30080 Federal Register / Vol. 66, No. 108 / Tuesday, June 5, 2001 / Rules and Regulations

Fairness Act of 1996, generally provides

that before a rule may take effect, the

agency promulgating the rule must

submit a rule report, which includes a

copy of the rule, to each House of the

Congress and to the Comptroller General

of the United States. EPA will submit a

report containing this rule and other

required information to the U.S. Senate,

the U.S. House of Representatives, and

the Comptroller General of the United

States prior to publication of this final

rule in the Federal Register. This final

rule is not a ‘‘major rule’’ as defined by

5 U.S.C. 804(2).

List of Subjects in 40 CFR Part 180

Environmental protection,

Administrative practice and procedure,

Agricultural commodities, Pesticides

and pests, Reporting and recordkeeping

requirements.

Dated: May 23, 2001.

James Jones,

Director, Registration Division, Office of

Pesticide Programs.

Therefore, 40 CFR chapter I is

amended as follows:

PART 180—[AMENDED]

1. The authority citation for part 180

continues to read as follows:

Authority: 21 U.S.C. 321(q), 346(a) and

371.

2. Section 180.458 is amended by

alphabetically adding the entry

vegetable, root (except sugar beet)

subgroup to the table in paragraph

(a)(3), by revising the entry for

vegetable, tuberous and corm group, and

by deleting the entries for carrot and

radish roots to read as follows:

§ 180.458 [((E)-(±)-2-[1-[[(3-chloro-2-

propenyl)oxy]imino]propyl]-5-[2-

(ethylthio)propyl]-3-hydroxy-2-cyclohexen1-one); tolerances for residues.

(a) * * *

(3) * * *

Commodity Parts per million

*****

Vegetable, root (except sugar beet) subgroup ........................................................ 1.0

*****

Vegetable, tuberous and corm, subgroup ............................................................... 1.0

* * * * *

[FR Doc. 01–14086 Filed 6–4–01; 8:45 am]

BILLING CODE 6560–50–S

FEDERAL COMMUNICATIONS

COMMISSION

47 CFR Parts 36 and 54

[CC Docket Nos. 96–45 and 00–256; FCC

01–157]

Federal-State Joint Board on Universal

Service; Multi-Association Group

(MAG) Plan for Regulation of Interstate

Services of Non-Price Cap Incumbent

Local Exchange Carriers and

Interexchange Carriers

AGENCY: Federal Communications

Commission.

ACTION: Final rule.

SUMMARY: In this document, the

Commission takes actions in response to

the Rural Task Force’s recommended

reforms to rural high-cost universal

service support and the proposals made

by the Multi-Association Group (MAG)

relating to this universal service support

mechanism.

DATES: Effective June 5, 2001, except for

§§ 36.605(c)(2), 36.611, 54.305(f), the

amendments to § 54.307(b), §§ 54.313(b)

and (c), 54.314, and 54.315, which

contain information collection

requirements that have not been

approved by the Office of Management

Budget (OMB). The Commission will

publish a document in the Federal

Register announcing the effective date

of those sections.

FOR FURTHER INFORMATION CONTACT:

Genaro Fullano, Paul Garnett, or Greg

Guice, Attorney, Common Carrier

Bureau, Accounting Policy Division,

(202) 418–7400.

SUPPLEMENTARY INFORMATION: This is a

summary of the Commission’s

Fourteenth Report and Order, TwentySecond Order on Reconsideration in CC

Docket No. 96–45 and Report and Order

in CC Docket No. 00–256 released on

May 23, 2001. 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.

I. Executive Summary

1. In this Order, we take the following

actions in response to the Rural Task

Force’s recommended reforms to rural

high-cost universal service support and

the proposals made by the MultiAssociation Group (MAG) relating to

this mechanism:

• We adopt the Rural Task Force’s

recommendation to re-base the high-cost

loop support fund for rural telephone

companies and retain an indexed cap on

the fund. We conclude that re-basing the

indexed fund will ensure that rural

carriers are able to are able tocontinue

providing supported services at

affordable and reasonably comparable

rates during the transition to a more

permanent high-cost support

mechanism for rural carriers.

• We adopt a ‘‘rural growth factor’’

that allows the high-cost loop support

fund to grow based on annual changes

in the Gross Domestic Product-Chained

Price Index (GDP–CPI) and the total

number of working loops of rural

carriers. We find that allowing the fund

to grow in this fashion over the next five

years will enable rural carriers to make

prudent investments in rural America.

• We adopt the Rural Task Force’s

recommendation to freeze the national

average loop cost at $240.00. We

conclude that freezing the national

average loop cost will provide rural

carriers with greater certainty as to their

eligibility for high-cost loop support.

• We adopt a modified version of the

Rural Task Force’s proposal as it relates

to corporate operations expenses. We

revise the corporate operations expense

limitation calculation so that the dollar

values in the formula are re-based and

indexed by the GDP–CPI.

• We also raise the minimum cap in

the revised corporate operations

expense limitation formula.

Specifically, we permit small rural

carriers to receive support for corporate

operations expenses of up to $600,000

or amounts derived from the revised

corporate operations expense formula,

whichever is greater. We find that

raising the minimum cap from $300,000

to $600,000 will enable small rural

carriers to receive more support for

corporate operations expenses without

having to file for waiver of our rules.

• We adopt a modified version of the

Rural Task Force’s proposed ‘‘safety net

additive’’ so that a carrier will receive

Federal Register / Vol. 66, No. 108 / Tuesday, June 5, 2001 / Rules and Regulations 30081

support for its incremental expense

adjustment associated with new

investment, rather than 50 percent of

the difference between capped and

uncapped support in a given year as

proposed by the Rural Task Force. By

modifying safety net support in this

way, we ensure that carriers that meet

the threshold requirement for eligibility

will receive support for their

incremental investment, but do not

recover more than the costs incurred as

a result of the additional investment.

• Consistent with the Rural Task

Force’s recommendation, we retain

§ 54.305 of the Commission’s rules,

which provides that a carrier acquiring

exchanges from an unaffiliated carrier

shall receive the same per-line levels of

high-cost support for which the

acquired exchanges were eligible prior

to their transfer. We modify the rule,

however, to provide a ‘‘safety valve’’

that provides support for additional

investment made in the acquired

exchanges.

• We decline at this time to adopt the

Rural Task Force’s proposal to freeze

high-cost loop support upon

competitive entry in rural carrier study

areas. The proposal may be of limited

benefit in serving its intended purpose

of preventing excessive fund growth,

and in some circumstances might

increase high-cost loop support levels.

We also conclude that the Rural Task

Force’s proposal would be

administratively burdensome and may

have the unintended consequence of

discouraging investment in rural

America.

• We address the Rural Task Force’s

concerns regarding frequency of

reporting and the lag in support in study

areas with competitive eligible

telecommunications carriers. First, we

require all eligible telecommunications

carriers serving such areas to report

updated line counts on a regular

quarterly basis. Second, we clarify that

competitive eligible

telecommunications carriers may

submit data and receive high-cost loop

support on a regular quarterly basis.

• We adopt, with certain

modifications, the three paths for the

disaggregation and targeting of high-cost

universal service support proposed by

the Rural Task Force. We also adopt the

general requirements that the Rural Task

Force proposed for all disaggregation

plans. We find that providing rural

carriers flexibility in the methods of

disaggregation and targeting is a

reasonable approach to address the

significant diversity among such carriers

and will facilitate competitive entry in

rural areas.

• We find that the Rural Task Force’s

proposed framework, with certain

modifications, shall remain in place for

five years and implementation shall

begin as of July 1, 2001.

• We adopt the use of a wireless

mobile customer’s billing address as the

basis for determining the customer’s

location for purposes of delivering highcost universal service support.

• We conclude that states should file

annual certifications with the

Commission to ensure that eligible

telecommunications carriers providing

service in the service area of a rural

carrier use universal service support

‘‘only for the provision, maintenance

and upgrading of facilities and services

for which the support is intended’’

consistent with section 254(e) of the

Act.

