Proposed changes in the universal service fund (USF) contribution...

it was “just plain wrong, and the FCC should abandon any further consideration of this unfair methodology.” TRAC urged the Commission to “carefully measure the adverse impact” on residential consumers of the proposal to alter how it assessed contributions to the USF. TRAC said the proposed change to a connection-based methodology from the current revenue-based one would shift much of the responsibility for USF funding to residential users from business ones and would increase USF rates for many average-use and low-use residential customers. It said the connection-based methodology, which would shift the assessment from the carriers to end users, would violate the Telecom Act by excluding some parties from contributing to the USF. TRAC Pres. Samuel Simon said under the connection-based system, high-volume residential or volume consumers and low-volume residential 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.” TRAC said low-income and low-volume users of prepaid wireless services also would be disadvantaged by the connection-based methodology because they were ineligible to receive the FCC’s “Lifeline” exemption from USF contributions and would be charged a flat connection fee regardless of the number of calls they made. In a separate comment, the National Grange, a rural advocacy organization, said a modified revenue-based methodology was the “most reasonable alternative for funding the USF because it [would] result in the fewest disruptions in the longstanding relationships among various companies and their consumers.” The Grange agreed with TRAC that connection-based methodologies would negatively affect low- volume long distance callers, residential customers and customers on fixed incomes that were “disproportionately represented in rural communities.” It said since one of the major purposes of the USF was to provide or enhance telephone services in high-cost rural residential areas, there was no “logic in any methodology that would effectively increase USF contributions from consumers who already reside in high cost rural areas.”