restate what you felt was the first consensus and we could --

MS. WILLIAMS: Yes. The first --

MR. McELDOWNEY: -- go around the room to see whether or not people agree with it.

MS. WILLIAMS: The first consensus was whether carriers should contribute based on a percentage of collected revenues or billed revenues? I'm sorry. It should be whether carriers should be -- carriers should be assessed based on current or projected revenues.

The industry and consumer commentors that I received unanimously agreed that carriers should be assessed on current rather than projected revenues because it is virtually impossible, as they noted, to accurately predict future revenues, particularly in today's changing marketplace.

It was also brought up that the FCC recently revised its rules governing carriers reporting obligations with respect to the USF contributions. And the FCC rules now mandate that carrier revenue assessments --

MR. McELDOWNEY; Andrea, let's stop on that one because I think there's disagreement on that one.

MS. WILLIAMS; Okay.

MR. McELDOWNEY; I think let's just focus -- let's just focus in terms of current --

MS. WILLIAMS: No. That was the reasoning they gave that before you go changing the mechanism at least evaluate the effectiveness of the current rule.

MR. McELDOWNEY: Right. I guess consumer action at AARP thought it should be the previous month or previous quarter.

MS. WILLIAMS: Right.

MR. McELDOWNEY: So let's just talk right now in terms of --

MS. WILLIAMS: Okay.

MR. McELDOWNEY: -- versus projected.

MS. WILLIAMS: And --

MR. McELDOWNEY: Susan?

MS. WILLIAMS: -- what the recommendation was is that CDAC supported a statement that the assessment of Universal Service contributions be based on current revenues. Simple as that.

MR. McELDOWNEY: Susan?

MS. GRANT: That makes sense. I just have a question. And that is about the new entrants and the fact that it appears that they wouldn't be making any contribution to the funds for the first six months. I'm wondering if in the case of new entrants, their contribution shouldn't be on a projected basis.

Surely they have some projections that they're operating on the basis of and getting into the marketplace. It strikes me as only fair that they should have to contribute something in that first six months. So I'm wondering if that's feasible?

MR. McELDOWNEY: Susan, I guess in California with the Lifeline program what basically happens is that people do it basically -- the surcharges are based on the previous month in which they bill their customers. I think that ends up being the most accurate way of doing it. Then if, in fact, in the future there are uncollectables, they can then true it up but it appears to be much simpler administratively.

Whether or not we go ahead with the previous month, the previous quarter, is a separate issue but I think that that would be something that at least a couple of consumer groups would support.

MS. ROOKER: Mike?

MR. DelCASINO: This is Mike DelCasino. All of this discussion focuses around the fact that the contribution being made based on revenue. I guess I would like to put on the table the possibility -- and I think that Anita and I think that the NPRM opened that up that contribution be made on other then a revenue basis.

The Universal Service Fund has very specific things that it is attempting to accomplish. It seems to me that generating the fund to -- generating the dollars to support that fund on a usage basis that's one way to do it, clearly. By the way, I think I would argue that if you were going to do that that it be on a current revenue basis.

But there's also the option of assessing it on a per line basis so that once the Commission or the Fund Manager determines how much money is required to do the work that the Universal Service Fund needs to do then that can simply be recovered directly from consumers as a pass through from the companies. I guess I'd like to have that option kicked around a little bit.

MR. McELDOWNEY: How would the -- I guess one of the concerns I have with that is that with the growing amount of folks using 1010 dial around, how would the dial around folks pay into the fund?

MR. DelCASINO: That's -- you know, I don't know how to answer that, Ken.

MR. McELDOWNEY: Okay.

MR. DelCASINO: I don't know how to answer that. I think there's a lot -- there are so many different kinds of service offerings, even the wireless service offerings. I personally can't speak to that. By the way, that's one of the reasons -- I kind of sympathize with some of the earlier discussion.

This is such a complex subject that it seems -- I know for myself, I certainly can't speak to all aspects of dial around and wireless and wire line services and what not, so --

MS. ROOKER: Matt and then Bob?

MR. KALTENBACH: This is -- hello? This is Matt Kaltenbach, Ericsson.

I'd like to concur with Michael's assessment that the existing mechanism doesn't recognize the difference between circuit switch and packet switch technologies.

Because I thought the goal was universal access, not just to circuit switch but to information. That the only mechanism that would be inherently universal would be one that was account-based and one that recognized that there would be a metric let's say subscriber month and that by the fact that all carriers and utilities and providers have to keep an account of the number of accounts they have active. This mechanism would be inherently extremely simple to administer, easier to account for and lower the cost structure of the administration to the point where a flat fee per account could be achievable.

This could be achievable cross technology and cross access mechanism. So unless we actually address those fundamental changes which I think are at the core of the reason for this NPRM, we haven't addressed the issue.

MS. ROOKER: Bob?

MR. McELDOWNEY: What, Shirley?

MS. ROOKER: Bob?

MR. McELDOWNEY: Yes. You can see people better than I can.

MS. ROOKER: Okay. All right.

MR. SEGALMAN: What would the advantage be to doing it in on an on-line basis as opposed to on a revenue basis?

MR. DelCASINO: I guess I'll take a stab at that. Matt indicated that at least one example, and that is that it would be I believe also very simple to administer the requirement of determining the revenues upon which the percentages would be based would be virtually eliminated in this case.

The issues associated with -- and I think Anita pointed some of these out -- associated with discrepancies between companies with declining revenues rather than companies with increasing revenues would be eliminated. The notion that companies have the ability to vary the percentage rate for things like uncollectables, vary the percentage rate based on who they choose and what services they choose to recover the money from their consumers.

All of those things would be eliminated and, therefore, the whole process I believe would be a whole lot simpler.

MR. McELDOWNEY: So you're basically saying that any company, any customer, regardless of whether it was wireless or dial one, there would be a per line charge regardless of the volume of their calls? So it would be wireless plus dial one presubscribed?

MR. DelCASINO: If I could just back off of the wireless piece.

MR. McELDOWNEY: Yes. Well, I think that's a key one.

MR. DelCASINO: Yeah.

MR. McELDOWNEY: Because if you don't -- that would be the only reason why I would even consider that because otherwise the low-volume customers get basically screwed.

MR. DelCASINO: I guess let me say that -- to answer your question I think I would say yes.

MR. McELDOWNEY: Okay.

MR. DelCASINO: Yes.

MR. McELDOWNEY: It sounds like it's time -- yeah.

MR. DelCASINO: Universally applied to all lines, but I have to temper that with my caution.

MR. McELDOWNEY: Okay.

MR. DelCASINO: The low-volume customer, obviously, is always an issue. To me if you think about what the Universal Service Fund is addressing, you kind of have to ask yourself the general question about what does usage have to do with it?

If my children are all over the country and I make $100 a month in long distance calls and you have one person that you call in Maryland and your bill is $20, what is it about that situation that says that I should be contributing five times what you contribute for universal service.

It seems to me that --

MS. O'REILLY: This is Kathleen O'Reilly. I would like --

MR. DelCASINO: -- that --

MS. O'REILLY: -- to address that.

MR. McELDOWNEY: Kathleen?

MS. O'REILLY: Okay.

MR. McELDOWNEY: Susan Palmer's been waiting to talk.

MS. O'REILLY: Okay. Just tell me when I'm next in line.

MR. McELDOWNEY: Huh?

MS. O'REILLY: Just let me know when I'm next in line.

MR. McELDOWNEY: Okay. I know. You're fourth.

MS. O'REILLY: Okay.

MR. McELDOWNEY: Susan, Jim, Joseph and then Kathleen.

MS. PALMER: One of the things that a per line charge does is that you contribute -- you don't contribute if you're a long distance carrier.

Another thing that happens is what happens in a situation where you have hearing carry over or voice carry over, you have two lines? Then you're paying double automatically even though the usage may not be the same. That doesn't make sense to me.

You know, I think that there are some serious challenges. I really strongly feel the way that we're doing now is more equitable. I'm not saying that because I'm a wireless carrier or that, just from a practical standpoint. I think you can simplify it but you can simplify and be unfair.

MR. TOBIAS: Well, let's see. I'd like to start off first by demystifying this microphone technology.

(Laughter.)

Is someone potting this up as we begin to speak or is it automatically adjusting? Can anyone in this room answer that question?

MR. McELDOWNEY: If they like you then your microphone is turned on.

(Laughter.)

MR. TOBIAS: No. I'm serious about that question.

MS. ROOKER: Jim, identify yourself.

MR. TOBIAS: Jim Tobias.

MS. ROOKER: Thank you.

MR. TOBIAS: Well, we'll get an answer later.

MS. ROOKER: We're going to get the answer.

MR. TOBIAS: Okay. Well, if there's no one -- is there someone in the control room or is there no one in the control room, I guess is the good -- we don't know? Okay. At any rate, let's move on to the content.

(Laughter.)

I have some detailed questions here that maybe the statistics folks from the FCC can help me with. It's about this issue of usage versus per line.

In a usage environment or a revenue environment, rather, is it possible for a carrier to -- it is possible for a carrier to distribute those charges onto bills however they choose. Is there any evidence -- because carriers are obviously predisposed to keeping their large volume customers happier and those large volume customers are correspondingly tighter on accounting for what they're getting billed for.

Is there any evidence that carriers are reducing charges to large volume customers and tipping the balance of recovery onto single line or other small, residential customers?

MS. CHENG: The answer to that is that, yes, to a certain extent. Carriers charge a different line item for residential subscribers than they do for their business subscribers.

MR. TOBIAS: For USF?

MS. CHENG: For USF, yes.

MR. TOBIAS: Is that tariffed or is that flexible in negotiation? In other words, if I'm a carrier and I want to get the business from some 100,000 line company, am I free to say, "We'll give you a deal on USF?"

MS. CHENG: I think it is tariffed but -- I'm sorry. Come on up.

MR. GUICE: It's Greg Guice. To the extent that large business consumers enter into contracts with their carriers they can negotiate away the fee that they would be required to contribute under the tariff.

MR. TOBIAS: Okay.

MR. GUICE: And those contracts supersede the tariff.

MR. TOBIAS: Okay. So that's an issue right there I would guess that we need to think about.

The second point is on the other side of the argument and that is the per line issue. I'm especially interested in any work that the Commission has done or is looking at, voice-over IP cannibalizing essentially the number of lines.

MR. GUICE: Mm-hmm.

MR. TOBIAS: Here again large organizations are already moving in that direction. So, you know, a company that might have had 10,000 lines last year has ditched all but a few thousand of them and is putting all of its internal voice traffic on its data network and maybe even some of its external traffic, as well.

You know, as a SoHo consumer I have recently been approached with -- I have a cable modem service and I can buy a device that allows me to replicate four outgoing voice lines on my cable modem and I could throw away, were it not for number portability issues in IP telephony, I could throw away those voice lines.

Has the Commission looked at -- has it seen any trend in that right now and has it looked at sort of what might happen over time to Universal Service Fund revenues based on different slopes of adoption of IP telephony?

MS. CHENG: Yeah. This is Anita Cheng. This is a topic that we have raised in the notice of proposed rulemaking. At this time the Commission has no plans to start basing contributions on voice saver IP but it is a concern that we have that voice over IP along with several other factors seems to be eroding away or possibly maybe eroding away at our interstate -- traditional wire line interstate long distance services that we base our contributions on. So it's something that we're looking at.

MR. TOBIAS: Okay.

MS. ROOKER: I will give you an answer on the microphones. They're activated once you start speaking by someone in the control booth, so give them time. They can't leave them all on because of the noise factor. So that's the situation. Just give them a second to get it going when you start to talk.

I think Susan Palmer has a follow-up question and then we need to go to Kathleen on the phone.

MR. McELDOWNEY: No. Joseph's next.

MS. ROOKER: Oh. Joe. Okay. Okay. All right.

Susan?

MS. PALMER: Go ahead with Kathleen.

MS. ROOKER: Did you have a follow-up on that or you had just made a comment?

MS, PALMER: No. Let me --

MS. ROOKER: Okay. Joe?

MR. McELDOWNEY: Joe?

MR. GASKINS: Joe Gaskins with ConnectBid. Taking a look at how the Universal Service Fund is collected, it's -- philosophically I guess I have an issue with it being collected based on revenues because to me although the carriers are being assessed it's really the consumer that winds up paying for this. The consumer has virtually no control over what they pay. They're paying based upon the revenues that a carrier generates.

So to me it would make more sense of being able to pass on -- coming up with some type of formula that you can pass on the contribution to the Universal Service Fund to the consumer and, in essence, the carriers become more of a collection-type agent like you would -- similar to a retailer collecting state and local sales tax at the point of sale.

I also think that you need to have a combination of fixed component, perhaps a per line charge, and a variable component based on perhaps usage and an additional charge for value-added services, for ISDN lines, for DSL lines.

All of this, of course, would have to be metered by the ability of the carriers and their billing systems, because billing systems really haven't been able to keep up the speed with what's going on with technology and packet switch services. So there's that issue, as well.

But it seems to me that passing the control of the Universal Service Fund contributions on to the consumer would really be more fair overall and allow the carriers to focus on their core business which is, you know, increasing their revenues.

MS. ROOKER: Thank you, Joe. Kathleen? You are next.

MS. O'REILLY: Yes. Peter, in his reference to the voice-over ISP cannibalization actually gave a wonderful example of the issue that I wanted to address, and that is to those who propose doing this on a line basis how do you assess a non-voice line under the old slice and dice issue?

Because in the growing trend to eliminate that it would in my view shift the cost of universal service to the most low-volume, low-tech, unsophisticated customers, which is related to the whole issue of the -- the question raised what's unfair about someone who makes only one long distance call a month paying the same as someone who make 100.

My response to that is that I think many of us would have preferred that the Universal Service Fund be paid for out of progressive income taxes and not under the most regressive way on the phone bills.

But at least that differential is minimized a bit by ensuring that the low-volume customer, often senior citizens on fixed incomes or working class families, not be forced to pay amounts that are way out of whack with what is being negotiated in high volume contracts where corporations and sophisticated individual users are able to sidestep an enormous amount of what would otherwise be their fair share of this cost.

MS. ROOKER: Thank you, Kathleen. Matt?

MR. KALTENBACH: This is Matt Kaltenbach, Ericsson. I'd like to address one issue that is paramount (1) this mike is dead.

MS. ROOKER: No. You're on.

MR. KALTENBACH: Oh, it is?

MS. ROOKER: Yes.

MR. KALTENBACH: Okay. Number one, there's a huge difference between circuit access and the term "lines." When we use lines we're commonly referring to circuit switch access.

I want to point out that several months ago data traffic exceeded voice traffic. So anyone that doesn't recognize that packet switched access, which is what the world is going to, is not just in the future, it already happened.

So assessing per line doesn't recognize the paradigm shift that's occurred in communication technology. Packet switch technology changes everything and within just a few short years packet switch technology is going to obliterate line technology.

So line technology no longer exists. We can already recognize it and we can't bill on it. So, therefore, I'm going to again propose that we look more at account and if we're going to term this, it's the account ID for access. It should be independent of packet switch, line switch. It's an access identified that's the only fundamentally fair mechanism that recognizes the paradigm shift.

MS. O'REILLY: But would that distinguish between voice and non-voice communication?

MR. KALTENBACH: No. It's universal.

MS. O'REILLY: So you're getting back to a very simplified every customer is going to pay the same amount and then by customer you will break that down by the services that customers subscribe to?

So that if I am a five service customer of a long distance company I will pay this five times? Is that how I should understand what you're proposing?

MR. KALTENBACH: I think what we need to do is talk to the manufacturer of the technology that Jim Tobias just referenced because you don't need five accounts to a single long distance company any longer. You only need one point of access, it's called IP. When you have that one point of access you can have as many lines as you would like.

MS. O'REILLY: But that would result in an individual who makes one long distance call a month and has no other contractual relationship with the provider paying the same for Universal Service as a multi-billion dollar corporation?

MR. KALTENBACH: No. Because the inherent cost structure of a packet switch technology is one tenth to one one hundredth that of a line switch technology.

If you look at net to phone or any of the other switch technologies you could have an internet telephone that inherently costs you one tenth of what it costs you today for line switch technology.

MS. ROOKER: Okay. It was Andrea and then Rich and then Paul.

MS. WILLIAMS: This is Andrea Williams. I just -- well, you've proven me wrong in terms of whether we can come up with a consensus --

(Laughter.)

-- on the first -- on the first and the second subissue.

(Laughter.)

I'd like to suggest that from what I'm hearing of the discussion that there appears to be too many variables to these issues to reach a consensus on number one and number two, and that perhaps the better way to approach this is to provide the FCC with a copy of the transcript so they could have the benefit of the discussion that took place, attach that with the ex parte communication. Would you believe that FCC would find that helpful?

MR. McELDOWNEY: Yes. I think it makes sense to move on to the next point.

MS. WILLIAMS: Yes.

MS. ROOKER: Let's -- Rich did have a comment and then Paul Schroeder.

MR. ELLIS: Just very briefly. Again, the problem with the per line or per count charge is that it does tend to shift a lot of the cost over to the local service provider and I think -- I would hate to speak for Congress because, Lord knows, they have a hard time speaking for themselves sometimes --

(Laughter.)

-- but I think their idea and basing it on interstate revenues was it would push the cost over on folks who readily could afford it more and at the same time keeping the basic rate low so folks who just want to have a basic rate to call their doctor, call the police, would be paying less opposed to somebody who had friends across the country who could afford to spend more. So I think that's what the theory was on that.

So I'm also concerned about a per line account where one person could have a regular dial tone line and pay the same as a person with a DSL line using it to make six or seven different line equivalents worth of calls.

MS. ROOKER: And Paul?

MR. SCHROEDER: This is Paul Schroeder. Two observations and a question.

The two observations are that I think Andrea and others are quite right that one of the problems that's emerged here is exactly what we've said all along, and that is that there are so many of us who are ill equipped to debate these issues.

When looking at the comments on this item I think most consumer groups said, "Yeah. It logically makes sense. Base it on current revenue as opposed to projected. Base it on collected as opposed to billed." You know, those things they just seem logical until you start peeling it apart and pulling it apart in this way.

I think that's one of the great contributions that this Committee can make is helping the Commission to understand that it's got to find ways for more voices to be heard in this debate and not just the technical experts who are slicing and dicing and, frankly, are largely corporate. I mean largely the players that are affected by the fees, but not the players that are affected as consumers either on the receiving end as low-income consumers, for example, or the paying end in terms of their costs on the phone bills.

The second -- I guess that's really -- that's the observation I wanted to make, but the question I wanted to get at which we haven't really resolved and I just wonder if we have a quick answer to it, and that's on dial around and how that's currently structured.

Because, as I understand it, in many instances the dial around companies are, in fact, segments of larger long distance companies that are -- and I guess that's billed differently. But how are those -- how are those revenues collected for the Universal Service Fund and how are consumers aware of what they're paying as a percentage of their rates for the Universal Service Fund?

MS. ROOKER: Does anyone have an answer for him?

MR. McELDOWNEY: I guess that you could probably direct that to the FCC perhaps, I guess.

A PARTICIPANT: Yeah.

MR. GARNETT: This is Paul Garnett. To the extent that dial around traffic is interstate telecommunications revenue, then carriers would be assessed on those revenues. As for how they actually recover those contributions from end users, I think it really depends on the carrier. Some don't recover those revenues from dial around -- through dial around traffic and some do. I really think it just depends.

MR. McELDOWNEY: While you're up there, I guess another question I have is how do the companies handle the pre-paid cards, which in some ways it seems it raises some of the issues as the wireless phones?

MR. GARNETT: The story is the same in the prepaid context to dial around. Some -- it really depends on the provider and how the recover their, you know -- the various different mechanisms that they use, whether it's purely on a revenue basis or a flat fee or whether it's just in the rate.

MS. ROOKER: Okay. Susan Palmer had a question.

MS. PALMER: There's one thing -- I think there's some debate certainly over line versus the other route but I'm wondering if we could make a recommendation that if they go this certain route we have consensus on that.

So if we just add the word "if" to agree and then maybe add some cautionary notes when you get to -- if you go this other route then you need to make sure that people aren't, you know, having to pay twice as much for the same functional access and things along those lines. Would that be a possibility for --

MR. McELDOWNEY: Could you -- Susan, could you --

MS. ROOKER: Susan?

MR. McELDOWNEY: -- make that sort of a full sentence?

(Laughter.)

MS. PALMER: I'm lacking the ability to read the actual proposal.

MR. McELDOWNEY: I know.

MS, PALMER: But if you just say if --

MR. McELDOWNEY: What would your sentence be though?

MS. PALMER: If the FCC goes around -- they were talking about if we're doing the recommendation, if they do that then we agree on the rest.

MS. WILLIAMS: Well, that's the other thing --

MR. McELDOWNEY: Susan?

MS. WILLIAMS: That's one of the things that I just asked in terms of taking off the table that because there seems to be such a difference of opinion, and that there's so many different variables that would impact how question number one and two we responded.

It doesn't look like there could be any consensus and probably the better thing to do is to acknowledge that there is a difference of opinion, provide the FCC with a transcript of this discussion so they would have the benefit of the discussion in their deliberations, because we can be here all day I think discussing whether revenue or line item or flat fee or --

MR. McELDOWNEY: Susan?

MS. GRANT: I don't even think that a transcript of this discussion really fully captures everything that people may think or people may wonder. I mean I have so many questions now which we don't have time for.

So just the discussion that's happened so far doesn't reflect all the questions that I want to ask that we don't have time for. I would prefer not to make any recommendation in this regard or pass anything to the Commissioners that purports to show even the diverse opinions because I don't think that we've heard them all or have time to hear them all.

A PARTICIPANT: Okay.

MR. McELDOWNEY: Well, maybe the thing to do would be to wait until the end of the day to decide whether or not based on the discussion here, the discussion -- the joint discussion of the Committees in the afternoon when we come back together, just in terms of whether or not we think there would be any value whatsoever in having the transcript go.

MS. GRANT: That's fine.

MR. McELDOWNEY: Andrea, why don't you move on to the next consensus item?

MS. WILLIAMS: Yeah.

(Laughter.)

MR. McELDOWNEY: And then later we'll get to the hard ones.

MS. ROOKER: Vernon James has a --

Vernon?

MR. JAMES; Thank you, Shirley.

MS. ROOKER: Thank you.

MR. JAMES: This is Vernon James -- Vernon James -- hello?

ALL: Hello. We're there.

MR. JAMES: Vernon James, San Carlos Apache Tribe.

I agree with the comments that there's a lot of discussion that's necessary and that everybody has different opinions.

My question is this MPR, is it completely closed, bringing up Shirley's initial question? Is it closed for discussion? If so, I think just the fact that there's been so much discussion and so much misunderstanding, so many questions to be asked, I think the recommendation should go forward that the notice for proposed rulemaking be extended so that there could be additional comments made so that we can have opportunities throughout this large country for input.

I disagree that it needs to be closed. I think there's need for additional discussion. Thank you.

A PARTICIPANT: Yeah.

MS. WILLIAMS: Vernon, this is --

MR. McELDOWNEY: I think that --

MS. WILLIAMS: Let me --

MR. McELDOWNEY: Yeah.

MS. WILLIAMS: Can I just respond to that --

MR. McELDOWNEY: Yeah.

MS. WILLIAMS: -- from the FCC processes?

Under the Administrative Procedures Act the FCC has to provide a certain period of time to allow interested parties to comment and reply comments. However, that is not the last opportunity that an interested party can let the FCC know how they feel about a specific issue.

In this case we're using what is called the ex parte communication. It is a provision that allows you to still bring your issues and questions to the FCC even after the comment period is closed but before the FCC decides it's going to make a certain decision.

