Before the

**Federal Communications Commission**

**Washington, D.C. 20554**

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| In the Matter of                 | * | CC Docket No. 98-171         |
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| Reporting Requirements           | * |                              |
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| Service Support Mechanisms       | * |                              |
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**ORDER**

**Adopted:** July 31, 2000 **Released:** August 1, 2000

By the Deputy Chief, Common Carrier Bureau:

# Introduction

1.  In this Order, we direct the Universal Service Administrative
    Company (USAC) to be responsible for administration, processing, and
    management of future filings of the Telecommunications Reporting
    Worksheet and for the distribution of essential contributor revenue
    data to the administrators of the: (1) Telecommunications Relay
    Services Fund; (2) the cost recovery mechanism for numbering
    administration; (3) the cost recovery mechanism for long-term local
    number portability; and (4) the universal service support
    mechanisms. These actions ensure that the administrators of these
    support and cost recovery mechanisms ("the administrators") will
    each have access to reliable and timely data on which to base
    contributions to these mechanisms and that filers of the
    consolidated Telecommunications Reporting Worksheet will be able to
    file only one copy of their completed worksheets.[^1] We also expect
    that the procedures approved in this Order will result in lower
    administrative costs overall and will ensure the lowest regulatory
    burden on the telecommunications service providers that contribute
    to these support and cost recovery mechanisms.

# Background

2.  In a series of separate proceedings, the Commission established
    procedures to fund interstate telecommunications relay services,
    universal service support mechanisms, administration of the North
    American Numbering Plan, and the shared costs of long-term local
    number portability.[^2] As directed by Congress, these efforts are
    funded by contributions from telecommunications carriers and certain
    other providers of telecommunications services.[^3] On July 14,
    1999, the Commission acted to reduce duplicative reporting burdens
    associated with these four support and cost recovery mechanisms.[^4]
    In particular, the Commission eliminated several different forms
    filed by contributing carriers and replaced them with one
    consolidated form, the Telecommunications Reporting Worksheet.[^5]
    The Commission also directed that contributors to the four support
    and cost recovery mechanisms need only file one copy of their
    completed Telecommunications Reporting Worksheet at one
    location.[^6] Pursuant to the Commission's order, contributors are
    required to file revenue data for the first half of each year on
    September 1 of that year and end-of-year revenue data on April 1 of
    the following year.[^7]

3.  Moreover, in order to facilitate the filing of the
    Telecommunications Reporting Worksheet, the Commission ordered the
    administrators to "develop efficient and effective procedures for
    collecting, validating, and distributing the centrally-filed
    contributor data amongst themselves."[^8] The Commission directed
    the administrators to file a summary of their proposed procedures
    and to include in that summary a description of how related costs
    would be equitably apportioned. The Commission delegated authority
    to the Common Carrier Bureau to review the administrators'
    summary.[^9]

4.  As directed in the *Streamlined Contributor Reporting Requirements
    Order*, the administrators filed a joint submission addressing data
    collection procedures and proposing a cost allocation
    methodology.[^10] The administrators stated in the Joint Submission
    that a "central data collection agent will be the most efficient and
    cost effective vehicle for implementing the FCC's consolidated
    revenue data collection procedures."[^11] The administrators
    proposed that a data collection agent should perform a variety of
    functions, including distributing the form to potential filers,
    responding to industry inquiries, performing necessary follow-up,
    maintaining a database of contributor information, and providing
    information to the other administrators on a regular basis. The
    administrators proposed a cost allocation methodology that would
    assign forty percent of the data collection-related costs to the
    administrator of the universal service support mechanisms, and
    twenty percent of the related costs each to the other three
    administrators.[^12]

5.  In an Order released February 4, 2000, the Bureau directed the
    National Exchange Carrier Association (NECA) to perform the data
    collection functions for the April 2000 filing of the
    Telecommunications Reporting Worksheet and set out procedures for
    the administrators to submit proposed arrangements for future
    filings.[^13] On May 15, 2000, the administrators filed a
    supplemental joint statement regarding the data collection
    procedures.[^14] In the *Supplemental Joint Submission*, the
    administrators propose that the Commission designate USAC as the
    entity responsible for the consolidated data collection. Under their
    proposal, USAC would perform "the responsibilities consistent with
    the procedures agreed upon by the program administrators in their
    October 1999 *Joint Submission* and utilized by NECA for the April
    1, 2000 consolidated worksheet."[^15] The administrators represent,
    in the *Supplemental Joint Submission*, that USAC intends to extend
    its current agreement with NECA to perform the revenue data
    collection functions through December 2002.[^16] The administrators
    further propose that USAC be granted long-term oversight of the data
    collection process, with the stated intention of seeking competitive
    bids for the data collection function as of January 2003.[^17]
    Comments were filed by one party, WorldCom, Inc., with reply
    comments filed jointly by the administrators.[^18]

