BEFORE THE WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION



Rulemaking to Establish a  )  Docket No. UT-980311(r)
Universal Service Mechanism  )  
for Intrastate Service  )  Comments of TRACER
______________________________)

 The Washington Telecommunications Ratepayers Association for Cost-based and 
Equitable Rates (TRACER) submits these comments in response to the Commission's 
Notice of Request for Comments on 2nd Draft Universal Service Rules.
 In TRACER's view, this 2nd Draft of the Universal Service Rules is much 
improved over the 1st Draft in several important respects.  Nevertheless, 
TRACER continues to have several fundamental concerns about this version of the 
rules and the USF program they would establish if approved.  Most of those 
concerns relate to way in which the SUSF would be funded or with the definition 
services to be supported and the criteria for ETC eligibility.  Thus, to a 
great extent, TRACER's comments on this draft of the proposed rules are similar 
to those submitted in connection with the 1st Draft.
 As with the comments on the 1st Draft, these comments are presented as general 
comments and as comments directed to the specific sections of this draft of the 
proposed rules; they should also be read in the context of the comments 
previously presented by TRACER on the 1st Draft of the USF rules.

I. GENERAL COMMENTS
 TRACER supports the goal of reforming the mechanisms that have been relied 
upon in the past to ensure the availability of affordable universal 
telecommunications service in high-cost areas.  Under traditional universal 
service policies consumers in high-cost areas have received support through a 
complex system of explicit and implicit subsidies embedded in interstate and 
intrastate rates.  These subsidies have ensured that high-cost consumers are 
not forced to pay prohibitively high rates in order to have phone service.  
Universal service policies have also helped ensure that low-income consumers 
have access to phone service at rates that are affordable.  It is widely agreed 
that these universal service policies have benefited all telephone users by 
ensuring that virtually everyone that wants a phone can be connected to the 
public switched network and, therefore, be accessible by phone to everyone else.
 In its Telecommunications Act of 1996 Pub. L. No. 104-104, 110 Stat. 56 
("Act")., Congress established a pro-competitive, deregulatory national policy 
framework for telecommunications services. The stated purpose of the Act is "to 
promote competition and reduce regulation in order to secure lower prices and 
higher quality services for American telecommunications consumers and encourage 
the rapid deployment of new telecommunications technologies." (Emphasis added.) 
Act, supra, purpose statement, at 56.  As explained by the FCC in its recent 
Model Platform Order Federal-State Joint Board on Universal Service, Fifth 
Report and Order, CC Docket No. 96-45, FCC 97-160 (rel. October 28, 1998) 
("Model Platform Order"). at ¶ 6, one of the principal goals of the Act is 
reforming universal service support so that universal service goals continue to 
be met as local exchange and exchange access markets move from monopoly to 
competition.  Thus, Congress directed the FCC to reform universal service 
support mechanisms to ensure that they are compatible with the pro-competitive 
goals of the Act.
 It is generally believed that, in requiring incumbents to open their markets 
to competitive entry, Congress rendered unsustainable the existing universal 
service support system of implicit subsidies.  The assumption is that rate 
structures that contain implicit subsidies are not sustainable in a competitive 
market, because competitors would enter markets where rates are artificially 
high relative to costs, and would not enter markets where rates are 
artificially low.  Thus, absent rate restructuring and restructuring of the 
universal service system, competitive market entry strategies would erode the 
support for universal service.
 In order to sustain universal service in a competitive environment, Congress 
determined that universal service support should be explicit, to the extent 
possible. Joint Explanatory Statement of the Committee of the Conference, S. 
Conf. Rep. No. 230, 104th Cong., 2d Sess. 131 (1996).  Thus, the primary 
purpose of reforming universal service support mechanisms is to protect 
universal service in a competitive environment.
 As stated previously, TRACER supports the goal of reforming the system of 
implicit universal service subsidies.  However, TRACER believes that the 
development and implementation of an alternative subsidy mechanism must proceed 
in a manner that will minimize the disruption and adverse impacts on consumers 
of all kinds.  Accordingly, in the following comments TRACER a number of 
changes to the draft rules that are consistent with federal and state law and 
that will both achieve universal service goals and avoid undue disruption and 
adverse impacts on all consumers.

II. COMMENTS ON PROPOSED RULES

GENERAL

WAC 480-123-010 Name.
 No comment.

