[Federal Register Volume 68, Number 27 (Monday, February 10, 2003)]
[Rules and Regulations]
[Pages 6646-6648]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-3111]


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FEDERAL COMMUNICATIONS COMISSION

47 CFR Part 54

[CC Docket No. 96-45; DA 03-24]


Federal-State Joint Board on Universal Service

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: In this document, the Federal Communications Commission's 
(Commission) Wireline Competition Bureau (Bureau) adopts the Delphi 
version of the forward-looking cost model with certain incorporated 
technical improvements, which has been translated from Turbo-Pascal 
computer language, for calculating high-cost universal service support 
for non-rural carriers. To avoid the possibility of two successive 
changes in support amounts within a relatively short period of time, 
the Bureau defers calculating support for non-rural carriers using the 
Delphi version of the forward-looking cost model with incorporated 
technical improvements until the effective date of a Commission order 
in the separate proceeding addressing the non-rural high-cost support 
methodology adopted in the Ninth Report and Order, which was remanded 
to the Commission by the United States Court of Appeals for the Tenth 
Circuit.

[[Page 6647]]


DATES: Effective March 12, 2003.

FOR FURTHER INFORMATION CONTACT: Katie King or Thomas Buckley, 
Attorneys, Wireline Competition Bureau, Telecommunications Access 
Policy Division, (202) 418-7400, TTY (202) 418-0484.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Order 
in CC Docket No. 96-45 released on January 7, 2003. The full text of 
this document is available for public inspection during regular 
business hours in the FCC Reference Center, Room CY-A257, 445 12th 
Street, SW., Washington, DC 20554.

I. Introduction

    1. The Bureau adopts the Delphi version of the forward-looking cost 
model, which has been translated from Turbo-Pascal computer language, 
for calculating high-cost universal service support for non-rural 
carriers. The Bureau also finds that certain technical improvements are 
necessary to ensure that the forward-looking cost mechanism operates as 
designed in the Fifth Report and Order, 63 FR 63993, November 18, 1998. 
To avoid the possibility of two successive changes in support amounts 
within a relatively short period of time, the Bureau shall defer 
calculating support for non-rural carriers using the Delphi version of 
the forward-looking cost model with incorporated technical improvements 
until the effective date of an order in the separate proceeding 
addressing the non-rural high-cost support methodology adopted in the 
Ninth Report and Order, 64 FR 67416, December 1, 1999, which was 
remanded to the Commission by the United States Court of Appeals for 
the Tenth Circuit. The Bureau finds, however, that adopting the Delphi 
version with incorporated technical improvements at this time is 
appropriate to enable its staff to perform necessary work to determine 
cost per loop estimates used to calculate high-cost support and to 
allow the Commission to consider such estimates in conjunction with its 
review of the Federal-State Joint Board on Universal Service's (Joint 
Board) recommendations in the Ninth Report and Order remand proceeding.

II. Discussion

    2. In this Order, the Bureau determines that it should use the 
Delphi version of the forward-looking cost model for calculating and 
targeting support for non-rural carriers. The Bureau also finds that 
the technical improvements incorporated into the Delphi version of the 
model and discussed herein are necessary and appropriate to ensure that 
the forward-looking cost mechanism operates as designed in the Fifth 
Report and Order. As discussed below, calculating support using the 
Delphi version of the cost model with incorporated technical 
improvements could lead to changes in support amounts. The Ninth Report 
and Order remand proceeding also could lead to modifications of the 
non-rural high-cost support methodology that, in turn could lead to 
changes within a relatively brief time in support amounts. To avoid the 
possibility of two successive changes in support amounts resulting from 
adoption of the Delphi version with incorporated technical improvements 
and thereafter a final Commission action in the Ninth Report and Order 
remand proceeding, the Bureau shall defer calculating support for non-
rural carriers using the Delphi version with incorporated technical 
improvements until the effective date of an order in the Ninth Report 
and Order remand proceeding.
    3. Translation to Delphi Computer Language. The Bureau concludes 
that it is appropriate to use the outside plant portion of the forward-
looking cost model that has been translated to Delphi computer 
language. Delphi, essentially an upgraded version of the previously 
used Turbo-Pascal language, is a more advanced and easier-to-use 
computer language than Turbo-Pascal. In particular, unlike Turbo-
Pascal, Delphi computer language allows a user to step through the 
source code line-by-line. This improvement will allow the Bureau and 
interested parties to better understand and follow the logic of the 
model in reaching its results. In addition, the Delphi computer 
language processes data more quickly and is more adaptable to the 
Windows operating system than Turbo-Pascal. As such, translation to 
Delphi will enable the Bureau and interested parties to more easily use 
and analyze the cost model and its results.
    4. The Bureau deferred adoption of Delphi computer language for the 
model last year in part to allow it to consider arguments that it 
should instead adopt a version of the outside plant portion of the 
model in Visual Basic computer language submitted by Qwest. Based on an 
examination of the record developed in response to the Delphi Public 
Notice, 66 FR 34447, June 28, 2001, the Bureau does not adopt the 
Visual Basic model submitted by Qwest for the reasons stated below. 
Because Delphi computer language uses the same logic in its programming 
steps as Turbo-Pascal, the translation to Delphi does not fundamentally 
change the organization of the model logic. Interested parties and 
Bureau staff already have invested a substantial amount of time 
understanding, testing, and fine tuning the Turbo-Pascal and Delphi 
computer code. Visual Basic, on the other hand, is an entirely 
different computer language. As a result, the Bureau finds it would be 
less reasonable to adopt the Visual Basic version than the Delphi 
translation. Rather, on this record, the Bureau finds it appropriate to 
use the outside plant portion of the model that has been translated to 
Delphi computer language.
    5. Technical Improvements. As noted above, the Commission foresaw 
that technical improvements would be necessary to ensure that the model 
operates as designed and instructed the Bureau to implement such 
improvements where necessary and appropriate. After posting a Delphi 
version of the model, the Bureau sought recommendations on improvements 
to that Delphi version, incorporated technical improvements where 
necessary, and then posted a revised Delphi version of the model on the 
Bureau's website. In the 2002 Line Counts Update Order, 67 FR 3118, 
January 23, 2002, the Bureau stated that more time was needed to study 
the effect these improvements would have on high-cost support 
calculations.
    6. After investigating the various technical improvements 
incorporated into the posted Delphi version of the model, the Bureau 
discovered that two changes in particular impacted cost estimates 
generated by the model, which in turn could affect high-cost support 
calculations. First, a correction was made to locate drop terminals 
using the 360 feet square grid cell assumption adopted in the Fifth 
Report and Order, 63 FR 63993, November 18, 1998, rather than 1000 feet 
square grid cells. This correction places drop terminals closer to 
customer locations and results in an overall decrease in distribution 
cable and structure costs. Second, Bureau staff corrected the coding 
that caused the model to read the wrong row of input tables for drop 
terminal, manhole, and service area interfaces (SAIs) costs. This 
coding error caused the model to retrieve incorrect values for these 
outside plant inputs. Correcting this coding error results in higher 
costs in certain wire centers.
    7. The Bureau finds that implementation of these technical 
improvements is necessary and appropriate to ensure that the model 
operates as designed in the Fifth Report and Order. The Bureau analysis 
indicates that these technical improvements cause small changes in