Usually the FCC puts out a notice when they're going to make that decision. And a week before that decision is made, that is when at that point the FCC doesn't take comments, whether they're comments, reply comments, ex parte communications. That week no one can talk to the Commission about that particular issue while they're doing their deliberations.

So there is still time for those who have additional questions to bring those issues to the FCC in ex parte communications.

MR. JAMES: But I hear a lot of discussion and a lot of questions being asked around the table and I don't think it should be a recommendation that it's a consensus or even give that kind of implication. I think that everybody has different opinions and it shouldn't be a general statement made that this is -- if, you know, and this is consensus because I don't think it is. I don't hear it.

MS. WILLIAMS: Well, I agree with you, Vernon. That's why I'm suggesting we just move on because we can't come to a consensus on number one and two because there are so many different opinions.

MR. McELDOWNEY: Andrea, why don't you move on to the next one?

MS. WILLIAMS: Right.

MR. McELDOWNEY: Hopefully, we can get one more out of the way before --

MS. WILLIAMS: Okay.

MR. McELDOWNEY: -- the lunch break.

MS. WILLIAMS: The other one, the last issue that was under this particular -- under mechanism for carrier contributions, had to deal with the different treatment for wireless companies.

While both industry and consumer commentors agree that treatment should be fair and equitable for all carriers, it appeared from the commentors -- some of the industry commentors -- I mean consumer commentors, they prefer to have additional information in terms of why they were treated differently.

Earlier today Anita and I and FCC staff and myself sort of explained the difference between this is sort of an anomaly of wireless that essentially -- because wireless services have such unique characteristics, we don't fit very easily into that regulatory model where things were decided by state boundaries.

What happens is that you have Universal Service Fund are to be recovered from interstate revenues ,and as one commentor explained, that CMRS carriers which are wireless carriers provide services and design their networks without regard to these type of political boundaries and also pursuant to their Federal licenses which don't necessarily line up with the state -- particular state boundaries.

Typically in the wireless context customers are free to call from anywhere within a large geographic area. In some instances it's nationwide, and from constantly changing locations. For example, you may start a call in Maryland and end up in Virginia and in between there have been in D.C. Well, how do you determine what's the interstate revenue?

So what the FCC recognized back in 1998 and came up with a safe harbor for wireless carriers because it was very difficult, while the wireless carriers did try to what I call fit that square into a round -- oh, it's a round peg into a square hole. Something like that.

(Laughter.)

That what was happening was that you had some companies that were wireless companies were overreporting and some were underreporting. So the FCC decided to make it -- to simplify it and come up with an interim safe harbor of 15 percent. Now where they got that number from was based on the level of interstate traffic that was experienced by wire line companies.

They used what they call the percentage of interstate wire line traffic for purposes of what they call the dial equipment minutes waiting program. The bottom line, that they call -- refer to as DEMS, that percentage has changed. It's now down to 13.25 percent.

One of the questions that the FCC asked is should they continue this interim safe harbor for wireless carriers? Also, some of the commenters -- one commentor pointed out not only should they continue it because that situation still exists, but should they lower the safe harbor so that it's in line with NECA's waiting program to 13.25 percent?

Now the recommendation that you see listed here was CDTAC would support the -- that the FCC maintain the safe harbor. Well, really there's two parts. First of all, that the FCC would maintain the interim safe harbor for wireless carriers and, secondly, whether there should be some discussion of whether we should reduce that to 13.25 percent? With that said, I'm going to open the floor up, I guess --

MR. McELDOWNEY: I guess I would sort of expand that a little.

I know that sort of my position was really one that was sort of, you know, again not having the expertise in the safe harbor thing, my position really was that the surcharge should be applied to wireless in the same way as to land line.

I think then that leaves it open then to the Commission to determine -- to make sure that, you know, wireless is being surcharged properly. I just don't think we have the expertise around the table to determine whether or not these safe harbor percentages are ripe. I think it would then be up to the industry and to the Commission to come up with a way of splitting off the interstate and the intrastate.

MR. KALTENBACH: Shirley?

MS. ROOKER: Okay, Matt?

MR. KALTENBACH: Matt Kaltenbach, Ericsson.

I'd like to suggest three things, number one, I think that the current youth cases today are not limited to wire line even though wire line seems to be the sole focus of the apportionment and assessment methodology. So I think it needs to encompass IP. It needs to encompass other technologies and a methodology which is independent of the technology.

Number two, I'd like to say it's information to access and not just a wire line service. I think that pretty much encompasses everyone that sits in the room today.

Number three, I'd like to say that the apportionment should be also equitable and flexible. It should be able to be utilized by the most cost-effective technology that services the goals of the program, the rural schools, the rural end users, the rural medical. Each and every one of these people just are not looking for access to wireline services.

So why should we limit our focus or our scope or our goal to that when it's information that they're trying to access. That's what you're trying to mainstream. So I'd like to suggest that we take a broader stroke in terms of guidance to the FCC to keep it a little bit more open to really make it universal access and not competitor access.

MS. WILLIAMS: Okay. Susan?

MS. PALMER; I really hear the first question as being should wireless be treated differently? I mean I think that's one very broad question.

Certainly our position would be it's a different animal. It should be equitable and I think we need to make that cautionary note, but I think the treatment should be different just for the reasons that Andrea outlined earlier. There are a lot of technical issues, there are billing issues that are very different in that environment, but I think we -- and I think that that's the first question more than the amount. That I would like to hear some discussion on.

MS. WILLIAMS: Okay.

MR. McELDOWNEY: Susan?

MS. GRANT: I think that we could all agree that wireless should pay its fair share. Beyond that though I think it's hard to figure out how that would be calculated when we can't even reach a consensus on the land line which ostensively should be easier to calculate.

MS. WILLIAMS: Very good point.

MS. GRANT: So I don't know if we can go beyond that as a statement.

MR. KALTENBACH: Matt Kaltenbach, Ericsson.

I'd like again to suggest a flat fee per account ID using a subscription month as the metric.

MS. WILLIAMS: Matt, I think that's the type of recommendation though that many people here would have to go back to their companies and their organizations to see if that's acceptable.

I think what the purpose of the Advisory Committee again this process is we went to NPRM and took specific issues that were related to consumers. We could be here again for ages talking about Universal Service, whether it should be IP, telephony, whether it should be wireless, who should be included.

What we were trying to do is just to narrowly focus on these specific issues. Now if you -- I suggest that by broadening it -- if we can't even reach consensus on some of these subissues and some of these narrowly focused issues, I don't see how we're going to be able to reach consensus on the broader issues.

MS. ROOKER: Well, maybe what we ought to do is have lunch.

(Laughter.)

MR. McELDOWNEY: Shirley?

MS. ROOKER: And we'll be a little bit more awake.

Yes? Who do we have down here? Judith?

MS. VIERA: Judy -- I think the message that we're -- use a little sign language to identify --

I think maybe what we should send a message to the Commission is that we would like to see a more forward looking look at this issue.

Many of the comments that have come up today are around the fact that things are changing very fast and if we just look at this very narrow way of assessing Universal Service that we've had in the past, we as consumers and as experts in the industry can see that we're going to be going nowhere fast.

We have declining revenues in this limited sector. We have increasing use of the Fund and we have technologies that are changing in ways that are going to make the whole world change. So that would be I think a message that we could send that would not be as narrowly focused on the NPRM which has a life of its own and has had a full comment period, anyway.

MS. ROOKER: Thank you, Judy. And on that note --

MS. WILLIAMS: Thank you, Judy.

MS. ROOKER: -- one more question. Where is -- who do we have? Oh, we have a question from the public.

Yes?

MS. WOODARD: My name is Gwendolyn Woodard. I'm President of Worldwide Educational Consultants.

Once AT&T and Verizon/Bell Atlantic had one bill. Now they are separate. You get the Universal Service fee on the Verizon bill and the Universal Service fee on the AT&T bill. What I want to know is how are those monies that's being collected from the AT&T side being used?

Question number two, will this Committee recommend to the Chairman to move the E-Rate program from the FCC to the Department of Education and recommend that to Congress?

So it's two questions.

MS. ROOKER: Who wants to answer the first part of that question? Rich

MR. ELLIS: I can take a little crack at it.

The Universal Service charge on the Verizon bill for most customers is just based on subscriber line charge. So it's about 50 cents. That's the majority of the interstate collection that we do.

The other long distance companies would collect a larger extent because most long distance calls are interstate but the money all goes to the same pot.

MR. DelCASINO: And I'll add to that. I think the fact that the AT&T bill and the Verizon bill used to be one for some customers, used to be one bill and now it's two bills, really doesn't change anything in terms of the payments that the customer made.

If AT&T long distance charges were included on a Verizon bill as part of a Verizon bill, there was a Universal Service Fund charge from AT&T on that bill. Now that you're getting the AT&T bill separately it's still the same Universal Service Fund charge.

MS. ROOKER: All right. Now as to the second question that you had, which has to do with recommendations, I'm certainly not qualified to answer that. Is there someone here that can? Scott? Can you respond to her?

MR. MARSHALL: I don't think I'm qualified, either, to respond --

(Laughter.)

-- to that question. Clearly, I think if you have concerns about this you can raise them also in writing to the Committee and we can circulate this item and maybe discuss it at a future meeting.

But keep in mind though that we are somewhat confined by our recommendations to what is within the jurisdiction of the FCC to do. If we -- we can certainly -- I mean, you know, excuse me -- you could certainly as a Committee make a recommendation for a statutory change. That's fine. But know that the FCC is not able to bring that about.

MS. ROOKER: Okay. Thank you. We're going to adjourn for lunch. Those members of the panel are invited to have lunch here -- of the Committee. For the rest of you, there is a cafeteria, where?

MR. McELDOWNEY: Courtyard level.

MS. ROOKER: Courtyard level, there are two cafeterias. Be back here at what time? 12:45? No, 1;00. Be back here at 1:00. Thank you.

(Lunch break at 12:14 p.m.)

(On the record at 1:05 p.m.)

MS. ROOKER: We're late. You've had five minutes of grace period.

(Pause.)

Thank you all for coming back. I would like to thank Susan Palmer and Cingular Wireless again for our lunch which was delicious.

Now I would like to -- we have, as was requested at our last meeting, we have speaking to us today someone that Dane Snowden, the Bureau Chief or CIB, is going to introduce. I'd like to turn the floor over to Dane now. Thank you.

MR. SNOWDEN: Thank you. I understand you all had a very spirited conversation about Universal Service Fund and I look forward to catching up more on that matter as we go forward.

It is my pleasure to introduce to you Marsha MacBride, who is the Chief of Staff to the Chairman and to the Federal Communications Commission.

Marsha, before coming back to the Commission, she worked at the Walt Disney Company for -- as the VP for Government Relations for again the Walt Disney Company. Before that, before she left, she actually was here at the FCC as a legal advisor to then Commissioner Powell.

So it is my pleasure to introduce Marsha and she will take some questions at the end of her remarks, as well. Thank you.

(Applause.)

MS. MacBRIDE: A long time veteran of the FCC. I came in 1991 and finally slipped out the door last summer only to be on the boomerang plan. Didn't know that, but I'm happy to be back and certainly happy to be working with the Chairman in the Chief of Staff position.

Good afternoon and welcome to the FCC on this very classic Washington, D.C. day. You can see about four feet in front of you outside. If you haven't been out in a while that's a good thing.

I'm pleased to have this opportunity to talk to this group and I'm really looking forward to working with you all on developing telecom policy that really focuses on the interests and the needs of consumers.

I'm also pleased that you've had this opportunity to meet Dane Snowden. Dane comes to this job with a tremendous amount of energy and a lot of new ideas and we're extremely excited to have him here.

Unfortunately, Dane is getting his lesson in patience, for some of you who work for the government would know, we don't move too quickly around here. So I keep saying, "Yes, we'll do that in due time." But he's getting used to that and a little more comfortable with it.

I promised you that our commitment, the Chairman's commitment, today and in the work of the CIB is great. As I'm going to talk about today, I want to give you kind of an overview of the role that we see with CIB and its relationship to this group and how that's so important in what we do and everything that we do at the Commission.

You've probably heard a lot of talk about competitive markets and I want to talk a little bit about consumers in competitive markets today because that's kind of the foundation of where we start from.

You know, I think if you look around the world and you look at what's happened in the latter half of the 20th Century you've noticed that a lot of countries that have tried different models, economic models, have come back to competitive markets as the model that best serves the overall needs of consumers.

But I think as we've also seen since the passage of the 1996 Act that competitive markets have their own set of unique problems for consumers. For instance, when we only had one phone company the government had a single point of contact. We could make a decision and that company could implement that decision across its entire network. You could reasonably and reliably predict the impact of a decision from the government on both the consumer as well as the company itself.

In a competitive market the actions of governments are a lot more complicated and a lot less predictable. Competitors have very different business models and different technical architectures. This makes the one size fits all rule very, very challenging.

In capital markets, as we have seen, sometimes can play an extremely volatile role in the continuing viability of competitors in a competitive marketplace. We have found that the need to coordinate with local and state officials on areas of consumer interest is great and is a challenge because it's spread across so many different entities across the country.

So now we're faced with the following questions, how do we develop policies for competitive markets that will ensure the consumers reap the benefits of those markets and how do we help protect consumers from market abuses?

Of course, answering those questions is why you're here. We're really looking forward to working with this group to help us focus on the issues and focus on what answers there are for us to use.

The Chairman recently gave a speech on his perspective on consumers and markets and I thought I'd take this opportunity to review with you a little bit of the highlights of that speech. I have copies of it as well which I will leave if you haven't seen it.

The main thrust of his remarks was to emphasize that everything we do is about consumers. I think this is an extremely important piece of how the Chairman looks at the issues that he faces and the Commission faces on a daily basis.

As public servants we only have one real client and that is the consumer. Competition policy that focuses on competitors but doesn't take that next step of looking at what the impact of those competitors are on the consumer sorely misses the mark.

In market economies consumers cannot be docile recipients of services but must be extremely avid, smart players. They must make decisions about what to buy and what price and those decisions can turn around and make or break a company's particular product line or even the long-term viability of the company itself.

So while government can take steps to promote competitors in a market it is ultimately up to the consumer as to whether the goods and services being offered by that particular company are particularly appealing.

So most of our emphasis so far has been trying to find ways to help consumers navigate through the maze of goods and services that are currently available by this very active, competitive market that we have. How do we do this?

Well, some of the following ways we think help bring FCC -- help the FCC bring consumers very squarely into the marketplace as very active and solid players.

The first thing we have to do is help manage expectations. When the government and the companies and the press are all touting new goods and services that have yet to be rolled out in any kind of a mass market way or have yet to be tested, we frustrate consumers. It's an understandable frustration.

It also can backfire in that they can then be turned off to particular goods and products that actually will be available, but it will take time for those services to be available to everybody at the kinds of prices people are willing to pay and with the kind of reliability people have come to be accustomed to, especially in communications services.

Brochures, consumer alerts, consumer forums, our webpage -- these are all ways that we try and reach out to consumers. As Dane always says, he needs to take the road show outside the Beltway. One of the things that we're really looking at is how can we bring all of this information that the FCC has in a very proactive way out to consumers instead of just sitting there expecting consumers to find us? So we're regularly challenging Dane. So far he's doing okay.

Customer confusion. We have to find ways that we can reduce or even eliminate customer confusion. They have to be able to make informed decisions. Managing expectations is a piece of that, but also the phone bills. Helping people understand how to read them. And helping people understand what the services are and have reasonable expectations of what they'll get from those services is extremely important. One of the main pieces of that is absolutely clarifying, doing everything that we can to clarify confusion.

We have a standard of efficiently trying to resolve consumer complaints. We continuously strive to improve our processes and we are really, you know, pleased that over the last year we have been able to take what's been in CIB and get rid of the backlog. So Dane's coming in thanks to his predecessor in a very nice way to come in and look forward.

We don't have a lot of backlog. We've got a lot of our times and our efficiencies down. Now the question is what's next? We're very excited about what we are -- have planned for that.

The other thing is is that we think that to protect the interest of consumers in market-driven economies that we have to be -- we have to have headlights on what's going on in the consumer marketplace through the complaint process.

We take in a wealth of information at our call centers. We're trying to develop new systems that will help us analyze that data, get that data back to the policy bureaus that work on particular areas and get solutions to that involved in the policies as they're being developed from the front end. That's an extremely important part of what we're doing now.

Accommodating special needs. We're very aware of our responsibility to work with organizations like yours and others to accommodate special needs because we know that there are some areas that the market just will not effectively address.

Congress recognized this in Section 255 and we have a concerted effort on trying to figure out ways we can work with groups to develop technology that will produce access for this community. This task force is absolutely crucial -- absolutely crucial to that endeavor.

We also are very focused on advancing opportunity in the communications fields. But finding ways to accomplish the goals of both introducing ownership and employment in the communications area is very difficult

to -- it's very challenging to find a way to do it that's Constitutionally sustainable by today's Courts.

As you're likely aware, the Chairman has also strongly supported the McCain tax bill, tax credit bill, and we are working with them regularly to try and move this in Congress because we think this is also a good way of helping consumers and more and more different types of consumers have involvement in the communications industry, both through employment and through ownership.

Finally, critically, it's our continuous struggle to find new and effective ways of improving access to the network. The fact that there are still large numbers of low-income individuals that are leaving money on the table that are designed to help them gain access to the system is just not -- it's not acceptable.

Only 30 percent of all of those low-income individuals that are eligible for Lifeline will actually take advantage of those services. We're committed to working with the states and local communities in developing increased participation in these low-income groups.

Access today means more than it ever has. Access is access to voice, it's access to data, it's internet. It's high-speed data. We are committed to doing what we can to facilitate as much access to this as we can in a reasonable manner, in a timely manner and in a manner, if I may go full circle, that is reasonably manages the expectations of consumers to these services and minimizes their confusion so they can be active players in the marketplace.

So I thank you for giving me this opportunity to share with you what we've been thinking about consumers. Hopefully, I've explained a little bit about how we envisioned CIB's processes in this.

We are committed to making CIB an active participant in every level of our process and, as Dane goes regularly knocking on all the Bureau Chief's doors, I can assure you he is a very, very active participant and a very avid proponent of his role and the role of CIB in everything that the Commission does. We're very happy to have such a strong leader in that spot.

I also believe that working through CIB this organization will be extremely helpful and crucial to our making the right decisions for consumers about the issues that are part of your charter and we're really looking forward to working with you through Dane to try and accommodate the needs of all of Americans as we move forward today. So thank you very much and I would be happy to take a few questions.

(Pause.)

That's quick. Been thinking about that one.

MR. McELDOWNEY: Yes. I was thinking about that one. I'm with a group called Consumer Action. I guess I wanted to sort of make a comment and then a question.

Consumer Action has a multi-lingual complaint hotline in English, Cantonese, Mandarin and Spanish.

A PARTICIPANT: Could you use the mike?

MR. McELDOWNEY: Oh, I'm sorry. I was -- my name is Consumer Action and we work with a wide -- with sort of the changing demographics. We have a complaint hotline in English, Cantonese, Mandarin and also Spanish. We work very closely with Federal agencies such as HUD, Department of the Treasury, Federal Reserve, in terms of translating and distributing their materials nationally in both Spanish and Asian languages.

I guess one of the real concerns that I've had I guess about the FCC in the past is that I think that they have been very slow in terms of reaching out to the diverse population in Spanish and Asian language to (1) resolve confusion, to educate and to make sure the complaints are received.

I'm just wondering what you all are going to be planning on doing in terms of both making your complaint hotline in Spanish and Asian languages but also in terms of getting your materials out in a wide number of languages.

MS. MacBRIDE: I'll let Dane answer the specifics of that, but it's certainly something that we have been thinking about very, very much.

One of the perspectives that Dane has brought to his job is that the Consumer Information Bureau is the Consumer Information Bureau, it's all consumers. He has really been focusing on how to make sure there's access to all American consumers of services and this is one of the areas in which he has also identified a need to move more quickly than we have moved in the past.

MR. SNOWDEN: To address your question specifically, we actually currently in our consumer centers, both in Gettysburg and here in Washington, if you call and you're a Spanish-speaker you can have another Spanish-speaker communicating with you.

The other languages we're looking into right now in terms of our outreach plan we are looking at the census data that is currently available telling us what is out there and what languages we should be targeting first. We have to make certain languages a priority over others.

Obviously, Spanish-speakers are definitely a priority in this country as we develop and also Asian-Americans as well. So we are moving in that direction with lightening speed.

MS. MacBRIDE: And the more gracious Congress is with our budget the more we'll be able to do in that regard --

(Laughter.)

-- without a doubt. Yes?

MS. GRANT: Hi! Susan Grant, National Consumers League.

The convergence of different kinds of communications and the emergence of interactive TV raise huge privacy concerns. I'm wondering what the Commission is doing to get out in front of that issue?

MS. MacBRIDE: We're very aware of those of those concerns, as well. We actually have been -- the Hill has a great concern about those things. I don't know how much of solving that problem is directly in the purview of the Commission.

But at the same time, one thing we really recognize and are trying to really work with Congress on is that we want to help be the technical experts. If Congress has to pass a law, if there has to be legislation of any kind that handles these things because we don't handle them, it's not within it, we want to make sure that we've got the independent, technical expertise and policy expertise that will be able to help Congress make those decisions.

So this is one of the areas that we look at, whether it be 911, the interactive television piece. It's hard when we don't know exactly what those things are going to look like yet, but I do think it's very important from the very beginning that we are very vocal about the needs for companies to be thinking about these issues as they move forward.

You know, you hope to some degree that the companies through either their own self-interest or otherwise will be active in protecting those interests as well so they, in fact, end up without having I think a lot of bad publicity that can come from mishandling privacy information. There's really nothing I think that upsets consumers more. Yes? I'll work around the table.

MR. BAKER: Hi! My name is Chris Baker and I'm with AARP.

I know through survey work that we've done that many of our members and many older people in general use wireless telephone service. What we couldn't find out from our survey work was how many had complaints or problems with their service and how many, you know, had drop calls or so forth.

I'm just wondering what the FCC is doing to record those complaints or publicize the complaints that people make about cellphone service?

MS. MacBRIDE: We are doing that, just for the --

MR. SNOWDEN: We've received several inquiries about the information, the complaint information, that we are currently gathering and we are in the process of gathering it and making sure it is accurate because once we release that information we realize that there will be people on both sides of the issues saying one thing about the information.

So what we're going to do is make sure the information is accurate and in due course time begin to release some of that information.

MS. MacBRIDE: The idea is to get it out, but the idea is to make sure that what we've got is accurate, and that what we've got reflects market trends and reflects problems, not little, isolated problems, but overall. We're trying to look at this from a very national point of view.

So we have -- wireless was our first one up so we're probably farther along on the wireless side than we are on some of the other sides.

You know, part of the technology and part of the struggle that wireless companies have for more spectrum is to fix a lot of the reliability issues. You've got to remember how young that service is. We sometimes think of it because we all glommed onto it so quickly that, you know, it's just a couple of years ago.

So it does not yet have the infrastructure for the type of reliability that you get in a wire line side. So we're really trying to work with companies to make sure that they use spectrum efficiently and in a manner that they can. The whole issue of getting polls out into the communities and the struggle with that all has to do with that.

So that's why when we want to make sure that when we release data that we have thought about it and its perspective. So it's again so we don't create confusion, we actually help to solve it. That's really where we are and we're very close on that, as well. All of that data has been going to the wireless bureau just so you know.

So as they focus through and help us understand it they are already kind of paying attention to any issues that have kind of arisen from it. So far I don't think they have found anything that has been anything more than what we expected to find in the complaint process as well. Yes, sir?

MR. SCHROEDER: Hi! Paul Schroeder with the --

MS. ROOKER: When you -- I'm sorry.

MR. SCHROEDER: Oops! I'm sorry.

MS. ROOKER: Go ahead.

