[Federal Register Volume 60, Number 194 (Friday, October 6, 1995)]
[Proposed Rules]
[Pages 52359-52362]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-25036]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 36
[CC Docket No. 80-286; FCC 95-416]
Proposed Six-Month Extension of the Interim Indexed Cap on the
Total Level of the Universal Service Fund
AGENCY: Federal Communications Commission.
ACTION: Notice of proposed rulemaking.
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SUMMARY: The Federal Communications Commission proposes to extend the
duration of the interim indexed cap on the total level of the Universal
Service Fund (USF) for an additional six months. The cap was intended
to be
[[Page 52360]]
effective as an interim measure moderating the growth of the USF during
the pendency of a broader rulemaking revising the Part 36
jurisdictional separations rules governing the USF. The Federal
Communications Commission proposes to extend the interim cap, which
expires January 1, 1996, for an additional six months while that
rulemaking is completed.
DATES: Comments must be filed on or before October 18, 1995, and reply
comments must be filed on or before October 27, 1995.
ADDRESSES: Comments should be addressed to Office of the Secretary,
Federal Communications Commission, 1919 M Street, NW., Washington, DC
20554.
FOR FURTHER INFORMATION CONTACT:
Deborah A. Dupont, Senior Attorney, 202-418-0873, Accounting and Audits
Division, Common Carrier Bureau.
SUPPLEMENTARY INFORMATION:
I. Introduction
In this Notice of Proposed Rulemaking we propose extending the
duration of the two-year indexed cap (``interim cap'') on the total
level of the Universal Service Fund (``USF'').\1\ The cap was intended
to be effective as an interim measure moderating the growth of the USF
during the pendency of our broader rulemaking revising the Part 36
jurisdictional separations rules governing the USF.\2\ We propose to
extend the interim cap for an additional six months while we complete
that rulemaking.
\1\ 47 CFR 36.601(c) (1994). Under the interim cap, growth in
the total level of the USF is indexed to growth in the total number
of working loops. Id.; see also Amendment of Part 36 of The
Commission's Rules And Establishment of a Joint Board, Report and
Order, 9 FCC Rcd 303, 305, para. 20 (1993) (Interim Order). A
working loop is ``[a] revenue producing pair of wires, or its
equivalent, between a customer's station and the central office from
which the station is served.'' 47 CFR Part 36, Appendix-Glossary
(1994).
\2\ Interim Order, supra note 1, at 303, paras. 1-2.
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2. We request comment on our proposed extension of the interim cap.
We also refer the proposed extension of the interim cap on the Federal-
State Joint Board in this proceeding for a recommended decision, as
required by Section 410(c) of the Communications Act of 1934, as
amended.\3\
\3\ 47 U.S.C. 410(c).
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3. To continue to moderate the growth of the USF effectively during
the entire rulemaking period, the six-month extension must be effective
by the January 1, 1996 expiration \4\ of the interim cap. For this
reason, and because we are proposing only to extend the current interim
rules for a limited duration, we set a relatively short comment cycle.
Comments will be due on October 18, 1985, and reply comments will be
due on October 27, 1995.
\4\ 47 CFR 36.601(c).
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II. Background
4. The USF rules were adopted in 1984 to promote universally
available telephone services at reasonable rates.\5\ The rules allow
local exchange carriers (``LECs'') with an average unseparated loop
cost per working loop \6\ (``average cost per loop'') above the
assistance threshold to allocate a percentage of these costs to the
interstate jurisdiction.\7\ The current rules offer the most assistance
to smaller LEC study areas \8\ with higher average cost per loop,\9\
although all study areas with average cost per loop above the
assistance threshold receive some assistance.\10\
\5\ Amendment of Part 67 of the Commission's Rules and
Establishment of a Joint Board, Decision and Order, 96 FCC 2d 781,
794, para. 29 (1984).
\6\ The costs included in the unseparated loop costs are
enumerated in 47 CFR 36.621(a) (1994). The number of working loops
within a LEC study area is defined in 47 CFR 36.611(a)(8) (1994).
The average unseparated loop cost per working loop and national
average unseparated loop cost per working loop are defined in 47 CFR
36.622 (1994).
