[Federal Register Volume 77, Number 66 (Thursday, April 5, 2012)]
[Rules and Regulations]
[Pages 20551-20553]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-7057]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 54 and 61

[WC Docket Nos. 10-90, 07-135, 05-337, 03-109; GN Docket No. 09-51; CC 
Docket Nos. 01-92, 96-45; WT Docket No. 10-208; DA 12-298]


Connect America Fund; A National Broadband Plan for Our Future; 
Establishing Just and Reasonable Rates for Local Exchange Carriers; 
High-Cost Universal Service Support

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: In this document, the Federal Communications Commission 
clarifies certain rules. The order clarifies, but does not otherwise 
modify, the USF/ICC Transformation Order. The petition for 
Clarification or, in the Alternative, for Reconsideration of Verizon is 
granted in part and dismissed in part, and the Petition for 
Reconsideration of United States Telecom Association is dismissed in 
part.

DATES: Effective May 7, 2012.

FOR FURTHER INFORMATION CONTACT: Amy Bender, Wireline Competition 
Bureau, (202) 418-1469, Victoria Goldberg, Wireline Competition Bureau, 
(202) 418-7353.

SUPPLEMENTARY INFORMATION: This is a summary of the Wireline 
Competition Bureau's Order in WC Docket Nos. 10-90, 07-135, 05-337, 03-
109; GN Docket No. 09-51; CC Docket Nos. 01-92, 96-45; WT Docket No. 
10-208; DA 12-298, released on February 27, 2012. 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. Or at the following Internet address: http://transition.fcc.gov/Daily_Releases/Daily_Business/2012/db0227/DA-12-298A1.pdf.

I. Introduction

    1. In the USF/ICC Transformation Order, the Commission delegated to 
the Wireline Competition Bureau (Bureau) the authority to revise and 
clarify rules as necessary to ensure that the reforms adopted in the 
Order are properly reflected in the rules. In this Order, the Bureau 
acts pursuant to this delegated authority to revise and clarify certain 
rules, and acts pursuant to authority delegated to the Bureau in 
Sec. Sec.  0.91, 0.201(d), and 0.291 of the Commission's rules to 
clarify certain rules.