# discussion

**A. Data Collection Functions Performed by a Single Entity**

6.  We approve the administrators' proposal and designate USAC as the
    entity responsible for the data collection functions associated with
    the Telecommunications Reporting Worksheet because we conclude that
    their proposal will reduce costs associated with the administration
    of the four support and cost recovery mechanisms, which will
    ultimately result in lower costs for the industry participants that
    fund these mechanisms.[^19] Moreover, this action will ensure the
    lowest burden on filers of the worksheet and the efficient
    distribution of the contributor-filed data among the administrators.

7.  As stated in the *April 2000 Collection Order*, we find reasonable
    the administrators' conclusion that significant benefits may be
    achieved by having one entity perform the data collection functions
    associated with the filing of the Telecommunications Reporting
    Worksheet.[^20] In reaching our earlier decision regarding the April
    2000 filing, we relied on the representations of the administrators
    that their overall costs would be reduced by consolidating the data
    collection functions.[^21] The administrators have now used the
    consolidated worksheet for the April 2000 filing and we take their
    continued recommendation of the procedures outlined in the *Joint
    Submission* to reflect their satisfaction with this approach. While
    a final accounting of administrative costs will not be available
    until later in the year, we continue to believe that administrative
    costs will be reduced overall. Particularly given that two of the
    administrators, NBANC and NeuStar, are performing under fixed price
    contracts, we expect that the administrators face incentives to
    minimize costs associated with these functions. Thus, we are again
    persuaded by the administrators' unanimous position that their data
    collection proposal will be cost effective and will enable them to
    carry out their responsibilities in an efficient manner.

8.  In addition, we note that centralizing the data collection functions
    with one entity has significant benefits for the contributors to the
    support and cost recovery mechanisms that must file the
    Telecommunications Reporting Worksheet. Such an approach ensures
    that telecommunications carriers and other providers of interstate
    telecommunications services need file only one copy of the
    consolidated worksheet and have one entity as the primary source for
    inquiries.

9.  We approve USAC to be responsible for these functions based on the
    unanimous support of the other administrators and the
    administrators' representations that USAC has in place procedures to
    ensure that these filings are handled competently, effectively, and
    with low cost for the administrators overall.[^22] In this regard,
    we note that USAC intends to contract with NECA to perform the data
    collection functions through the year 2002 and that NECA has
    performed these functions in a satisfactory manner in the past.[^23]
    We also note that, as administrator to the largest of the four
    mechanisms, USAC faces incentives to compile, validate, and process
    contributor data in an accurate and efficient fashion. In this
    regard, we are not persuaded by WorldCom's arguments that USAC
    should not be selected to perform these functions. WorldCom argues
    that USAC should not take on additional administrative
    responsibilities and that USAC should focus solely on implementation
    of the Schools and Libraries program.[^24] We have been presented
    with no evidence that USAC is incapable of performing both these
    functions, much as they would have done if the Commission had not
    combined the original four data collections. Finally, if the other
    administrators become dissatisfied with the quality of USAC's
    performance or if routine audits indicate that USAC is unable to
    perform these data collection functions, we will not hesitate to
    revisit this issue. Nor does WorldCom present any evidence for its
    claim that USAC lacks neutrality in its operations.[^25] In our
    view, given NECA's experience with the data collection process, the
    choice of NECA to perform many of the data collection functions
    through 2002, in itself, raises no particular concerns about
    neutrality.

    **B. Allocation of Costs Consistent with the Joint Submission**

10. The terms under which USAC will serve as the data collection agent
    have largely been outlined in the administrators' joint submissions.
    In particular, the administrators propose that the cost allocation
    methodology proposed in the Joint Submission \-- and used for the
    April 2000 filing \-- should continue to apply to future filings
    covered by this order.[^26] We found, in the April 2000 Collection
    Order, that this methodology appeared to be reasonable.[^27] Again,
    we have been presented with no evidence to suggest that the
    administrators face incentives to do anything other than keep their
    administrative costs to a minimum. Nor have any parties \--
    administrators or contributors \-- contested the allocation of costs
    associated with the April 2000 collection, which utilized the same
    cost allocation methodology. Accordingly, we direct that costs
    associated with the data collection functions be apportioned
    pursuant to the administrators' proposal in the *Joint Submission*.

