[Federal Register Volume 63, Number 163 (Monday, August 24, 1998)]
[Proposed Rules]
[Pages 45038-45040]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-22474]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 36, 54, and 69

[CC Docket Nos. 96-45 and 97-160; DA 98-1587]


Model Platform Development

AGENCY: Federal Communications Commission.

ACTION: Proposed rule.

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SUMMARY: In the Universal Service Order, 62 FR 32862 (June 17, 1997), 
the Commission stated that it would select a federal mechanism to 
calculate the forward-looking economic cost of non-rural carriers 
serving rural, insular, and high cost areas. The Commission determined 
that it would select the ``platform'' (fixed assumptions and 
algorithms) of the mechanism in one stage, and that it would select 
other parts of the mechanism, including all input values, in a second 
stage. Three models have been submitted to the Commission for 
consideration as the platform for the federal mechanism: the Benchmark 
Cost Proxy Model (BCPM), the HAI Model (HAI), and the Hybrid Cost Proxy 
Model (HCPM). In an effort to move towards a result that combines the 
best ideas of all parties considering these complex issues, this 
document seeks comment on approaches to a model platform that combine 
specific aspects from the customer location and outside plant modules 
of the models under consideration.

DATES: Comments are due on or before August 28, 1998 and reply comments 
are due on or before September 11, 1998.

ADDRESSES: One original and six copies of all comments and reply 
comments should be sent to the Commission's Secretary, Magalie Roman 
Salas, Office of the Secretary, Federal Communications Commission, 1919 
M Street, N.W., Room 222, Washington, D.C. 20554. All filings should 
reference CC Docket Nos. 96-45 and 97-160, and DA 98-1587. Parties also 
may file comments electronically via the Internet at: <http://
www.fcc.gov/e-file/ecfs.html> and <[email protected]>. Only one copy of 
an electronic submission must be submitted. In completing the 
transmittal screen, commenters should include their full name, Postal 
Service mailing address, and the lead docket number for this 
proceeding, which is Docket No. 96-45. Parties not submitting their 
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, 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 
(including the lead docket number in this case, Docket No. 96-45), type 
of pleading (comment or reply 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. In addition, parties must send copies to the Commission's copy 
contractor, International Transcription Service, Inc., 1231 20th 
Street, N.W., Washington, D.C. 20037.

FOR FURTHER INFORMATION CONTACT: Chuck Keller, Common Carrier Bureau, 
Accounting Policy Division, (202) 418-7400 or Jeff Prisbrey, Common 
Carrier Bureau, (202) 418-7400.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's 
document released on August 7, 1998. The full text of this document is 
available for public inspection during regular business hours in the 
FCC Reference Center, Room 239, 1919 M Street, N.W., Washington, D.C., 
20554. An electronic copy of the complete

[[Page 45039]]

document also may be found on the Commission's Universal Service Web 
Page at <www.fcc.gov/ccb/universal__service/da981587.pdf>.

Background

    1. In the Universal Service Order, 62 FR 32862 (June 17, 1997), the 
Commission stated that it would select a federal mechanism to calculate 
the forward-looking economic cost of non-rural carriers serving rural, 
insular, and high cost areas. The Commission determined that it would 
select the ``platform'' (fixed assumptions and algorithms) of the 
mechanism in one stage, and that it would select other parts of the 
mechanism, including all input values, in a second stage. Three models 
have been submitted to the Commission for consideration as the platform 
for the federal mechanism: the Benchmark Cost Proxy Model (BCPM), the 
HAI Model (HAI), and the Hybrid Cost Proxy Model (HCPM). These models 
have been subject to extensive review by Commission staff and outside 
parties, and thousands of pages of comments have been filed regarding 
their relative merits and problems. Recent ex parte meetings between 
Commission staff and the model sponsors suggest that certain areas of 
agreement now exist on the optimal approach to designing a platform for 
the federal mechanism. In an effort to move towards a result that 
combines the best ideas of all parties considering these complex 
issues, this document seeks comment on approaches to a model platform 
that combine specific aspects from the customer location and outside 
plant modules of the models under consideration.