II. Discussion

A. Intercarrier Compensation

    2. In the USF/ICC Transformation Order, the Commission adopted a 
prospective transitional intercarrier compensation framework for VoIP-
PSTN traffic. This transitional framework included default compensation 
rates and addressed a number of implementation issues, including 
explaining the scope of charges that local exchange carrier (LEC) 
partners of affiliated or unaffiliated retail VoIP providers are able 
to include in tariffs. In particular, the Commission determined that it 
was appropriate to adopt a ``symmetric'' framework for VoIP-PSTN 
traffic. This symmetric approach means that ``providers that benefit 
from lower VoIP-PSTN rates when their end-user customers' traffic is 
terminated to other providers' end-user customers also are restricted 
to charging the lower VoIP-PSTN rates when other providers' traffic is 
terminated to their end-user customers.''
    3. As part of its symmetric regime, the Commission adopted rules 
that ``permit a LEC to charge the relevant intercarrier compensation 
for functions performed by it and/or its retail VoIP partner, 
regardless of whether the functions performed or the technology used 
correspond precisely to those used under a traditional TDM 
architecture.'' The Commission cautioned, however, that ``although 
access services might functionally be accomplished in different ways 
depending upon the network technology, the right to charge does not 
extend to functions not performed by the LEC or its retail VoIP service 
provider partner.'' The Commission adopted this limitation to address 
concerns in the record regarding double billing. This limitation was 
codified as part of the VoIP-PSTN framework in Sec.  51.913(b) of the 
Commission's rules. The Commission also modified its tariffing rules in 
Part 61 for competitive LECs to implement the VoIP symmetry rule.
    4. On February 3, 2012, YMax Communications Corp. (YMax) filed an 
ex parte letter seeking confirmation of its interpretation that ``under 
[the Commission's] new VoIP-PSTN `symmetry' rule, a LEC is performing 
the functional equivalent of ILEC access service, and therefore 
entitled to charge the full `benchmark' rate level, whenever it is 
providing telephone numbers and some portion of the interconnection 
with the PSTN, and regardless of how or by whom the last-mile 
transmission is provided.'' Stated differently, YMax seeks guidance 
from the Commission as to whether the revised rule language in Part 61, 
specifically, Sec.  61.26(f) permits a competitive LEC to tariff and 
charge the full benchmark rate even if it includes functions that 
neither it nor its VoIP retail partner are actually providing. YMax 
asserts that the purpose of the Commission's revisions to Sec.  
61.26(f) was to ``defin[e] the minimum access functionality necessary 
in order for a CLEC to be allowed to collect access charges at the full 
benchmark level under the VoIP-PSTN symmetry rule.'' We disagree. The 
Commission revised Sec.  61.26(f) to reflect the change in the 
tariffing process to implement the VoIP symmetry rule, which included 
limitations to prevent double billing. Interpreting the rule in the 
manner proposed by YMax could enable double billing. The Commission 
made clear in adopting the VoIP-symmetry rule that it intended to 
prevent double billing and charging for functions not actually 
provided. Indeed, Sec.  51.913(b) expressly states that ``[t]his rule 
does not permit a local exchange carrier to charge for functions not 
performed by the local exchange carrier itself or the affiliated or 
unaffiliated provider of interconnected VoIP service or non-
interconnected VoIP service.''
    5. YMax's letter does, however, highlight a potential ambiguity 
because the amended rule Sec.  61.26(f), which is the tariffing 
provision intended to implement the VoIP symmetry rule, did not include 
an express cross reference to Sec.  51.913(b). Although Sec.  51.913(b) 
makes clear that its terms apply notwithstanding any other Commission 
rule, to remove any ambiguity regarding the scope of what competitive 
LECs are permitted to assess in their tariffs, we amend Sec.  61.26(f) 
to make clear that the ability to charge under the tariff is limited by 
Sec.  51.913(b). In so doing, we address and reject YMax's 
interpretation of Sec.  61.26(f).

[[Page 20552]]

