[Federal Register Volume 65, Number 218 (Thursday, November 9, 2000)]
[Proposed Rules]
[Pages 67322-67331]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-28728]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 54

[CC Docket No. 96-45; FCC 00-359]


Federal-State Joint Board on Universal Service: Petition for 
Forbearance by Operator Communications, Inc. d/b/a Oncor 
Communications, Inc.

AGENCY: Federal Communications Commission.

ACTION: Notice of proposed rules.

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SUMMARY: In this document, the Commission seeks comment on proposals to 
modify the Commission's rules relating to contributions to the federal 
universal service support mechanisms. In light of significant recent 
developments in the interstate telecommunications marketplace, such as 
the entry of Regional Bell Operating Companies into the interexchange 
services market, we seek comment on whether the existing methodology 
provides or will provide a competitive advantage to certain carriers in 
the marketplace. By initiating this rulemaking, we seek to ensure that 
assessment of contributions to the federal universal service support 
mechanisms remains competitively neutral, and that the mechanisms 
continue to meet the statutory requirement to be specific, predictable, 
and sufficient.

DATES: Comments are due on or before November 30, 2000. Reply comments 
are due on or before December 14, 2000. Written comments by the public 
on the proposed and/or modified information collections discussed in 
this Further Notice of Proposed Rulemaking are due on or before 
November 30, 2000. Written comments must be submitted by the Office of 
Management and Budget (OMB) on the proposed and/or modified information 
collections on or before January 8, 2001.

ADDRESSES: All filings must be sent to the Commission's Secretary, 
Magalie Roman Salas, Office of the Secretary, Federal Communications 
Commission, 445 12th Street, SW., Washington, DC 20554. In addition to 
filing comments with the Secretary, a copy of any comments on the 
information collection(s) contained herein should be submitted to Judy 
Boley, Federal Communications Commission, Room 1-C804, 445 12th Street, 
SW, Washington, DC 20554, or via the Internet to <a href="/cdn-cgi/l/email-protection#0268606d6e677b426461612c656d74"><span class="__cf_email__" data-cfemail="86ece4e9eae3ffc6e0e5e5a8e1e9f0">[email protected]</span></a> and to 
Edward C. Springer, OMB Desk Officer, 10236 NEOB, 725 17th Street, NW., 
Washington, DC 20503, or via the Internet to <a href="/cdn-cgi/l/email-protection#a1d7c9d4d5c9e1ceccc38fc4ced18fc6ced7"><span class="__cf_email__" data-cfemail="b9cfd1cccdd1f9d6d4db97dcd6c997ded6cf">[email protected]</span></a>. Parties 
also should send three paper copies of their filing to Sheryl Todd, 
Accounting Policy Division, Common Carrier Bureau, Federal 
Communications Commission, 445 Twelfth Street, SW., Room 5-B540, 
Washington, DC 20554.

FOR FURTHER INFORMATION CONTACT: Praveen Goyal, Attorney, Common 
Carrier Bureau, Accounting Policy Division, (202) 418-7400. For further 
information concerning the information collection contained in this 
Further Notice of Proposed Rulemaking contact Judy Boley, Federal 
Communications Commission, Room 1-C804, 445 12th Street, SW., 
Washington, DC 20554, or via the Internet to <a href="/cdn-cgi/l/email-protection#5f353d30333a261f393c3c71383029"><span class="__cf_email__" data-cfemail="f59f979a99908cb5939696db929a83">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's 
Further Notice of Proposed Rulemaking in CC Docket No. 96-45 released 
on October 12, 2000. The full text of this document is available for 
public inspection during regular business hours in the FCC Reference 
Center, Room CY-A257, 445 Twelfth Street, SW., Washington, DC 20554.
    This FNPRM contains proposed information collection(s) subject to 
the Paperwork Reduction Act of 1995 (PRA). It has been submitted to the 
Office of Management and Budget (OMB) for review under the PRA. OMB, 
the general public, and other Federal agencies are invited to comment 
on the proposed information collections contained in this proceeding.

Paperwork Reduction Act

    The FNPRM contains a proposed information collection. The 
Commission, as part of its continuing effort to reduce paperwork 
burdens, invites the general public and OMB to comment on the 
information collection(s) contained in this FNPRM, as required by the 
PRA, Public Law 104-13. Public and agency comments on the proposed and/
or modified information collections discussed in this Further Notice of 
Proposed Rulemaking are due on or before November 30, 2000. Written 
comments must be submitted by the Office of Management and Budget (OMB) 
on the proposed and/or modified information collections on or before 
January 8, 2001.
    Comments should address: (a) Whether the proposed collection of 
information is necessary for the proper performance of the functions of 
the Commission, including whether the information shall have practical 
utility; (b) the accuracy of the Commission's burden estimates; (c) 
ways to enhance the quality, utility, and clarity of the information 
collected; and (d) ways to minimize the burden of the collection of 
information on the respondents, including the use of automated 
collection techniques or other forms of information technology.
    OMB Control Number: 3060-0855.
    Title: Telecommunications Reporting Worksheet and Associated 
Requirements, CC Docket No. 96-45.
    Form No.: FCC Forms 499A and 499S.
    Type of Review: Proposed Revision.
    Respondents: Businesses or other for-profit.
    Proposal 1: Periodic current Revenue Reports of Proposed Changes to 
the Contribution Assessment Methodology.

------------------------------------------------------------------------
                                                                Total
              Title                 Number of     Hrs. per      annual
                                   respondents    response      burden
------------------------------------------------------------------------
FCC Form 499A....................         3500            8       28,000
FCC Form 499S....................         2000          5.5       11,000
Periodic Current Revenue                  2000          5.5      132,000
 Reporting (Monthly).............
------------------------------------------------------------------------
    Total Annual Burden for        ...........  ...........      171,000
     Proposal 1..................
------------------------------------------------------------------------


[[Page 67323]]

    Cost of Respondents: $0.
    Needs and Uses: If adopted, this proposal on which the Commission 
seeks comment in the FNPRM may entail altering the current revenue 
reporting requirements to which interstate telecommunications carriers 
are subject under Secs. 54.709 and 54.711 of the Commission's rules. 
Under one proposed contribution assessment methodology, carriers would 
determine the amount of their contributions to the universal service 
fund by applying the contribution factor as currently calculated to 
their current end-user revenues, as opposed to their prior-year end-
user revenues. As a result, this contribution methodology would require 
periodic current revenue reports in addition to the two historical 
revenue reports already required semi-annually, increasing the number 
of revenue filings carriers must make to USAC.
    Proposal 2: Annual and Quarterly Reports of Proposed Changes to the 
Contribution Assessment Methodology.