MR. SCHROEDER: Who --

MS. ROOKER: Paul?

MR. SCHROEDER: Okay. Paul Schroeder, Alliance for Public Technology and American Foundation for the Blind. I have two questions for you. One has to do with infrastructure and I gather there might be another proceeding coming up on 706, but not so much specifically on that but what would you like -- what would be helpful for the Commission to hear from us around the issues of access to broadband services, making sure that consumers in all categories have access assured to them, what kinds of recommendations around universal service, if any, would be useful in that area? That's question one. I mean I think this issue of infrastructure deployment and development is pretty critical.

The second one is somewhat 255-related and that is are you looking at the impact on access to converged technologies, that is to say technologies with data and voice. But primarily 255 has focused on voice because of distinctions, but obviously there are a number of issues around data. We've already talked today about the fact that data has already surpassed voice in terms of its use on the lines.

So the question is what is the Commission planning to do to try to keep 255 up to speed with the reality of technology?

MS. MacBRIDE: Two very good questions. Let me answer your second question first. The Commission is following this as fast as we can in terms of what's available out there, what technologies are available out there. We have a -- on the technology side who has a group that just looks at what's going to be coming down the pipeline in terms of technology challenges for individuals with specific assess needs and also how we're going to conceptualize those in the rules and policies that we're putting out today.

You know, the FCC can do a lot but we don't always know exactly what the right answer is of what we should require. What's going to be effective? How is it going to be effective? Then certainly that kind of comes back to your first question and that's really what we're looking at from this group.

We look at the data. We can analyze the data about what we can see out there. We don't have great data, we're working on that as well, and that's 706 that's supposed to help us do that. From that we are supposed to be able to decide what kinds of trends are necessary.

But there are new products out there all the time. There are new ways that people are developing access. There are new technologies out there that don't have access as part of their thinking.

It really is kind of -- my thought that the focus of this group really talks about those things, tries to categorize them, tries to put them in a perspective that we can then develop some type of policy that would help effectuate the goals of getting more service to particular groups of people who for whatever reason aren't able to do so. And identifying where they are and coming up with some solutions about how to do that. That's the hard part, there's no doubt about it. That's the hard part. Yes, sir?

MR. GOLDBERG: Larry Goldberg from the National Center for Assessable Media, WGBH.

The Commission's done some wonderful things in terms of solving some of the marketplace failures in terms of close captioning and video description. The captioning rules have been tremendously effective. The video description rules were also well written, but as you know are now in the Court of Appeals being challenged.

Can you give us a little bit of an update on where that stands and how the Commission might be dealing with that?

MS. MacBRIDE: Stands right there in the Courts. I think that the biggest issue that we have with that is whether or not the Courts are going to sustain it given its statutory basis.

I think you find the one thing that we are really struggling with here at the Commission is having the do-overs. We have a lot of do-overs that we have before us now because we did not write rules sustained by a record that the Court would accept. As a result we are struggling to keep within the bounds.

So even if we don't take as big a step as we would like to take we've taken a step that the Courts will say, "Yes. Congress clearly included this within the authority which it gave you to do." That is a little bit more conservative in approach, but it's the approach that the Chairman has already spoken quite a few times about the way he'll take it, a much more judicial approach.

We will have to see, just like we did in the cable area. We will have to see what guidance the Court gives us about how far we can push in that area. They may think that what was there for statutory authority was sufficient, in which case that gives us a whole different set of roads to travel than if it sends it back and says, "You can't go near these things."

So right now, unfortunately, we've been on the -- you know, on the hurting end I think a little bit of the expanse of our authority independent of specific comments from Congress. The Courts have been very wary of giving us deference on issues and we're working very hard to repair that relationship. To do so, I think it's going to take some very kind of step-by-step approaches so we don't end up two years really have gone nowhere at all because we overreached the first time. Yes?

MS. WILLIAMS: Hi! I'm Andrea Williams from CTIA.

This morning Commissioner Copps reminded us that even as an Advisory Committee that we can't address everything. I think it would be helpful if you could give us some idea what are some of the -- if you give us the top four of five priorities in the Commission that we as a committee can have some impact and provide some guidance or advice to the Commission.

MS. MacBRIDE: That would be helpful?

MS. WILLIAMS: That would be helpful, mm-hmm.

MS. MacBRIDE: Well, I can certainly give you my list but I think given that charge I would prefer to work with Dane and the Chairman himself. Because they would be -- if you're asking for his priorities and the priorities of the Commissioners we could certainly pull that together for you. I think that would be extremely helpful.

I would agree that you can't be in all the places that you need to be at once. Let me take that back to Dane and we will work on what we think, or what the areas of the proceedings and the things that working out that your involvement in those we think are crucial to our coming up with the right answer. Okay.

MS. BATTAT: To follow-up to your response to Chris about publicizing the complaints, is that also going to include complaints on disability issues?

MS. MacBRIDE: Do we collect them that way?

MR. SNOWDEN: Yes, we do collect them --

MS. MacBRIDE: Then the answer is yes. We're really just -- it's a big project and it's a big project that has not been particularly funded. So we're now really getting to the point where we can develop data bases and we can develop processing of data that allows us to be effective in pulling together trends.

As long as we're collecting it we can move from there. What we'll do is we'll find areas that we're not collecting information that we should be and will modify them. It will always be kind of a work in progress.

Is that it?

(No response.)

Well, thank you and I'll let you get back to work.

MS. O'REILLY: Is it still possible to ask a question?

MS. MacBRIDE: Oh, sure.

MS. O'REILLY: This is Kathleen O'Reilly on the line. I have a question that might be in the category of something to take back to the Chairman and the Commissioners.

You've brought the message that the Chairman himself has reiterated that he views consumers as the number one constituency of the Commission and competitive markets being the superior way to protect them and that there are areas where competitive markets are not working. He has expressed frustration that finds in his view have not been sufficient to create the incentive for compliance with the law and is looking to make recommendations as far as increasing the Commission's enforcement rules.

I'm wondering beyond increasing fines at levels that would make it less profitable for there to be violations of the law. What specific other enforcement tools that the Commission already has is the Commission looking at to enforcing? Specifically, cease and desist or when information filed under oath is found to be false? In particular cases to turn these matters over for criminal prosecution or licensing revocation? Some of the other enforcement tools that would give consumers more protection than we've been getting with really inadequate fines?

MS. MacBRIDE: The issue of inadequate fines, obviously, is a very serious one and one we've been haranguing from the very beginning. The problem that we have is that fines are a deterrent mechanism. They're like triple or treble damages that you get in the anti-trust. We are not going to fix every little place that we find a problem, always.

If we have complaints that come to us that's fine, but in order to get companies and in order to make sure that our rules are respected and abided by across the country, it really requires that there be a deterrence effort. That's really the main part of those fines, to make it so if you get caught you get stung a little bit.

We're looking at lots of different ways to do it. That was actually one of the main goals of developing the enforcement bureau was to try and find more specific ways to permit the government to have an impact in the way that its rules are abided by across the country and it's been working on that.

Some rules, some statutory rules, allow us to have revocation as a solution and some statutory rules do not, so it varies from area to area.

But I think one of the things that we're really been successful on is identifying -- beginning to identify where there are greater needs in the enforcement bureau. I would actually probably leave it to David Solomon, who has spent a lot of time working and thinking about this to answer your question. But it is something we're absolutely committed to and we do look at fines as only a piece -- a piece of that solution, although I think an extraordinarily large piece of it. Okay?

MS. O'REILLY: Thank you so much.

MS. MacBRIDE: Thank you.

(Applause.)

MS. ROOKER: Now we are going to go into our breakout sessions and Scott will give you the logistics on that.

MR. MARSHALL: Indeed. We're breaking out into two groups this afternoon, the Disability Subcommittee -- I'm sure you know who you are but in case you don't, people with yellow badges will go to room 442, which is right again across the hall out the door here to my right and straight across the hall and down the hall past the turn to the restrooms, a few more yards and 442 is on your left.

Chairing that group today will be Jim Tobias. Thank you, Jim. Micaela will also be joining you via teleconference in that group. If you could be back here say at about 25 to --

MS. ROOKER: 3:40.

MR. MARSHALL: 3:40, okay, is the word from our Chairman. That would be great.

The rest of you in the blue and the pink, that is the Consumer Subcommittee and the Affordability Subcommittee. If you could stay right here we will be having a joint meeting with those two groups. Thanks.

MS. ROOKER: Actually you're meeting is from 1:30 to 3:30 and you get a 10 minute break.

MR. SCHROEDER: Shirley?

MS. ROOKER: So don't ever say we're too bad.

Yes, Paul?

MR. SCHROEDER: Paul Schroeder. Do we have a charge of what we're -- are we talking about this Universal Service thing? What are we doing?

MS. ROOKER: Well, in the -- with the accessibility -- the Affordability and the Consumer Subcommittees that are going to meet here, we are going to be talking about Universal Service.

The Disabilities Committee has its own issue -- list of issues and priorities that they're going to discuss because they're coming together to some consensus on their priorities. So does that answer your question?

MR. SCHROEDER: Mm-hmm.

MS. ROOKER: Okay. All right. Thank you very much.

(Off the record at 1:38 p.m.)

(On the record at 1:45 p.m.)

MS. ROOKER: Well, it was apparent to me this morning that there are so many opinions on the Universal Service Fund that there might be some items of agreement. I'm not willing to give that up yet, but I'm probably overly optimistic.

Andrea and Ken and I were discussing at lunch how we might proceed this afternoon. Perhaps what we should do is to spend the first hour or so looking at the many issues in Universal Service and then seeing -- because if we find that we can't reach an agreement, which I think is probably likely, it might be useful for us to see if we could come up with some differing opinions and being presented as that, not as recommendations but as some of the thoughts and concerns that we have about the various sections.

Those can be conflicting. They don't have to be, as I said -- it's not an opinion, but that these would be items that had been discussed by the Committee, subcommittees, and presented to the Committee. I don't know whether that's reasonable or not.

My goal was to see if we could come up with something to present to the Chairman. Certainly we're not going to present recommendations, it doesn't seem.

What is your thought on us trying to come up with maybe three or four items with -- or points of discussion with some of the various aspects of Universal Service Fund? Does that make sense? I'd like to hear -- I mean I'm just looking for a way for us to come up with something constructive. Belinda?

MS. NELSON: Thank you, Madame Chair.

I think we need to go back to the basics of the Universal Service concept, kept that in mind and try to keep some focus here for the subcommittee.

As I understand it, Universal Service is -- the concept is the ability for everyone in the country to afford telephone service. So the funds and the issue that we have before us as a subcommittee is to make that funding work.

So if we keep our focus on the funding -- and I speak on behalf of the unserved and undeserved population of this country -- and I'm all for making those populations have access to telephony or to technology or to information, so let's try to keep the focus on the funding issue and then perhaps from there my suggestion would be to build some kind of consensus on principles and how to get some kind of methodology for building these contributions from different carriers.

I do know and I understand that there's different technologies out there and, for instance, usage might not be feasible because of voice-over IP. That technology doesn't allow to measure for minutes of use so usage might be thrown out.

Concepts or principles such as being equitable, you know, have all carriers contribute in some manner that's equitable to all carriers. As the gentleman from Ericsson said, should be independent of technology because there's just such a wide array of technology here.

So maybe if we concentrate on principles of how to adapt that methodology then we won't be so torn on the different types of technology and maybe perhaps gain a broader sweep of how we're going to attack this issue.

MS. ROOKER: Well, actually Andrea and Ken are going to be running this meeting. I only put out my thoughts as a -- just to kick us off. So what I'd like for them to do is to take over and run it. I'm going to go take a nap.

(Laughter.)

MS. NELSON: Don't you dare.

MS. ROOKER: But, at any rate, I would like for them to take it over and go with it to where it may. Thank you.

MS. WILLIAMS: I think Nancy had --

MS. ELLIS: Nancy Linke-Ellis, Tri Caption Films. Hope nobody's on the phone line.

Really mine is more of a comment that anything -- and speaking from a deaf consumer standpoint, the more I hear the more confused I become.

I don't work for Verizon and I don't work for any of the major telephone carriers. But for somebody like myself who is an end user, and we sit here and we discuss whether it's, you know, current or projected incomes and I'm sitting here saying, "Well, does it -- where does my two-way pager fit in? Where does my PDA fit in? Where does my cellphone? Where do my bundled phone services?"

I think in order to make any kind of intelligent comment I would like to know how these are covered? My second comment is -- or at least what category they're specified in so that we don't get off on track of, you know, all the different things.

We talk about the revenues and we talk about how they should be discerned, but nowhere have I heard about the monies or the efforts put forward to developing the new undeserved areas. Obviously, we don't want companies to go under trying to, you know, provide for this, but on the other hand, when you have the Native American side that is under 30 percent coverage, somewhere that we'll call it development or increased outreach, I want to know where does that fit into all of the percentages of coverage and carrier fees?

MS. WILLIAMS: Michael?

MR. DelCASINO: This is Michael DelCasino.

I'd like to take off just for a minute, not for a nap --

(Laughter.)

-- but to take off for a minute on Belinda's notion of principles but maybe take it to a different level.

This is a consumer advisory committee so it seems to me that if we did anything we could pass along to the Chairman some principles against which to evaluate all of the comments that he's -- the separate comments that he's received from companies and industry and consumer groups and what not.

I'm just going to throw out a few thoughts, but one is the notion of simplicity. From a consumer perspective it seems to me anything that they do with Universal Service ought to be as simple as possible. I'm just making that statement. How do you define simplicity? We could probably talk for hours about that, but simplicity is a principle that they might want to undertake and that we can talk about a little bit, something that's easy to understand from the consumer perspective.

Then the other item is how do you communicate this change to consumers? This is an area maybe where this group could identify some ways where industry, the FCC, and maybe the consumer groups and associations, industry associations, could jointly put together some communication packages for consumers.

That should -- it seems to me that would ease the consumers minds if you see some sort of communication that's coming from the FCC and Verizon and AT&T and the American Association for the Blind and what not, that they would be, you know, a little bit more -- put a little bit more at ease.

So whatever the decision finally comes out to be if we could put together some communication package or something like that. That's -- just a few thoughts in that regard.

MS. WILLIAMS: So -- Susan?

MS. PALMER: I really want to support the idea of guiding principles -- I'm not on? Okay. Of guiding principles because I think that there are some things we can agree upon. We may -- and one of them might be that, you know, there needs to be more consumer involvement early on so they can understand the issues better and make informed recommendations.

Because I think -- I mean I have a good support system in my company and I still have a lot of trouble with this -- this issue. So certainly education sounds like it's a piece and there's some other issues. I think if we can focus our discussion on things we generally agree upon and things we can support. We could go back with some meaningful recommendations, even if it's not go with this technology or go with this process. But at least these are guiding principles in making decisions.

My only question is is that going to be useful to the people from the FCC or is there no one here who could respond to that?

MS. WILLIAMS: Ken?

MR. McELDOWNEY: Yeah. I think maybe -- I sort of like the idea of the guiding principle thing. Two that sort of came in my mind -- I know that one of the questions that they were asking was whether or not the surcharge Lifeline customers.

Certainly in California it's -- the Lifeline surcharge is not applied on Lifeline customers. I would think that that would be a guiding principle that we could have here just in terms of should not be on Lifeline customers.

The second one I think really would be that if, in fact, a company is choosing to pass on the surcharge to their customers, that they pass it on to all of their customers in an equitable fashion.

I guess I never thought that someone would be more cynical than me, but it never crossed my mind that long distance companies would negotiate contracts with large business customers in which they would tell them that they did not have to pay the surcharge. It never crossed my mind.

So I think that that would be a guiding principle, that if they're going to pass it on to their customers that they have to pass it on to all of their customers in an equitable fashion.

MS. WILLIAMS: Ken, one of the things that I'd like to follow-up on. First of all, I like this idea of guiding principles. I think that's something that we can all coalesce around. Unless I hear otherwise, we will proceed in that fashion.

Also, those who are sitting out in the audience, this is a subcommittee meeting and you are welcomed to provide us with your input, as well. One of -- oh --

MR. McELDOWNEY: Andrea, Rich has been having --

MS. WILLIAMS: I think, Ken, one of the issues that you just pointed out in terms of making sure customers can understand the simplicity, as Michael pointed out, I think all of us in this room would agree that the goal should be providing consumers with accurate and understandable bills with non-misleading information concerning the Universal Service Fund.

Is that a principle that everyone can agree to or --

MS. PALMER: Is someone charting these? I mean I hate to mention that since I can't read the chart, but that might be helpful if it's not being done.

MS. WILLIAMS: Pardon me? Susan, I can't hear you.

MS. PALMER: To chart the ideas so people can look at them in addition to listening? Is that a possibility --

MS. WILLIAMS: Yes. Can I have --

MS. PALMER: -- to have like a --

MS. WILLIAMS: -- volunteer who would --

(Pause.)

There's a chart right behind us. A volunteer who would write some of these guiding principles that we --

(Pause.)

MS. AYLWARD: I'd be happy to do it.

MS. WILLIAMS: Rayna has come.

MS. AYLWARD: Just one clarification before we move forward with the discussion.

Since there seems to be a general accord about focusing on guiding principles rather than going into technical --

MS. WILLIAMS: Recommendations, right.

MS. AYLWARD: So does this then place our committee, our subcommittee, as kind of an interim or an intermediary function so that we're not going to be making any specific recommendations, but we are going to be giving recommendations or general operating principles to yet another group that is then going to be composed of the different interest groups and they are the ones that are going to hammer out the actual --

MS. WILLIAMS: No. But I see the goal of the two subcommittees is that we would come up with -- try to develop some guiding principles and then when we get back with the other subcommittee have a discussion. These are the guiding principles that these two committees came up with and were able to get consensus on and have their input.

I'm sure there's maybe -- some people may want to broaden some of those guiding principles or shorten them. But at the end of the day that we will have one set of guiding principles that we all can vote and Shirley can put before the full Committee to vote and adopt, but that

they --

MR. McELDOWNEY: That would then go to the

Chair -- to the Chairman of the Commission as a -- in essence, our recommendation to the Chairman would be the guiding principles.

MS. AYLWARD: So instead of actually coming to any kind of resolution about whether --

MR. McELDOWNEY: Right.

MS. AYLWARD: -- the revenue -- the --

MR. McELDOWNEY: Right.

MS. AYLWARD: -- the revenue should be on current or billed or all of those things. In effect, we're taking the questions that were brought to us and putting them in a different framework and then we're kind of handing it back to the Commission saying, "You still have to make all of the decisions."

MS. ROOKER: Well, that was not our goal initially, but the discussion this morning when we talked about it, it seemed to me that there were so many divergent opinions that we'd never get to a consensus.

Now if you think that there are some issues that we can find consensus we are not precluding putting together consensus opinions for the major committee.

MS. AYLWARD: I'm not -- I'm seeing that that's the case and, in fact, even in the e-mails that we -- even within the corporate industry representatives who are responding there wasn't -- there wasn't consensus among them about the particular answers.

So it's just -- I think it's leading to a somewhat different definition of what our group is doing. That's the only point I'm making.

MS. WILLIAMS: Right. Instead of having -- getting specific responses for what was passed out today we have now jumped off -- this has only been a facilitator to get to where we are now --

MS. AYLWARD: Yeah.

MS. WILLIAMS: -- in terms of looking at this in terms of guiding principles as opposed to specific recommendations.

I think, as Ken and Shirley and I were talking at lunch today, I think that our time is better spent in coming up with either if there is, as Shirley pointed out, a divergent -- different opinions rather than coming up with recommendations.

Belinda had another idea which were principles which a number of people in here now agree that maybe that is the best approach. That is why I asked if everyone thought that was a better approach.

Believe me, I -- me, personally, I am not wedded to this. As I said, I'm here -- I see my role as helping to facilitate discussion to get us to where everyone believes they can have some input and come out with something that we can provide the Commission to give them some guidance, whether they be guiding principles -- I don't like to use the word "recommendations" because it gets back to this original document.

But, yes, we are going down a different -- a little different route and that's fine.

MS. ROOKER: Rich has a question.

MR. ELLIS: My comment's a little out of sync but it's so rare that Verizon and AT&T agree on a lot of issues I wanted to --

(Laughter.)

-- highlight them when we do.

(Laughter.)

MS. WILLIAMS: Well, we don't even agree sometimes on wireless here.

(Laughter.)

MR. ELLIS: Until one of us buys the other.

(Laughter.)

But I think Mike is right on target, that no matter what we do here our overriding priority has got to be to try and foster more education of consumers about what Universal Service Funds are for. Regardless of how it's collected and who pays for it, the bottom line is customers don't understand what it is even when they understand the words on their bill.

To say Universal Service Fund is meaningless to customers. I'll tell you an anecdote that came out of one of customer advisory board meetings recently where Pat Wood, the Chairman of -- the former Chairman of the Texas Public Service Commission, was speaking about a complaint he got from a customer in Valentine, Texas who didn't want to pay the Universal Service fee.

He said, "Well, that's about $1.00 on your bill." She said, "That's correct." He said, "Well, do you realize that it costs about $1,000 a month to provide service to you in Valentine, Texas and you're paying about $8 a month and you have the choice."

(Laughter.)

All of a sudden the Universal Service fee seemed real good to her.

(Laughter.)

I think if a lot of customers knew what the Universal Service Fund was they'd be more supportive of it.

I know from Verizon's perspective we get lots of calls from customers who don't know what it is and are complaining about it on their bill. I know the FCC does, as well. So we really need to focus on the good, social good, this Universal Service Fund does so that customers will support it.

Second of all, while I've got the mike I wanted to do a blatant plug for a website that was set up by several of the phone companies that were involved in the Calls Coalition in coordination with USTA. For those who don't know what the acronym stands for, it doesn't make any difference.

A lot of the phone companies got together and put up a website that lists the qualifying information for Lifeline and link up services by states. It's probably more applicable to service organizations rather than individual consumers but it's www.lifelinesupport.org. You can click on your state and then click on the phone company that serves you and it talks all about the requirements for Universal Service and Lifeline funding for your organization or your state.

With that, I surrender the mike. Thank you.

MS. WILLIAMS: Susan?

MS. GRANT: I think it makes a lot of sense to go down the road we're heading down now. There really are two issues, one is how the companies are assessed for the fund. I don't think we want to go there.

Then the other issue is how our individual subscribers assessed, which I think we can identify some basic principles to put forward to the whole council.

Then the other thing I just wanted to remind people is that it's a better thing to talk about public education than consumer education, especially since I think at least a fair number of people around the table think that business customers should share the responsibility for these costs to be passed along to them one way or another, either as a separate line item or as part of the rate that they pay.

I think it's important for everybody who in one way or another contributes to this fund to understand the social benefits and the importance of it. So let's not just think that residential consumers need this information, but talk about public education broadly.

MS. WILLIAMS: Let me summarize so far. Thanks, Rayna, for volunteering. Some of the guiding principles that have been discussed: simplicity, public education --

MS. AYLWARD: Simplicity for consumers and not necessarily --

MS. WILLIAMS: I can't hear you, Rayna.

MS. AYLWARD: Simplicity will be more to the public and not --

MS. WILLIAMS: Right.

MS. AYLWARD: --

MS. PALMER: And equity I think, simplicity and equity.

MS. WILLIAMS: I'm sorry, Susan.

MS. PALMER: Simplicity and equity I think are one.

MS. WILLIAMS: Yes. Equity in terms of that all of --

MS. PALMER: That we all share --

MS. WILLIAMS: Share --

MS. PALMER: -- share the responsibility.

MS. WILLIAMS: -- share the burden or share the responsibility. Another guiding principle is public education.

MS. PALMER: Not just consumer education.

MS. WILLIAMS: Not just consumer education, but public education on the social benefits of Universal Service.

(Pause.)

MS. AYLWARD: We can call that the Valentine,

Texas --

(Laughter.)

