6. Solicitation of Comments
Based upon the relevant scope of inquiry as set forth above, we envision the review of the CHCF-A program as illustrated in Appendix H. We therefore solicit comments on the following issues:57
A. CHCF-A Support Evaluation
1. Has the CHCF-A met its goal of promoting universal service while minimizing rate disparity?
2. If the CHCF-A has met its goal, should it be discontinued immediately or should it be phased out over time?
3. If the CHCF-A support should be phased out, should it be done in accordance with the current "waterfall" mechanism?
4. If the CHCF-A fund is discontinued or altered, is there a need for a monitoring mechanism to assure that universal service goals continue to be met?
5. If the CHCF-A has met its goals, should new goals be adopted based on changes in the needs of consumers, technological advancements, competition in the market, and California objectives?
B. Review of Program Implementation Rules
1. What implementation rules must be revised to account for proposed program changes?
2. Should new rules be adopted? If so, what rules, and why?
3. Should the current fourteen small ILECs continue to be classified as rate of return carriers?
4. Should the carriers who have elected not to receive CHCF-A support be reclassified as Non-CHCF-A eligible carriers, thus reducing the number of eligible carriers? How should they then be considered, for ratemaking purposes?
C. Implementing a Cap on the CHCF-A
1. Should the Commission implement a cap on the CHCF-A subsidy?
2. If a cap is implemented, how should the amount be determined?
3. What affects could a cap have on universal service?
D. Basis for Urban Rate Caps
1. Should AT&T's urban rate which is currently used as a basis for a small ILEC's rate design continue to be used going forward to determine basic service rates?
2. Should the small ILECs' rates be adjusted automatically in response to changes in AT&T's rates?
3. How should small ILECs' rates be determined if AT&T's rates are no longer regulated?
4. How should the small ILECs' basic residential rates be determined now that full pricing flexibility has been realized by the URF ILECs?
5. Should the Commission consider phasing-in the small ILECs' subsequent increases in basic rates over a defined time period to avoid rate shock?
6. Should the Commission consider granting current CHCF-A eligible small ILECs full pricing flexibility?
7. Should the Commission adopt a different mechanism for determining the CHCF-A basic residential service rate?
E. Standardizing Accepted Costs Among Carriers
1. Which carrier costs can be standardized for eligible carriers?
2. Should standard costs be established?
3. How often and by what means should costs be reviewed and/or adjusted?
F. Per Access Line Subsidy
1. Should the Commission establish a per access line subsidy for CHCF-A eligible carriers?
2. Should all small carriers be subject to the same per access line subsidy amount or should amounts be established on a per carrier basis?
3. Would the cost threshold model used for the CHCF-B be appropriate for the CHCF-A?
4. If a per access line subsidy is established, how should the Commission transition from rate of return regulation to a per access line subsidy?
G. Monitoring Affiliate Transactions
1. Should the rules for affiliate transactions be modified?
2. Should the Commission adopt new reporting requirements for affiliate transactions?
3. How should fair market rates for the use of regulated networks by affiliates be calculated?
4. Should affiliates' rates of return be considered when determining that of the regulated entity?
H. Opening Small ILEC Territories to Competition
1. Should wireline competition be allowed in small ILEC territories?
2. When evaluating the presence of competition should all communications technologies be considered?
I. Alternative Models to Consider
1. Should an Incentive-Benchmark Subsidy Model be considered in which carriers are rewarded for improving efficiency in operations, enhanced market penetration of universal service, and prudent investments?
2. Should an End-User-Direct Subsidy Model be considered in which the payment of a subsidy is directed to end users?
3. Should a Risk-Sharing Subsidy Model be considered in which, business risks are shared between shareholders and rate payers? For example, should any non-regulated revenues generated from the investment of the CHCF-A fund subsidy mechanism, like capital investment in infrastructure, be shared with the CHCF-A fund?
4. Should a Total Operations Model be considered in which, all communications services including landline telephone service, broadband, VoIP, etc. are included for ratemaking purposes?
5. Should the Commission consider purchasing services for rural customers from alternative providers to reduce costs?
6. What factors should the Commission consider to determine if an alternative provider is a suitable substitute?
7. What other subsidy mechanisms should the Commission consider in this review?
J. General Issues
1. How can the CHCF-A program administration be made more efficient?
2. Should we consolidate the CHCF-A with other public programs to efficiently capture the synergic potential of programs? If so, what programs should be included?
3. Should the entire small ILEC service territory remain eligible for high cost support? If not, what areas should be eligible for CHCF-A support?
4. Should the CHCF-A subsidy be expanded to cover other voice communication technologies such as wireless and VoIP?
5. What other issues should the Commission consider in this review?
6. What impacts will developments in the FCC USF proceeding have on the CHCF-A program?
7. Should the CHCF-A subsidy be de-linked from the federal subsidy?
57 To the extent questions identified for comment in the preceding text are not explicitly set forth below, parties are still expected to address those questions in their filed comments.