• Consistent with the Rural Task

Force’s recommendation, the Joint

Board on Universal Service is currently

considering the definition of supported

services. We agree with the Rural Task

Force that our universal service policies

should not inadvertently create barriers

to the provision of access to advanced

services, and believe that our current

universal service system does not create

such barriers. We commit to further

consideration of the Rural Task Force’s

proposed ‘‘no barriers to advanced

services’’ policy in the future.

• We find the Rural Task Force’s

recommended principles for access

reform to be reasonable and generally

consistent with prior Commission

actions to reform the access rate

structure of price cap carriers. These

principles will aid our consideration of

access charge reform issues in the

pending MAG proceeding. We recognize

the importance of completing access

reform for rate-of-return carriers and

intend to act expeditiously to resolve

issues raised in the MAG proceeding.

II. Procedural Matters

A. Final Regulatory Flexibility Analysis

2. As required by the Regulatory

Flexibility Act (RFA), an Initial

Regulatory Flexibility Analysis (IRFA)

was incorporated in the Further Notice

of Proposed Rulemaking (FNPRM), 66

FR 7725, January 25, 2001. The

Commission sought written public

comment on the proposals in the

FNPRM, including comment on the

IRFA. This present Final Regulatory

Flexibility Analysis (FRFA) conforms to

the RFA.

1. Need for, and Objectives of, the Order

3. The 1996 Act requires the

Commission to consult with the Joint

Board in implementing section 254,

which establishes a number of

principles for the preservation and

advancement of universal service in a

competitive telecommunications

environment. The Commission initiated

this proceeding to consider the

Recommended Decision of the Joint

Board regarding a rural universal service

plan developed by the Rural Task Force.

In this Order, consistent with the

recommendation of the Joint Board, we

adopt interim rules for determining

high-cost universal service support for

rural telephone companies based upon

the modified embedded cost mechanism

proposed by the Rural Task Force.

These rules should benefit all rural

carriers because they will result in

predictable levels of support so that

rural carriers can continue to provide

affordable service in rural America,

while ensuring that consumers in all

regions of the Nation, including rural

areas, have access to affordable and

quality telecommunications services.

4. In this Order, we take the following

actions in response to the Rural Task

Force’s recommended reforms to the

rural high-cost loop support mechanism

and the proposals made by the MAG

relating to these rules. First, we adopt

the Rural Task Force’s recommendation

to re-base the high-cost loop support

fund for rural telephone companies and

retain an indexed cap on the fund.

Second, we adopt a rural growth factor

that allows growth in the high-cost loop

support fund based on the annual

increases in the Gross Domestic

Product-Chained Price Index (GDP–CPI)

and growth in the total number of

working loops of rural carriers. Third,

we adopt a modified version of the

Rural Task Force’s proposal as it relates

to corporate operations expense. We

revise the corporate operations expense

limitation calculation so that the dollar

values in the formula are re-based and

indexed by the GDP–CPI. We also raise

the minimum cap for those carriers with

6,000 or fewer loops. In the revised

corporate operations expense formula,

we allow these carriers to receive

support for corporate operations

expenses of up to $600,000 or amounts

derived from the revised corporate

operations expense formula, whichever

is greater. Fourth, we adopt a modified

version of the Rural Task Force’s

proposed safety net additive so that if

certain criteria are met, a carrier may

receive support for its incremental

expense adjustment associated with

new investment. Fifth, while we retain

§ 54.305 of the Commission’s rules

which provides that a carrier acquiring

exchanges from an unaffiliated carrier

shall receive the same per-line levels of

30082 Federal Register / Vol. 66, No. 108 / Tuesday, June 5, 2001 / Rules and Regulations

high-cost support for which the

acquired exchanges were eligible prior

to their transfer, we also modify the rule

to provide safety valve support for

additional investment made in the

acquired exchanges. Sixth, we adopt,

with certain modifications, the three

paths for the disaggregation and

targeting of high-cost universal service

support proposed by the Rural Task

Force. We also adopt the general

requirements that the Rural Task Force

proposed for all disaggregation plans.

Seventh, we adopt the Rural Task

Force’s proposed framework, with the

noted modifications, and it shall remain

in place for five years. Finally, we

conclude that states should file annual

certifications with the Commission to

ensure that rural carriers and

competitive eligible

telecommunications carriers providing

service in the service area of a rural

local exchange carrier use universal

service support ‘‘only for the provision,

maintenance and upgrading of facilities

and services for which the support is

intended’’ consistent with section 254(e)

of the Act.

5. In this Order, the Commission also

addresses certain issues raised in the

MAG proceeding. Specifically, we find

that the MAG proposal to remove the

indexed cap entirely and to eliminate

the limits on corporate operations

expenses is unwarranted. We also

decide against the MAG proposal to the

extent that it recommends elimination

of § 54.305 entirely. Finally, we disagree

with the MAG proposal to allow rural

carriers to disaggregate universal service

support up to three zones per wire

center. We find the Rural Task Force’s

recommended principles for access

reform to be reasonable and generally

consistent with prior Commission

actions to reform the access rate

structure of price cap carriers. These

principles will aid our consideration of

access charge reform issues in the

pending MAG proceeding.

6. We find that the interim rules strike

a fair and reasonable balance among the

principles and goals enumerated in

section 254 of the Communications Act

of 1934, as amended by the

Telecommunications Act of 1996.

Specifically, as the Commission

continues to develop a long-term

coordinated universal service plan, this

interim plan will provide predictable

levels of support so that rural carriers

can make prudent investments in rural

America.

2. Summary of Significant Issues Raised

by Public Comments in Response to the

IRFA

7. No comments were submitted in

response to the IRFA, nor did

commenters address the potential

impact of these interim rules on small

business. The Commission, however,

did consider the burden that certain

provisions contained in the Order may

have on smaller carriers and sought to

minimize that burden. For example, as

the Commission states in this Order, to

reduce the need for small carriers to

seek a waiver under the corporate

operations expense rules, we raise the

minimum cap on allowable corporate

operations expenses supported by

universal service to $600,000 or

amounts derived from the revised

corporate operations expense formulas,

whichever is greater. This eliminates the

burden and expense associated with the

waiver process for those carriers.

3. Description and Estimate of the

Number of Small Entities to Which the

Notice Will Apply

8. The RFA directs agencies to

provide a description of, and, where

feasible, an estimate of the number of

small entities that may be affected by

the proposed rules adopted herein. The

RFA generally defines the term ‘‘small

entity’’ as having the same meaning as

the terms ‘‘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. 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 Small Business

Administration (SBA).

9. We have included small incumbent

local exchange carriers in this 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

local exchange carriers are not dominant

in their field of operation because any

such dominance is not ‘‘national’’ in

scope. We have therefore included small

incumbent carriers in this RFA analysis,

although we emphasize that this RFA

action has no effect on the

Commission’s analyses and

determinations in other, non-RFA

contexts.

10. Local Exchange Carriers. Neither

the Commission nor the SBA has

developed a definition for small

providers of local exchange services.

The closest applicable definition under

the SBA rules is for telephone

communications companies other than

radiotelephone (wireless) companies.

According to the most recent Trends in

Telephone Service report, 1,335

incumbent carriers reported that they

were engaged in the provision of local

exchange services. We do not have data

specifying the number of these carriers

that are either dominant in their field of

operations, 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 local exchange

carriers that would qualify as small

business concerns under the SBA’s

definition. Of the 1,335 incumbent

carriers, 13 entities are price cap carriers

that are not subject to these rules.

Consequently, we estimate that fewer

than 1,322 providers of local exchange

service are small entities or small

incumbent local exchange carriers that

may be affected.

11. Competitive Access Providers.

Neither the Commission nor the SBA

has developed a definition of small

entities specifically applicable to

competitive access services providers

(CAPs). The closest applicable

definition under the SBA rules is for

telephone communications companies

other than radiotelephone (wireless)

companies. According to the most

recent Trends in Telephone Service

data, 349 CAPs/competitive local

exchange carriers and 60 other local

exchange carriers reported that they

were engaged in the provision of

competitive local exchange services. 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

CAPs that would qualify as small

business concerns under the SBA’s

definition. Consequently, we estimate

that there are less than 349 small entity

CAPs and 60 other local exchange

carriers that may be affected.