MS. WILLIAMS: Ken, you had mentioned --

MR. McELDOWNEY: Well, I was wondering whether or not -- and it sort of shades a little past or principle. I wondered if there would be consensus around a sense that the surcharges should not be applied to Lifeline customers since they're benefitting from it.

A PARTICIPANT: Madame Chair, that is the requirement from what I understand. One of the orders is that Lifeline customers are not charged anyway, so it's already mandated to all carriers --

MR. McELDOWNEY: I think --

A PARTICIPANT: They're not to be charged --

MR. McELDOWNEY: -- that was one of the questions that was raised in the NPRM.

A PARTICIPANT: Mm-hmm.

MS. WILLIAMS: Could someone from the FCC staff -- and I believe you're correct, that the --

MR. GARNETT: My understanding is that -- is that price cap -- local exchange carriers as part of the Calls Order are not permitted to collect Universal Service charges from Lifeline customers. Rate of return, local exchange carriers, still have that ability to assess Universal Service charges on Lifeline customers, I believe. If someone knows something different --

A PARTICIPANT: --

MR. GARNETT: Right, yes, that's also true.

MS. WILLIAMS: Susan?

MR. McELDOWNEY: Wait. I think -- was there -- is a sense that would there be a consensus on that around the table on exclusion of Lifeline customers?

(No response.)

MR. McELDOWNEY: Okay. Good.

MS. WILLIAMS: I would have to abstain because from a wireless standpoint we don't have Lifeline customers. Am I --

(Multiple voices.)

MR. McELDOWNEY: Certainly that's one of the issues that are being considered in states like California in terms of whether or not there should be -- given the -- given the penetration rate of wireless, whether or not we should start considering wireless as a -- you know, as a possibility of Lifeline service. You just hold your hand up half up.

(Laughter.)

MS. WILLIAMS: Okay. That's -- I can tell you, I would not be able to speak for CTIA in terms of whether wireless could be part of the Lifeline program. That is something -- that is an issue that I would have to take and get Board approval.

MR. McELDOWNEY: Well, I guess the way I worded it, basically, was that wire line customers -- I mean

Lifeline customers would not be subject to the surcharge. So it seems like that's independent. I don't think -- it seems like you would still be able to support that. It's just that sentence as opposed to broadening it.

MS. WILLIAMS: Yes?

MS. PALMER: I think it's just uncomfortable since we're not -- it doesn't impact -- I mean --

MS. WILLIAMS: Right.

MS. PALMER: -- I would feel uncomfortable responding because it doesn't impact us directly. So I can't really weigh the consequences, but I certainly wouldn't oppose, either.

MR. McELDOWNEY: Okay. That's a fair way of saying it.

MS. WILLIAMS: Mike?

MR. DelCASINO: This is Mike DelCasino. To try it another way, maybe we could state Ken's idea as a principle that, for example, Lifeline -- that the Commission when it's evaluating -- when it's coming to its decisions regarding Universal Service Fund should consider exemption for Lifeline customers as a principle.

MS. PALMER: Yeah. You could even broaden it to say -- I mean for specific categories such as Lifeline or situations where you have the need in terms of accessibility for two lines for the same functional equivalency. So there might be a broader way of saying it that would incorporate that if people are comfortable with that, that there are sometimes specific circumstances that may make exceptions necessary.

MR. McELDOWNEY: Right. Certainly that's one of the things we've done in California when there's been two line -- when there's a need for two lines for the single line functionality, they're both entitled to the Lifeline coverage.

MS. WILLIAMS: Susan?

MS. GRANT: I don't want to quibble, but I do.

(Laughter.)

MR. McELDOWNEY: Next?

(Laughter.)

MS. WILLIAMS: Okay. You know, that's fine.

(Laughter.)

MS. GRANT: I wonder if people would be agreeable to substituting easy to understand for simplicity. Simplicity makes me a little nervous because it could be read as recommending a flat rate scenario which --

MS. WILLIAMS: I see.

MS. GRANT: -- a number of people, including myself, have concerns about. It might be the simplest thing to do, but maybe not the most equitable thing. So if there was an easy to understand way of computing it that would make me more comfortable.

MS. WILLIAMS: Rayna?

MS. AYLWARD: --

MS. WILLIAMS: So we would change that to easy to understand?

MS. AYLWARD: Understandable.

MS. WILLIAMS: What about what I said earlier in terms of accurate, easy to understand, and not misleading?

MS. O'REILLY: This is Kathleen O'Reilly. It seems to me that to state as a principle something that is already law is not particularly useful. The truth in billing order of the FCC already compels that what is disclosed is supposed to be truthful and not misleading.

By the same token, if I understood the principle with respect to Lifeline, did I understand that as it's now worded up on the board, it's for the FCC to consider exempting Lifeline and potentially other customers?

MS. WILLIAMS: No. Susan, do you want to rephrase?

MS. PALMER: I think -- I probably didn't word it well, either. But it is to say to the FCC that there may be exceptions that need to be examined. These could include the Lifeline and the other issues around accessibility.

Somebody else, I'm sure, can word it much better but that was the thought that I had.

MS. O'REILLY: Well, considering that they are currently exempted and the Commission through its NPRM has already indicated it is going to consider that, it just seems redundant to ask them to consider something they've already said they're going to consider.

That we should either make it a strong principle that we export exclusion for Lifeline customers or say nothing.

MS. WILLIAMS: Kathleen, I don't know if you heard the conversation that Susan and I had in terms of our reluctance to even address Lifeline customers because wireless does not have Lifeline --

MS. O'REILLY: Right. And I understand that many people around the table from industry need to abstain. Even though it may not affect your company, the precedent is something that strategically your principles may not want to have on the books.

But I think that the consumer and disability representatives around the table would, hopefully, be in a position to either support or not to support the exemption for Lifeline customers and that that should be the driving force behind our committee.

MS. WILLIAMS: What should be the driving force?

MS. O'REILLY: -- point in asking the Commission to consider exceptions that exist and to consider keeping them when, in fact, they've made it very clear they are going to consider keeping them.

MS. PALMER: I also said that I wouldn't oppose if that's something that the rest of the group is talking about. Certainly I think maybe it's to open it up and get a sense from the other consumers, as well, if they feel strongly about it or not.

MS. WILLIAMS: Michael?

MR. DelCASINO: Well, I guess I would just ask why did the Commission ask the question in the NPRM?

MS. WILLIAMS: Good point.

MS. PALMER: Right. Right.

MS. O'REILLY: I think it's very disturbing they asked the question and that this is our opportunity to take away any doubt as to where we stand.

MR. McELDOWNEY: Yeah. I mean I think that one of the things I just sort of am looking at there in the NPRM and one of the issues they raised is they are worried or expressed concern that exempting Lifeline customers would cause a sharp fall in the fund. So it looks like there are already pressures to start collecting it from Lifeline customers.

MS. O'REILLY: Absolutely.

MR. McELDOWNEY: So I think it's important for us to state that we do not believe -- recognizing the need to put it in the principle, that we do not believe that Universal Service contributions should be collected from Lifeline customers.

MR. KALTENBACH: I'd like to propose -- this is Matt Kaltenbach. I would like to propose that there's one of two possible avenues we could take here.

If we choose to go through developing guiding principles, the Commission has in its NPRM provided us six specific scopes within their introduction which in general describe the problems and then we have the opportunity of providing guiding principles towards the scope of those problems and some guidance.

If we choose to get more specific into the actual structural inadequacies of it I would think that would require a more detailed approach of the rest of the NPRM.

But we could probably be more effective by providing some guidance towards at least a feedback or some form of consensus view on the top six scope items in the introduction without getting too much detail from the rest of the NPRM.

That would allow us at least to be concise. It will at least give us a voice and potentially take off line some of the more technical issues of the NPRM.

MS. O'REILLY: This is Kathleen O'Reilly.

MS. WILLIAMS: Kathleen, wait, wait, wait. One second.

MS. O'REILLY: All right.

MS. WILLIAMS: Nancy has been waiting patiently.

MS. O'REILLY: But mine is a follow-up to the point I made, if I might.

(Laughter.)

All right. I'll wait until I'm identified.

MS. NELSON: No. Go ahead. Go ahead. I'll wait.

MS. WILLIAMS: Go ahead, Kathleen. Nancy said she'll wait.

MS. O'REILLY: I think that this issue illustrates one of my concerns about the Committee composition and our mission and how we reconcile the inherent divergent between some of these issues as to where the consumer disability community would come out and where industry would come out.

I am not wedded to the need for us to achieve consensus on every issue if by achieving consensus it means that some of the more peer consumer disability issues get eliminated from the table because they don't rise to the level of being at such a lowest common denominator.

I very much would like there to be a recorded vote on the issue of whether Lifeline customers are or are not to be billed for Universal Service Fund and would not like it removed from the table simply because there is some concern that we could not reach consensus on it.

MR. KALTENBACH: I think the issue here is that we're trying to be responsive to the timeframe that's been provided by the NPRM to file ex parte comments.

I think that I also agree that there's a need to provide substantive and detailed responses, but that should be the result of proposals and comments by individuals that get worked -- in committees potentially after we file ex parte comments.

MS. PALMER: Is there any reason not to do a straw man at this point?

MS. WILLIAMS: Could Nancy --

MS. O'REILLY: I didn't hear that point.

MS. WILLIAMS: Excuse me. Could Nancy finally

get --

MS. ELLIS: I just want to say this because I think maybe this is why we've gotten a little derailed.

When we put number three on the board of guiding principles it had to do with public consumer education. Basically, what that was is (1) to explain to the public at large what, you know, the --

MS. WILLIAMS: What Universal Service Fund --

MS. ELLIS: That's right. What it is; and (2) who benefits and who is eligible for the Lifeline?

I think what Rich said about somehow explaining, you know, the social good will also help bring in more people who will use the Lifeline because, as I understand it, most of the people who are eligible for it don't even know about it. So I think we were talking more about an education principle rather than deciding who would be exempt and who wouldn't.

MS. O'REILLY: I thought it was a separate principle.

MS. WILLIAMS: Susan?

MS. GRANT: My understanding is that they are separate principles. I think that this is a really, really important issue. If we can't agree on this basic issue that for those kinds of carriers who are making those charges now and who might in the future, that we all agree that people who meet the criteria of Lifeline should not be charged the fee that enables them to get that benefit.

If we can't agree on that then I don't know what we can agree on. This is something that I think, you know, the consumer and disability people, and I imagine a lot of the company people as well, feel really strongly about.

The people who feel that for some reason they can't voice an opinion on that particular issue if they don't object to it and wish to abstain, then I'd like to see a show of hands if that would be an order for the ones that would support that principle as opposed to the ones that would actively object to it.

MS. WILLIAMS: Let me -- let me -- before we close the discussion there's Belinda, Rayna, Joseph and Chris.

MS. NELSON: Thank you, Madame Chair. I don't know why it's so complicated to decide on whether or not we want to exempt Lifeline users.

You know, I'm looking at material here that was supported our telephone company about the NECA tariff and it states in there that in Tariff 3.9 it exempts Lifeline customers from the charge.

As I understand it, as the gentleman from the FCC staff mentioned, price cap carriers charge their end users. But right now there's an order, from what I understand, that will allow rate of return carriers to also pass on the charge to the customers.

But in the NCCA tariff -- I have it before me -- I mean the information regarding the charge, that in Section 3.9 of their tariff they exclude Lifeline customers from this charge but, nonetheless, I believe we should just from a consumer standpoint state that we support the principle that these customers should not be charged these charges and should be exempt whether or not we're industry or otherwise. Thank you.

MS. WILLIAMS: Rayna?

MS. AYLWARD: I agree with everything everybody has said.

(Laughter.)

I agree with everything and disagree with everything. But I am -- with all of the passion I feel for the Lifeline principle and the exemption seeming to he equitable, I'm still caught by the example of employment -- unemployment benefits and social security benefits, disability benefits, all of which are charged income tax.

So there is a precedent for the Federal Government taking with the right hand what it gives with the left.

MS. WILLIAMS: --

MS. AYLWARD: One other thing. If it's based on a flat fee then it's one thing. If it's based on a percentage of the bill and the Lifeline consumers are paying considerably less, then maybe there's a little bit more wiggle room in that regard in terms of equity.

MS. WILLIAMS: Joseph?

MR. GASKINS: I just had a real quick question just out of curiosity more than anything else.

But are there -- is there anybody sitting around the table today that would have issue with number two, as well, the equity side? The reason I ask is because I would imagine that would put carriers potentially in a difficult situation, too, if that's something that hasn't been brought to the Board it would eliminate a negotiated table for the people, for their salespeople.

MS. WILLIAMS: I'm sorry. I didn't catch the last part, Joseph.

MR. GASKINS: I just said that because it could potentially eliminate a negotiating tool for their salespeople if you were to say that you couldn't waive universal charges. I was just wondering. Anybody have an issue.

MS. WILLIAMS: Okay. Chris?

MR. BAKER: I just want to strongly support Susan's comments about the need to have a vote on this.

I think it is important for consumers to be able to say or for this group to be able to say where they stand on this basic issue.

Then also I wanted to make sure we didn't forget Kathleen's point before about the possibility of exempting everybody from this charge and not having a line item fee. It seems to fit with what Michael was saying about simplicity and equity. Is that something you would be interested in, exempting the fee?

MS. WILLIAMS: Aren't we then getting into --

MR. BAKER: Issues more?

MS. WILLIAMS: -- more of the issues rather than the --

MR. BAKER: Okay.

MS. WILLIAMS: -- guiding principles?

MR. BAKER: Well, I mean --

MS. WILLIAMS: Well, Mike, let me let you speak for yourself.

MR. DelCASINO: To me this is almost like a -- it's almost we're talking -- it seems like we're talking all around ourselves. I think I can say unequivocally AT&T doesn't charge the Lifeline customers USF. So it's not an issue here for AT&T.

I thought we were going down a path of trying to establish guidelines for the Commission to use when they evaluated the substance of the USF NPRM, the substance of the comments. If we can -- if we can stick to that then we need to stay away from the specific substance of the NPRM. One of the specific substantive items in the NPRM was whether or not to charge Lifeline customers? We shouldn't answer that question if we're going to stick to producing guidelines.

That doesn't mean that we can't say that the Commission should -- that one of the principles that the Commission should apply when it evaluates the USF comments is that its current procedures for exempting Lifeline customers and perhaps even expanding those exemptions where applicable.

MS. WILLIAMS: Right.

MR. DelCASINO: Some kind of language like that. You're putting a very firm principle in front of them against which to analyze all of the comments that they have in front of them, but you're not specifically answering one of the substantive issues in the proceeding.

MR. BAKER: My second question about that though is if we're describing principles about Lifeline charge and what it should be haven't we already assumed then or does that imply that we should have a Lifeline charge?

MS. WILLIAMS: No. I think what Michael is saying is that we're not going to be telling the Commission whether they should or shouldn't. That we look at it in terms of a principle.

Mike, you just so eloquently stated that --

MR. DelCASINO: I've never been accused of that, by the way.

(Laughter.)

MS. WILLIAMS: Pardon me?

MR. DelCASINO: I've never been accused of that --

(Laughter.)

-- being eloquent.

(Laughter.)

MS. WILLIAMS: That when the Commission is looking at all of the comments, the reply comments that they receive in ex parte communications, that there are certain guiding principles that they should look at.

Now when do they get to the issue of whether there should be exemptions for any particular group that this group may want to say that the Commission may want to consider continuing the exemption for Lifeline and other -- what was the word you used, Michael? And other --

(Pause.)

I'm sorry? Any other?

MR. DelCASINO: Lifelines and in case there are, you know, other similar circumstances.

MS. WILLIAMS: Circumstances where applicable.

A PARTICIPANT: Right.

MS. WILLIAMS: So that gives the Commission a framework in reviewing these comments. It does not -- we don't say, "You know, this is what you should do on Lifeline." It doesn't take a yes, a pro or a con. It remains neutral.

MR. DelCASINO: And by the way though, part of the way that I phrased it said that one of the principles would be to at least continue the exemptions as they are in existence today and perhaps expand them to other areas as applicable.

MR. KALTENBACH: I think we may have found the first thing we can agree on today, Michael.

MR. DelCASINO: We'll see.

(Laughter.)

MR. JAMES: I just want to go back to what Joseph said. I just would like to revisit a statement by Joseph about equitable, the equitable application of USF.

It should be equitable to all entities and not just specific and it should also be applied to wireless, as well. Western Wireless is a good example of the most recent company that is using USF funds.

MS. WILLIAMS: I'm sorry. Rich?

MR. ELLIS: I'm going to address both Joe and Chris' equitable and the line item fee.

In our discussion of Universal Service I think we need to take a step back and really look at this as what it is. It's a social program that in the best of all possible worlds -- and I think I heard Kathleen say this earlier

on -- so it's a wonderful day of agreement for everybody here. In the best of all possible worlds, this would have been funded through an income tax that would have hit everybody.

But, politically speaking, the reality is it's a social program that has to get funded by somebody. The question is does it get funded by the users, all the users, just some users, or does it get funded by the companies which means it gets funded by the shareholders?

If the shareholders fund it it's a tax on them. They're going to say, "Well, why should I invest in this company, you know, paying this money when I can go and invest someplace else and get a better return?"

So the question isn't, you know, can we take this line item off the bill and pretend it's not going to exist? Somebody has to pay for all of these services.

So when we talk about expanding Lifeline or expanding Universal Service to cover other things, remember that the bottom line is somebody has to pay for it eventually. The question is how to do it most equitably?

We heard earlier that some people said we shouldn't allow companies to pick and choose who they put the fund on. And the theory was that the business customers aren't paying it and the residential customers are taking flack. But if it were slipped the other way I'm sure that many folks would say, that's a great idea, you know.

So there's two sides to every issue and I think what the companies are saying is, "Give us the flexibility in terms of how we assess it on consumers and as long as you make it explicit of how it's coming out then consumers can decide whether that makes sense or not."

MR. BAKER: Well, wouldn't you have the flexibility if you didn't charge them that fee and you could -- once you get them on your network then you can charge them for call waiting or call forwarding or -- not call waiting and call forwarding, but bundled services?

You certainly get the benefit of having people on your network and not having that fee might increase the amount of people on the network.

MR. ELLIS: Well, that would make sense if the money -- for example, we collect in Massachusetts or let's take Washington, D.C., which is a low-cost area.

The people in Washington, D.C. are paying on their phone bills to subsidize people in other parts of the country, Montana, Utah, West Virginia, where the costs are high, you know. So in theory if we sold a lot of services here, you know, we could subsidize the services here but that doesn't help people in Montana. They're never going to sell enough Caller ID in Montana to subsidize the cost of providing local service in Montana.

MR. BAKER: Well, I disagree about the subsidies, of whether D.C.'s subsidizing Utah, but I understand.

MS. WILLIAMS: Larry Sargeant from USDA.

MR. SARGEANT: Just on this gentleman's point. One of the things you have to look at in Section 254 is the fact that -- and this is reiterated by the Fifth Circuit -- Universal Service must be explicit.

We are moving from a system that has Universal Service embedded in the cost of service to taking it out and making it explicit, which is why we have an explicit fund today and an explicit funding mechanism ad it's why the rate of return carriers, in fact, who have their Universal Service recovery in their access rates were ordered by the Fifth Circuit Court of Appeals within the last six months to take it out and make it explicit.

So the law requires that it be explicit and that you not recover it in your rates to customers for other services.

MS. GRANT: This isn't the problem that I have with reaching consensus on the equity point then, Rich, is whether we would agree that it's equitable if, in fact, consumers are -- residential subscribers are bearing the entire cost.

MR. ELLIS: Well, first of all, I don't think that residential customers are bearing the entire cost.

But when you look at telecommunications services I don't think anybody's just paying for their own service, everybody's sort of being subsidized and -- as to others. I'm sure a lot of business costs are subsidizing residential services as well and so we're trying to get more to where things pay for themselves.

MS. O'REILLY: Kathleen O'Reilly. I'd just like to be in line at some point.

MR. McELDOWNEY: Okay. Rich, I guess one of the questions -- one of the concerns I have is that certainly I think that's true and I think it's --

One of the issues I guess is when a Federally-mandated surcharge where I think a consumer would assume that residential and business customers were pay it equally. My guess is that consumers -- if consumers learned that 50 percent of the large business customers were not paying it because it was negotiated out of a contract, and they were paying it instead, and that's why their rate was 10 or 12 percent as opposed to 6.1, my guess is there would be some real issues there in terms of whether or not they would consider that equitable.

MR. ELLIS: Again, this isn't really a Verizon issue because in our case it is everybody getting charged, which is my understanding.

But the other thing is that it's not a Federally-mandated surcharge, as the FCC will be the first to point out. The companies are required to pay into the fund but how they recover it my understanding is --

A PARTICIPANT: Right.

MR. ELLIS: -- it's their prerogative. Is that right, Larry?

MR. SARGEANT: Well, you just can't embed it in your other rates.

MR. ELLIS: Right.

MS. WILLIAMS: No, you can't.

MR. SERGEANT: -- subsidy in your other rates.

MR. ELLIS: Right.

(Pause.)

MS. WILLIAMS: Rayna?

MS. AYLWARD: I think in some way we're getting as involved in the equity and resource division here in discussion as involved as it is on income tax and whether it's going to be progressive or recessive and how the people have lots of money to pay little taxes and things like that.

We're not -- we're not going to get any answer there and we're not going to be able to solve the IRS situation. It's there because, it's not the best but it's the only way that we seem to be able to do things.

So given this very, very complicated situation in which we have so many decentralized telephone companies and we don't have the kind of universal resourcing that maybe really something as broad as this should be.

I think both as consumers and as industry we're interconnected and we have to realize that there's just -- there's a limited pie. The pie is -- in this case it's basically on the industry to portion -- to divide up, to resource this fund.

If we have continuing use of the fund -- in other words, there are more and more areas that we're going to be funding out of that -- it can't be coming from that same pie which, in fact, is shrinking in terms of what's happening economically now.

As consumers if telephone companies keep having to pay more and more to this fund, they are going to have to reduce something somewhere or charge more. They're not going to charge more if they can help it so that they remain competitive.

So what will happen is it's like the parallel between what's happened with directory assistance. As companies have had to reduce their expenses in some ways, they've reduced the services for 411.

If you look at the parallel with public education, which we fund out of private property, in areas where the property taxes go down, the services to the schools go down. So I think taking it back to the whole issue of equity, it needs to be equitable on all sides, on the industry side, on the consumer side, because really it's interconnected.

So as we're thinking about, oh, we want to -- and, yes, we do want to expand. There are more and more underserved communities, and there are more and more people that need accessibility, yes, but keeping it within the context of what is achievable in our situation.

MS. WILLIAMS: Well, that said, Rayna, I think we should move on in terms of the guiding principles.

Right now we have easy to understand, equitable with respect to industry and consumers, public education. And I don't think we reached any -- well, no, Mike DelCasino suggestion that the Commission at least keep the exemption for current programs and possibly consider expansion to other. Am I wording that correctly, Mike?

MR. McELDOWNEY: Current, not program exemption.

MS. WILLIAMS: Pardon me?

MR. McELDOWNEY: It's current exemption, I think, not program. Right? Maintain the current -- the current exemption for Lifeline customers and possibly expand it which again --

MS. PALMER: I think we may want to qualify the expansion, too, in terms of what I raised was a very specific issue in terms of basic communication where you need two lines.

MR. McELDOWNEY: Mm-hmm.

MS. PALMER: Similar to what you're talking about in California. I think we need to narrow it a little that way otherwise it just gets more confusing than helpful.

It's a very small percentage of the population but there are people who need two lines for one line functionality because of disability.

MR. McELDOWNEY: Well, I think he is probably talking about the -- which I think was considering expanding it to rate of return carriers, as well.

