Step 4 Filing Requirements

Safety Net Additive

Safety Net Additive (SNA) support is a sub-component of High Cost Loop (HCL) support and is available to rural price-cap and rate-of-return incumbent carriers and competitive carriers providing service in the areas of these rural companies. SNA support is support "above the cap" for carriers that make significant investment in rural infrastructure in years in which HCL support is capped. SNA support is intended to provide rural carriers with the appropriate incentives to invest in the network infrastructure serving their communities.

Determination of Support Amount

• To receive support in a particular study area, a carrier must show that growth in telecommunications plant in service (TPIS) per line is at least 14% greater than the study area's TPIS per line in the prior year. A carrier that qualifies for SNA support will receive support for its incremental, or additional, expense adjustment associated with new investment.
• Investments made in categories other than those supported by HCL support may allow a carrier to qualify for SNA, but the investment itself will not qualify for additional SNA support. That is, SNA support can only be applied to the incremental costs associated with new investment in categories eligible for support under HCL. For a further explanation of the investment categories eligible for HCL support, please refer to Section 36.621 of the FCC's rules (47 C.F.R. § 36.621).

The following formula will be used to determine the amount of SNA support for which a carrier is eligible: (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).

• The amount of SNA support for which a carrier qualifies will be in addition to the capped support it receives under HCL. Under no circumstances will a carrier eligible for SNA support receive less support than it would normally receive under the cap.
• Consistent with the principle of competitive neutrality, SNA support will be available to competitive ETCs in an amount equal to that received by the incumbent rural carrier on a per-line basis.
• If the safety net formula results in a negative amount, the carrier will not be eligible for SNA support in that year.
• SNA support is only available in years in which HCL support is capped. In the event that HCL is not capped in a particular year, there will be no SNA support available to carriers.
• Once a carrier qualifies for SNA support, it will receive such support in any of the remaining years of the Rural Task Force (RTF) plan in which the HCL cap is triggered. The carrier need not meet the 14% TPIS trigger in those subsequent years.
• SNA support does not transfer if an exchange is sold or transferred.

Notice Requirement

Carriers seeking to qualify for SNA support must provide written notice to USAC that a study area meets the 14% TPIS trigger. This notice (see Sample Letter) should be provided to USAC in conjunction with the carrier's annual or quarterly data submission to NECA and should be submitted to the following address. Please note that the notice must clearly reference "CC Docket No. 96-45."
USAC
Vice President, High Cost and Low Income
2000 L Street NW, Suite 200
Washington, DC 20036

Important Note: The consequence of failure to provide written notice is that the study area will not be eligible for SNA support and will have to meet the 14% trigger in a subsequent year in order to qualify.