Federal Register / Vol. 63, No. 141 /Thursday, July 23, 1998 / Proposed Rules 39549

for deletion from the NPL. In the case

of the McColl site, EPA believes that the

following criteria for site deletion has

been met:

All appropriate response under

CERCLA has been implemented, and no

further action by the responsible parties

is appropriate.

EPA, with the concurrence of DTSC,

believes that this criterion for deletion

have been met. Subsequently, EPA is

proposing deletion of this site from the

NPL. Documents supporting this action

are available from the docket.

I. State Concurrence

The California Department of Toxic

Substances Control concurs with the

proposed deletion of the McColl

Superfund site from the NPL.

Dated: July 16, 1998.

Keith A. Takata,

Acting Regional Administrator, Region 9.

[FR Doc. 98–19653 Filed 7–22–98; 8:45 am]

BILLING CODE 6560–50–P

FEDERAL COMMUNICATIONS

COMMISSION

47 CFR Parts 54 and 69

[CC Docket Nos. 97–21 and 96–45; DA 98–

1336]

Federal Universal Service Support

Mechanisms

AGENCY: Federal Communications

Commission.

ACTION: Proposed rule; request for

comments.

SUMMARY: In this document, the

Commission seeks comment on the

Report and Proposed Plan of

Reorganization (Plan) filed on July 1,

1998 by the Universal Service

Administrative Company (USAC), the

Schools and Libraries Corporation

(SLC), and the Rural Health Care

Corporation (RHCC). The Plan proposes

a revised administrative structure of the

federal universal service support

mechanisms. RHCC filed a Separate

Statement of the Rural Health Care

Corporation and Request for Three

Changes in the Plan, dissenting from

certain provisions of the proposed Plan.

In this document, the Commission also

seeks comment on other issues

regarding the administration of the

federal universal service support

mechanisms, including processes for

Commission review of actions by USAC,

SLC, and RHCC.

DATES: Comments are due on or before

August 5, 1998 and Reply Comments are

due on or before August 12, 1998.

ADDRESSES: One original and six copies

of all comments and reply comments

should be sent to the Commission’s

Secretary, Magalie Roman Salas, Office

of the Secretary, Federal

Communications Commission, 1919 M

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

D.C. 20554. All filings should refer to

USAC Plan of Reorganization, CC

Docket Nos. 97–21 and 96–45, and DA

98–1336. Parties also may file comments

electronically via the Internet at: <http:/

/www.fcc.gov/e-file/ecfs.html>. Only

one copy of an electronic submission

must be submitted. In completing the

transmittal screen, commenters should

include their full name, Postal Service

mailing address, and the lead docket

number for this proceeding, which is

Docket No. 97–21. Parties not

submitting their comments via the

Internet are also asked to submit their

comments on diskette. Parties

submitting diskettes should submit

them to Sheryl Todd, Accounting Policy

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

8606, Washington, D.C. 20554. Such a

submission should be on a 3.5 inch

diskette formatted in an IBM compatible

format using WordPerfect 5.1 for

Windows or compatible software. The

diskette should be accompanied by a

cover letter and should be submitted in

‘‘read only’’ mode. The diskette should

be clearly labelled with the party’s

name, proceeding (including the lead

docket number in this case, Docket No.

97–21), type of pleading (comment or

reply comment), date of submission,

and the name of the electronic file on

the diskette. Each diskette should

contain only one party’s pleadings,

preferably in a single electronic file. In

addition, parties must send copies to the

Commission’s copy contractor,

International Transcription Service,

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

Washington, D.C. 20037.

FOR FURTHER INFORMATION CONTACT:

Sharon Webber, Attorney, Common

Carrier Bureau, Accounting Policy

Division, (202) 418–7400 or Adrian

Wright, Common Carrier Bureau,

Accounting Policy Division, (202) 418–

7400.

SUPPLEMENTARY INFORMATION: This is a

summary of the Commission’s

document released on July 15, 1998.