MR. DelCASINO: From my perspective --

MR. McELDOWNEY: Yeah.

MR. DelCASINO: -- that's one way that it --

MR. McELDOWNEY: Yeah. That's one way. So I think it's not just two lines, there's a big one in there, as well.

MS. WILLIAMS: I'd like to hear from the FCC in terms of the NPRM, the issue with respect to Lifeline and other programs were considering expansion. My sense is that the FCC has a concern that the fund is going to come up short and how they're going to make up that funding. Is it going to be through carriers? Is it going to be through consumers? Is that correct?

(Pause.)

MR. GARNETT: This is with regard to the Lifeline issue specifically?

MS. WILLIAMS: Right, mm-hmm. The reason why you were asking that question, the way I read the NPRM was you were asking that question in the context of if we exempt -- continue the exemption for Lifeline and even expand it to other programs, what does that mean in terms of the shortage in the fund?

MR. GARNETT: Right.

MS. WILLIAMS: And how should the FCC make up for that shortage?

MR. GARNETT: Yeah. I mean any time we're talking about reducing the pool of revenues from which we would assess contributions, of course, we're concerned about that but I don't think specifically we were targeting Lifeline customers --

MS. WILLIAMS: Okay.

MR. GARNETT: -- as an area of specific concern. I think we raised that issue generally throughout the notice of proposed rulemaking.

MS. WILLIAMS: Okay.

MR. GARNETT: And the other issue is that even if we were to extend the current prohibition that we have on the recovery of Universal Service contributions from Lifeline customers, we may still access Universal Service contributions on Lifeline revenues.

So it might not necessarily be as big of a reduction in terms of the pool of revenues that we could assess as if we just did not assess on Lifeline revenues.

MS. WILLIAMS: Okay.

MR. GARNETT: -- at all. Thank you. Steve?

MR. JACOBS: Thank you. One thing that occurred to me, and I don't know if this would be possible, and I guess the members of industry would have to say whether or not this is doable, but we really can't calculate the financial impact of any of our recommendations. For example, what was just discussed.

Would it be possible to put together some type of a spreadsheet that would be -- that would fairly represent the different variables of this formula? I mean there has to be some kind of a formula to calculate the total amount of funding and determine whether or not a set of recommendations will meet that or not rather than just to approve a set of recommendations.

If we had that to work with I think it would help us to understand how reasonable whatever it is we recommend is, and whether it really makes a large enough difference to make sense. Does that make sense?

MS. WILLIAMS: Yes, yes. Rayna?

MS. AYLWARD: Absolutely, Steven. That actually -- you need to look at both sides of the equation. We've only been looking at the resourcing part but we need to look at the expenditure part, too.

If we had some kind of a spreadsheet or a list of variables, we would also be able to look at the uses of the fund, how much we basically have to deal with under different circumstances and have to look at the actual appropriations and the span of the fund before we start saying, "Well, it has to cover this and it has to cover that and it has to cover that."

I mean basically we have -- we don't have a zero sum game here. We do have a limited amount of resources.

A PARTICIPANT: Are you --

MS. WILLIAMS: But don't we also --

A PARTICIPANT: Sorry.

MS. WILLIAMS: -- aren't we then also getting back to getting away from the principle that these are just guiding the -- guiding the Commission in terms of when they look at the substantive comments?

MS. AYLWARD: I think this is like a principle to suggest to them that when they're going through their deliberations that they have such a calculus to take into account and that it looks at both the amount of resources available --

MS. WILLIAMS: I see.

MS. AYLWARD: -- and the needs that can be addressed by it.

MR. KALTENBACH: I think what's being proposed --

MS. AYLWARD: Can we --

MR. KALTENBACH: -- is a functional model on both the supply side and on the expenditure side. Yes, spreadsheet just models where the allocations are going.

MS. WILLIAMS: Rayna, can you put that up on

the --

MS. AYLWARD: Because that does have implications for consumer groups.

MS. ROOKER: I just wanted --

MR. JACOBS: Does --

MS. ROOKER: Oh, excuse me.

MR. JACOBS: Can industry to an agreement on how to define the different variables? I don't have a sense for that. I don't really know the answer to that.

MR. KALTENBACH: I think the recommendation would be to have the Commission go off and authorize the construction of a model that would allow the explanation of both the revenue income and the expenditure outgo of the program.

MR. JACOBS: Thank you.

MS. WILLIAMS: The only thing I -- Larry, did you?

Because I think one of the things that I want to point -- hasn't the Commission already done that?

A PARTICIPANT: Yeah. I mean wouldn't we assume that they were doing it?

MS. WILLIAMS: The cost methodology?

MR. SERGEANT: Yeah. We should --

A PARTICIPANT: I can't believe they haven't.

MR. SARGEANT: Before you reinvent the wheel, you might want to have the Commission staff check with USAC and see the data that USAC already collects in administering the funds and see what's available and whether it meets your needs.

One of the difficulties in industry going to other members of industry to populate a spreadsheet on revenues is that's competitively sensitive information, and I can't imagine industry would want to attempt that.

But to the extent that there is information that has to be reported to the USAC in order to administer the fund both on the collections side and probably on the disbursement side, that is probably a place where you may already have what you need and maybe it would be worth just checking before the Commission commands anybody to gather more data.

MS. WILLIAMS: Michael and then Shirley.

MR. DelCASINO: Maybe now it's time for me to throw the bouquet the other way to Verizon.

(Laughter.)

A PARTICIPANT: God bless you!

(Laughter.)

MR. DelCASINO: I think in one of the comments that Rich sent around, and maybe this becomes another principle, that this is not to be -- the Universal Service Fund should not be considered as a profit center.

MS. GRANT: Right.

MR. DelCASINO: I think those were your words.

MS. GRANT: Right. Right.

MR. DelCASINO: So, therefore, the amount of expenditure has to equal the amount that you collect from the consumer.

MS. GRANT: Okay. We added -- oh, can I say something?

MS. WILLIAMS: Shirley and then --

MS. ROOKER: Well, that's okay. They're -- I'm waiting to say something else.

MS. WILLIAMS: Oh. Susan?

MS. GRANT: I want the bouquet.

(Laughter.)

We also though added that we thought that it would not be unfair for companies to recover the cost of implementing the program.

We agree that it should not be a profit center for the company. It should not be -- they should not unfairly profit. But we do think that it's also reasonable to say companies could recover the cost for administering the program.

MS. WILLIAMS: Is that a principle we want?

MS. GRANT: That's one I would put in.

A PARTICIPANT: Yeah, I don't have any problem --

MS. GRANT: But I didn't get any flowers. I'm sorry.

MS. ROOKER: Sure you did, Susan. We're sending them to you.

(Laughter.)

MR. DelCASINO: I'll talk to you later.

MS. WILLIAMS: Is that a principle that -- another principle that we want to --

Can someone take over -- oh, Rayna's going in.

A PARTICIPANT: Thank you, Rayna.

MS. WILLIAMS: Susan?

MS. PALMER: Companies should not unfairly profit from collection of universal service funds but should also be able to recover costs for implementing the program.

MS. GRANT: But do you need the word "unfairly" should not profit from? Because recovering their costs would not --

MS. PALMER: Yeah.

MS. GRANT -- be a profit.

MS. PALMER: Yeah. That's okay.

(Multiple voices.)

MR. McELDOWNEY: Susan, I guess --

MS. GRANT: I think that's fair, you know.

MR. McELDOWNEY: Susan, the question I have for you, would you consider a company that did not charge their large business customers and then like say increase the rates on the residential customers. Would that be profiting from?

MS. PALMER: That's a really tough question because I would say personally --

MR. McELDOWNEY: This determines whether or not you get your flowers.

MS. PALMER: Yeah, okay.

(Laughter.)

I may or may not.

I would say that I'm not so convinced that the consumers are always carrying the burden for the businesses and that it doesn't work the other way. So without knowing that, it's hard for me to answer.

I know that when I -- and I don't know Verizon, so don't get made at me, Rich. I have two -- if you have two lines, if you have a business line and the consumer line, the business line costs a lot more. I don't know why, but I suspect it's to help with some of the other things. Am I misquoting that?

MR. ELLIS: That's my understanding, as well. And also, just --

MS. PALMER: So I --

MR. ELLIS: While we're talking about the waiving of fees, I just want to make it clear that it's not just businesses that get the fees waived.

For example, Verizon's long distance company, which is a whole different part than I really represent but just FYI, has several plans for consumers, I think five or six plans. One of them does not charge Universal Service fee on their customers.

So it's not just businesses don't get charged and residents do. It's the flexibility to charge some customers and not others with the end result being that the amount of money that we collect from customers is the same as we send out to the Universal Service Fund.

MS. PALMER: And I would also say that if you were a customer and you're paying a lot more for something you can go somewhere else. At least that would be my sense.

MS. O'REILLY: This is Kathleen O'Reilly and I'm still on line. I just want to make sure that I'm on the list.

MR. McELDOWNEY: Oh, go ahead.

(Laughter.)

MS. O'REILLY: Well, I'll start from that last point on the subsidy because it's the second time it's been raised. Although for years it was true that business customers subsidized residential and local service, in at least eight or 10 years it's been just the opposite.

Every state commission that has looked at that issue using the local phone company's data has concluded that residential customers are subsidizing business, the most recent such finding coming out of Georgia.

But my real question was one of clarification. I'm not sure if we're proceeding in sort of brainstorming fashion or whether we are actually as this morning going through points in trying to vote on and wrap them up individually because I thought I had a motion on the floor for which there had not yet been, and maybe never will be a second, as to a recorded vote on the Lifeline exemption issue.

I was not aware that in deciding to focus our discussion on guiding principles rather than individual, specific items in the NPRM, that we had precluded our ability to take as a guiding principle something that is a specific issue in the NPRM.

I didn't think it was either/or. And, therefore, I want to repeat my desire that we as a subcommittee actually vote on whether or not we do or do not support exclusion of Lifeline customers from being assessed a Universal Service fee.

MS. WILLIAMS: Kathleen, this is Andrea. Your motion I think was modified in that --

MS. O'REILLY: It can't be modified unless I say so. I mean I can either accept a friendly amendment or we can scrap my motion and start anew, but that's why I'm confused about how we're proceeding. It sounds like we're kind of bouncing back and forth between equity and public entity and --

MS. WILLIAMS: Well, I'll tell you what, Kathleen. We will take a vote on whether to accept your motion and then we will move to -- if it's accepted, fine, we'll move on. If it's not accepted then we'll look at the amended motion as Mike DelCasino put forth.

MS. O'REILLY: But it sounded to me -- and again I apologize, I'm handicapped by being on the phone and not there maybe to hear everything -- that the reason it was being sort of pushed aside was on some underlying assumption that in discussing guiding principles we would not and could not address anything with such specificity as to then wander into the arena of taking a position on the NPRM?

MS. WILLIAMS: That's correct.

MS. O'REILLY: And that's my question.

MS. WILLIAMS: That's correct.

MR. McELDOWNEY: Kathleen, I may have a different -- sort of a slightly different perspective on it.

As I understand it, given sort of the role of the subcommittee and the full Committee, since the recommendations would be coming from the full Committee, I would think that if you're seeking an actual vote on the Lifeline exemption that it should come before the full Committee and not the subcommittee.

MS. O'REILLY: I guess I don't understand why we cannot take or at least try to take a position on recommendations that are specific if, in fact, the Consumer and Disability Committee, the majority, can reach some kind of a position.

I understand from this morning's discussion that the odds of us doing that on most things is slight to nil. But I stated at the outset, and I think Susan agreed and others that if there's one issue I would think that the Consumer and Disability representatives could come to an agreement on is the exclusion of Lifeline customers from this assessment.

MS. WILLIAMS: Kathleen, it was the process that we agreed to at the beginning of the subcommittee was that we would -- and as you may recall the discussion that Rayna raised the issue of whether we were going down a different path and it was agreed that we would go down a different path in terms of providing -- looking at guiding principles to help the Commission to -- when they sit down to review the substantive comments that are already in the docket that these are guiding principles that they will use in reviewing and evaluating those comments.

That we are not here to determine yay or nay, you know, if A than B. What this Committee is working on -- is providing guiding principles for the FCC with respect to how they review the substantive comments.

Now I agree with Ken, if the consumers that are on the Board and industry members on the Board, as well, on the Committee, the full Committee, that want to address specifically whether we should vote yay and nay on the Lifeline, I agree with Ken, that is an issue that can be raised at the Committee level.

But at the subcommittee level we have agreed, again, that we are going to look at guiding principles so -- to give the FCC when they are looking at the substantive comments. Susan then Shirley.

MS. GRANT: I agree with Kathleen that this could be seen as a guiding principle, however. Also, in terms of process, correct me if I'm wrong, but this subcommittee or this combined subcommittee we are going to hopefully by the end of our subcommittee meeting adopt recommendations that we then give to the full Committee, the full council, for its consideration. Is that correct?

MS. WILLIAMS: No.

(Multiple voices.)

MS. GRANT: Because that's what I --

MS. WILLIAMS: -- let's get rid of that word "recommendations." That what we are going to -- to tell the full Committee, "These are guiding principles. There are no specific recommendations. We all agree, there are no specific recommendations that we can give the Commission to the issues that were originally brought earlier today because there is a divergence."

MS. GRANT: Are we --

MS. WILLIAMS: But we can't --

MS. GRANT: -- are we trying to agree on these principles though?

MS. WILLIAMS: Right.

MS. GRANT: Okay.

MS. WILLIAMS: Okay.

MS. GRANT: So then I think the only problem here is that some of us are seeing this as a principle.

MS. O'REILLY: Exactly.

MS. WILLIAMS: Okay.

MS. GRANT: And I'm having a hard time understanding the difference between Mike's wording and the more straightforward espousal of that principle. I welcome your explaining it, but --

MS. PALMER: Can I ask just an access question?

MS. WILLIAMS: Sure.

MS. PALMER: Can I hear the two different wordings? Because they probably are written down somewhere but I don't know what they are now because I'm confused. So if we could get just like a side-by-side. What did Kathleen say and what did Mike say and how much do they differ?

MS. O'REILLY: Thank you.

MS. WILLIAMS: Kathleen? Mike?

MS. O'REILLY: Mine, which I consider both a principle and a specific position on the NPRM is that Lifeline eligible customers may not be assessed for Universal Service costs.

(Pause.)

MS. WILLIAMS: Mike?

MR. DelCASINO: I don't know if I can do this again.

(Laughter.)

MS. WILLIAMS: You were so eloquent.

MR. DelCASINO: Okay. To preface it a little bit, to me that statement gets right at one of the very specific items for consideration in the NPRM. So I have chosen not to word it that way, but I guess I'll try and reconstruct what I was suggesting.

What I was suggesting was that we provide the Commission with a principle that says when you are evaluating the substance of the NPRM issues that you consider -- I believe I said maintaining the existing Lifeline exemptions at a minimum and perhaps extending them where circumstances are -- where it's appropriate. Something like that.

(Pause.)

I think it pretty much -- frankly, I mean I think it pretty much -- pretty much says the same thing. It leaves a little bit of a door open for however the substance of the NPRM comes out. When the Commission is considering all of those factors in the NPRM they've got -- you know, they've got some latitude as to how they treat Lifeline, but when they do decide to treat Lifeline they treat it with this principle in mind.

MS. WILLIAMS: Rayna?

MS. AYLWARD: After all, we are in Washington where every little nuance of a word like, you know --

(Laughter.)

-- what is the definition of "is" kind of thing. So I think that maybe the basic difference, the nuance difference, between a recommendation and a principle is the recommendation says, "You should do such and such." The guiding principle is, "It's important to consider."

So I think isn't that what we're saying here, that it's important to consider this particular factor --

MS. WILLIAMS: Exactly.

MS. AYLWARD: -- but we're not saying --

Kathleen, does that make sense?

MS. O'REILLY: Well, it goes back to my original point, they're going to consider it anyway so I don't know why we need to even expend time on such a policy guideline. I don't see that's it's either/or, we either take a vote on the specifics of the NPRM or we have guiding principles.

If, in fact, there's an overlap, as I think there is here, then I think we should proceed to test the waters to see if there is an agreement.

MS. WILLIAMS: Well, let me ask what is the pleasure of the rest of the members of the subcommittee? Do you want to choose which version you want or --

Okay.

MS. AYLWARD: Could we just maybe make for the record that there was strong feeling on the part of some members of our subcommittee that there be this emphatic support for the principle? Could that be part of our recommendation? Because, obviously, it concerned a number of us --

MS. WILLIAMS: Mike?

MR. DelCASINO: Let me try and add maybe just a slightly different perspective on this.

Suppose in the course of the development of the Commission's conclusions with respect to the USF issue they are considering expanding exemptions for some reason. I have no idea whether that's even a possibility, but suppose they were.

If we were to say that they should exempt Lifeline, and not say anything about any other exemptions, haven't we kind of not -- we've kind of locked them out a little bit? You know, we can always --

MS. O'REILLY: I disagree. There is nothing --

(Multiple voices.)

MR. DelCASINO: -- have the option.

MS. O'REILLY: -- in the language that says that and they can refer to the transcribed minutes of this meeting to be the equivalent of a legislative history to ensure that they do not read into it that unintended interpretation.

MS. WILLIAMS: But the thing is this was not a legislative history, and it was already stated that we would not just give the transcript to the FCC. There were a number of members on the Committee who felt that that would not be appropriate, particularly when there were some members who felt that they were not at a place where they felt comfortable commenting.

MS. O'REILLY: Yes. I've not suggested that the minutes of the meeting be given to the Commissioner so that they can interpret the recommendation. I am saying that it is already a given the transcribed minutes of this meeting will be available to them or anyone else.

So if before they do or do not cite such a recommendation if it were approved by this Committee either in their opinion order, or in their own discussions and wanted to ensure that they were not misinterpreting it to be so narrow as to preclude and expansion of exemption they could have access to the minutes for that purpose.

MR. BAKER: Well, why can't we say what Kathleen said, Lifeline customers may not be assessed for Universal Service charges and then also say if there are other circumstances where it is appropriate to expand that we should do that, as well? I mean if that's your concern I think that would get to it.

MS. O'REILLY: But the exemption then could bring in the business customers that can and several of us have expressed a concern about a different treatment of business versus residential customers.

I'm concerned about anything so open-ended as appropriate. I'd rather state that our recommendation that Lifeline customers not be assessed Universal Service charges should not be construed as a prohibition against amy potential consideration of an expansion.

But I would want all of us to have an opportunity to comment on such a proposal rather than give an almost carte blanche preapproval to whatever is open-endedly considered appropriate.

MR. BAKER: Fine. But can deal with it -- with your first thought first, and then talk about the considerations second?

MS. O'REILLY: Certainly.

MS. WILLIAMS: Okay. I'm going to take one more comment. Then right now let me make sure I have this straight, we were getting ready to vote on two different definitions, one would be -- that would get right to the specific NPRM recommendation and the other would be providing a guiding principle.

MR. BAKER: Yes.

MS. WILLIAMS: And even the one that is a recommendation has been amended by Chris.

MS. GRANT: I think they're both being offered in the spirit of being principles.

MS. O'REILLY: Yes.

MS. GRANT: I'd like to --

MS. WILLIAMS: Okay.

MS. GRANT: -- make that clear.

MR. BAKER: And I'm not --

MS. WILLIAMS: Principles, okay.

MR. BAKER: And I wasn't --

MS. WILLIAMS: Susan?

MR. BAKER: I'm sorry. I wasn't changing his motion. It's his motion so, you know, it's just a suggestion.

MS. WILLIAMS: Oh, okay.

MS. GRANT: Yeah.

MS. WILLIAMS: Susan?

MS. PALMER: I'd like to propose a friendly amendment to Mike's, which is --

(Laughter.)

-- to put residential in there, which I think addresses Kathleen's.

But I'd like to know how people feel on both? Are people pretty much comfortable with both? If that's the case maybe we should bring that to the full Committee on vote on, you know, which they like better. I don't know.

MS. PALMER: We could do that.

MS. WILLIAMS: Okay. We've got three motions on the floor now.

(Laughter.)

MS. PALMER: And waiting.

MS. WILLIAMS: Okay.

MS. ROOKER: Why don't we just take them in order?

MS. WILLIAMS: Okay.

MR. BAKER: Isn't Michael's motion -- that's two issues. One issue is Lifeline customers and the other issue is other possible exemptions.

MS. WILLIAMS: Right.

MR. BAKER: Can't we vote -- are we going to vote on Michael's -- the first part of his --

MS. WILLIAMS: No. We're going to vote on the -- the first part is what Kathleen --

MR. BAKER: Right.

MS. WILLIAMS: -- said that Lifeline eligible customers may not be assessed for Universal Service Fund costs, period.

MR. BAKER: But I think -- I think that's slightly different than what he was --

MS. WILLIAMS: I know.

MR. BAKER: Okay.

(Multiple voices.)

MR. MARSHALL: Let me finish.

MR. BAKER: Okay.

MS. WILLIAMS: The next motion is the one that Mike --

MS. PALMER: Right.

MS. WILLIAMS: -- put forward is when you are evaluating the substance of an NPRM -- the substance of the comments to the NPRM that the FCC consider maintaining the Lifeline exemption and perhaps consider -- wait a minute --

MR. BAKER: Expansion.

MS. WILLIAMS: -- perhaps they consider -- when you are evaluating the NPRM that they consider maintaining the existing Lifeline exceptions at a minimum and perhaps extending them where circumstances are appropriate.

The third motion that Susan just put on the table is to amend -- which one?

(Laughter.)

MR. WALSH: It's just -- no, it's as Mike -- it's clarifying as appropriate for residential customers as appropriate.

MS. WILLIAMS: Are appropriate --

MS. PALMER: And I was asking Mike if he felt that would be a friendly amendment?

MR. McELDOWNEY: I'm not sure it's needed for Mike's --

MR. BAKER: -- as appropriate?

MR. McELDOWNEY: Yeah. Because it's -- his specifically talks about Lifeline.

MR. BAKER: Right.

MR. McELDOWNEY: And extending the Lifeline exemption.

MS. PALMER: And Lifeline is --

(Multiple voices.)

MS. WILLIAMS: Okay.

MR. McELDOWNEY: And it says basically residential, anyway.

A PARTICIPANT: Do you want to withdraw that?

MS. PALMER: Yes -- Kathleen's point, but I can withdraw. That's fine.

MR. McELDOWNEY: Yes.

MS. WILLIAMS: Okay.

Okay.

(Laughter.)

On the first motion, all of those who would like to put before the Commission a principle which states that Lifeline eligible customers may not be assessed for Universal Service Fund costs. First I need a second on that motion.

MS. AYLWARD: Second.

MR. McELDOWNEY: Second.

MS. WILLIAMS: Okay. Second by Rayna. All those in favor of that wording please say aye.

MR. McELDOWNEY: Raise your hand.

MS. WILLIAMS: Raise your hand.

(Pause.)

Shirley, can you count?

(Laughter.)

A PARTICIPANT: If she takes off her shoes.

(Laughter.)

MS. ROOKER: Eight.

MS. WILLIAMS: Eight?

MR. McELDOWNEY: Eight.

MS. WILLIAMS: Kathleen?

MS. O'REILLY: I support the motion.

MS. WILLIAMS: That's nine for. Those opposed?

(Pause.)

Six.

A PARTICIPANT: Which one is number one again?

MR. McELDOWNEY: Kathleen's.

(Laughter.)

MS. WILLIAMS: Okay.

MR. McELDOWNEY: It was Kathleen's.

MS. WILLIAMS: The principle that Lifeline eligible customers may not be assessed for Universal Service Fund costs. Those in favor -- there were nine in favor.

A PARTICIPANT: I'm sorry. I -- I --

MS. ROOKER: Who's in favor of it?