\7\ LECs with average cost per loop above 115% of the national
average cost per loop can allocate a specified percentage of these
costs to the interstate jurisdiction. 47 CFR 36.631 (c), (d) (1994).
This allocation is in addition to the interstate allocation allowed
under our general jurisdictional separations rules. See 47 CFR
36.154(c) (1994).
\8\ 47 CFR 36.631(c) (allowing LEC study areas with 200,000 or
fewer working loops to allocate to the interstate jurisdiction 65%
or more of their average cost per loop above 115% of the national
average cost per loop) with Sec. 36.631(d) (allowing LEC study areas
with greater than 200,000 working loops to allocate to the
interstate jurisdiction 60% or more of their average cost per loop
above 200% of the national average cost per loop and 10% to 30% of
their average cost per loop above 115% and at or below 200% of the
national average cost per loop).
\9\ Compare 47 CFR 36.631(c)(1) (allowing LEC study areas with
200,000 or fewer working loops to allocate to the interstate
jurisdiction 65% of their average cost per loop above 115% and at or
below 150% of the national average cost per loop) with
Sec. 36.631(c)(2) (allowing LEC study areas with 200,000 or fewer
working loops to allocate to the interstate jurisdiction 75% of
their average cost per loop above 150% of the national average cost
per loop); compare Sec. 36.631(d)(1) (allowing LEC study areas with
greater than 200,000 working loops to allocate to the interstate
jurisdiction 10% of their average cost per loop above 115% and at or
below 160% of the national average cost per loop) with
Sec. 36.631(d)(4) (allowing LEC study areas with greater than
200,000 working loops to allocate to the interstate jurisdiction 75%
of their average cost per loop above 250% of the national average
cost per loop).
\10\ LECs of any size with average cost per loop above 115% of
the national average cost per loop can allocate some portion of
these costs to the interstate jurisdiction. 47 CFR 36.631 (c), (d).
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5. In 1993, in response to pronounced and erratic growth in the
total level of the USF, we stated our intention to reappraise the USF
high-cost assistance mechanisms to determine whether changes were
needed to better serve our underlying public policy goals.\11\ The
completion of the eight-year USF phase-in period and ``numerous
regulatory, technological, and market changes in the telecommunications
industry'' also supported a reevaluation of the high-cost assistance
mechanisms at that time.\12\ We intended to address possible changes in
the Part 36 USF rules through a notice of proposed rulemaking.\13\ An
indexed cap on the total level of the USF was imposed for the purpose
of moderating growth in the USF for the anticipated duration of that
rulemaking period.\14\ The interim cap expires on January 1, 1996.\15\
\11\ Amendment of Part 36 of The Commission's Rules And
Establishment of a Joint Board, Notice of Proposed Rulemaking, FCC
Rec 7114, 7114-15, paras. 2, 11-15 (1993) (Interim Notice). 58 FR
48815, September 20, 1993.
\12\ Interim Order, supra note 1, at 305, para. 15.
\13\ Id. at 303, paras. 1-2.
\14\ Id. at 303, para. 1.
\15\ 47 CFR 36.601(c).
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6. In order to focus the issues in advance of the proposed
rulemaking,\16\ we requested comments on several policy questions
relating to the goals and effects of high-cost assistance.\17\ We also
requested comment on two broad alternative approaches to the high-cost
assistance mechanisms of Part 36.\18\ Under the first approach,
assistance would be based on actual reported costs, as is the case
under our present rules.\19\ Under the second, proxy factors reasonably
correlated with either the need for assistance or with costs would be
used to determine assistance.\20\
\16\ Amendment of Part 36 of The Commission's Rules And
Establishment of a Joint Board, Notice of Inquiry, 9 FCC Rec 7404,
7406 n.5 (1994) 59 FR 46606, September 9, 1994.
\17\ Id. at 7406, para. 2.
\18\ Id.
\19\ Id. at 7414-15, para. 26.
\20\ Id. at 7426-27, paras. 61-64.
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7. On July 13, 1995, we issued a Notice of Proposed Rulemaking and
Notice of Inquiry (``Notice'') proposing revisions to our USF rules.