[[Page 6648]]

cost estimates generated by the model. For instance, using year-end 
2000 line counts as input values, the combined effect of these 
technical improvements would cause the nationwide average cost per line 
to increase by less than $0.03 for 2002. However, the effect on 
statewide average cost per line varies by state. The statewide average 
cost per line increases in states containing wire centers with higher 
density zones because such service areas require more underground 
structure, larger SAIs, and larger drop terminals. By contrast, the 
average cost per line for states containing wire centers with lower 
density zones decreases, relative to the nationwide average, because 
their service areas require less underground structure, smaller SAIs, 
and fewer large drop terminals. Under the benchmark methodology adopted 
in the Ninth Report and Order, minor changes in nationwide or statewide 
average costs will affect non-rural high-cost support amounts.
    8. The Bureau shall defer calculating support for non-rural 
carriers using the Delphi version of the cost model with incorporated 
technical improvements until the effective date of an order in the 
Ninth Report and Order remand proceeding. The Ninth Report and Order 
remand proceeding could lead to modifications to the non-rural high-
cost support methodology that, in turn, would lead to changes in 
support amounts. Calculating support using the Delphi version of the 
cost model with incorporated technical improvements likewise could lead 
to changes in support amounts. Section 254(b)(5) of the Communications 
Act of 1996 Act states that the universal support mechanism should be 
specific and predictable. Consistent with this principle, the Bureau 
finds that coordinating the determination of support for non-rural 
carriers using the revised Delphi version of the cost model, 
incorporating the technical improvements described above, with the 
effective date of an order in the Ninth Report and Order remand 
proceeding will avoid the possibility of two successive changes in the 
model's calculations and support amounts within a relatively short 
period of time. Specifically, the Delphi version of the model with 
incorporated technical improvements will be used for purposes of 
estimating forward-looking costs and determining support for non-rural 
carriers following the effective date of an order in the Ninth Report 
and Order remand proceeding. In the intervening interim period, non-
rural support shall continue to be based on cost estimates of the 
Turbo-Pascal version of the cost model using the data updates adopted 
in the 2002 Line Counts Update Order. In addition, the Bureau will 
continue to adjust support amounts calculated using the current model's 
cost estimates to reflect the lines reported by non-rural carriers each 
quarter. The Bureau finds that adopting the Delphi version with 
incorporated technical improvements at this time is appropriate to 
enable the staff to perform necessary work to determine cost estimates 
under this version. Accompanying this Order is a Public Notice seeking 
comment on updating line counts and other input values for the Delphi 
version of the cost model consistent with the framework adopted in the 
2001 and 2002 Line Counts Update Orders, 65 FR 81759, December 27, 
2000. Such action will enable the Commission to consider such estimates 
in conjunction with its consideration of the Joint Board 
recommendations in the Ninth Report and Order remand proceeding.

III. Ordering Clause

    9. 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, this Order is adopted.
    10. It is further ordered that this Order will be effective March 
12, 2003.

Federal Communications Commission.
Marlene H. Dortch,
Secretary.
[FR Doc. 03-3111 Filed 2-7-03; 8:45 am]
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