[Federal Register Volume 64, Number 250 (Thursday, December 30, 1999)]
[Rules and Regulations]
[Pages 73427-73429]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-33766]


=======================================================================
-----------------------------------------------------------------------

FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 36 and 54

[CC Docket No. 96-45; FCC 99-396]


Federal-State Joint Board on Universal Service

AGENCY: Federal Communications Commission.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: This document concerning the Federal-State Joint Board on 
Universal Service makes a procedural change to the new high-cost 
universal service support mechanism for non-rural carriers adopted in 
the High-Cost Methodology Order on October 21, 1999. The change 
concerns the targeting of high-cost support amounts to individual wire 
centers, which was set to occur beginning in the first quarter of 2000.

DATES: Effective December 30, 1999.

FOR FURTHER INFORMATION CONTACT: Jack Zinman, Attorney, Common Carrier 
Bureau, Accounting Policy Division, (202) 418-7400.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's 
Nineteenth Order on Reconsideration in CC Docket No. 96-45 released on 
December 17, 1999. 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.

I. Introduction

    1. In this Order, the Commission on its own motion makes a 
procedural change to the new high-cost universal service support 
mechanism for non-rural carriers adopted in the High-Cost Methodology 
Order, 64 FR 67416 (December 1, 1999), on October 21, 1999, and 
scheduled to become effective on January 1, 2000. The change concerns 
the targeting of high-cost support amounts to individual wire centers, 
which was set to occur beginning in the first quarter of 2000. Because 
non-rural carriers will be filing wire center line count data for the 
first time on December 30, 1999, the Commission will not have a 
sufficient opportunity to review and verify that data to enable 
targeting during the first and second quarters of 2000. We therefore 
find that support payments targeted to the wire center level shall be 
issued beginning with payments provided in the third quarter of 2000. 
This change affects only the targeting of support during the first and 
second quarters of 2000, and does not alter the January 1, 2000 
effective date of the new mechanism or the aggregate amount of support 
provided to each non-rural carrier under the new mechanism.

II. Discussion

    2. We conclude that support payments should be calculated using the 
targeting approaches previously adopted. We conclude, however, that the 
provision of forward-looking support should be deferred until the third 
quarter of 2000. Until targeted support is provided in the third 
quarter of 2000, interim hold-harmless support shall be provided at the 
study-area level. Because non-rural carriers will be formally 
submitting wire center line count data for the first time on December 
30, 1999, we do not believe that there will be sufficient time to 
analyze and verify the data before carriers are scheduled to receive 
targeted interim hold-harmless support in the first quarter of 2000 and 
targeted forward-looking support in the second quarter of 2000. Our 
decision to postpone the targeting of support will allow us to work 
with carriers and USAC to address any anomalies in carriers' first-time 
filings and to ensure that the wire center line count data are valid 
and sufficiently accurate for targeting purposes. We emphasize, 
however, that this decision does not change the January 1, 2000 
effective date of the new mechanism or the aggregate amount of high-
cost support provided to non-rural carriers under the new mechanism.
    3. We therefore reconsider and amend on our own motion 
Secs. 54.313(c) and 54.311(b) of our rules, as set forth. Specifically, 
we delete Sec. 54.313(c)(1)(i) of our rules, thereby eliminating the 
January 1, 2000 state certification option, which would have permitted 
any carrier in a state that filed a certification by that date to 
receive targeted forward-looking support for the first and second 
quarters of 2000 in the second quarter of 2000. The elimination of this 
filing option, however, does not eliminate a carrier's ability to 
obtain forward-looking support for the first and second quarters of 
2000. Under the rules adopted in the High-Cost Methodology Order, if a 
state files the requisite certification by April 1, 2000, carriers 
subject to that certification shall receive forward-looking support for 
the first and third quarters of 2000 in the third quarter of 2000, and 
forward-looking support for the second and fourth quarters of 2000 in 
the fourth quarter of 2000. We also amend Sec. 54.311(b) of our rules, 
so that for the first and second quarters of 2000, non-rural carriers 
eligible for interim-hold harmless support shall receive such support 
at the study-area level, rather than the wire center level. Targeting 
of interim hold-harmless support shall occur at the wire center level 
beginning in the third quarter of 2000.
    4. We also correct an oversight in the rules that we adopted in the 
High-Cost Methodology Order concerning the calculation of the expense 
adjustments for non-rural carriers. In that order, we amended 
Sec. 36.631(d) of our rules so that the expense adjustment for study 
areas reporting more than 200,000 working loops would be calculated 
pursuant to the new forward-looking support mechanism or the interim 
hold-harmless provision, whichever is applicable, effective January 1, 
2000. We inadvertently did not make a similar amendment to 
Sec. 36.631(c) of our rules, which concerns study areas reporting 
200,000 or fewer working loops, even though a small number of non-rural 
carriers serve such study areas. To remedy this oversight, we now amend 
Sec. 36.631(c) so that the expense adjustment for non-rural carriers 
serving study areas reporting 200,000 or fewer working loops will be 
calculated pursuant to the new forward-looking support mechanism or the 
interim hold-harmless provision, whichever is applicable, effective 
January 1, 2000.

