1. Universal Service Reform CSG September 2006

2. Federal Universal Service Program Funds rural & high-cost areas to provide comparable technology and rates; K-12 and public libraries; low income life line & link up; and rural health care. Funded through collection of percent of revenue from all telco providers (10-11%)

3. Recent FCC Actions Increased wireless safe harbor from 28.5% to 37% or can use traffic studies Require VoIP providers that interact with the PSTN to pay in assuming 64% of traffic is interstate.

4. Pending Contribution Reform Proposal Replace % with numbers based calculations – Significant financial impact to campus-based services – Timing uncertain, most likely a year off

5. Pending Distribution Reform Proposals Reverse auctions, rural distribution methods, etc. Calls to support broadband services Impact of legislative proposals