12. Cellular Licensees. Neither the

Commission nor the SBA has developed

a definition of small entities applicable

to cellular licensees. Therefore, the

applicable definition of small entity is

the definition under the SBA rules

applicable to radiotelephone (wireless)

companies. This provides that a small

entity is a radiotelephone company

Federal Register / Vol. 66, No. 108 / Tuesday, June 5, 2001 / Rules and Regulations 30083

employing no more than 1,500 persons.

According to the Bureau of the Census,

only twelve radiotelephone firms from a

total of 1,178 such firms which operated

during 1992 had 1,000 or more

employees. Therefore, even if all twelve

of these firms were cellular telephone

companies, nearly all cellular carriers

were small businesses under the SBA’s

definition. In addition, we note that

there are 1,758 cellular licenses;

however, a cellular licensee may own

several licenses. In addition, according

to the most recent Trends Report data,

806 carriers reported that they were

engaged in the provision of either

cellular service or Personal

Communications Service (PCS) 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

cellular service carriers that would

qualify as small business concerns

under the SBA’s definition.

Consequently, we estimate that there are

fewer than 808 small cellular service

carriers that may be affected.

13. Broadband Personal

Communications Service (PCS). 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 their 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 percent

of the 1,479 licenses for Blocks D, E, and

F. Based on this information, we

conclude that the number of small

broadband PCS licensees will include

the 90 winning C Block bidders and the

93 qualifying bidders in the D, E, and F

blocks, for a total of 183 small entity

PCS providers as defined by the SBA

and the Commission’s auction rules.

14. 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.

15. Specialized Mobile Radio (SMR).

The Commission awards bidding credits

in auctions for geographic area 800 MHz

and 900 MHz SMR licenses to firms that

had revenues of no more than $15

million in each of the three previous

calendar years. In the context of both

the 800 MHz and 900 MHz SMR, a

definition of ‘‘small entity’’ has been

approved by the SBA.

16. These fees 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 no

more than $15 million. One firm has

over $15 million in revenues. We

assume, for purposes of this FRFA, that

all of the remaining existing extended

implementation authorizations are held

by small entities, as that term is defined

by the SBA.

17. For geographic area licenses in the

900 MHz SMR band, there are 60 who

qualified as small entities. For the 800

MHz SMRs, 38 are small or very small

entities.

18. 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 and

61,670 private operational-fixed

licensees and broadcast auxiliary radio

licensees in the microwave services.

The Commission has not yet defined a

small business with respect to

microwave services. For purposes of

this FRFA, we 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.

19. 39 GHz Licensees. Neither the

Commission nor the SBA has developed

a definition of small entities applicable

to 39 GHz licensees. Therefore, the

applicable definition of small entity is

the definition under the SBA rules

applicable to radiotelephone (wireless)

companies. This provides that a small

entity is a radiotelephone company

employing no more than 1,500 persons.

For purposes of the 39 GHz license

auction, the Commission defined ‘‘small

entity’’ as an entity that has average

gross revenues of less than $40 million

in the three previous calendar years,

and ‘‘very small entity’’ as an entity that

has average gross revenues of not more

that $15 million for the preceding three

calendar years. The Commission has

granted licenses to 29 service providers

in the 39 GHz service. 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 39 GHz

licensees that would qualify as small

business concerns under the SBA’s

definition. Consequently, we estimate

that there are no more than 29 service

providers in the 39 GHz service that

may be affected.

4. Description of Projected Reporting,

Recordkeeping, and Other Compliance

Requirements

20. In the Order, we adopt the Rural

Task Force’s proposal that rural carriers

be given a choice of three different

options for disaggregating and targeting

per-line universal service high-cost

support, including high-cost loop

support, Long Term Support (LTS), and

Local Switching Support (LSS). Rural

carriers are required to choose one of

the paths detailed within 270 days of

the effective date of the new rules

through submission to the state

commissions. Rural carriers not subject

to the jurisdiction of the state are

required to make such submissions to

the Commission. Rural carriers that

elect to disaggregate and target per-line

support under either Path Two or Three

are required to report loops at the costzone level, which is a modification of

the current requirement that carriers

report loops at the study-area level. This

change will require only minor

increases in a carrier’s reporting

burdens, and predominantly only in the

first year that the carrier revises its

method of reporting. Path 1 is available

to rural carriers that do not want to

target high-cost support. Path Two is

available to rural carriers that want state

commission review and approval of a

disaggregation plan. Path Three is

available to rural carriers interested in

self-certifying a method for

30084 Federal Register / Vol. 66, No. 108 / Tuesday, June 5, 2001 / Rules and Regulations

disaggregating universal service support

into a maximum of two cost zones per

wire center. Only a disaggregation plan

filed under Path Three requires

additional reporting requirements to the

Commission. Under Path Three, a

carrier must use a rationale that is

reasonably related to the cost of

providing service for each cost zone

within each disaggregation category

(high-cost loop support, LSS, and LTS).

We estimate that the annual burden

hours in the first year would be 60

hours. We estimate subsequent annual

burden hours at 8 hours. We believe the

burden associated with this reporting

requirement is appropriately balanced

with the benefits reporting rural carriers

will receive.

21. The Commission also adopted the

Rural Task Force’s proposal to extend

the section 254(e) certification process

to rural carriers. Under this process,

state regulatory commissions provide

the Commission with annual

certifications indicating that the rural

carriers in their states receiving federal

universal service support will use the

support ‘‘only for the provision,

maintenance, and upgrading of facilities

and services for which the support is

intended.’’ Carriers not subject to the

jurisdiction of the state must submit a

sworn affidavit to the Commission

stating that they will use support ‘‘only

for the provision, maintenance, and

upgrading of facilities and services for

which the support is intended.’’ This

reporting requirement will provide

states and carriers with access to federal

universal service support in a way that

ensures the integrity of the universal

service fund. We estimate that the

annual burden hours associated with

the section 254(e) certification process

would be 12 hours per carrier. This is

a nominal burden on rural carriers and

is balanced against the high degree of

federal universal service benefits rural

carriers would receive.

22. Finally, the Commission adopted

a modification to an existing reporting

requirement regarding working loops.

Under the current rules, rural carriers

are required to submit, on an annual

basis, the number of working loops it

has for each study area it serves. In this

Order, we modify this reporting

requirement to require that once a

competitor enters a rural carriers study

area, working loops are required to be

reported on a quarterly basis. The

Commission determined that this was

necessary to prevent the overpayment of

support to incumbent rural carriers,

which occurs under the current rule

because competitors have an incentive

to update quarterly, while the

incumbent has an incentive to only

update annually.

5. Steps Taken To Minimize Significant

Economic Impact on Small Entities, and

Significant Alternatives Considered

23. 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.

24. The Order adopted herein is the

result of an analysis of a number of

options for distributing federal universal

service support to rural carriers.

Throughout the Order, it is evident that

the Commission took great strides in

balancing the burdens associated with

modification of the existing embedded

cost mechanism and the benefits these

modifications confer on rural carriers

and competitive eligible

telecommunications carriers. In this

regard, it is important to note that we

make these modifications with only

minimal reporting requirements.

25. Among the significant

alternatives, we considered whether

modification of the corporate operations

expense cap would minimize the

burden and expense associated with

seeking a waiver for smaller carriers. In

this Order, we decide to raise the

existing cap for carriers with 6,000 or

fewer working loops so they can receive

support for up to $600,000 or amounts

derived from the revised corporate

operations expense formula adopted

herein, whichever is greater. We thus

decrease the need of smaller carriers to

request a waiver. In addition, we adopt

a modified version of the safety net

additive mechanism proposed by the

Rural Task Force. We conclude that a

modification to the safety net additive is

warranted because as proposed, the

mechanism potentially allowed for the

recovery of more than 100 percent of

incremental costs. We also consider

alternative measurements of

‘‘meaningful investment’’ for purposes

of calculating safety valve support. We

conclude that the alternatives

considered would, in some instances,

deny the recovery of such meaningful

investments.

