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[Federal Register Volume 62, Number 228 (Wednesday, November 26, 1997)]
[Notices]
[Pages 63175-63176]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-31116]

[[Page 63175]]

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FEDERAL COMMUNICATIONS COMMISSION

[CC Docket No. 96-45; DA 97-2392]

Universal Service

AGENCY: Federal Communications Commission.

ACTION: Notice.

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FOR FURTHER INFORMATION CONTACT: Diane Law, Common Carrier Bureau, 
Accounting and Audits Division, Universal Service Branch, (202) 418-
7400, or via E-mail to ``[email protected]''.

SUPPLEMENTARY INFORMATION:

    Released: November 13, 1997.

    In this Public Notice, the Accounting and Audits Division announces 
the proposed universal service contribution factors for the first 
quarter of 1998.
    In the Universal Service Order released on May 8, 1997, the 
Commission established new federal universal service support mechanisms 
consistent with the Telecommunications Act of 1934, as amended. (See 
Federal-State Joint Board on Universal Service, CC Docket No. 96-45, 
Report and Order, FCC 97-157 (62 FR 32862, June 17, 1997)). The 
Commission required all telecommunications carriers that provide 
interstate telecommunications services, providers of interstate 
telecommunications, and payphone service providers to contribute to the 
federal universal service support mechanisms. The Commission found that 
contributions for the schools, libraries, and rural health care 
programs would be based on interstate, intrastate, and international 
end-user telecommunications revenues. The Commission also found that 
contributions for the high cost, rural, and insular and low-income 
programs would be based on interstate and international end-user 
telecommunications revenues.
    On July 18, 1997, the Commission released an Order directing the 
National Exchange Carrier Association (NECA) to create an independently 
functioning not-for-profit subsidiary, the Universal Service 
Administrative Company (USAC), through which it will administer 
temporarily certain aspects of the federal universal service support 
mechanisms. The Commission also directed NECA to create two 
independent, not-for-profit entities, Schools and Libraries Corporation 
and Rural Health Care Corporation, to administer certain aspects of the 
schools, libraries, and rural health care programs of the federal 
support mechanisms. The Commission instructed USAC, Schools and 
Libraries Corporation, and Rural Health Care Corporation to submit 
projections of demand and administrative expenses for their respective 
programs for the first quarter of 1998 to the Commission at least sixty 
days before the start of the first quarter of 1998. USAC also must 
compile total interstate, intrastate, and international end-user 
telecommunications revenues and submit that information to the 
Commission. The Commission stated that it would publish these figures 
and the proposed quarterly contribution factors in a Public Notice. 
(See Changes to the Board of Directors of the National Exchange Carrier 
Association, Inc., Federal-State Joint Board on Universal Service, 
Report and Order and Second Order on Reconsideration, FCC 97-253 (62 FR 
41294, August 1, 1997)).
    On October 31, 1997, USAC, Schools and Libraries Corporation, and 
Rural Health Care Corporation submitted projections of demand and 
administrative expenses for their respective programs for the first 
quarter of 1998. Those figures are as follows:

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                                                                                                        Total   
                                    Program                                                            program  
             Program                 demand     Administrative expenses        Interest income          costs   
                                   (million)                                                          (millions)
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Schools and Libraries Program...       $299.1  $2.7 million............  ($1.8 million)............       $300.0
Rural Health Care Program.......         98.4  2.2 million.............  (605,000).................        100.0
High Cost Program...............        434.0  1.1 million.............  (2.8 million).............        432.3
Low Income Program..............        135.7  600,000.................  (900,000).................        136.0
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      Totals....................        967.2  6.6 million.............  (6.1 million).............        968.3
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    Based on information contained in the Universal Service Worksheets, 
FCC Form 457, USAC submitted the following information regarding end-
user telecommunications revenues on November 13, 1997:
    Total Interstate and International End-User Telecommunications 
Revenues from January 1, 1997-June 30, 1997: $35.001 billion;
    Total Interstate, Intrastate, and International End-User 
Telecommunications Revenues from January 1, 1997--June 30, 1997: 
$89.827 billion.
    To calculate the proposed quarterly contribution factors, the 
Bureau divided the combined total demand projections by the appropriate 
six-month contribution base. Based on USAC's recommendation, to account 
for possible uncollectible contributions and possible errors in the 
projections of demand and administrative expense, the Accounting and 
Audits Division decreased the contribution base totals submitted by 
USAC by two percent. Based on the figures submitted by USAC, Schools 
and Libraries Corporation, and Rural Health Care Corporation, the 
proposed contribution factors for the first quarter of 1998 are as 
follows:
    Contribution factor for interstate and international end-user 
telecommunications revenues: 0.0166. This figure was calculated by 
dividing $568 million total projected demand for the high cost and low 
income programs by $34,301 million interstate and international end-
user telecommunications revenues. $34,301 million is 98 percent of the 
reported $35.001 billion interstate and international end-user 
telecommunications revenues contribution base.
    Contribution factor for interstate, intrastate, and international 
end-user telecommunications revenues: 0.0045. This figure was 
calculated by dividing $400 million total projected demand for the 
schools, libraries, and rural health care programs by $88,030 million 
interstate, intrastate, and international end-user telecommunications 
revenues. $88,030 million is 98 percent of the reported $89.827 billion 
interstate, intrastate, and international end-user telecommunications 
revenues contribution base.
    If the Commission takes no action regarding the proposed 
contribution factors by November 28, 1997, the proposed contribution 
factors will be deemed approved by the Commission. Until November 28, 
1997, the Commission reserves the right to modify

[[Page 63176]]

these contribution factors and set the projections of demand and 
administrative expenses at amounts that the Bureau determines will 
serve the public interest. Once the proposed contribution factors are 
deemed approved by the Commission or are modified and approved in a 
subsequent Public Notice, USAC shall use the approved contribution 
factors to calculate and bill first quarter universal service 
contributions. USAC will send all contributors a quarterly bill for the 
federal universal service support mechanisms in December of 1997. 
Contributors must submit their first quarter universal service 
contribution to USAC within thirty days of the date listed on their 
quarterly bill. Payments must be sent to the address specified on the 
quarterly bill.

Federal Communications Commission.
Timothy A. Peterson,
Deputy Division Chief, Common Carrier Bureau.
[FR Doc. 97-31116 Filed 11-24-97; 10:00 am]
BILLING CODE 6712-01-P
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