02-7997. Multi-Association Group (MAG) Plan for Regulation of Non-Price Cap Incumbent Local Exchange Carriers and Interexchange Carriers; Federal-State Joint Board on Universal Service

AGENCY:

Federal Communications Commission.

ACTION:

Final rule; partial waiver and amendment.

SUMMARY:

In this document, the Commission modifies on its own motion the data collection and filing procedures for implementation of the Interstate Common Line Support (ICLS) mechanism for incumbent local exchange carriers in order to ensure timely implementation of the ICLS mechanism on July 1, 2002 as adopted in the Multi-Association Group (MAG) MAG Order and to reduce administrative burdens on rate-of-return carriers.

DATES:

Effective April 2, 2002.

FOR FURTHER INFORMATION CONTACT:

William Scher, Attorney, Common Carrier Bureau, Accounting Policy Division, [phone].

SUPPLEMENTARY INFORMATION:

This is a summary of the Commission's First Order on Reconsideration in CC Docket No. 00-256 and Fourth Order on Reconsideration in CC Docket No. 96-45 released on March 22, 2002. The full text of this document is available for public inspection during regular business hours in the FCC Reference Center, Room CY-A257, 445 Twelfth Street, SW., Washington, DC 20554 and at http://www.fcc.gov/​wcb/​universal_​service/​welcome.html.

I. Introduction

1. In this Order, we modify on our own motion the data collection and filing procedures for implementation of the Interstate Common Line Support (ICLS) mechanism, in order to ensure timely implementation of the ICLS mechanism on July 1, 2002 as adopted in the MAG Order, 66 FR 59719, November 30, 2001. First, we extend until April 18, 2002 the original March 31, 2002, deadline set forth in § 54.903(a) for the submission of projected data and line counts to the Universal Service Administrative Company (USAC). Second, we waive the requirement under § 54.903(a) that each carrier file its data with USAC in order to permit the National Exchange Carrier Bureau Association (NECA) to file the data for each member of the common line pool for the purpose of this initial ICLS filing deadline. Finally, we specify the data to be submitted for this initial ICLS filing under § 54.903(a). We conclude that these actions are appropriate to ensure timely implementation of the ICLS mechanism, accuracy of support, and compliance with the new filing requirements, and shall apply only to the initial ICLS filing deadline.

II. Discussion

2. In this Order we modify, on our own motion, the initial ICLS data collection and filing procedures to ensure timely implementation of the ICLS mechanism on July 1, 2002. We recognize that implementation of the ICLS mechanism is a critical element of the Commission's achievement of its access reform and universal service goals. Since adoption of the MAG Order, rural carriers and other interested parties have indicated that additional time would significantly improve their ability to file complete and accurate data with USAC. We have been working with USAC, rural carriers, and other interested parties to ensure that carriers have sufficient time to prepare and submit the data necessary to implement the ICLS mechanism. We conclude that the actions we take in this Order are appropriate to ensure timely ICLS implementation, to permit the submission of accurate data, and to minimize the associated administrative burdens on rate-of-return carriers.

3. We emphasize that our actions in this Order apply only to the initial implementation of ICLS and the first filing currently scheduled for March 31, 2002, and are not intended to restrict USAC's ability in the future to determine the data necessary to fulfill its obligations as Administrator of the ICLS mechanism, including its duty to prevent waste, fraud, and abuse. We expect that Commission staff and USAC will work with affected rate-of-return carriers and other interested parties to develop the appropriate filing requirements for future data submissions consistent with the Commission's rules. Although the Commission directed USAC to determine the data required for the ICLS mechanism, the Commission retains oversight authority over the ICLS program. To that end, we direct the Common Carrier Bureau to take steps reasonably necessary to implement the ICLS mechanism, consistent with the Commission's rules, while minimizing the administrative burdens on affected carriers. We are confident that USAC, under the Bureau's oversight, will develop procedures and filing requirements that fulfill the Commission's intent to limit as much as possible the administrative burdens associated with the ICLS mechanism, while promoting accurate and efficient distribution of support.

