[Federal Register Volume 63, Number 176 (Friday, September 11, 1998)]
[Rules and Regulations]
[Page 48634]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-24276]



[[Page 48634]]

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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 54 and 69

[CC Docket No. 96-45; DA 98-1581]


Federal-State Joint Board on Universal Service

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: In this document, the Commission clarifies the application of 
the Commission's ``lowest corresponding price'' requirement set forth 
in the Universal Service Order, 62 FR 32862 (June 17, 1997). The 
Commission clarifies that this requirement was not intended to preempt 
state law, and does not obligate carriers to offer rates that would 
violate state laws.

EFFECTIVE DATE: September 11, 1998.

FOR FURTHER INFORMATION CONTACT: Kaylene Shannon, Attorney, Common 
Carrier Bureau, Accounting Policy Division, (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. This document is also available from the Commission's copy 
contractor, International Transcription Service, 1231 20th Street, 
N.W., Washington, D.C. 20036.

I. Background

    1. In the Universal Service Order, 62 FR 32862 (June 17, 1997), the 
Commission provided that schools and libraries should be eligible to 
apply for discounted telecommunications services, Internet access, and 
internal connections, subject to certain limitations and conditions. 
The Universal Service Order concluded that, to ensure that their lack 
of experience in dealing with telecommunications providers does not 
prevent schools and libraries from receiving competitive prices, 
service providers must offer services to eligible schools and libraries 
at prices no higher than the lowest price the provider charges to 
similarly situated non-residential customers for similar services. The 
Commission clarified that, for purposes of determining the lowest 
corresponding price, similar services would include those provided 
under contract as well as those provided under tariff. The Commission 
established a rebuttable presumption that rates offered within the 
previous three years are compensatory.
    2. In the Fourth Reconsideration, 63 FR 2093 (January 13, 1998), 
the Commission concluded that earlier versions of tariffs that have 
been modified should be included in the comparable rates upon which the 
lowest corresponding rate is determined, ``[u]nless a regulatory agency 
has found that the tariffed rate should be changed, and affirmatively 
ordered such change, or absent a showing that the rate is not 
compensatory.'' A question has been raised whether the lowest 
corresponding rate can be based on rates not lawfully offered under 
state law.

II. Discussion

    3. Although the Commission disagreed with the general assertion 
that the lowest corresponding price should not reflect expired tariffs, 
the Commission did not expressly preempt state laws governing what 
rates may lawfully be offered to eligible schools and libraries. In the 
absence of such an expressly stated intention to preempt, we conclude 
that the Commission did not intend to require carriers to base the 
lowest corresponding rate on rates that may not lawfully be offered 
under state law. Thus, we interpret the Fourth Reconsideration as 
requiring only that rates that may be offered consistent with state law 
must be made available as the lowest corresponding price.

III. Ordering Clause

    4. Accordingly, it is ordered that, pursuant to section 4(i) and 
section 254 of the Communications Act of 1934, as amended, 47 U.S.C. 
154(i) and 254, and sections 0.91 and 0.291 of the Commission's rules, 
47 CFR 0.91 and 0.291, the lowest corresponding price requirement is 
clarified.

List of Subjects

47 CFR Part 54

    Healthcare providers, Libraries, Reporting and recordkeeping 
requirements, Schools, Telecommunications, Telephone.

47 CFR Part 69

    Communications common carriers, Reporting and recordkeeping 
requirements, Telephone.

Federal Communication Commission.
Kathryn C. Brown,
Chief, Common Carrier Bureau.
[FR Doc. 98-24276 Filed 9-10-98; 8:45 am]
BILLING CODE 6712-01-P