------------------------------------------------------------------------
                                                                Total
              Title                 Number of     Hrs per       annual
                                   respondents    response      burden
------------------------------------------------------------------------
FCC Form 499A....................         3500            8       28,000
Report of Revenues (Quarterly)...         2000          5.5       44,000
------------------------------------------------------------------------
    Total Annual Burden for        ...........  ...........       72,000
     Proposal 2..................
------------------------------------------------------------------------

    Cost to Respondents: $0.
    Needs and Uses: If adopted, this proposal on which the Commission 
seeks comment in the FNPRM may entail altering the current revenue 
reporting requirements to which interstate telecommunications carriers 
are subject under Secs. 54.709 and 54.711 of the Commission's rules. 
This proposed contribution assessment methodology would shorten the 
interval between the accrual of revenues by carriers and the assessment 
of universal service contributions based on those revenues from a range 
of 12 to 18 months to a range of 3 to 6 months. Under this proposal, 
carriers would continue to file FCC Form 499A annually as they are 
required to do under the existing methodology. Carriers would, however, 
begin to report their revenues for each quarter by the beginning of the 
second month of the first following quarter. By the 20th day of the 
second month of the first following quarter, USAC would prepare a 
quarterly contribution base for the second following quarter. Finally, 
as it does currently, the Commission would release a proposed 
contribution factor for the second following quarter in the last month 
of the first following quarter. Under this proposal, carriers' filings 
increase from the two semi-annual filings currently required to one 
annual filing and four quarterly filings, for a total of five revenue 
filings per year.

Synopsis of FNPRM

I. Introduction

    1. In this Further Notice of Proposed Rulemaking (FNPRM), we seek 
comment on proposals to modify the Commission's rules relating to 
contributions to the federal universal service support mechanisms. 
Currently, contributions to the universal service support mechanisms 
are based on carriers' interstate and international end-user 
telecommunications revenues from the prior year. In light of 
significant recent developments in the interstate telecommunications 
marketplace, such as the entry of Regional Bell Operating Companies 
(RBOCs) into the interexchange services market under section 271 of the 
Communications Act, we seek comment on whether the existing methodology 
provides or will provide a competitive advantage to certain carriers in 
the marketplace.
    2. By initiating this rulemaking, we seek to ensure that assessment 
of contributions to the federal universal service support mechanisms 
remains competitively neutral, and that the mechanisms continue to meet 
the statutory requirement to be specific, predictable, and sufficient. 
Specifically, in this rulemaking, we seek comment on the following: (1) 
A proposed methodology for the assessment of universal service 
contributions based on current revenues; (2) a proposed methodology 
that would reduce the current interval between the accrual of revenues 
and the collection of universal service contributions based on those 
revenues; and (3) other proposals for the reporting of carrier revenues 
and the collection of contributions that maintain the competitive 
neutrality of contributions to the federal universal service support 
mechanisms, and that enable the mechanisms to continue to meet the 
statutory requirement to be specific, predictable, and sufficient.

II. Proposals To Modify the Universal Service Assessment 
Methodology

A. Contribution Assessment Generally

    3. In light of significant recent developments in the interstate 
telecommunications marketplace, such as the entry of RBOCs into the 
interexchange services market under section 271 of the Act, we seek 
comment generally on whether and how to modify the existing 
contribution assessment methodology. Specifically, we ask parties to 
comment on whether, as a result of changes in the interstate 
marketplace, the existing methodology provides or will provide a 
competitive advantage to certain carriers in the marketplace.
    4. Carriers have argued that, as a result of the existing 
methodology which assesses contributions based on carriers' interstate 
end-user telecommunications revenues from the prior year, new entrants 
to the long distance marketplace, particularly RBOCs, may have a 
competitive advantage as they gain entry into the long distance market. 
They argue that, during the first year of post in-region interLATA 
entry, the new entrant is not required to contribute to the universal 
service fund on its interstate end-user revenues generated from the new 
in-region interexchange service. If the new entrants do not accrue a 
portion of their revenues for making universal service contributions 
during the following year that will be based on those revenues, such 
new entrants may be able to undercut the prices offered by established 
providers.
    5. In subsequent years, to the extent new entrants increase their 
long distance market share and recover universal service contributions 
against current end-user revenues, the revenue base against which they 
recover their universal service contributions would remain greater than 
the revenue base against which their contributions are assessed, 
creating a potential for a continuing competitive advantage. Similarly, 
carriers have also expressed concern that, under the existing 
contribution methodology, carriers with decreasing interstate revenues 
may have a competitive disadvantage as compared to carriers with 
increasing interstate revenues. As interexchange carriers lose market 
share, they may have to recover from a declining current revenue base

[[Page 67324]]

their universal service contributions assessed against a larger prior-
year revenue base.
    6. We therefore ask whether and how to modify the existing 
contribution assessment methodology, in light of the recent 
developments in the long distance market. We seek comment on whether 
the current methodology would place interexchange carriers at a 
competitive disadvantage against RBOCs as they gain entry into the long 
distance market. We seek comment on whether any such competitive 
advantage might impede the development of competition in the local 
exchange marketplace, for example, by giving incumbent local exchange 
carriers entering the long distance marketplace a competitive advantage 
in the provision of bundled local and long distance service offerings. 
We further seek comment on whether the contribution methodology 
disadvantages carriers with declining shares of interstate revenues as 
compared to carriers with increasing shares of interstate revenues. 
Commenters should also address whether any such competitive advantage 
under the current recovery methodology would render the methodology 
inconsistent with section 254's requirement that contributions be 
``equitable and nondiscriminatory.''
    7. The preceding discussion assumes that new entrants into the 
interstate telecommunications marketplace are likely to pay universal 
service contributions out of current period revenue. We seek comment on 
the likelihood that they instead would collect a surcharge in their 
first periods of operation in order to accrue revenue for the purpose 
of making universal service contributions in subsequent periods. To the 
extent new entrants follow such a procedure, we seek comment on whether 
and how established carriers already contributing to the universal 
service mechanisms would nonetheless be disadvantaged under the 
existing contribution assessment methodology.
    8. In the discussion, we seek comment on two specific proposals to 
change the universal service recovery methodology. We also invite 
commenters to propose any other alternatives for assessment of 
contributions that are competitively neutral and consistent with the 
Act. In particular, we request comment from the state members of the 
Federal-State Joint Board on Universal Service and from USAC on the 
issues raised in this Further Notice of Proposed Rulemaking.

