[Federal Register Volume 63, Number 96 (Tuesday, May 19, 1998)]
[Proposed Rules]
[Pages 27542-27544]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-13336]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 54
[CC Docket No. 96-45; DA 98-872]
Proposed Revision of 1998 Collection Amounts for Schools and
Libraries and Rural Health Care Universal Service Support Mechanisms
AGENCY: Federal Communications Commission.
ACTION: Proposed rule.
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SUMMARY: The Common Carrier Bureau seeks comment on the proposed
revision of 1998 collection amounts for the schools and libraries and
rural health care universal service support mechanisms.
DATES: Comments in response to this proposed rule are due May 22, 1998.
ADDRESSES: One original and five copies of all comments responsive to
this Public Notice must be sent to Magalie Roman Salas, Secretary,
Federal Communications Commission, 1919 M Street, N.W., Washington,
D.C. 20554. Three copies also should be sent to Sheryl Todd, Accounting
Policy Division, Common Carrier Bureau, 2100 M Street, N.W., 8th Floor,
Washington, D.C. 20554.
FOR FURTHER INFORMATION CONTACT: Irene Flannery, Accounting Policy
Division, Common Carrier Bureau, (202) 418-7383.
SUPPLEMENTARY INFORMATION: The final rules providing for universal
service support for schools, libraries, and health care providers
appear in 47 CFR part 54, subparts F and G, which were originally
published on June 17, 1997 (62 FR 32862) and amended in rules published
on January 3, 1998 (63 FR 2094) and January 27, 1998 (63 FR 3830).
By the Common Carrier Bureau:
Consistent with section 254 of the Communications Act, as amended,
and the recommendations of the Federal-State Joint Board on Universal
Service, we remain committed to providing support to eligible schools
and libraries for telecommunications services, Internet access, and
internal connections. We also remain committed to providing the
greatest level of support to the most economically disadvantaged
schools and libraries. At the same time, however, we strive to ensure a
smooth transition to the new universal service support mechanisms and
to minimize disruption to consumers. We seek to provide support to
schools, libraries, and rural health care providers in a manner that
does not require consumers' rates to rise, and without causing rate
churn. We thus seek comment on a proposal to implement a gradual phase-
in of the schools, libraries, and rural health care universal service
support mechanisms that takes advantage, and reflects the timing, of
access charge reductions, will provide substantial support and at the
same time will minimize disruption to consumers.
As of May 1, 1998, SLC projected that $2.02 billion in discounts
have been requested by applicants who have filed through April 28,
1998. RHCC projected that the rural health care support mechanism will
require $25 million for the third quarter. Although the local exchange
carriers will not file their access tariffs until June 16, 1998, based
on preliminary information provided by the local exchange carriers, we
estimate that the July 1, 1998 access charge reductions will be
approximately $700 million below current levels. Given projected access
charge reductions, we estimate that the quarterly collection rate for
schools and libraries could rise from $325 million (the second quarter
collection rate) to approximately $524 million (We reach this result in
the following manner: Long distance carriers pay direct contributions
to universal service and, through interstate access charges, indirectly
pay for most of the local exchange carrier contributions. Directly and
indirectly, long distance carriers are responsible for approximately
82.5 percent of schools and libraries and rural health care
contributions. Multiplying $700 million by 1/.825 yields $848 million.
We divide $848 million by 4 to find the incremental amount available
for each quarter, which is $212 million. We then add $212 million to
the average quarterly collection rate for the first half of 1998, $312
million (the average of $300 and 325 million). Accordingly, access
charge reductions of $700 million yield $524 million as a quarterly
collection rate for the third and fourth
[[Page 27543]]
quarters of 1998 without increasing total access and universal service
payments by long distance carriers. Accordingly, schools and libraries
could be funded at approximately $1.67 billion for the 1998 calendar
year. Because the 75-day initial filing window period for the rural
health care support mechanism just opened on May 1, 1998, we propose
that the quarterly collection rate for the rural health care support
mechanism remain at $25 million for the third and fourth quarters of
1998. Accordingly, rural health care providers would be funded at $100
million for the 1998 calendar year.)
We do not seek comment on revising the annual caps adopted in the
Universal Service Order. Rather, we seek comment on adjusting the
maximum amounts that may be collected and spent during the initial year
of implementation in order to ensure that collection rates do not
exceed access charge reductions and to prevent rate churn for
subscribers. We emphasize that any adjustments should not impact the
level of support available to the most economically disadvantaged
schools and libraries, and seek comment on ways to ensure that those
entities receive adequate support.
