Federal Register / Vol. 62, No. 152 / Thursday, August 7, 1997 / Proposed Rules 42457

FEDERAL COMMUNICATIONS

COMMISSION

47 CFR Parts 54 and 69

[CC Docket No. 96–45; 97–160; FCC 97–

256]

Federal-State Board on Universal

Service and Forward-Looking

Mechanism for High Cost Support for

Non-Rural LECs

AGENCY: Federal Communications

Commission.

ACTION: Notice of proposed rulemaking.

SUMMARY: On July 18, 1997, the

Commission adopted a Further Notice of

Proposed Rulemaking (FNPRM) to

establish a forward-looking mechanism

to determine high cost support for nonrural local exchange carriers (LECs). In

the FNPRM, the Commission seeks

further comment on the platform design

and input variables the Commission

should adopt in a forward-looking

economic cost mechanism to estimate

the costs of the telephone network

necessary to provide universal service to

high cost areas.

DATES: Interested parties may file

comments concerning the platform

designs of the switching, interoffice

trunking, signaling, and local tandem

components on or before August 8,

1997, and parties should submit

corresponding reply comments on or

before August 18, 1997. Comments

concerning the platform design features

determining customer location,

including the geographic unit for cost

calculations and the algorithm

measuring customer distribution and

line counts, should be submitted on or

before September 2, 1997, and reply

comments regarding these components

should be submitted on or before

September 10, 1997. Comments

discussing the platform-design issues

relating to outside plant investment,

including the algorithms determining

plant mix, installation and cable costs,

drop lengths, structure sharing, the

fiber-copper cross-over point, digital

loop carriers, and the wireless threshold

must be submitted on or before

September 24, 1997, with reply

comments submitted on or before

October 3, 1997. Comments discussing

all platform issues not otherwise

addressed, including the components

addressing general support facilities,

expenses, and support areas, and all

input values issues must be submitted

by October 17, 1997, with reply

comments due on or before October 27,

1997.

ADDRESSES: Parties should send their

comments or reply comments to Office

of the Secretary, Federal

Communications Commission, 1919 M

Street, N.W., Room 222, Washington,

D.C. 20554. Parties should also send

copies of their comments to the

individuals listed on the Service List

included as Attachment A. Parties

should also file one copy of any

documents filed in this docket with the

Commission’s copy contractor,

International Transcription Services,

Inc., 1231 20th Street, N.W.,

Washington, D.C. 20036. Comments and

reply comments will be available for

public inspection during regular

business hours in the FCC Reference

Center, 1919 M Street, N.W., Room 239,

Washington, D.C. 20554. Commenters

may also file informal comments or an

exact copy of formal comments

electronically via the Internet at <http:/

/gullfoss.fcc.gov/cgi-bin/websql/cgi-bin/

comment/comment.hts>. Only one copy

of electronically-filed comments must

be submitted. A commenter must note

whether an electronic submission is an

exact copy of formal comments on the

subject line. A commenter also must

include its full name and Postal Service

mailing address its submission.

Parties are also asked to submit their

comments and reply comments on

diskette. Such diskette submissions are

in addition to and not a substitute for

the formal filing requirements addressed

above. See section IV. C., paragraph 90,

under Supplementary Information for

further details. Parties submitting

diskettes should submit them to Sheryl

Todd of the Common Carrier Bureau,

2100 M Street, N.W., Room 8611,

Washington, D.C. 20554.

FOR FURTHER INFORMATION CONTACT:

Valerie Yates, Legal Counsel, Common

Carrier Bureau, (202) 418–1500, or

Sheryl Todd, Common Carrier Bureau,

(202) 418–7400.

SUPPLEMENTARY INFORMATION: This is a

summary of the FNPRM adopted and

released by the Commission on July 18,

1997. The full text of this FNPRM is

available for inspection and copying

during normal business hours in the

FCC Reference Center (Room 239), 1919

M St., NW, Washington, DC.

The FNPRM divides the issues related

to developing model platform

components and input values into four

broad groups, and establishes a series of

comment and reply comment deadlines

that, together, create a staged approach

to the model development process

during which the Common Carrier

Bureau, acting pursuant to delegated

authority, will provide guidance to the

model proponents.

The FNPRM requests comment on

platform and input issues related to the

following groups of issues: switching,

interoffice trunking, signaling, and local

tandem investment; customer location;

outside plant design and investment;

and other miscellaneous issues

including general support facilities,

depreciation, expenses, and support

areas. The FNPRM also requests

comment on how the Commission

should determine the measure of local

usage that should be included in the

definition of universal service.

Summary of Notice of Proposed

Rulemaking

I. Modeling Forward-Looking Economic

Cost

1. Introduction. In the May 1997

Report and Order on Universal Service

the Federal Communications

Commission adopted a plan for

establishing universal service support

mechanisms for rural, insular, and high

cost areas that will replace the current

patchwork of implicit subsidies with

explicit support based on the forwardlooking economic cost of providing

supported services. The Commission

adopted a forward-looking economic

cost methodology that will calculate

universal service support in four steps.

First, the Commission will estimate the

forward-looking economic costs of

providing universal service in rural,

insular, and high cost areas. Second, the

Commission established a nationwide

revenue benchmark calculated on the

basis of average revenue per line. Third,

the Commission will calculate the

difference between the forward-looking

economic cost and the benchmark.

Fourth, federal support will be 25

percent of that difference,

corresponding to the percentage of loop

costs allocated to the interstate

jurisdiction. The Commission further

decided to use forward-looking

economic cost studies conducted by

state commissions that choose to submit

such cost studies to determine universal

service support.

2. In the Universal Service Order, the

Commission concluded that support for

universal service should be based on the

forward-looking economic cost of

constructing and operating the network

facilities and functions used to provide

the services. The Commission

additionally concluded that a state

could elect to submit its own cost study

to calculate the level of universal

service support available to carriers in

its state, if the state’s study meets the

criteria outlined in the Order. That

study must be based on forward-looking

economic cost principles, be supported

by publicly available data and

computations, and be the same cost
42458 Federal Register / Vol. 62, No. 152 / Thursday, August 7, 1997 / Proposed Rules

study that is used by the state to

determine intrastate universal service

support levels pursuant to section

254(f). In the Order, the Commission

asked states to elect, by August 15,

1997, whether they will conduct their

own forward-looking economic cost

studies. States that elect to conduct such

studies must file them with the

Commission on or before February 6,

1998.

3. The Commission is currently

considering two models, BCPM and

Hatfield, to use as a mechanism to

calculate forward-looking economic cost

for providing universal service. The

BCPM and Hatfield models produce

dramatically different results, even

when modeling a network over the same

geographic area, because of differences

in both their platform design and their

input values. Both models are composed

of modules representing the different

components of an exchange network.

These components include customer

location, outside plant investment,

switching, interoffice trunking,

signaling, and local tandem investment,

general support facilities, depreciation,

other expenses, and the support area.

Each module consists of related

platform design assumptions and input

values. The Commission concluded in

the Order that the Commission would

select a platform by the end of 1997, and

that the Commission would select a

complete mechanism, including inputs,

by August 1998. The Commission’s

methodology will be implemented on

January 1, 1999. In the FNPRM, the

Commission has adopted specific

procedures and documentation

requirements to allow the Commission,

state regulators, and the parties to

compare and validate the models most

effectively.

4. The Commission expects that all

future submissions of the platforms of

the two models will be flexible enough

to incorporate revisions within the

individual component algorithms.

Because the design features for the

components vary in complexity, the

Commission concludes that a graduated

submission and review process will

permit the Commission, the states, and

the public, to evaluate all features

thoroughly. The Commission concludes

that, besides affording the Commission

sufficient time to evaluate the more

complex platform components,

requiring proponents to present

individual components for final

submission in stages will prevent

constant revisions of an entire platform

from disrupting the evaluation process.

A. Procedures for Revising the Models

5. Staged Platform Submission

Schedule. The Commission requires that

comments concerning the platform

design of the switching, interoffice

trunking, signaling, and local tandem

components must be submitted on or

before August 8, 1997, and that parties

should submit corresponding reply

comments on or before August 18, 1997.

Comments concerning the platform

design features determining customer

location, including the geographic unit

for cost calculations and the algorithm

measuring customer distribution and

line counts, must be submitted to the

Commission on or before September 2,

1997 and reply comments regarding

these components must be submitted on

or before September 10, 1997.

Comments discussing the outside plant

investment components, including the

algorithms determining plant mix,

installation and cable costs, drop

lengths, structure sharing, the fibercopper cross-over point, digital loop

carriers, and the wireless threshold

must be submitted on or before

September 24, 1997, with reply

comments submitted on or before

October 3, 1997. Comments discussing

all platform issues not otherwise

addressed, including the components

addressing general support facilities,

expenses, and support areas must be

submitted by October 17, 1997, with

reply comments due on or before

October 27, 1997.

6. Commission Guidance. Before and

during the initial comment and reply

comment periods, the Commission

intends to hold one or more public

workshops on particular model platform

components. Further, prior to the

Commission’s adoption of a particular

platform in December 1997, the

Common Carrier Bureau will issue

orders and public notices on a regular

basis explaining its analysis of the

model submissions and industry

comments and selecting particular

design features. The Commission will

work with the states throughout this

process so that the selected mechanism

reflects the concerns of state regulatory

authorities in developing forwardlooking economic cost methodologies

for state universal service programs or

for cost studies to be submitted in this

proceeding.

7. Inputs Submission. Although the

Commission has stated its intention to

select default input values by August

1998, it must receive the proponents’

input submissions in order to evaluate

a model’s performance. The

Commission requires that comments

regarding all input values be submitted

by October 17, 1997. Reply comments

must be submitted by October 27, 1997.

In addition, commenters should provide

explanation and documentation of their

suggestions in order to establish that

their suggestions are reasonable,

accurate, and reflect forward-looking

cost.