III. Procedural Matters

A. Regulatory Flexibility Act Certification

    5. The Regulatory Flexibility Act (RFA) requires an Initial 
Regulatory Flexibility Analysis (IRFA) whenever an agency publishes a 
notice of proposed rulemaking, and a Final Regulatory Flexibility 
Analysis (FRFA) whenever an agency subsequently promulgates a final 
rule, unless the agency certifies that the proposed or final rule will 
not have ``a significant economic impact on a substantial number of 
small entities,'' and includes the factual basis for such 
certification. 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

[[Page 73428]]

of operation; and (3) satisfies any additional criteria established by 
the Small Business Administration (SBA). The SBA defines a small 
telecommunications entity in SIC code 4813 (Telephone Communications, 
Except Radiotelephone) as an entity with 1,500 or fewer employees.
    6. In the High-Cost Methodology Order, the Commission certified 
pursuant to the RFA that the final rules adopted in that order would 
not have a significant economic impact on a substantial number of small 
entities. We concluded that the High-Cost Methodology Order adopted a 
final rule affecting only the amount of high-cost support provided to 
non-rural LECs. Non-rural LECs generally do not fall within the SBA's 
definition of a small business concern because they are usually large 
corporations or affiliates of such corporations. In a companion Further 
Notice of Proposed Rulemaking adopted in this docket, the Commission 
prepared an IRFA seeking comment on the economic impacts on small 
entities. No comments were received in response to that IRFA.
    7. The rule changes adopted in this order are merely procedural and 
affect only the timing of the implementation of certain aspects of the 
High-Cost Methodology Order, and the correction of an oversight in the 
rules accompanying the High-Cost Methodology Order. The changes adopted 
in this order will affect only non-rural LECs. As mentioned, non-rural 
LECs generally do not fall within the definition of a small business 
concern. Therefore, we certify pursuant to section 605(b) of the RFA, 
that the final rules adopted in this order will not have a significant 
economic impact on a substantial number of small entities. The Consumer 
Information Bureau, Reference Information Center, will send a copy of 
the Nineteenth Order on Reconsideration, including a copy of this final 
certification, to the Chief Counsel for Advocacy of the SBA in 
accordance with the RFA. In addition, this certification and order will 
be published in the Federal Register. Finally, the Commission's 
Consumer Information Bureau, Reference Information Center, will send a 
copy of the Nineteenth Order on Reconsideration, including a copy of 
this final certification, in a report to Congress pursuant to the Small 
Business Regulatory Enforcement Fairness Act of 1996.

B. Effective Date of Final Rules

    8. We conclude that the amendments to our rules adopted herein 
shall be effective December 30, 1999. In this order, we make minor 
amendments to the rules adopted in the High-Cost Methodology Order, 
which implement a new forward-looking high-cost support mechanism, 
effective January 1, 2000. Making the amendments effective 30 days 
after publication in the Federal Register would jeopardize the required 
January 1, 2000 implementation date. Accordingly, pursuant to the 
Administrative Procedure Act, we find good cause to depart from the 
general requirement that final rules take effect not less than 30 days 
after their publication in the Federal Register.

IV. Ordering Clauses

    9. The authority contained in sections 1-4, 201-205, 214, 218-220, 
254, 303(r), 403, and 410 of the Communications Act of 1934, as 
amended, and Sec. 1.108 of the Commission's rules, the Ninetheenth 
Order on Reconsideration is adopted.
    10. Parts 36 and 54 of the Commission's Rules, 47 CFR 36 and 54, 
are amended as set forth, effective December 30, 1999.
    11. The Commission's Consumer Information Bureau, Reference 
Information Center, shall send a copy of this Nineteenth Order on 
Reconsideration, including the Final Regulatory Flexibility 
Certification, to the Chief Counsel for Advocacy of the Small Business 
Administration.

List of Subjects

47 CFR Part 36

    Reporting and recordkeeping requirements, Telephone.

47 CFR Part 54

    Universal service.

Federal Communications Commission.
William F. Caton,
Deputy Secretary.

