[Federal Register: May 28, 2003 (Volume 68, Number 102)]
[Rules and Regulations]
[Page 31620-31623]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr28my03-11]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 54
[CC Docket Nos. 00-256 and 96-45; FCC 03-106]
Multi-Association Group (MAG) Plan for Regulation of Interstate
Services of Non-Price Cap Incumbent Local Exchange Carriers and
Interexchange Carriers; 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 addresses a Petition for
Reconsideration of the MAG Order filed by the National Exchange Carrier
Association (NECA), the National Rural Telecom Association, the
Organization for the Promotion and Advancement of Small
Telecommunications Companies, and the United States Telecom Association
(collectively, the Joint Petitioners). In response to the concerns
raised by the Joint Petitioners, the Commission grants their request to
amend of our rules to move the deadline for filing actual common line
cost and revenue data from July 31st to December 31st of each year. The
Commission also amends its rules to permit rate-of-return carriers to
file updates of projected common line cost and revenue data on June
30th of each year. Additionally, the Commission adopts several minor
amendments to its rules in response to issues raised by the Joint
Petitioners and on our own motion.
DATES: Effective June 27, 2003.
FOR FURTHER INFORMATION CONTACT: Theodore Burmeister, Attorney,
Telecommunications Access Policy Division, Wireline Competition Bureau,
(202) 418-7400.
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Third
Order on Reconsideration in CC Docket Nos. 00-256 and 96-45 released on
May 8, 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 Commission addresses a Petition for Reconsideration of the
MAG Order, 66 FR 59719, November 30, 2001, filed by the National
Exchange Carrier Association (NECA), the National Rural Telecom
Association, the Organization for the Promotion and Advancement of
Small Telecommunications Companies, and the United States Telecom
Association (collectively, the Joint Petitioners). The Joint
Petitioners raise issues concerning the filing requirements for
Interstate Common Line Support (ICLS), the new universal service
support mechanism established in the MAG Order. In response to the
concerns raised by the Joint Petitioners, the Commission grants their
request to amend Sec. 54.903(a)(4) of our rules to move the deadline
for filing actual common line cost and revenue data from July 31st to
December 31st of each year. The Commission also amends Sec.
54.903(a)(3) of our rules to permit rate-of-return carriers to file
updates of projected common line cost and revenue data on June 30th of
each year. As discussed, these changes will promote more accurate and
efficient distribution of ICLS while minimizing administrative burdens
on rate-of-return carriers. Additionally, the Commission adopts several
minor amendments to Sec. Sec. 54.307, 54.902, and 54.903 of our rules
in response to issues raised by the Joint Petitioners and on our own
motion.
II. Discussion
2. Filing of Actual Cost and Revenue Data. On reconsideration, the
Commission grants the Joint Petitioners' request to change the filing
date for actual cost and revenue data for the prior calendar year from
July 31st to December 31st. The Commission finds that changing the
filing date for actual cost and revenue data to December 31st will
better serve the Commission's goals of minimizing administrative
burdens on carriers and promoting accurate and efficient distribution
of ICLS. A December 31st filing date will reduce administrative costs.
The Joint Petitioners contend that, based on NECA's experience with the
common line pooling process, many small carriers would have difficulty
completing accurate cost studies by July 31st, whereas carriers have
historically complied with a December 31st deadline. Moving the filing
deadline to December 31st will reduce burdens on carriers and minimize
the potential need for late filings and corrections. The resulting
delay in the initiation of adjustments to ICLS as part of the ICLS
true-up process will be mitigated by the measures the Commission adopts
below to improve the accuracy of ICLS payments. In particular,
permitting carriers to revise their projected data for the current and
upcoming ICLS funding years on June 30th will mitigate the lag between
projected and actual data filings and give carriers more meaningful
opportunities to revise projections to adjust ICLS where necessary.
Moving the deadline for filing actual cost and revenue data to December
31st also will not result in any delay in the completion of the ICLS
true-up process. Under the current rules, ICLS true-up payments are
spread over the calendar year following the filing of actual data. The
Commission concludes that ICLS true-up payments instead can be
distributed over the final two quarters of the calendar year without
affecting fund stability.
3. Voluntary Updates of Projected Cost and Revenue Data. The
Commission also concludes that certain modifications to Sec.
54.903(a)(3), governing the filing of projected cost and revenue data,
are warranted. Under the rules adopted in the MAG Order, carriers that
wish to receive ICLS must, on March 31st, file projected data for the
upcoming July 1st to June 30th funding year and may correct that data
until April 10th. The Commission concludes that permitting carriers at
their discretion to correct their projected data for the upcoming
funding year until June 30th would better promote the accurate and
efficient distribution of ICLS without increasing administrative
burdens. Additionally, the Commission provides a voluntary opportunity
for rate-of-return carriers to update on June 30th their projected data
for the ICLS funding year ending on that date will promote the accurate
and efficient distribution of ICLS.