8. Additional Revision Procedures.

The Commission requests that the

current models be modified, if

necessary, to generate output reports

that: (a) Show costs by element of the

network; (b) disaggregate study area

expenses, investments, taxes, and return

according to USOA accounts; and (c)

calculate study area support as the

difference between CBG cost and the

benchmark for every CBG in a study

area. Parties providing the models under

consideration shall provide the

Commission with a clear and

comprehensive programmers’ flow chart

because the current models are unclear

as to how the calculations are being

made. The Commission also requests

that the models be revised, if necessary,

to employ the NECA telephone

company study area names and

identification codes in all subsequent

revisions. In addition, to enable the

Commission and commenters to manage

their resources most effectively, the

Commission requests that the parties

submitting models give the Commission

and commenters reasonable advance

warning of the approximate date when

they expect to release a new version of

a model. Also, if a party intends to

release a new version of a model that is

designed to work with a software or

hardware product that differs from the

previous version, the Commission

requests that party give the Commission

and others reasonable advance notice of

what hardware and software they must

secure to operate and evaluate the new

version of the model. Finally, the

Commission requests that a party that

releases a new version of a model

clearly indicate the major changes that

have been made, and, in particular, any

additions to the model. The

Commission requests that the model

proponents file complete

documentation including all third-party

information, studies, and surveys used

by the models. The Commission

understands that some of this

information is proprietary and cannot be

released to the public, and encourages

parties to use the Commission’s

procedures for submitting proprietary

information to the Commission

wherever necessary.

9. The models under consideration do

not presently include any information

on Alaska and insular areas. In the

Order, however, the Commission
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concluded that non-rural carriers in

Alaska and the insular areas begin

receiving support based on a forwardlooking mechanism at the same time as

other non-rural carriers (i.e., January 1,

1999). Accordingly, the Commission

asks that parties discuss the input

values or model design features that

would allow the mechanism adopted in

this proceeding to determine support for

non-rural carriers in Alaska and insular

areas.

10. Hybrid Models. The Commission

will determine the design components

of the platform and input values that

will most accurately estimate carriers’

forward-looking economic costs for the

mechanism that it will adopt. Although

they share some design features, BCPM

and Hatfield differ in many respects and

possess different strengths and

weaknesses. The Commission

encourages the proponents of Hatfield

and BCPM to refine their models by

incorporating portions of the other’s

model where appropriate. Whether the

Commission chooses to create its own

model or whether it relies upon a model

developed by the industry, the

Commission seeks comment on the

ramifications of combining features of

the two models. The Commission seeks

comment on whether alternative

platform components or assumptions,

not currently included in either Hatfield

or BCPM, could be incorporated into

Hatfield, BCPM, or a hybrid model

created by the Commission.

B. Platform Design Components and

Input Values

i. Customer Location

11. Geographic Unit. A geographic

unit is the size of the serving area over

which cost is calculated. The

Commission seeks comment on whether

it should adopt an area smaller than a

CBG as the geographic unit for customer

location and cost calculation in the

platform design. The Commission seeks

comment on whether using CBGs, CBs,

or grid cell data would allow the

Commission to calculate the cost of

providing universal service more

accurately and would better target

support. Advocates of using geographic

units smaller than CBGs should also

discuss the technical feasibility of their

proposal and the availability of relevant

data at the proposed level of detail.

12. Distribution of Customers.

Customers may be clustered in towns,

spread uniformly over regions, or

otherwise distributed across CBGs. In

dealing with the distribution of

customers, the models use algorithms to

project the customer distribution within

a geographic unit in order to estimate

the cost of the outside cables required

to serve customers. In general, BCPM

uses a uniform customer distribution

algorithm, which assumes that

customers are spread evenly across an

entire CBG. In rural areas, BCPM

eliminates areas from the CBG data that

are more than 500 feet from any road,

based on its assumption that households

are located within 500 feet of a road.

Several commenters criticized the

assumption present in BCPM that

households are evenly distributed

across a geographic unit. In contrast to

BCPM, Hatfield uses a clustering

algorithm. The Hatfield algorithm first

removes the empty space within each

CBG by removing CBs when census data

indicates that they do not contain any

population. In low-population-density

CBGs, the Hatfield algorithm clusters 85

percent of the population within a town.

For dense areas, Hatfield uses a

clustering algorithm that establishes two

clusters if more than fifty percent of the

CBG is empty and four clusters where

50 percent or less of the CBG is empty.

Finally, in CBGs where the line density

is so high that customer locations must

necessarily be ‘‘stacked,’’ the Hatfield

algorithm assumes that the population

lives in multi-unit dwellings.

13. The Commission tentatively

concludes that a clustering algorithm

would more accurately distribute

customers within some CBGs and would

consequently generate more accurate

estimates of loop length and, therefore,

of the cost of the outside plant.

Furthermore, the Commission

tentatively concludes that, if a model

presumes that customers are clustered,

the accuracy of the position of the

population cluster relative to the wire

center is important to an accurate

prediction of the necessary support

amount. The Commission therefore

tentatively concludes that the selected

mechanism should calculate population

clusters’ proximity to wire centers with

more precision that the models

currently permit. The Commission seeks

comment on these tentative conclusions

and also seeks comment on how

BCPM’s uniform distribution algorithm

and Hatfield’s clustering algorithm

could be modified to provide more

accurate information regarding the

locations of customers. The Commission

also seeks comment on how to improve

both models’ accuracy in assigning

CBGs to serving wire centers.

14. The Commission seeks comment

on whether, instead of the methods

currently used by either Hatfield or

BCPM, an alternate method should be

used to locate population in carrier

serving areas. Generally, the

Commission seeks comment on whether

loop lengths should be more closely

linked with actual loop statistics. The

Commission seeks comment on whether

a method that combines actual

geographical maps, census data, and the

location of the serving wire centers

would estimate customer location, and

therefore costs, better than the

algorithms currently used by the

models. The Commission specifically

seeks comment on whether the

following proposal would be a more

accurate method by which to estimate

the distribution of customers. In relation

to locating residential population, the

Commission notes that census data

provide the number of households

within a CB as well as internal point

coordinates and polygon vertex

coordinates. The Commission seeks

comment on what currently available

commercial mapping software, if any,

could be used to identify the location of

customers in all CBs within a service

territory. The Commission further seeks

comment on whether a model should

impose a uniform grid over an ILEC’s

service territory in order to create

subscriber population clusters,

determining the size of the cluster

according to the technology constraints

of electronic systems that are used to

provide universal service, such as

Asymmetric Digital Subscriber Line

(ADSL) and High bit rate Digital

Subscriber Line (HDSL) technologies,

rather than basing cluster sizes on

census data. The Commission seeks

comment on whether this approach is

more representative of the engineering

design of a network because it does not

rely on census-mapping conventions.

The Commission seeks comment on

whether this proposal could be

incorporated into either Hatfield, BCPM,

or any hybrid model that the

Commission may develop. The

Commission also seeks comment on

whether any alterations in either BCPM

or Hatfield would be necessary to

incorporate this proposal into either

model or a potential hybrid model.

15. Line Count. The selected

mechanism must estimate a line count

at the wire center, CBG, or CB level if

the Commission concludes that cost

estimates should be developed at those

levels. Both models use a ‘‘closing

factor,’’ i.e. a ratio of line counts, as

provided by the NECA and ARMIS

databases, compared to the models’

estimates, to adjust the estimates

produced by their algorithms to reflect

the actual ILEC line counts. Neither

model clearly discloses the closing

factors for all lines that are used in their

line count calculations. Because reliable

line counts are necessary for
42460 Federal Register / Vol. 62, No. 152 / Thursday, August 7, 1997 / Proposed Rules

determining accurate cost estimates, it

appears that reasonable estimates of the

number of lines in each CBG, CB, or grid

cell are necessary to calculate universal

service support, even if the Commission

decides to provide support on a wire

center basis. The Commission

tentatively concludes that the sizes and

uses of models’ closing factors should

be evident to the user so that they may

be evaluated. The Commission seeks

comment on whether the selected

mechanism should adopt a maximum

closing factor of 10 percent, as suggested

by the state members of the Joint Board.

The Commission also seeks comment on

whether other data sources could be

used to enhance the models’ algorithms

or be used to create an alternative

method for determining line counts. The

Commission seeks comment on

whether, for example, the Commission

should assign business lines to

geographic units by using commercially

produced maps that give the coordinates

of all businesses located in the U.S.

along with their employment by

standard industrial classification (SIC)

code. The Commission seeks comment

on whether such a method should use

some multiple of the employment data

to estimate the number of business lines

in each grid block. Alternatively, the

Commission seeks comment on whether

there are any databases that use zip code

information or precise latitude and

longitude (geo-coding) information that

could be used to improve the line-count

estimation process.

16. Interested parties may file

comments on all issues regarding

customer location on or before

September 2, 1997, and reply comments

on or before September 10, 1997.

ii. Outside Plant Investment

17. Outside plant investment includes

every part of an ILEC’s network

infrastructure connecting the wire

center to customer locations.

18. Plant Mix. The outside plant

consists of a mix of aerial, underground,

and buried cable. It appears that while

both models have made many

improvements, the failure of both BCPM

and Hatfield to incorporate terrain

factors into their plant-mix tables

seriously undermines the accuracy of

the outside plant costs predicted by

each model. The Commission finds that

an efficient carrier will vary its plant

mix according to the population density

of an area. The Commission, therefore,

tentatively concludes that the

assignment of plant mix defined by the

selected mechanism should reflect both

terrain factors and line density zones.

Specifically, the Commission tentatively

concludes that relatively more feeder

and distribution cable should be

assigned to aerial installation for all

population density groups in wire

centers characterized by ‘‘hard rock’’

conditions than those in wire centers

with other terrain conditions. The

Commission seeks comment on these

tentative conclusions. The Commission

also seeks comment on identifying the

terrain that would lead an efficient firm

to minimize forward-looking costs by

using aerial plant and on whether

climate conditions, such as the

possibility that a hurricane will destroy

aerial plant, will affect an efficient

carrier’s decision to deploy aerial plant.

