STATE OF NEW JERSEY
BOARD OF PUBLIC UTILITIES
DOCKET NO. TX95120631

IN THE MATTER OF THE :
INVESTIGATION REGARDING :
LOCAL EXCHANGE COMPETITION :
FOR TELECOMMUNICATIONS SERVICES :

BRIEF AND APPENDIX ON BEHALF OF
THE DIVISION OF THE RATEPAYER ADVOCATE
ON UNIVERSAL SERVICE ISSUES

BLOSSOM A. PERETZ
Ratepayer Advocate
Of Counsel

HEIKKI LEESMENT
Deputy Ratepayer Advocate
LAWANDA R GILBERT
Assistant Deputy Ratepayer Advocate
On the Brief

Currently New Jersey ranks 38th in the nation in the number of computers available to students.⁸ Clearly measures must be taken to ruse our rankings and ensure that New Jersey's students are not disadvantaged with the ever increasing importance of technology in today's society. To address these concerns, the Ratepayer Advocate is currently developing a comprehensive report for the New Jersey Legislature conceding the technology needs for schools and libraries. This report will include proposals with the goal of ensuring that New Jersey's schools and libraries meet the educational needs of our state in the information age. Recognizing that the needs are great it is incumbent upon the Board and the telecommunications industry to reduce the telecommunications costs of our schools and libraries to the maximum degree possible, thus increasing the funding available for the considerable costs Associated with equipment and training that must be resolved The goals of this program include: (1) establishing a sufficient technological capability within schools so that students and school districts obtain the benefits of distance learning and are not just exposed to, but are actually able to make extensive use of such technologies; (2) to provide an appropriate number of computers in the classrooms so that computers are fully integrated into all aspects of the curriculum and computer access is more than just a dream to the majority of New Jersey's students; (3) establish local libraries as technology centers that can be used by all citizens to access the Internet and other information.

A quantification of the overall cost of the schools and library program will be identified report is finalized, its conclusion and analysis will be submitted to the Board, hopefully, with the Advocate's reply comments in this phase of the local competition docket. While the program will require significant expenditures, the Consequences of not undertaking the program will be incalculable in monetary teens, through reduced capabilities of our students and diminished career opportunities for decades to come. In the current proceeding, the Board has an opportunity to partner with the Legislature and our schools ant libraries in creating integrated solutions ant comprehensive public policies in several public areas. By sharing the common burden and absorbing a measure of these costs through the New Jersey Universal Service Fund, thereby reducing the costs which taxpayers, schools and libraries would otherwise have to bear, the Board can be a catalyst for fundamental improvement to education throughout the State. For many of the state's citizens, schools and libraries will be the only access they have to the Internet.

The Ratepayer Advocate recommends that the Board adopt a telecommunications discount program for schools and libraries that is consistent with that recommended by the Federal-State Joint Board while avoiding certain fundamental limitations that represent potentially serious defects in that program as it may apply to New Jersey. Specifically,follows:

 While the above program represents significant potential needs-based discounts, it is not clear (1) the extent to which NJ's schools will qualify for a very significant discount, or (2) whether the PCC will adopt the Joint Board decision, or (3) the extent to which the national cap of $2.25 billion will additionally impact on New Jersey. New Jersey needs to decade what is required, and make it happen.

The Board must take actions that ensure, not by chance or depending on other circumstances, that all schools and libraries in this State have the ability to afford the advanced

leave this vitally important societal goal subject to the vagaries and uncertainties of the federal program. This must be a priority for the Board and for the State. Consistent with that goal. The Ratepayer Advocate proposes that as an initial measure, the Board adopt the discounts proposed by the Joint Board, without the cap, as the level of discount to be afforded to New Jersey's schools and libraries. In addition, the Board should require that schools and libraries receive local exchange service and all other services terrified separately for residential subscribes at rates that are no higher than those at which equivalent services are provided to residential customers on a statewide basis. This lane recommendation recognizes not only the fiscal pressures of schools and libraries, but also that, for many uses, the only practical vehicle for accessing the internet will be through schools and libraries. In other words, for many citizens, school and library telecommunications represents telecommunications that, for others, is residential service.

Finally, the Ratepayer Advocate recommends the, if a school, due to unique local conditions finds that the level of funding for which it is eligible under the federal and State programs is insufficient then it should have an opportunity to seek additional support from the telecommunications fund. The Board should cooperate with the State Department of Education in determining any Location of the fund in response to such requests.

It is clear that the are many unknowns with regard to the schools and library program recommended by the Joint Board. While the ultimate level offending for any given state is unknown, it is also not known whether the benefits of that program will enable schools and libraries to actually afford distance learning and Internet access for most students. It must be recognized that the total cost of Internet service include not only telecommunications access. but

of the school and library fund after two years, to ensure that the fund is working to achieve the State's goals.

VIII. FEDERAL SUBSIDY PROGRAMS

Universal telecommunications services has been supported by a number of federal and state programs. Two low-income programs currently exist udder federal auspices - Lifeline and Link-Up America. The Lifeline program consists of two plans, but only California participates in Plan 1, which is not discussed herein. Plan 2, in which over 30 states have elected to participate but not including New Jersey, provides a subscriber's bill could be reduced by twice the $3.50 monthly Subscribe Line Charge, or more, if the state more than matches the value of the federal waive. The state contribution can come from any source including connection charges, customer deposit requirements and state assistance for basic local telephone service.

The Link-Up America program provides assistance by reducing the service connection charges paid by eligible customers, up to one-half of the carrier's customary connection charge or $30.00, whichever is less.

Other programs, such as the Carrier Common Line Charge ("CCLC"), were intended to provide overall cost support for local exchange services without being targeted either to high cost areas or low income customers. Finally, New Jersey historically has adopted the practice of charging relatively low rates for basic local exchange service, with the hope that this would encourage subscribership. Due to the extremely small local calling areas in New Jersey, low

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⁸Source: USA Today, p. 6D, Wednesday, June 5, 1996. _Back