[Federal Register Volume 62, Number 237 (Wednesday, December 10, 1997)]
[Rules and Regulations]
[Pages 65036-65038]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-32178]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 54
[CC Docket No. 96-45, CC 97-21; FCC 97-400]
Universal Service Support Mechanisms
AGENCY: Federal Communications Commission.
ACTION: Final rule.
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SUMMARY: The Commission authorized the Administrator of the universal
service support mechanisms to require payment of quarterly
contributions to universal service in equal monthly installments.
Allowing monthly payments will reduce the cash flow impact on
contributors because their payments will be smaller. It also will
better enable contributors to offset their contributions by payments
from the support mechanisms. It will not jeopardize the sufficiency of
the support mechanisms.
EFFECTIVE DATE: January 9, 1998.
FOR FURTHER INFORMATION CONTACT: Diane Law, (202) 418-7400.
SUPPLEMENTARY INFORMATION:
SECOND ORDER ON RECONSIDERATION in CC Docket No. 97-21
I. Background
1. In the Universal Service Order, the Commission created new
federal universal service support mechanisms and concluded that all
telecommunications carriers that provide interstate telecommunications
services, other providers of interstate telecommunications, and
payphone service providers will contribute to universal service. (See
Federal-State Joint Board on Universal Service, Report and Order, CC
Docket No. 96-45, FCC 97-157, 62 FR 32862 (June 17, 1997)). In the NECA
Report and Order, the Commission instructed the National Exchange
Carrier Association (NECA) to create an independent subsidiary, the
Universal Service Administrative Company (USAC or Administrator), to
administer temporarily portions of the universal service support
mechanisms. (See Changes to the Board of Directors of the National
Exchange Carriers Association, Inc., Federal-State Joint Board on
Universal Service, Report and Order and Second Order on
Reconsideration, CC Docket No. 97-21, CC Docket No. 96-45, FCC 97-253,
62 FR 41294 (August 1, 1997)). The Commission also instructed the
Administrator to bill contributors and collect contributions to the
federal universal service support mechanisms on a quarterly basis.
2. USAC requests that it be authorized to collect universal service
contributions on a monthly, as opposed to a quarterly, basis. USAC
states that collecting contributions on a quarterly basis may create
significant cash flow problems for contributors. USAC explains that,
because of the delay between funds collection and funds distribution,
monthly billing will not increase the likelihood that the Administrator
will be required to borrow money to fund early requests for discounts
by eligible schools and libraries. In addition, USAC notes that
collecting contributions on a monthly basis will generate some interest
income, albeit less than would be collected on a quarterly basis, that
can be applied to meet program demands. NECA supports USAC's request.
II. Discussion
3. Based on the Administrator's request, we reconsider, on our own
motion, our requirement that the Administrator collect contributions on
a quarterly basis. Allowing monthly payments would reduce the cash flow
impact on contributors because their payments would be smaller. It also
would better enable contributors to offset their contributions by
payments from the support mechanisms. We conclude that permitting
monthly as opposed to quarterly contributions will not jeopardize the
sufficiency of the support mechanisms. The Commission reduced the
estimated total contribution base by two percent when calculating the
universal service contribution factors to take account of the
possibility that contributions to the support mechanisms may fall short
of estimated levels due to, for example, uncollectibles or higher-than-
foreseen demand. In addition, since March 20, 1998 appears to be the
earliest date on which the Administrator could be required to make
distributions under the schools, libraries, and rural health care
programs,1 we anticipate that, under our
[[Page 65037]]
revised billing schedule, the Administrator will have sufficient funds
to meet initial demand for support for these and all other service
programs. USAC has not requested that we revise the manner in which the
amount of each contributor's obligation is determined and we see no
reason to do so. Thus, as provided in Sec. 54.709 of the Commission's
current rules, the Administrator will apply the quarterly contribution
factors to determine the amount that contributors must remit to the
Administrator. We amend Sec. 54.709 of our rules to authorize the
Administrator to require payment of those quarterly contributions in
equal monthly installments.
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\1\ We calculate that March 20, 1998 reflects the earliest date
on which the Administrator will distribute funds under these
programs, by starting with November 24, 1997 and adding to it a 75-
day period and two 20-day periods, derived from the requirements
described below. The Schools and Libraries and Rural Health
Corporations must authorize USAC to disburse the appropriate payment
amounts as quickly as possible, but no later than 20 days following
receipt of the requisite forms. USAC must distribute payments as
quickly as possible, but no later than 20 days following receipt of
authorization to disburse funds. In addition, the Schools and
Libraries and Rural Health Care Corporations established 75-day
window filing periods in which all requests will be treated with
equal priority. The window period will begin to run when the Schools
and Libraries and Rural Health Care Corporations begin to receive
applications for support. Funds will not be committed until the
closing of the 75-day window filing period. Thus, even assuming the
window period were to begin on November 24, 1997, support would not
begin to be distributed before March 20, 1998.
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4. We understand that USAC intended to begin sending out bills in
December, 1997, which would require contributors to begin making
payments in January, 1998. We find that both USAC and contributors need
a reasonable opportunity to respond to the modification from a
quarterly to a monthly billing schedule. We therefore direct USAC not
to require contributors to make payments pursuant to the new universal
service mechanisms set forth in section 254 prior to February 1998.