4. The Commission will amend Sec. 54.903(a)(3) of our rules for
voluntarily updating the March 31st filing to replace the existing
April 10th deadline with a June 30th deadline. The Commission agrees
with NECA that this deadline extension will provide a more meaningful
opportunity for carriers to revise their projections and, therefore,
will increase the accuracy of ICLS for the coming funding year. Two
major factors potentially affecting projections will be resolved by the
June 30th prior to the start of each funding year. First, the
Commission normally approves or modifies the common line average
schedule settlements formula proposed by NECA by June 15th of each
funding year. Because this formula functions in
[[Page 31621]]
the same manner as the common line revenue requirement for average
schedule carriers, the specific resolution of this formula could have a
significant effect on the amount of prospective ICLS received by
average schedule carriers. Second, NECA, as tariff agent on behalf of
pooling carriers, continues to update projected cost and revenue data
until its June 15th deadline for filing a common line tariff with the
Commission. The new deadline the Commission adopts here will enable
carriers to incorporate these updates into their ICLS filings, will
permit calculation of more accurate ICLS amounts for the coming funding
year, and will reduce the size of the true-ups required when actual
cost and revenue data is available.
5. The Commission also concludes that permitting carriers, at their
option, to update on June 30th their projected data for the past
funding year will promote the Commission's goals of minimizing
administrative burdens while promoting accuracy of ICLS payments. This
update will provide carriers an additional opportunity, in advance of
the true-up process, to recognize changed circumstances that may have
affected their projections. This will have the effect of minimizing the
size of the final true-up adjustments that will occur after actual cost
and revenue data is filed. The Administrator shall reflect both the
corrections to projections for the upcoming funding year and updates to
projections for the past funding year through adjustments to ICLS
payments made during the first two quarters of the following calendar
year.
6. In light of the modifications the Commission adopts here, we
eliminate the optional quarterly update of actual data adopted in the
MAG Order. The quarterly update of actual data was intended to permit
carriers to accelerate the true-up process by recognizing actual costs
and revenues earlier than would otherwise be possible. However, based
on further consideration, the Commission finds that the ability to
update actual data on a quarterly basis will not be useful for most
carriers. In addition, the quarterly update of actual data creates
potential administrative costs that the measures the Commission adopts
herein make unnecessary.
7. The Commission denies the Petition for Reconsideration's request
to move the deadline for carriers to file projected data with USAC from
March 31st to July 15th. At the time the Petition was filed, the Joint
Petitioners contended that these changes were necessary because data
used to develop projections were not available on March 31st. The
Petition for Reconsideration further suggested that carriers instead be
allowed to rely on NECA to submit aggregate projections for the common
line pool on March 31st. NECA later indicated, however, that it had
made changes to its own procedures that would ensure that carriers
could make projections by March 31st, rendering unnecessary the request
for the Commission to change the March 31st filing date. In addition,
consistent with USAC's administrative obligations and the necessity of
calculating per-line support amounts, ICLS payments for the coming
funding year must be based on individual carrier data, not aggregate
data. For these reasons, the Commission denies the Joint Petitioners'
request. The Commission notes that, under the rules adopted in the MAG
Order, a rate-of-return carrier may elect to rely on NECA, as its
agent, to submit ICLS data to USAC on its behalf.
8. Collection of Projected and Actual Revenue Data. As requested by
the Joint Petitioners, the Commission also amends our rules to clarify
that carriers must file common line revenue data to permit calculation
of ICLS. The Joint Petitioners correctly note that Sec. 54.903(a)(3)
and (a)(4) of the Commission's rules do not explicitly state that
carriers must file revenue data in addition to cost data, even though
revenue data is clearly necessary to calculate ICLS. The MAG Order
unambiguously granted USAC authority to collect any data necessary to
administer the ICLS mechanism, including revenue data, and the
Commission does nothing here to change that. The Commission revises the
rules only to more clearly state certain types of data that will be
required. Accordingly, the Commission amends Sec. 54.903(a)(3) and
(a)(4) to clarify that the types of data that carriers must file
thereunder include common line revenue data.