26. Report to Congress: The

Commission will send a copy of the

Order, including this FRFA, in a report

to be sent to Congress pursuant to the

Congressional Review Act. In addition,

the Commission will send a copy of the

Order, including the FRFA, to the Chief

Counsel for Advocacy of the SBA. A

copy of the Order and FRFA (or

summaries thereof) will also be

published in the Federal Register.

B. Paperwork Reduction Act

27. As described, the rules we adopt

in this Order reflect our efforts to

balance the needs of rural carriers,

while minimizing the burden on those

entities that must comply with our

reporting requirements. The information

we request should not require

significant additional resources as they

are a modification of current reporting

requirements. Additionally, by freezing

the national average loop cost at $240,

we eliminate the need for non-rural

carriers to file loop cost data on a

quarterly basis, thus alleviating those

carriers of an administrative burden.

28. The action contained herein has

been analyzed with respect to the

Paperwork Reduction Act of 1995 and

found to impose new or modified

reporting and recordkeeping

requirements or burdens on the public.

Implementation of these new or

modified reporting and recordkeeping

requirements will be subject to approval

by the Office of Management and

Budget (OMB) as prescribed by the Act,

and will go into effect once OMB

approves the collection requirements.

Once OMB approves the required

collections the Commission will publish

a document in the Federal Register

announcing the effective date of those

sections.

C. Effective Date of Final Rules

29. We conclude that the amendments

to our rules adopted herein shall be

effective June 5, 2001, except for

§§ 36.605(c)(2), 36.611, 54.305(f),

54.307(b), 54.313(b) and (c), 54.314, and

54.315, which contain information

collection requirements that have not

been approved by the Office of

Management Budget (OMB). The

Commission will publish a document in

the Federal Register announcing the

effective date of those sections. The

final rules must take effect prior to 30

days after their publication in the

Federal Register in order for NECA to

be able to implement the necessary

changes to the high-cost loop support

mechanism by July 1, 2001.

Federal Register / Vol. 66, No. 108 / Tuesday, June 5, 2001 / Rules and Regulations 30085

III. Ordering Clauses

30. Pursuant to the authority

contained in sections 1–4, 201–205, 214,

218–220, 254, 303(r), 403, 405, and 410

of the Communications Act of 1934, as

amended, this Fourteenth Report and

Order and Twenty-Second Order on

Reconsideration in CC Docket No. 96–

45, and Report and Order in CC Docket

No. 00–256 is adopted.

31. Parts 36 and 54 of the

Commission’s rules, are amended as set

forth hereto, effective June 5, 2001,

except for §§ 36.605(c)(2), 36.611,

54.305(f), 54.307(b), 54.313(b) and (c),

54.314, and 54.315, which contain

information collection requirements that

have not been approved by the Office of

Management Budget (OMB). The

Commission will publish a document in

the Federal Register announcing the

effective date of those sections.

32. The Commission’s Consumer

Information Bureau, Reference

Information Center, shall send a copy of

this Order, including the Final

Regulatory Flexibility Analysis, to the

Chief Counsel for Advocacy of the Small

Business Administration.

List of Subjects

47 CFR Part 36

Jurisdictional separations, Reporting

and recordkeeping requirements,

Telecommunications, Telephone.

47 CFR Part 54

Reporting and recordkeeping

requirements, Telecommunications,

Telephone.

Federal Communications Commission.

William F. Caton,

Deputy Secretary.

Final Rules

For the reasons discussed in the

preamble, the Federal Communications

Commission amends 47 CFR parts 36

and 54 as follows:

PART 36—JURISDICTIONAL

SEPARATIONS PROCEDURES;

STANDARD PROCEDURES FOR

SEPARATING

TELECOMMUNICATIONS PROPERTY

COSTS, REVENUES, EXPENSES,

TAXES AND RESERVES FOR

TELECOMMUNICATIONS COMPANIES

1. The authority citation for part 36

continues to read as follows:

Authority: 47 U.S.C. 151, 154(i) and (j),

205, 221(c), 254, 403, and 410.

2. Amend § 36.601 by revising the

first sentence of paragraph (c) to read as

follows.

§ 36.601 General.

* * * * *

(c) Until June 30, 2001, the annual

amount of the total nationwide expense

adjustment shall consist of the amounts

calculated pursuant to § 54.309 of this

chapter and the amounts calculated

pursuant to this subpart F.* * *

* * * * *

3. Add §§ 36.602, 36.603, 36.604, and

36.605 to subpart F under the center

heading ‘‘General’’ to read as follows:

§ 36.602 Calculation of non-rural carrier

portion of nationwide loop cost expense

adjustment.

Effective July 1, 2001, for purposes of

determining non-rural carrier interim

hold-harmless support, pursuant to

§ 54.311 of this chapter, the annual

amount of the total nationwide loop cost

expense adjustment calculated pursuant

to this subpart F shall not exceed the

amount of the total loop cost expense

adjustment for the immediately

preceding calendar year, increased by a

rate equal to the rate of increase in the

total number of working loops during

the calendar year preceding the July

31st filing. The total loop cost expense

adjustment shall consist of the loop cost

expense adjustments, including

amounts calculated pursuant to

§§ 36.612(a) and 36.631. The rate of

increase in total working loops shall be

based upon the difference between the

number of total working loops on

December 31 of the calendar year

preceding the July 31st filing and the

number of total working loops on

December 31 of the second calendar

year preceding that filing, both

determined by the company’s

submissions pursuant to § 36.611. Nonrural incumbent local exchange carriers

and eligible telecommunications

carriers serving lines in the service area

of non-rural incumbent local exchange

carriers shall only receive support

pursuant to this subpart F to the extent

that they qualify pursuant to § 54.311 of

this chapter for interim hold-harmless

support. Support amounts calculated

pursuant to this subpart F but not

received due to the phase down of

interim hold-harmless support or the

receipt of forward-looking support

pursuant to § 54.311 of this chapter

shall not be redistributed to other

carriers.

§ 36.603 Calculation of rural incumbent

local exchange carrier portion of nationwide

loop cost expense adjustment.

(a) Effective July 1, 2001, the rural

incumbent local exchange carrier

portion of the annual nationwide loop

cost expense adjustment will be

recomputed by the fund administrator

as if the indexed cap calculated

pursuant to § 36.601(c) and the

corporate operations expense limitation

calculated pursuant to § 36.621 had not

been in effect for the calendar year 2000.

For the period July 1, 2001, to December

31, 2001, the annualized amount of the

rural incumbent local exchange carrier

portion of the nationwide loop cost

expense adjustment calculated pursuant

to this subpart F shall not exceed the

non-capped amount of the total rural

incumbent local exchange carrier loop

cost expense adjustment for the

calendar year 2000, multiplied times

one plus the Rural Growth Factor

calculated pursuant to § 36.604.

Beginning January 1, 2002, the annual

amount of the rural incumbent local

exchange carrier portion of the

nationwide loop cost expense

adjustment calculated pursuant to this

subpart F shall not exceed the amount

of the total rural incumbent local

exchange carrier loop cost expense

adjustment for the immediately

preceding calendar year, multiplied

times one plus the Rural Growth Factor

calculated pursuant to § 36.604.

(b) The annual rural incumbent local

exchange carrier portion of the

nationwide loop cost expense

adjustment shall be reduced to reflect

the transfer of rural incumbent local

exchange carrier access lines that are

eligible for expense adjustments

pursuant to § 36.631. The reduction

shall equal the amount of the § 36.631

expense adjustment available to the

transferred access lines at the time of

the transfer and shall be effective in the

next calendar quarter after the access

lines are transferred.

(c) Safety net additive support

calculated pursuant to § 36.605, and

transferred high-cost support and safety

valve support calculated pursuant to

§ 54.305 of this chapter shall not be

included in the rural incumbent local

exchange carrier portion of the annual

nationwide loop cost expense

adjustment.

§ 36.604 Calculation of the rural growth

factor.

