Universal Telephone Service Preservation Act of 1983

(Reported to Senate from the Committee on Commerce, Science, and Transportation with amendment, S. Rept. 98-270)

Universal Telephone Service Preservation Act of 1983 - Amends the Communications Act of 1934, with respect to telephone service to require that any exchange access charges established by the Federal Communications Commission (FCC): (1) achieve equitable treatment of all interexchange carriers and other persons using the services of exchange companies through direct or indirect connection; (2) ensure that costs are assigned to exchange access in a manner that is open and accountable to the public; (3) achieve flexibility in accommodating changes in market conditions and technology; (4) establish incentives for efficient investment decisions and technological choices; and (5) ensure that exchange carriers are compensated for their costs of providing exchange access.

Directs the Universal Telephone Service Joint Board (established by this Act) to establish a Universal Service Fund to reimburse certain small rural exchange companies for universal service costs and to reimburse companies required to provide lifeline service for lifeline costs. Requires the Board to establish a schedule which: (1) designates the universal service and lifeline costs to be allocated to each Federal jurisdiction; (2) provides for the collection of a universal service surcharge from any interexchange carrier or other person using the services of exchange companies through direct or indirect connection; and (3) provides for the collection of a universal service charge from any person that owns or operates any transmission facilities or services used as a substitute for voice grade or equivalent transmission facilities or services offered by exchange carriers. Requires that such a universal service charge shall be designed to: (1) maintain universal service; (2) ensure fairness to interexchange carriers; and (3) promote competition and the development of technologies.

Defines reimbursable universal service costs as 90 percent of the eligible exchange company's nontraffic sensitive costs for basic exchange telephone service which exceed 110 percent of the average cost of providing comparable service throughout the United States, and 100 percent of the amount by which such costs of such an exchange company exceed 250 percent of the national average cost. Provides that costs shall be eligible for reimbursement if they are determined by State regulatory commissions to be reasonably incurred and directly related to the efficient and economic provision of basic exchange telephone service Directs the Board to ensure that reimbursements are used by a carrier to reduce rates for basic exchange telephone service on a nondiscriminatory basis.

Provides that the percent of lifeline costs defrayed by Fund reimbursements shall be the same for all carriers, but it shall not exceed 50 percent.

Defines "lifeline costs" as the amount by which the cost of providing lifeline telephone service exceeds the rate actually charged for such service. Defines "lifeline telephone service" as residential telephone service provided at the order of a State regulatory commission by an exchange carrier to subscribers such as elderly, unemployed, or low-income persons who would be unlikely to be able to afford such access. Requires that such State commission order: (1) verify that the lifeline telephone service shall be offered only to such persons and at such rates as are necessary to ensure that access to telephone service remains available to the same percentage of households as served by the exchange carrier on January 1, 1983; (2) verify the cost of providing such lifeline service; and (3) compute the total lifeline reimbursements necessary for that service.

Prohibits exchange carriers from recovering any flat charges for interstate access service directly from residential and single line business end users before January 1, 1986.

Directs the FCC to establish the Universal Telephone Service Joint Board to be responsible for the collection of universal service charges and surcharges and the reimbursement of universal service and lifeline costs under this act. Directs the FCC to adopt Board decisions as final decisions.

Establishes a forfeiture penalty to be imposed against any person who fails to pay an exchange company a universal service charge or surcharge under this Act.

Grants the FCC discretion to: (1) establish standards, charges, and practices governing interim access charges until final access charges are made effective pursuant to this Act; and (2) require exchange carriers to submit interim tariffs that are consistent with such interim charges. Provides that such tariffs may remain in effect until six months after the universal service and lifeline service charge procedures take effect. Declares that the record already established in relevant FCC proceedings shall be a sufficient basis for establishing such interim charges.

Requires that rates for interstate MTS and WATS services be integrated so that persons in the noncontiguous States do not pay higher rates for interstate telecommunications than the rates paid by persons in other States. Directs the FCC within 180 days after enactment of this Act, to initiate proceedings to accomplish such integration of rates.

Directs the FCC to consult with the Board and report to Congress by March 1, 1985, on the administration of this Act, proposed action regarding access charges and universal telephone service, appropriate legislative recommendations, and recommendations on whether the amendments made by this Act should be continued or terminated.