B. Proposal To Assess Contributions Based on Current Revenues

    9. We seek comment on a proposal to adopt an assessment methodology 
based on current-year revenues, as suggested by one carrier. Under this 
proposal, the contribution factor would continue to be set quarterly in 
the same manner as it is currently, based on the ratio of estimated 
federal support to total end-user telecommunications revenues. The 
revenue base used in calculating the contribution factor would continue 
to be determined by USAC as it is currently, based on semi-annual 
filings of the FCC Form 499 Telecommunications Reporting Worksheet by 
interstate telecommunications carriers. Carriers, however, would 
calculate their contributions by applying the factor to their current 
end-user revenues, as opposed to their prior-year end-user revenues. 
Assuming a level or upward trend in industry revenues, the application 
of a contribution factor based on prior-year revenues to current 
revenues should allow USAC to recover sufficient contributions from the 
industry as a whole in order to fund the universal service support 
mechanisms. We seek comment on whether this proposal would be 
competitively neutral and consistent with the requirements of section 
254 of the Act, including the requirements that the Commission's 
universal service support mechanisms be ``equitable and 
nondiscriminatory'' and ``specific, predictable, and sufficient.''
    10. In particular, we seek comment on the potential effects of such 
a methodology on the integrity of the universal service fund, including 
whether a potential shortfall in the fund might result. Under the 
existing contribution assessment methodology, the revenue base used in 
calculating the contribution factor and the revenue base against which 
contributions are assessed are the same. Under the proposal on which we 
seek comment here, which would apply contribution factors as presently 
calculated to current revenues, the revenue base used in calculating 
the contribution factor would be one year prior to the revenue base 
against which contributions would be assessed. We seek comment on 
whether a decline in industry-wide interstate telecommunications 
revenues could generate a shortfall in the universal service fund under 
such a methodology, and whether the possibility of such a shortfall 
would render this proposal inconsistent with the Act's mandate of a 
``sufficient'' fund. We also seek comment on whether certain events or 
market conditions, such as increased use of Internet Protocol (IP) 
telephony, changes in international settlement rates, or economic 
recession, might result in a dramatic or systemic decline in interstate 
end-user telecommunications revenues, and on the likelihood of such 
events or conditions and a resultant decline.
    11. We also seek comment on whether certain safeguards might be 
adopted with this proposal to ensure universal service fund integrity. 
Specifically, we ask commenters to address whether a quarterly ``true-
up'' mechanism could be implemented with this proposal to allow USAC to 
adjust the contribution assessment rate retrospectively, and whether 
mid-quarter contribution factor adjustments would prevent a shortfall 
in the fund caused by a systemic or extended decline in revenues. We 
also seek comment on the effectiveness of the ``true-up'' safeguard in 
light of the lag that could occur between USAC's detection of an 
impending shortfall in the fund and the Commission's establishment of 
an adjusted mid-quarter contribution factor. Commenters should also 
discuss the method by which USAC could project whether there would be a 
shortfall in the fund under this proposed recovery methodology, and 
what methodology should be used to adjust the contribution factor mid-
quarter in the event of a projected shortfall. Finally, commenters 
should discuss any other possible safeguards they believe should be 
included with such a proposal, and explain why such safeguards should 
be implemented.
    12. Because this contribution methodology would require periodic 
current revenue reports in addition to the two historical revenue 
reports already required semi-annually, it would increase the number of 
revenue filings carriers must make to USAC. Consequently, this 
contribution recovery methodology may also pose significant 
administrative burdens for carriers and for USAC, which we ask 
commenters to address. Specifically, we seek comment on the frequency 
with which carriers should report revenues to USAC under this proposal, 
the types of burdens carriers will face in periodically reporting 
revenues to USAC, and whether the costs of such reporting are 
outweighed by the potential benefits posed by the proposed methodology. 
Where possible, commenters, especially small businesses, should 
quantify the costs and benefits of this proposal. We also seek comment 
on how USAC's billing and collection procedures would need to be 
revised to accommodate this

[[Page 67325]]

contribution methodology. Currently, USAC calculates individual 
contributions by multiplying the quarterly contribution factor by the 
applicable period of historic quarterly revenues. USAC then bills 
contributors in equal monthly installments at a fixed amount each 
month. We seek comment on whether and/or how this procedure should be 
modified under an assessment methodology based on current revenues.
    13. We seek comment on the incentives carriers may have under this 
proposed recovery methodology to report their current revenues in an 
accurate and timely manner. For example, this proposal may create 
incentives for carriers to underreport revenues for the early months of 
a reporting period in an attempt to reduce their current contribution 
obligations, thereby freeing capital for other uses, such as interest-
bearing investments. Such carriers could then overreport revenues in 
the later months of a reporting period so that their total revenues for 
the reporting period are accurate. We seek comment on the extent to 
which this proposal creates such incentives and the likelihood that a 
shortfall in the fund might result. We also seek comment on whether 
changes should be made to USAC's auditing abilities to ensure accurate 
reporting, and on any other administrative mechanisms that might be 
implemented to ensure accurate reporting of current revenues. 
Commenters should address measures USAC should take to verify carrier 
revenue reports, and what burdens or costs USAC would bear in 
performing such verifications. Parties should explain the procedures 
that should be followed where a carrier's current revenue reports do 
not reconcile with its report of annual revenues filed the following 
April, and whether penalties should be imposed on such a carrier. We 
also seek comment on whether this proposal would increase the 
likelihood of delinquent payments by carriers, and thus a shortfall in 
the fund. We invite comment on possible administrative mechanisms to 
minimize any such potential for delinquent payments.
    14. We seek comment on how to make the transition from the existing 
contribution assessment methodology to a methodology based on current 
revenues, if we were to adopt this proposal for assessment of universal 
service contributions. In particular, we ask commenters to address when 
assessments based on current revenues should begin under the proposal, 
and how to ``close out'' the assessment of contributions under the 
existing methodology. We also seek comment on whether a one-time over-
collection of funds might be necessary to make the transition to the 
proposed methodology, and whether such an over-collection would need to 
be maintained going forward in order to safeguard fund integrity.
    15. Finally, we invite commenters, especially small businesses, to 
discuss any additional advantages, disadvantages, or other 
implementation issues presented by this proposed contribution 
assessment methodology. Commenters should indicate whether the costs of 
implementing this proposal outweigh the benefits and quantify such 
claims, where possible. Furthermore, in light of the issues presented 
by this proposal, commenters should discuss whether it would meet the 
requirements of section 254 of the Act, including the requirement that 
the Commission's universal service support mechanisms be ``specific, 
predictable, and sufficient.''

C. Universal Service Contribution Assessment With a Shorter Interval

    16. Under the existing assessment methodology, the interval between 
the accrual of revenues by carriers and the assessment of universal 
service contributions based on those revenues ranges from 12 to 18 
months. We seek comment on a proposal to revise the existing assessment 
methodology to reduce this interval to three to six months.
    17. Under this proposal, carriers would continue to file FCC Form 
499A annually as they are required to do under the existing 
methodology. Carriers would, however, begin to report their revenues 
for each quarter by the beginning of the second month of the first 
following quarter. By the 20th day of the second month of the first 
following quarter, USAC would prepare a quarterly contribution base for 
the second following quarter. Finally, as it does currently, the 
Commission would release a proposed contribution factor for the second 
following quarter in the last month of the first following quarter. 
Thus, for example, revenues for January 2001 through March 2001, namely 
for 1Q 2001, would be reported by May 1, 2001, the beginning of the 
second month in 2Q 2001. USAC would estimate a quarterly contribution 
base using these 1Q 2001 revenues by May 20, 2001, the 20th day of the 
second month in 2Q 2001. Finally, the Commission would release a 
proposed contribution factor for 3Q 2001, based on 1Q 2001 revenues, at 
the beginning of June 2001 (the last month of 2Q 2001).
    18. Like the existing assessment methodology, and unlike an 
assessment methodology based on current revenues, this proposal would 
assess contributions against the same revenue base used to calculate 
the contribution factor. We seek comment on whether this reduced 
interval between the accrual of revenues and the assessment of 
contributions would result in a methodology that is competitively 
neutral and ``specific, predictable, and sufficient,'' consistent with 
section 254 of the Act. This methodology would also reduce the interval 
between revenue accrual and contribution assessment from the current 
interval of twelve to eighteen months to an interval of three to six 
months. We seek comment on whether this proposal poses any concerns 
regarding universal service fund integrity.
    19. The shortened schedule under this proposal would give USAC 20 
days to compile quarterly filing information and estimate the 
contribution base. Parties are asked to address whether this schedule 
allows sufficient time for USAC to perform these functions. In 
particular, parties should address whether carriers could file reliable 
revenue information within 30 days of the close of a quarter. USAC is 
asked to comment on the extent to which this schedule would increase 
the likelihood of late filings, the extent to which data would have to 
be estimated for late filings, and the likelihood and size of resulting 
over-collections or under-collections.
    20. Under this proposal, carriers' filings increase from two semi-
annual filings to one annual filing and four quarterly filings, for a 
total of five revenue filings per year. We seek comment, especially 
from small businesses, on whether the costs associated with the 
increased reporting requirements under this proposal outweigh the 
benefits of the reduced interval between revenue accrual and 
contribution assessment. We also invite commenters to address whether 
this proposal should be offered as an optional alternative to the 
current assessment methodology, rather than as a replacement for it. 
Commenters should explain whether making this proposal optional 
adequately addresses concerns about the burden it would impose. 
Commenters should also address whether offering this proposal as an 
option alongside the current assessment methodology would result in a 
methodology that is competitively neutral and ``specific, predictable, 
and sufficient,'' consistent with section 254 of the Act.