B. Universal Service

    6. Verizon Petition for Clarification or, in the Alternative, for 
Reconsideration. In the USF/ICC Transformation Order, the Commission 
adopted rules to phase down existing high-cost support for competitive 
eligible telecommunications carriers (ETCs), and addressed the phase 
down of existing high-cost support to Verizon Wireless and Sprint 
pursuant to those carriers' prior merger commitments, as clarified by 
the Corr Wireless Order. On December 29, 2011, Verizon Wireless filed a 
petition for clarification or, in the alternative, for reconsideration 
of this aspect of the Order as it applies to Verizon Wireless. Verizon 
Wireless argues that there are two permissible interpretations of the 
USF/ICC Order as it bears on the phase down of support for Verizon 
Wireless: That the general phase down of the competitive ETC support 
applies but Verizon Wireless's merger commitment no longer does, or 
that Verizon Wireless's merger commitment remains in effect but general 
phase down of competitive ETC support does not. Verizon Wireless states 
that a Bureau-level clarification is the appropriate means of resolving 
this ambiguity.
    7. The Bureau clarifies that, pursuant to paragraph 520 of the USF/
ICC Transformation Order, only Verizon Wireless's merger commitment 
applies. Specifically, the Bureau clarifies that Verizon Wireless will 
receive support in 2012 based on its merger commitments, as clarified 
by the Corr Wireless Order, not based on the general phase down of 
competitive ETC support described in the USF/ICC Transformation Order. 
Verizon Wireless will not receive high-cost competitive ETC support 
after 2012. The Universal Service Administrative Company (USAC) shall 
disburse to Verizon Wireless in 2012 20 percent of the support it would 
have received for each ETC service area in the absence of its merger 
commitment and the USF/ICC Transformation Order. As a proxy for the 
amount Verizon Wireless would have received in 2012 in the absence of 
its merger commitment and the USF/ICC Transformation Order, USAC shall 
use the amount of support it calculated for Verizon Wireless in 2011 
pursuant to the identical support rule and the interim cap, including 
any support not actually disbursed to Verizon Wireless as a result of 
the merger commitment.
    8. Accordingly, the Bureau grants Verizon's Petition to the extent 
it requests clarification of the phase down of competitive ETC support 
and dismisses Verizon's Petition to the extent it alternatively 
requests reconsideration of the same issue.
    9. Other Matters. First, the Bureau amends the definition of 
``rate-of-return carrier'' in Sec.  54.5 of our rules to correct an 
erroneous cross-reference to the definition of price cap regulation.
    10. Second, the Bureau dismisses in part the petition for 
reconsideration filed by the United States Telecom Association 
(USTelecom), which, among other things, asked the Commission to clarify 
that reductions in legacy support resulting from a failure to meet the 
urban rate floor will, at most, extend only to high-cost loop support 
and high-cost model support.
    11. In the USF/ICC Clarification Order, the Bureaus addressed this 
issue by amending Sec.  54.318(d) to clarify that support reductions 
associated with the rate floor will offset frozen CAF Phase I support 
only to the extent that the recipient's frozen CAF Phase I support 
replaced HCLS and HCMS. The Bureaus further stated that the offset does 
not apply to frozen CAF Phase I support to the extent that it replaced 
IAS and ICLS. Because the USF/ICC Clarification Order addressed this 
issue, the Bureau dismisses as moot that portion of the USTelecom 
petition for reconsideration.

III. Procedural Matters

A. Paperwork Reduction Act

    12. This document does not contain new or modified information 
collection requirements subject to the Paperwork Reduction Act of 1995 
(PRA), Public Law 104-13. In addition, therefore, it does not contain 
any new or modified information collection burden for small business 
concerns with fewer than 25 employees, pursuant to the Small Business 
Paperwork Relief Act of 2002, Public Law 107-198, see 44 U.S.C. 
3506(c)(4).

B. Final Regulatory Flexibility Act Certification

    13. Final Regulatory Flexibility Certification. The Regulatory 
Flexibility Act of 1980, as amended (RFA), requires that a regulatory 
flexibility analysis be prepared for rulemaking proceedings, unless the 
agency certifies that ``the rule will not have a significant economic 
impact on a substantial number of small entities.'' 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 of operation; and (3) 
satisfies any additional criteria established by the Small Business 
Administration (SBA).
    14. This Order clarifies, but does not otherwise modify, the USF/
ICC Transformation Order. These clarifications do not create any 
burdens, benefits, or requirements that were not addressed by the Final 
Regulatory Flexibility Analysis attached to USF/ICC Transformation 
Order. Therefore, we certify that the requirements of this Order will 
not have a significant economic impact on a substantial number of small 
entities. The Commission will send a copy of the Order including a copy 
of this final certification in a report to Congress pursuant to the 
Small Business Regulatory Enforcement Fairness Act of 1996, see 5 
U.S.C. 801(a)(1)(A). In addition, the Order and this certification will 
be sent to the Chief Counsel for Advocacy of the Small Business 
Administration, and will be published in the Federal Register. See 5 
U.S.C. 605(b).

C. Congressional Review Act

    15. The Commission will send a copy of this Order to Congress and 
the Government Accountability Office pursuant to the Congressional 
Review Act.