This will provide USAC additional time to issue bills that are
consistent with the billing modification set forth herein. The
additional time will not delay disbursement of funds pursuant to the
new universal service mechanisms, because distribution of funds
pursuant to the schools and libraries and rural health care universal
service programs will not begin before March 20, 1998 and distributions
for the new high cost and low income universal service programs will
not begin until February 1998.
III. Supplemental Final Regulatory Flexibility Analysis
5. As required by Section 603 of the Regulatory Flexibility Act
(RFA), 5 U.S.C. 603, an Initial Regulatory Flexibility Analysis (IRFA)
was incorporated in the Notice of Proposed Rulemaking and Order
Establishing Joint Board (NPRM). In addition, the Commission prepared
an IRFA in connection with the Recommended Decision, seeking written
public comment on the proposals in the NPRM and Recommended Decision. A
Final Regulatory Flexibility Analysis (FRFA) was also included in the
Order. The Commission's Supplemental Final Regulatory Flexibility
Analysis (SFRFA) in this Order conforms to the RFA, as amended.
A. Need for and Objectives of This Report and Order and the Rules
Adopted Herein
6. The Commission is required by section 254 of the Act, as amended
by the 1996 Act, to promulgate rules to implement promptly the
universal service provisions of section 254. On May 8, 1997, the
Commission adopted rules whose principle goal is to reform our system
of universal service support mechanisms so that universal service is
preserved and advanced as markets move toward competition. In this
Order, we reconsider one aspect of those rules. Our reconsideration was
prompted by ex parte letters filed by USAC and NECA suggesting that
contributions to the universal service support mechanisms be collected
on a monthly, rather than the quarterly basis currently specified in
our rules. In addition, on our own motion, we adopt a rule in order to
give contributors and USAC a reasonable opportunity to respond to the
billing modification.
B. Summary and Analysis of the Significant Issues Raised by Public
Comments in Response to the IRFA
7. Other than those described in the Order, no additional comments
were filed in response to the IRFAs described above. Nor were any
comments filed in response to the ex parte letters from the
Administrator and NECA.
C. Description and Estimates of the Number of Small Entities to Which
the Rules Adopted in This Report and Order Will Apply
8. In the FRFA at paragraphs 890-922 of the Order, we described and
estimated the number of small entities that would be affected by the
new universal service rules. The rule adopted here will apply to the
same telecommunications carriers and entities affected by the universal
service rules. We therefore adopt the provisions of paragraphs 890-922
of the Order.
D. Summary Analysis of the Projected Reporting, Recordkeeping, and
Other Compliance Requirements and Significant Alternatives and Steps
Taken to Minimize the Significant Economic Impact on a Substantial
Number of Small Entities Consistent with Stated Objectives
9. In the FRFA to the Order, we described the projected reporting,
recordkeeping, and other compliance requirements and significant
alternatives and steps taken to minimize significant economic impact on
a substantial number of small entities consistent with stated
objectives associated with the Administration section of the Order.
Because the rule adopted herein will only marginally affect those
requirements, we adopt the provisions of paragraphs 980-981 of the
Order, which describe those requirements and provide the following
analysis of the new requirements adopted herein. Under the rule adopted
herein, telecommunications carriers and providers must submit their
quarterly contributions on a monthly basis. Although monthly
contributions may slightly increase the paperwork burdens imposed on
small entities, this payment scheme may reduce their cash flow burdens
and thus provides an offsetting benefit. We also adopt a rule herein to
provide contributors, including small entities, a reasonable
opportunity to respond to the billing change.
IV. Ordering Clauses
10. Accordingly, It is ordered that, pursuant to the authority
contained in sections 1-4, 201-205, 254, and 405 of the Communications
Act of 1934, as amended, 47 U.S.C. 151-154, 201-205, 254, and 405,
Sec. 1.108 of the Commission's rules, 47 CFR 1.108, and section 553 of
the Administrative Procedure Act, 5 U.S.C. 553, this Order is adopted,
effective 30 days from publication of the text in the Federal Register.
11. It is further ordered that part 54 of the Commission's rules,
47 CFR 54.709, is amended, effective January 9, 1998.
List of Subjects in 47 CFR Part 54
Communications common carriers, Health facilities, Libraries,
Reporting and recordkeeping requirements, Schools, Telecommunications,
Telephone.
[[Page 65038]]
Federal Communications Commission.
Magalie Roman Salas,
Secretary.
Rule Changes
Part 54 of title 47 of the Code of Federal Regulations is amended
as follows:
PART 54--UNIVERSAL SERVICE
1. The authority citation for part 54 continues to read as follows:
Authority: 47 U.S.C. 1, 4(i), 201, 205, 214, and 254 unless
otherwise noted.
2. Section 54.709 is amended by revising paragraph (a)(4) and
adding a new paragraph (a)(5) to read as follows:
Sec. 54.709 Computations of required contributions to universal
service support mechanisms.
(a) * * *
(4) For each quarter, the Administrator shall bill contributors
monthly and require payment of contributions in equal monthly
installments.
(5) The Administrator shall not require contributors to make
payments pursuant to the universal service mechanisms set forth in 47
U.S.C. 254 prior to February 1998.
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[FR Doc. 97-32178 Filed 12-9-97; 8:45 am]
BILLING CODE 6712-01-P
