[Federal Register Volume 67, Number 15 (Wednesday, January 23, 2002)]
[Rules and Regulations]
[Pages 3118-3120]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-1567]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 54

[CC Docket No. 96-45; DA 01-2928]


Federal-State Joint Board on Universal Service

AGENCY: Federal Communications Commission.

ACTION: Final rule; petition for reconsideration.

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SUMMARY: In this document, the Commission updates line count input 
values for the high-cost universal service support mechanism for non-
rural carriers for purposes of calculating and targeting support 
amounts for the year 2002. Specifically, the Commission shall use 
updated line count data in the universal service cost model to estimate 
non-rural carriers' forward-looking economic costs of providing the 
services supported by the federal high-cost mechanism. The Commission 
further updates the company-specific data used in the model to 
calculate investment in general support facilities and switching costs.

DATES: Effective February 22, 2002.

FOR FURTHER INFORMATION CONTACT: Katie King or Thomas Buckley, 
Attorneys, Common Carrier Bureau, Accounting Policy Division, (202) 
418-7400.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Order 
and Order on Reconsideration in CC Docket No. 96-45 released on 
December 18, 2001. 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. Order

    1. 2000 Line Counts. Consistent with the framework adopted in the 
Twentieth Reconsideration Order, 66 FR 26513, May 8, 2000, and the 2001 
Line Counts Update Order, 65 FR 81759, December 27, 2000, the 
Commission concludes the cost model should use year-end 2000 line 
counts filed July 31, 2001, as input values for purposes of estimating 
average forward-looking costs and determining support for the year 
2002. The Commission also concludes that line counts should be 
allocated to the classes of service used in the model based on the line 
count data filed pursuant to the 1999 Data Request. The Commission 
further concludes that special access line counts should be allocated 
on the basis of the 1999 Data Request data and trued-up to 2000 43-08 
ARMIS special line counts. In addition, the Commission will adjust 
support amounts every quarter to reflect the lines reported by 
carriers, according to the methodology set forth in the Twentieth 
Reconsideration Order, 66 FR 26513, May 8, 2000. The Commission also 
stated that it plans to initiate a proceeding to study how often line 
counts and other input values should be updated.
    2. Further, consistent with its action in the 2001 Line Counts 
Update Order, 65 FR 81759, December 27, 2000, and because an updated 
customer location and road data set remains unavailable at this time, 
the Commission will not update customer location and road data at this 
time. Although the Commission recognizes that a new source of year 2000 
Census data may be useful in creating an updated customer location and 
road data set in the future, such information is not in a usable data 
set format for purposes of determining support for 2002. The 
Commission, therefore, defers the issue of using these data in the 
model until the Commission initiates a comprehensive proceeding to 
study revisions and changes to the model inputs and model platform. In 
the meantime, all new lines should be treated as if they were located 
at existing locations in the model.
    3. Class of Service Allocations. The Commission finds that using 
the methodology employed in the 2001 Line Counts Update Order, 65 FR 
81759, December 27, 2000, which used year-end wire center line count 
data filed pursuant to the 1999 Data Request, remains a reasonable 
method for allocating line counts to the classes of service used in the 
model. The Commission believes this methodology is a preferable 
approach because it remains a reasonably accurate process for 
disaggregating line counts without imposing burdensome reporting 
requirements on carriers. For purposes of 2002 support, the Commission 
therefore shall allocate line counts to the classes of service used in 
the model by dividing the year-end 2000 lines reported by non-rural 
carriers into business lines, residential lines, payphone lines, and 
single line business lines for each wire center in the same proportion 
as the lines filed pursuant to the 1999 Data Request (year-end 1998 
lines).

[[Page 3119]]

