[Federal Register Volume 63, Number 126 (Wednesday, July 1, 1998)]
[Notices]
[Pages 35930-35931]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-17486]



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FEDERAL COMMUNICATIONS COMMISSION

[CC Docket No. 96-45; DA 98-1130]


Third Quarter 1998 Universal Service Contribution Factors Revised 
and Approved

AGENCY: Federal Communications Commission.

ACTION: Notice.

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SUMMARY: The Common Carrier Bureau announces approved universal service 
contribution factors for the third quarter of 1998.

DATES: The third quarter contribution factors were announced in a 
Public Notice released on June 12, 1998.

ADDRESSES: One original and five copies of all comments responsive to 
this Public Notice must be sent to Magalie Roman Salas, Secretary, 
Federal Communications Commission, 1919 M Street, N.W., Washington, 
D.C. 20554. Three copies also should be sent to Sheryl Todd, Accounting 
Policy Division, Common Carrier Bureau, 2100 M Street, N.W., 8th Floor, 
Washington, D.C. 20554.

FOR FURTHER INFORMATION CONTACT: Lori Wright, Accounting Policy 
Division, Common Carrier Bureau, (202) 418-7391.

SUPPLEMENTARY INFORMATION: In this Public Notice, the Common Carrier 
Bureau (Bureau) revises and approves the final universal service 
contribution factors for the third quarter of 1998. On May 13, 1998, 
using information submitted on May 1, 1998 by the Universal Service 
Administrative Company (USAC), Schools and Libraries Corporation (SLC), 
and Rural Health Care Corporation (RHCC), the Accounting Policy 
Division (Division) of the Bureau announced the proposed universal 
service contribution factors for the third quarter of 1998. The 
proposed factors were published in the Federal Register on May 26, 
1998. Pursuant to the Commission's rules, if the Commission had taken 
no action by June 9, 1998, the proposed third quarter contribution 
factors would have been deemed approved. On June 8, 1998, the Division 
extended until 11:59 p.m. on June 12, 1998 the time period during which 
the Commission could modify the proposed third quarter 1998 universal 
service contribution factors.
    Also on May 13, 1998, the Bureau released a Public Notice seeking 
comment on whether to reduce the 1998 collection amounts for the 
schools and libraries and rural health care universal service support 
mechanisms. In an Order adopted today, the Commission, among other 
things, adjusts the 1998 collection amounts for the schools and 
libraries and rural health care universal service support mechanisms. 
Specifically, the Commission directs USAC to collect only as much as 
required by demand, but in no event more than $325 million per quarter 
for the third and fourth quarters of 1998 and the first and second 
quarters of 1999 to support the schools and libraries universal service 
support mechanism. The Commission further directs SLC to commit to 
applicants no more than $1.925 billion for disbursement during 1998 and 
the first half of 1999. With respect to the rural health care universal 
service support mechanism, the Commission directs USAC to collect only 
as much as required by demand, but in no event more than $25 million 
per quarter for the third and fourth quarters of 1998. The adjustments 
to the collection amounts for the third quarter of 1998 are reflected 
in the table below under the ``total program costs'' column. We note 
that, because the demand for funds exceeds the maximum amount that will 
be collected for the schools and libraries support mechanism in the 
third quarter of 1998, the ``total program costs'' for the third 
quarter (i.e., $325 million) is less than the demand that SLC 
projected. Because the table lists expenses, positive income flows are 
denoted with parentheses.

                                               Third Quarter 1998                                               
                                            [In millions of dollars]                                            
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                                                                Administrative                    Total program 
                   Program                     Program demand      expenses     Interest income       costs     
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Schools and Libraries.......................            690.0              4.4            (0.0)            325.0
Rural Health Care...........................             24.3              1.2            (0.5)             25.0
                                             -------------------------------------------------------------------
      Subtotal..............................            714.3              5.6            (0.5)            350.0
                                             ===================================================================
High Cost...................................            414.1              0.8            (0.7)            414.2
Low Income..................................            125.3              0.4            (1.0)            124.7
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      Subtotal..............................            539.4              1.2            (1.7)            538.9
                                             ===================================================================
      Total.................................          1,253.7              6.8            (2.2)            888.9
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    Based on information contained in the Universal Service Worksheets, 
FCC Form 457, USAC submitted on May 1, 1998, end-user 
telecommunications revenues for the 1997 calendar year. On May 14, 
1998, USAC submitted revised end-user telecommunications revenues for 
the 1997 calendar year. Funding bases for the third and fourth quarters 
are determined by subtracting the revenues reported for January through 
June 1997 (on the September Worksheet) from the 1997 calendar year 
revenues reported on the March Worksheet. The amounts are as follows:

Total Interstate, Intrastate, and International End-User 
Telecommunications Revenues from July 1, 1997--December 31, 1997: 
$94.066 billion
Total Interstate and International End-User Telecommunications Revenues 
from July 1, 1997--December 31, 1997: $34.719 billion

    To account for uncollectible contributions, we decrease by one 
percent the revenue estimates listed above. It has come to our 
attention that several carriers subject to the universal service 
contribution obligation have failed to meet this obligation. To 
maintain the integrity of the universal service support mechanisms, 
pending enforcement of this obligation, we determine that we should 
account for uncollectible contributions at a rate of one percent. This 
is consistent with USAC's estimated rate of uncollectible 
contributions. Additionally, because each quarter is three months long, 
we

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estimate quarterly revenues by dividing by two the six-month revenue 
estimates.
    Based on the revised end-user telecommunications revenues submitted 
by USAC, SLC, and RHCC, a one-percent reduction in the revenue 
estimates to account for uncollectible contributions, and consistent 
with the revised collection amounts for the schools and libraries and 
rural health care support mechanisms adopted today, the approved 
contribution factors for the third quarter of 1998 are as follows:

Contribution factor for the schools and libraries and rural health care 
support mechanisms: Total Program Costs / Contribution Base 
(Interstate, International, and Intrastate) = $0.350 billion / ( 
$93.125 billion / 2) = 0.0075
Contribution factor for the high cost and low income support 
mechanisms: Total Program Costs / Contribution Base (Interstate and 
International) = $0.539 billion / ($34.372 billion / 2) = 0.0314

    These factors are the approved third quarter 1998 universal service 
contribution factors that USAC shall use to calculate third quarter 
universal service contributions. USAC will bill and collect these 
contributions on a monthly basis.
    For further information, contact Lori Wright, Accounting Policy 
Division, Common Carrier Bureau, at (202) 418-7400.

Federal Communications Commission.
Lisa S. Gelb,
Chief, Accounting Policy Division, Common Carrier Bureau.
[FR Doc. 98-17486 Filed 6-30-98; 8:45 am]
BILLING CODE 6712-01-U