We seek comment on directing the Universal Service Administrative
Company (``USAC'') to collect only as much money as is required by
demand, but in no event more than $25 million per quarter for the third
and fourth quarters of 1998 to support the rural health care universal
service support mechanism, and no more than $524 million per quarter
for the third and fourth quarters of 1998 to support the schools and
libraries universal service support mechanism. We also seek comment on
directing the administrative corporations to neither commit nor
disburse more than $100 million for the health care support mechanism
or more than $1.67 billion for the schools and libraries support
mechanism during the 1998 funding year.
While we have not had an opportunity to review fully the statement
of Commissioner Furchtgott-Roth, we do take this opportunity to note
that the 60-day congressional review period referenced in that
statement does not apply to ``any rule promulgated under the
Telecommunications Act of 1996 and the amendments made by that Act.''
Parties wishing to comment on these issues and the Initial
Regulatory Flexibility Analysis below are directed to file comments on
or before May 22, 1998, and to follow the following procedures. All
filings should reference: Proposed Revision of Maximum Collection
Amounts for Schools and Libraries and Rural Health Care Providers,
Public Notice, CC Docket No. 96-45, DA 98-872. All interested parties
should include the name of the filing party and the date of the filing
on each page of their comments. Parties should include a table of
contents in all documents regardless of length and should indicate
whether they are filing an electronic copy of a submission via the
Internet or via diskette. Pleadings must comply with Commission rules.
One original and five copies of all comments must be sent to Magalie
Roman Salas, Secretary, Federal Communications Commission, 1919 M
Street, N.W., Washington, D.C. 20554. Three copies also should be sent
to Sheryl Todd, Accounting Policy Division, Common Carrier Bureau, 2100
M Street, N.W., 8th Floor, Washington, D.C. 20554. Copies of documents
filed with the Commission may be obtained from the International
Transcription Service, 1231 20th Street, N.W., Washington, D.C. 20037,
(202) 857-3800. Such documents are also available for review and
copying at the FCC Reference Center, Room 239, 1919 M Street, N.W.,
Washington, D.C., from 9:00 a.m. to 4:30 p.m.
Parties may also file informal comments or an exact copy of formal
comments electronically via the Internet at: http://www.fcc.gov/e-
file/ecfs.html>. Only one copy of an electronic submission must be
submitted. A party must note whether an electronic submission is an
exact copy of formal comments on the subject line and should note in
its paper submission that an electronic copy of its comments is being
submitted via the Internet. A commenter also must include its full name
and Postal Service mailing address in its submission. Parties not
submitting an exact copy of their formal comments via the Internet are
also asked to submit their comments on diskette. Parties submitting
diskettes should submit them to Sheryl Todd, Accounting Policy
Division, Common Carrier Bureau, 2100 M Street, N.W., Room 8606,
Washington, D.C. 20554. Such a submission should be on a 3.5 inch
diskette formatted in an IBM compatible format using WordPerfect 5.1
for Windows or compatible software. The diskette should be accompanied
by a cover letter and should be submitted in ``read only'' mode. The
diskette should be clearly labelled with the party's name, proceeding,
type of pleading (comment), date of submission, and the name of the
electronic file on the diskette. Each diskette should contain only one
party's pleadings, preferably in a single electronic file. Electronic
submissions are in addition to and not a substitute for the formal
filing requirements addressed above.
Ex parte contact. Filing of this petition initiates a permit-but-
disclose proceeding under the Commission's rules.
Initial Regulatory Flexibility Analysis
1. The Regulatory Flexibility Act (RFA) 1 requires that
an initial regulatory flexibility analysis be prepared for notice-and-
comment rulemaking proceedings, unless the agency certifies that ``the
rule will not, if promulgated, have a significant economic impact on a
substantial number of small entities.'' 2
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\1\ The RFA, see 5 U.S.C. Sec. 601 et seq., has been amended by
the Contract With America Advancement Act of 1996, Pub. L. No. 104-
121, 110 Stat. 847 (1996) (CWAAA). Title II of the CWAAA is the
Small Business Regulatory Enforcement Fairness Act of 1996 (SBREFA).
\2\ 5 U.S.C. Sec. 605(b).