The Notice requested comments by September 12 and reply comments by
October 12.\21\ The Notice invited comment on three proposals for
revising our USF rules.\22\ The first proposal presented three specific
alternative modifications to the existing rules that would continue to
[[Page 52361]]
base high-cost assistance on actual costs reported by LECs.\23\ Under
the second proposal, assistance would be distributed on the basis of
factors related to the cost of providing service rather than on the
basis of actual reported costs.\24\ The third proposal suggested the
distribution of assistance among the States, with State utility
commissions deciding the allocation of assistance among the carriers
serving the State under distribution plans developed under Commission
guidelines and reviewed by the Commission.\25\ In addition to the three
proposals, comment was solicited on the use of credits, or customer
vouchers, directing assistance to LECs selected by the customer.\26\
Finally, the Notice invited comment on the abolition, revision, or
combination with USF assistance of dial equipment minute (``DEM'')
weighting, which currently allows LEC study areas with fewer than
50,000 loops to allocate part of their local switching costs to the
interstate jurisdiction.\27\
\21\ Amendment of Part 36 of The Commission's Rules And
Establishment of a Joint Board, CC Docket No. 80-286, FCC 95-282,
36, para. 91 (released July 13, 1995), 60 FR 46803, September 8,
1995.
\22\ Id. at 10, para. 17.
\23\ Id, at 17, paras. 37-38, at 22, para. 47, at 23-24, para.
51.
\24\ Id. at 25-31, paras. 56-75.
\25\ Id. at 32, paras. 76-77.
\26\ Id. at 10, para. 17.
\27\ Id. at 7-9, paras. 9-12.
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8. On August 31, we granted requests from interested parties,
including the Alaska Public Utilities Commission, for an extension of
time for the filing of comments and reply comments, because we were
persuaded that an extension would serve the public interest.\28\ We
noted that an extension would encourage more detailed analysis by
interested parties of the complex issues presented in the Notice for
their consideration.\29\ The new deadlines for filing comments are
October 10 and November 9, 1995.\30\
\28\ Amendment of Part 36 of the Commission's Rules and
Establishment of a Joint Board, Order, CC Docket No. 80-286, DA 95-
1876, 2 para. 4 (released September 1, 1995).
\29\ Id.
\30\ Id. at 2, para. 5.
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III. Discussion
9. We proposed the interim cap for the purpose of moderating growth
in the total level of the USF for the duration of an intended
rulemaking that would address possible permanent changes to the USF
rules.\31\ In imposing the interim cap, we noted that previous changes
to the jurisdictional separations rules involved lengthy phase-in
periods to ease the transition for affected carriers.\32\ Since the
intended rulemaking could result in new USF rules retargeting
assistance, we concluded that the interim cap would facilitate our
ability to implement the new rules in a timely manner.\33\
\31\ Interim Notice, supra note 11, at 7114, paras. 1-2.
\32\ Interim Order, supra note 1, at 305, paras. 17-18.
\33\ Id. at 305, paras. 16-18.
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10. We note that the Commission had limited the duration of the
interim cap to two years in the belief that two years would be
sufficient for the completion of the rulemaking.\34\ We specifically
stated that should rulemaking conclude prior to the expiration of the
cap, the new rules would replace the interim cap.\35\ The issues
addressed in this rulemaking are complex, however, and despite diligent
effort by the Commission staff and interested parties, it is now clear
that their resolution will take more time than the anticipated two
years.
\34\ Interim Notice, supra note 11, at 7114, para. 4.
\35\ Id. at 7114 n. 2; Interim Order, supra note 1 at 306, para.
24.
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11. In view of the progress in the rulemaking process to date, we
believe that an additional six months should be sufficient to complete
it. Given the scope of the proposals presently under consideration for
amending the jurisdictional separations rules,\36\ we conclude that the
extension of the interim cap for the purpose of continuing to moderate
the growth of the USF for the remainder of the rulemaking period is
prudent. We propose extending the interim cap for an additional six
months while we complete the rulemaking. We seek comment on this
proposed extension of the interim rules. We also invite interested
parties to propose longer or shorter extensions, with accompanying
justifications for the length of time proposed.