The full text of this document and the

Plan are available for public inspection

during regular business hours in the

FCC Reference Center, Room 239, 1919

M Street, N.W., Washington, D.C.,

20554. An electronic copy of the

complete plan of reorganization also

may be found on the Commission’s

Universal Service Web Page at

<www.fcc.gov/ccb/universallservice/

usacjuly.pdf>.

Background

1. In connection with supplemental

appropriations legislation enacted on

May 1, 1998, Congress requested that

the Commission propose a single entity

to administer the support mechanisms

for schools and libraries and rural

health care providers. In its Report to

Congress, the Commission proposed to

merge the Schools and Libraries

Corporation (SLC) and the Rural Health

Care Corporation (RHCC) into the

Universal Service Administrative

Company (USAC) as the single entity

responsible for administering the

universal service support mechanisms

for schools, libraries and rural health

care providers by January 1, 1999. The

Commission indicated that USAC, SLC

and RHCC would be required jointly to

prepare and submit a plan of

reorganization, for approval by the

Commission.

2. On July 1, 1998, SLC, RHCC and

USAC filed a Report and Proposed Plan

of Reorganization (Plan) for revising the

administrative structure of the federal

universal service support mechanisms.

RHCC filed a Separate Statement of the

Rural Health Care Corporation and

Request for Three Changes in the Plan

(RHCC Statement), proposing certain

modifications to the Plan. In this

document, we seek comment from

interested parties on issues raised by the

Plan and the RHCC Statement. We also

seek comment on other issues regarding

the administration of the federal

universal service support mechanisms,

including processes for Commission

review of actions by USAC, RHCC and

SLC, divestiture of USAC from the

National Exchange Carrier Association

(NECA), and compensation limitations.

Issues for Comment

Revised Administrative Structure

3. USAC, SLC, and RHCC have

proposed a plan to merge SLC and

RHCC into USAC as the single entity

responsible for administering the

universal service support mechanisms

for schools, libraries and rural health

care providers by January 1, 1999. As

described more fully in the Plan, USAC

would consist of three divisions—the

High Cost & Low Income Division, the

Schools and Libraries Division, and the

Rural Health Care Division. The current

USAC Board consists of seventeen

members representing a cross-section of

industry and beneficiary interests.

Under the revised administrative

structure, the USAC Board of Directors

(the Board) would consist of seventeen
39550 Federal Register / Vol. 63, No. 141 /Thursday, July 23, 1998 / Proposed Rules

members plus the USAC Chief

Executive Officer (CEO). In addition, the

Plan proposes that two new committees

of the USAC Board would be

established to oversee the schools and

libraries and rural health care support

mechanisms. Any action taken by the

Rural Health Care, Schools and

Libraries, and High Cost and Low

Income committees with regard to their

respective support mechanisms would

be binding on the Board, unless such

action is presented for review to the full

Board by the USAC CEO and the Board

disapproves of such action by a twothirds vote of a quorum of directors.

However, all committee budgetary

matters would be presented to the full

USAC Board and could be disapproved

by a two-thirds vote of a quorum of

directors. Under the Plan, the USAC

CEO would manage all three universal

service support mechanisms.

4. We seek comment on whether

vesting the consolidated USAC with the

administrative responsibilities for all of

the universal service support

mechanisms would best further the

goals of efficient administration and

accountability. We also seek comment

on whether the Plan fulfills the goal of

administrative efficiency while

preserving the distinct missions of the

three universal service support

mechanisms. We seek comment on any

other administrative structures the

Commission could adopt. To the extent

that parties suggest alternative

structures, we urge them to provide as

much detail as possible, and to evaluate

fully the benefits and disadvantages of

such structure in comparison to USAC’s

Plan. We also seek comment on the

proposed functions and composition of

the three committees of the Board, as

described in the Plan.

5. Although the Plan is silent on the

selection process for the USAC CEO, we

seek comment on whether the

Commission should adopt the

procedure that currently applies to the

selection of a CEO for SLC and RHCC.

Under that procedure, the consolidated

USAC Board would submit to the

Chairman of the Commission a

candidate to serve as the USAC CEO.

Final selection of that individual would

be subject to the approval of the

Chairman of the Commission.