[[Page 67326]]

    21. As with the first proposal discussed, we seek comment on the 
incentives carriers have under this proposed methodology to report 
their quarterly revenues in an accurate and timely manner. In 
particular, commenters should address whether this proposal minimizes 
carriers' incentives to underreport revenues for the early quarters of 
a reporting year. We also seek comment on whether changes should be 
made to USAC's auditing abilities to ensure accurate quarterly 
reporting. In addition, we invite comment on possible administrative 
mechanisms that might be implemented to ensure accurate reporting of 
quarterly revenues, including the use of penalties. We also ask 
commenters to address whether such a methodology would increase the 
likelihood of delinquent payments by carriers, and thus a shortfall in 
the fund. We seek comment on possible administrative mechanisms that 
might be implemented to minimize any such potential for delinquent 
payments, including the use of penalties.
    22. We also seek comment on how to make the transition from the 
existing assessment methodology to the proposal discussed here. In 
particular, we ask commenters to address when assessments based on 
quarterly revenues should begin under the proposal, and how to ``close 
out'' the assessment of contributions under the existing methodology. 
We also seek comment on whether a one-time over-collection of funds 
might be necessary to make the transition to the proposed methodology. 
In addition, we ask commenters to address how to make the transition 
from the existing methodology to the proposal discussed here if that 
proposal is made optional.
    23. Finally, we invite commenters, especially small businesses, to 
discuss any additional advantages, disadvantages, or other 
implementation issues presented by this proposed contribution 
methodology. Commenters should indicate whether the costs of 
implementing this proposal outweigh the benefits and quantify such 
claims, where possible. Furthermore, commenters should discuss whether 
it would meet the requirements of section 254 of the Act, including the 
requirements that the Commission's universal service support mechanisms 
be ``equitable and nondiscriminatory'' and ``specific, predictable, and 
sufficient.''

D. Other Proposed Universal Service Contribution Assessment 
Methodologies

    24. In addition to the two proposals discussed, we invite 
commenters, especially small businesses, to suggest other alternative 
assessment methodologies. For example, some parties have suggested the 
use of a contribution methodology that requires carriers to recover 
their contributions through a fixed-percentage end-user surcharge. We 
invite commenters to address the legal and policy issues associated 
with such an approach. Specifically, we encourage commenters to address 
the extent to which consumers will benefit from such an approach. 
Commenters should explain the operation of this alternative, or any 
other alternative, including a plan for transition from the existing 
methodology to the proposed alternative.
    25. We ask commenters offering alternative proposals to address the 
following questions in detail. (1) Is the proposed alternative 
consistent with the requirements of section 254 of the Act, including 
the requirements that the Commission's universal service support 
mechanisms be ``equitable and nondiscriminatory'' and ``specific, 
predictable, and sufficient?'' (2) Does the alternative protect the 
integrity of the universal service fund, in particular by guarding 
against a shortfall in the fund? (3) To the extent there are concerns 
about the competitive neutrality of the universal service assessment 
methodology, does the alternative address these concerns, and is it 
more competitively neutral than the current methodology and other 
proposed methodologies? (4) Does the alternative minimize burdens, 
including recordkeeping and reporting requirements, on carriers? (5) 
How should the alternative be implemented, and how should the 
Commission transition from the existing contribution assessment 
methodology to the alternative? (6) Finally, what are the advantages 
and disadvantages of any such alternative (quantifying the associated 
costs and benefits where appropriate)?

III. Procedural Matters

A. Ex Parte

    26. This is a non-restricted notice and comment rulemaking 
proceeding. Ex parte presentations are permitted, except during the 
Sunshine Agenda period, provided they are disclosed as provided in the 
Commission's rules.

B. Initial Paperwork Reduction Act of 1995 Analysis

    27. This FNPRM contains either a proposed or modified information 
collection. As part of a continuing effort to reduce paperwork burdens, 
we invite the general public and the Office of Management and Budget 
(OMB) to take this opportunity to comment on the information 
collections contained in this FNPRM, as required by the Paperwork 
Reduction Act of 1995, Public Law 104-13. Public and agency comments 
are due at the same time as other comments on this FNPRM; OMB comments 
are due 60 days from the date of publication of this FNPRM in the 
Federal Register. Comments should address: (a) Whether the proposed 
collection of information is necessary for the proper performance of 
the functions of the Commission, including whether the information 
shall have practical utility; (b) the accuracy of the Commission's 
burden estimates; (c) ways to enhance the quality, utility, and clarity 
of the information collected; and (d) ways to minimize the burden of 
the collection of information on the respondents, including the use of 
automated collection techniques or other forms of information 
technology.