Issues for Comment

    2. In a Further Notice of Proposed Rulemaking (Further NPRM), 62 FR 
4257 (August 7, 1997), the Commission raised the possibility that the 
platform for the federal mechanism may represent a synthesis of 
approaches from different sources. Such a synthesis would capitalize on 
the strengths of the algorithms and approaches of the models under 
consideration. As the Commission stated in the Further NPRM, the goal 
of this model development process is to determine the platform design 
components and input values that will most accurately estimate 
carriers' forward-looking economic costs. With this goal in mind, we 
note that a synthesis of the approaches taken in the models under 
consideration may result in a model platform with significant 
advantages over each of the individual models.
    3. The algorithms that identify customer locations and design 
outside plant in each of the models under consideration are important 
in determining the estimated costs for a wire center or study area. One 
approach that might enhance the accuracy of a model's cost estimate 
would be a synthesis of HAI's geocoded customer location information, 
which identifies customer locations by latitude and longitude 
coordinates, BCPM's assumption that customers that cannot be located 
precisely are located along roads, HAI's clustering approach, and 
HCPM's outside plant algorithms, which are able to design outside plant 
directly, or nearly directly, to latitude and longitude coordinates. 
This approach could be combined with other aspects of BCPM, HAI, or 
HCPM to develop a complete model platform. While we seek comment on 
this possible synthesis and on the specific issues set out below, we 
note that the Commission may select as part of the federal mechanism 
other combinations of algorithms not described herein. We therefore 
also seek comment on any other combinations of algorithms on the record 
in this proceeding that they believe would most accurately estimate 
non-rural carriers' forward-looking economic costs of providing the 
supported services starting July 1, 1999.
    4. Customer Location Data. HAI uses data provided by PNR Associates 
to identify customer locations by latitude and longitude (actual 
geocode data) and creates surrogate geocodes for those customer 
locations that cannot be identified (surrogate geocode data). HAI then 
uses an algorithm, also provided by PNR, to identify clusters of 
customers. BCPM and HCPM, on the other hand, identify customer 
locations using publicly available data about the number of customers 
in each Census Block. BCPM combines the Census block data about 
customer location with road network data, and places customers in 
microgrids based on the assumption that people are more likely to be 
located along roads. In the Further NPRM, the Commission requested 
comment on the availability, feasibility, and reliability of using 
geocode data to determine the distribution of customers in the federal 
mechanism. Many commenters from across the spectrum of the industry 
agree that geocode data that identify the actual geographic locations 
of customers are preferable to algorithms intended to estimate customer 
locations based on information such as census block data. Although 
comments on this issue have already been received, this document 
provides a final opportunity for parties to comment on how a model 
platform may use the most accurate customer location data available, 
which in some cases may be geocode data, in the most effective manner. 
We also seek comment on how the expenses for obtaining geocode data for 
high cost universal service mechanisms should be recovered.
    5. As many commenters have noted, actual geocode data appear to be 
incomplete, particularly in low-density areas. A model, therefore, will 
have to make assumptions about where non-geocoded customers are likely 
to be located. Currently, the BCPM developers create surrogate geocodes 
on the assumption that those customers in a census block that cannot be 
geocoded are distributed along both the internal and peripheral roads 
in the Census block. HAI believes that a more accurate assumption would 
place surrogate geocodes along the boundary of that Census block. 
Another option would be to distribute surrogate geocodes randomly 
throughout an entire Census block, rather than just along its 
boundaries or roads. Although comments on this issue have already been 
received, this document provides a final opportunity for parties to 
comment on the algorithm or combination of algorithms that would locate 
most accurately those customers without actual geocodes, and on the 
empirical basis for such comments. If commenters propose a different 
approach than one of those described above, we seek detailed comments 
on how such an approach should be implemented.
    6. Grouping Customers. After determining where customers are 
located using actual or surrogate geocodes, a model platform must group 
customers into serving areas to design feeder and distribution plant 
efficiently to those customers. In this document, we consider a model 
platform that groups customers using a clustering approach because it 
appears to have advantages over gridding approaches. HAI has placed the 
computer code for its clustering algorithm on the record in this 
proceeding. We are also releasing a clustering algorithm and a set of 
cluster outputs generated from sample, surrogate geocode data. These 
clusters were generated using a clustering algorithm, developed by 
Commission staff, that differs somewhat from the clustering algorithm 
used in HAI. We seek comment on the relative merits of HAI's clustering 
algorithm and the Commission staff's clustering algorithm described in 
the ``Test Data'' section, below. We also intend that parties will use 
these cluster outputs to test the