WAC 480-123-020 Purpose and Authority.
 This section should track the requirements of RCW 80.36.600-.620 (ESSB 6622).  
Indeed, RCW 80.36.620 provides:  "Any rules regarding universal service adopted 
by the utilities and transportation commission shall comply with the purpose, 
as stated in RCW 80.36.600, for establishing a program for the preservation and 
advancement of universal telecommunications service."  (Emphasis added.)
 In order to meet this legislative requirement, TRACER recommends that this 
section be rewritten as follows:
 The purpose of this chapter is to preserve and advance universal 
telecommunications service in a competitive environment and to benefit 
telecommunications ratepayers in the state by prescribing a program of explicit 
support for the provision of basic telecommunications service in high-cost 
locations that is specific, sufficient, competitively neutral, and 
technologically neutral.
 TRACER believes that some of the language in this section of the draft rule is 
inappropriate.  For example, one of the principles set forth in the 1996 Act 
that is to guide the Federal-State Joint Board and the FCC in establishing 
universal service policies is that consumers in rural, insular, and high-cost 
areas "should have access to . . . services . . . that are reasonably 
comparable" to those provided in urban areas and that are "available at rates 
that are reasonably comparable to [those] in urban areas."  (Emphasis added.) 
1996 Act § 254(b)(3).  It is important to recognize that this is a guide, not a 
mandatory requirement, and that the standard is "reasonable" comparability, not 
identity of services or rates.  Obviously, reasonably comparable service 
capability may be better provided by a different technology in a rural, 
high-cost area (e.g., wireless or satellite service) than is appropriate in a 
dense, urban area (e.g., fiber, copper, or coaxial cable).  Strict 
comparability, as contemplated in the draft rule, is inappropriate and is not 
required by either the federal Act or RCW 80.36.600-.620.
 In addition, TRACER disagrees with the statement in the draft rule that 
"competition will be promoted in all local telecommunications markets though 
minimizing implicit sources of support, and maximizing explicit sources of 
support. . ."  As discussed in the General Comments section above, the primary 
purpose of establishing explicit sources of support for high-cost areas is to 
protect universal service support from erosion resulting from competition.  A 
secondary purpose may be to more equitably spread the burden of supporting 
affordable service in high-cost areas.  But, the purpose of establishing 
explicit subsidies is not to promote competition in all areas.  In fact, 
maximizing explicit sources of support will have the opposite effect, at least 
in areas outside of those that receive the support.  Even in supported, 
high-cost areas, competition will not be promoted unless the universal service 
program is truly competitively neutral.  As discussed below, TRACER does not 
believe that the program proposed in the draft rules meets that criterion.  
Moreover, subsidizing all lines, as proposed in the draft rules, can discourage 
competition for advanced services where the competitors for those services do 
not bundle them with basic switched voice services.


WAC 480-123-030 Applicability.
 No comment.

WAC 480-123-040 Reports Include Declaration.
 No comment.

WAC 480-123-050 Coordination.
 No comment.

WAC 480-123-060 [Reserved]
 No comment.

WAC 480-123-070 Outcome Measure Report.
 No comment.

DEFINITIONS

WAC 480-123-080 Definitions.
 No comment.

WAC 480-123-090 Access Line.
 As stated in its comments on the 1st Draft of the proposed rules, TRACER 
suggests that the definition of "access line" be changed to state that "'access 
line' means 'switched access line' or 'radio access line' as those terms are 
defined in RCW 82.14B.020."