19. The Commission directs the

models’ proponents to justify fully the

default values they selected for their

outside-structure plant mix, noting that

recent installations of outside structure

may more closely meet forward-looking

design criteria than do historical

installations. The Commission seeks

comment on these issues and

encourages parties to file documentation

supporting suggestions to alter either

Hatfield or BCPM’s input values or

default assumptions concerning plant

mix. The Commission also seeks

comment on the input values that will

accurately reflect the level of impact

that varying terrain conditions have on

costs.

20. Installation and Cable Costs. The

forward-looking economic cost

mechanism must estimate the cost of

installing wire and cable facilities as

part of the overall cost of building a

network to provide supported services.

These costs can be expected to vary by

soil type and line density zone. The

default values for installation costs

included in BCPM and Hatfield

represent their proponents’ estimates of

the total cost of installing wire and cable

facilities. Both BCPM and Hatfield make

assumptions about soil conditions and

population density to estimate the cost

of installing buried and underground

cable. Specifically, the models use

different numbers of density zones. It

appears that a greater number of density

zones helps identify high and low cost

areas more accurately; too many density

zones, however, would make the data

calculations too complex. The

Commission tentatively concludes that

the selected mechanism should specify

costs for installation of aerial cable,

buried cable, and underground cable

that incorporate terrain factors and line

density zones. The Commission seeks

comment on this tentative conclusion.

21. In the Majority State Members’

Second Report, state members expressed

preference for BCPM’s approach

because they found that Hatfield’s

approach did not adequately account for

the effect of different types of

installation activity on outside plant

costs, and because using a multiplier

will overestimate costs in some areas

and underestimate costs in other areas.

Based on the majority state member’s

recommendations, the Commission

tentatively concludes that the selected

mechanism should adopt BCPM’s

approach of prescribing additional costs

to account for additional expenses

caused by difficult terrain, rather than

Hatfield’s approach of using cost

multipliers. The Commission seeks

comment on this tentative conclusion,

on how this tentative conclusion would

affect cost estimates, and on the

appropriate input values for such

additional expenses. In addition, the

Commission seeks comment on the

majority state members’ conclusion that

it is not reasonable to assume, as

Hatfield does, that an installer could

simply increase its use of distribution

cable by 20 percent to avoid burying

cable in difficult soil conditions.

22. The Commission tentatively

concludes that the selected mechanism

should specify costs per foot for conduit

installation that vary by line density

zone, as proposed in both BCPM and

Hatfield. The Commission also

tentatively concludes that the

mechanism should define density zones

based on lines per square mile, as in

Hatfield. The Commission seeks

comment on these tentative conclusions

and on the number of density zones that

should be included in the selected

mechanism. The Commission invites

comment on how to calculate forwardlooking economic costs of conduit

installation and welcomes data on any

recent conduit installations, including

conduit installed for purposes other

than the construction of telephone

networks.

23. The Commission tentatively

concludes that materials and

installation costs should be separately

identified by both density zone and

terrain type. The Commission seeks

comment on the default input values

that the selected mechanism should use,

and asks parties to present supporting

cost data. The Commission seeks

comment on the accuracy of the values

in BCPM’s cost tables and of Hatfield’s

cost multipliers, and encourages parties

to submit company records or other

industrial data to support their position.

The Commission also seeks comment on

the cost of installing aerial, buried, and

underground cable, regardless of

whether it is used to provide telephone

service, and encourage parties to submit

detailed cost data on any recent cable

installations. In addition, the

Commission seeks comment on whether
Federal Register / Vol. 62, No. 152 / Thursday, August 7, 1997 / Proposed Rules 42461

it would be possible to use national

statistical averages of contractor

construction prices and independent

verification of the cost of installation of

distribution plant to verify these costs.

The Commission also seeks comment on

whether a labor cost variable should be

incorporated into the selected

mechanism.

24. Because the Commission has

received no documentation confirming

that feeder and distribution cable

installation costs should differ, the

Commission tentatively concludes that

the selected mechanism will adopt

Hatfield’s assumption that such costs

are identical. The Commission seeks

comment on this tentative conclusion

and encourage parties to submit

documentation in support of their

positions.

25. Drops. A drop is the connection

between a residence or business and the

distribution cable. In BCPM and

Hatfield, several cost elements are

combined under the general heading of

drops. These cost elements include the

cost of the copper or fiber loop that

extends from the distribution cable to

the residence or business, the terminal

and splice investment, and the pedestal

costs. BCPM estimates the drop length

as the distance from the corner of the

residential lot to the center of the

residential lot. Hatfield assigns predetermined loop lengths for each of

seven density zones. The lengths are

longer in low density areas than

elsewhere. In general, the drop lengths

are longer in BCPM than in Hatfield.

26. The Commission seeks comment

on whether the selected mechanism

should estimate drop lengths or should

incorporate predetermined drop length

assumptions. The Commission also

seeks comment on the accuracy of

Hatfield’s assumed drop lengths.

Because an efficient carrier’s network

must include drops in order to provide

the supported services, the Commission

tentatively concludes that the selected

mechanism will determine the forwardlooking economic cost of drops,

including installation, terminal, splice,

and pedestal costs. The Commission

invites comment on the accuracy of the

estimated costs of these items under the

proposed models.

27. Structure Sharing. Structure

sharing describes the practice of sharing

facilities such as poles, trenches, and

conduits with other utilities. BCPM

assumes that an efficient

telecommunications carrier will not

benefit very much from sharing. BCPM’s

default input values assign between 50

and 100 percent of the costs of the poles

and between 80 and 100 percent of the

cost of trenches and conduits used by

telephone companies to those

companies. The Hatfield model assumes

utilities will engage in substantial

sharing; for the most part, Hatfield’s

default input values assign between 25

percent and 50 percent of the costs of

shared facilities to telephone

companies. Both models alter the

percentages of costs they assume will be

shared depending on the type of

structure (buried, conduit, or aerial) and

on the line density zone.

28. Because it appears that an efficient

carrier would vary its sharing levels

according to installation activity and

terrain, as BCPM assumes, the

Commission tentatively concludes that

the selected mechanism should adopt

BCPM’s categories for installation

activities and terrain conditions. The

Commission seeks comment on BCPM’s

estimates for the relative frequency for

each type of installation activity. The

Commission tentatively concludes that

the selected mechanism should also

include line density zones in its

estimates of sharing and the

Commission seeks comment on

whether, because it tentatively

concludes above that Hatfield’s line

density zones are superior, the selected

mechanism should use Hatfield’s line

density zones to estimate sharing. The

Commission seeks comment on how

BCPM’s assumptions would need to be

altered to accommodate Hatfield’s line

density zones.

29. The Commission tentatively

concludes that Hatfield incorrectly

assumes that carriers benefit from

sharing for such cable and that the

selected mechanism will assign 100

percent of costs to the telephone

company for cable that is buried using

a cable plow. The Commission also

tentatively concludes that Sprint’s

suggested value of 66 percent is an

acceptable aggregate default input value

for the percent of costs assigned to the

telephone company for all other shared

facilities. The Commission also seeks

comment on AT&T’s contention that

changes to the regulatory climate will

increase the extent to which carriers are

required or are willing to share

structures.

30. Loop Design. The loop plant

constitutes a significant part of the

network cost that the models calculate.

The two models, however, differ greatly

in their assumptions regarding loop

design and standards. In selecting the

loop design components for the selected

mechanism, the Commission seeks to

implement its conclusion that the

mechanism employ the least-cost, mostefficient and reasonable technology for

providing the supported services and

the Act’s provision that universal

service support be sufficient. The

Commission will consider fiber-copper

cross-over point, loop standards, and

digital loop carriers in its selection

process.

31. Fiber-Copper Cross Over Point.

The fiber-copper cross-over point

determines when carriers will use fiber

cable instead of copper cable in their

feeder plant. In addition, a carrier’s

decision regarding the fiber-copper

cross-over point will affect whether that

carrier uses loading coils, because

loading coils are used to extend the

viable length of copper cable.

32. The Joint Board recommended

that the choice between fiber and

copper should reflect the least-cost

method of placing loop facilities, and

the Commission agreed in the Order that

‘‘the technology assumed must be the

least-cost, most-efficient, and reasonable

technology’’ and that the ‘‘model must

include the capability to examine and

modify the critical assumptions and

engineering principles * * *

includ[ing] * * * fiber-copper crossover points * * * ’’ Neither the BCPM

nor Hatfield proponents have submitted

studies showing whether their crossover points are designed to reflect the

Commission’s least-cost criterion.

33. The Commission tentatively

concludes, based on the comments of

NCTA/ETI and the recommendation of

the majority state members of the Joint

Board, that the BCPM maximum crossover default value should be set at

18,000 feet rather than 12,000 feet, and

seek comment on this tentative

conclusion. The Commission seeks

comment on whether the BCPM fiber/

copper cross-over point can also be set

at 18,000 feet when the copper loop

length is extended to 18,000 feet. The

Commission also seeks comment on the

impact on the costs for digital loop

carriers of their decision regarding the

appropriate fiber-copper cross-over

point.

34. Loop Standards. WorldCom

contends that the Commission should

specify one of more loop design

standards in order to create greater

certainty in loop modeling process.

WorldCom states that the two loop

standards that the Commission should

consider are the Revised Resistance

Design (RRD) and the Carrier Serving

Area (CSA) Standards. WorldCom

contends that because the CSA standard

will also enable LECs to offer video

dialtone services, which would have

significant commercial value, the

universal service fund should not pay

for LEC entry into this new market

against competitors that would not

receive universal service funding. The

Commission seeks comment on whether
42462 Federal Register / Vol. 62, No. 152 / Thursday, August 7, 1997 / Proposed Rules

it should adopt any loop design

standards in the forward-looking

economic cost mechanism, and if so,

which standard should be adopted.