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2. Description of the Reasons Why Agency Action Is Being
Considered. This Notice requests comment on adjusting the maximum
amounts that may be collected and spent during the initial year of
implementation of the universal service support mechanisms for schools,
libraries, and rural health care providers in order to ensure that
collection rates do not exceed access charge reductions and to prevent
rate churn for subscribers. The notice emphasizes that any adjustments
should not impact the level of support available to the most
economically disadvantaged schools and libraries, and seeks comment on
ways to ensure that those entities receive adequate support. As the
notice indicates, some parties have already suggested ways to
prioritize the distribution of funds if necessary in response to a
prior public notice.
3. Objectives and Legal Basis for the Proposed Action. The proposed
action is supported by sections 1, 4(i) and (j), and 254, of the
Communications Act, as amended, 47 U.S.C. Secs. 151, 154(i) and (j),
and 254. The objective is to provide support to schools, libraries and
rural health care providers in a manner that does not require
consumers' rates to rise, and without causing rate churn.
4. Description and Estimate of the Number of Small Entities That
May Be Affected by this Notice. The RFA generally defines ``small
entity'' as having the same meaning as the terms ``small business,''
``small organization,'' and ``small governmental jurisdiction'' and the
same meaning as the term ``small business concern'' under the Small
Business Act, 15 U.S.C. Sec. 632,
[[Page 27544]]
unless the Commission has developed one or more definitions that are
appropriate to its activities.3 Under the Small Business
Act, a ``small business concern'' is one that: (1) is independently
owned and operated; (2) is not dominant in its field of operation; and
(3) meets any additional criteria established by the Small Business
Administration (SBA).4
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\3\ 5 U.S.C. Sec. 601(3) (incorporating by reference the
definition of ``small business concern'' in 15 U.S.C. Sec. 632).
\4\ Small Business Act, 15 U.S.C. Sec. 632 (1996).
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5. The SBA has defined a small business for Standard Industrial
Classification (SIC) categories 4812 (Radiotelephone Communications)
and 4813 (Telephone Communications, Except Radiotelephone) to be small
entities having fewer than 1,500 employees.5 Small incumbent
LECs subject to the universal service rules are either dominant in
their field of operation or are not independently owned and operated,
and consistent with our prior practice they are excluded from the
definition of ``small entity'' and small business concerns.
Accordingly, our use of the terms ``small entities'' and ``small
business'' does not encompass small incumbent LECs. Out of an abundance
of caution, however, for regulatory flexibility analysis purposes, we
will consider small incumbent LECs within this analysis and use the
term ``small incumbent LECS'' to refer to any incumbent LECs that
arguably might be defined by the SBA as ``small business concerns.''
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\5\ 13 C.F.R. Sec. 121.201.
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6. In the final regulatory flexibility analysis (FRFA) in the
Universal Service Order, the Commission described and estimated in
detail the number of small entities that would be affected by the new
universal service rules.6 These entities included various
types of telecommunications carriers and service providers, as well as
schools, libraries, rural health care providers and other beneficiaries
of the universal service mechanisms. The proposal in this notice would
apply to the same entities described in the FRFA. Therefore we
incorporate by reference the description and estimate of the number of
small entities affected included in the FRFA to the Order.7
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\6\ Order, 12 FCC Rcd at 9227-9243.
\7\ 12 FCC Rcd at 9227-9243.
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7. Description of Projected Reporting, Recordkeeping and Other
Compliance Requirements. The notice does not propose any new reporting
or recordkeeping requirements. It proposes to change the existing
compliance requirements for universal service by adjusting the amount
of support available to schools, libraries, and rural health care
providers in the first year of the new universal service support
mechanisms and to ensure that the most economically disadvantaged
schools and libraries receive adequate support.
8. Description of Significant Alternatives which could Minimize Any
Significant Economic Impact on Small Entities. The requirements
proposed could have a significant economic impact on small
telecommunications carriers and providers, including small LECs by
reducing the amount of their universal service contributions in the
first year of the support mechanisms for schools and libraries, and
rural health care providers. In addition the proposed requirements
could have a significant economic impact on small schools, libraries,
rural health care providers, and small government jurisdictions by
reducing the amount of support available during that year. The notice
seeks comments on alternative ways of ensuring adequate support for the
most economically disadvantaged schools and libraries. We invite
specific comment on the impact of the proposed requirements on small
entities.
9. Federal Rules that May Duplicate, Overlap, or Conflict With the
Notice. None.
Federal Communications Commission.
Magalie Roman Salas,
Secretary.
[FR Doc. 98-13336 Filed 5-15-98; 11:24 am]
BILLING CODE 6712-01-P