WAC 480-123-100 Access-Line Equivalent.
 This definition is inappropriate for at least three reasons. First, it is not 
technically sound.  If the basis for considering a DS1 trunks to be equivalent 
to two access lines is the fact that DS1 service provided over copper requires 
use of a 4-wire loop, the definition ignores the fact that DS1 service can also 
be provided over fiber.  Further, DS3 is almost always provided over fiber; 
therefore, the fact that DS3 can provide capacity equivalent to 28 DS1s, in 
terms of voice-grade channels, is irrelevant for determining cost.
 Second, the equivalency presumed in this definition does not reflect the 
assumptions about access line counts used in calculating per-line costs in the 
cost studies at issue in Docket UT-980311(a).  If the Commission were to use 
the definition of "access-line equivalent" in the proposed rule, a mismatch 
between the basis for the calculation of cost and the support that could be 
received would result.
 Third, use of the proposed definition of "access line", which includes "access 
line equivalents", particularly in the calculation of a revenue benchmark, 
would lead to anomalous and nonsensical results.  Take for example, the 
calculation of a revenue per-line figure for Digital Switched Service ("DSS").  
A DSS customer purchases either a DS1 or a DS3 connection from its premise to 
the LEC CO and then pays for the number of DSS trunks it actually uses over 
that connection.  For example, the customer may purchase a DS1, which has the 
capacity for carrying 24 DSS trunks, but that customer may actually use only 20 
of those trunks.  In that case the customer pays for 20 DSS trunks in addition 
to the DS1.  Under the proposed definition, the revenue from the DS1 and the 20 
DSS trunks would be divided by "two access lines", yielding a 
revenue-per-access line figure that is grossly distorted.  The proposed 
definition is simply unworkable.
 The concept of "switched access line equivalency" for different switched 
services has been fully developed in connection with E-911, TDD, and WTAP 
service funding.  See "Enhanced 911 Excise Tax Study," Report to the 
Legislature on the Enhanced 911 Excise Taxes in Washington State, Washington 
State Department of Revenue, July 1, 1995, at 3-23 through 3-25 ("Applications 
of the Tax to Different Telecommunications Technology").  As discussed in that 
Report, for wireless services, each telephone number assigned to or used by an 
end-user for two-way, local wireless voice service is considered as one radio 
access line.  For wireline services, (1) each line for residential and business 
local exchange service; (2) each trunk for PBX local exchange service; (3) each 
Network Access Register (NAR) for restricted (blocked) centrex service; (4) 
each line for unrestricted (unblocked) centrex service; (5) each trunk for 
Digital Switched Service (DSS); and (6) each B-channel for ISDN service, is 
considered as one switched access line.  This "equivalency" table puts all 
switched and radio access lines on an equal footing, since it measures the 
comparable ability of each of the above services to access the PSTN. 
 Depending on the various uses of the term "access line" in the rules 
eventually adopted by the Commission, it may be necessary to have different 
definitions in order to achieve rational results.

WAC 480-123-110 Administrator.
 No comment.

WAC 480-123-120 Commission.
 No comment.

WAC 480-123-130 Telecommunications Carrier.
 The definition should be expanded to clarify that an entity providing 
telecommunications services to itself or to affiliated entities is not to be 
considered a "telecommunications carrier" subject to the requirements of the 
USF program.  An entity not otherwise a telecommunications carrier should have 
to contribute to the USF and make reports called for under the proposed rules 
only to the extent that it sells excess capacity to unaffiliated entities.
 In addition, there should be a definition of a wireline carrier and a 
non-wireline carrier.  If the Commission is going to distinguish between them 
and treat them differently, there needs to be a definition of what is and what 
is not a wireline carrier.  For example, is cable TV a wireline carrier?  Is a 
carrier using fixed wireless technology a wireline or a wireless carrier?  What 
about a carrier that uses a mix of technologies?

WAC 480-123-140 Eligible Telecommunications Carrier (ETC).
 This definition should be revised to refer only to eligibility to draw from 
the state USF.

WAC 480-123-150 Service Area.
 No comment. 

WAC 480-123-160 End-User Retail Revenue.
 As discussed below, TRACER does not believe that contributions to universal 
service support should be based on revenue, but should be based on switched 
access lines and, if wireless carriers are actually able to draw from the SUSF, 
from radio access lines.  In any case, if it is ultimately determined that 
end-user retail revenues should be used, only those end-user retail revenues 
from intrastate telecommunications services provided within Washington should 
be included.
 Moreover, if USF contributions are required from private network owners or 
end-users who lease services from carriers and resell excess capacity to 
non-affiliated entities, provisions will need to be added to the rules to 
ensure that there is no double-assessment of USF contributions on the resold 
excess capacity.

WAC 480-123-170 Telecommunications Services.
 See comments on WAC 480-123-170.

WAC 480-123-180 High-Cost Location.
 No comment.

WAC 480-123-190 Revenue Benchmark.
 TRACER agrees that the revenue benchmark should take account of all revenues 
the ETC receives as a result of providing service, including vertical service 
revenue and revenue from all access services.  To be consistent with that 
principle, revenue from Primary Interexchange Carrier Charges ("PICC") should 
be included in the revenue benchmark.

