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 Federal  Communications  Commission  FCC  01-  200 
 Before  the  Federal  Communications  Commission 
 Washington,  D.  C.  20554 
 In  the  Matter  of 
 Federal-  State  Joint  Board  on 
 Universal  Service 
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 )  ) 
 )  ) 
 )  ) 
 ) 
 CC  Docket  No.  96-  45 
 TWENTY-  THIRD  ORDER  ON  RECONSIDERATION 
 Adopted:  July  5,  2001  Released:  July  11,  2001 
 By  the  Commission:  Commissioner  Abernathy  not  participating 
 I.  INTRODUCTION 
 1.  In  this  Order,  the  Commission  on  its  own  motion  1  makes  a  correction  to  section 
 36.605(  c)(  3)(  ii)  of  its  rules  adopted  in  the  Fourteenth  Report  and  Order  released  on  May  23,  2001.  2  The 
 correction  concerns  the  calculation  of  safety  net  additive  support  in  the  years  following  qualification  for 
 such  support  and  is  necessary  to  make  the  rule  consistent  with  the  text  of  the  underlying  order.  3 
 Specifically,  this  correction  revises  the  language  in  section  36.605(  c)(  3)(  ii)  to  make  it  clear  that  rural 
 telephone  companies  receive  the  lesser  of  either:  (1)  the  sum  of  capped  support  and  the  safety  net  additive 
 support  in  each  year  or  (2)  uncapped  support  in  each  year  when  the  cap  is  not  triggered. 
 II.  BACKGROUND 
 2.  In  the  Fourteenth  Report  and  Order,  the  Commission  adopted  the  safety  net  additive 
 mechanism,  which  seeks  to  mitigate  the  potential  negative  effects  of  a  cap,  and  provide  rural  carriers  with 
 the  predictability  to  make  investments  in  their  communities.  4  Rural  telephone  companies  that  become 
 eligible  for  safety  net  support  receive  support  for  the  incremental  expense  adjustment  associated  with  new 
 1  Section  1.  108  of  the  Commissions  rules  provides  that  [  t]  he  Commission  may,  on  its  own  motion,  set  aside  any 
 action  made  or  taken  by  it  within  30  days  from  the  date  of  public  notice  of  such  action  .  47  C.  F.  R.    1.108.  The 
 Federal  Register  item  for  the  Fourteenth  Report  and  Order  was  published  in  the  Federal  Register  on  June  5,  2001. 
 See  Federal-  State  Joint  Board  on  Universal  Service,  66  Fed.  Reg.  30,  080  (2001). 
 2  Federal-  State  Joint  Board  on  Universal  Service,  Fourteenth  Report  and  Order,  Twenty-  Second  Order  on 
 Reconsideration,  and  Further  Notice  of  Proposed  Rulemaking  in  CC  Docket  No.  96-  45,  and  Multi-  Association 
 Group  (MAG)  Plan  for  Regulation  of  Interstate  Services  of  Non-  Price  Cap  Incumbent  Local  Exchange  Carriers  and 
 Interexchange  Carriers,  Report  and  Order  in  CC  Docket  No.  00-  256,  FCC  01-  157  (rel.  May  23,  2001)  (Fourteenth 
 Report  and  Order). 