35. Digital Loop Carriers. Digital loop

carriers (DLCs) connect fiber feeder

cables and copper loops. DLCs

transform electric signals carried on the

copper loops into optical signals carried

on fiber lines and vice versa. Most large

DLCs can assign multiple subscriber

lines to a single electronic channel

rather than assigning one channel per

subscriber line. Both Hatfield and the

BCPM assume that, when they are to be

used, DLCs would be one of two sizes,

depending upon the number of

subscriber lines connected to them.

BCPM assumes the larger DLC will be

used for more than 672 subscriber lines.

Hatfield, by contrast, switches to the

larger DLC at 384 subscriber lines, but

allows adjustment of this level as a

variable.

36. Although both Hatfield and BCPM

assume extensive deployment of DLCs,

their cost estimates differ significantly.

The Commission seeks comment on the

models’ assumptions regarding the

number of subscriber lines that should

trigger the use of a large DLC. The

Commission also requests comment on

whether the models should consider use

of DLCs of more than two sizes; the

Commission particularly seeks comment

on whether DLCs smaller than those

used in the model are available and

under what circumstances such smaller

DLCs might be used. The Commission

also requests comment on the impact of

the fiber-copper cross-over on the

number and size of DLCs needed in the

network.

37. The Commission seeks comment

on whether the models should also

compare the cost of extending fiber to

fewer points in the CBG, placing larger

DLCs at those points, and running

copper to customers including the

possible additional cost of repeater

electronics on the longer copper loops.

The Commission seeks discussion of

how to calculate the forward-looking

economic cost of DLCs. Parties should

discuss whether the models’ current

inputs for these costs are reasonable, as

well as Sprint’s proposed BCPM

modification.

38. Wireless Threshold. Once the

level of support a carrier will receive is

determined, the carrier may use

whatever technology it prefers to

provide the supported services; the level

of support it receives is not dependent

upon the technology it uses. Both BCPM

and Hatfield, however, estimate the

costs of providing the supported

services using engineering assumptions

based on wireline technology.

39. In light of the contention by RUS

that wireless service does not

necessarily cost less than $10,000.00 per

loop, the Commission seeks comment

on whether the cost of a loop should be

capped at $10,000.00 in all cases. The

Commission agrees with the wireless

commenters that, to the extent practical,

the selected mechanism should estimate

the cost of providing the supported

services using wireless technology in

areas where wireless technology is

likely to be the least-cost, most efficient

technology. The Commission notes,

however, that it has received almost no

information regarding how to estimate

such costs, or the criteria that the

selected mechanism should use to

determine whether wireline or wireless

service is more economical. Thus, the

Commission seeks comment on the

feasibility of including an additional

component in the mechanism that

would compare the cost of providing

service via a wireless network with the

cost of providing service via a wireline

network and would choose the lowestcost technology to calculate the costs of

providing the supported services. The

Commission seeks comment on

whether, because wireless companies

must currently determine whether it is

economical for them to enter a

particular market, wireless companies

have already developed such models.

The Commission strongly encourages

commenters supporting the inclusion of

engineering assumptions regarding

wireless technology in the mechanism

to submit models or other assumptions

that they believe should be included.

The Commission further encourages

commenters to submit data about the

cost and types of wireless networks and

their components in support of their

suggestions, and reminds commenters

that any wireless component that might

be added to the selected mechanism

must also meet the Commission’s

criteria.

40. The Commission notes that BCM

was first filed with the Commission in

December 1995. The Commission seeks

comment on the length of time

necessary to develop a mechanism that

compares the cost of wireless

engineering with the cost or wireline

engineering. Specifically, the

Commission seeks comment on whether

modeling wireless technology would be

less complex than modeling wireline

technology, and therefore whether a

wireless platform could be developed by

December 1997, and a complete

mechanism, including inputs, by

August 1998, in accordance with the

Commission’s schedule. In the

alternative, the Commission seeks

comment on whether the development

of a competitive bidding mechanism

would be a better way to capture the

differing costs between wireline and

wireless technology.

41. Because the Commission is

uncertain whether or not it will be able

to develop a mechanism that includes

the cost of wireless technology within

their schedule, it seeks comment on

whether basing support amounts on the

cost of wireline technology will be

consistent with section 254 and with the

Commission’s universal service goals.

The Commission tentatively concludes

that providing support based on the cost

of a wireless network to provide the

supported services would meet the

statutory directive that support be

‘‘sufficient.’’ The Commission seeks

comment on this tentative conclusion.

The Commission also seeks comment on

whether basing support solely on

wireline costs, when wireless

technology may offer a less expensive

option, would be consistent with the

Commission’s conclusion that the

mechanism should use the least-cost,

most-efficient technology available. The

Commission additionally seeks

comment on whether the models should

include assumptions that would

consider microwave, satellite, or other

non-wireline technologies in situations

where such technologies could allow

the provision of universal service more

cost-effectively than wireline

technology.

42. Additional Outside Plant Input

Value Issues. The Commission must

determine what input values it should

use for the following components of

outside plant: manholes, poles, anchors,

guys, aerial cable, and building

attachments, network interface devices,

service area interfaces, and fill factors.

The Commission seeks data

demonstrating the forward-looking

economic cost for each component,

including materials and installation, for

inclusion in the selected mechanism.

43. Poles, Anchors, Guys, Aerial

Cable, and Building Attachments. The

Commission seeks comment on what

the accurate input values should be for

the forward-looking economic cost of

materials and installation for poles. The

Commission seeks comment on the

reasonableness of the type of materials

chosen by each model. The Commission

also seeks comment on whether

installation costs for poles should vary

with terrain. Commenters should submit

cost documentation in support of their

suggested input values. The

Commission also seeks comment on

whether BCPM’s materials and

installation cost estimates for anchors

and guys are accurate, and whether
Federal Register / Vol. 62, No. 152 / Thursday, August 7, 1997 / Proposed Rules 42463

Hatfield’s pole materials and

installation costs are sufficient to cover

the cost of anchors and guys. The

Commission also seeks comment on

whether the selected mechanism should

identify separately costs for poles, guys,

and anchors. Parties should submit cost

data in support of their suggested input

values. Because both models include

them, the Commission tentatively

concludes that the selected mechanism

should include pole spacing input

values. The Commission seeks comment

on this tentative conclusion and on the

pole spacing input values that we

should use. In light of the models’

similar input values, the Commission

seeks comment on whether the models’

input values for these costs are accurate

or on whether averaging the two sets of

input values would provide an accurate

calculation of these costs. Commenters

should submit cost documentation in

support of their suggested input values.

44. The Commission tentatively

concludes that the selected mechanism

should include feeder and distribution

cable costs for both copper and fiber.

The Commission seeks comment on the

forward-looking costs of copper and

fiber cable. The Commission specifically

seeks comment on whether, as the

BCPM proponents contend, buried cable

and underground cable are less

expensive than aerial cable.

Commenters should submit cost

documentation in support of their

suggested input values.

45. Network Interface Devices. A

network interface device (NID) is a

device that connects the wiring that

belongs to a customer, and is located

inside a customer’s premises, to the

loop facilities outside a customer’s

premises. The Commission tentatively

concludes that it should prescribe NID

costs in the selected mechanism. The

Commission tentatively concludes that

Hatfield correctly separates the cost of

protection blocks from the cost of the

NID, and correctly distinguishes

between the cost of a residential NID

and a business NID, and that the

selected mechanism should incorporate

these distinctions. The Commission

seeks comment on these tentative

conclusions, and on the correct input

values that should be used for NID and

related costs. Such comments should be

supported with cost data wherever

possible.

46. Service Area Interfaces. The

Service Area Interface (SAI) is the

physical interface between distribution

and feeder cable. The SAI is usually

located outside buildings, but is located

inside buildings when the feeder plant

terminates in the basement of a high-rise

building. The Commission tentatively

concludes that the selected mechanism

should include the cost of SAI for

various cable sizes, and should assume

different costs for indoor and outdoor

cable as Hatfield does. The Commission

seeks comment on this tentative

conclusion. In light of the wide

disparities in SAI costs assigned by the

mechanisms, the Commission seeks

comment on the forward-looking

economic costs of SAIs, and encourages

parties to submit additional data on

these costs.

47. Fill Factors and Utilization. A

cable fill factor is the percentage of the

total usable capacity of cable that is

expected to be used rather than the

amount available in reserve. The

Commission notes that, over time, the

models’ estimates for fill factors have

converged. The Commission seeks

comment on the fill factor that should

be used for the selected mechanism. In

light of the similarities between the

models, the Commission seeks comment

on whether their input values are

accurate and how the differences

between the values may be reconciled.

The Commission encourages parties to

submit engineering data or other

relevant documentation in support of

the fill factor that they favor.

48. Dates for Comments on Outside

Plant Investment. Interested parties may

file comments regarding the design of

the outside plant investment

components, including the algorithms

determining plant mix, installation and

cable costs, drop lengths, structure

sharing, the fiber-copper cross-over

point, digital loop carriers, and the

wireless threshold on or before

September 24, 1997, and reply

comments on or before October 3, 1997.

Interested parties may file comments

regarding all input values regarding

outside plant input investment on or

before October 17, 1997, and reply

comments on or before October 27,

1997.

iii. Switching

49. Mix of Host, Stand-Alone, and

Remote Switches. Switches can be

designated as either host switches,

stand-alone switches, or remote

switches. Both a host switch and a

stand-alone switch can provide a full

complement of switching services

without relying on another switch. A

remote switch relies on a host switch to

supply a complete array of switching

functions and for interconnection with

other switches. Proponents of both

models claim that they detect no

difference in switching costs based on

the type of switch used, and therefore

their models do not distinguish among

the different switch types. A review of

1996 depreciation filings, however,

shows that large ILECs are purchasing

fewer host switches and more remote

switches. Suggesting that choices about

switch type could affect the total cost

computed more than the models

currently suggest, the Joint Board

expressed concern that the models did

not distinguish among types of

switches. The Commission, therefore,

tentatively concludes that the selected

mechanism should include an algorithm

that will place host switches in certain

wire centers and remote switches in

other wire centers. Based on ILECs’

decisions, as revealed in the

depreciation filings, to deploy more

remote switches, the Commission

tentatively concludes that the hostremote arrangement is more costeffective in many cases than employing

stand-alone switches. The Commission

seeks comment on this tentative

conclusion, and urges parties to provide

engineering and cost data to

demonstrate the most cost-effective

deployment of switches in general and

host-remote switching arrangements in

particular. The Commission also seeks

detailed comment describing how to

design an algorithm to predict this

deployment pattern. The Commission

seeks comment on how to obtain

information that would verify or refute

the assertion of the models’ proponents

that there is no cost difference between

host switches and remote switches.