9. Apportionment of NECA Costs. The Commission denies the Joint
Petitioners' request to amend Sec. 69.603 to specify how NECA, as
common line pool administrator, should apportion its administrative
expenses among pooling carriers for the purposes of calculating
individual study area common line revenue requirements. In the MAG
Order, the Commission amended its rules to ensure that NECA's
administrative costs are appropriately allocated after the
implementation of the MAG Order's reforms. The Joint Petitioners
request that the Commission further amend Sec. 69.603(h)(2) of its
rules to specify how NECA should apportion its Category I.B. costs--
those costs assigned to the common line pool--among members of the
common line pool. No comments were received on this issue, and,
subsequently, NECA filed projected cost and revenue data with USAC
which apportioned NECA Category I.B. expenses among its members. The
Commission finds that NECA has appropriate discretion under the
Commission's existing rules to determine how to apportion expenses
among members of the common line pool in an equitable manner, and we
see no need to amend our rules to prescribe a specific apportionment
method at this time.
10. Miscellaneous issues. On our own motion, the Commission further
amends our rules to correct three errors. First, the Commission amends
Sec. 54.902 to correct erroneous cross-references. Second, in order to
conform our rules to the Commission's intent in the MAG Order, we amend
Sec. 54.307(a)(2) to include a reference to ICLS. Third, the
Commission amends Sec. 54.903(b)(3) to clarify that the reconciliation
performed by USAC as part of its true-up process applies to the support
amounts received by carriers, not their common line revenue
requirements.
III. Procedural Matters
A. Supplemental Final Regulatory Flexibility Analysis
11. As required by the Regulatory Flexibility Act of 1980, as
amended (RFA), an Initial Regulatory Flexibility Analysis (IRFA) was
included in the MAG Notice. Additionally, a Final Regulatory
Flexibility Analysis (FRFA) was included in the MAG Order. In
compliance with the RFA, this Supplemental Final Regulatory Flexibility
Analysis (Supplemental FRFA) supplements the FRFA included in the MAG
Order to the extent that changes to that Order adopted here on
reconsideration require changes in the conclusions reached in the FRFA.
1. Need for, and Objective of, the Third Order on Reconsideration
12. This Third Order on Reconsideration addresses a Petition for
Reconsideration filed jointly by the National Exchange Carrier
Association, the National Rural Telecom Association, the Organization
for the Promotion and Advancement of Small Telecommunications
Companies, and the United State Telecom Association (collectively, the
Joint Petitioners). Section 254 of the Communications Act of 1934, as
amended by the 1996 Act, requires the Commission to promulgate rules to
preserve and advance universal service support. Pursuant to that
mandate, the Commission, in the MAG
[[Page 31622]]
Order, adopted reforms to the interstate access rate structure and
universal service support mechanisms for rate-of-return carriers. In
making these reforms, the Commission created the ICLS mechanism to
provide explicit universal service support and adopted rules governing
its administration. The Commission now concludes that certain changes
to the rules governing ICLS's administration will promote more accurate
and efficient distribution of ICLS while minimizing administrative
burdens on rate-of-return carriers. In response to the concerns raised
by the Joint Petitioners, the Commission grants their request to amend
Sec. 54.903(a)(4) of our rules to move the deadline for filing actual
common line cost and revenue data from July 31st to December 31st of
each year. The Commission also amends Sec. 54.903(a)(3) of our rules
to permit rate-of-return carriers to file updates of projected common
line cost and revenue data on June 30th of each year. As discussed,
these changes will promote more accurate and efficient distribution of
ICLS while minimizing administrative burdens on rate-of-return
carriers. Additionally, the Commission adopts several minor amendments
to Sec. Sec. 54.307, 54.902, and 54.903 of our rules in response to
issues raised by the Joint Petitioners and on our own motion.
2. Summary of Significant Issues Raised by Public Comments
13. In response to the Joint Petitioners' Petition for
Reconsideration, the Commission received one comment. However, after
careful consideration, the Commission concludes that this comment does
not raise significant small business-related issues.
3. Description and Estimate of the Number of Small Entities to Which
This Order on Reconsideration Will Apply
14. The RFA directs agencies to provide a description of, and,
where feasible, an estimate of, the number of small entities that may
be affected by the rules adopted herein. The RFA generally defines the
term ``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).
15. In the previous FRFA at paragraphs 289-300 of the MAG Order,
the Commission described and estimated the number of small entities
that would be affected by the new universal service rules. These
included local exchange carriers, interexchange carriers, competitive
service providers, and providers of wireless telephony, rural
radiotelephone service, fixed microwave services, and 39 GHz service.
The rule amendment adopted herein may apply to the same entities
affected by the rules adopted in that order. The Commission therefore
incorporates by reference paragraphs 289-300 of the MAG Order.