\36\ See supra para. 7.
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IV. Procedural Matters
A. Ex Parte
12. This is a non-restricted notice and comment rulemaking
proceeding. ``Ex parte'' presentations are permitted, except during the
Sunshine Agenda period, provided they are disclosed as provided in the
Commission's rules.\37\
\37\ See generally 47 CFR 1.1202, 1.1203, 1.1206(a) (1994).
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B. Regulatory Flexibility
13. We certify that the Regulatory Flexibility Act of 1980 does not
apply to this rulemaking proceeding because if the proposals in this
proceeding are adopted, there will not be a significant economic impact
on a substantial number of small business entities, as defined by
Section 601(3) of the Regulatory Flexibility Act.\38\ Because of the
nature of local exchange and access service, the Commission has
concluded that LECs, including small LECs, are dominant in their fields
of operation and therefore are not ``small entities'' as defined by
that act.\39\ The Secretary shall send a copy of this Notice of
Proposed Rulemaking, including the certification, to the Chief Counsel
for Advocacy of the Small Business Administration in accordance with
Section 603(a) of that act.\40\
\38\ 5 U.S.C. 601(3).
\39\ See MTS and WATS Market Structure, 93 FCC 2d 241, 338-39
(1983).
\40\ 5 U.S.C. 603(a).
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C. Comment Dates
14. We invite comment on the proposals and tentative conclusions
set forth above. Pursuant to applicable procedures set forth in
Sections 1.415 and 1.419 of the Commission's Rules,\41\ interested
parties may file comments on or before October 18, 1995, and reply
comments on or before October 27, 1995. To file formally in this
proceeding, you must file an original and four copies of all comments,
reply comments, and supporting comments. If you want each Commissioner
to receive a personal copy of your comments, you must file an original
plus nine copies. You should send comments and reply comments to Office
of the Secretary, Federal Communications Commission, Washington, D.C.
20554. Parties should send one copy of any documents filed in this
docket to the Commission's copy contractor, International Transcription
Service (ITS), 2100 M Street, N.W., Suite 140, Washington, D.C. 20037.
We also ask that parties send a copy of their comments to each member
of the Federal State Joint Board and its staff, as indicated in the
attached service list. Comments and reply comments will be available
for public inspection during regular business hours in the FCC
Reference Center, Room 239, 1919 M Street, N.W., Washington, D.C.
20554.
\41\ 47 CFR 1.415, 1.419 (1994).
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V. Ordering Clauses
15. Accordingly, it is ordered that, pursuant to Sections 1, 4(i),
4(j), and 403 of the Communications Act of 1934, as amended, 47 U.S.C.
Sec. Sec. 151, 154(i), 154(j), and 403, notice is hereby given of
proposed interim amendments to Part 36, Subpart F of the Commission's
Rules, 47 C.F.R. Part 36, Subpart F, as described in the Notice of
Proposed Rulemaking.
16. It is further ordered, pursuant to Section 410(c) of the
Communications Act of 1934, as amended, 47 U.S.C.
[[Page 52362]]
410(c), that the issues relating to interim amendments to Part 36,
Subpart F of the Commission's Rules, 47 C.F.R. Part 36, Subpart F, as
described in the Notice of Proposed Rulemaking, shall be and hereby are
referred to the Federal State Joint Board established in this
proceeding for a recommended decision.
List of Subjects in 47 CFR Part 36
Communications commoncarriers; Reporting and recordkeeping
requirements; Telephone; Uniform System of Accounts.
Federal Communications Commission.
William F. Caton,
Acting Secretary.