C. Initial Regulatory Flexibility Analysis

    28. As required by the Regulatory Flexibility Act (RFA), the 
Commission has prepared this Initial Regulatory Flexibility Analysis 
(IRFA) of the possible significant economic impact on small entities by 
the policies and rules proposed in this Further Notice of Proposed 
Rulemaking. Written public comments are requested on this IRFA. 
Comments must be identified as responses to the IRFA and must be filed 
by the deadlines for comments on the FNPRM provided below. The 
Commission will send a copy of the FNPRM, including this IRFA, to the 
Chief Counsel for Advocacy of the Small Business Administration (SBA). 
In addition, the FNPRM and IRFA (or summaries thereof) will be 
published in the Federal Register.
1. Need for, and Objectives of, the Proposed Rules
    29. The Telecommunications Act of 1996 requires that ``[e]very 
telecommunications carrier that provides interstate telecommunications 
services shall contribute, on an equitable and nondiscriminatory basis, 
to the specific, predictable, and sufficient mechanisms established by 
the Commission to preserve and advance universal service.'' This FNPRM 
addresses issues of the methodology that should be used to assess 
carriers' contributions to the universal service support mechanisms. We 
desire to adopt rules for an assessment methodology that best meets the 
statute's requirements that contributions be equitable and

[[Page 67327]]

nondiscriminatory and that the universal service support mechanisms be 
specific, predictable, and sufficient. We also seek, wherever possible, 
to minimize the regulatory burden on affected parties.
2. Legal Basis
    30. The legal basis as proposed for this FNPRM is contained in 
section 254 of the Communications Act of 1934, as amended by the 
Telecommunications Act of 1996, 47 U.S.C. 254.
3. Description and Estimate of the Number of Small Entities to Which 
the Proposed Rules Will Apply
    31. The Commission's contributor reporting requirements apply to a 
wide range of entities, including all telecommunications carriers and 
other providers of interstate telecommunications services that offer 
telecommunications services for a fee. Thus, we expect that the rules 
adopted in this proceeding could have a significant economic impact on 
a substantial number of small entities. Of the estimated 5,000 filers 
of the Telecommunications Reporting Worksheet, FCC Form 499, we do not 
know how many are small entities, but we offer below a detailed 
estimate of the number of small entities within each of several major 
carrier-type categories.
    32. To estimate the number of small entities that would be affected 
by this economic impact, we first consider the statutory definition of 
``small entity'' under the RFA. The RFA generally defines ``small 
entity'' as having the same meaning as the term ``small business,'' 
``small organization,'' and ``small governmental jurisdiction.'' In 
addition, the term ``small business'' has the same meaning as the term 
``small business concern'' under the Small Business Act, unless the 
Commission has developed one or more definitions that are appropriate 
to its activities. Under the Small Business Act, a ``small business 
concern'' is 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. The SBA has defined a small business 
for Standard Industrial Classification (SIC) categories 4812 
(Radiotelephone Communications) and 4813 (Telephone Communications, 
Except Radiotelephone) to be small entities when they have no more than 
1,500 employees. We first discuss the number of small telephone 
companies falling within these SIC categories, then attempt to refine 
further those estimates to correspond with the categories of telephone 
companies that are commonly used under our rules.
    33. The most reliable source of information regarding the total 
numbers of certain common carrier and related providers nationwide, as 
well as the numbers of commercial wireless entities, appears to be data 
the Commission publishes annually in its Carrier Locator report, 
derived from filings made in connection with the Telecommunications 
Relay Service (TRS). According to data in the most recent report, there 
are 4,144 interstate carriers. These carriers include, inter alia, 
incumbent local exchange carriers, competitive local exchange carriers, 
competitive access providers, interexchange carriers, other wireline 
carriers and service providers (including shared-tenant service 
providers and private carriers), operator service providers, pay 
telephone operators, providers of telephone toll service, wireless 
carriers and services providers, and resellers.
    34. We have included small incumbent local exchange carriers (LECs) 
in this present RFA analysis. As noted, a ``small business'' under the 
RFA is one that, inter alia, meets the pertinent small business size 
standard (e.g., a telephone communications business having 1,500 or 
fewer employees), and ``is not dominant in its field of operation.'' 
The SBA's Office of Advocacy contends that, for RFA purposes, small 
incumbent LECs are not dominant in their field of operation because any 
such dominance is not ``national'' in scope. We have therefore included 
small incumbent LECs in this RFA analysis, although we emphasize that 
this RFA action has no effect on FCC analyses and determinations in 
other, non-RFA contexts.
    35. Total Number of Telephone Companies Affected. The United States 
Bureau of the Census (the Census Bureau) reports that, at the end of 
1992, there were 3,497 firms engaged in providing telephone services, 
as defined therein, for at least one year. This number contains a 
variety of different categories of carriers, including local exchange 
carriers, interexchange carriers, competitive access providers, 
cellular carriers, mobile service carriers, operator service providers, 
pay telephone operators, PCS providers, covered SMR providers, and 
resellers. It seems certain that some of those 3,497 telephone service 
firms may not qualify as small entities or small incumbent LECs because 
they are not ``independently owned and operated.'' For example, a PCS 
provider that is affiliated with an interexchange carrier having more 
than 1,500 employees would not meet the definition of a small business. 
It seems reasonable to conclude, therefore, that fewer than 3,497 
telephone service firms are small entity telephone service firms or 
small incumbent LECs that may be affected by the decisions and rule 
changes adopted in this proceeding.
    36. Wireline Carriers and Service Providers. The SBA has developed 
a definition of small entities for telephone communications companies 
other than radiotelephone companies. The Census Bureau reports that, 
there were 2,321 such telephone companies in operation for at least one 
year at the end of 1992. According to the SBA's definition, a small 
business telephone company other than a radiotelephone company is one 
employing no more than 1,500 persons. All but 26 of the 2,321 non-
radiotelephone companies listed by the Census Bureau were reported to 
have fewer than 1,000 employees. Thus, even if all 26 of those 
companies had more than 1,500 employees, there would still be 2,295 
non-radiotelephone companies that might qualify as small entities or 
small incumbent LECs. Although it seems certain that some of these 
carriers are not independently owned and operated, we are unable at 
this time to estimate with greater precision the number of wireline 
carriers and service providers that would qualify as small business 
concerns under the SBA's definition. Consequently, we estimate that 
there are fewer than 2,295 small entity telephone communications 
companies other than radiotelephone companies that may be affected by 
the decisions and rule changes adopted in this proceeding.
    37. Local Exchange Carriers, Interexchange Carriers, Competitive 
Access Providers, Operator Service Providers, and Resellers. Neither 
the Commission nor the SBA has developed a definition particular to 
small LECs, interexchange carriers (IXCs), competitive access providers 
(CAPs), operator service providers (OSPs), or resellers. The closest 
applicable definition for these carrier-types under the SBA rules is 
for telephone communications companies other than radiotelephone 
(wireless) companies. The most reliable source of information regarding 
the number of these carriers nationwide of which we are aware appears 
to be the data that we collect annually in connection with the 
Telecommunications Relay Service. According to our most recent data, 
there are 1,348 incumbent LECs, 212 CAPs and competitive LECs, 171 
IXCs, 24 OSPs, 388 toll resellers, and 54 local resellers. Although it 
seems certain that some of these carriers are not independently owned 
and operated, or have more than 1,500 employees, we are