50. Capacity Constraints. BCPM does

not include any switch capacity

limitations, but Hatfield includes a

number of switch capacity constraints.

The Commission tentatively concludes

that the selected mechanism should

assign more than one switch to a wire

center whenever the mechanism

predicts that any one of a set of capacity

constraints would be exceeded. The

Commission seeks comment on this

tentative conclusion and on what

capacity constraints the selected

mechanism should adopt. Parties are

encouraged to provide technical data to

support any proposed capacity

constraints.

51. Switch Costs. In the Order, the

Commission agreed with the state

members of the Joint Board that

estimating the switching investment

cost is a significant unresolved problem

of the cost models. Proponents of the

models are apparently having difficulty

acquiring accurate estimates of switch

costs because of the lack of public

information on those costs. The Joint

Board concluded that the convergence

of the models’ switch cost estimates

should alleviate this lack of information.

They urged the Commission and its staff

to perform additional analysis and to
42464 Federal Register / Vol. 62, No. 152 / Thursday, August 7, 1997 / Proposed Rules

obtain more reliable switch cost

information.

52. BCPM switching cost estimates are

based on the results of a survey of large

ILECs that asked ILECs to report the

switching costs they use as inputs for

ILEC Switching Cost Information

System (SCIS) model runs. BCPM model

proponents estimated a switching curve

based on the answers to the survey. The

Hatfield model combines public

information and information from other

unnamed industry sources to develop

switching cost estimates. The model

proponents fit a logarithmic curve to

three data points to determine the

relationship between switch-cost per

line and switch-line size. Hatfield

reduces the per-line cost of the switch

below the logarithmic curve by

assuming more efficient use of trunk

and line cards.

53. Pursuant to the Joint Board’s

recommendation, Commission staff

examined information regarding

switching costs from several sources.

The Commission’s found data supports

the models’ assumptions, and imply

that the current switching costs of small

companies should be higher than the

current switching costs of large

companies. The Commission, therefore,

tentatively concludes that the selected

mechanism should incorporate the

Commission staff’s estimates of

switching costs because these estimates

are based on filings with the

Commission that record actual ILEC

switch purchases. The Commission

seeks comment on this tentative

conclusion. The Commission also seeks

comment on whether there is an

alternative data source for these costs

that would provide a better estimate of

the current cost of switches. The

Commission also seeks comment on the

reasonableness of using the default

input values from BCM2, as suggested

by Sprint. In addition, the Commission

seeks comment on whether it should

incorporate the cost of growth lines into

their switching cost estimate and, if so,

how it should incorporate these costs,

and what data sources it should use for

the cost of growth lines.

54. Percent of Switch Assigned to Port

and to Provision of Universal Service.

The models differ with respect to the

percentage of switch costs they assign to

the port and the percentage of switch

costs that is assigned to the provision of

universal service. The models divide the

switch investment between two basic

functions: port and usage. BCPM uses

local-usage dial equipment minutes

(DEM) to divide switch costs between

the costs of providing universal service

and the costs of providing all other

services. In contrast, Hatfield assigns 30

percent of switch cost to port costs and

assigns all of the port costs to the cost

of providing universal service. Hatfield

further divides the 70 percent of switch

cost it assigns to usage between local

traffic and toll traffic on the basis of

conversation minutes and includes the

cost of local traffic in the cost of

universal service. The BCPM

proponents state that both models could

be adjusted so that they assign less than

100 percent of local usage to the

provision of universal service, and vary

the portion of traffic sensitive access

usage assigned to the provision of

universal service.

55. The Commission tentatively

concludes that switch costs should be

divided between line-side port and

usage costs. The Commission tentatively

concludes, however, not to adopt either

of the models’ assumptions regarding

the percentage of the switch investment

that is associated with the port. The

Commission seeks comment on these

tentative conclusions and on whether it

can use the information that ILECs must

file in response to their Access Charge

Reform Order to determine the

percentage of the switch investment to

be allocated to the port function. The

Commission also seeks comment on a

reasonable percentage of switch costs to

include in the port function.

56. In light of the difficulty in

obtaining information on switching

costs and the proportion of the switch

to be included in the port function, the

Commission seeks comment on whether

it should undertake a detailed

engineering study of several of the large

host switches currently being deployed

by ILECs (such as the Nortel DMS–100

and the Lucent 5ESS) and associated

remote switches and smaller switches

(such as the Nortel DMS–10) to

ascertain what portions of the switch

equipment are associated with the port

function. The Commission seeks

comment on whether such an

engineering study could result in useful

information about the portions of switch

that are associated with the port

function and the costs of that

equipment. The Commission also seeks

comment on whether alternative data

sources are available for the purpose of

estimating current switching cost. If so,

the Commission seeks comment on how

to obtain and use that information. The

Commission tentatively concludes that

all of the port cost and a percentage of

the usage cost are costs of providing

universal service. The Commission

tentatively concludes that the

percentage of the usage cost that should

be assigned to the cost of providing

universal service should be determined

by the amount of local usage included

in the definition of supported services

that it will adopt, as a percentage of

total usage that the model predicts on

the network. The Commission seeks

comment on these tentative

conclusions.

57. Interested parties may file

comments on the platform design

relating to switching on or before

August 8, 1997, and reply comments on

or before August 18, 1997. Interested

parties may file comments on the input

values relating to switching on or before

October 17, 1997, and reply comments

on or before October 27, 1997.

iv. Interoffice Trunking, Signaling, and

Local Tandem Investment

58. The Commission recognizes two

uses for interoffice trunking, signaling,

and local tandem facilities: (1) The

completion of local calls and (2)

transport to an IXC point of presence

(POP). Because transport for

interexchange service is not a supported

service, the selected mechanism will

estimate only the cost of interoffice

trunking, signaling, and local tandem

facilities used for the completion of

local calls. BCPM employs a simple

multiplier to estimate the portion of

total interoffice trunking, signaling, and

local tandem costs that should be

attributed to supported services.

Hatfield treats these facilities on a more

disaggregated basis. Both models allow

the user to alter the input values to their

transport equations. Because interoffice

trunking, signaling, and local tandem

facilities are an integral part of the

network necessary to provide the

supported services, the Commission

tentatively concludes that the selected

mechanism should calculate specific

cost estimates for the interoffice

elements necessary to provide these

functionalities. Because Hatfield’s

platform design can generate cost

estimates at this level of specificity, but

BCPM’s cannot, the Commission

tentatively concludes that only

Hatfield’s platform is currently adequate

in this regard. The Commission seeks

comment on this tentative conclusion

and on the accuracy of Hatfield’s

transport algorithm. The Commission

also seeks comment on the accuracy of

the specific interoffice trunking,

signaling, and local tandem input values

proposed by Hatfield.

59. Interested parties may file

comments concerning design issues on

or before August 8, 1997, and reply

comments on or before August 18, 1997.

Interested parties may file comments on

the issues relating to input values on or

before October 17, 1997, and reply

comments on or before October 27,

1997.
Federal Register / Vol. 62, No. 152 / Thursday, August 7, 1997 / Proposed Rules 42465

v. General Support Facilities

60. General support facilities (GSF)

include the investment and expenses

related to vehicles, land, buildings, and

general purpose computers. General

purpose computers comprise the largest

share of the investment and expenses in

this category; buildings also comprise a

large share. BCPM computes investment

in the GSF category for items other than

buildings as a percentage of all other

plant investment. Building investment

is computed as a percentage of

switching equipment investment. BCPM

sets GSF expenses at a fixed amount per

line based on data from its ILEC

surveys. Hatfield also segregates some

buildings from the GSF category in

computing GSF investment but, instead

of segregating all buildings as BCPM

does, Hatfield only segregates buildings

that house switches (i.e., wire center

buildings). To compute GSF investment

not related to wire center buildings that

house switches, Hatfield uses ARMIS

data to compute a ratio of ILECs’ GSF

investment to ILECs’ total-plant-inservice investment. This ratio is then

applied to the total-plant-in-service

investment that the model computes to

arrive at the amount of GSF investment

not related to wire center buildings. For

investment in wire center buildings,

Hatfield uses a table of values based on

a set number of square feet per switch

in use and number of lines served. For

GSF expenses, Hatfield uses the ARMIS

ratios described above to reach an

expense amount. The Commission

concluded in their Access Charge

Reform Order that the current allocation

of GSF costs enables ILECs to recover

through regulated interstate access

charges costs associated with the ILECs’

nonregulated billing and collecting

functions.

61. The Commission requests

comment on the appropriate platform

assumptions to compute GSF

investment and expenses. The

Commission seeks comment on how it

may remove costs for nonregulated

activities from costs for regulated

activities to incorporate the appropriate

amount of GSF investment and

expenses into a forward-looking

mechanism. The Commission also seeks

comment on whether a more accurate

GSF computation would depend on

factors tied to the cost of computers,

because much GSF investment and

expense is for general purpose

computers. Assuming GSF investment is

tied more closely to computer costs, the

Commission also seeks comment on

whether the selected mechanism should

account for the increasing use of

computers by businesses generally.

Also, because a large share of GSF

expense is attributable to the cost of

land, the Commission tentatively

concludes that GSF expenses should

vary by state with reference to

differences in land values. The

Commission requests comment on this

tentative conclusion. Commenters

should critique the assumptions

regarding GSF investment and expenses

that are currently included in BCPM

and Hatfield. Commenters advocating a

platform that requires an input ratio to

calculate GSF expenses should discuss

what that input ratio level should be,

and provide supporting cost data if

possible.

