PUBLIC NOTICE![](media/image1.png){width="0.95in"
height="0.9055555555555556in"}

FEDERAL COMMUNICATIONS COMMISSION

445 12th STREET, S.W.

WASHINGTON, D.C. 20554 **DA 00-1825**

News media information 202/418-0500 Fax-On-Demand 202/418-2830 Internet:
http://www.fcc.gov ftp.fcc.gov

COMMON CARRIER BUREAU EXTENDS PLEADING CYCLE FOR COMMENT ON UPDATING
LINE COUNTS FOR CALCULATING HIGH-COST UNIVERSAL SERVICE SUPPORT FOR
NON-RURAL CARRIERS FOR THE YEAR 2001

# CC Docket No. 96-45

### Release Date: August 10, 2000

#### Comment Date: August 30, 2000

**Reply Comment Date: September 6, 2000**

On July 24, 2000, the Common Carrier Bureau released a Public Notice
seeking comment on updating line counts for calculating high-cost
universal service support for non-rural carriers for the year 2001 and
establishing comment and reply comment dates of August 8 and August 15,
2000, respectively.[^1] We extend the comment and reply comment dates to
August 30 and September 6, 2000, respectively. Accordingly, reply
comments addressing comments filed August 8 and August 30, 2000 are due
September 6, 2000.

On October 21, 1999, the Commission adopted two orders implementing a
new high-cost universal service support mechanism for non-rural carriers
for determining support beginning January 1, 2000.[^2] The Commission
recognized the importance of updating the inputs in the universal
service cost model as technology and other conditions change.[^3] On
April 7, 2000, the Commission released an order clarifying how updated
line count data, filed by non-rural carriers every quarter, would be
used to determine support amounts for the year 2000.[^4] In this Public
Notice, we seek comment on updating line count input values for purposes
of determining support for the year 2001.[^5]

Line counts are used for two general purposes in the high-cost support
mechanism for non-rural carriers.[^6] First, line counts are used in the
universal service cost model to estimate the forward-looking costs of
providing supported services.[^7] Second, line counts are used to
calculate support based on those costs and target that support to
high-cost areas. In the *Twentieth Reconsideration Order*, the
Commission clarified that the cost model would use the line count input
values adopted by the Commission in October 1999, that is, year-end 1998
line counts. The Commission also clarified that support would be
calculated and targeted using wire center line count data reported by
the carriers on a quarterly basis.[^8] Under this approach, for each
state, the average per-line support amounts are determined using the
forward-looking cost estimates generated with the October 1999 line
count inputs. The Universal Service Administrative Company (USAC) then
determines statewide support amounts by multiplying the average per-line
support amount by the number of lines reported. While the average
per-line support amount does not change from quarter to quarter, the
total support amounts change quarterly as the number of lines reported
changes.[^9]

We seek comment on updating line count data in the universal service
cost model. If the line count input values are not updated, non-rural
support would continue to increase indefinitely because of line
growth.[^10] Thus, the non-rural high-cost support mechanism would never
take into account the economies of scale resulting from serving more
lines.[^11] On July 31, 2000, non-rural carriers will file year-end 1999
wire center line count data.[^12] We specifically seek comment on
whether the Commission should update the line count input values used in
the cost model for purposes of determining support amounts for the year
2001.[^13] If the Commission were to use these updated line counts in
the model, we seek comment on how these line counts, which are USF
loops,[^14] should be allocated to the classes of service used in the
model.[^15] In particular, we seek comment on whether the Commission
should use wire center line count data filed by non-rural carriers
pursuant to the *1999 Data Request* to allocate lines to the classes of
service used in the model.[^16] If the Commission were to use the *1999
Data Request* to allocate USF loops to switched line categories, we also
seek comment on how to determine the number of special lines in each
wire center.[^17] Now that carriers file wire center line count data,
these line counts should be matched to the wire centers used in the
model. Accordingly, we also seek comment on how to match the quarterly
wire center line counts with the wire centers in the model.

