AT&T got little support for request to base its universal service...

universal service fund. FCC assesses carrier payments by calculating contribution factor that’s based on companies’ interstate revenue. However, there is lag between when contribution factor is set and when it’s applied to revenue. For example, first quarter revenue would be used as base to calculate amount to be charged to carrier in 3rd quarter. AT&T asked that Commission calculate contribution factor on projected revenue for quarter when payment was made, subject to true-up if actual revenue was different than projected one. In comments to FCC filed April 12, Bell companies, and even fellow long distance company WorldCom, urged FCC to deny AT&T plan. BellSouth said proposal should be “summarily denied” because it didn’t demonstrate any public interest benefits: “Indeed AT&T’s request is about AT&T’s pecuniary and competitive interests, not the public interest.” Verizon said AT&T hadn’t shown any special circumstances to justify such treatment since “its complaints about declining interstate demand can be matched by many other carriers, including Verizon.” FCC already has opened general rulemaking to look at contribution issues and that’s more appropriate place to deal with AT&T’s concerns, Verizon said. WorldCom said AT&T’s request would cause it competitive harm since AT&T would be able to charge its customers lower universal service fee than WorldCom: “As a result, all other things being equal, the total cost of purchasing long distance service from WorldCom would be greater than purchasing from AT&T. Customers who might otherwise have selected WorldCom will select AT&T as a service provider because of the effects of the universal service assessment scheme.” Long distance carriers usually pass their universal service assessments onto to customers in monthly fees. Rather than dealing with that problem in “piecemeal fashion,” FCC “is far better served by addressing the underlying problem that the current funding mechanism based on revenues is inherently unstable and must be replaced,” WorldCom said. Assn. of Communications Enterprises (ASCENT) said “AT&T’s request dramatically highlights the flaws inherent in a system which assesses universal service contributions predicated upon stale revenue data.” FCC should “act now to address the problem highlighted by AT&T” by adopting projected revenue system for all carriers, ASCENT said. Agency then could work on “more drastic” change such as replacing revenue-based system with something else such as connection-based scheme, ASCENT said. It could take FCC long time to make more sweeping changes in universal service contribution methodology so AT&T’s plan could give relief in meantime, group said. Otherwise, carriers with decreasing revenue will forced to continue calculating contributions “based upon stale and inflated historical revenue data, with… inequitable results,” ASCENT said.