 3  Id.  at  para.  88. 
 4  Id.  at  para.  80. 
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 investments.  Recognizing  that  the  costs  associated  with  these  investments  are  not  typically  recovered  in 
 one  year,  the  Commission  adopted  provisions  that  allow  for  recovery  in  the  four  succeeding  years 
 provided  that  the  cap,  as  calculated  by  section  36.601  of  the  Commissions  rules,  is  subsequently 
 triggered.  5  The  Commission  described  the  mechanics  of  the  payment  of  support  in  the  succeeding  years 
 as  follows: 
 [i]  n  any  of  the  succeeding  four  years  in  which  the  cap  is  again  triggered,  the  carrier 
 will  be  eligible  for  the  lesser  of  the  sum  of  capped  support  and  the  safety  net 
 additive  received  in  the  qualifying  year  or  uncapped  support.  Therefore,  qualifying 
 carriers  will  receive  safety  net  additive  in  each  year  that  the  cap  is  triggered  under 
 the  five-  year  plan  we  adopt  in  this  order.  6 
 This  formulation  was  necessary  to  prevent  rural  telephone  companies  from  receiving  more  support  than 
 the  amount  they  would  have  received  if  the  cap  had  not  been  triggered.  7  As  adopted,  however,  the  rule 
 states  in  relevant  part  that  [  s]  upport  in  the  four  succeeding  years  shall  be  the  lesser  of    the  amount  of 
 support  based  on  [a]  recalculation  of  support,  8  thus  indicating  that  the  Administrator  should  recalculate 
 safety  net  additive  support  in  each  of  the  four  succeeding  years. 
 III.  DISCUSSION 
 3.  This  Order  on  Reconsideration  corrects  section  36.605(  c)(  3)(  ii)  of  our  rules  so  that  support 
 paid  in  the  succeeding  four  years  shall  be  the  lesser  of:  (1)  the  sum  of  capped  support  and  the  safety  net 
 additive  received  in  the  qualifying  year  or  (2)  uncapped  support  in  that  year  if  the  cap  is  not  triggered.  9 
 Uncorrected,  the  rule  could  be  read  to  require  the  Administrator  to  recalculate  safety  net  additive  support 
 in  the  succeeding  years  in  order  to  determine  the  amount  that  the  rural  telephone  company  is  eligible  to 
 receive.  10  As  described  above,  such  an  interpretation  would  be  contrary  to  the  Commissions  stated  intent 
 in  the  order.  Accordingly,  we  modify  section  36.605(  c)(  3)(  ii)  so  that  safety  net  additive  support  paid  in 
 succeeding  years  will  be  the  lesser  of:  (1)  the  sum  of  capped  support  and  the  safety  net  additive  received 
 in  the  qualifying  year  or  (2)  uncapped  support  in  that  year  if  the  cap  is  not  triggered.  11 
 IV.  PROCEDURAL  MATTERS 
 A.  Regulatory  Flexibility  Act  Certification 
 4.  The  Regulatory  Flexibility  Act  (RFA)  12  requires  an  Initial  Regulatory  Flexibility  Analysis 
 (IRFA)  13  whenever  an  agency  publishes  a  notice  of  proposed  rulemaking,  and  a  Final  Regulatory 
 Flexibility  Analysis  (FRFA)  14  whenever  an  agency  subsequently  promulgates  a  final  rule,  unless  the 
 5  Id.  at  para.  88.  See  also  47  C.  F.  R.    36.601. 
 6  Fourteenth  Report  and  Order,  at  para.  88. 
 7  Id. 
 8  Id.  at  Appendix  A. 
 9  Id.  at  para.  88. 
 10  47  C.  F.  R.    36.  605(  c)(  3)(  ii). 
 11  See  Appendix  A. 
 12  See  5  U.  S.  C.    601  et  seq.  The  RFA  was  amended  by  the  Small  Business  Regulatory  Enforcement  Fairness  Act  of 
 1996,  Title  II  of  the  Contract  with  America  Advancement  Act  of  1996,  Pub.  L.  104-  121,  110  Stat.  847  (1996). 
 13  5  U.  S.  C.    603. 
 14  5  U.  S.  C.    604. 