WAC 480-123-200 Services Supported By The Universal Service Fund.
 Subsection (2) is inappropriate and should be stricken for several reasons.  
First, the requirement that new and upgraded lines in high-cost locations be 
capable of sending and receiving information rates no lower than 28.8 kilobits 
per second ("Kbps") is inconsistent with the definition of basic 
telecommunications service to be supported under the federal USF program and 
with the definition of basic telecommunications service contained in RCW 
80.36.600(7)(b).  As stated in RCW 80.36.620:  "Services to be supported are 
only those basic services defined in RCW 80.36.600(7)."
 Second, it is unclear what the reference to "new and upgraded lines" means 
with respect to wireless services.  Based on the proposed definition of "access 
line" in WAC 480-123-090, presumably it would mean any new service provided to 
any customer in a high-cost location.  Because a wireless carrier is not 
building a physical wireline to each customer, but providing a radio signal and 
a mobility or "roaming" capability, meeting this criterion would require 
upgrading and changing the wireless carrier's entire system.  In other words, 
an incremental change on a "line-by-line" basis would be unlikely.  Therefore, 
TRACER assumes that this proposed requirement effectively would require 
wireless carriers to meet the 28.8 Kbps transmission standard for all customers 
everywhere service is provided.
 Third, current switched wireless services such as cellular and PCS services 
cannot meet this transmission standard.  It is TRACER's understanding that the 
current transmission limits of those services is 14.4 Kbps.  Thus, imposing a 
requirement of 28.8 Kbps effectively eliminates wireless carriers from ETC 
eligibility.  As a result, it cannot be said that the proposed state USF 
program is competitively neutral.
 TRACER recognizes that the FCC in its recent Model Platform Order at ¶ 67 
stated:  "We agree that a reasonable standard for ensuring that a model's 
network does not impede the provision of advanced services would ensure the 
reasonable performance of 28.8 Kbps modems."  However, there is a significant 
difference between saying that a cost proxy model should not assume a network 
design that would impede the performance of 28.8 Kbps modems and saying that a 
guarantee of transmission speeds of no less than 28.8 Kbps is a defining 
characteristic of basic service to be supported and a criterion for eligibility 
to draw from the state USF.  Data transmission at speeds no less than 28.8 Kbps 
is not a criterion for eligibility to draw from the federal USF, nor is it 
included in the definition of basic telecommunications service adopted by the 
Federal-State Joint Board or the FCC.
 If it is ultimately determined by the Legislature that this criterion should 
be added to the definition of supported basic services, thereby effectively 
eliminating wireless carriers from ETC status and being eligible to draw from 
the SUSF, TRACER believes it would be inappropriate to require wireless 
carriers or their customers to contribute to the fund.
 As an alternative, TRACER recommends that the rules be amended to provide for 
a waiver of the 28.8 Kbps transmission requirement for wireless carriers.  In 
this way, wireless carriers could remain eligible to draw from the USF, and 
consumers could be free to make a market decision of whether to obtain basic 
voice service from a wireless carrier or from a wireline carrier that might 
also be able to provide faster digital transmission capability.
 Finally, TRACER understands that inclusion of this requirement was intended to 
ensure that standard modems widely available to consumers today will perform in 
rural areas at speeds at least as fast as the same modems can perform on the 
typical existing wireline network of a non-rural wireline carrier.  TRACER 
agrees that this is a desirable objective. However, it believes it is best 
achieved by reliance on market pressures to incent incumbent wireline LECs to 
upgrade their networks.
 It should be remembered that data transmission capabilities for such 
applications as Internet access, including high bandwidth capabilities, can be 
provided by a number of technologies including wireline telephone networks, 
terrestrial wireless services (e.g., cellular digital packet data (CDPD), 
Ricochet, LMDS, 38 GHz), satellite, cable TV systems, and fiber optic 
networks.  And, there is no reason why high bandwidth services and applications 
must be provided over the circuit-switched telephone network or by incumbent 
LECs.  The mere fact that alternative technologies for data applications are 
either available now or will be soon should incent ILECs to maximize their data 
transmission capabilities.
 In addition to reliance on market pressures, the Commission can also encourage 
ILECs to make the necessary network enhancements and permit them cost recovery 
and a reasonable return on the necessary investments.  Moreover, to the extent 
that USF support is based on cost estimates using network designs that will 
accommodate 28.8 Kbps transmission, wireline ILECs should receive sufficient 
support to allow them to provide basic services in a manner that will also 
permit reasonable performance of standard modems.


CONTRIBUTORS AND CONTRIBUTIONS

WAC 480-123-210 Contributors To the Universal Service Fund.
 TRACER believes that the most appropriate basis for USF contributions is an 
end-user per-line excise tax or surcharge imposed on each switched access line 
and, if wireless carriers are fully eligible to draw from the SUSF, on each 
radio access line.  All carriers providing those lines should be required to 
collect the taxes or surcharges.  Such a contribution system would be 
competitively neutral, easy to administer, minimize the cost the USF by 
avoiding "taxes on taxes", and would guarantee that the ultimate burden of USF 
support would be equitable and avoid undue disruption for carriers and 
consumers.

