Washington, DC, April 21, 2003 - In a filing submitted on Friday, The Telecommunications Research & Action Center (TRAC) strongly urged the Federal Communications Commission to carefully measure the adverse impact on residential consumers of a proposal to alter how it assesses contributions to the universal service fund (USF). TRAC noted that the proposed change from the current revenue-based methodology (RBM) to a connection-based methodology (CBM) would shift much of the responsibility for USF funding from business users to residential users, and would increase USF rates for many average-use and low-use residential customers.

The current proposal goes against the clear mandate of the Telecommunications Act of 1996, which states that every telecommunication carrier should be assessed for USF contributions. Under the CBM, the assessment would shift from the carriers to the end-users. According to Samuel Simon, Founder and Chairman of TRAC, "Under the proposed CBM, high-volume and low-volume consumers would be charged the same flat fee. This is hardly equitable or nondiscriminatory, given that business consumers, who typically make many interstate calls would be assessed the same as residential consumers, many of whom are low-income and low-volume callers. Low-volume residential consumers would have to contribute the same to the USF as high-volume residential or business consumers."

TRAC stressed the twin hardship faced by low-income and low-volume users who use pre-paid wireless services should the Commission adopt the CBM. Low-income users of pre-paid wireless services are ineligible to receive the FCC's "Lifeline" exemption from USF contributions. Sadly, low-income and low-volume consumers will be charged a flat connection fee regardless of the number of calls they make as well as being ineligible for the Lifeline exemption.

Said Simon, "The connection-based methodology disparately impacts low-income and low-volume residential consumers. It's just plain wrong, and the FCC should abandon any further consideration of this unfair methodology."

TRAC, founded in 1983, is a non-profit membership organization based in Washington, DC that promotes the interests of residential telecommunications customers. TRAC staff researches telecommunications issues and publishes rate comparisons to help consumers make informed decisions regarding their long distance and local phone service options. TRAC can be found on the web at http://www.trac.org.

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