Major Problems

• Many Rural States Can’t Afford to Pay 75% of High-Cost Need

  • Key variable is the ratio of low-cost to high-cost customers

• Proxy Models

  • Widely divergent positions
  • Accuracy of Model for small areas

• Inherent Tensions Between the Players

  • High-cost states vs. low cost states
  • Local service providers vs. other telecom providers

• Who Will Pay For Universal Service? How?

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