11. We reiterate, however, that the Commission has authority to
    re-examine these arrangements, in the future, for example, if we
    determine that costs are excessive, that one fund is bearing an
    unreasonable portion of the costs, or that data are not being
    collected efficiently and accurately or shared in a reasonable and
    timely fashion.

    **C. Procedures for Filings after the Year 2002**

12. In the *April 2000 Collection Order*, we requested proposed
    procedures for handling the September 2000 filing and for the year
    2001 and 2002 filings.[^28] Accordingly, and for the reasons
    described above, we specifically authorize USAC to be responsible
    for the data collection functions for these filings.

13. We also note that the administrators have requested that USAC be
    granted responsibility to handle these functions beyond this two
    year period. Given this apparent unanimity between the
    administrators, we see no reason to limit USAC's role as a data
    collection agent unnecessarily. Accordingly, we designate USAC as
    the data collection agent on an on-going basis. However, we preserve
    the right of any of the administrators to submit alternative
    proposals for filings that would occur after the year 2002 because
    it may be appropriate to re-examine the specific terms of the data
    collection agent functions from time to time. Any such proposals
    must be filed in sufficient time for Commission review and for
    administrator implementation. For example, USAC would need to carry
    out its competitive bidding process sufficiently in advance of the
    April 2003 filing. Thus, we conclude that any administrator or other
    party that wishes to propose alternative arrangements for filings
    after the year 2002 must submit such proposals no later than March
    31, 2002. In the absence of any such filings, USAC shall continue as
    the data collection agent, pursuant to the terms of the joint
    submissions and in accordance with Commission orders.

# conclusion

14. For all the reasons set forth above, we adopt this order to promote
    the efficient administration of the federal support and cost
    recovery mechanisms for telecommunications relay services, numbering
    administration, local number portability, and universal service
    support. We conclude that the actions taken here will provide the
    least burdensome process for contributors to comply with the
    Commission's reporting requirements and will reduce costs borne by
    the telecommunications industry overall.

# ordering clauses

15. ACCORDINGLY, IT IS ORDERED, pursuant to sections 1, 4(i), 4(j), 11,
    201-205, 210, 214, 218, 225, 251, 254, 303(r), 332, and 403 of the
    Communications Act of 1934, as amended, 47 U.S.C. §§ 1, 4(i), 4(j),
    11, 201-205, 210, 214, 218, 225, 251, 254, 303(r), 332, and 403 that
    this ORDER is hereby ADOPTED.

    FEDERAL COMMUNICATIONS COMMISSION

    Yog R. Varma

    Deputy Chief, Common Carrier Bureau

    **[APPENDIX A - JOINT SUBMISSION OF THE PROGRAM
    ADMINISTRATORS]{.underline}**

    **[APPENDIX B - SUPPLEMENTAL JOINT SUBMISSION OF THE PROGRAM
    ADMINISTRATORS]{.underline}**

    **[APPENDIX C - LIST OF COMMENTERS]{.underline}**

    [Comments]{.underline}

    Worldcom, Inc. (Worldcom)

    [Reply Comments]{.underline}

    NBANC, National Exchange Carrier Association, Neustar, and Universal
    Service Administrative Company (filed jointly, collectively referred
    to as "Administrators' Joint Reply Comments")

[^1]: The administrators consist of: 1) USAC, for the federal universal
    service support mechanisms; 2) NeuStar, for the local number
    portability cost recovery mechanisms; 3) National Exchange Carrier
    Association, Inc. (NECA), for the interstate Telecommunications
    Relay Services Fund; and 4) NBANC, as billing and collection agent
    for the North American Numbering Plan. *See Joint Submission of
    Program Administrators Regarding Consolidated Data Collection
    Procedures and Cost Allocation Methodology*, CC Docket 98-171 (Oct.
    12, 1999) (*Joint Submission*); *Supplemental Joint Submission of
    Program Administrators Regarding Consolidated Data Collection
    Procedures and Cost Allocation Methodology*, CC Docket 98-171 (May
    15, 2000) (*Supplemental Joint Submission*).