MR. McELDOWNEY: Too late.

MS. AYLWARD: Butterfly ballot.

MR. McELDOWNEY: Too late.

(Laughter.)

MS. WILLIAMS: Okay. Are you saying, Rayna, that you're opposed?

MS. AYLWARD: I was for the one that Mike proposed.

MS. WILLIAMS: Okay.

So that's eight, seven. How many abstaining?

(Pause.)

Okay. The motion passed that we will use the principle Lifeline eligible customers may not be assessed for Universal Service Fund costs.

MS. ROOKER: Keeping in mind that we're recommending this to the committee. We're not saying --

A PARTICIPANT: Right.

(Multiple voices.)

MS. ROOKER: -- for the committee.

A PARTICIPANT: Right.

MS. WILLIAMS: Okay. Yes. Are there any other principles that we would like to --

MR. McELDOWNEY: Well, now --

MS. WILLIAMS: Yes?

MR. McELDOWNEY: -- Mike's principle. Mike's principle.

MS. ROOKER: Well, you can't introduce both of them, can you? I mean --

MR. BAKER: Well, sure, because he's --

(Multiple voices.)

MR. BAKER: -- been non-Lifeline.

MS. ROOKER: We can all vote on it too.

MR. McELDOWNEY: Huh?

MS. WILLIAMS: I'm sorry. Ken, can you speak in the mike because I can't hear you.

MR. McELDOWNEY: Oh, I'm sorry. Did you want to vote on Mike's, too, or are you assuming that because Kathleen's passed, Mike's wouldn't pass?

(Multiple voices.)

A PARTICIPANT: I'm confused.

A PARTICIPANT: I'm confused, also.

MS. PALMER: I thought we were voting number one was Mike.

MS. WILLIAMS: Okay. Let's do this again now.

(Laughter.)

The first motion --

MS. PALMER: Could we make this any more --

MS. WILLIAMS: -- is a principle proposed by Kathleen O'Reilly that states, "Lifeline eligible customers may not be assessed for Universal Service Fund costs."

All those in favor of this language raise your hand.

MS. ROOKER: Didn't we vote on this already?

MR. McELDOWNEY: Yeah. But there was confusion.

A PARTICIPANT: We're doing it again.

MS. PALMER: I thought the point was to find out what -- if there was a strong preference for one over the other. So it might be better to say vote for one or two.

A PARTICIPANT: Yeah.

MS. WILLIAMS: Oh, okay.

MR. McELDOWNEY: That's good. I like that.

MS. PALMER: And then that gives a sense of, you know, is there a strong majority --

MS. WILLIAMS: Oh, I see.

MS. PALMER: -- one way or the other.

MS. WILLIAMS: So you're saying it's not either/or?

MS. PALMER: Yeah.

MR. BAKER: Could you read Mike's again, just the first part of it? Because I don't think -- I think he has two parts to his and I don't think the first part seems that much different or I'm not sure if the first part is different.

MS. WILLIAMS: Okay. Let me read the first part.

(Multiple voices.)

MR. BAKER: Consider. So that is a difference --

MS. WILLIAMS: Okay.

MR. BAKER: -- a big difference.

MS. WILLIAMS: The first -- let me read Mike DelCasino's proposed principle. "When the Commission is evaluating the substance of the NPRM that the Commission consider -- consider maintaining the existing Lifeline exemptions at a minimum and perhaps extending them where circumstances are appropriate."

MS. PALMER: That's number two.

MS. WILLIAMS: That's number two. The difference, the first one says, "Lifeline eligible customers may not be assessed for Universal Service Fund costs, period."

MR. BAKER: Could -- could we --

MS. WILLIAMS: The second one says that we provide the Commission with the principle that says, "When the Commission is evaluating the NPRM or the comments to the NPRM that it considers maintaining the existing -- the existing Lifeline exemptions at a minimum and perhaps extending them where the circumstances are appropriate."

MR. BAKER: So couldn't we just compare apples to apples here and say the first part of Mike's versus Kathleen's and then the second part, which Kathleen doesn't talk about --

MS. WILLIAMS: Right.

MR. BAKER: -- in her motion would be the third? Would be another --

MS. ROOKER: Well, there's two. There's two.

A PARTICIPANT: No. Mike's --

MS. ROOKER: You can't do that.

A PARTICIPANT: No.

MS. ROOKER: You can't split them.

MR. BAKER: Okay. That was my question.

MS. ROOKER: There's one and there's two.

A PARTICIPANT: Yeah.

MR. BAKER: All right.

MS. ROOKER: One is Kathleen's, the second one is Mike's. I think the suggestion that we vote for either one or two makes a lot of sense.

A PARTICIPANT: Exactly.

MS. ROOKER: So why don't we just vote -- who wants to vote for number one?

(Pause.)

Six.

MS. WILLIAMS: Six?

A PARTICIPANT: And Kathleen?

MS. ROOKER: Kathleen?

MS. O'REILLY: Yeah.

MS. ROOKER: And Kathleen is seven.

MS. WILLIAMS: Seven.

For number two?

(Pause.)

Eight for number two.

MS. ROOKER: So number two carries?

MS. WILLIAMS: What about is anyone abstaining?

(Pause.)

Four people are abstaining.

(Pause.)

Okay.

MS. ROOKER: Moving on.

(Laughter.)

All right. Could I --

MS. O'REILLY: Was this done simply by a count of hands or is this a recorded vote?

MS. ROOKER: It was a count of hands.

MS. O'REILLY: I would request a recorded vote.

MS. ROOKER: I don't know what you mean.

MR. McELDOWNEY: You want paper ballots?

MS. O'REILLY: No. I would like the minutes to reflect which members voted which way.

MS. ROOKER: Oh.

MR. McELDOWNEY: Kathleen, I think that's a little too --

MS. ROOKER: We've got to move on. We've only got 15 minutes left and we really have a lot of other things. We've spent about 45 minutes debating between two issues. Couldn't we move it on? Could I make a motion that we move on?

MS. ROOKER: Do I hear a second? Do I hear a second?

A PARTICIPANT: Second.

A PARTICIPANT: Second.

MS. WILLIAMS: Moved and seconded. We move on. All those in favor?

ALL: Aye.

MS. WILLIAMS: All those opposed?

(No response.)

All those -- any abstentions?

(No response.)

Let's move on.

MS. ROOKER: Yes. I wanted to bring up something as a principle that Susan Palmer had brought up earlier that I don't think made it our list. And that was -- and I thought it was very interesting -- she said the early consumer involvement in issues that are going to be raised before the FCC, before the Commission, and I -- so that we're involved early in the process of development.

I thought that was -- would be a very good guiding principle. Somehow, Susan, thank you very much, it didn't make it to our list.

MS. WILLIAMS: Okay. Involvement of consumers.

A PARTICIPANT: Is this -- does this Committee --

MS. WILLIAMS: That would be under public education.

MS. ROOKER: I think it would be -- no. This would be --

MS. WILLIAMS: It would be a separate --

MS. ROOKER: -- making certain -- well, the Committee or the consumer. I don't know. You would have to ask her how she --

Susan, what did you say?

MS. PALMER: Well, it was early consumer involvement on issues like this, but particularly in Universal Service, any movement forward.

I think this also goes with Judy Harkins' recommendation earlier that we're forward thinking in the approach.

(Pause.)

MR. McELDOWNEY: Yeah. Judith isn't here but -- and I can't remember the -- but I thought it made a lot of sense. I'm just not exactly sure what the wording was. But do you remember it more, Susan?

(Pause.)

I think it was -- I think it was more that encouraging the FCC to in a sense to look --

MS. PALMER: Right.

MR. McELDOWNEY: -- forward thinking as opposed to backward thinking because --

MS. PALMER: Right.

MR. McELDOWNEY: -- so much of this NPRM is sort of already dated.

MS. PALMER: Right. And maybe -- and maybe I should --

MS. WILLIAMS: Judy -- oh -- Judy had mentioned that with rapid -- with rapidly changing technology it is important that the FCC look forward with respect to Universal Service Fund contributions.

A PARTICIPANT: Right.

MR. McELDOWNEY: That's good.

MS. ROOKER: But I think this is broader, not just Universal Service. What Susan Palmer had said was much broader.

MS. WILLIAMS: Okay.

MS. PALMER: And maybe I should -- might qualify by saying consumer and industry or a joint --

MS. ROOKER: Yes. I think both.

MS. PALMER: Because I think that that would be helpful maybe to avoid some situations in the future that are not as clear.

You know, the thing that I'm finding here that, you know, there's actually probably more disagreement within the industry than there is between industry and consumers. But there's a lot of opportunities here to find some common ground where we can approach issues and prevent problems and miscommunications that we have, or complexities here that we have.

MS. AYLWARD: Shirley, if I could just ask, would you consider this Committee itself to be one of consumer involvement?

MS. ROOKER: Sure.

MS. AYLWARD: And if this Committee had been meeting --

A PARTICIPANT: Use the microphone.

MS. AYLWARD: Sorry. If this Committee had been meeting say a year before as these issues were beginning to be considered and worded and put into -- put out, would that have addressed what you're talking about?

MS. ROOKER: Well, actually what I was repeating is what Susan Palmer had brought up earlier, but it would certainly -- yes, it would be exactly if it came to the attention of this Committee --

A PARTICIPANT: My -- my --

MS. ROOKER: -- and I suspect it would have if we had been in existence.

A PARTICIPANT: And my point is beyond just the Committee or people on the Beltway, but in general --

MS. WILLIAMS: I think it's very much what Dane -- what Marsha MacBride said -- alluded to, that Dane's looking to take the show on the road.

I can't tell you how important that is because it's so often -- you know, all of us sitting around this table, consumer groups as well as industry, we understand or know the FCC. We know it's more than just that label you stick up on a phone or you see once in a while in a public service announcement.

But I know that the FCC used to have regional offices, and part of the responsibility of those regional offices were consumer outreach as well as engineering and technical issues. I think what the FCC is seeing now because of that cut back -- and I understand appropriations are what appropriations are -- but they lost a valuable asset and tool.

I can only stress and urge and comment the CIB, Consumer Information Bureau Chief, for bringing that back into the FCC's process.

MS. PALMER: Do we want to add another guiding principle, which is that they should support CIB and the FCC in its efforts to do these things? Because I think that that might be some practical but still a guiding principle.

MS. AYLWARD: I think maybe -- would that be a subset of that one principle. Not to quibble about it, but that's one way to -- certainly a way to make sure that

that happens.

A PARTICIPANT: Yeah.

MR. JAMES: Maybe that should be the Preamble to all of this?

MS. AYLWARD: All of this.

MR. JAMES: Incorporate that statement to begin with?

MS. ROOKER: Support for the CIB. I think that's a great idea.

MR. JAMES: And also be pro-active by consulting with us --

MS. PALMER: And I think it could be --

MR. JAMES: -- about changes.

MS. PALMER: Yeah. Beyond CIB. I mean CIB and other departments that might be involved or other activities that would lead to because it might -- it might be a satellite office or it might be something else that they think of that would promote that.

MS. GRANT: I don't necessarily object to these principles, but aren't we getting off the topic of the Universal Service Fund and do we mean to? Is that appropriate? Are we straying?

MS. WILLIAMS: The issue came up in terms of early consumer involvement in terms of the Universal Service Fund issues. Susan felt that that should be not just limited to Universal Service Fund but as a part of CIB's mission not only just as advisory -- looking just to this advisory committee but being pro-active, as Vernon said, and reaching out and consulting with consumers not just inside the Beltway, but outside the Beltway as well. So that's where it comes in.

MS. GRANT: Okay.

MS. WILLIAMS: Are there any other guiding principles?

MS. PALMER: Can you review what's on there?

MS. WILLIAMS: Yes.

MR. McELDOWNEY: I'm sorry. I just want to say one more thing. I think it's important though, so there's not confusion, is that when this is finally written up that it be tied somehow to the NPRM so that it's -- I think some of the things -- some of the aspects of what Susan was saying I would certainly support, but I think that it may read better if at least at this point it's tied to the NPRM.

MS. PALMER: I don't oppose that at all.

MR. McELDOWNEY: Yeah.

MS. PALMER: I agree.

MR. McELDOWNEY: And I think there's going to be plenty of opportunity for us to pass subsequent motions around what we want CIB to do and the role we want it to play.

MS. PALMER: And just for clarification, I'm not trying to get the overworked people at CIB made at me.

(Laughter.)

MR. McELDOWNEY: Or your company.

MS. PALMER: Although they may already be. I don't know.

(Laughter.)

MS. WILLIAMS: Okay. Let's -- what I'm going to do now is review what we put down so far.

(Pause.)

MR. McELDOWNEY: She's holding it hostage.

(Pause.)

MS. WILLIAMS: I'm going to try to multi-task here. Yeah, could you --

A PARTICIPANT: Do you need some help with --

MS. WILLIAMS: And excuse us if our backs are to you.

In terms of the guiding principles that the FCC will consider when they are reviewing and evaluating the notice of -- the comments to the notice of -- the substantive comments to the notice of proposed rulemaking that the FCC would -- guiding principle number one is easy to understand, that the Universal Service Fund be easy to understand.

Equity is the seconding guiding principle. Equity in terms of consumers and industry.

A PARTICIPANT: Financial obligations.

MS. WILLIAMS: Yes. Equity in terms of financial obligations of consumers as well as industry.

Three, public education on the social benefits of the Universal Service Fund.

Okay. Four is -- oh, God! Four is the language.

(Laughter.)

Okay. Steve is going to give us -- okay. Number four, is guiding principles.

MR. JACOBS: Easy for me to say. I just --

MS. WILLIAMS: Oh, no!

(Laughter.)

A PARTICIPANT: Wait, wait, wait, wait.

(Laughter.)

A PARTICIPANT: -- with the principle --

(Laughter.)

A PARTICIPANT: Let's start over.

(Laughter.)

A PARTICIPANT: Wait a minute.

MS. WILLIAMS: Number four is that when the Commission is valuating the substance of the notice of proposed rulemaking that the FCC consider -- consider at a minimum maintaining -- consider maintaining the Lifeline exemption at a minimum, and perhaps consider extending such exemptions where appropriate.

(Laughter.)

Okay. No. Five, Universal Service Fund calculus supply side and outgoing. This is where Larry Sargeant suggested that the Commission use USAC's spreadsheets or methodologies in terms of collecting --

MR. SARGEANT: Information they gather to implement the fund.

MS. WILLIAMS: The information that the USAC gathers to implement the fund.

MS. GRANT: Did we agree to that?

MS. WILLIAMS: I'm sorry. Susan?

MS. GRANT: I'm sorry. Did we agree to that? I thought -- I may have misunderstood, but I thought the sentiment around the table was that the Commission was going to do that kind of analysis anyway so that we didn't need to include that in our principles.

I, frankly, don't know enough about it to know what --

MS. WILLIAMS: The USAC?

MS. GRANT: -- I think of that principle.

MS. AYLWARD: I think we left it that if it were not being done then we suggested it be done, but we assumed that it was such a logical thing to be done that --

MS. GRANT: I mean do --

MR. DelCASINO: Wasn't that the one that was reworded to say that it wouldn't be unduly or wouldn't be a profitable --

MS. AYLWARD: No, that's a separate one.

MS. GRANT: That's a separate one.

MR. DelCASINO: Is that a separate one?

MS. GRANT: Yeah.

MR. DelCASINO: Okay. I'm sorry.

MS. GRANT: I mean I don't know that we really got into deciding that we wanted to recommend some sort of cost benefit analysis or whatever the heck that is. I mean I just --

MS. ROOKER: These are not recommendations, these are guidelines.

MS. GRANT: I don't know that that's a principle that we -- that there was a consensus around the table that we --

MS. WILLIAMS: Okay.

MS. GRANT: -- said. Yes.

MS. WALLS: Oh, I thought the reason that that came up --

MS. WILLIAMS: Karen, you have to talk into the microphone.

MS. WALLS: Well, I don't think it's working. So that's why I'm not -- but I think the reason that that came up is we were talking about what if Lifeline consumers were exempted, what would the financial impact on the revenue of the program be, and what could the USF do in various funding scenarios? What would happen to the funds revenue if we exempted Lifeline folks?

A PARTICIPANT: Right.

MS. WILLIAMS: I think that what Steve suggested that is there some way of determining what's coming in and what's coming out, and is this something that the carriers can put together?

Larry Sargeant indicated it's -- the USAC already does that and rather than reinventing the wheel, to use that information rather than reinventing the wheel. Susan?

MS. GRANT: I don't see that as fitting in with the sort of consumer principle side of things that I thought was the road that we were on. That's almost an issue for the companies, but I just don't know enough about that to incorporate that as a consumer principle.

MR. McELDOWNEY: Can I --

MS. WILLIAMS: Ken?

MR. McELDOWNEY: Yeah. I guess the other issue I have is that I think it sort of runs counter to our earlier principle that Mike expressed.

I mean we've said flatly that should consider maintaining the current exemption and expanding it when appropriate. It then seems really inappropriate later on to say, "Oh, if it doesn't -- if it doesn't work don't do it." So I -- again, I don't feel comfortable with this one, either.

MS. WILLIAMS: Rayna?

MS. AYLWARD: Well, let me just start with what Susan said about this being a consumer --

MS. O'REILLY: It's very hard to hear. Could whoever is talking --

MS. AYLWARD: What happens is at the beginning it takes a little while for the mike to warm up. Is it warmed up yet? Oh, boy!

A PARTICIPANT: No.

MS. AYLWARD: Okay.

A PARTICIPANT: Hold it closer.

A PARTICIPANT: Keep going.

MS. AYLWARD: Like a torch singer. Okay. I think that this is meant to be a holistic viewpoint, a holistic set of principles, not just consumer aimed, number one.

I think that the phrase "as appropriate" means where -- looks at the supply side as well as the demand side. I think the reason that this -- it doesn't have to be a guiding principle.

If this kind of research is being done, we hope that it will be taken into consideration, but it's to show that it's not just -- there's not the -- what did I say? The unlimited pie. That we are dealing with a certain amount of resources that we have to take into account as we look at how we're going to be using them.

MR. McELDOWNEY: Again --

MS. ROOKER: Why don't we just kind of decide -- let the Committee take --

A PARTICIPANT: Yeah.

MS. ROOKER: -- the subcommittee take a vote whether they want to include it?

MR. McELDOWNEY: Yeah.

MS. ROOKER: Because we're out of time and we're going to have to move on.

MS. WILLIAMS: Okay. All those in favor of leaving that on raise your hands.

(Pause.)

Kathleen?

MS. O'REILLY: No.

MS. WILLIAMS: Okay. All those opposed?

(Pause.)

MS. ROOKER: Take it off.

MS. WILLIAMS: Take it off?

A PARTICIPANT: Take it off.

MS. ROOKER: Take it off.

A PARTICIPANT: Take it off.

MS. WILLIAMS: Okay. Number -- the next one -- principle is that the Universal Service Fund should not be a profit center. Companies should only recover fees and --

MS. AYLWARD: Administrative costs.

MS. WILLIAMS: -- and administrative costs. Seven. Early consumer and industry involvement in Universal Service Fund matters and the FCC -- that goes more with the idea of forward thinking as technology changes, and also -- the Preamble to these guiding principles that the FCC support the Consumer Information Bureau in its outreach efforts on Universal Service.

A PARTICIPANT: Yay!

MS. WILLIAMS: Well, we are out of time.

MS. O'REILLY: Is this being reported then as there being total support of everything that wasn't voted on? I'm confused as to what we voted on and what we did not. I did not want to take the time to raise concerns about the wording of some of the others.

MS. WILLIAMS: I'm sorry. Say that again, Kathleen.

MS. O'REILLY: Well, I voted on some of these principles and others were discussed, and then I guess just kept on the list. And the assumption is that there's across the board support.

MS. WILLIAMS: Are you asking -- well, let me ask you, are you asking for a vote on each of the principles?

MS. O'REILLY: Well, I wasn't sure what we were doing and I did not take the time to address concerns about the wording of a couple of others and did not want my name lending support to some of them.

But if you're just reporting in broad strokes to the full committee that this is the package that the subcommittee is bringing to them --

MS. WILLIAMS: Yes.

MS. O'REILLY: -- I guess that will be it.

(Pause.)

MR. McELDOWNEY: She says okay.

(Laughter.)

MS. WILLIAMS: No. It's just that I'm a little bit behind because I --

MR. McELDOWNEY: Oh.

MS. WILLIAMS: -- I can't hear --

MR. McELDOWNEY: Yeah.

MS. WILLIAMS: -- very well with conference phones. Okay.

(Pause.)

Any other questions?

MS. ROOKER: Five minutes. We have five minutes before we leave.

MS. WILLIAMS: Are there any other issues? Ken?

MR. McELDOWNEY: Well, I guess -- I guess in terms of the wordsmithing, I think we have the broad outlines. Hopefully, it will go through for the full Committee. Then I assume that what? The Committee Chairs will wordsmith it or it will be wordsmithed by the FCC staff in consultation, or how is the wordsmithing going to take place?

MR. MARSHALL: It was our hope that we could wordsmith it today, if we could. The FCC staff really would be very uncomfortable --

MR. McELDOWNEY: Okay.

MR. MARSHALL: -- wordsmithing your recommendations --

MR. McELDOWNEY: Okay. Good.

MR. MARSHALL: -- because it would want them to be yours and we want to be sure that it's translated correctly.

MS. WILLIAMS: Scott, I can't hear you.

MR. MARSHALL: Okay.

It was our hope that the wordsmithing could be done today, and we have a computer set up for that purpose. If after you review these with the full committee there's closure, if someone could then wordsmith and bring back the document for final approval, we've got about an hour and a half to do that in. That would be the ideal.

We're really not, as a staff here at the FCC, in a position to wordsmith it for you and it would probably be inappropriate if we did.

MR. McELDOWNEY: Interesting.

(Laughter.)

MS. WILLIAMS: Well, I mean I can -- if someone gives me a computer I can knock this out.

MR. MARSHALL: Yep.

MR. McELDOWNEY: Good.

MR. MARSHALL: We have --

MR. McELDOWNEY: Thanks, Andrea.

MS. WILLIAMS: Could I get a couple of people?

A PARTICIPANT: We have a couple --

MS. WILLIAMS: Oh. You have --

A PARTICIPANT: We have --

MS. WILLIAMS: Oh, okay. Well, can I get a couple of volunteers? My memory is not as good as it used to be.

MR. JAMES: Andrea, may I --

MS. WILLIAMS: Sure, Vernon.

MR. JAMES: On number six, when I indicated Preamble I was hoping that we would include number six, the gist of what number six is saying --

MS. WILLIAMS: Okay.

MR. JAMES: -- in that Preamble that -- that FCC supports CIB and would consult with this Committee in looking at new legislation or NPR's or whatever's coming down -- down the line as far as FCC is concerned so that we can avert some of these problems that we're experiencing.

MS. AYLWARD: So it's five principles?

MS. WILLIAMS: So -- right. Six should be --

MR. JAMES: It's actually the principles.

MS. WILLIAMS: -- and the Preamble -- that should all be the Preamble. Okay.

A PARTICIPANT: Yeah.

MR. McELDOWNEY: Andrea, I'll help.

MS. WILLIAMS: Thanks, Ken. Anyone else? Rayna?

MS. AYLWARD: Yes.

MS. WILLIAMS: Thank you.

(Pause.)

MR. McELDOWNEY: So we're adjourned and come back at what time, Shirley?

MS. ROOKER: In three minutes.

MR. McELDOWNEY: Okay. Well --

(Laughter.)

Okay.

MS. ROOKER: At 3:40.

MR. McELDOWNEY: Oh, I'm sure we can do it in three minutes.

(Laughter.)

Is -- I guess the -- Scott, is the Disability panel, are they going to be a part, as well?