6. In the RHCC Statement, RHCC

proposes three modifications to the

proposed Plan. First, RHCC proposes

that two additional rural health care

representatives serve on the USAC

Board and that the Plan identify the

individuals who initially would serve

on the combined Board and the

individuals who would serve on the

initial Rural Health Care Committee.

Second, RHCC proposes that the RHCC

Committee have the authority to bind

the full USAC Board with regard to all

of the Committee’s programmatic

functions and that Committee decisions

not be subject to disapproval by a twothirds vote of a quorum of the Board.

Third, while RHCC agrees that the CEO

should have the authority to hire and

fire the division heads, RHCC proposes

that the RHCC division head be granted

the authority to hire and fire division

staff. We seek comment on RHCC’s

proposals.

Compensation Limitations

7. In the Commission’s recent order

regarding funding for the schools and

libraries universal service support

mechanism, the Commission concluded

that the Administrator must, as a

condition of its continued service,

compensate all officers and employees

of SLC and RHCC at an annual rate of

pay, including any non-regular

payments, bonuses, or other

compensation, that does not exceed the

rate of basic pay in effect for Level I of

the Executive Schedule under section

5312 of Title 5 of the United States

Code. The Commission further stated

that such level of compensation would

apply, effective July 1, 1998, to all

officers and employees of SLC and

RHCC, as currently organized, as well as

to all such officers and employees in the

consolidated administrative corporation

following reorganization on January 1,

1999. We seek comment on whether

compensation limitations also should

apply to all USAC officers and

employees, including, for example,

those responsible for administering the

support mechanisms for high cost areas

and low income consumers as well as

those responsible for performing the

billing and collection functions for all of

the support mechanisms. We also seek

comment on whether such

compensation limitations should apply

to officers and employees of NECA.

USAC’s Permanence and Divestiture

From NECA

8. In the Report to Congress, the

Commission proposed that the revised

administrative structure be made

permanent, subject to the Commission’s

review and determination after one year

that the new structure is administering

the distribution of universal service

support and benefits to eligible entities

in an efficient, effective and

competitively neutral manner. We seek

comment on the Commission’s proposal

to designate USAC as the permanent

Administrator. In the Report to

Congress, the Commission further

proposed that, pending Commission

review of USAC’s performance after one

year, USAC should be divested from

NECA. The Plan proposes to divest

USAC from NECA as soon as possible.

We seek comment on the proposed

divestiture of USAC from NECA and the

timing of such divestiture.

FCC Oversight

9. The Commission has always

retained ultimate control over the

operation of the federal universal

service support mechanisms through its

authority to establish the rules

governing the support mechanisms and

to review all decisions concerning

administration of the support

mechanisms. The consolidated USAC

would continue to be accountable to the

Commission pursuant to the procedures

that currently apply to USAC, SLC, and

RHCC. SLC and RHCC have the

authority to direct the performance of

audits of schools and libraries and rural

health care provider beneficiaries of

universal service support. The

Commission also oversees the structure

and content of the annual independent

audit that USAC, SLC, and RHCC are

required to undertake.

10. The Commission will levy a

forfeiture for a violation of the Act

under section 503(b)(1)(B) and (2)(C) of

the Act. Furthermore, persons found

willfully to have made false statements

to the Commission may be subject to

criminal penalties under Title 18 of the

United States Code.

11. We note that parties already have

asked the Commission what procedures

will be used to review decisions by SLC,

RHCC, and USAC. Any affected party

may seek review from the Commission

using existing Commission procedures.

However, until a revised administrative

structure is adopted, we strongly

encourage parties seeking relief from a

decision of USAC, SLC, or RHCC to seek

initial reconsideration from SLC, RHCC

or the High Cost and Low Income

Committee, as appropriate.