4. Extension of March 31 Filing Deadline. We conclude that it is appropriate to extend until April 18, 2002, the initial March 31, 2002, filing deadline in § 54.903(a) of the Commission's rules. We established the March 31 ICLS filing deadline to provide rate-of-return carriers with sufficient time to prepare and submit the necessary data, and to provide USAC a reasonable opportunity to implement the mechanism on July 1, 2002 and perform its obligations as Administrator. Since the adoption of the MAG Order, affected carriers have indicated that it will be difficult to provide complete and accurate data by the initial March 31, 2002, deadline. Implementation of the ICLS mechanism and calculation of ICLS support depend on the submission of complete and accurate data. We find that it is appropriate to extend the deadline for the first-time filing of this data until April 18, 2002. This extension will provide sufficient time for the submission of complete and accurate data, while allowing USAC to implement the ICLS mechanism and calculate support beginning July 1, 2002.

5. NECA to Submit Data on Behalf Pooling Carriers. In order to further ensure the timely submission of complete and accurate data for the initial implementation of the ICLS support mechanism beginning July 1, 2002, we waive the requirement under § 54.903(a) that each carrier file its data with USAC. Specifically, we permit NECA to file the data set forth below in this Order for each member of its common line pool for the purposes of this initial ICLS filing deadline. Interested parties have indicated that initial implementation of the ICLS mechanism, including the first-time filing of the necessary data, may be difficult for the approximately 1300 rate-of-return carriers eligible for ICLS. We believe that, by directing NECA to complete the filing on behalf of each member of its common line pool, we will mitigate the first-time filing obligations on the vast majority of the 1300 carriers eligible for ICLS. As members of the NECA common line pool, these carriers already provide cost, revenue, and line count data to NECA to permit NECA to prepare projected common line cost and revenue data for tariff filings on behalf of its members. NECA should possess all of the projected data and line counts set forth in detail below and thus should be able to file the data on its members' behalf by April 18, 2002, in accordance with the instructions set forth below.

6. Based on input from interested parties, we do not expect pooling carriers to object to NECA filing on their behalf. If, however, a carrier prefers to file its own data or designate an agent other than NECA to file its data, it may do so at its option. If a pooling carrier files data separately from NECA, USAC will disregard the data filed by NECA on the carrier's behalf. A carrier that does not participate in NECA's common line pool must file its own data or designate an agent to do so, as discussed below.

7. We also conclude that NECA should make certain certifications with respect to the data submission. First, it must certify that the projected cost and revenue data are accurate to the best of its knowledge and ability. Second, it must certify that the line count data are accurate to the best of its knowledge and represents actual data supplied to NECA by the carrier. Third, it must certify that it has notified each carrier of the filing and will provide each carrier with a copy of the part of the filing relevant to the individual carrier within 15 days. We believe that such certifications are necessary for the purposes of this initial filing deadline to ensure the accuracy and reliability of the data used to calculate ICLS and that carriers are aware of the data that has been filed on their behalf. NECA may file a single statement making these certifications for all of the data it files and need not separately certify for each carrier, as long as the certifications are truthful for each carrier's data.

8. Filings By Parties Other Than NECA. To ensure the accuracy of the data for purposes of this initial filing deadline, we require certifications from non-pooling carriers or pooling carriers that choose to file their data separately from NECA. Specifically, the carrier or its designated agent will certify that (1) its projections are accurate to the best of its knowledge and ability, and (2) its line count data is accurate. If the filing is made by a carrier's designated agent, it must be accompanied by an authorization by the carrier. These certifications are necessary to ensure the accuracy and reliability of the data used to calculate support.