62. Interested parties may file

comments regarding GSF issues on or

before October 17, 1997, and reply

comments on or before October 27,

1997.

vi. Depreciation

63. Economic depreciation measures

the periodic reduction in the market

value of an asset over time. When

calculating depreciation expenses, the

models do not simulate the periodic

reduction in the market value of the

assets. Rather, they use ‘‘adjusted

projected lives’’ to recover the current

costs of the assets. Under this approach,

the annual depreciation charges

associated with an asset are computed

by dividing the asset’s current cost by

its adjusted projected life. A shorter life

will increase the annual depreciation

expense.

64. Commenters disagree on the

depreciation rates to be used as inputs

to the models. In light of the

Commission’s conclusion that

depreciation should be computed

within the range specified in their rules,

the Commission tentatively concludes

that it should adopt, as an input to their

forward-looking cost mechanism,

depreciation expenses that reflect a

weighted average of the rates authorized

for carriers that are required to submit

their rates to us. The Commission

requests comment on this tentative

conclusion. Further, the Commission

seeks comment on whether adjusted

projected lives should reflect the asset

lives of facilities and equipment

dedicated to providing only the

supported services or whether the asset

lives should reflect a decision to replace

existing plant with plant that can

provide broadband services.

65. As noted in the Order, the

Commission intends to issue a notice of

proposed rulemaking in the near future

to consider changes to the Commission’s

depreciation rules. The Commission

cannot be certain, however, that its new

rules will be effective in time for states

to incorporate them in their cost studies,

which they must file in February 1998.

Accordingly, the Commission

tentatively concludes that the

Commission should use the range

prescribed in the Commission’s current

rules for purposes of this proceeding,

with the understanding that it could

adjust the depreciation inputs to their

mechanism in light of the outcome of

their depreciation rulemaking. The

Commission seeks comment on this

tentative conclusion, and on whether

the states should also be permitted to

adjust their cost studies to incorporate

any changes to the depreciation rules. In

addition, the Commission asks parties to

discuss how the inclusion of

depreciation rates in the selected

mechanism would be affected by

changes in the Commission’s

depreciation rules.

66. Interested parties may file

comments on depreciation issues on or

before October 17, 1997, and reply

comments on or before October 27,

1997.

vii. Expenses

67. BCPM estimates expenses on a

per-line basis. These estimates are

derived from a survey of ILECs. BCPM

permits users to vary expense estimates

for small, medium, and large

companies, although the default values

for BCPM do not vary with company

size. In general, Hatfield estimates most

expenses based on ARMIS data,

expressed as ratios of investment. BCPM

estimates total expenses, as detailed

above, at $11.34 per line per month.

Hatfield’s estimates of total expenses

vary based on investment or other costs.

68. The Commission seeks comment

on how to establish forward-looking

expenses for the selected mechanism.

The Commission seeks comment on

which expenses should be calculated on

a per-line basis, as BCPM does, and

which should be calculated as a ratio of

investment, as Hatfield does. The

Commission tentatively concludes that

the selected mechanism should provide

the user with the capability to calculate

each category of expense based on either

line count or other investment, at the

user’s election, and request comment on

this tentative conclusion. The

Commission also seeks comment on

whether it should forecast expenses

and, if so, what forecasting technique it

should use. The Commission tentatively

concludes that users should be able to

use different expense estimates for

small, medium, and large companies, as

the BCPM allows. The Commission

seeks comment on this tentative

conclusion. The Commission also seeks

comment on whether there are
42466 Federal Register / Vol. 62, No. 152 / Thursday, August 7, 1997 / Proposed Rules

measures, other than lines and

investment to which specific expenses

should be tied.

69. The Commission seeks comment

on the accuracy of BCPM’s default input

value of $11.34 per line, and urge the

proponents of BCPM to submit the

survey upon which they base their

expense inputs. The Commission seeks

comment on how this value should vary

for small, medium, and large

companies. The Commission seeks

comment on whether the selected

mechanism should use ARMIS data,

data from a survey of ILECs, or data

from some other source.

70. Plant Specific Expenses. Plant

specific expenses include such expenses

as maintenance of facilities and

equipment expenses. BCPM estimates

the following plant specific expenses on

a per-line basis: network support (USOA

Account 6110); general support (6120);

Central Office Equipment (COE)

switching (6210); operator systems

(6220); COE transmission (6230);

information origination/termination

(6310); and cable and wire facilities

(6410). Hatfield estimates central office

switching expenses as a percentage of

investment in digital switching

equipment, and circuit equipment

expense as a percentage of investment

for all circuit equipment based on a

New England Incremental Cost Study

rather than an ARMIS ratio of expenses

to investment. Hatfield estimates NID

expense as a yearly per-line expense.

Hatfield uses separate expense ratios for

aerial, buried, and underground cable,

while BCPM uses a per-line estimate for

cable maintenance that does not vary

with the plant mix. Because the two

models differ in their listing of plant

specific expenses, the two resulting

expense estimates may not be

comparable. Neither model allows plant

specific expenses to vary with climate

or soil type.

71. BCPM’s default per-line permonth values for plant specific

expenses are: network support—$0.15;

general support—$1.20; COE

switching—$0.34; operator systems—

$0.01; COE transmission—$0.23;

information origination/termination—

$0.07; and cable and wire facilities—

$2.76. Hatfield’s default central office

switching expense factor is 2.69 percent

of digital switching investment.

Hatfield’s default circuit equipment

expense factor is 0.015 percent of circuit

equipment investment. Hatfield’s

default for NID expenses is $1.00 per

line per year. The state Joint Board

members recommend that plant specific

operating costs be calculated as a

percentage of investment, and suggest

the following percentages: 3.5 percent

for cable and wire; 2.8 percent for

central office switching; and 2 percent

for transmission. The state members

also recommend the use of nationwide

factors that do not vary by company.

72. The Commission seeks comment

identifying and discussing the complete

set of forward-looking plant-specific

expenses for which universal service

support should be available, and

discussing whether each of these

expenses is best estimated on a per-line

basis or by some other method. The

Commission seeks comment on whether

the platforms of BCPM and Hatfield are

comparable with respect to their

expense assumptions, whether one of

the two generates superior expense

calculations, or whether expense

assumptions of the two should be

combined, either in one of the two

existing models or in a hybrid model, to

estimate expenses most accurately. The

Commission seeks comment on what

specific input values for each of these

expenses should be. In addition, the

Commission seeks comment on whether

maintenance expense estimates should

depend upon plant mix and, in

particular, whether an increase in the

use of aerial cable also increases

maintenance expenses. The Commission

also seeks comment on whether plant

specific expenses should vary with such

characteristics as climate or soil type.

73. Plant Non-Specific Expenses.

Plant non-specific expenses include

such expenses as engineering, network

operations, and power expenses. BCPM

estimates the following plant nonspecific expenses on a per-line basis:

other property plant (USOA Account

6510); network operations (6530); and

access (6540). Hatfield calculates

network operations expense as a

percentage of ARMIS-reported network

operations expense. BCPM’s default perline per-month plant non-specific

expenses are: other property plant—

$0.03; network operations—$1.33; and

access $0.00. Hatfield’s default value for

network operations expense is 50

percent of ARMIS-reported network

operations expense. Hatfield contends

that this percentage is reasonable

because forward-looking network

operations expenses are significantly

lower than ARMIS-reported expenses

for network operations. Hatfield asserts

that ARMIS-reported expenses reflect

excessive staffing at end offices. The

Commission seeks comment on the

complete set of forward-looking plant

non-specific expenses that should be

covered by universal service support,

and whether the Commission should

estimate each of these expenses on a

per-line basis or by some other method.

The Commission also seeks comment

discussing what specific input values

for each of these expenses should be.

74. Customer Services. Customer

services expenses include marketing,

billing, and directory listing expenses.

BCPM estimates the following customer

services expenses on a per-line basis:

marketing (USOA Account 6610) and

services (6620). Hatfield estimates the

cost of bill generation and billing

inquiries for end users as a fixed, perline expense. Hatfield includes a perline directory listing expense and

assigns local number portability

expenses on a per-line basis. Hatfield

also assigns carrier-to-carrier customer

service expenses (associated with the

provision of unbundled network

elements) on a per-line basis. Hatfield

excludes marketing (USOA Account

6610) entirely. BCPM’s per-line permonth default values for customer

services expenses are: marketing—$0.35

and services—$2.42. State Joint Board

members suggest that BCPM’s services

expenses should be reduced 29 percent

to $1.75 to exclude operator services

and directory assistance. They also

recommend excluding marketing

expenses from the cost of supported

services. Hatfield’s default per-line

customer service expenses, which are

based on ARMIS data, are: billing—

$1.22 per month; directory listing—

$0.15 per month; local number

portability—$0.25 per month; and

carrier-carrier customer service—$1.69

per month. The Commission seeks

comment identifying and discussing the

complete set of forward-looking

customer service expenses that should

be covered by universal service support,

and whether each of these expenses is

best estimated on a per-line basis or by

some other method. The Commission

also seeks comment on specific input

values for each of these expenses.

75. Corporate Operations. Corporate

operations expenses include general,

administrative, human resources, legal,

and accounting expenses. BCPM

estimates the following corporate

operations expenses on a per-line basis:

executive and planning (USOA Account

6710); general and administrative

(6720); and uncollectibles (6790).