[^2]: *See 1998 Biennial Regulatory Review \-- Streamlined Contributor
    Reporting Requirements Associated with Administration of
    Telecommunications Relay Services, North American Numbering Plan,
    Local Number Portability, and Universal Service Support Mechanisms*,
    Notice of Proposed Rulemaking, FCC 98-233, 13 FCC Rcd 19295, ¶¶ 5-14
    (Sept. 25, 1998) (*Streamlined Contributor Reporting Requirements
    Notice*).

[^3]: *See Streamlined Contributor Reporting Requirements Notice*, 13
    FCC Rcd 19295, ¶¶ 5-14.

[^4]: *See 1998 Biennial Regulatory Review \-- Streamlined Contributor
    Reporting Requirements Associated with Administration of
    Telecommunications Relay Services, North American Numbering Plan,
    Local Number Portability, and Universal Service Support Mechanisms*,
    Order, FCC 99-175, CC Docket 98-171 (Jul. 14, 1999) (*Streamlined
    Contributor Reporting Requirements Order*).

[^5]: *Streamlined Contributor Reporting Requirements Order,* ¶¶ 9-13.

[^6]: *Id.* at ¶ 36.

[^7]: *Id.* at ¶ 32.

[^8]: *Id* at ¶ 45.

[^9]: *Id.* at ¶ 46.

[^10]: *See* *Joint Submission*, *supra* n.2. The original joint
    submission was filed on behalf of the Universal Service
    Administrative Company (Administrator for the universal service
    support mechanisms), Lockheed Martin-IMS (Administrator for local
    number portability), NECA (Administrator of the TRS Fund), and NBANC
    (Billing and Collection Agent for the North American Numbering
    Plan). A copy of the administrator's Joint Submission is attached as
    Appendix A. Neustar has since replaced Lockheed Martin-IMS as
    Administrator for the local number portability cost recovery
    mechanisms.

[^11]: *Joint Submission* at 2. The administrators' Joint Submission did
    not propose a specific entity to serve as the data collection agent.

[^12]: *Joint Submission* at 3. The administrators reason that "\[i\]n
    the past ... USAC was required to collect data twice annually, while
    the other entities each collected data annually. Since this resulted
    in five data collections per year, the program administrators
    believe that an equitable sharing of costs would result from
    two-fifths of the costs of the \[data collection agent\] being borne
    by USAC, with each of the other program administrators being
    assigned one-fifth of the \[data collection agent's\] costs." *Id.*

[^13]: *1998 Biennial Regulatory Review \-- Streamlined Contributor
    Reporting Requirements Associated with Administration of
    Telecommunications Relay Services, North American Numbering Plan,
    Local Number Portability, and Universal Service Support Mechanisms*,
    Order, DA 00-214, CC Docket 98-171 (Feb. 4, 2000) (*April 2000
    Collection Order*).

[^14]: *See Supplemental Joint Decision*, *supra* n.2.

[^15]: *Supplemental Joint Submission* at 3.

[^16]: *Id.* at 3.

[^17]: *Id.* at 3-4.

[^18]: *See* Appendix C, List of Commenters.

[^19]: Administrator costs born by the four mechanisms are ultimately
    passed on to contributors.

[^20]: *April 2000 Collection Order* at ¶ 8. *See also Joint Submission*
    at 2.

[^21]: *April 2000 Collection Order* at ¶ 8.

[^22]: *See Supplemental Joint Submission* at 4-5.

[^23]: As administrator, NECA performed data collection functions for
    the TRS Fund and, under contract, NECA performed data collection
    functions for the universal service support mechanisms and for the
    NANPA, in the past. NECA also acted as the data collection agent for
    the April 2000 filing of the Telecommunications Reporting Worksheet.

[^24]: Worldcom Comments at 4.

[^25]: *Id.*

[^26]: *Supplemental Joint Submission* at 3. *See also Joint Submission*
    at 3 (assigning forty percent of the data collection-related costs
    to the administrator of the universal service support mechanisms and
    twenty percent of the related costs each to the other
    administrators).

[^27]: *April 2000 Collection Order* at ¶ 12 (concluding that the
    administrators' proposal appears to provide for a reasonable
    allocation of costs among the four mechanisms).

[^28]: *April 2000 Collection Order* at ¶¶ 10-11.