    4. The Commission also finds that estimating special line growth 
for purposes of calculating 2002 support can be accurately determined 
by dividing the 2000 ARMIS special access lines among wire centers in 
the same proportion as the special lines from the 1999 Data Request. 
The Commission finds that this methodology continues to be a reasonable 
approach to estimating special line growth for calculating support for 
2002.
    5. Matching Wire Centers. The Commission will use the same 
methodology employed in the 2001 Line Counts Update Order, 65 FR 81759, 
December 27, 2000, to match wire centers reported by carriers in their 
quarterly line count filings with wire centers found in the 1999 Data 
Request and in the model's customer location data.
    6. General Support Facilities. In addition to line counts, the 
model uses other types of data that are updated annually under current 
Commission rules and procedures. Among other things, the model uses 
company-specific ARMIS data to calculate investment in general support 
facilities (GSF). GSF investment includes buildings, motor vehicles, 
and general purpose computers. A portion of GSF investment must be 
added to the model's estimate of outside plant, switching, and 
transport investment to adequately reflect the cost providing the 
supported services. The Commission finds that updating the tables used 
in the model with 2000 ARMIS data used to compute GSF investment will 
improve the model's cost estimates by taking into account the current 
costs of GSF investment associated with supported services.
    7. Switching. The model also uses company-specific data in 
determining switching costs. A wire center's switch directs both 
interstate and intrastate traffic. Universal service support, however, 
is only provided for the portion of the switch used to direct 
intrastate traffic. Therefore, to determine the amount of a wire 
center's switch that is eligible for support, the model needs to 
determine the percentage of the switch used to direct intrastate 
service. The model currently uses 1998 ARMIS Dial Equipment Minutes 
(DEM) data to determine the overall switch usage. Then, because the 
ARMIS DEM data do not distinguish between local and intrastate toll 
usage, the model uses 1997 traffic parameter data filed with the 
National Exchange Carrier Association (NECA) which, in addition to 
identifying intrastate and interstate switch usage, identifies the 
local DEM to compute the portion of non-interstate local usage. 
Therefore, the model currently uses data sources from different years 
to determine the portion of the switch used to direct intrastate 
traffic. The Commission further concludes that it should update the 
tables in the model with the most recent traffic parameters available 
from NECA to determine the percentage of the switch allocated to 
supported services and the switch port requirement for interoffice 
transport. The Commission finds that using only NECA data for switch 
allocation, which are only one year behind the ARMIS data but contain 
all the data necessary to serve as the sole source for switch 
apportionment is a preferable alternative than using two different 
sources of data. Further, the Commission will continue to use ARMIS 
traffic parameter data for estimating signaling costs.
    8. Model Platform. The Commission defers, until a later date, the 
question of whether and when to transition to the Delphi version of the 
forward-looking cost model. The Delphi version posted on the 
Commission's web site contained certain modifications, in addition to 
translation to the Delphi computer language. Commenters have noted that 
some of the cost estimates generated by this modified version of the 
cost model of the cost model significantly differ with the results from 
the previous year's Turbo-Pascal version. This may warrant further 
investigation of whether the total amount of universal service support 
can vary substantially with small changes in inputs due to technical 
corrections to the model. In addition, numerous commenters have 
recommended use of the cost model in Visual Basic computer language in 
lieu of the Delphi version. They contend that Visual Basic is a 
preferable computer language because it is: (1) More widely used than 
Delphi; and (2) part of the cost model already uses Visual Basic and 
therefore, transition here would make the cost model more uniform. In 
order to permit an opportunity for further consideration and analysis 
of these issues, the Commission will use a Turbo-Pascal version of the 
model, at present, to calculate support for non-rural carriers for 
calculating 2002 cost estimates. The Commission anticipates that a 
number of technical corrections will ultimately be made to the cost 
model. Upon further examination of proposed modifications, the 
Commission may revise its calculations of support for future quarters 
in 2002.

II. Order on Reconsideration

    9. The Commission denies Sprint Corporation's (Sprint) petition for 
reconsideration of the 2001 Line Counts Update Order, 65 FR 81759, 
December 27, 2000. Specifically, after review of the arguments 
presented on reconsideration, the Commission concludes that Sprint has 
not provided any new information or arguments that requires it to alter 
its decision to update line counts without updating customer location 
data for purposes of calculating support for 2001. As the Commission 
explained in the 2001 Line Counts Update Order, updated line count data 
were available for the model's inputs, but updated customer location 
data were not. Consequently, the Commission concluded that, on balance, 
it was better to update the model with available line count data at 
that time than wait until a customer location data set could be 
obtained.
    10. Relying on that same analysis and reasoning, the Commission has 
decided to use updated line count data in the universal service cost 
model for purposes of calculating support for non-rural carriers for 
2002 without updating customer location data. Again, because an updated 
customer location and road data set remains unavailable for use at this 
time, the Commission finds that, on balance, it is best not to delay 
updating line counts. In addition, the Commission has noted that it 
intends to initiate, at a later date, a proceeding to study proposed 
revisions and changes to the model inputs and model platform.

VI. Order Clauses

    11. It is ordered pursuant to 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, 47 U.S.C. 151-154, 201-205, 
214, 218-220, 254, 303(r), 403, and 410, and section 1.108 of the 
Commission's rules, 47 CFR 0.91(f), this Order is adopted. 
Specifically, the Commission updates line count input values for the 
high-cost universal service support mechanism for non-rural carriers 
for purposes of calculating and targeting support amounts for the year 
2002. Therefore, the Commission shall use updated line count data in 
the universal service cost model to estimate non-rural carriers' 
forward-looking economic costs of providing the services supported by 
the federal high-cost mechanism. In addition, non-rural support amounts 
will continue to be adjusted each quarter to account for line growth 
based on the wire center line count data reported quarterly by non-
rural carriers. The Commission further updates the company-specific 
data used in the model to calculate investment in general support 
facilities and switching costs.

[[Page 3120]]

    12. It is further ordered that, pursuant to sections 4, 201-205, 
218-220, 303(r), and 405 of the Communications Act of 1934, as amended, 
47 U.S.C. 154, 201-205, 218-220, 303(r), and 405 of the Communications 
Act of 1934, as amended, and sections 1.106 and 1.429 of the 
Commission's rules, 47 CFR 1.106, 1.429, that the petition for 
reconsideration filed January 26, 2001, by Sprint Corporation is 
denied.

Federal Communications Commission.
William F. Caton,
Deputy Secretary.
[FR Doc. 02-1567 Filed 1-22-02; 8:45 am]
BILLING CODE 6712-01-P