MR. MARSHALL: They're prepared to give a report of their activities while you go out and work on your --

MR. McELDOWNEY: Okay. Good. So that -- that will be the first thing on the agenda. Okay. Good.

(Off the record at 3:38 p.m.)

(On the record at 3:49 p.m.)

MS. ROOKER: What we'd like to do is to continue the meeting. Some members of the Affordability and the Consumer Subcommittees have left to prepare recommendations for the full Committee. They'll be coming back to us with their documents.

But what we'd like to do is get your attention, have everyone sit down and go through the report from the Disability Subcommittee. Are you ready to do that, Jim?

MR. TOBIAS: In the absence of the other?

MS. ROOKER: We'll have to. There's -- well, most of us are here. It's just like three people from the other committee are out preparing a report for us.

MR. TOBIAS: Oh, okay.

MS. ROOKER: Unfortunately, it's unavoidable. We had to do it that way.

MR. TOBIAS: Okay. Give me a second --

MS. ROOKER: Okay.

MR. TOBIAS: -- and I'll see about the transportation.

MS. ROOKER: Okay. There's a few housekeeping items. Please leave this card as you go out, leave it out by the registration desk or give it to an FCC staffer. Don't take it with you.

Secondly, if you need transportation at 5:00 what we'd like for you to do is to let us know, and we can order cabs for you or whatever you need.

A PARTICIPANT: I'm sorry?

MS. ROOKER: Transportation. If you need transportation after the meeting today.

A PARTICIPANT: Let's have a show of hands.

MS. ROOKER: Who needs a cab? All right. Susan Palmer, Julie, Bob, Matt, Larry. Anybody else?

Five, six. Laura Ruby, Jim Tobias. Metro's a couple of blocks away. So how many cabs? Let me -- again, let's see a show of hands of how many people need cabs and if you're going to airport. Who's going to the airport?

A PARTICIPANT: Larry. Larry is going to the airport, okay.

So we need how many cabs? Show me your hands? One, two, three, four. Laura, do you need a cab?

MS. RUBY: Yes.

MS. ROOKER: Put your hand up.

One, two, three, four, five, six. Six cabs. Seven, eight. We need eight cabs.

A PARTICIPANT: Any sharing?

MS. ROOKER: Anybody able to share a cab? Who's going to the airport?

A PARTICIPANT: Which airport?

A PARTICIPANT: National.

MS. ROOKER: National? Anybody going to National?

(No response.)

MR. TOBIAS: Anybody going to Reagan?

MS. ROOKER: Anybody going to Reagan? That's the same thing.

(Laughter.)

Oh, Jim.

A PARTICIPANT: Oh, Jim.

MR. TOBIAS: I'm from Massachusetts. Thank you.

(Laughter.)

MS. ROOKER: Okay. So we don't know. So it looks like we've got independent cabs here.

A PARTICIPANT: Eight individual -- okay.

MS. ROOKER: Eight cabs.

A PARTICIPANT: All right.

MS. ROOKER: Just one to the airport.

MR. MARSHALL: And you've got that --

A PARTICIPANT: I've got you, Scott.

MR. MARSHALL: Okay. Thanks.

MS. ROOKER: Okay. 5:00. All right. Thank you very much.

Now, Jim --

MR. TOBIAS: Sure.

MS. ROOKER: -- are you prepared? All right.

MR. TOBIAS: Yes.

MS. ROOKER: Jim Tobias, in Micaela's absence, is going to give us the report. Micaela, are you on the phone?

MS. TUCKER: Yes, I am.

MS. ROOKER: Oh, good. Welcome.

MS. TUCKER: Thank you.

MS. ROOKER: Jim's going to give us the Disability Subcommittee report.

MR. TOBIAS: Okay. For those of you who have been watching our progress on the LIST SERV I would encourage you to continue to do so. Notes from today taken by Pam Gregory and also taken by Micaela will be folded together and will appear on the LIST SERV, as well. We are entirely open to input from any member of the Committee and any member of the public.

Today we discussed a number of items, of course, our work priorities. In addition, we discussed splitting up into working groups so that we'd have literally subcommittees of the subcommittee. Two areas that we are doing that on are Section 255 will be one large group and TRS will be the other large group. There will be some general overarching issues such as standards work, and consumer outreach, and education that will be covered by both of those.

In addition, there were some items that would not fall under 255 or TRS and those will be handled either by another group or by independent action.

What I'm going to do is read off the basic priorities of our work and some of the discussion that we had today.

One of the items was an appraisal of compliance of Section 255, that is looking at the Telecomm Act of '96 being five years old and the regs being about two years old. What has actually happened from an industry perspective, what changes have been wrought in the products and services. From a consumer perspective, what are consumers experiencing, and then a request to the FCC for some statistics, and an understanding of complaints, and how those complaints have been processed.

We discussed better access to basic network functionality, that is what network features are currently not accessible, such as operator intercept messages, when the number you call is no longer in service? We know that some of those messages do have a TTY parallel and some don't in different jurisdictions. There are several other network functionality items in that category, as well.

Another topic we consider to be very important is reimbursement for relay service. Both the current voice and text translation relay services and emerging services such as video relay, and internet IP telephony-based relay.

Currently only common carriers are authorized to receive reimbursement for those services. We will make some sort of suggestion to the Commissioners to expand that program so that others who may be better situated to provide new emerging services can do so without registering as common carriers.

We discussed general issues of information access and accessibility going beyond Section 255, it's current understanding, and pressing the Commission to make a determination about the coverage of other information services such as web access and IP telephony, and all of the things that were covered in the further notice of inquiry a year and a half ago or so.

We've also discussed technical assistance to consumers both in understanding how they can navigate through the FCC's procedures, and also some product and service-oriented information. We felt very strongly that consumers with disabilities are not understanding all of their product options. They don't know what products are out there, what product categories are out there, that might meet their needs better.

Although there are several existing channels, no single channel was seen as reaching a large enough proportion of those folks. So we want to urge the Commission to take an active role in that.

There's a specific issue that we feel is ready for routing to the Commissioners, and that has to do with frequency allocation for assisted listening device and audio description in theaters. These devices are not currently primary in their spectrum slots and they are always kind of subject to encroachment from other applications. So we want to get a permanent, you know, kind of a game preserve or something for ALD's and audio description.

Then we discussed at some length the idea of creating a disability-specific Universal Service Fund program. We have the existing four programs that we've heard about, but what are the possibilities, and what would have to happen, and which kinds of program elements should be included in a disability-specific program?

For example, the issue of equipment distribution programs in the various states came up. These programs are administered differently, they have different needs assessments, different requirements for qualification, different kinds of equipment that are distributed through different mechanisms. Consumers over the years have complained about the disparities or inequities between the state programs.

There are some products like braille TTY's or telebrailles which are very low-volume, high-cost products that almost no one can afford on their own and so the market for them can never really be encouraged enough. So we would consider that to be kind of a candidate element of a disability-specific Universal Service Fund program.

That's basically what we did today in a nutshell. We will continue to use e-mail and our LIST SERV very richly. Again, we encourage full participation from all of the members of the Committee.

MS. ROOKER: Well, I think we'd like to open up the floor to discussion on the items that you've mentioned.

Does anyone want to elaborate, ask questions or whatever?

(No response.)

You're to be congratulated for coming up with such an impressive working list. I know you all have been very busy this summer.

Do we have comments or questions from anyone for Jim or other members of the subcommittee?

(No response.)

What about from the public? I would invite you at this time also if you want to make comments.

(No response.)

My goodness! It's a quiet group. It must be late in the day.

(Laughter.)

All right. Well, thank you so much, Jim, and for your subcommittee's hard work. I look forward to the progress that we're making.

The next item -- the next agenda item is to talk about the agenda for our November meeting. Scott, do you have any instructions you want to give for people? I think -- are we going to pass something around today to see if we can set up a --

MR. MARSHALL: Yes.

MS. ROOKER: -- find a convenient --

MR. MARSHALL: Yes.

MS. ROOKER: -- date --

MR. MARSHALL: Right.

MS. ROOKER: -- for everyone for November. Do you want to talk to them?

MR. MARSHALL: In your packets -- and if you need some assistance with this just let us know. There is a calendar sheet for the month of November. Yes, we have done this before. I haven't lost my senses.

(Laughter.)

But we didn't come to closure on a good date in November, preferably a Monday or a Friday, so that people could have weekend stayovers that had to come a long distance, for the air fare saving.

If you could tell us when you're not available, the dates that you would not be available in November, that would be helpful and then I will get back with you --

A PARTICIPANT: I will not be available the day after Thanksgiving.

MR. MARSHALL: Then we will get back to you with a whole -- the date memo ASAP.

As far as next year is concerned we were thinking about -- I'd like your reaction to this, too, in the discussion that follows -- that perhaps the best months for us to meet weather-wise as well as activity-wise might be March, June and October. I would be interested if that sounds good to you, then we'll have to send out a canvass on those dates, as well, or do it in November. But I'd be interested in your thoughts about that, as well.

As far as agenda items are concerned, I think that's an open floor for topics that you'd like to see on the November agenda. Shirley and the Co-Chairs and I will meet again very soon to try to develop that agenda even earlier than we were able to do for this meeting.

MS. ROOKER: And you don't have to give them to us today.

MR. MARSHALL: No.

MS. ROOKER: You can send them to us at any time.

MR. MARSHALL: Right.

MS. ROOKER: What Scott was referring to is this calendar in your folders. If you would just put an X through the days that you're not available --

MR. MARSHALL: Correct.

MS. ROOKER: -- that would --

A PARTICIPANT: What days?

MS. ROOKER: Mondays or Fridays. Any Monday or Friday. The reason for that is the transportation issues.

A PARTICIPANT: Okay.

MS. ROOKER: So any Monday or Friday in November that you're not available, probably the Friday after Thanksgiving is one that most of us would not want to participate in a meeting.

(Laughter.)

I strongly encourage you to X that one out.

(Laughter.)

But we had originally talked about the 2nd of November, which I think is a conflict date for some of you. So if you would let us know, please.

MR. MARSHALL: We're hoping that schedules have changed.

MS. ROOKER: Yes. We're hoping that you're suddenly free on the 2nd of November, but if you're not that's -- we'll have to take that into consideration. So if you would do that.

Does anyone have any suggestions or comments on what we might want to consider in November? And in this group I can't believe someone doesn't have a comment or a suggestion. Yes, Nancy?

MS. ELLIS: Thank you. November 9th or November 12th.

MS. ROOKER: The 9th or the 12th are good for you?

MS. ELLIS: Mm-hmm.

MS. ROOKER: Okay. Well, mark that on your calendar. Mark out -- if you have a priority date that is your first choice put a "1" in it, but if you can't make it put an "X" through it.

MS. ELLIS: Right.

MR. MARSHALL: Right.

MS. ROOKER: Okay.

A PARTICIPANT: Would you say that again?

MS. ROOKER: If you can't make a Monday or any Friday in November put an "X" through it so that we know that that is the day that you will not be available, that's Mondays and Fridays in November.

If you have a day that's available and it's your first choice and your second choice put "1" and "2" in them, but don't "X" it out. "X" out the Friday after Thanksgiving, okay.

(Laughter.)

Do you get a hint here from me?

(Laughter.)

All right.

A PARTICIPANT: Remember, not the Friday after Thanksgiving.

MS. ROOKER: Right. Are there other things that you'd like to discuss? We're waiting for the report from the Consumer and the Affordability Subcommittees. They're doing a little cleaning up of wording. I hope it doesn't take them too long.

A PARTICIPANT: Okay.

MS. ROOKER: I hope it doesn't take them as long as it did for us to get to this --

(Laughter.)

-- to get to the process of reporting to you, at any rate.

(Pause.)

Oh, yeah. Why don't we -- while we're waiting for them to get back, why don't we go to opening the floor to any items of discussion welcoming public comment, as well? I think it would be appropriate to do this. Then we won't have to tack it on at the end of the day or we can do it then, also.

So I would invite any of you who are here as public members to comment, which I hope you felt free to comment during the day, and some of you have. We appreciate that very much. Are there any items for discussion?

(No response.)

Look, I don't sing and I don't dance.

A PARTICIPANT: Thank God for that!

(Laughter.)

MS. ROOKER: So some -- right.

(Laughter.)

So somebody's going to have to entertain us or you're going to have me sitting here talking at you and that's not entertaining.

A PARTICIPANT: My son with the guitar just left.

MS. ROOKER: Oh! Nancy, you have a comment?

MS. ELLIS: I don't know. This is just kind of in general. One of the things that we've discussed in both meetings is the fact that many people don't know what the FCC does and how it applies to them. I think this is a perfect example for some kind of PSA program that mentions your phone bill, and mentions all of the other things that we do, you know, disability and otherwise, and somehow incorporate that into a television, radio, internet PSA.

MS. ROOKER: It's a great idea.

MS. ELLIS: I don't know if there's a budget for it but --

MS. ROOKER: Well, we'll have to look around the table and find somebody. Yes, Paul Schroeder?

MR. SCHROEDER: I wasn't volunteering money.

(Laughter.)

MS. ROOKER: Oh, weren't you, Paul?

(Laughter.)

MR. SCHROEDER: Well, let's see what I've got.

(Laughter.)

It's just -- I thought it might be interesting to contemplate for an agenda item in November a discussion with the CIB and the DRO, the Consumer Information Bureau and the Disability Rights Office, how they're doing outreach to consumer groups, what their travel plan schedules are, how we can be of help in that, if any way?

But really get a better sense of what kind of interaction they're having with consumers, how they're structuring that, and also maybe some discussion about making sure that Commissioners are more involved.

I thought it was wonderful what Commissioner -- I think it was Copps -- said about his trip out to TDI, which was outstanding. I would hope that every consumer group starts pushing hard to get Commissioners out to their -- to their meetings, especially in Sioux Falls where there's not a whole lot else to do, I gather.

(Laughter.)

Andy's going to probably hit me here.

(Laughter.)

But I think that might be -- it's not necessarily an agenda topic but it would be perhaps a good item for some discussion to see how this group of organizations can be helpful to the Bureau and to the office.

MS. ROOKER: I think that's an excellent suggestion. Is that possible? Could we do this as an agenda item for November?

MR. MARSHALL: Mm-hmm.

MS. ROOKER: Scott's saying yes, mm-hmm. Okay.

MS. STRAUSS: I can tell you that it was really educational for the Commissioner to come out and I think you're right.

MR. SCHROEDER: Just keep talking.

MS. STRAUSS: Okay.

(Laughter.)

MR. SCHROEDER: Sing first and then -- until they get you on mike.

(Laughter.)

MS. STRAUSS: Anyway, I think it would be very good if he came out to other consumer groups, if various Commissioners came out to other consumer groups. I think that it's very different when they're right on the site to really witness and experience the variations in consumer needs.

MS. ROOKER: Okay. I think Ms. Nixon had a comment she wanted to make.

MS. NIXON: Is it appropriate? Did you open to the floor?

MS. ROOKER: We did.

MS. NIXON: Okay.

MS. ROOKER: Absolutely.

MS. NIXON: This morning I was actually talking to Margaret and Dane, Chief Snowden, right. I don't know him that well to call him Dane. Anyway, I was making comment and they suggested that I say it to the floor.

Normally, you have seen me flitting back and forth between Shelley's chair. I am her mother. I tried to act like wallpaper in these meetings so that I'm not, you know, hovering over her. But I decided to follow-up and say what I needed to say.

I jotted down some notes. I've been looking around the room and I see a lot of generations here. Some of you have learned about disabilities and the needs of people with disabilities through your jobs. And many of you have learned about the needs of disabilities through your own disabilities, and through your own life experiences. Many of this latter group can remember what life was like before the ADA and IDEA and 255 and all of that.

I see all of these generations and I see Shelley. Shelley is actually the next generation. All right. It has occurred to me very clearly as I've worked with her over the summer -- because we're in the process of trying to find appropriate voice recognition and screen readers and all of that -- so I have been her screen reader.

It has occurred to me quite clearly that the next generation, Shelley's generation, has really not been prepared to fill your seats. They will need to fill your seats some day.

The current unemployment rate for young people with disabilities or multiple handicaps are around 75 percent. So many of them will not learn how to advocate for their needs on the job, as many of you have. So that leaves them very few ways to learn the skills they need. And they didn't really fight the fight to get all of these things that are out there today.

Most of Shelley's contemporaries grew up with all of these laws and all of these mandates. Therefore, they really haven't learned the skills to -- that are taken to get them, and they do not know how easily it can be lost, if you're following me, okay.

So what I wanted to point out is that what all of you need to know is that Shelley's participation on this Committee is her first exposure, and her family's first exposure to everything you've been discussed [sic] in these last two meetings, everything.

That she is 24. She will be a senior in college. She's had more meetings that we can even count with Centers for Independent Living, Transition, IEP's, agencies, OVR and not once, not once, have we ever heard any of this discussed, which tells you that outreach and education.

So I guess you could be wondering what is my point, and my point is that all of you are talking about outreach, and education, and all of these issues, and I keep hearing about how -- you know, what the FCC can do about outreach, and education and it's critical. But I propose to you that it should not be considered just FCC's responsibility.

I would urge each of you to go back to your own communities, your own organizations, your own jobs, and look how are you outreaching? Are you shadowing anybody? Are you mentoring anybody? Are you teaching anybody these skills with even one or two people of this next generation around you? Because, yes, the CIB can do it but they really can't do it all. Shelley and our family is an example that they can't do it all because it didn't reach us.

So I just urge you to educate not only what laws are there, what mandates are there, how they got there, but also Shelley's generation. What skills are you going to need to keep them there? That's all.

MS. ROOKER: Thank you so much. You've given us something to think about and to go look at our own lives. Thank you.

There were some other comments. Susan Palmer?

MS. PALMER: I think this might be a good time to put in a plug for AAPD Disability Mentoring Day. I know that Cingular Wireless and Microsoft and probably several other companies here are involved in that. If you are interested as a company or an organization in mentoring a person with a disability please contact AAPD and I'm sure they can help you with that.

MS. ROOKER: And how do we do that?

MS. PALMER: I think it's AAP-DC-org.

A PARTICIPANT: Dot org.

MS. PALMER: Dot org. I'm sorry.

MS. ROOKER: Repeat that again for the slow ones here, me.

MS. PALMER: AAPD-DC.org and it's www. Right?

A PARTICIPANT: Yeah.

MS. ROOKER: AAPD- -- that's the little up -- not the underline -- DC.org.

MS. PALMER: Right.

MS. ROOKER: Okay. And that -- the date is when?

MS. PALMER: October 24th.

MR. TOBIAS: Yeah.

MS. PALMER: I think it's dash.

MS. ROOKER: October 24th.

A PARTICIPANT: Dash, yeah.

MS. ROOKER: That's the day that we want to focus, but we want to carry it to the rest of our lives.

MS. PALMER: Well, I'm sure that they'll be very happy to help you expand that if you want to.

MS. ROOKER: Great. Okay. Thank you. Jim?

MR. TOBIAS: With respect to the November agenda, I know that something that was discussed on the disability LIST SERV was some technical presentations because we felt that many people in our group would benefit from knowing more about, you know, say emerging technologies of one sort or another.

I was pleased, but also surprised, to hear this morning that the CIB and maybe the DRO has some internal technical group that's doing research on the accessibility of emerging technologies. Is that right, Karen?

MS. STRAUSS: Pam?

MR. TOBIAS: Pam?

MS. PALMER: Could you repeat that question?

(Laughter.)

MR. TOBIAS: I heard this morning --

MS. STRAUSS: I think you're referring to TAC?

A PARTICIPANT: Yeah.

MS. STRAUSS: Aren't you referring to the other --

MR. TOBIAS: No. I don't -- I didn't think so. I thought --

MS. STRAUSS: -- an internal group that's doing -- somebody on staff doing research into emerging technologies in DRO?

A PARTICIPANT: Emerging technologies.

A PARTICIPANT: Yeah.

MS. STRAUSS: DO you know something that I -- that we don't know?

MR. TOBIAS: Who was it who was speaking when the -- I think it might have been --

MS. ROOKER: Commissioner Copps?

MR. TOBIAS: -- Dane.

MS. ROOKER: Dane?

MR. TOBIAS: Possibly?

Okay. So there is no such thing.

(Laughter.)

But, hey, we're not going to fire somebody just because they lied to --

(Multiple voices.)

Okay. So --

A PARTICIPANT: Well, let's get it going.

MR. TOBIAS: Yeah, let's get it going.

A PARTICIPANT: That sounds great.

MR. TOBIAS: So just as a raw idea, some kind of presentation on that stuff.

MR. MARSHALL: Jim, it's Scott.

I think just -- I think I know what you're talking about.

(Laughter.)

Our Technical Advisory Council --

MR. TOBIAS: Oh.

MR. MARSHALL: -- which is --

MR. TOBIAS: Okay.

MR. MARSHALL: -- another Federal advisory committee, one of the six or seven that the FCC has, has a subcommittee on disability.

MR. TOBIAS: Right. And Larry's the Chair.

MR. MARSHALL: And Larry is -- yeah. Larry, you should be talking about this, not me. If you want to make a comment about what your group does?

MR. GOLDBERG: Yes. Although I don't think it solves the problem that Jim's asking for.

MR. MARSHALL: Okay. Then you're the best guy to respond to that.

MR. GOLDBERG: In any case, the FCC Technological Advisory Committee was formed four years ago -- well, actually, no, two years ago -- and we're now in the second two years, to look at issues over the horizon and try to highlight for the FCC emerging technology concerns and questions.

In the first round there was a disability working group and Greg Vanderheiden headed that up. Out of that there seemed to be recommendations that helped the impetus to create this Committee. Having reformed now, it's made up of a lot of CIO's and very high-tech individuals from telecommunications companies and hardware and software. They've re-upped on the disabilities activities and we're just starting out. Our next meeting will be in mid-September in gathering issues of concern on disabilities issues, as well.

But they're not actually developing or studying, as the way you couched it before, but are trying to provide an advisory role for the FCC on such issues as spectrum band width, home networking, and issues over the horizon the FCC hasn't begun grappling with yet.

MS. ROOKER: Okay. Yes, Bob?

MR. SEGALMAN: I wanted to follow-up on what Ms. Dickson [sic] said.

One of the ways to do outreach and education is through the relay, and getting each state to work with each department of vocational rehabilitation. I think if the FCC could develop a relationship with the Rehabilitation Services Administration you could get RSA to issue information -- an information memorandum to the states to develop this relationship.

MS. STRAUSS: I think that's a good idea. You know, again it's a matter of resources. It depends on what the priorities are of the Disability Subcommittee and what order you want us to address different issues.

But we do have -- DRO, actually, does have liaisons with lots of different governmental agencies. I don't know whether RSA is one of them, and if it's not it should be.

MS. ROOKER: Thank you, Bob. Well, we have --

MR. MARSHALL: Ask if somebody else has any comments.

MS. ROOKER: Does somebody else have any other comments? Someone else have a comment?

MR. MARSHALL: Jim, do you have another agenda comment? I cut him off.

MS. ROOKER: Jim Tobias, did you have another agenda comment?

No? Okay. All right. Then why don't we proceed to the Consumer and the Affordabilities Committee report, which is literally hot off the press. I'm going to start these around. If you would take a copy, please, we'll pass -- oops! Excuse me.

(Laughter.)

I'll get them.

(Pause.)

Okay. What we'd like to do is to -- Andrea and Ken were the Co-Chairs of these two -- are the Chairs of these two subcommittees. I don't know how you want to go in presenting this. I'll leave that up to you, Andrea or Ken?

MR. MARSHALL: Copies shortly?

MS. ROOKER: Your copies are coming around. Where are they?

A PARTICIPANT: Are these accessible --

MR. MARSHALL: Yeah. Braille is on the way.

MS. ROOKER: Yeah. Where are the brailles?

