Part of a series on universal service, Payers
and Receivers, was produced in response to a request from regulatory
commissioners to facilitate a nationwide dialog among federal regulators,
state regulators, and the telecommunications industry on options for
support to rural areas for telephone service (universal service).
This paper models six options plus variations
for the federal high cost fund (HCF), focusing on support for high-cost,
non-rural companies. Each option demonstrates the effect on customers and
states, showing which states are net payers and receivers. Payers and
Receivers includes questions that should be answered to determine if the
new fund meets the requirements of the Telecommunications Act of 1996. Cash flow charts show current and new subsidies.