The Rural Growth Factor (RGF) is

equal to the sum of the annual

percentage change in the United States

Department of Commerce’s Gross

Domestic Product—Chained Price Index

(GPD–CPI) plus the percentage change

in the total number of rural incumbent

local exchange carrier working loops

during the calendar year preceding the

July 31st filing submitted pursuant to

§ 36.611. The percentage change in total

rural incumbent local exchange carrier

working loops shall be based upon the

difference between the total number of

30086 Federal Register / Vol. 66, No. 108 / Tuesday, June 5, 2001 / Rules and Regulations

rural incumbent local exchange carrier

working loops on December 31 of the

calendar year preceding the July 31st

filing and the total number of rural

incumbent local exchange carrier

working loops on December 31 of the

second calendar year preceding that

filing, both determined by the

company’s submissions pursuant to

§ 36.611. Loops acquired by rural

incumbent local exchange carriers shall

not be included in the RGF calculation.

§ 36.605 Calculation of safety net additive.

(a) ‘‘Safety net additive support.’’ A

rural incumbent local exchange carrier

shall receive safety net additive support

if it satisfies the conditions set forth in

paragraph (c) of this section. Safety net

additive support is support available to

rural telephone companies, as

conditioned in paragraph (c) of this

section, in addition to support

calculated pursuant to § 36.631. Safety

net additive support shall not be

available to rural telephone companies

for exchange(s) that are subject to

§ 54.305 of this chapter.

(b) Calculation of safety net additive

support: Safety net additive support is

equal to the amount of capped support

calculated pursuant to this subpart F in

the qualifying year minus the amount of

support in the year prior to qualifying

for support subtracted from the

difference between the uncapped

expense adjustment for the study area in

the qualifying year minus the uncapped

expense adjustment in the year prior to

qualifying for support as shown in the

following equation: Safety net additive

support = (Uncapped support in the

qualifying year¥Uncapped support in

the base year)¥(Capped support in the

qualifying year¥Amount of support

received in the base year).

(c) Operation of safety net additive

support: (1) In any year in which the

total carrier loop cost expense

adjustment is limited by the provisions

of § 36.603 a rural incumbent local

exchange carrier shall receive safety net

additive support as calculated in

paragraph (b) of this section, if in any

study area, the rural incumbent local

exchange carrier realizes growth in end

of period Telecommunications Plant in

Service (TPIS), as prescribed in

§ 32.2001 of this chapter, on a per loop

basis, of at least 14 percent more than

the study area’s TPIS per loop

investment at the end of the prior

period.

(2) If paragraph (c)(1) of this section

is met, the rural incumbent local

exchange carrier must notify the

Administrator; failure to properly notify

the Administrator of eligibility shall

result in disqualification of that study

area for safety net additive, requiring the

rural incumbent local exchange carrier

to again meet the eligibility

requirements in paragraph (c)(1) of this

section for that study area in a

subsequent period.

(3) Upon completion of verification by

the Administrator that the study area

meets the stated criterion in paragraphs

(a), (b), (c) of this section, the

Administrator shall:

(i) Pay to any qualifying rural

telephone company, safety net additive

support for the qualifying study area in

accordance with the calculation set

forth in paragraph (b) of this section;

and

(ii) Continue to pay safety net additive

support for the succeeding four years.

Support in the four succeeding years

shall be the lesser of:

(A) The amount of support paid in the

qualifying year; or

(B) The amount of support based on

recalculation of support pursuant to

paragraph (b) in this section.

4. Amend § 36.611 by revising the

introductory text to read as follows:

§ 36.611 Submission of information to the

National Exchange Carrier Association

(NECA).

In order to allow determination of the

study areas and wire centers that are

entitled to an expense adjustment

pursuant to § 36.631, each incumbent

local exchange carrier (LEC) must

provide the National Exchange Carrier

Association (NECA) (established

pursuant to part 69 of this chapter) with

the information listed for each study

area in which such incumbent LEC

operates, with the exception of the

information listed in paragraph (h) of

this section, which must be provided for

each study area and, if applicable, for

each wire center, as defined in part 54

of this chapter, and each disaggregation

zone as established pursuant to § 54.315

of this chapter. This information is to be

filed with NECA by July 31st of each

year. The information provided

pursuant to paragraph (h) of this section

must be updated pursuant to § 36.612.

Rural telephone companies that

acquired exchanges subsequent to May

7, 1997, and incorporated those

acquired exchanges into existing study

areas shall separately provide the

information required by paragraphs (a)

through (h) of this section for both the

acquired and existing exchanges.

* * * * *

5. Amend § 36.612 by revising

paragraph (a) introductory text to read

as follows:

§ 36.612 Updating information submitted

to the National Exchange Carrier

Association.

(a) Any rural telephone company, as

that term is defined in § 51.5 of this

chapter, may update the information

submitted to the National Exchange

Carrier Association (NECA) on July 31st

pursuant to §§ 36.611 (a) through (h)

one or more times annually on a rolling

year basis according to the schedule,

except that rural telephone companies

in service areas where an eligible

telecommunications carrier has initiated

service and has reported line count data

pursuant to § 54.307(c) of this chapter

must update the information submitted

to NECA on July 31st pursuant to

§ 36.611(h) according to the schedule.

Every non-rural telephone company

must update the information submitted

to NECA on July 31st pursuant to

§ 36.611 (h) according to the schedule.

* * * * *

6. Amend § 36.621 by revising the last

sentence of paragraph (a)(4)

introductory text, by revising paragraph

(a)(4)(i), and the first sentence of

paragraph (a)(4)(ii), by revising

paragraphs (a)(4)(ii)(A) through

(a)(4)(ii)(C), and adding paragraph

(a)(4)(ii)(D) to read as follows:

§ 36.621 Study area total unseparated loop

cost.

(a) * * *

(4) * * * Total Corporate Operations

Expense, for purposes of calculating

universal service support payments

beginning July 1, 2001, shall be limited

to the lesser of:

(i) The actual average monthly perloop Corporate Operations Expense; or

(ii) A monthly per-loop amount

computed according to paragraphs

(a)(4)(ii)(A), (a)(4)(ii)(B), (a)(4)(ii)(C), and

(a)(4)(ii)(D) of this section.* * *

(A) For study areas with 6,000 or

fewer working loops the amount

monthly per working loop shall be

$33.30853¥(.00246 × the number of

working loops), or, $50,000 ÷ the

number of working loops, whichever is

greater;

(B) For study areas with more than

6,000 but fewer than 18,006 working

loops, the monthly amount per working

loop shall be $3.83195 + (88,429.20 ÷

the number of working loops); and

(B) For study areas with more than

6,000 but fewer than 18,006 working

loops, the monthly amount per working

loop shall be $3.83195 + (88,429.20 ÷

the number of working loops); and

(C) For study areas with 18,006 or

more working loops, the monthly

amount per working loop shall be

$8.74472.

Federal Register / Vol. 66, No. 108 / Tuesday, June 5, 2001 / Rules and Regulations 30087

(D) Beginning January 1, 2002, the

monthly per-loop amount computed

according to paragraphs (a)(4)(ii)(A),

(a)(4)(ii)(B), and (a)(4)(ii)(C) of this

section shall be adjusted each year to

reflect the annual percentage change in

the United States Department of

Commerce’s Gross Domestic ProductChained Price Index (GDP–CPI).

* * * * *

7. Amend § 36.622 by adding a

sentence at the end of paragraph (a)

introductory text to read as follows:

§ 36.622 National and study area average

unseparated loop costs.

(a) * * * Effective July 1, 2001, the

national average unseparated loop cost

for purposes of calculating expense

adjustments for rural incumbent local

exchange carriers, as that term is

defined in § 54.5 of this chapter, is

frozen at $240.00.

* * * * *

PART 54—UNIVERSAL SERVICE

8. The authority citation for part 54

continues to read as follows:

Authority: 47 U.S.C. 1, 4(i), 201, 205, 214,

and 254 unless otherwise noted.

9. Amend § 54.5 by adding the

following definition in alphabetical

order:

§ 54.5 Terms and definitions.