Hatfield estimates corporate overhead

expense as a percentage of total capital

costs and operations expenses. BCPM’s

per-line per-month default input values

for corporate operations expenses are:

executive and planning—$0.14; general

and administrative—$2.15; and

uncollectibles—$0.17. Hatfield’s default

corporate overhead expense is 10.4

percent of the total of capital costs and

operations expenses. The Commission

seeks comment identifying and

discussing the complete set of forward-
Federal Register / Vol. 62, No. 152 / Thursday, August 7, 1997 / Proposed Rules 42467

looking corporate operations expenses

that should receive universal service

support, and whether each of these

expenses is best estimated on a per-line

basis or by some other method. The

Commission seeks comment on what

the specific input values for each of

these expenses should be.

viii. Other

76. Interested parties may file

comments on the issues relating to

expenses on or before October 17, 1997,

and reply comments on or before

October 27, 1997.

77. The Commission also seeks

comment on any other issues related to

the platform and inputs to the forwardlooking cost models that are currently

under consideration. Any such

comments should be supported by

specific data and analysis of the models.

The Commission seeks comment on

whether it should develop a method to

adjust the costs estimated by their cost

mechanism on an annual basis, and if so

how it should do so. The Commission

seeks comment on whether the

adjustment mechanism should be tied to

inflation and include an offset similar to

their price cap mechanisms.

Alternatively, the Commission seeks

comment on whether it should use the

actual cost estimates provided by the

selected mechanism for a fixed number

of years, and re-evaluate and modify the

mechanism at the end of that period.

Interested parties may file comments on

these issues on or before October 17,

1997, and reply comments on or before

October 27, 1997.

C. Support Area

78. A support area is the geographic

area used to determine universal service

support levels. The support area need

not be the same as the geographic area

used by the selected mechanism to

calculate the cost of providing the

supported services. The support area

may be an aggregation of those

geographic areas used to determine cost.

For example, Hatfield uses CBGs to

determine cost and density zones,

which are an aggregation of CBGs with

similar line densities, to calculate

support. In the Order, the Commission

concluded that support areas should be

no larger than wire centers. While the

Commission agreed with the Joint Board

that the use of smaller support areas

would allow for better targeting of

support and minimize the possibility of

‘‘cream-skimming,’’ the Commission

was uncertain that any mechanism that

it could adopt would accurately predict

the number of customers in such small

areas.

79. To determine the level of support

a particular carrier should receive, the

Commission must know the number of

lines in the support area. Carriers

currently do not associate lines with a

particular CBG, CB, or grid cell. They

do, however, keep records of the

number of lines served by each wire

center. The Commission seeks comment

on whether it should provide support

according to geographic areas other than

the geographic areas used to calculate

cost. The Commission tentatively

concludes that the ability of carriers to

associate lines with CBGs, or other

small areas will determine how the

Commission defines support areas in

the future. The Commission seeks

comment on the feasibility of geocoding households, as proposed by SBC

and Sprint. Interested parties may file

comments on these issues on or before

October 17, 1997, and reply comments

on or before October 27, 1997.

II. Support for Local Usage

80. The Joint Board recommended

that support for voice-grade access to

the public switched network should

include a local usage component. In the

Order, the Commission agreed with the

Joint Board that the Commission should

determine the measure of local usage to

be supported by federal universal

service mechanisms. The Commission

concluded that ‘‘consumers might not

receive the benefits of universal service

support unless we determine a

minimum amount of local usage that

must be included within the supported

services’’ because carriers receiving

universal service support might charge

high per-minute rates that prevent

service from being affordable. The

Commission also observed that, unless

the definition of universal service

includes a usage component, carriers

using technologies (such as wireless)

that can provide basic access relatively

inexpensively but that entail higher

usage-based costs would have an

artificial advantage over carriers using

technologies that have higher basic

access costs and lower usage-based

costs.

81. The Commission tentatively

concludes that a local usage component

should be included in the definition of

universal service to ensure that

customers realize the benefits of

universal service support even if they

cannot afford high per-minute charges.

Failing to include a local usage

component in the definition of universal

service would create a bias in favor of

carriers (such as wireless carriers) that

provide service with facilities that allow

relatively inexpensive access to the

network but that have higher usage

costs. This bias would be exacerbated if

the Commission later set support levels

using competitive bidding. Carriers able

to provide relatively inexpensive access

could underbid competitors, yet

customers might not receive affordable

service because of high usage-based

charges.

82. The Commission seeks comment

on the level of local usage that should

be included. The Commission could

prescribe this level to be the number of

minutes per month used by the average

customer subscribing to flat-rate local

service. Alternatively, the Commission

could define the level as the product of

the average number of calls that are

included in carriers’ measured-rate

service and the average call length. The

Commission seeks comment on other

potential ways to calculate the local

usage component. The Commission also

seeks comment on whether it should

consider the impact of increased

Internet usage on average call length

and, if so, how. Finally, the Commission

requests comment on whether the local

usage component should differ for

residential and business service.

Commenters submitting usage data are

requested to segregate those data

between residential and business users.

83. The Commission also seeks

comment on the connection, if any,

between the amount of usage that the

models assume to determine

specifications such as switch size and

average cost per minute, and the amount

of usage that should be supported as

part of the definition of universal

service. The Commission tentatively

concludes that no necessary connection

exists between these two measures of

usage because they serve different

purposes within the support

mechanisms. For example, Hatfield

currently determines per-minute

switched cost based on all usage (local

and toll), but determines support based

only on local usage. Similarly, the

Commission tentatively concludes that

the forward-looking economic cost

methodology that it will employ should

consider all local usage to determine

switching capacity and to compute

average cost per minute, and that it

should determine the amount of local

service to include in the definition of

universal service without regard to these

other measures of usage. Interested

parties may file comments on all of the

issues relating to the level of local usage

on or before October 17, 1997, and reply

comments on or before October 27,

1997.
42468 Federal Register / Vol. 62, No. 152 / Thursday, August 7, 1997 / Proposed Rules

1See 5 U.S.C. 601 et seq. The RFA was amended

by the ‘‘Small Business Regulatory Enforcement

Fairness Act of 1996’’ (SBREFA), Title II of the

Contract with America Advancement Act of 1996,

Public Law 104–121, 110 Stat. 847 (1996)

(CWAAA).

2 5 U.S.C. 605(b).

3 5 U.S.C. 601(3) (incorporating by reference the

definition of ‘‘small business concern’’ in 15 U.S.C.

632). Pursuant to 5 U.S.C. 601(3), the statutory

definition of small business applies ‘‘unless an

agency after consultation with the Office of

Advocacy of the Small Business Administration

and after opportunity for public comment,

establishes one or more definitions of such term

which are appropriate to the activities of the agency

and publishes such definitions in the Federal

Register.’’

4 15 U.S.C. 632.

5 13 CFR 121.201.

6Order at paras. 885, 892, 944–50. See also 13

CFR 121.902(b)(4).

7We define ‘‘rural’’ as those carriers that meet the

statutory definition of a ‘‘rural telephone company’’

set forth at 47 U.S.C. 153(37).

8Order at paras. 885, 944–50.

9 47 U.S.C. 605(b). 10Cf. 47 CFR § 1.49(b).

Procedural Matters

III. Ex Parte Presentations

84. This is a non-restricted noticeand-comment rulemaking proceeding.

Ex parte presentations are permitted,

except during the Sunshine Agenda

period, provided that they are disclosed

as provided in the Commission’s rules.

See generally 47 CFR 1.1202, 1.1203,

1.1206.

IV. Initial Regulatory Flexibility Act

Certification

85. Section 603 of the Regulatory

Flexibility Act (RFA) 1 requires an Initial

Regulatory Flexibility Analysis (IRFA)

in notice and comment rulemaking

proceedings, unless the Commission

certifies that ‘‘the rule will not, if

promulgated, have a significant

economic impact on a substantial

number of small entities.’’ 2 It further

requires that the IRFA describe the

impact of the proposed rule on small

entities. The RFA generally defines

‘‘small entity’’ as having the same

meaning as the term ‘‘small business

concern’’ under the Small Business Act,

15 U.S.C. 632.3 The Small Business

Administration (SBA) defines a ‘‘small

business concern’’ as one that ‘‘(1) is

independently owned and operated; (2)

is not dominant in its field of operation;

and (3) meets any additional criteria

established by the SBA.4 Section

121.201 of the Small Business

Administration regulations defines a

small telecommunications entity in SIC

code 4813 (Telephone Companies

Except Radio Telephone) as any entity

with 1,500 or fewer employees at the

holding company level.5 The

Commission has determined that the

RFA is inapplicable to this FNPRM

because the non-rural LECs affected by

the proceeding do not meet these

criteria.

86. The Commission has not adopted

a definition of a ‘‘small LEC.’’ Out of an

abundance of caution, however, the

Commission did include rural LECs in

the regulatory flexibility analysis

accompanying the Order as if rural LECs

fell within the definition of ‘‘small

entity’’ for regulatory flexibility

purposes.6 The Commission notes that

the term ‘‘rural’’ LEC, which is

statutorily defined, is based on the

population density of and number of

access lines in the area served.7 For

purposes of this certification, however,

the Commission need not make a

conclusive finding on whether the rural

LECs are small entities for purposes of

the RFA, for even if rural LECs were

‘‘small entities’’ under the RFA, the

Commission would still certify that no

regulatory flexibility analysis is

necessary because none of the proposals

in the FNPRM, if adopted, would affect

rural LECs. This FNPRM seeks comment

only on the mechanisms the

Commission should use to estimate the

forward-looking economic costs that

non-rural LECs would incur to provide

universal service in rural, high cost and

insular areas. In this FNPRM, the

Commission does not consider or adopt

a forward-looking economic cost

mechanism for rural LECs. As discussed

in the Final Regulatory Flexibility

Analysis in the Order, the Commission

has permitted rural carriers to shift to a

forward-looking economic cost

mechanism more gradually than larger

carriers.8

87. The Commission therefore

certifies, pursuant to section 605(b) of

the RFA, that these proposals would not

have significant economic impact on a

substantial number of small entities.9

The Commission will send a copy of

this Certification, along with this

FNPRM, in a report to Congress

pursuant to the Small Business

Regulatory Enforcement Fairness Act of

1996, 5 U.S.C. 801(a)(1)(A), and to the

Chief Counsel for Advocacy of The

Small Business Administration, 5 U.S.C.