12. In the Report to Congress, the

Commission proposed to establish

specific appeal procedures under which

administrative decisions made by USAC

would be reviewable by the

Commission. We seek comment on the

following proposal: An affected party

would be permitted to file with the

Common Carrier Bureau (the Bureau),

within sixty days of an action taken by

USAC, a petition for Commission

review. The Bureau would have

delegated authority to rule on such

petition and if the Bureau took no action

within sixty days, USAC’s decision

would be deemed approved by the

Bureau. As with other decisions made

by the Bureau acting pursuant to its
Federal Register / Vol. 63, No. 141 /Thursday, July 23, 1998 / Proposed Rules 39551

delegated authority, parties could seek

Commission review of the Bureau’s

decision. The Bureau also would have

the authority to review the decisions of

USAC at any time on the Bureau’s own

motion. The Bureau would conduct de

novo review of appeals from USAC

decisions. If an application for

discounted services or support is

approved, and that approval is appealed

to the Commission, the pendency of that

appeal would not affect the eligibility of

the applicant to receive discounted

services, nor would it prevent

reimbursement of carriers for

discounted services provided to such

applicants. We seek comment on all

aspects of this proposal. At the same

time, we propose to limit the Bureau’s

authority to issues that are not novel

questions of fact, law or policy. We seek

comment on this proposal. We also seek

comment on whether state procurement

rules or other state experiences may

serve as useful models in addressing

appeals of USAC’s decisions.

13. In addition, we seek comment on

whether a party affected by a decision

made by the division staff should be

required to seek relief from the

appropriate committee of the Board

before filing an appeal with the

Commission. Similarly, if the relief

sought pertains to a matter that is solely

within the jurisdiction of the full USAC

Board, we seek comment on whether the

affected party should be required to seek

relief from the full USAC Board before

filing an appeal with the Commission.

We also seek comment on the timing

issues that would be raised if the USAC

CEO chose to bring the matter before the

full USAC Board under the

supermajority procedure. In addition,

we seek comment on other ways in

which the appeals process may be made

as fair and efficient as possible.

14. To foster greater accountability of

the consolidated USAC entity, the

Commission proposed in the Report to

Congress that, in connection with its

annual audit, USAC prepare and file

with Congress and the Commission an

annual report describing all significant

aspects of its structure and operations

for the preceding year. We seek

comment on this proposal and on ways

to structure such a report to enhance the

Commission’s oversight of USAC’s

administration and operations.

15. We seek comment on whether

there are any additional enforcement

mechanisms that the Commission

should invoke. Furthermore, we seek

comment on what action the

Commission should take if it is

determined that an application was

approved and funds subsequently

disbursed erroneously.

Regulatory Flexibility Analysis

16. The Regulatory Flexibility Act

(RFA) requires that a regulatory

flexibility analysis be prepared for

notice and comment rulemaking

proceedings, unless the agency certifies

that ‘‘the rule will not, if promulgated,

have a significant economic impact on

a substantial number of small entities.’’

The RFA generally defines ‘‘small

entity’’ as having the same meaning as

the terms ‘‘small business,’’ ‘‘small

organization,’’ and ‘‘small governmental

jurisdiction.’’ A small organization is

generally ‘‘any not-for-profit enterprise

which is independently owned and

operated and is not dominant in its

field.’’ This regulatory flexibility

analysis supplements our prior

certification and analyses.

17. Supplemental Regulatory

Flexibility Certification. In the NECA

Governance Order, the Commission

directed NECA, as a condition of its

service as temporary Administrator of

the universal service support

mechanisms, to create an independent

subsidiary, USAC, to administer

temporarily certain aspects of the

universal service support mechanisms

and to establish SLC and RHCC to

administer specific aspects of the

universal service mechanisms for

schools and libraries and rural health

care providers. In that Order, the

Commission concluded that NECA is

not a small organization within the

meaning of the RFA, finding that NECA

is a non-profit association that was

created to administer the Commission’s

interstate access tariff and revenue

distribution processes. On this basis, the

Commission certified pursuant to the

RFA that the rules adopted in the NECA

Governance Order would not have a

significant economic impact on a

substantial number of small entities.

18. This document seeks comment on

the proposed plan to merge SLC and

RHCC into USAC as the single entity

responsible for the administration of the

universal service support mechanisms

for schools, libraries and rural health

care providers. We also seek comment

on a proposal to require USAC to

prepare and file with Congress and the

Commission an annual report describing

all significant aspects of its structure

and operations for the preceding year.