* * * * *

Rural Incumbent Local Exchange

Carrier. ‘‘Rural incumbent local

exchange carrier’’ is a carrier that meets

the definitions of ‘‘rural telephone

company’’ and ‘‘incumbent local

exchange carrier,’’ as those terms are

defined in § 51.5 of this chapter.

10. Amend § 54.305 by designating

the undesignated text as paragraph (a)

and by adding paragraphs (b), (c), (d),

(e), and (f) to read as follows:

§ 54.305 Sale or transfer of exchanges.

* * * * *

(b) Transferred exchanges in study

areas operated by rural telephone

companies that are subject to the

limitations on the transfer of high-cost

universal service support in paragraph

(a) of this section may be eligible for a

safety valve loop cost expense

adjustment based on the difference

between a rural incumbent local

exchange carrier’s index year expense

adjustment and subsequent year

expense adjustments for the acquired

exchanges. Safety valve loop cost

expense adjustments shall only be

available to rural incumbent local

exchange carriers that, in the absence of

restrictions on the transfer of high-cost

support in § 54.305(a), would qualify for

high-cost loop support for acquired

exchanges under § 36.631 of this

chapter.

(c) The index year expense

adjustment for acquired exchange(s)

shall be equal to the rural incumbent

local exchange carrier’s high-cost loop

cost expense adjustment for acquired

exchanges calculated at the end of the

company’s first year operating the

acquired exchange(s). The index year

expense adjustment for the acquired

exchange(s) shall be established through

cost data submitted in accordance with

§§ 36.611 and 36.612 of this chapter and

shall be calculated in accordance with

§ 36.631 of this chapter. For carriers

establishing an index year for acquired

exchanges pursuant to § 36.611 of this

chapter, the index year for the acquired

exchange(s) shall commence at the

beginning of the next calendar year after

the transfer of said exchanges. For

carriers establishing an index year for

acquired exchanges pursuant to § 36.612

of this chapter, the index year for the

acquired exchange(s) shall commence at

the beginning of the next calendar

quarter after the transfer of said

exchanges. The index year expense

adjustment for rural telephone

companies that have operated

exchanges subject to this section for

more than a full year on the effective

date of this paragraph shall be based on

loop cost data submitted in accordance

with § 36.612 of this chapter for the year

ending on the nearest calendar quarter

following the effective date of this

paragraph. At the end of each

subsequent year, a loop cost expense

adjustment for the acquired exchanges

will be calculated pursuant to § 36.631

of this chapter and will be compared to

the index year expense adjustment. A

rural incumbent local exchange carrier’s

subsequent year expense adjustments

shall end on the same calendar quarter

as its index year expense adjustment. If

acquired exchanges are incorporated

into an existing rural incumbent local

exchange carrier study area, the rural

incumbent local exchange carrier shall

exclude costs associated with the

acquired exchanges from the costs

associated with its pre-acquisition study

area in its universal service data

submissions filed in accordance with

§§ 36.611 and 36.612 of this chapter.

Such excluded costs shall be used to

calculate the rural incumbent local

exchange carrier’s safety valve loop cost

expense adjustment.

(d) Up to fifty (50) percent of any

positive difference between the

subsequent year loop cost expense

adjustment and the index year expense

adjustment will be designated as the

study area’s safety valve loop cost

expense adjustment and will be

available in addition to the amounts

available to the study area under

§ 54.305. In no event shall a study area’s

safety valve loop cost expense

adjustment exceed the difference

between the carrier’s uncapped study

area loop cost expense adjustment

calculated pursuant to § 36.631 of this

chapter and transferred support

amounts available to the acquired

exchange(s) under paragraph (a) of this

section. Safety valve support shall not

transfer with acquired exchanges.

(e) The sum of the safety valve loop

cost expense adjustment for all eligible

study areas operated by rural telephone

companies shall not exceed five (5)

percent of the total rural incumbent

local exchange carrier portion of the

annual nationwide loop cost expense

adjustment calculated pursuant to

§ 36.603 of this chapter. The five (5)

percent cap on the safety valve

mechanism shall be based on the lesser

of the rural incumbent local exchange

carrier portion of the annual nationwide

loop cost expense adjustment calculated

pursuant to § 36.603 of this chapter or

the sum of rural incumbent local

exchange carrier expense adjustments

calculated pursuant to § 36.631 of this

chapter. The percentage multiplier used

to derive study area safety valve loop

cost expense adjustments for rural

telephone companies shall be the lesser

of fifty (50) percent or a percentage

calculated to produce the maximum

total safety valve loop cost expense

adjustment for all eligible study areas

pursuant to this paragraph. The safety

valve loop cost expense adjustment of

an individual rural incumbent local

exchange carrier also may be further

reduced as described is paragraph (d) of

this section.

(f) Once an acquisition is complete,

the acquiring rural incumbent local

exchange carrier shall provide written

notice to the Administrator that it has

acquired access lines that may be

eligible for safety valve support. Rural

telephone companies also shall provide

written notice to the Administrator of

when their index year has been

established for purposes of calculating

the safety valve loop cost expense

adjustment.

11. Amend § 54.307 by revising

paragraph (a)(1), and by revising the

second sentence in paragraph (b), by

adding a sentence at the end of

paragraph (b), and by revising the first

sentence in paragraph (c) introductory

text to read as follows:

30088 Federal Register / Vol. 66, No. 108 / Tuesday, June 5, 2001 / Rules and Regulations

§ 54.307 Support to a competitive eligible

telecommunications carrier.

(a) * * *

(1) A competitive eligible

telecommunications carrier serving

loops in the service area of a rural

incumbent local exchange carrier, as

that term is defined in § 54.5 of this

chapter, shall receive support for each

line it serves in a particular service area

based on the support the incumbent

LEC would receive for each such line,

disaggregated by cost zone if

disaggregation zones have been

established within the service area

pursuant to § 54.315 of this subpart. A

competitive eligible

telecommunications carrier serving

loops in the service area of a non-rural

incumbent local exchange carrier shall

receive support for each line it serves in

a particular wire center based on the

support the incumbent LEC would

receive for each such line.

* * * * *

(b) * * * For a competitive eligible

telecommunications carrier serving

loops in the service area of a rural

incumbent local exchange carrier, as

that term is defined in § 54.5 of this

chapter, the carrier must report the

number of working loops it serves in the

service area disaggregated by cost zone

if disaggregation zones have been

established within the service area

pursuant to § 54.315 of this subpart.

* * * Competitive eligible

telecommunications carriers providing

mobile wireless service in an incumbent

LEC’s service area shall use the

customer’s billing address for purposes

of identifying the service location of a

mobile wireless customer in a service

area.

(c) A competitive eligible

telecommunications carrier must submit

the data required pursuant to paragraph

(b) of this section according to the

schedule. * * *

* * * * *

12. Amend § 54.313 as follows:

a. Revise the section heading.

b. Redesignate paragraphs (b) and (c)

as paragraphs (c) and (d).

c. Add a new paragraph (b).

d. Revise newly designated paragraph

(c).

e. In newly redesignated paragraph

(d), the reference to ‘‘paragraph (b)’’ is

revised to read ‘‘ paragraph (c)’’.

The addition and revisions read as

follows:

§ 54.313 State certification of support for

non-rural carriers.

* * * * *

(b) Carriers not subject to State

jurisdiction. A non-rural incumbent

local exchange carrier not subject to the

jurisdiction of a state or an eligible

telecommunications carrier not subject

to the jurisdiction of a state serving lines

in the service area of a non-rural

incumbent local exchange carrier that

desires to receive support pursuant to

§§ 54.309 and/or 54.311 of this subpart

must file an annual certification with

the Administrator and the Commission

stating that all federal high-cost support

provided to such carriers will be used

only for the provision, maintenance,

and upgrading of facilities and services

for which the support is intended.

Support provided pursuant to §§ 54.309

and/or 54.311 of this subpart shall only

be provided to the extent that the carrier

has filed the requisite certification

pursuant to this section.

