USTA Chief Wants Parity

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Boca Raton, Fla. -- Cable-modem revenue should not be exempt from helping to keep local phone service affordable if competing high-speed-data providers do not enjoy the same exemption, phone-industry officials said here Monday.

The United States Telecommunications Association kicked off its 105th
convention here with a message to regulators that their policies have gone awry
on a number of fronts, including the 50-state program (commonly called the
universal-service fund) designed to keep local phone bills reasonable for the
poor and the costly-to-serve rural population.

USTA president Walter McCormick called on the Federal Communications
Commission, which is reviewing its universal-service policies, to ensure that
cable is not given a regulatory advantage.

"We want to see symmetrical regulation across the board. To the extent that
cable-modem access is accessing an interstate service, we think it should pay
into universal service proportionately to those who access interstate voice
service," McCormick told reporters following a keynote speech filled with fiery
rhetoric about how Washington regulators are "picking apart" local phone
incumbents with outdated rules.

Margaret H. Greene, president of regulatory and external affairs for
BellSouth Corp., issued the same call for balance between digital-subscriber-line service and cable modems.

"If we are assessed for universal service, cable modems should be assessed
for universal service," said Greene, who will serve as USTA chairman for at
least the next year. BellSouth's DSL service makes universal-service-fund
contributions, she said.

USTA members -- the four Baby Bells and hundreds of small carriers -- fear for
the financial viability of their companies if universal-service funding its not
sustained at appropriate levels.

They also believe wireless carriers are not paying enough money into the
fund.

Some cable operators do contribute to universal service -- a point raised in a
panel session here by Alexandra Wilson, vice president of public policy for Cox
Enterprises Inc., which provides local phone service and high-speed data over
its cable lines.

A portion of Cox's voice revenue goes to universal service, and Cox is even a
recipient of universal-service funding.

James Cicconi, AT&T Corp.'s general counsel and senior VP,
said he shared the USTA's view about regulatory parity with regard to universal-service contributions.

Over the years, AT&T has not been known for staking out positions that
track with those of the USTA.

"It may come as a shock to some of you that I believe, we believe at
AT&T, that the disparity between DSL and cable modems on universal service
needs to be fixed, that they ought to be treated similarly," Cicconi
said.

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