4. Description of Projected Reporting, Recordkeeping, and Other
Compliance Requirements
16. This Third Order on Reconsideration makes several changes to
the reporting requirements for rate-of-return carriers receiving ICLS,
but creates few additional burdens. First, this Third Order on
Reconsideration changes the existing annual filing date for actual
common line cost and revenue data from July 31st to December 31st, but
adds no new requirements with respect to that filing. Second, this
Third Order on Reconsideration changes the existing deadline for filing
voluntary corrections to projected common line cost and revenue data
from April 10th to June 30th, but adds no new requirements with respect
to that filing. The Commission also creates an opportunity for each
carrier to voluntarily file an annual update to its projected data, but
do not require a carrier to perform the update. In connection with
these changes, the Commission also eliminates an existing opportunity
for voluntary update of actual common line cost and revenue data on a
quarterly basis. Third, the Commission amends our rules to clarify the
data required for certain existing filing requirements, but do not
require the reporting of any additional data beyond that already filed
by carriers. These amendments apply equally to all entities affected,
and therefore impose no different burdens on smaller entities.
5. Steps Taken To Minimize the Significant Economic Impact on Small
Entities, and Significant Alternatives Considered
17. The RFA requires an agency to describe any significant
alternatives that it has considered in developing its approach, which
may include the following four alternatives (among others): ``(1) The
establishment of differing compliance or reporting requirements or
timetables that take into account the resources available to small
entities; (2) the clarification, consolidation, or simplification of
compliance and reporting requirements under the rule for such small
entities; (3) the use of performance rather than design standards; and
(4) an exemption from coverage of the rule, or any part thereof, for
such small entities.''
18. The Commission notes that we do not find that this Third Order
on Reconsideration creates a significant economic impact on small
entities. The Commission could therefore meet our obligations under the
RFA by certifying that there is no significant economic impact on small
entities, rather than including this SFRFA. The Commission nonetheless
includes this Supplemental FRFA to demonstrate that we have considered
the impact of our action on small entities in adopting this Third Order
on Reconsideration.
19. As noted, the amendment to our rules adopted in this Third
Order on Reconsideration does not have a significant impact on small
entities. Our actions are intended primarily to reduce administrative
burdens on small carriers associated with the ICLS mechanism, while
also promoting the accurate and efficient distribution of ICLS. Our
actions respond to concerns raised by representatives of small
carriers. The Commission does consider alternatives to the actions
adopted herein but concluded that these alternatives would not reduce
administrative burdens or increase the accuracy of ICLS as effectively
as the measures we adopt. These alternatives include retaining the
filing requirements currently codified in the Commission's rules,
extending the current March 31st date for filing projected cost and
revenue data to July 15th, and permitting carriers to update their
projected data on a quarterly basis.
6. Report to Congress
20. The Commission will send a copy of this Third Order on
Reconsideration, including this Supplemental FRFA, in a report to be
sent to Congress pursuant to the Congressional Review Act. In addition,
the Commission will send a copy of this Third Order on Reconsideration,
including this Supplemental FRFA, to the Chief Counsel for Advocacy of
the Small Business Administration. A copy of the Third Order on
Reconsideration and Supplemental FRFA (or summaries thereof) will also
be published in the Federal Register.
B. Paperwork Reduction Act
21. The action contained herein has been analyzed with respect to
the Paperwork Reduction Act of 1995 (PRA)
[[Page 31623]]
and found to impose new or modified reporting or recordkeeping
requirements or burdens to the public. Implementation of these new or
modified reporting and recordkeeping requirements will be subject to
approval by the Office of Management and Budget (OMB) as prescribed by
the Act, and will go into effect upon announcement in the Federal
Register of OMB approval.
IV. Ordering Clauses
22. It is ordered that, pursuant to the authority contained in
sections 1-4, 10, 201-202, and 254 of the Communications Act of 1934 as
amended, and Sec. Sec. 1.3 and 1.103 of the Commission's rules, this
Third Order on Reconsideration is adopted.
23. It is further ordered that part 54 of the Commission's rules,
is amended as set forth, effective June 27, 2003. The collections of
information are contingent upon approval by the Office of Management
and Budget as necessary.
24. It is further ordered that the Commission's Consumer and
Governmental Affairs Bureau, Reference Information Center, shall send a
copy of this Third Order on Reconsideration, including the Supplemental
Final Regulatory Flexibility Analysis, to the Chief Counsel for
Advocacy of the Small Business Administration.
List of Subjects in 47 CFR Part 54
Communications common carriers, Reporting and recordkeeping
requirements, Telecommunications, Telephone.
Federal Communications Commission.
Marlene H. Dortch,
Secretary.