(c) Certification format. A certification

pursuant to this section may be filed in

the form of a letter from the appropriate

regulatory authority for the State, and

must be filed with both the Office of the

Secretary of the Commission clearly

referencing CC Docket No. 96–45, and

with the Administrator of the high-cost

universal service support mechanism,

on or before the deadlines set forth in

paragraph (d) of this section. If provided

by the appropriate regulatory authority

for the state, the annual certification

must identify which carriers in the State

are eligible to receive federal support

during the applicable 12-month period,

and must certify that those carriers will

only use support for the provision,

maintenance, and upgrading of facilities

and services for which support is

intended. A State may file a

supplemental certification for carriers

not subject to the State’s annual

certification. All certificates filed by a

State pursuant to this section shall

become part of the public record

maintained by the Commission. Nonrural incumbent local exchange carriers

not subject to the jurisdiction of a state

or eligible telecommunications carrier

not subject to the jurisdiction of a state

serving lines in the service area of a

non-rural incumbent local exchange

carrier, shall file a sworn affidavit

executed by a corporate officer attesting

to the use of the support for the

provision, maintenance, and upgrading

of facilities and services for which

support is intended. The affidavit must

be filed with both the Office of the

Secretary of the Commission clearly

referencing CC Docket No. 96–45, and

with the Administrator of the high-cost

universal service support mechanism,

on or before the deadlines set forth in

paragraph (d) of this section. All

affidavits filed pursuant to this section

shall become part of the public record

maintained by the Commission.

* * * * *

13. Add § 54.314 to subpart D to read

as follows:

§ 54.314 State certification of support for

rural carriers.

(a) State certification. States that

desire rural incumbent local exchange

carriers and/or eligible

telecommunications carriers serving

lines in the service area of a rural

incumbent local exchange carrier within

their jurisdiction to receive support

pursuant to §§ 54.301, 54.305, and/or

54.307 and/or part 36, subpart F of this

chapter must file an annual certification

with the Administrator and the

Commission stating that all federal highcost support provided to such carriers

within that State will be used only for

the provision, maintenance, and

upgrading of facilities and services for

which the support is intended. Support

provided pursuant to §§ 54.301, 54.305,

and/or 54.307 and/or part 36, subpart F

of this chapter shall only be provided to

the extent that the State has filed the

requisite certification pursuant to this

section.

(b) Carriers not subject to State

jurisdiction. A rural incumbent local

exchange carrier not subject to the

jurisdiction of a state or an eligible

telecommunications carrier not subject

to the jurisdiction of a state serving lines

in the service area of a rural incumbent

local exchange carrier that desires to

receive support pursuant to §§ 54.301,

54.305, and/or 54.307 and/or part 36,

subpart F of this chapter shall file an

annual certification with the

Administrator and the Commission

stating that all federal high-cost support

provided to such carriers will be used

only for the provision, maintenance,

and upgrading of facilities and services

for which the support is intended.

Support provided pursuant to §§ 54.301,

54.305, and/or 54.307 and/or part 36,

subpart F of this chapter shall only be

provided to the extent that the carrier

has filed the requisite certification

pursuant to this section.

(c) Certification format. A certification

pursuant to this section may be filed in

the form of a letter from the appropriate

regulatory authority for the State, and

shall be filed with both the Office of the

Secretary of the Commission clearly

referencing CC Docket No. 96–45, and

with the Administrator of the high-cost

universal service support mechanism,

on or before the deadlines set forth in

paragraph (d) of this section. If provided

by the appropriate regulatory authority

for the state, the annual certification

must identify which carriers in the State

Federal Register / Vol. 66, No. 108 / Tuesday, June 5, 2001 / Rules and Regulations 30089

are eligible to receive federal support

during the applicable 12-month period,

and must certify that those carriers will

only use support for the provision,

maintenance, and upgrading of facilities

and services for which support is

intended. A State may file a

supplemental certification for carriers

not subject to the State’s annual

certification. All certificates filed by a

State pursuant to this section shall

become part of the public record

maintained by the Commission. Rural

incumbent local exchange carriers not

subject to the jurisdiction of a state or

eligible telecommunications carriers not

subject to the jurisdiction of a state

serving lines in the service area of a

rural incumbent local exchange carrier,

shall file a sworn affidavit executed by

a corporate officer attesting to the use of

the support for the provision,

maintenance, and upgrading of facilities

and services for which support is

intended. The affidavit must be filed

with both the Office of the Secretary of

the Commission clearly referencing CC

Docket No. 96–45, and with the

Administrator of the high-cost universal

service support mechanism, on or before

the deadlines set forth in paragraph (d)

of this section. All affidavits filed

pursuant to this section shall become

part of the public record maintained by

the Commission.

(d) Filing Deadlines. Upon the filing

of the certification described in

paragraph (c) of this section, support

shall be provided pursuant to the

following schedule:

(1) Certifications filed on or before

October 1. Carriers for which

certifications are filed on or before

October 1 shall receive support

pursuant to §§ 54.301, 54.305, and/or

54.307 and/or part 36, subpart F of this

chapter, in the first, second, third, and

fourth quarters of the succeeding year.

(2) Certifications filed on or before

January 1. Carriers for which

certifications are filed on or before

January 1 shall receive support pursuant

to §§ 54.301, 54.305, and/or 54.307 and/

or part 36, subpart F of this chapter, in

the second, third, and fourth quarters of

that year. Such carriers shall not receive

support pursuant to §§ 54.301, 54.305,

and/or 54.307 and/or part 36, subpart F

of this chapter in the first quarter of that

year.

(3) Certifications filed on or before

April 1. Carriers for which certifications

are filed on or before April 1 shall

receive support pursuant to §§ 54.301,

54.305, and/or 54.307 and/or part 36,

subpart F of this chapter, in the third

and fourth quarters of that year. Such

carriers shall not receive support

pursuant to §§ 54.301, 54.305, and/or

54.307 and/or part 36, subpart F of this

chapter in the first and second quarters

of that year.

(4) Certifications filed on or before

July 1. Carriers for which certifications

are filed on or before July 1 shall receive

support pursuant to §§ 54.301, 54.305,

and/or 54.307 and/or part 36, subpart F

of this chapter, in the fourth quarter of

that year. Such carriers shall not receive

support pursuant to §§ 54.301, 54.305,

and/or 54.307 and/or part 36, subpart F

of this chapter in the first, second, or

third quarters of that year.

(5) Certifications filed after July 1.

Carriers for which certifications are filed

after July 1 shall not receive support

pursuant to §§ 54.301, 54.305, and/or

54.307 and/or part 36, subpart F of this

chapter, in that year.

14. Add § 54.315 to subpart D as

follows:

§ 54.315 Disaggregation and targeting of

support by rural incumbent local exchange

carriers.

(a) Within 270 days of the effective

date of this rule, all rural incumbent

local exchange carriers for which highcost universal service support pursuant

to §§ 54.301, 54.303, and/or 54.305 and/

or part 36, subpart F of this chapter is

available must select a disaggregation

path as described in paragraphs (b), (c),

or (d) of this section. In study areas in

which a competitive carrier has been

designated as a competitive eligible

telecommunications carrier prior to the

effective date of this rule, the rural

incumbent local exchange carrier may

only disaggregate support pursuant to

paragraph (b), (c), or (d)(1)(iii) of this

section. A rural incumbent local

exchange carrier failing to select a

disaggregation path as described in

paragraphs (b), (c), or (d) of this section

within 270 days of the effective date of

this rule will not be permitted to

disaggregate and target federal high-cost

support unless ordered to do so by the

state commission as that term is defined

in § 54.5.

(b) Path 1: Carriers Not Disaggregating

and Targeting High-Cost Support:

(1) A carrier may certify to the state

commission that it will not disaggregate

and target high-cost universal service

support.

(2) A carrier’s election of this path

becomes effective upon certification by

the carrier to the state commission.

(3) This path shall remain in place for

such carrier for at least four years from

the date of certification to the state

commission except as provided in

paragraph (b)(4) of this section.

