[Federal Register: November 26, 2002 (Volume 67, Number 228)]
[Rules and Regulations]
[Page 70703-70704]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr26no02-19]
[[Page 70703]]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 54
[CC Docket No. 96-45; FCC 02-307]
Federal-State Joint Board on Universal Service
AGENCY: Federal Communications Commission.
ACTION: Final rule.
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SUMMARY: In this document, the Commission asks the Federal-State Joint
Board on Universal Service to review certain of the Commission's rules
relating to the high-cost universal service support mechanisms to
ensure that the dual goals of preserving universal service and
fostering competition continue to be fulfilled.
DATES: Effective December 26, 2002.
FOR FURTHER INFORMATION CONTACT: Kathy Tofigh, Attorney, Wireline
Competition Bureau, Telecommunications Access Policy Division, (202)
418-7400.
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Order
in CC Docket No. 96-45 released on November 8, 2002. 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.
1. In this Order, we ask the Federal-State Joint Board on Universal
Service (Joint Board) to review certain of the Commission's rules
relating to the high-cost universal service support mechanisms to
ensure that the dual goals of preserving universal service and
fostering competition continue to be fulfilled. In particular, we
request the Joint Board to review the Commission's rules relating to
high-cost universal service support in study areas in which a
competitive eligible telecommunications carrier (ETC) is providing
service, as well as the Commission's rules regarding support for second
lines. We request that the Joint Board provide recommendations to the
Commission regarding if and how those rules should be modified. We
anticipate that the Joint Board will seek public comment on whether
these rules continue to fulfill their intended purposes, and whether
modifications are warranted in light of developments in the
telecommunications marketplace. We also ask the Joint Board to examine
the process for designating ETCs.
2. In light of developments in the telecommunications marketplace
since 1997, we believe that it is appropriate to request the Joint
Board to review the Commission's rules relating to support in
competitive study areas and support for second lines. We also ask the
Joint Board to examine the process for designating ETCs. The Joint
Board should address how its recommendations regarding the issues set
forth below further the universal service goals outlined in section 254
of the Act, including the principle of competitive neutrality. In
addition, the Joint Board should consider how its analysis relates to
the five-year time frame for high-cost support adopted in the Rural
Task Force Order.
3. We ask the Joint Board to review the methodology for calculating
support for ETCs in competitive study areas. In the First Report and
Order, 62 FR 32862, June 17, 1997, the Commission determined that it
was appropriate to calculate per-line portable universal service
support for all ETCs based on the support that the incumbent LEC would
receive for the same line. The Commission reasoned that calculating
support based on the incumbent LEC's costs would aid the emergence of
competition and would be the least burdensome way to administer the
support mechanisms. In addition, the Commission explained that although
a competitive ETC may have different costs than the incumbent LEC, a
competitive ETC must also comply with section 254(e) of the Act, and
that section 214(e) requirements would prevent competitive ETCs from
profiting by limiting service to low cost areas. Some groups have
argued that this methodology provides a windfall and creates an unfair
advantage for competitive ETCs with lower costs, whereas others argue
that the current rules are necessary for competitive neutrality and are
the least administratively burdensome way to administer support. We ask
the Joint Board to review the methodology for calculating support for
ETCs in competitive study areas, taking into consideration the
universal service principles outlined in section 254 of the Act and the
principle of competitive neutrality. We also ask the Joint Board to
examine the rules governing calculation of high-cost support for
competitive ETCs utilizing UNEs.
4. Support for competitive ETCs currently is not capped under the
Commission's rules. On the other hand, the Commission's rules limit the
overall amount of rural high-cost loop support available to incumbent
LECs. When the Commission adopted these rules in 2001, it concluded
that the modified embedded cost mechanism would provide rural carriers
with specific, predictable and sufficient support over the next five
years. The Joint Board should address the potential benefits and costs
of modifying these rules for stability, predictability, and sufficiency
of the fund, as well as their potential effects on competition and
competitive neutrality. In addition, the Joint Board should address the
specific concerns raised in the Rural Task Force Order regarding
excessive growth in the fund if incumbent rural carriers lose a
significant number of lines to competitive ETCs. The Joint Board should
also consider the methodology for determining the location of a line
served by a mobile wireless service provider, and whether modifications
are warranted.
5. The Joint Board should also consider the extent to which the
Commission's current rules relating to support for second lines may
impact the size of the universal service fund, and provide
recommendations on whether the Commission should adopt modifications in
this area. Under our current rules, all residential and business
connections provided by ETCs are eligible for high-cost support. In
adopting these rules in 1997, the Commission recognized that ``overly
expansive universal service mechanisms potentially could harm all
consumers by increasing the cost of telecommunications services for
all.'' At that time, the Commission indicated it would continue to
evaluate the issue. We now ask the Joint Board to consider whether the
goals of section 254 would be served if support were limited to a
single connection to the end-user--whether provided by the incumbent or
a competitive ETC. We also ask the Joint Board to consider whether such
a rule would be competitively neutral and how it would impact
competition.
6. Finally, the Joint Board should address the system for resolving
requests for ETC designations under section 214(e)(2) of the Act. Some
parties have argued that shortcomings in the current system hamper the
emergence of competition in rural areas, whereas others have expressed
concerns that universal service goals will be undermined if state
commissions do not impose similar universal service obligations on
incumbent LECs and competitive ETCs. Taking into consideration these
concerns, we ask the Joint Board to consider whether it is advisable to
establish federal processing guidelines for ETC applications, and if
so, what should be included in such guidelines. Furthermore, in the
Rural Task Force Order, the Commission determined that the level of
disaggregation of support should be
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considered in determining whether to certify new ETCs for a service
area other than a rural carrier's entire study area. We ask the Joint
Board to consider whether the Commission should provide additional
guidance regarding the manner in which the level of disaggregation of
support should be considered, and if so, what guidance the Commission
should provide.
7. Pursuant to sections 1, 4(i) and (j), 214(e), 254, and 410 of
the Communications Act of 1934, as amended, this Order is adopted.
8. Pursuant to sections 1, 4(i) and (j), 214(e), 254, and 410 of
the Communications Act of 1934, as amended, the Federal-State Joint
Board on Universal Service is requested to review the Commission's
rules relating to high-cost universal service support in study areas in
which a competitive eligible telecommunications carrier is providing
service and support for second lines and provide recommendations to the
Commission.
List of Subjects in 47 CFR Part 54
Reporting and recordkeeping requirements, Telecommunications,
Telephone.
Federal Communications Commission.
Marlene H. Dortch,
Secretary.
[FR Doc. 02-29966 Filed 11-25-02; 8:45 am]
BILLING CODE 6712-01-P