For the same reasons stated in the NECA

Governance Order, we find that NECA

is not a small organization within the

meaning of the RFA. Similarly, USAC,

as a wholly-owned, non-profit

subsidiary of NECA, is not a small

organization. SLC and RHCC are nonprofit corporations created by NECA as

a condition of its service as temporary

Administrator. Even if NECA, USAC,

SLC and RHCC are small entities, we

certify that the reorganization of SLC,

RHCC, and USAC proposed here will

affect directly only those four entities

and thus will not have a direct,

significant impact on a substantial

number of small entities. We therefore

certify, pursuant to RFA, 5 USC 605(b),

that this action will not have a

significant economic impact on a

substantial number of small entities.

19. Supplemental Regulatory

Flexibility Analysis. This document

seeks comment on the proposed

procedures under which administrative

decisions made by USAC would be

reviewable by the Commission. This

document also seeks comment on the

enforcement mechanisms the

Commission should invoke in

connection with the universal service

support mechanisms. We previously

performed a regulatory flexibility

analysis regarding the implementation

of the universal service support

mechanisms. This supplemental

regulatory flexibility analysis addresses

possible changes to our previous

analyses that might result from our

proposal here.

20. The Commission is required by

sections 254(a)(2) and 410(c) of the Act

to propose rules to implement properly

the universal service support

mechanisms. In this document, the

Commission proposes procedures under

which administrative decisions made by

USAC would be reviewable by the

Commission. This document also seeks

comment on whether a party affected by

a decision made by the division staff of

USAC should be required to seek relief

from the appropriate committee of the

USAC Board before filing an appeal

with the Commission. Specific appeal

procedures are necessary to ensure that

the Commission retains ultimate

authority over the implementation of

universal service support mechanisms.

The description of the small entities to

which the proposed rules would apply

is set forth in the Universal Service

Order and continues to apply to our

analysis. The Commission proposes a

two-level appeal process. We do not

believe that such a requirement will

have a significant economic impact on

the small entities affected by the

process. Affected parties will benefit

from review by the appropriate

committee of the full USAC Board

instead of having to resort to full

Commission review in the first instance.

We seek comment on these tentative

conclusions.

21. The Commission’s Office of Public

Affairs Reference Operations Division,

will send a copy of this document,
39552 Federal Register / Vol. 63, No. 141 /Thursday, July 23, 1998 / Proposed Rules

1Section 2005(b) of Senate Bill 1768.

2For example, I am concerned about the degree

of oversight that is being exercised regarding

administrative and start-up costs. In their latest

filing, the Schools and Libraries Corporation

indicates that it paid NECA $1.86 million in startup costs, more than three time the original estimate,

and it is still not able to provide an accurate

estimate of all its administrative costs for the first

quarter. Third Quarter 1998 Fund Size

Requirements for the Schools and Libraries

Universal Service Program, dated May 1, 1998.

including this certification, to the Chief

Counsel for Advocacy of the Small

Business Administration.

Ex Parte

22. Pursuant to 47 CFR 1.1206, this

proceeding will be conducted as a

permit-but-disclose proceeding in

which ex parte communications are

permitted subject to disclosure.

List of Subjects

47 CFR Part 54

Healthcare providers, Libraries,

Schools, Telephone.

47 CFR Part 69

Communications common carriers.

Federal Communications Commission.

Kathryn C. Brown,

Chief Common Carrier Bureau.

Statement of Commissioner Harold

Furchtgott-Roth

Re: Proposal to Revise Administrative

Structure for Federal Universal Service

Support Mechanisms; (CC Docket No

96–45)

July 15, 1998.

Today the Common Carrier Bureau

releases a Public Notice seeking

comment on the Universal Service

Administrative Company’s (USAC)

proposed plan for reorganization of the

universal service administrative

structures. The proposal for

consolidating the three corporations is a

good first step in reaching a more

rational and efficient structure to

administer universal service. I also

appreciate that the Bureau is following

up on the Commission’s commitment in

its May 8, 1998 report to Congress to

‘‘establish a procedure under which

administrative decisions made by USAC

would be reviewable by the

Commission.’’ I have reservations,

however, about the details of these

proposals, including the specific

functions of the consolidated entity and

the Bureau’s proposed procedures for

Commission oversight.