(4) A state commission may require,

on its own motion, upon petition by an

interested party, or upon petition by the

rural incumbent local exchange carrier,

the disaggregation and targeting of

support under paragraphs (c) or (d) of

this section.

(5) A carrier not subject to the

jurisdiction of a state, e.g., certain

tribally owned carriers, may select Path

1, but must certify to the Federal

Communications Commission as

described in paragraphs (1) through (4)

of this section.

(c) Path 2: Carriers Seeking Prior

Regulatory Approval for the

Disaggregation and Targeting of

Support:

(1) A carrier electing to disaggregate

and target support under this paragraph

must file a disaggregation and targeting

plan with the state commission.

(2) Under this paragraph a carrier may

propose any method of disaggregation

and targeting of support consistent with

the general requirements detailed in

paragraph (e) of this section.

(3) A disaggregation and targeting

plan under this paragraph becomes

effective upon approval by the state

commission.

(4) A carrier shall disaggregate and

target support under this path for at

least four years from the date of

approval by the state commission except

as provided in paragraph (c)(5) of this

section.

(5) A state commission may require,

on its own motion, upon petition by an

interested party, or upon petition by the

rural incumbent local exchange carrier,

the disaggregation and targeting of

support in a different manner.

(6) A carrier not subject to the

jurisdiction of a state, e.g., certain

tribally owned carriers, may select Path

2, but must seek approval from the

Federal Communications Commission

as described in paragraphs (c)(1)

through (5) of this section.

(d) Path 3: Self-Certification of the

Disaggregation and Targeting of

Support:

(1) A carrier may file a disaggregation

and targeting plan with the state

commission along with a statement

certifying each of the following:

(i) It has disaggregated support to the

wire center level; or

(ii) It has disaggregated support into

no more than two cost zones per wire

center; or

(iii) That the carrier’s disaggregation

plan complies with a prior regulatory

determination made by the state

commission.

(2) Any disaggregation plan submitted

pursuant to this paragraph must meet

the following requirements:

(i) The plan must be supported by a

description of the rationale used,

including the methods and data relied

30090 Federal Register / Vol. 66, No. 108 / Tuesday, June 5, 2001 / Rules and Regulations

upon to develop the disaggregation

zones, and a discussion of how the plan

complies with the requirements of this

paragraph. Such filing must provide

information sufficient for interested

parties to make a meaningful analysis of

how the carrier derived its

disaggregation plan.

(ii) The plan must be reasonably

related to the cost of providing service

for each disaggregation zone within

each disaggregated category of support.

(iii) The plan must clearly specify the

per-line level of support for each

category of high-cost universal service

support provided pursuant to §§ 54.301,

54.303, and/or 54.305 and/or part 36,

subpart F of this chapter in each

disaggregation zone.

(iv) If the plan uses a benchmark, the

carrier must provide detailed

information explaining what the

benchmark is and how it was

determined. The benchmark must be

generally consistent with how the total

study area level of support for each

category of costs is derived to enable a

competitive eligible

telecommunications carrier to compare

the disaggregated costs used to

determine support for each cost zone.

(3) A carrier’s election of this path

becomes effective upon certification by

the carrier to the state commission.

(4) A carrier shall disaggregate and

target support under this path for at

least four years from the date of

certification to the state commission

except as provided in paragraph (d)(5)

of this section.

(5) A state commission may require,

on its own motion, upon petition by an

interested party, or upon petition by the

rural incumbent local exchange carrier,

modification to the disaggregation and

targeting of support selected under this

path.

(6) A carrier not subject to the

jurisdiction of a state, e.g., certain

tribally owned carriers, may select Path

3, but must certify to the Federal

Communications Commission as

described in paragraphs (d)(1) through

(5) of this section.

(e) Additional Procedures Governing

the Operation of Path 2 and Path 3:

Disaggregation and targeting plan

adopted under paragraphs (c) or (d) of

this section shall be subject to the

following general requirements:

(1) Support available to the rural

incumbent local exchange carrier’s

study area under its disaggregation plan

shall equal the total support available to

the study area without disaggregation.

(2) The ratio of per-line support

between disaggregation zones for each

disaggregated category of support shall

remain fixed over time, except as

changes are allowed pursuant to

paragraph (c) and (d) of this section.

(3) The ratio of per-line support shall

be publicly available.

(4) Per-line support amounts for each

disaggregation zone shall be

recalculated whenever the rural

incumbent local exchange carrier’s total

annual support amount changes using

the changed support amount and lines

at that point in time.

(5) Per-line support for each category

of support in each disaggregation zone

shall be determined such that the ratio

of support between disaggregation zones

is maintained and that the product of all

of the rural incumbent local exchange

carrier’s lines for each disaggregation

zone multiplied by the per-line support

for those zones when added together

equals the sum of the rural incumbent

local exchange carrier’s total support.

(6) Until a competitive eligible

telecommunications carrier is certified

in a study area, monthly payments to

the rural incumbent local exchange

carrier will be made based on total

annual amounts for its study area

divided by 12.

(7) When a competitive eligible

telecommunications carrier is certified

in a study area, per-line amounts used

to determine the competitive eligible

telecommunications carrier’s

disaggregated support shall be based on

the rural incumbent local exchange

carrier’s then-current total support

levels, lines, and disaggregated support

relationships.

(f) Submission of Information to the

Administrator:

(1) A rural incumbent local exchange

carrier certifying under paragraph (b) of

this section that it will not disaggregate

and target high-cost universal service

support shall submit to the

Administrator a copy of the certification

submitted to the state commission, or

the Federal Communications

Commission, when not subject to state

jurisdiction.

(2) A rural incumbent local exchange

carrier electing to disaggregate and

target support under paragraph (c) of

this section shall submit to the

Administrator a copy of the order

approving the disaggregation and

targeting plan submitted by the carrier

to the state commission, or the Federal

Communications Commission, when

not subject to state jurisdiction, and a

copy of the disaggregation and targeting

plan approved by the state commission

or the Federal Communications

Commission.

(3) A rural incumbent local exchange

carrier electing to disaggregate and

target support under paragraph (d) of

this section shall submit to the

Administrator a copy of the selfcertification plan including the

information submitted to the state

commission pursuant to (d)(2)(i) and

(d)(2)(iv) of this section or the Federal

Communications Commission.

(4) A rural incumbent local exchange

carrier electing to disaggregate and

target support under paragraph (c) or (d)

of this section must submit to the

Administrator maps which precisely

identify the boundaries of the

designated disaggregation zones of

support within the carrier’s study area.

[FR Doc. 01–14008 Filed 6–4–01; 8:45 am]

BILLING CODE 6712–01–P

FEDERAL COMMUNICATIONS

COMMISSION

47 CFR Part 73

[DA 01–1237; MM Docket No. 01–64; RM–

10074]

Radio Broadcasting Services;

Monticello, Maine

AGENCY: Federal Communications

Commission.

ACTION: Final rule.

SUMMARY: This document allots Channel

234A to Monticello, Maine, in response

to a petition filed by Allan H. Wiener.

See 66 FR 14873, March 14, 2001. The

coordinates for Channel 234A at

Monticello, Maine, are 46–24–20 NL

and 67–50–45 WL. Although Canadian

concurrence has been requested for the

allotment of Channel 234A at

Monticello, notification has not been

received. Therefore, operation with the

facilities specified for Monticello herein

is subject to modification, suspension,

or termination without right to hearing,

if found by the Commission to be

necessary in order to conform to the

1991 Canada-USA FM Broadcast

Agreement or if specifically objected to

by Canada. A filing window for Channel

234A at Monticello, Maine, will not be

opened at this time. Instead, the issue of

opening this allotment for auction will

be addressed by the Commission in a

subsequent order.

DATES: Effective July 3, 2001.

FOR FURTHER INFORMATION CONTACT:

Kathleen Scheuerle, Mass Media

Bureau, (202) 418–2180.

SUPPLEMENTARY INFORMATION: This is a

summary of the Commission’s Report

and Order, MM Docket No. 01–24,

adopted May 9, 2001, and released May

18, 2001. The full text of this

Commission decision is available for

inspection and copying during normal

business hours in the Commission’s