Federal-State Joint Board Service List
The Honorable Sharon L. Nelson, Chairman; Washington Utilities and
Transportation Commission; Chandler Plaza Building; 1300 South Evergeen
Park Drive, S.W.; Olympia, Washington 98504-7250
The Honorable Cheryl L. Parrino, Chair; Wisconsin Public Service
Commission; Post Office Box 7854; Madison, Wisconsin 53707-7854
The Honorable Stephen O. Hewlett, Commissioner; Tennessee Public
Service Commission; 460 James Robertson Parkway; Nashville, Tennessee
37243-0505
The Honorable Laska Schoenfelder, Chairman; South Dakota Public
Utilities Commission; State Capitol Building; Pierre, South Dakota
57501-5070
The Honorable Reed E. Hundt, Chairman; Federal Communications
Commission; 1919 M Street, N.W.--Room 814; Washington, D.C. 20554
The Honorable Andrew C. Barrett, Commissioner; Federal Communications
Commission; 1919 M Street, N.W.--Room 826, Stop 0105; Washington, D.C.
20554
The Honorable Susan Ness, Commissioner; Federal Communications
Commission; 1919 M Street, N.W.--Room 832; Washington, D.C. 20554
Deborah A. Dupont, FCC Joint Board Staff Chair; Federal Communications
Commission; Common Carrier Bureau--Accounting & Audits Div.; 2000 L
Street, N.W.--Room 257; Washington, D.C. 20036
Teresa Pitts, State Joint Board Staff Chair; Washington Utilities and
Transportation Commission; 1300 South Evergreen Park Drive, S.W.;
Olympia, Washington 98504-7250
Charles Bolles; South Dakota Public Utilities Commission; State Capitol
Building; Pierre, South Dakota 57501-5070
Elton Calder; Georgia Public Service Commission; 162 State Office
Building; 244 Washington Street, S.W.; Atlanta, Georgia 30334
Ronald Choura; Michigan Public Service Commission; 6545 Mercantile Way;
Lansing, Michigan 48910
Rowland Curry; Texas Public Utility Commission; 7800 Shoal Creek
Blvd.--Suite 400N; Austin, Texas 78757
Ann Dean; Maryland Public Service Commission; 6 St. Paul Centre;
Baltimore, Maryland 21202
Dean Evans; California Public Utilities Commission; 505 Van Ness
Avenue--Room 4004; San Francisco, California 94102
William Howden; Federal Communications Commission; Common Carrier
Bureau--Accounting & Audits Div.; 2000 L Street, N.W.--Room 812;
Washington, D.C. 20036
George Johnson; Federal Communications Commission; Common Carrier
Bureau--Accounting & Audits Div.; 2000 L Street, N.W.--Room 257;
Washington, D.C. 20036
Chris Klein; Tennessee Public Service Commission; 460 James Robertson
Parkway; Nashville, Tennessee 37243-0505
Robert Loube; Public Service Commission of District of Columbia; 450
Fifth Street, N.W.; Washington, D.C. 20001
Sam Loudenslager; Arkansas Public Service Commission; 1000 Center
Street; Post Office Box C-400; Little Rock, Arkansas 72203
Rafi Mohammed; Federal Communications Commission; Common Carrier
Bureau--Accounting and Audits Div.; 2000 L Street--Room 812;
Washington, D.C. 20036
Paul Pederson; Missouri Public Service Commission; Post Office Box 360;
Jefferson City, Missouri 65102
James Bradford Ramsay; National Association of Regulatory Utility
Commissioners; 1102 ICC Building; Constitution Avenue & 12th Street,
N.W.; Post Office Box 684; Washington, D.C. 20044
Jonathan Reel; Federal Communications Commission; Common Carrier
Bureau--Accounting and Audits Div.; 2000 L Street, N.W.--Room 257;
Washington, D.C. 20036
Jeff Richter; Wisconsin Public Service Commission; Post Office Box
7854; Madison, Wisconsin 53707-7854
Gary Seigel; Federal Communications Commission; Common Carrier Bureau--
Accounting & Audits Div.; 2000 L. Street, N.W.--Room 812; Washington,
D.C. 20036
Joel B. Shifman; Maine Public Utilities Commission; State House Station
# 18; Augusta, Maine 04333
Fred Sistarenik; New York Public Service Commission; 3 Empire State
Plaza; Albany, New York 12223
Mary Steele; North Carolina Utilities Commission; Box 29510; Raleigh,
North Carolina 27626-0510
[FR Doc. 95-25036 Filed 10-5-95; 8:45 am]
BILLING CODE 6712-01-M