9. Projected Data Required. In order to ensure that NECA and affected carriers have sufficient guidance as to the data required to ensure timely implementation of the ICLS mechanism, we specify below the data that must be included in the initial filing under § 54.903(a) of the Commission's rules. We find that, for the initial April 18, 2002, data submission, the only projected data required are the data specifically identified in § 54.901(a) of the Commission's rules. The initial filing shall therefore include the following data for each eligible rate-of-return carrier: (1) Projected common line revenue requirement; (2) projected SLC revenues; (3) projected revenue from its transitional CCL charge; (4) projected special access surcharges; (5) projected line port costs in excess of basic analog service; and (6) projected LTS. The Commission's rules implementing the MAG Order recognize that these data points are necessary for the calculation of ICLS. We are also confident, based on consultation with interested parties, that this data can be filed by the April 18, 2002 filing deadline. We therefore do not anticipate NECA or any individual carrier will be unable to file this data.

10. To ensure the timely implementation of the ICLS mechanism, we find that it is sufficient for purposes of this initial filing to collect only the data points specifically identified in § 54.901(a). We note that, under the rules adopted in the MAG Order, all support distributed based on the data submitted for this initial ICLS filing will be subject to true-up based on a subsequent actual data. We recognize that, for future projected data submissions, USAC may determine that the collection of additional projected data may be necessary for verification and validation purposes. We expect that Commission staff and USAC will work with affected rate-of-return carriers and other interested parties to ensure that future projected data submissions result in the accurate and efficient calculation and verification of support, while imposing minimal administrative burdens on carriers.

11. Line Count Data Required. We clarify that the line count data that must be submitted on April 18, 2002, pursuant to § 54.903(a), shall include line count data for each study area by customer class (single-line business/residential and multi-line business), but need not include line counts by disaggregation zone. Under the Commission's rules, carriers need not elect a disaggregation path until May 15, 2002. Thus, few carriers will file disaggregated line count data on April 18, 2002. In addition, carriers must file disaggregated line count data on the July 31 annual line count filing. Under these circumstances, we conclude that it is appropriate for the initial April 18, 2002, filing to require line count data by study area rather than by disaggregation zone. We recognize that, in those study areas that have established disaggregation zones by April 18, 2002, portable support initially will be distributed to CETCs on a study-area basis, rather than by disaggregation zone. Because we anticipate that few study areas will have established disaggregation zones by April 18, 2002, we find that it is appropriate to simplify the initial line count filing as described above.

12. Filing Specifications. We direct NECA and carriers filing individually to submit the projected cost and revenue data and line count data with USAC under a single cover letter. The filing should be addressed to USAC at the following address:

U.S. Mail	Overnight or Expedited Mail/Courier Services
USAC	USAC.
P.O. Box 11993	One South Market Square.
Harrisburg, PA 17108	Harrisburg, PA 17101 [phone].

The filing should clearly identify the carrier's name and study area code, and provide specific contact information for an individual, including that contact's name, telephone number, and e-mail address, as well as the address of the carrier. The data may be presented in a letter or in an appropriate electronic format (i.e., an Access or Excel spreadsheet on CD). The filing must clearly indicate that the projected data is for the 2002-03 ICLS year, and the line count data represents line counts as of September 30, 2001. The cover letter may be used to make the necessary certifications for both the projected data and the line count data. Confidential treatment of the filed data may be requested in the cover letter, pursuant to § 0.459 of the Commission's rules.

13. USAC shall post to its website, www.universalservice.org,, a sample letter and spreadsheets that the filing parties are encouraged follow. We anticipate that USAC will conduct additional outreach to ensure that non-pooling carriers are able to meet these requirements. We expect also that NECA will consult with USAC regarding the best manner to provide its filing to USAC. Questions regarding these filing procedures may be directed to USAC by telephone at [phone], by fax at [phone], or by e-mail at [e-mail].

