Access Reform/Rate Rebalancing

• The Flip-Side of Universal Service

• As Explicit Support is Increased Rates are Reduced to Remove Implicit Support

• If Sufficient Explicit Support is not Provided:

  • Implicit support remains in rates
  • Competition erodes implicit support
  • Pressure for rural rate increases

• Implicit Support Distorts Competitive Markets

  • False entry signals in low-cost markets
  • No incentives for competition in rural markets