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722 REGULATION: ISSUES AND (SOME) ANSWERS
devastated the Gulf Coast of the United States in 2005. In response, the FCC modifi
ed certain USF rules as follows:
• Schools and Libraries Program: The commission opened a new application
window to allow schools and libraries in the affected area and those serving
increased numbers of students and patrons to resubmit their requests for E - rate
funds for 2005.The commission also assigned the E - rate program ’ s highest level
of funding priority (i.e., 90 percent) to schools and libraries in the Hurricane
Katrina disaster area for funding years 2005 and 2006.
• Rural and High - Cost Program: The FCC clarifi ed that, under the rules for
receiving high - cost support, carriers in the disaster area may use US $ 240 million
in high - cost support funds received for high - cost areas in Alabama, Louisiana,
and Mississippi to assist in reconstructing facilities damaged by the hurricane.
• Rural Health Care Program: The commission adopted rules to allow rural and
nonrural public and nonprofi t health care providers, including American Red
Cross shelters providing health care services to disaster victims, to apply for
support for advanced telecommunications and information services used for
telemedicine applications in temporary quarters.
• Low - Income Consumers Program: The FCC adopted Lifeline rules to provide
households eligible for individual housing assistance under rules of the Federal
Emergency Management Agency (FEMA) with temporary wireless telecommunications
service. The commission also adopted Link - Up rules and authorized
US $ 211 million to help pay the costs of reestablishing connections, both
temporary and permanent, to the telecommunications network [7] .
Note that especially in a deregulated competitive environment some carrier must
be designated as the provider of last resort , which concept is part and parcel of
universal service. In other words, some carrier must serve even the least desirable
residential end user, even if that customer lives in the middle of nowhere, requires
only the most basic service, has neither the willingness nor ability to pay, and so on.
Traditionally, the designee was what we currently refer to as the ILEC. Into the
future, it is unclear how this will be handled.
By the way, each state in the United States also has a Universal Service Fund of
some sort. In the case of the state of Washington, with which I am most familiar
because I happen to have the great pleasure of living there, the Telephone Assistance
Program (TAP) derives funding through an excise tax at a rate of 14 percent that
applies to all switched access lines. The tax appears on the customer bill as a separate
line item. TAP revenues go toward providing telecommunications services for low -
income customers. If the resident is homeless, the fund will provide access to a
community voice mailbox.
Universal service is no longer confi ned to the United States. Australia, for example,
formally established a Universal Service Obligation (USO) in 2001, when the government
fi nalized an agreement with Telstra, the ILEC, for the provision of untimed
local calls and upgraded services in the extended zones of Australia. The agreement
provides A $ 150 million for the infrastructure upgrade necessary to provide these
services and was funded from the proceeds of the second sale of shares in Telstra,
which originally was a government agency. The extended zones are located in the