WAC 480-123-220 De Minimis Contributions Not Required.
 This provision should be amended to provide that, where the costs of 
compliance exceed the amount of the contribution, the contribution will be 
deemed to be de minimis.  $100 per year is too small of a standard for de 
minimis contributions.


WAC 480-123-230 Contributions Based on End-User Retail Revenue As Reported on 
FCC Universal Service Worksheet Form 457.
 TRACER recommends that this section be reworked.  See comments on WAC 
480-123-210.
 TRACER believes that basing contributions on revenue is ultimately unfair to 
consumers.  Depending on how it is passed on to end-users, it also may not be 
competitively neutral, and, perhaps, be anticompetitive.  It certainly leads to 
unnecessary administrative expense and unnecessarily increases the cost of the 
SUSF.
 When contributions are based on revenues, end-users that pay the highest rates 
end up paying the most for USF.  It should be remembered that retail rates 
(hence, revenues), even for similar services, vary widely throughout the 
state.  Why should a residential ratepayer "A" be required to contribute three 
times what ratepayer "B" contributes simply because he/she takes service from a 
LEC whose retail rates are three times those of the LEC providing service to 
ratepayer "B"?  Such a result is not fair to consumers.
 The revenue approach also creates a further inequity, or at least a difficult 
complication, for entities offering bundled services, some of which may not be 
telecommunications services. For example, a service provider that offers 
telecommunications transmission services, bundled with computer services or 
with data management or other management services, faces a real problem.  Does 
it have to pay universal service contributions based on the total revenues 
received for the bundled service?  If not, how is the allocation of revenue to 
be made?  Many of these bundled service providers, including systems 
integrators, would find it extremely difficult, if not impossible, to allocate 
the revenue among the various services and products included in their service 
offerings.  At a minimum basing contributions on net revenues would force a 
significant change in business practices. In effect, it would stifle creative 
packaging of telecommunica-tions and non-telecommunications services.  While 
proposed in the name of promoting equity and competitive neutrality, it likely 
would have just the opposite effect.
 As discussed previously, TRACER believes that contributions should be 
disclosed and recovered through an explicit end-user excise tax or surcharge.  
Even if carriers are required to contribute directly to the support fund, 
consumers will ultimately pay for that support.  There really can be no 
question that carriers will pass the cost of USF contributions to their 
customers.
 It is critical that, if contributions are based on revenues, carriers be 
required to assess the cost of those contributions proportionately across all 
of their services.  Unless carriers are required to assess the cost of 
contributions proportionately across all of their services, they likely will 
allocate the cost of the subsidy strategically among those services, placing 
the burden of recovery on the most captive customers.  Because universal 
service is a broad social responsibility and provides a broad social benefit, 
the burden should fall equally and equitably on all, not only or 
disproportionately on the most politically or economically vulnerable.


WAC 480-123-240 Revenue Reports.
 This section is troublesome for a variety of reasons. First, it is clear that 
under the contribution approach proposed in the draft rules a significant 
administrative and bureaucratic obligation will be created, both for the 
Commission and for carriers.  This also will require new, effective, and 
expensive procedures to protect the highly proprietary nature of the 
information provided.  This would be unnecessary if contributions were based on 
the number of switched and radio access lines provided, as proposed by TRACER.
 Second, the penalties appear to be draconian and largely arbitrary.  It is 
certainly troublesome to have the Commission turned into a form of USF police.

WAC 480-123-250 Access Line Reports.
 No comment.

WAC 480-123-260 [Reserved].
 No comment.

WAC 480-123-270 Determination of Contribution.
 See comments on WAC 480-123-230 and -240.

WAC 480-123-280 Net Contributions Required.
 See comments on WAC 480-123-390, infra.