Pursuant to sections 1.415 and 1.419 of the Commission\'s rules, 47
C.F.R. §§ 1.415, 1.419, interested parties may file comments on or
before **August 30, 2000** and reply comments on or before **September
6, 2000**. Comments may be filed using the Commission\'s Electronic
Comment Filing System (ECFS) or by filing paper copies. *See Electronic
Filing of Documents in Rulemaking Proceedings*, 63 Fed. Reg. 24,121
(1998). Comments filed through the ECFS can be sent as an electronic
file via the Internet to \<http://www.fcc.gov/e-file/ecfs.html\>.
Generally, only one copy of an electronic submission must be filed. If
multiple docket or rulemaking numbers appear in the caption of this
proceeding, however, commenters must transmit one electronic copy of the
comments to each docket or rulemaking number referenced in the caption.
In completing the transmittal screen, commenters should include their
full name, Postal Service mailing address, and the applicable docket or
rulemaking number. Parties may also submit electronic comments by
Internet e-mail. To receive filing instructions for e-mail comments,
commenters should send an e-mail to ecfs@fcc.gov, and should include the
following words in the body of the message, \"get form \<your e-mail
address.\" A sample form and directions will be sent in reply. Parties
who choose to file by paper must file an original and four copies of
each filing. If more than one docket or rulemaking number appears in the
caption of this proceeding, commenters must submit two additional copies
for each additional docket or rulemaking number. All filings must be
sent to the Commission\'s Secretary, Magalie Roman Salas, Office of the
Secretary, Federal Communications Commission, 445 12th Street, S.W.,
Washington, D.C. 20554.

Parties also must send three paper copies of their filing to Sheryl
Todd, Accounting Policy Division, Common Carrier Bureau, Federal
Communications Commission, 445 Twelfth Street S.W., Room 5-B540,
Washington, D.C. 20554. In addition, commenters must send diskette
copies to the Commission\'s copy contractor, International Transcription
Service, Inc., 1231 20th Street, N.W., Washington, D.C. 20037.

Pursuant to section 1.1206 of the Commission's rules, 47 C.F.R. §
1.1206, this proceeding will be conducted as a permit-but-disclose
proceeding in which *ex parte* communications are permitted subject to
disclosure.

The full text of this document is available for public inspection and
copying during regular business hours at the FCC Reference Information
Center, Portals II, 445 12th Street, SW, Room CY-A257, Washington, DC,
20554. This document may also be purchased from the Commission's copy
contractor, International Transcription Service, Inc. (ITS), 1231 20th
Street, NW, Washington, DC 20036, telephone 202-857-3800, facsimile
202-857-3805.

For further information, contact Katie King, Accounting Policy Division,
Common Carrier Bureau, at (202) 418-7400, TTY (202) 418-0484.

[^1]: *Common Carrier Bureau Seeks Comment on Updating Line Counts for
    Calculating High-Cost Universal Service Support for Non-Rural
    Carriers for the Year 2001*, Public Notice, CC Docket No. 96-45, DA
    00-1626 (rel. July 24, 2000).

[^2]: *See Federal-State Joint Board on Universal* Service, CC Docket
    96-45, Ninth Report and Order and Eighteenth Order on
    Reconsideration, 14 FCC Rcd 20432 (1999) (*Ninth Report and Order*);
    *Federal-State Joint Board on Universal Service, Forward-Looking
    Mechanism for High Cost Support for Non-Rural LECs*, Tenth Report
    and Order, CC Docket Nos. 96-45, 97-160, 14 FCC Rcd 20156 (1999)
    (*Tenth Report and Order*).

[^3]: *See Tenth Report and Order*, 14 FCC Rcd at 20170 ("We believe
    that the model, as used in the methodology we set out in the
    companion \[order\], is the best way to generate non-rural carriers'
    support amounts for the funding year beginning January 1, 2000. We
    also recognize, however, that the model must evolve as technology
    and other conditions change."). Among other things, the Commission
    recognized the need to consider how often input data should be
    updated.