Final Rules

    Parts 36 and 54 of Title 47 of the Code of Federal Regulations are 
amended as follows:

PART 36--JURISDICTIONAL SEPARATIONS PROCEDURES; STANDARD PROCEDURES 
FOR SEPARATING TELECOMMUNICATIONS PROPERTY COSTS, REVENUES, 
EXPENSES, TAXES AND RESERVES FOR TELECOMMUNICATIONS COMPANIES

    1. The authority citation for part 36 continues to read as follows:

    Authority: 47 U.S.C. 151, 154(i) and (j), 205, 221(c), 254, 403, 
and 410 unless otherwise noted.

    2. Amend Sec. 36.631 by revising paragraph (c) introductory text to 
read as follows:


Sec. 36.631  Expense adjustment.

* * * * *
    (c) Beginning January 1, 1998, for study areas reporting 200,000 or 
fewer working loops pursuant to Sec. 36.611(h), the expense adjustment 
(additional interstate expense allocation) is equal to the sum of 
paragraphs (c)(1) through (2). After January 1, 2000, the expense 
adjustment (additional interstate expense allocation) for non-rural 
telephone companies serving study areas reporting 200,000 or fewer 
working loops pursuant to Sec. 36.611(h) shall be calculated pursuant 
to Sec. 54.309 of this Chapter or Sec. 54.311 of this Chapter (which 
relies on this part), whichever is applicable.
* * * * *

PART 54--UNIVERSAL SERVICE

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

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

    4. Amend Sec. 54.311 by revising paragraph (b) to read as follows:


Sec. 54.311  Interim hold-harmless support for non-rural carriers.

* * * * *
    (b) Distribution of Interim Hold-Harmless Support Amounts. Until 
the third quarter of 2000, interim hold-harmless support shall be 
distributed pursuant to part 36 and, if applicable, Sec. 54.303 of this 
subpart. Beginning in the third quarter of 2000, the total amount of 
interim hold-harmless support provided to each non-rural incumbent 
local exchange carrier within a particular State pursuant to paragraph 
(a) shall be distributed first to the carrier's wire center with the 
highest wire center average FLEC per line until that wire center's 
average FLEC per line, net of support, equals the average FLEC per line 
in the second most high-cost wire center. Support shall then be 
distributed to the carrier's wire center with the highest and second 
highest wire center average FLEC per line until those wire center's 
average FLECs per line, net of support, equal the average FLEC per line 
in the third most high-cost wire center. This process shall continue in 
a cascading fashion until all of the interim hold-harmless support 
provided to the carrier has been exhausted.
* * * * *
    5. Amend Sec. 54.313 by revising paragraph (c) to read as follows:

[[Page 73429]]

Sec. 54.313  State certification.

* * * * *
    (c) Filing Deadlines. In order for a non-rural incumbent local 
exchange carrier in a particular State, and/or an eligible 
telecommunications carrier serving lines in the service area of a non-
rural incumbent local exchange carrier, to receive federal high-cost 
support, the State must file an annual certification, as described in 
paragraph (b), with both the Administrator and the Commission. Support 
shall be provided in accordance with the following schedule:
    (1) First Program Year (January 1, 2000-December 31, 2000). During 
the first program year (January 1, 2000-December 31, 2000), a carrier 
in a particular State shall receive support pursuant to Sec. 54.311 of 
this subpart. If a State files the certification described in this 
section during the first program year, carriers eligible for support 
pursuant to Sec. 54.309 shall receive such support pursuant to the 
following schedule:
    (i) Certifications filed on or before April 1, 2000. Carriers 
subject to certifications that apply to the first and second quarters 
of 2000, and are filed on or before April 1, 2000, shall receive 
support pursuant to Sec. 54.309 of this subpart for the first and third 
quarters of 2000 in the third quarter of 2000, and support for the 
second and fourth quarters of 2000 in the fourth quarter of 2000. Such 
support shall be net of any support provided pursuant to Sec. 54.311 of 
this subpart for the first or second quarters of 2000.
    (ii) Certifications filed on or before July 1, 2000. Carriers 
subject to certifications filed on or before July 1, 2000, shall 
receive support pursuant to Sec. 54.309 of this subpart for the fourth 
quarter of 2000 in the fourth quarter of 2000.
    (iii) Certifications filed after July 1, 2000. Carriers subject to 
certifications filed after July 1, 2000, shall not receive support 
pursuant to Sec. 54.309 of this section in 2000.
* * * * *
[FR Doc. 99-33766 Filed 12-29-99; 8:45 am]
BILLING CODE 6712-01-P