March 17, 1995

The Honorable Reed Hundt
Chairman
Federal Communications Commission
1919 M Street, N.W.
Washington, D.C. 20554

Dear Chairman Hundt:

      On January 11, 1995, the Commission issued an order
requiring carriers to impose a subscriber line charge (SLC) on a
"per channel" basis./1/  The Administration has been informed
that this approach could increase the price of integrated
services digital network (ISDN) offerings by as much as 30
percent.  As the
Commission noted in its order, new services are being delivered
over "network architectures that differ from those envisioned
when the access charge rules were first adopted."/2/  As the
Commission further noted, the comments filed in the tariff
proceeding "raise policy issues which would best be addressed in
the context of a rulemaking proceeding, not in a tariff review
process."/3/

      The Administration thus urges the Commission to begin such
a rulemaking immediately, as the manner in which the SLC is
imposed raises numerous policy concerns.  There are concerns
about adequate cost recovery, as well as about the deployment of
new technologies.  We support the Commission's determination that
a rulemaking would allow for the "full development of a factual
record reflecting the views of all interested parties."/4/

      Certain carriers have recently filed petitions seeking a
waiver of the Commission's SLC rule./5/  Given the important
potential benefits of ISDN, we urge the Commission to take a
"hard look" at these waiver requests./6/  ISDN is an important
low-cost, near-term technology for the information superhighway.
Consumers, businesses, and educators are using this service for
high-speed Internet access, telecommuting, video-conferencing,
and PC-based collaboration.  A significant increase in the cost
of ISDN could severely reduce demand just as the market for this
service is poised to take off.  Thus, it is important that the
Commission consider the impact of the current rule on the
deployment and use of ISDN when considering the merits of the
waiver requests.

      Thank you for your attention to this issue.



                                                 Sincerely,



                                                 Larry Irving

cc:   The Honorable James H. Quello
      The Honorable Andrew C. Barrett
      The Honorable Susan Ness
      The Honorable Rachelle B. Chong
      Kathleen Wallman, Chief, Common Carrier Bureau


ENDNOTES
1.    See NYNEX Telephone Companies Revisions Transmittal No.
      116, FCC No. 94-356 (released Jan. 11, 1995).

2.    Id. at 16.

3.    Id. at 26.

4.    Id.

5.    See 47 C.F.R. 69.104.

6.    See WAIT Radio v. Federal Communications Commission, 418
      F.2d 1153 (D.C. Cir. 1969).