IV. Ordering Clauses

    16. Accordingly, it is ordered, pursuant to the authority contained 
in sections 1, 2, 4(i), 201-206, 214, 218-220, 251, 252, 254, 256, 
303(r), 332, and 403 of the Communications Act of 1934, as amended, and 
section 706 of the Telecommunications Act of 1996, 47 U.S.C. 151, 152, 
154(i), 201-206, 214, 218-220, 251, 252, 254, 256, 303(r), 332, 403, 
1302, and pursuant to Sec. Sec.  0.91, 0.201(d), 0.291, 1.3, and 1.427 
of the Commission's rules, 47 CFR 0.91, 0.201(d), 0.291, 1.3, 1.427 and 
pursuant to the delegation of authority in paragraph 1404 of FCC 11-161 
(rel. Nov. 18, 2011), that this Order is adopted, effective May 7, 
2012.
    17. It is further ordered, that parts 54 and 61 of the Commission's 
rules, 47 CFR parts 54, 61 are amended as set forth, and such rule 
amendments shall be effective 30 days after the date of publication of 
the rule amendments in the Federal Register.
    18. It is further ordered that, pursuant to the authority contained 
in section 254 of the Communications Act of 1934, as amended, 47 U.S.C. 
254, and the authority delegated in Sec. Sec.  0.91 and 0.291 of the 
Commission's rules, 47 CFR 0.91, 0.291, the Petition for Clarification 
or, in the Alternative, for Reconsideration of

[[Page 20553]]

Verizon is granted in part and dismissed in part and the Petition for 
Reconsideration of United States Telecom Association is dismissed in 
part.
    19. It is further ordered, that the Commission shall send a copy of 
this Order to Congress and the Government Accountability Office 
pursuant to the Congressional Review Act, see 5 U.S.C. 801(a)(1)(A).
    20. It is further ordered, that the Commission's Consumer and 
Governmental Affairs Bureau, Reference Information Center, shall send a 
copy of this Order, including the Final Regulatory Flexibility 
Certification, to the Chief Counsel for Advocacy of the Small Business 
Administration.

List of Subjects 47 CFR Parts 54 and 61

    Communications common carriers, Reporting and record keeping 
requirements, Telecommunications, Telephone.

Federal Communications Commission.
Sharon E. Gillett,
Chief, Wireline Competition Bureau.

Final Rules

    For the reasons discussed in the preamble, the Federal 
Communications Commission amends 47 CFR parts 54 and 61 to read as 
follows:

PART 54--UNIVERSAL SERVICE

0
1. The authority citation for part 54 continues to read as follows:

    Authority:  47 U.S.C. 151, 154(i), 201, 205, 214, 219, 220, 254, 
303(r), 403, and 1302 unless otherwise noted.



0
2. Amend Sec.  54.5 by revising the definition of ``rate-of-return 
carrier'' to read as follows.


Sec.  54.5  Terms and definitions.

* * * * *
    Rate-of-return carrier. ``Rate-of-return carrier'' shall refer to 
any incumbent local exchange carrier not subject to price cap 
regulation as that term is defined in Sec.  61.3(ee) of this chapter.
* * * * *

PART 61--TARIFFS

0
3. The authority citation for part 61 continues to read as follows:

    Authority: Secs. 1, 4(i), 4(j), 201-205 and 403 of the 
Communications Act of 1934, as amended; 47 U.S.C. 151, 154(i), 
154(j), 201-205 and 403, unless otherwise noted.



0
4. Revise Sec.  61.26(f) to read as follows:


Sec.  61.26  Tariffing of competitive interstate switched exchange 
access services.

* * * * *
    (f) If a CLEC provides some portion of the switched exchange access 
services used to send traffic to or from an end user not served by that 
CLEC, the rate for the access services provided may not exceed the rate 
charged by the competing ILEC for the same access services, except if 
the CLEC is listed in the database of the Number Portability 
Administration Center as providing the calling party or dialed number, 
the CLEC may, to the extent permitted by Sec.  51.913(b) of this 
chapter, assess a rate equal to the rate that would be charged by the 
competing ILEC for all exchange access services required to deliver 
interstate traffic to the called number.
* * * * *
[FR Doc. 2012-7057 Filed 4-4-12; 8:45 am]
BILLING CODE 6712-01-P