[^4]: *Federal-State Joint Board on Universal Service*, Twentieth Order
    on Reconsideration, CC Docket No, 96-45, FCC 00-126 (rel. April 7,
    2000) (*Twentieth Reconsideration Order*).

[^5]: *See Tenth Report and Order*, 14 FCC Rcd at 20170.

[^6]: Non-rural carriers are now required to file line count data by
    wire center, rather than by study area. *See* 47 C.F.R. §§ 36.611,
    36.612, 54.307. Prior to December 30, 1999, non-rural incumbent
    local exchange carriers and competitive eligible telecommunications
    carriers seeking to receive support were required to file line count
    data at the study area level pursuant to section 36.611 and 54.307
    of the Commission's rules.

[^7]: *See* http://www.fcc.gov/ccb/apd/hcpm. The cost model uses PNR
    Associates (PNR) wire center line counts trued up to study area
    access line counts provided by the carriers in their 1998 ARMIS
    filings.

[^8]: Non-rural carriers began filing quarterly wire center line counts
    for the first time on December 30, 1999. These line counts reflected
    a carrier's lines as of June 30, 1999.

[^9]: *See Twentieth Reconsideration Order*, FCC 00-126 at paras. 9-10,
    17.

[^10]: Pursuant to the methodology adopted in the *Twentieth
    Reconsideration Order*, the average per-line support amount
    calculated using the October 1999 line count input values is
    multiplied by the number of lines reported to determine statewide
    support amounts. If the average cost is not adjusted for line
    growth, line growth always results in an increase in support
    amounts. If, on the other hand, the reported lines are incorporated
    earlier in the process, that is, in determining the average cost
    per-line, the shared costs are spread over more lines and the
    average per-line support amount could decrease.

[^11]: *See Federal-State Joint Board on Universal Service*, CC Docket
    No. 96-45, Report and Order, 12 FCC Rcd 8776, 8915 (1997) (*First
    Report and Order*) (subsequent history omitted) ("The cost study or
    model must estimate the cost of providing service for all businesses
    and households within a geographic region. . . . Such inclusion of
    multi-line business services and multiple residential lines will
    permit the cost study or model to reflect the economies of scale
    associated with the provision of these services.").

[^12]: *See* 47 C.F.R. § 36.611.

[^13]: If the Commission were to determine that line count input values
    should be updated, the average per-line support amount in each state
    would then be determined using these updated input values.
    Consistent with the methodology set forth in the *Twentieth
    Reconsideration Order*, statewide support amounts would be
    determined by multiplying the updated average support amounts by the
    number of lines reported each quarter by non-rural carriers in each
    state.

[^14]: Section 36.611 of the Commission's rules requires carriers to
    file, for universal service support purposes, "working Exchange Line
    C&WF loops used jointly for exchange and message telecommunications
    service, including C&WF subscriber lines associated with pay
    telephones in C&WF Category 1, but excluding WATS closed end access
    and TWX service." *See* 47 C.F.R. § 36.611(h).

[^15]: To estimate wire center costs, the model uses line counts for
    business lines, residential lines, special lines, payphone lines,
    and single business lines.

[^16]: *See* *Federal-State Joint Board on Universal Service*, CC Docket
    No. 96-45*, Forward-Looking Mechanism for High-Cost Support for
    Non-Rural LECs*, CC Docket No. 97-160, Order, DA 99-1406 (rel. July
    19, 1999) (*1999 Data Request*). The *1999 Data Request* required
    non-rural carriers to file year-end 1998 wire center line count data
    for business lines, residential lines, special lines, payphone
    lines, and single business lines, measured as voice grade equivalent
    analog or digital lines. In addition, the *1999 Data Request* sought
    information on facility (as opposed to voice grade equivalent) line
    counts for business and special access lines.

[^17]: The *1999 Data Request* defined "special lines" to include state
    private lines as well as interstate special access lines. *See 1999
    Data Request* at 4-5. The PNR data used in the model was trued-up to
    1998 ARMIS access line counts, which includes only interstate lines.