WAC 480-123-290 Contributions From Company Revenue.
 TRACER disagrees with this section and does not believe it is in the public 
interest.
 TRACER does not understand that the intent or effect of the proposed 
requirement that SUSF contributions "be paid from carrier revenue" and "not . . 
. billed directly to customers" would be to preclude carriers from recovering 
the costs of contributing to the SUSF.  In TRACER's view, a requirement 
purporting to preclude such recovery would be illegal--not only inconsistent 
with rate base, rate-of-return principles but also an unconstitutional 
confiscation of property.  Instead, TRACER understands the language as 
purporting to require only that the contributions be buried in the carrier's 
rates and not identified to customers as a discreet part of the prices they pay.
 TRACER believes that contributions should be disclosed and recovered through 
an explicit end-user surcharge.  Even if carriers are required to contribute 
directly to the support fund, they will pass the cost of those contributions to 
their customers.  Because the end result is the same, carriers should recover 
their universal service support contributions through an explicit end-user 
surcharge and provide information to consumers about the services they purchase.
 Even if contributions are based on end-user revenues, an explicit surcharge, 
appearing as a line-item on an end-user's bill, will require carriers to assess 
the cost of contribution proportionately across all of their services, rather 
than allowing them to allocate the cost of the subsidy strategically among 
their services or customers.  As discussed above in connection with WAC 
480-123-230, this is an extremely important consideration if competitive 
neutrality and fairness to consumers is to be maintained.
 TRACER believes that a better approach is to impose a uniform, flat excise tax 
or surcharge on each switched access line and, if wireless carriers are fully 
eligible to draw from the SUSF, on each radio access line.  The tax, then, 
could be offset by an equal reduction in the statewide averaged basic exchange 
rates.  In such a case, no one would be harmed by switching from an implicit to 
an explicit universal service support mechanism.
 TRACER believes there is no legitimate good served by trying to keep consumers 
in the dark about the costs of ensuring universal service.  If the public is to 
be able to make informed decisions about how they want their money spent among 
competing interests, they must have the relevant information made available to 
them in a meaningful way.  Only explicit end-user surcharges satisfy that 
requirement.
 In short, adoption of an end-user surcharge would make the universal service 
support system accountable to those who are paying for it -- the ratepayers.
 Also, if carriers include the cost of contribution in their charges for 
service, the contribution would be treated as revenue and would be subject to 
federal and state taxes.  By requiring that USF contributions be buried in 
rates, as the draft section appears to contemplate, ratepayers ultimately will 
be forced to pay taxes on these USF contributions.  In other words, consumers 
will have to pay taxes on taxes.  The cost of the USF will be higher and 
consumers will be forced to pay more to support universal service than if the 
contributions were included on their bills as explicit end-user excise taxes.

WAC 480-123-300 Commission Notice on Universal Service.
 No comment.

ELIGIBLE TELECOMMUNICATIONS CARRIERS

WAC 480-123-310 Eligibility to Draw Universal Service Fund Support.
 No comment.

WAC 480-123-320 Petition for Eligible Telecommunications Carrier.
 No comment.

WAC 480-123-330 Designation of Eligible Telecommunications Carriers.
 This section should be amended to clarify that eligibility for ETC status is 
not conditioned on a carrier subjecting itself to Commission regulation--in 
this case, quality of service regulation--in conflict with the provisions of 
RCW 80.36.370.


WAC 480-123-340 Modification, Revocation, or Suspension of Eligible 
Telecommunications Carrier Designation.
 No comment.

WAC 480-123-350 Limitation on Resellers' Eligibility for Designation.
 No comment.

REVENUE BENCHMARK AND CALCULATION OF SUPPORT

WAC 480-123-360 Revenue Benchmark--Wireline.
 The benchmarks should be applied for a period longer than 18 months.  Revision 
of the benchmarks should occur only if the Commission determines that 
affordability has changed.  If the effects of competition on carrier revenues 
is considered, the effects of such competition, including the effects of new or 
alternative technology, on costs should also be taken into account at the same 
time.  If costs are to be re-examined only every three years, review of the 
revenue benchmarks should be conducted on the same schedule.

WAC 480-123-370 Revenue Benchmark--Non-Wireline.
 There should be no separate revenue benchmark for wireless carriers.  Setting 
different revenue benchmarks for different technologies is not competitively or 
technologically neutral.
 Setting a separate non-wireline benchmark might preclude entry of a cheaper 
technology, such as fixed-wireless, which may not be providing service in the 
high cost areas today.  Entry of such a new technology should be encouraged if 
it can provide service cheaper than either the existing wireline companies or 
the existing wireless companies.  Low-income residential customers and 
struggling businesses located in low-cost areas should not be required to fund 
an inefficient carrier in high-cost areas, if a cheaper one can be found.
 The Commission should encourage that entry of low-cost companies.  Then, in 
two or three years, if it deems it appropriate, the Commission could gather new 
data on