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 agency  certifies  that  the  proposed  or  final  rule  will  not  have  "a  significant  economic  impact  on  a 
 substantial  number  of  small  entities,"  and  includes  the  factual  basis  for  such  certification.  15  The  RFA 
 generally  defines  "small  entity"  as  having  the  same  meaning  as  the  terms  "small  business,"  "small 
 organization,"  and  "small  governmental  jurisdiction."  16  In  addition,  the  term  "small  business"  has  the 
 same  meaning  as  the  term  "small  business  concern"  under  the  Small  Business  Act.  17  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).  18  The  SBA  defines  a  small  telecommunications  entity  in  NAICS  code  51331  (Wired 
 Telecommunications  Carrier)  as  an  entity  with  1,500  or  fewer  employees.  19 
 5.  In  the  Fourteenth  Report  and  Order,  the  Commission  prepared  a  FRFA  detailing  the  ways  in 
 which  the  Commission  had  sought  to  minimize  the  burden  of  new  regulations  on  small  businesses.  20  The 
 rule  change  adopted  in  this  Order  on  Reconsideration  is  merely  a  correction  of  the  rule  adopted  in  the 
 Fourteenth  Report  and  Order.  Therefore,  we  certify  pursuant  to  the  RFA  that  the  final  rule  adopted  in 
 this  order  will  not  have  a  significant  economic  impact  on  a  substantial  number  of  small  entities.  21  The 
 Consumer  Information  Bureau,  Reference  Information  Center,  will  send  a  copy  of  the  Twenty-  Third 
 Order  on  Reconsideration,  including  this  final  certification,  to  the  Chief  Counsel  for  Advocacy  of  the 
 SBA  in  accordance  with  the  RFA.  22  In  addition,  this  certification  and  order  will  be  published  in  the 
 Federal  Register.  23 
 B.  Effective  Date  of  Final  Rules 
 6.  Pursuant  to  5  U.  S.  C.    553(  d),  the  rule  change  adopted  herein  shall  take  effect  thirty  (30) 
 days  after  publication  in  the  Federal  Register. 
 V.  ORDERING  CLAUSES 
 7.  Accordingly,  IT  IS  ORDERED  that,  pursuant  to  the  authority  contained  in  sections  1-  4,  201- 
 205,  218-  220,  254,  303(  r),  403,  405,  and  410  of  the  Communications  Act  of  1934,  as  amended,  47  U.  S.  C. 
   151-  154,  201-  205,  218-  220,  254,  303(  r),  403,  405,  and  410,  this  Twenty-  Third  Order  on 
 Reconsideration  in  CC  Docket  No.  96-  45  IS  ADOPTED. 
 15  5  U.  S.  C.    605  (b). 
 16  5  U.  S.  C.    601  (6). 
 17  5  U.  S.  C.    601  (3)  (incorporating  by  reference  the  definition  of  small  business  concern  in  Small  Business  Act, 
 15  U.  S.  C.    632). 
 18  Small  Business  Act,  15  U.  S.  C.    632. 
 19  13  C.  F.  R.    121.  201. 
 20  Fourteenth  Report  and  Order,  at  para.  212-  236. 
 21  See  5  U.  S.  C.  605  (b). 
 22  Id. 
 23  Id. 
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 8.  IT  IS  FURTHER  ORDERED  that  Part  36  of  the  Commissions  Rules,  47  C.  F.  R.  Part  36,  IS 
 AMENDED  as  set  forth  in  Appendix  A  hereto,  effective  30  days  after  publication  in  the  Federal  Register. 
 9.  IT  IS  FURTHER  ORDERED  that  the  Commission's  Consumer  Information  Bureau, 
 Reference  Information  Center,  SHALL  SEND  a  copy  of  this  Order  on  Reconsideration  in  CC  Docket  No. 
 96-  45,  including  the  Regulatory  Flexibility  Act  Certification,  to  the  Chief  Counsel  for  Advocacy  of  the 
 Small  Business  Administration. 
 FEDERAL  COMMUNICATIONS  COMMISSION 
 Magalie  Roman  Salas 
 Secretary 
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 APPENDIX  A    RULE  CHANGE 
 1.  Section  36.605  is  amended  by  revising  paragraph  (c)(  3)(  ii)  to  read  as  follows: 
 (c)(  3)(  ii)  continue  to  pay  safety  net  additive  support  in  any  of  the  four  succeeding  years  in  which  the  total 
 carrier  loop  expense  adjustment  is  limited  by  the  provisions  of    36.603.  Safety  net  additive  support  in 
 the  succeeding  four  years  shall  be  the  lesser  of: 
 (A)  the  sum  of  capped  support  and  the  safety  net  additive  support  received  in  the  qualifying  year;  or 
 (B)  the  rural  telephone  companys  uncapped  support. 
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