605(b). A copy of this initial

certification will also be published in

the Federal Register.

C. Deadlines and Instructions for Filing

Comments

88. Pursuant to applicable procedures

set forth in §§ 1.415 and 1.419 of the

Commission’s rules, 47 CFR §§ 1.415

and 1.419, interested parties may file

comments concerning the platform

designs of the switching, interoffice

trunking, signaling, and local tandem

components must be submitted on or

before August 8, 1997, and parties

should submit corresponding reply

comments on or before August 18, 1997.

Comments concerning the platform

design features determining customer

location, including the geographic unit

for cost calculations and the algorithm

measuring customer distribution and

line counts, on or before September 2,

1997, and reply comments regarding

these components should be submitted

on or before September 10, 1997.

Comments discussing the platformdesign issues relating to outside plant

investment, including the algorithms

determining plant mix, installation and

cable costs, drop lengths, structure

sharing, the fiber-copper cross-over

point, digital loop carriers, and the

wireless threshold must be submitted on

or before September 24, 1997, with

reply comments submitted on or before

October 3, 1997. Comments discussing

all platform issues not otherwise

addressed, including the components

addressing general support facilities,

expenses, and support areas, and all

input values issues must be submitted

by October 17, 1997, with reply

comments due on or before October 27,

1997.

89. The Commission directs all

interested parties to include the name of

the filing party and the date of the filing

on each page of their comments and

reply comments. Comments and reply

comments also must clearly identify the

specific portion of this Further Notice of

Proposed Rulemaking to which a

particular comment or set of comments

is responsive. If a portion of a party’s

comments does not fall under a

particular topic listed in the outline of

this Notice, such comments must be

included in a clearly labelled section at

the beginning or end of the filing.

Irrespective of the length of their

comments or reply comments, parties

shall include a table of contents in their

documents.10

90. Parties should send their

comments or reply comments to Office

of the Secretary, Federal

Communications Commission, 1919 M

Street, N.W., Room 222, Washington,

D.C. 20554. Parties should also file one

copy of any documents filed in this

docket with the Commission’s copy

contractor, International Transcription

Services, Inc., 1231 20th Street, N.W.,

Washington, D.C. 20036. Comments and

reply comments will be available for

public inspection during regular

business hours in the FCC Reference

Center, 1919 M Street, N.W., Room 239,

Washington, D.C. 20554. Commenters
Federal Register / Vol. 62, No. 152 / Thursday, August 7, 1997 / Proposed Rules 42469

may also file informal comments or an

exact copy of formal comments

electronically via the Internet at <http:/

/gullfoss.fcc.gov/cgi-bin/websql/cgi-bin/

comment/comment.hts>. Only one copy

of electronically-filed comments must

be submitted. A commenter must note

whether an electronic submission is an

exact copy of formal comments on the

subject line. A commenter also must

include its full name and Postal Service

mailing address in its submission.

Parties are also asked to submit their

comments and reply comments on

diskette. Such diskette submissions are

in addition to and not a substitute for

the formal filing requirements addressed

above. Parties submitting diskettes

should submit them to Sheryl Todd of

the Common Carrier Bureau, 2100 M

Street, N.W., Room 8611, Washington,

D.C. 20554. Such a submission should

be on a 3.5 inch diskette formatted in an

IBM compatible form using WordPerfect

5.1 for Windows or compatible software.

The diskette should be submitted in

‘‘read only’’ mode. The diskette should

be clearly labelled with the party’s

name, proceeding, type of pleading

(comment or reply comments) and date

of submission. Each diskette should

contain only one party’s comments in a

single electronic file. The diskette

should be accompanied by a cover

letter.

Ordering Clauses

91. It is ordered, pursuant to Sections

1, 4(i) and (j), and 254 of the

Communications Act as amended, 47

U.S.C. §§ 151, 154(i), 151(j), and 254,

that the Further Notice of Proposed

Rulemaking is hereby adopted and

comments are requested as described

above.

92. It is further ordered, pursuant to

§§ 0.91 and 0.291 of the Commission’s

rules, 47 CFR 0.91, 0.291, that authority

is delegated to the Common Carrier

Bureau to issue orders in this

proceeding directing model proponents

to make certain changes in their models

in order for those models to remain

under consideration in this proceeding.

List of Subjects

47 CFR Part 54

Universal service.

47 CFR Part 69

Communications common carriers.

Federal Communications Commission.

William F. Caton,

Acting Secretary.

Attachment A, Service List

The Honorable Reed E. Hundt, Chairman,

Federal Communications Commission,

1919 M Street, NW., Room 814,

Washington, DC 20554

The Honorable Rachelle B. Chong,

Commissioner, Federal Communications

Commission, 1919 M Street, NW., Room

844, Washington, DC 20554

The Honorable Susan Ness, Commissioner,

Federal Communications Commission,

1919 M Street, NW., Room 832,

Washington, DC 20554

The Honorable James H. Quello,

Commissioner, Federal Communications

Commission, 1919 M Street, NW., Room

802, Washington, DC 20554

The Honorable Julia Johnson, State Chair,

Chairman, Florida Public Service

Commission, 2540 Shumard Oak Blvd.,

Gerald Gunter Building, Tallahassee, FL

32399–0850

The Honorable David Baker, Commissioner,

Georgia Public Service Commission, 244

Washington Street, SW., Atlanta, GA

30334–5701

The Honorable Sharon L. Nelson, Chairman,

Washington Utilities and Transportation

Commission, 1300 South Evergreen Park

Dr. SW., P.O. Box 47250, Olympia, WA

98504–7250

The Honorable Laska Schoenfelder,

Commissioner, South Dakota Public

Utilities Commission, State Capitol, 500

East Capitol Street, Pierre, SD 57501–5070

Martha S. Hogerty, Missouri Office of Public

Council, 301 West High Street, Suite 250,

P.O. Box 7800, Jefferson City, MO 65102

Tom Boasberg, Federal Communications

Commission, Office of the Chairman, 1919

M Street, NW., Room 814, Washington, DC

20554

Charles Bolle, South Dakota Public Utilities

Commission, State Capitol, 500 East

Capitol Street, Pierre, SD 57501–5070

Deonne Bruning, Nebraska Public Service

Commission, 300 The Atrium, 1200 N

Street, P.O. Box 94927, Lincoln, NE 68509–

4927

James Casserly, Federal Communications

Commission, Commissioner Ness’s Office,

1919 M Street, NW., Room 832,

Washington, DC 20554

Rowland Curry, Texas Public Utility

Commission, 1701 North Congress Avenue,

P.O. Box 13326, Austin, TX 78701

Bridget Duff, State Staff Chair, Florida Public

Service Commission, 2540 Shumard Oak

Blvd., Tallahassee, FL 32399–0866

Kathleen Franco, Federal Communications

Commission, Commissioner Chong’s

Office, 1919 M Street, NW., Room 844,

Washington, DC 20554

Paul Gallant, Commissioner Quello’s Office,

Federal Communications Commission,

1919 M Street, NW., Room 802,

Washington, DC 20554

Emily Hoffnar, Federal Staff Chair, Federal

Communications Commission, Accounting

and Audits Division, Universal Service

Branch, 2100 M Street, NW., Room 8617,

Washington, DC 20554

Lori Kenyon, Alaska Public Utilities

Commission, 1016 West Sixth Avenue,

Suite 400, Anchorage, AK 99501

Debra M. Kriete, Pennsylvania Public

Utilities Commission, North Office

Building, Room 110, Commonwealth and

North Avenues, P.O. Box 3265, Harrisburg,

PA 17105–3265

Sandra Makeeff, Iowa Utilities Board, Lucas

State Office Building, Des Moines, IA

50319

Philip F. McClelland, Pennsylvania Office of

Consumer Advocate, 1425 Strawberry

Square, Harrisburg, PA 17120

Thor Nelson, Colorado Office of Consumer

Counsel, 1580 Logan Street, Suite 610,

Denver, CO 80203

Barry Payne, Indiana Office of the Consumer

Counsel, 100 North Senate Avenue, Room

N501, Indianapolis, IN 46204–2208

Timothy Peterson, Deputy Division Chief,

Federal Communications Commission,

Accounting and Audits Division, 2100 M

Street, NW., Room 8613, Washington, DC

20554

James Bradford Ramsay, National Association

of Regulatory Utility Commissioners, 1100

Pennsylvania Ave., NW., P.O. Box 684,

Washington, DC 20044–0684

Brian Roberts, California Public Utilities

Commission, 505 Van Ness Avenue, San

Francisco, CA 94102

Kevin Schwenzfeier, NYS Dept of Public

Service, 3 Empire State Plaza, Albany, NY

12223

Tiane Sommer, Georgia Public Service

Commission, 244 Washington Street, SW.,

Atlanta, GA 30334–5701

Sheryl Todd (plus 8 copies), Federal

Communications Commission, Accounting

and Audits Division, Universal Service

Branch, 2100 M Street, NW., Room 8611,

Washington, DC 20554

[FR Doc. 97–20958 Filed 8–6–97; 8:45 am]

BILLING CODE 6712–01–P

DEPARTMENT OF TRANSPORTATION

National Highway Traffic Safety

Administration

49 CFR Parts 571 and 572

[Docket No. 74–14; Notice 120]

RIN 2127–AG39

Anthropomorphic Test Dummy;

Occupant Crash Protection

AGENCY: National Highway Traffic

Safety Administration (NHTSA), DOT.

ACTION: Notice of Proposed Rulemaking

(NPRM).

SUMMARY: This document proposes

modifications to the Hybrid III test

dummy, which is specified by the

agency for use in compliance testing

under Standard No. 208, Occupant

crash protection. The agency is

proposing minor modifications to the

test dummy’s clothing and shoes and to

the hole diameter in the femur flange in

the pelvis bone flesh. The changes

would facilitate compliance testing,

while having practically no effect on

Standard No. 208 test results.

DATES: Comments must be received by

October 6, 1997.