[[Page 67328]]

unable at this time to estimate with greater precision the number of 
these carriers that would qualify as small business concerns under the 
SBA's definition. Consequently, we estimate that there are fewer than 
1,348 incumbent LECs, 212 CAPs and competitive LECs, 171 IXCs, 24 OSPs, 
388 toll resellers, and 54 local resellers that may be affected by the 
decisions and rule changes adopted in this proceeding.
    38. Wireless (Radiotelephone) Carriers. The SBA has developed a 
definition of small entities for radiotelephone (wireless) companies. 
The Census Bureau reports that there were 1,176 such companies in 
operation for at least one year at the end of 1992. According to the 
SBA's definition, a small business radiotelephone company is one 
employing no more than 1,500 persons. The Census Bureau also reported 
that 1,164 of those radiotelephone companies had fewer than 1,000 
employees. Thus, even if all of the remaining 12 companies had more 
than 1,500 employees, there would still be 1,164 radiotelephone 
companies that might qualify as small entities if they are 
independently owned and operated. Although it seems certain that some 
of these carriers are not independently owned and operated, we are 
unable at this time to estimate with greater precision the number of 
radiotelephone carriers and service providers that would qualify as 
small business concerns under the SBA's definition. Consequently, we 
estimate that there are fewer than 1,164 small entity radiotelephone 
companies that may be affected by the decisions and rule changes 
adopted in this proceeding.
    39. Cellular, PCS, SMR, and Other Mobile Service Providers. In an 
effort to further refine our calculation of the number of 
radiotelephone companies that may be affected by the rules adopted 
herein, we consider the data that we collect annually in connection 
with the TRS for the subcategories Wireless Telephony (which includes 
Cellular, PCS, and SMR) and Other Mobile Service Providers. Neither the 
Commission nor the SBA has developed a definition of small entities 
specifically applicable to these broad subcategories, so we will 
utilize the closest applicable definition under the SBA rules--which, 
for both categories, is for telephone companies other than 
radiotelephone (wireless) companies. To the extent that the Commission 
has adopted definitions for small entities providing PCS and SMR 
services, we discuss those definitions below. According to our most 
recent TRS data, 808 companies reported that they are engaged in the 
provision of Wireless Telephony services and 23 companies reported that 
they are engaged in the provision of Other Mobile Services. Although it 
seems certain that some of these carriers are not independently owned 
and operated, or have more than 1,500 employees, we are unable at this 
time to estimate with greater precision the number of Wireless 
Telephony Providers and Other Mobile Service Providers, except as 
described below, that would qualify as small business concerns under 
the SBA's definition. Consequently, we estimate that there are fewer 
than 808 small entity Wireless Telephony Providers and fewer than 23 
small entity Other Mobile Service Providers that might be affected by 
the decisions and rule changes adopted in this proceeding.
    40. Broadband PCS Licensees. The broadband PCS spectrum is divided 
into six frequency blocks designated A through F, and the Commission 
has held auctions for each block. The Commission defined ``small 
entity'' for Blocks C and F as an entity that has average gross 
revenues of less than $40 million in the three previous calendar years. 
For Block F, an additional classification for ``very small business'' 
was added, and is defined as an entity that, together with its 
affiliates, has average gross revenues of not more than $15 million for 
the preceding three calendar years. These regulations defining ``small 
entity'' in the context of broadband PCS auctions have been approved by 
the SBA. No small businesses within the SBA-approved definition bid 
successfully for licenses in Blocks A and B. There were 90 winning 
bidders that qualified as small entities in the Block C auctions. A 
total of 93 small and very small business bidders won approximately 40% 
of the 1,479 licenses for Blocks D, E, and F. However, licenses for 
Blocks C through F have not been awarded fully, therefore there are 
few, if any, small businesses currently providing PCS services. Based 
on this information, we estimate that the number of small broadband PCS 
licenses will include the 90 winning C Block bidders and the 93 
qualifying bidders in the D, E, and F blocks, for a total of at least 
183 small PCS providers as defined by the SBA and the Commissioner's 
auction rules.
    41. SMR Licensees. Pursuant to Sec. 90.814(b)(1) of the 
Commission's rules, the Commission has defined ``small entity'' in 
auctions for geographic area 800 MHz and 900 MHz SMR licenses as a firm 
that had average annual gross revenues of less than $15 million in the 
three previous calendar years. The definition of a ``small entity'' in 
the context of both 800 MHz and 900 MHz SMR has been approved by the 
SBA. Any rules proposed in this proceeding may apply to SMR providers 
in the 800 MHz and 900 MHz bands that either hold geographic area 
licenses or have obtained extended implementation authorizations. We do 
not know how many firms provide 800 MHz or 900 MHz geographic area SMR 
service pursuant to extended implementation authorizations, nor how 
many of these providers have annual revenues of less than $15 million. 
We assume, for purposes of this IRFA, that all of the extended 
implementation authorizations may be held by small entities, that may 
be affected by the decisions and rule changes adopted in this 
proceeding.
    42. The Commission recently held auctions for geographic area 
licenses in the 900 MHz SMR band. There were 60 winning bidders who 
qualified as small entities in the 900 MHz auction. Based on this 
information, we conclude that the number of geographic area SMR 
licensees that may be affected by the decisions and rule changes 
adopted in this Order includes these 60 small entities. No auctions 
have been held for 800 MHz geographic area SMR licenses. Therefore, no 
small entities currently hold these licenses. A total of 525 licenses 
will be awarded for the upper 200 channels in the 800 MHz geographic 
area SMR auction. The Commission, however, has not yet determined how 
many licenses will be awarded for the lower 230 channels in the 800 MHz 
geographic area SMR auction. There is no basis, moreover, on which to 
estimate how many small entities will win these licenses. Given that 
nearly all radiotelephone companies have fewer than 1,000 employees and 
that no reliable estimate of the number of prospective 800 MHz 
licensees can be made, we assume, for purposes of this IRFA, that all 
of the licenses may be awarded to small entities who may be affected by 
the decisions and rule changes adopted in this proceeding.
    43. 220 MHz Radio Service--Phase I Licensees. The 220 MHz service 
has both Phase I and Phase II licenses. There are approximately 1,515 
such non-nationwide licensees and four nationwide licensees currently 
authorized to operate in the 220 MHz band. The Commission has not 
developed a definition of small entities specifically applicable to 
such incumbent 220 MHz Phase I licensees. To estimate the number of 
such licensees that are small businesses, we apply the definition under 
the SBA rules applicable to radiotelephone

[[Page 67329]]