III. Procedural Issues

A. Supplemental Final Regulatory Flexibility Certification

14. The Regulatory Flexibility Act of 1980, as amended (RFA) requires that a regulatory flexibility analysis be prepared for rulemaking proceedings, unless the agency certifies that “the rule will not have a significant economic impact on a substantial number of small entities.” The RFA generally defines “small entity” as having the same meaning as the terms “small business,” “small organization,” and “small governmental jurisdiction.” In addition, the term “small business” has the same meaning as the term “small business concern” under the Small Business Act. A small business concern is one which: (1) Is independently owned and operated; (2) is not dominant in its field of operation; and (3) satisfies any additional criteria established by the Small Business Administration (SBA).

15. On October 11, 2001, the Commission adopted MAG Order, which has as its the principle goal the gradual elimination of implicit support in the access rate structure of non-price cap carriers and replacement with an explicit support mechanism, ICLS. In this Order on Reconsideration, we adopt modifications to our rules concerning the initial filing of data for the ICLS mechanism. First, we extend the deadline for completing the initial filing from March 31, 2002, to April 18, 2002. Second, we order NECA to complete the initial filing on behalf of members of its common line pool based on data already in its possession. This relieves individual carriers that participate in the NECA common line pool—the vast majority of rate-of-return carriers—from the burden of completing the filings on their own. Members of the NECA common line pool need not rely on NECA's filing if they would prefer to make their own filing as our rules currently require. A carriers that does not participate in the NECA common line pool must file its own data or have another designated agent file its data, as currently required in our rules. These modifications are expected to reduce the administrative burdens associated with making the initial ICLS filings. The modifications apply only to the initial filings under the ICLS mechanism, and are not permanent changes to the Commission's rules. Finally, we note that NECA, which itself is a small entity due to its non-profit status, appears to be the only entity with any additional compliance burden as a result of our actions. Because the modifications reduce, rather than increase, administrative costs and are of a one-time nature, and because any additional compliance burden falls only on NECA, we certify that the requirements of this Order on Reconsideration will not have a significant economic impact on a substantial number of small entities.

16. The Commission will send a copy of this Order on Reconsideration, including a copy of this supplemental certification, in a report to Congress pursuant to the Congressional Review Act. In addition, this Order on Reconsideration and certification will be sent to the Chief Counsel for Advocacy of the Small Business Administration, and will be published in the Federal Register.

B. Paperwork Reduction Act Analysis

17. The decision herein has been analyzed with respect to the Paperwork Reduction Act of 1995, Public Law 104-13, and found to impose new or modified reporting and/or recordkeeping requirements or burdens on the public. Implementation of these new or modified reporting and/or recordkeeping requirements will be subject to approval by the Office of Management and Budget.

IV. Ordering Clauses

18. It is ordered, pursuant to sections 1-4, 10, 201-202, and 254 of the Communications Act of 1934, as amended, and §§ 1.3 and 1.103 of the Commission's rules, this Order on Reconsideration is adopted.

19. The Accounting Policy Division of the Common Carrier Bureau shall send a copy of the Order, upon release, to the National Exchange Carrier Association, Inc., CenturyTel-Ohio, Ogden Telephone—New York, Warwick Valley Telephone Company, Alltel Georgia Comm, Corp., Georgia Alltel Telecom, Inc., Great Plains Communications, and Interstate Telecommunications Cooperative, Inc.

20. The Commission's Consumer Information Bureau, Reference Information Center, shall send a copy of this Order on Reconsideration, including the Supplemental Final Regulatory Flexibility Certification, to the Chief Counsel for Advocacy of the Small Business Administration.

Federal Communications Commission.

William F. Caton,

Acting Secretary.

For the reasons set forth in the preamble, 47 CFR part 54 is amended as follows:

1. The authority citation for part 54 continues to read as follows:

Authority: 47 U.S.C. 1, 4(l), 201, 205, 214, and 254 unless otherwise noted.

2. Section 54.903 is amended in paragraphs (a)(1) and (a)(3) by removing the date “March 31, 2002” and adding in its place “March 18, 2002.”