Final Rules
0
For the reason discussed in the preamble, the Federal Communications
Commission amends 47 CFR part 54 as follows:
PART 54--UNIVERSAL SERVICE
0
1. 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.
0
2. Amend Sec. 54.307(a)(2) by revising the second sentence to read as
follows:
Sec. 54.307 Support to a competitive eligible telecommunications
carrier.
(a) * * *
(2) * * * A competitive eligible telecommunications carrier that
uses loops purchased as unbundled network elements pursuant to Sec.
51.307 of this chapter to provide the supported services shall receive
the lesser of the unbundled network element price for the loop or the
incumbent LEC's per-line payment from the high-cost loop support, LTS,
and Interstate Common Line Support mechanisms, if any. * * *
* * * * *
0
3. Amend Sec. 54.902 by revising the first sentence of paragraph
(a)(1), by revising paragraphs (a)(2), and (a)(3), by revising the
first sentence of paragraph (b)(1), by revising paragraphs (b)(2), and
(b)(3), (c)(2), and paragraph (c)(3) to read as follows:
Sec. 54.902 Calculation of Interstate Common Line Support for
transferred exchanges.
(a) * * *
(1) Each carrier may report its updated line counts to reflect the
transfer in the next quarterly line count filing pursuant to Sec.
54.903(a)(1) that applies to the period in which the transfer occurred.
* * *
(2) Each carriers' projected data for the following funding year
filed pursuant to Sec. 54.903(a)(3) shall reflect the transfer of
exchanges.
(3) Each carriers' actual data filed pursuant to Sec. 54.903(a)(4)
shall reflect the transfer of exchanges. All post-transaction
Interstate Common Line Support shall be subject to true up by the
Administrator pursuant to Sec. 54.903(b)(3).
(b) * * *
(1) The acquiring carrier may report its updated line counts for
the study area into which the acquired lines are incorporated in the
next quarterly line count filing pursuant to Sec. 54.903(a)(1) that
applies to the period in which the transfer occurred. * * *
(2) The acquiring carrier's projected data for the following
funding year filed pursuant to Sec. 54.903(a)(3) shall reflect the
transfer of exchanges.
(3) The acquiring carrier's actual data filed pursuant to Sec.
54.903(a)(4) shall reflect the transfer of exchanges. All post-
transaction Interstate Common Line Support shall be subject to true up
by the Administrator pursuant to Sec. 54.903(b)(3).
(c) * * *
(2) The acquiring carrier's projected data for the following
funding year filed pursuant to Sec. 54.903(a)(3) shall reflect the
transfer of exchanges.
(3) The acquiring carrier's actual data filed pursuant to Sec.
54.903(a)(4) shall reflect the transfer of exchanges. All post-
transaction Interstate Common Line Support shall be subject to true up
by the Administrator pursuant to Sec. 54.903(b)(3)
* * * * *.
0
4. Amend Sec. 54.903 by revising paragraphs (a)(3), (a)(4), and (b)(3)
to read as follows:
Sec. 54.903 Obligations of rate-of-return carriers and the
Administrator.
(a) * * *
(3) Each rate-of-return carrier shall submit to the Administrator
annually on March 31st projected data necessary to calculate the
carrier's prospective Interstate Common Line Support, including common
line cost and revenue data, for each of its study areas in the upcoming
funding year. The funding year shall be July 1st of the current year
through June 30th of the next year. Each rate-of-return carrier will be
permitted to submit a correction to the projected data filed on March
31st until June 30th for the upcoming funding year. On June 30th each
rate-of-return carrier will be permitted to submit to the Administrator
an update to the projected data for the funding year ending on that
date.
(4) Each rate-of-return carrier shall submit to the Administrator
on December 31st of each year the data necessary to calculate a
carrier's Interstate Common Line Support, including common line cost
and revenue data, for the prior calendar year. Such data shall be used
by the Administrator to make adjustments to monthly per-line Interstate
Common Line Support amounts in the final two quarters of the following
calendar year to the extent of any differences between the carrier's
ICLS received based on projected common line cost and revenue data and
the ICLS for which the carrier is ultimately eligible based on its
actual common line cost and revenue data during the relevant period.
(b) * * *
(3) Perform periodic reconciliation of the Interstate Common Line
Support provided to each carrier based on projected data filed pursuant
to paragraph (a)(3) of this section and the Interstate Common Line
Support for which each carrier is eligible based on actual data filed
pursuant to paragraph (a)(4) of this section.
* * * * *
[FR Doc. 03-13232 Filed 5-27-03; 8:45 am]
BILLING CODE 6712-01-P