communications companies. According to the Census Bureau, only 12 
radiotelephone firms out of a total of 1,178 such firms which operated 
during 1992 had 1,000 or more employees. Therefore, if this general 
ratio continues to 2000 in the context of Phase I 220 MHz licensees, we 
estimate that nearly all such licensees are small businesses under the 
SBA's definition.
    44. 220 MHz Radio Service--Phase II Licensees. The Phase II 220 MHz 
service is a new service, and is subject to spectrum auctions. In the 
220 MHz Third Report and Order, 62 FR 16004 (April 3, 1997), this 
Commission adopted criteria for defining small businesses and very 
small businesses for purposes of determining their eligibility for 
special provisions such as bidding credits and installment payments. We 
have defined a small business as an entity that, together with its 
affiliates and controlling principals, has average gross revenues not 
exceeding $15 million for the preceding three years. Additionally, a 
very small business is defined as an entity that, together with its 
affiliates and controlling principals, has average gross revenues that 
are not more than $3 million for the preceding three years. An auction 
of Phase II licenses commenced on September 15, 1998, and closed on 
October 22, 1998. 908 licenses were auctioned in 3 different-sized 
geographic areas: three nationwide licenses, 30 Regional Economic Area 
Group Licenses, and 875 Economic Area (EA) Licenses. Of the 908 
licenses auctioned, 693 were sold. Companies claiming small business 
status won: one of the Nationwide licenses, 67% of the Regional 
licenses, and 54% of the EA licenses. As of January 22, 1999, the 
Commission announced that it was prepared to grant 654 of the Phase II 
licenses won at auction.
    45. Paging. The Commission has proposed a two-tier definition of 
small businesses in the context of auctioning licenses in the Common 
Carrier Paging and exclusive Private Carrier Paging services. Under the 
proposal, a small business will be defined as either (1) an entity 
that, together with its affiliates and controlling principals, has 
average gross revenues for the three preceding years of not more than 
$3 million, or (2) an entity that, together with affiliates and 
controlling principals, has average gross revenues for the three 
preceding calendar years of not more than $15 million. Because the SBA 
has not yet approved this definition for paging services, we will 
utilize the SBA's definition applicable to radiotelephone companies, 
i.e., an entity employing no more than 1,500 persons. At present, there 
are approximately 24,000 Private Paging licenses and 74,000 Common 
Carrier Paging licenses. According to the most recent Carrier Locator 
data, 303 carriers reported that they were engaged in the provision of 
either paging or messaging services, which are placed together in the 
data. We do not have data specifying the number of these carriers that 
are not independently owned and operated or have more than 1,500 
employees, and thus are unable at this time to estimate with greater 
precision the number of paging carriers that would qualify as small 
business concerns under the SBA's definition. Consequently, we estimate 
that there are fewer than 303 small paging carriers that may be 
affected by the decisions and rule changes under consideration in this 
proceeding. We estimate that the majority of private and common carrier 
paging providers would qualify as small entities under the SBA 
definition.
    46. Narrowband PCS. The Commission has auctioned nationwide and 
regional licenses for narrowband PCS. There are 11 nationwide and 30 
regional licensees for narrowband PCS. The Commission does not have 
sufficient information to determine whether any of these licensees are 
small businesses within the SBA-approved definition for radiotelephone 
companies. At present, there have been no auctions held for the major 
trading area (MTA) and basic trading area (BTA) narrowband PCS 
licenses. The Commission anticipates a total of 561 MTA licenses and 
2,958 BTA licenses will be awarded by auction. Such auctions have not 
yet been scheduled, however. Given that nearly all radiotelephone 
companies have no more than 1,500 employees and that no reliable 
estimate of the number of prospective MTA and BTA narrowband licensees 
can be made, we assume, for purposes of this IRFA, that all of the 
licenses will be awarded to small entities, as that term is defined by 
the SBA.
    47. Rural Radiotelephone Service. The Commission has not adopted a 
definition of small entity specific to the Rural Radiotelephone 
Service. A significant subset of the Rural Radiotelephone Service is 
the Basic Exchange Telephone Radio Systems (BETRS). We will use the 
SBA's definition applicable to radiotelephone companies, i.e., an 
entity employing no more than 1,500 persons. There are approximately 
1,000 licensees in the Rural Radiotelephone Service, and we estimate 
that almost all of them qualify as small entities under the SBA's 
definition.
    48. Air-Ground Radiotelephone Service. The Commission has not 
adopted a definition of small entity specific to the Air-Ground 
Radiotelephone Service. Accordingly, we will use the SBA's definition 
applicable to radiotelephone companies, i.e., an entity employing no 
more than 1,500 persons. There are approximately 100 licensees in the 
Air-Ground Radiotelephone Service, and we estimate that almost all of 
them qualify as small entities under the SBA definition.
    49. Private Land Mobile Radio (PLMR). PLMR systems serve an 
essential role in a range of industrial, business, land transportation, 
and public safety activities. These radios are used by companies of all 
sizes operating in all U.S. business categories. The Commission has not 
developed a definition of small entity specifically applicable to PLMR 
licensees due to the vast array of PLMR users. For the purpose of 
determining whether a licensee is a small business as defined by the 
SBA, each licensee would need to be evaluated within its own business 
area.
    50. The Commission is unable at this time to estimate the number 
of, if any, small businesses which could be impacted by the rules. 
However, the Commission's 1994 Annual Report on PLMRs indicates that at 
the end of fiscal year 1994 there were 1,087,267 licensees operating 
12,481,989 transmitters in the PLMR bands below 512 MHz. Because any 
entity engaged in a commercial activity is eligible to hold a PLMR 
license, the proposed rules in this context could potentially impact 
every small business in the United States.
    51. Fixed Microwave Services. Microwave services include common 
carrier, private-operational fixed, and broadcast auxiliary radio 
services. At present, there are approximately 22,015 common carrier 
fixed licensees in the microwave services. The Commission has not yet 
defined a small business with respect to microwave services. For 
purposes of this IRFA, we will utilize the SBA's definition applicable 
to radiotelephone companies--i.e., an entity with no more than 1,500 
persons. We estimate, for this purpose, that all of the Fixed Microwave 
licensees (excluding broadcast auxiliary licensees) would qualify as 
small entities under the SBA definition for radiotelephone companies.
    52. Offshore Radiotelephone Service. This service operates on 
several UHF TV broadcast channels that are not used for TV broadcasting 
in the coastal area of the states bordering the Gulf of

[[Page 67330]]