(Pause.)

It's not a really very long document.

MR. MARSHALL: Could we just quickly read it?

MS. ROOKER: Sure. Why don't we just take a couple of minutes?

Do we have the braille copies available yet?

(No response.)

If not, they are very short. Can someone share them with Paul and who else? Julie? Anybody else here that wants --

A PARTICIPANT: Susan.

MS. ROOKER: Or Susan. Susan, yeah. Belinda, would you share them with Susan, please?

I'm sorry. This is -- as I said, they really are hot off the press. Why don't you just take a few minutes?

(Pause.)

MS. ROOKER: Okay. We've had a chance to take a look at them. If so, I'm going to turn the microphones over to Ken and Andrea.

MS. WILLIAMS: When our subcommittees met for about two hours this afternoon and based on the discussion this morning it was very clear to all of us that on the subcommittee level that it would be very, very difficult, if not impossible, to come to a consensus on the recommendations and the earlier document that I presented.

What we agreed upon was to look at guiding principles in which these are principles that we are suggesting to the Commission -- that the Committee would suggest to the Commission that when they are evaluating -- reviewing and evaluating the substantive comments in the proceeding that they keep these guiding principles in mind.

Before we even get to the principles there's a fundamental issue that we -- the subcommittee discussed that really needs to be addressed and that is to make sure there is support for the Consumer Information Bureau in their efforts to engage early consumer and industry participation in future Universal Service Fund proceedings.

We were also trying to include the concept that Judy Harkins had mentioned earlier, that the Commission take a forward-looking approach with respect to the Universal Service Fund issues because of the rapidly evolving technological environment in which they are dealing with.

As Judy pointed out, you know, we're already talking about data and digital and that the Commission should be thinking in that respect, as well. Judy, I hope we captured the essence of the concept.

In terms of the principle, again this is -- these are principles -- we were -- we did not feel that we could say yay or nay or a particular recommendation because there was such diverse views. And that is why we came up with these five principles that we feel that everyone on the Committee or that the Committee could endorse, and to provide to the Chairman, and the Commissioners.

Number one, one of the things that we have kept hearing from consumers and from everyone, not only just consumers but also the industry, is that the Universal Service Fund -- the whole mechanism needs to be simplified, and that the contributions and assessments should be calculated and disclosed in any easy to understand manner.

Number two, USF contributions and assessments should be equitable to both consumers and members of the telecommunications industry. This was a whole concept of -- that there's only so much in the pie, that everyone -- that all telecommunications carriers fund the program. However, if you keep having so many programs not everyone -- you can't keep taking out when there's a decline in revenues going in.

Did I -- Committee members, please jump in and help me. And that this is an area --

MR. McELDOWNEY: Andrea?

MS. WILLIAMS: -- that it should be equitable, not only for -- with respect among industry but the balancing of consumers as well as industry.

MR. McELDOWNEY: I guess one of the things that I would say about this and maybe some of the others is that I think it might be good if we just sort of stick to the language that's in the point. If there are then

questions --

MS. WILLIAMS: Okay.

MR. McELDOWNEY: -- we can expand. Because my guess is it's one of those things that the more you say the more trouble you're going to --

(Laughter.)

-- we're going to get ourselves into. So --

(Laughter.)

-- so I -- let's just stick to the wording --

MS. WILLIAMS: Okay.

MR. McELDOWNEY: -- that's --

MS. WILLIAMS: No problem.

MR. ELLIS: We're not going to put on my proposal again, are we?

(Laughter.)

MS. WILLIAMS: God, no! I hope not.

(Laughter.)

The public should be educated on the social benefits of the Universal Service Fund. When the Commission evaluates the NPRM comments they should consider maintaining the existing Lifeline exemptions, at a minimum, and perhaps extending them where circumstances are appropriate. US --

MR. TOBIAS: Excuse me. Can I -- can I ask a question just about that?

MR. McELDOWNEY: Yes.

MS. WILLIAMS: Sure.

MR. TOBIAS: It's not clear to me what that means.

(Laughter.)

MS. WILLIAMS: Oh, God!

(Laughter.)

Jim, if you only knew the --

MS. ROOKER: Can I say something?

MS. WILLIAMS: Sure.

MS. ROOKER: I think we -- I think we meant to say "as a minimum." I don't want to put words in Mike's mouth.

MR. TOBIAS: Right. Exactly. In other words, you don't want the Lifeline exemptions to stay at some --

MS. ROOKER: "As a minimum."

MS. WILLIAMS: Oh, "as a minimum."

MR. TOBIAS: Yeah. Or should consider --

MS. ROOKER: Isn't that correct?

MR. TOBIAS: -- consider "at a minimum" --

MS. ROOKER: Yes.

MR. TOBIAS: -- maintaining --

MS. ROOKER: "As a minimum." That is the minimum thing they should consider.

MR. TOBIAS: Or should consider "at" --

MS. ROOKER: "As."

MR. TOBIAS: -- "as" a minimum.

MS. ROOKER: "As a minimum."

MR. TOBIAS: Maintaining the existing Lifeline exemptions.

(Multiple voices.)

MS. ROOKER: Is that what you said?

A PARTICIPANT: Yeah.

MS. WILLIAMS: "As a minimum."

MS. PALMER: The second part of that really had to do with like two line voice carry-over, hearing carry-over, and situations where a double line is really needed for effective communication and would be comparable to one -- one line.

MS. WILLIAMS: Let me read that again. "When the Commission evaluates the NPRM comments they should consider, as a minimum, maintaining the existing Lifeline exemptions and perhaps extending them where circumstances are appropriate."

Five, the Universal Service Fund should not be a profit center. However, companies should be able to recover administrative costs for supporting the USF program.

MS. STRAUSS: Can you -- I'm sorry. I wasn't in this room. When you say "profit center" what does that mean? What was your intent on that?

MR. McELDOWNEY: I think that was getting at that whole thing in terms of the issue about some companies charging far above the authorized rate.

MS. AYLWARD: Can I just add something about the process that went into particularly the one point, number four, Jim, that you had questioned.

We probably spent three quarters of our time on that point. I think that maybe we should -- the record should reflect that that was the closest vote that we had. I think it was eight to seven with four people left standing.

The seven people wanting the point to be actually prescriptive saying that the Lifeline exemption, or the Lifeline users should be exempt from any of the fees. So there was a very strong minority viewpoint on that particular point.

MS. WILLIAMS: Susan?

MR. CHROSTOWSKI: This -- this -- I'm sorry.

MS. WILLIAMS: Oh, I'm sorry.

A PARTICIPANT: Sorry.

MS. WILLIAMS: Robert and then Susan.

A PARTICIPANT: Okay.

MR. CHROSTOWSKI: This is Bob Chrostowski. I would suggest you add the words "reasonable" administrative costs.

A PARTICIPANT: Good suggestion.

(Pause.)

MS. O'REILLY: If amendments are being entertained -- this is Kathleen O'Reilly -- I would recommend "demonstrable." In other words, they have to be proven.

MS. WILLIAMS: I'm sorry, Kathleen?

MS. O'REILLY: As a term of art often used for audit purposes, "demonstrable costs."

In the absence of any standard, it's for every carrier to simply self-select what their costs are and there's no outside ability to evaluate that. "Demonstrable" at least sets a standard.

MR. CHROSTOWSKI: I agree with what you're saying, but to me that implies that as long as they can demonstrate what they're doing. "Reasonable" implies that it falls within --

MS. O'REILLY: How about "reasonable" and "demonstrable?"

MS. ROOKER: I like that.

MR. CHROSTOWSKI: It falls -- you know, it falls within reason. It's a common term used to -- when you do not wish someone to exceed boundaries that are exorbitant.

MS. O'REILLY: The experience of audits has demonstrated though a routine conflict between what certain entities consider reasonable, and what regulatory staff and consumer advocates think is reasonable.

Therefore, "demonstrable" at least in accompaniment with that I think sends a strong signal against padding.

MS. WILLIAMS: This is Andrea.

When we say the word "reasonable" and "demonstrable" I would assume that it's the FCC -- well, it would be the FCC's determination on what's reasonable and not the company or the consumer, for that matter.

MS. O'REILLY: Right. And I'm aware that there are different standards, but it's at least stronger than the way it had been worded which had bothered me when in subcommittee.

(Pause.)

MS. WILLIAMS: Susan?

MS. GRANT: I would support that addition and a couple of other things, one really minor and one that might open a can of worms. I don't know. Hopefully not. In number four --

MS. WILLIAMS: Mm-hmm.

MS. GRANT: -- when the Commission evaluates NPRM comments it should be "it" and not "they," Commission being singular.

Then, number two, I thought when we were talking about equity but we may not have had a full enough discussion, that we were talking about equity, and the burden of consumer and business customers for paying into the fund, not equity between consumers and members of the telecommunications industry.

MS. WILLIAMS: If you recall, we started the discussion in terms of consumers, residential, and business, and then Rayna pointed out -- and then the discussion went from there to that it has to be equitable in terms of everyone sharing their burden in terms of within the telecommunications industry, for example, the land line --

MS. GRANT: Oh, okay. All right.

MS. WILLIAMS: -- wireless, everyone would --

MS. GRANT: Could I make a suggestion then?

MS. WILLIAMS: -- share the burden.

MS. GRANT: Okay. I understand you. Could we change "consumers" to "subscribers" then? Two -- that's two.

MR. McELDOWNEY: Would that be "subscribers" or "customers?"

MS. GRANT: Or "customers?"

MS. WILLIAMS: Okay.

MS. GRANT: Either one.

MR. McELDOWNEY: "Customers," I think.

MS. GRANT: "Customers." Okay.

MR. McELDOWNEY: "Customers."

MS. WILLIAMS: Both.

MS. GRANT: Good point.

MS. WILLIAMS: I'm sorry. What was --

MR. McELDOWNEY: "Customers."

MS. WILLIAMS: Oh, "customers," okay. Paul?

MR. SCHROEDER: Paul Schroeder. I wanted to stay on two for a second to understand what "equitable" means in this context. Is it equally sharing of burden or sharing a burden equal to the ability to share the burden, particularly among -- well, I guess really among all groups being contemplated?

MS. WILLIAMS: Paul, we sort of looked at in two aspects. One, as Susan was saying, the equitable to both types of customers as well as among telecommunications members.

The discussion focused on -- and I will let Rich give the example of -- that he had with Pat Woods from the Texas -- who's a former Texas PUC Chairman -- where -- and example of where a woman subscriber called, and was complaining about her USF charge for -- which was --

MR. ELLIS: A couple of dollars.

MS. WILLIAMS: -- a couple of dollars and --

Rich, why don't you explain it? You did a much better job.

MR. ELLIS: Basically, what Commissioner Woods said was he had received a call from a customer complaining about the Universal Service Fund fee on her bill and the numbers as I recall was -- it was a couple of dollars per month. He said it costs -- and I think it was $1,000 a month, it was certainly in the multiple hundreds, to thousands of dollars, per month to provide her service.

Once he had mentioned that's how much her service actually cost she became an ardent supporter of the Universal Service Fund on her bill.

(Laughter.)

MR. SCHROEDER: Okay. That's a good discussion for why we need to do an education -- number three I think it was, the social benefits.

(Laughter.)

But I'm still not quite getting the point. I don't want to -- I don't have an answer to this, but I think this could be read to say that we support a flat fee charge to all consumers, and I don't know what it says about the members of the industry. I haven't a clue how that would be interpreted.

MR. McELDOWNEY: Well, I guess --

MR. SCHROEDER: And I'm not sure that we're saying the first part, which is that we do agree with the flat fee charge, for example. So --

MS. WILLIAMS: Susan?

MS. PALMER: I don't think we went into flat fee, or percentage, or how -- but more that it's a burden that all companies, all of the wireless, wire line, long distance, local, across the board, should share equally. I think that was the point that we were trying to get at on that side.

MR. SCHROEDER: And on the consumer side?

MR. McELDOWNEY: I guess I've read it differently than you did. I guess that's part of the problem when you try to come down to a principle.

I guess I was looking at more as in terms of it being equitable that, for example, residential customers would not pay a disproportionate share as opposed to business. It never -- to me it never -- at least in the discussion had never -- the flat fee versus a percent never came up.

A PARTICIPANT: No.

MR. McELDOWNEY: It was much more between residential and business customers.

MR. SCHROEDER: Yeah. Well, that was going to be my next -- my next point. So I would agree with your interpretation, but I wasn't sure that that's what the principle said necessarily.

MS. WILLIAMS: Paul, is there some language that you could suggest that perhaps would make it clearer?

MR. SCHROEDER: I have to admit to you that I am not real good at editing from memory so I don't recall what this says and I can't -- without it being under my fingers, but -- you know, I think for the moment I would accept -- I think it's probably okay with the explanation.

I realize these are principles and the point is to get something down and I think you're, first of all, to be commended. I should have said that right from the beginning, that you all have done some great work.

MR. McELDOWNEY: What if it said "residential customers?" Would that help at all?

A PARTICIPANT: You would have to read it as a whole with the change.

MR. McELDOWNEY: "USF contribution assessment should be equitable to both residential customers, and members of the telecommunication industry."

A PARTICIPANT: I would strongly disagree with that because we have --

MS. WILLIAMS: Let me first --

MR. McELDOWNEY: Okay. Never mind. It doesn't help.

MS. WILLIAMS: Robert? Mike and then Steve.

MR. DelCASINO: Trying to get at Paul's point a little bit, I think the bottom line is we really didn't define "equity" when we were talking about it and I think we didn't define "equity" because we were talking about all of these multiple circumstances.

There are a lot of aspects of specific content in the Universal Service Fund NPRM and the point that we wanted to try and get across is that when the Commission is considering those points, they should consider the notion of equity, so that if they're talking about percentage fees versus flat fees, equity should be a principle that they think about when they're making their decision.

If they're talking about whether it should be universally applied to, you know, all consumers, equity should be something that they think about. When they think about what industries should bear the burden of USF, equity should be a principle.

So it kind of applies in a lot of different ways in the USF NPRM and their considerations. You know, the word "equity" is going to mean something different in each of those cases.

MS. WILLIAMS: Okay. Robert?

MR. CHROSTOWSKI: I was going to suggest that you might want to change the word to both, change that word to "among" implying that --

A PARTICIPANT: Oh.

MR. CHROSTOWSKI: -- you treat each --

A PARTICIPANT: Right.

MR. CHROSTOWSKI: -- entity as their own and among themselves --

A PARTICIPANT: Right.

MR. CHROSTOWSKI: -- there's equity.

A PARTICIPANT: That's good.

MR. McELDOWNEY: That's good.

MS. WILLIAMS: So you're suggesting, Robert, that it should be read "Universal Service Fund contributions and assessments should be equitable among customers and members of the telecommunications industry?"

MR. CHROSTOWSKI: Customers or consumers or some entity.

MR. McELDOWNEY: That's good.

MR. ELLIS: Well, the editor of -- would amend it and say "Equitable among customers and among members."

A PARTICIPANT: Yeah.

A PARTICIPANT: Yeah.

MR. McELDOWNEY: Okay.

A PARTICIPANT: Okay.

A PARTICIPANT: I didn't know you could write.

(Laughter.)

MR. ELLIS: Words is my business.

(Laughter.)

MS. WILLIAMS: Jim?

MR. TOBIAS: Okay. Not having sat on this Committee, I'm entirely free to blast the product.

(Laughter.)

MS. WILLIAMS: You want to get out of here alive, right, Jim?

(Laughter.)

MR. TOBIAS: I'm closer to the door than most of the people who could catch up.

(Laughter.)

I guess my question is -- well, my first question is is it conceivable that the Commissioners will not consider equity in making this, in making their determination?

But my real question is would it be valuable to include the arguments in favor of one mechanism or the other in terms of equity from the people represented in this room? In other words, you know, we heard why some people think flat fee is better for some reasons and we heard why for other reasons. I don't know if the job of this Committee is to inform the Commissioners as to those arguments or whether they already know them. But I'm just trying to put some more content into this to make it a more valuable product.

MS. WILLIAMS: Jim, we had talked about providing -- in addition to a document providing the Commission with the transcript of the discussion and dialogue that occurred this morning and this afternoon.

There were some concerns by some members of the Committee that they did not feel it was appropriate at this time -- they did not feel comfortable expressing their views. They didn't feel that they had enough information to -- that the Commission may not get the full benefit of everyone's discussion. So that's why we decided not to include the transcript.

Now, as you know, the minutes of the meeting will be available to anyone and everyone on the website. I'm sure the Commissioners and the Chairman will be reading the minutes of the meeting. Susan?

MS. PALMER: I think we also need to remember that people have commented, and replied, and also have the opportunity I think to continue with ex parte presentations should they feel more clarification is needed. But that is about as much consensus as we can reach on that with very different opinions on specifics how to.

MR. McELDOWNEY: I guess I would move that the Committee adopt these guiding principles.

MS. WILLIAMS: There's a motion on the floor that the Committee adopt the guiding principles and provide them to the Commission, the Chairman.

MR. McELDOWNEY: I hope I get a second --

MS. WILLIAMS: Do I get a second.

MR. McELDOWNEY: -- after all of this --

MS. PALMER: Second.

MR. McELDOWNEY: Thank you, Susan.

MS. WILLIAMS: It's been moved and seconded. All those in favor raise your hands.

(Pause.)

All those opposed?

(Pause.)

Kathleen?

MS. O'REILLY: I abstain.

MS. WILLIAMS: Micaela?

MS. TUCKER: Approve.

MS. WILLIAMS: We have one --

MR. POEHLMAN: And David Poehlman approves.

MS. WILLIAMS: Pardon?

A PARTICIPANT: Ask if there are other abstentions?

A PARTICIPANT: Does David Poehlman approve?

MS. WILLIAMS: Are there any other abstentions?

Paul?

A PARTICIPANT: Is David Poehlman on the line?

MS. WILLIAMS: Paul, are you abstaining or do you want to ask --

MR. SCHROEDER: I am.

MS. WILLIAMS: Okay. So we have two abstentions. The motion so carries.

A PARTICIPANT: We've got another voter on the line. David Poehlman.

A PARTICIPANT: David Poehlman.

MS. WILLIAMS: Oh. We have another --

A PARTICIPANT: He's on the line, I believe.

MS. WILLIAMS: David?

MR. POEHLMAN: Yes. I approve, thank you.

A PARTICIPANT: Just wanted to get that vote.

MR. McELDOWNEY: Good.

MS. WILLIAMS: Are there any other Committee members on the line that I may have missed?

(No response.)

Thank you. The motion so moves. Madame Chairman, I turn it back over to you.

MS. ROOKER: Well, thank you so much.

Are there any other items of business that we need to attend to today? Yes?

MR. MARSHALL: Or comments?

MS. ROOKER: Comments? Rayna?

A PARTICIPANT: Is it open?

MS. ROOKER: Well, we will. We will do that.

A PARTICIPANT: Okay.

MS. ROOKER: But we've already done that but we'll do it again.

A PARTICIPANT: Okay.

MS. AYLWARD: I just was curious to know if the representatives of the FCC were -- if this was the kind of product they were looking for from this Committee or did you expect to have a more concrete set of capital "R" Recommendations to go forward?

MS. STRAUSS: Well, if you're asking what we were hoping for, I think that we can probably concur that we were hoping for more substantive recommendations, but given the short time frame and the difficulty -- the difficult nature of the subject matter I'm -- I guess this is better than nothing and it's far better than nothing. I don't want to make it sound like it's --

(Laughter.)

-- it's a start.

MS. AYLWARD: Can we put that in quotes?

(Laughter.)

MS. STRAUSS: Please don't.

(Laughter.)

MS. ROOKER: Put the far better quote.

MS. STRAUSS: Yeah.

(Multiple voices.)

I mean it's disappointing but I can't -- I guess I can't say that I'm surprised because I mean many of you have sat on committees before and you all know how difficult it is to come to an agreement.

I guess I would have been equally surprised to have come to -- to have seen you come to conclusive recommendations, as well. So I think it's a good start for this Committee.

MS. EGLER: I'd just like to add something to that. This is Margaret Egler.

The most important thing to us is that the Committee is doing what it has set out to do. So as far as it's pretty much up to the Committee to determine what it wants to give to the Commission, and the Commission will greatly value anything the Committee gives to it. But it's up to the different subcommittees and the Committee as a whole to decide how they're going to be an entity, that's a unique and independent entity unto itself, and participate in the rulemaking process.

So it's basically -- the answer is it's whatever you want it to be. The Commission is extremely grateful for anything you guys can give us and especially, as the Chairman has pointed out, anything having to do with consumers will only be helpful.

MS. ROOKER: Thank you, Margaret.

MS. AYLWARD: At our next meeting we don't get lunch, right?

(Laughter.)

We're not going to get lunch. I have a quick question. I don't know, you may have talked to other logistics of this, but do you have a mechanism as a Committee for how you will be submitting this in a formal document?

MS. ROOKER: I had asked Scott about that. I think that since we've approved this document with the changes made to it, that I will simply put a cover letter on it and forward it to the Chairman, if that meets with your approval and we can --

MR. MARSHALL: To the Secretary's office.

A PARTICIPANT: To the Secretary.

MS. ROOKER: To the Secretary of the Commission and then that in turns goes on to the Chairman. Is there any issue with that?

(No response.)

It will be simply a letter forwarding it.

MS. PALMER: I have a question.

MS. STRAUSS: Susan?

MS. ROOKER: Susan?

MS. PALMER: Does it just go to the Chairman or does it go to all the Commissioners?

MS. ROOKER: It goes to the Secretary of the Commission and then I guess it's distributed to the -- to all the members of the Commission.

MS. STRAUSS: What usually happens is that people send it to the Secretary's office and then they do courtesy copies to all the different Commission offices and usually to the Bureau that will be -- which is the Common Carrier Bureau. So --

MS. O'REILLY: And then I assume that someone will give you, Shirley, the form you need to fill out for ex parte compliance requirements?

MS. ROOKER: I'm sorry. I didn't hear you.

MS. STRAUSS: She asked whether there was a form to fill out for ex parte requirements? There really is no form. You can just note it as --

MS. O'REILLY: But it has to be noted so that other parties know that it's sitting there.

A PARTICIPANT: Yeah.

MS. STRAUSS: That's right. Just note is as an ex parte letter.

MS. O'REILLY: And then there has to be a short summary of it, I think --

MS. STRAUSS: This --

MS. O'REILLY: -- with that note.

MS. STRAUSS: -- this itself will be the short summary and you can indicate that this --

MS. O'REILLY: Okay.

MS. STRAUSS: -- will be for the recommendations of the CDTAC.

MS. WILLIAMS: Shirley, I would be happy to help you with that. This is Andrea.

MS. ROOKER: Oh, thank you, Andrea. I appreciate that. Okay. Do we have any other orders of business?

(No response.)

I would like to again invite public comment if we don't have any other items of business from the Committee itself.

(No response.)

Okay. Then do we have any other comments from the public attendees, members, who are here? People from the public who are attending today?

(No response.)

No? Well, then we're going to finish early.

A PARTICIPANT: That's all right, Shirley.

(Laughter.)

That's all right? Well, I would like to thank all of you for braving the Washington weather, and for your contributions today. Please leave your slip.

A PARTICIPANT: Your badge and your tent.

MS. ROOKER: Your badge and your tent. Your tent is your name thing that's on the table in front of you. Now I figured it out. When he said "tent" I thought what is he meaning?

(Laughter.)

Anyway, leave those and shall we have a motion to adjourn?

A PARTICIPANT: Shirley --

A PARTICIPANT: So moved.

MS. ROOKER: We move -- the motion to move to adjourn. Do I hear a second?

MS. WILLIAMS: I second the motion.

MS. ROOKER: And all in favor, aye.

ALL: Aye.

MS. ROOKER: Thank you very much. Please leave this. Leave this.