[[Page 45040]]

various algorithms for designing distribution and feeder plant that are 
discussed herein.
    7. Designing Distribution and Feeder Plant. After identifying 
groups of customers, a model must design distribution plant from the 
digital loop carrier (DLC) or serving area interface (SAI) to the 
customers, and feeder plant from the central office to the DLC or SAI. 
In order to design distribution plant, both BCPM and HAI create square 
or rectangular distribution areas and assume that the customers in each 
group are uniformly spread throughout the distribution areas. While 
these approaches create a predictable pattern of customer lots to which 
the models may design distribution plant, both also appear to distort 
the actual locations of customers when such locations can be identified 
with specificity. HCPM appears to be capable of designing plant with 
less distortion to customer locations. By reducing the size of its 
microgrids, HCPM can associate those latitude and longitude coordinates 
of each customer with a small microgrid (the version that is currently 
available uses grids 360 feet on each side). With customers grouped by 
a clustering algorithm, HCPM can build loop plant directly to 
individual microgrids in which customers are located. Thus, HCPM could 
build plant directly to every customer with an error of no more than a 
few hundred feet from the actual or surrogate geocode specified for any 
individual customer. We seek comment on a model that synthesizes this 
approach with the use of geocode data and a clustering algorithm. We 
also seek comment on the appropriate microgrid size to utilize in 
building distribution plant to latitude and longitude coordinates, and 
on the methods used by HCPM to subdivide microgrids into lots.
    8. The feeder modules of both HAI and BCPM use a modified ``pine 
tree'' algorithm that deploys main feeder routes in each of four 
quadrants surrounding the central office switch, with subfeeder routes 
connecting each serving area interface to the closest main feeder. In 
effect, HAI and BCPM build an individual subfeeder route to nearly 
every serving area (or cluster). The feeder module of HCPM allows for 
more sharing among subfeeder routes by using a modified ``spanning 
tree'' algorithm. The spanning tree algorithm finds the minimum 
distance necessary to connect a set of remote locations to a central 
point. As applied to feeder plant, this algorithm connects SAIs to the 
switch. HCPM has modified the spanning tree algorithm to consider 
explicitly the amount of traffic that must be carried and factors such 
as the costs of cable and structures. We seek comment on these 
different approaches to designing feeder plant, including on the feeder 
algorithm that should be used if the Commission also adopts a model 
platform that includes HCPM's distribution algorithm.
    9. Test Data. As noted above, to enable parties to evaluate fully 
the synthesis discussed herein, particularly the HCPM distribution and 
feeder algorithm, the Bureau has made available on the Commission's 
World Wide Web site a set of sample geocode data and customer clusters, 
and the clustering algorithm used to generate those clusters. In 
addition, an interface that converts the output of the HCPM clustering 
algorithm to an appropriate input for the HCPM distribution and feeder 
algorithms has been placed on the public record. These latter 
algorithms overlay a grid on top of each cluster, and then assign each 
customer location in the cluster to a microgrid cell within the grid 
for the purpose of building distribution plant. A similar interface 
could be used for HAI's cluster data point outputs, or any other set of 
clustering outputs. The interface and test data are available via the 
World Wide Web at http://www.fcc.gov/Bureaus/Common__Carrier/Other/
hcpm. The sample geocode data represent points randomly distributed 
within the census blocks of several wire centers. Groups of the sample 
geocode data have been identified according to a clustering algorithm 
developed by Commission staff. By making a set of sample geocode points 
publicly available and grouping them into clusters, we hope to 
facilitate evaluation and analysis of this particular synthesis. We 
note that these data could also be used to evaluate other potential 
approaches.

List of Subjects

47 CFR Part 36

    Reporting and recordkeeping requirements and Telephone.

47 CFR Part 54

    Universal service.

47 CFR Part 69

    Communications common carriers.

Federal Communications Commission.
James D. Schlichting,
Acting Chief, Common Carrier Bureau.
[FR Doc. 98-22474 Filed 8-21-98; 8:45 am]
BILLING CODE 6712-01-P