Mexico. At present, there are approximately 55 licensees in this 
service. We are unable at this time to estimate the number of licensees 
that would qualify as small entities under the SBA's definition for 
radiotelephone communications.
    53. Wireless Communications Services. This service can be used for 
fixed, mobile, radio location and digital audio broadcasting satellite 
uses. The Commission defined ``small business'' for the wireless 
communications services (WCS) auction as an entity with average gross 
revenues of $40 million for each of the three preceding years, and a 
``very small business'' as an entity with average gross revenues of $15 
million for each of the three preceding years. The Commission auctioned 
geographic area licenses in the WCS service. In the auction, there were 
seven winning bidders that qualified as very small business entities, 
and one that qualified as a small business entity. We conclude that the 
number of geographic area WCS licensees that may be affected by the 
decisions and rule changes under consideration in this proceeding 
includes these eight entities.
4. Description of Projected Reporting, Recordkeeping, and Other 
Compliance Requirements
    54. As currently structured, telecommunications carriers and other 
service providers having interstate revenues are required to file 
semiannually the Telecommunications Reporting Worksheet, which includes 
their reporting of end-user telecommunications revenues for purposes of 
the federal universal service support mechanisms. Any decisions or rule 
changes adopted in this proceeding carry the potential to increase the 
reporting and recordkeeping requirements on telecommunications service 
providers regulated under the Communications Act. For example, two of 
the possible alternatives to the current universal service contribution 
assessment methodology discussed, (1) basing universal service 
contributions on current year revenues and (2) reducing the time period 
between accrual of revenues and the assessment of universal service 
contributions based on those revenues, would entail additional monthly 
or quarterly reporting of end-user telecommunications revenues. Any 
such additional reporting requirements could potentially require the 
use of professional skills, including legal and accounting expertise. 
At this point, until we receive more data, we are unable to estimate 
the costs of compliance with these or other possible universal service 
assessment methodologies upon small telecommunications service 
providers that might be affected by any of the proposals discussed in 
the FNPRM. Entities, especially small businesses, are encouraged to 
file comments identifying and quantifying the costs of the two 
contribution assessment methodologies proposed and any other 
alternative methodologies during this proceeding.
5. Steps Taken To Minimize Significant Economic Impact on Small 
Entities, and Significant Alternatives Considered
    55. The RFA requires an agency to describe any significant 
alternatives that it has considered in reaching its proposed approach, 
which may include the following four alternatives (among others): (1) 
The establishment of differing compliance or reporting requirements or 
timetables that take into account the resources available to small 
entities; (2) the clarification, consolidation, or simplification of 
compliance or reporting requirements under the rule for small entities; 
(3) the use of performance, rather than design, standards; and (4) an 
exemption from coverage of the rule, or any part thereof, for small 
entities.
    56. To minimize the significant economic impact on carriers, 
including carriers which are small entities, this FNPRM proposes two 
alternative contribution assessment methodologies: (1) Basing 
contributions on current year revenues and (2) reducing the time period 
between accrual of revenues and the assessment of universal service 
contributions based on those revenues. These two alternatives impose 
different revenue reporting requirements. For example, the current year 
methodology proposed would require carriers to submit reports of their 
current revenues regularly in addition to the semiannual reports 
already required of revenues from the prior year in Forms 499A and 
499S. The other methodology proposed, however, would increase filing 
burdens to a lesser degree, requiring quarterly reporting of revenue 
data and the annual filing of the Form 499A. These alternatives would 
require the same reporting requirements for both large and small 
entities. Therefore, this Notice also seeks comment on other 
alternative contribution assessment methodologies that might minimize 
recordkeeping and reporting burdens on carriers, including small 
entities. The final alternative may be to leave the current 
contribution assessment methodology in place. This alternative will 
depend on the record developed in this proceeding.
6. Federal Rules that May Duplicate, Overlap, or Conflict With the 
Proposed Rules
    57. None.

D. Comment Dates and Filing Procedures

    58. We invite comment on the issues and questions set forth. 
Pursuant to applicable procedures set forth in Secs. 1.415 and 1.419 of 
the Commission's rules, interested parties may file comments as 
follows: comments are due November 30, 2000 and reply comments are due 
December 14, 2000. Comments may be filed using the Commission's 
Electronic Comment Filing System (ECFS) or by filing paper copies. See 
Electronic Filing of Documents in Rulemaking Proceedings, 63 FR 24121, 
May 1, 1998.
    59. Comments filed through the ECFS can be sent as an electronic 
file via the Internet to http://www.fcc.gov/e-file/ecfs.html>. 
Generally, only one copy of an electronic submission must be filed. If 
multiple docket or rulemaking numbers appear in the caption of this 
proceeding, however, commenters must transmit one electronic copy of 
the comments to each docket or rulemaking number referenced in the 
caption. In completing the transmittal screen, commenters should 
include their full name, Postal Service mailing address, and the 
applicable docket or rulemaking number. Parties may also submit 
electronic comments by Internet e-mail. To receive filing instructions 
for e-mail comments, commenters should send an e-mail to <a href="/cdn-cgi/l/email-protection#0d686e6b7e4d6b6e6e236a627b"><span class="__cf_email__" data-cfemail="87e2e4e1f4c7e1e4e4a9e0e8f1">[email protected]</span></a>, 
and should include the following words in the body of the message, 
``get form your e-mail address>.'' A sample form and directions will be 
sent in reply.
    60. Parties who choose to file by paper must file an original and 
four copies of each filing. If more than one docket or rulemaking 
number appears in the caption of this proceeding, commenters must 
submit two additional copies for each additional docket or rulemaking 
number. All filings must be sent to the Commission's Secretary, Magalie 
Roman Salas, Office of the Secretary, Federal Communications 
Commission, 445 12th Street, SW., Washington, DC 20554. Parties also 
should send three paper copies of their filing to Sheryl Todd, 
Accounting Policy Division, Common Carrier Bureau, Federal 
Communications Commission, 445 Twelfth Street, SW., Room 5-B540, 
Washington, DC 20554.
    61. Parties who choose to file by paper should also submit their 
comments on diskette to Sheryl Todd, Accounting Policy Division, Common

[[Page 67331]]

Carrier Bureau, Federal Communications Commission, 445 Twelfth Street, 
SW., Room 5-B540, Washington, DC 20554. Such a submission should be on 
a 3.5 inch diskette formatted in an IBM-compatible format using 
Microsoft Word 97 for Windows or a compatible software. The diskette 
should be accompanied by a cover letter and should be submitted in 
``read-only'' mode. The diskette should be clearly labeled with the 
commenter's name, proceeding, including the lead docket number in the 
proceeding (CC Docket No. 96-45), type of pleading (comment or reply 
comment), date of submission, and the name of the electronic file on 
the diskette. The label should also include the following phrase 
(``Disk Copy Not an Original.'') Each diskette should contain only one 
party's pleadings, preferably in a single electronic file. In addition, 
commenters must send diskette copies to the Commission's copy 
contractor, International Transcription Service, Inc., 1231 20th 
Street, NW., Washington, DC 20037.
    62. Written comments by the public on the proposed and/or modified 
information collections discussed in this FNPRM are due November 30, 
2000. Written comments must be submitted by the Office of Management 
and Budget (OMB) on the proposed and/or modified information 
collections on or before January 8, 2001. In addition to filing 
comments with the Secretary, a copy of any comments on the information 
collection(s) contained herein should be submitted to Judy Boley, 
Federal Communications Commission, Room 1-C804, 445 12th Street, SW., 
Washington, DC 20554, or via the Internet to <a href="/cdn-cgi/l/email-protection#fb919994979e82bb9d9898d59c948d"><span class="__cf_email__" data-cfemail="6a000805060f132a0c0909440d051c">[email protected]</span></a> and to 
Edward C. Springer, OMB Desk Officer, 10236 NEOB, 725 17th Street, NW., 
Washington, DC 20503, or via the Internet to <a href="/cdn-cgi/l/email-protection#1b6d736e6f735b747679357e746b357c746d"><span class="__cf_email__" data-cfemail="1f69776a6b775f70727d317a706f31787069">[email protected]</span></a>.

IV. Ordering Clauses

    63. Pursuant to the authority contained in sections 1, 4(i), 4(j), 
254, and 403, of the Communications Act of 1934, as amended, that this 
Further Notice of Proposed Rulemaking is adopted, that Comments are 
Requested as described, and that Notice is Hereby Given of proposed 
amendments to parts 54 of the Commission's rules, as described in this 
Further Notice of Proposed Rulemaking.
    64. The Commission's Consumer Information Bureau, Reference 
Information Center, shall send a copy of this Further Notice of 
Proposed Rulemaking, including the Initial Regulatory Flexibility 
Analysis, to the Chief Counsel for Advocacy of the Small Business 
Administration.

Federal Communications Commission.
Magalie Roman Salas,
Secretary.
[FR Doc. 00-28728 Filed 11-8-00; 8:45 am]
BILLING CODE 6712-01-P


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