Section 2005(b)(2)(A) of Senate Bill

1768, which prompted these revisions,

provides for an extremely limited

administrative entity:

[T]he entity proposed by the

Commission to administer the

program—(i) is limited to

implementation of the FCC rules for

applications for discounts and

processing the application necessary to

determine eligibility for discounts under

section 254(h) of the Communications

Act of 1934 (47 U.S.C. 254(h)) as

determined by the Commission: (ii) may

not administer the program in any

manner that requires that entity to

interpret the intent of Congress in

establishing the programs or interpret

any rule promulgated by the

Commission in carrying out the

programs, without appropriate

consultation and guidance from the

Commission.

In light of such limited administrative

functions, I fail to see the need for such

bureaucratic corporations with formal

multiple committees. If the overall

entity is prohibited from setting policy

and limited to the function of

processing applications, then any

subcommittee must be similarly

constrained. But what kinds of

decisions will any subcommittee be

making that would be of such

paramount interest to the program that

it would be necessary to bind the full

USAC board absent a supermajority? In

establishing an entity to review and

process the applications, the

Commission is merely contracting out

administrative functions. All decisions

regarding where the money should be

going and how it should be distributed

should—indeed must—be made by the

Commission.

I am also concerned that the

Commission itself is insufficiently

involved in the decision-making process

under the Bureau’s proposal. For

example, an affected party would file a

petition for review first with the

Common Carrier Bureau, who would

have specific delegated authority to rule

on the petitions with possible appeal to

the full Commission. I would prefer that

the full Commission be more actively

involved in overseeing the

administration of these new programs.

For example. unless amended, this

process would allow for Bureau

approval of USAC decisions without an

order explaining their reasoning. My

concerns regarding sufficient

Commission involvement earlier in the

process are only exacerbated by the

Bureau’s proposal to allow applicants to

receive discounted services and carriers

to be reimbursed during the pendency

of such an appeal. Thus, If the Bureau

failed to act for any number of reasons,

public funds would still be disbursed

while a potentially valid challenge

remained. What assurances are there for

taxpayers that erroneous payments will

be returned?

I also fail to see the need for any party

to be required to appeal a USAC staff

decision first to the USAC Board, and

possibly even to the relevant committee

of the Board, as proposed. USAC has no

policy-making or adjudicative authority.

As such, an affected party should be

able to seek relief directly from the full

Commission, or the Bureau if

appropriate under delegated authority.

Moreover, my concerns regarding

appropriate Commission oversight are

heightened by the fact that the proposed

committees of USAC would have the

power to bind the USAC Board

regarding matters within their expertise,

absent a supermajority of the full USAC

Board voting to override the

committee’s actions. Matters within the

Schools and Libraries Committee’s

expertise. For example, include

‘‘developing and implementing other

distinctive program functions.’’ I am

concerned with such open-ended

authority, especially in light of the

protracted procedure for Commission

review. I encourage parties to take these

issues into account when commenting

on the proposed structure.

I believe that the full Commission

must take a more active role in the

direct oversight of these quasi-public

companies. Congress clearly favors a

more efficient organization of only

limited administrative functions,

without the ability to ‘‘interpret the

intent of Congress’’ or ‘‘any rule

promulgated by the Commission.1

While a good start, this public notice

fails to ensure meaningful and early

Commission involvement in budgetary

decisions and the policy-making

process.2

Finally, I remain concerned that the

report fails to address fully the issues

raised by the GAO report regarding the

legality of the Commission creating any

new corporations without specific

statutory authority. I fail to see how the

Commission can direct that these

corporations continue to act without

first receiving the requisite

authorization from Congress, and urge

others to comment on this aspect of the

revised organization.

[FR Doc. 98–19707 Filed 7–22–98; 8:45 am]

BILLING CODE 6712–01–M