FCC Appoints Eight USAC Board Members: USAC Board Appoints Board Members to Committees

Michael Powell, Chairman of the Federal Communications Commission (FCC) has appointed eight individuals to the Board of Directors of the Universal Service Administrative Company (USAC). The appointments are a result of a FCC public notice soliciting nominations to fill the vacancies that would be created when the terms of six current members expire on December 31, 2001, and to fill two vacant positions on the board. The USAC Board represents the diverse stakeholders that participate in the universal service programs. The terms are staggered and six expire each year.

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FCC Releases MAG Order

On November 8, the FCC released the MAG Order, [FCC 01-304; 918kb] in which it modified its rules to reform the interstate access charge and universal service support system for local exchange carriers subject to rate-of-return regulation.

The FCC established a new universal service support mechanism, called the Interstate Common Line Support mechanism. This new mechanism will replace the carrier common line (CCL) charge with explicit support that will be available to all eligible telecommunications carriers on an equitable, non-discriminatory, and competitively neutral basis.

Among many other important actions that the FCC took in the MAG Order, it concluded that the plan for disaggregation and targeting of high cost support for rural carriers adopted in the Rural Task Force Order will also apply to Interstate Common Line Support. That is, the same three paths that are available for the disaggregation and targeting of other forms of high cost support for rural carriers will be available for the disaggregation of Interstate Common Line Support. It is important to note that the FCC extended the date by which disaggregation plans must be submitted, from March 18, 2002 to May 15, 2002.

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FCC Designates Western Wireless as an ETC on the Pine Ridge Reservation

In companion orders released on October 1, the FCC found that it had jurisdiction to designate Western Wireless as an eligible telecommunications carrier (ETC) on the Pine Ridge Reservation in South Dakota. The FCC also determined that it was in the public interest to designate Western Wireless as an ETC for service offered to tribal members on the Pine Ridge Reservation.

In the Pine Ridge Jurisdiction Order, the FCC undertook a jurisdictional analysis to determine whether the FCC or the South Dakota Public Utilities Commission (South Dakota PUC) should decide whether Western Wireless is eligible to receive federal universal service support for providing telephone service to residents of the Pine Ridge Reservation. After reviewing federal Indian law and the specific facts of the case, the FCC concluded that it should make the ETC determination for Western Wireless's provision of service to members of the Oglala Sioux Tribe on the Pine Ridge Reservation, and the South Dakota PUC should do so for the provision of non-tribal members on the Reservation.

In the companion Pine Ridge Waiver Order, the FCC granted Western Wireless's petition to be designated as an ETC for service offered to tribal members on the Pine Ridge Reservation pursuant to section 214(e)(6) of the Communications Act of 1934, as amended. In so doing, the FCC concluded that Western Wireless had satisfied the statutory eligibility requirements of section 214(e)(1). Specifically, the FCC concluded that Western Wireless has demonstrated that it will offer and advertise the services supported by the federal universal service support mechanisms throughout the designated service area. In addition, the FCC found that the designation of Western Wireless as an ETC in those areas of the reservation served by rural telephone companies serves the public interest by promoting competition and the provision of new technologies to tribal members on the Pine Ridge Reservation that suffer from significant impediments to affordable telecommunications service.

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Revised LSS Forms Now Available

The revised local switching support (LSS) forms have been approved by OMB and are now available in the HC Forms area. Completed forms are due on October 1 and may be submitted via mail, fax, or e-mail. Please refer to the form instructions for the appropriate addresses.

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Certifications Due October 1

Each state commission is required to certify that all of the rural carriers in its state will use any high cost support received only for the provision, maintenance, and upgrading of the facilities and services eligible for support. In addition, states in which non-rural carriers are eligible to receive either high cost model or interim hold harmless support are required to make the same certification. These certifications are due by October 1, 2001. Carriers not certified by October 1 will not be eligible to receive high cost support in the first quarter of 2002. Visit Certification Requirement for details about the certification requirement.

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High Cost Website Redesigned

Please visit the newly redesigned High Cost website. New features include information on implementation of the FCC's Rural Task Force (RTF) Order, UNE zone maps filed by carriers eligible for Interstate Access Support (IAS), and a process overview for establishing eligibility for high cost universal service support. Please note that the FAQs have also been substantially revised.

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August 2, 2001: Quarterly Filing Released

On August 2, 2001, USAC made its quarterly filing with the FCC. This filing contains the fund size projections and contribution base for the fourth quarter of 2001. There are 12 high cost appendices to the filing, and the following list provides a roadmap to their contents:

HC1: High cost support by state by study area
This appendix provides the projected amount of individual company for high cost loop, interstate access, long term support, and local switching support. The data is segregated by rural and non-rural status of the companies.

HC2: High cost support by state
This appendix provides projected 2001 annual high cost support for each state or territory.

HC3: High cost support disaggregated for Washington state
This appendix provides results of disaggregated support in Washington state in accordance with the waiver approving the disaggregation methodology proposed for rural companies by the Washington Utilities and Telecommunications Commission. The appendix provides support amounts for the fourth quarter of 2001.

HC4: High cost loop support by state by study area
This appendix provides projected monthly high cost loop payments by study area for 4Q2001 in accordance with the FCC's hold harmless provisions. High cost loop support projected for non-rural carriers receiving forward-looking support is superceded by the projections listed in appendices HC11 and HC12.

HC5: Local switching support by study area
This appendix provides individual study area local switching support amounts per month.

HC6: Long term support by study area
This appendix provides monthly and 4Q2001 long term support amounts on a study area basis.

HC7: Interstate access support by study area
This appendix provides projected monthly and annual interstate access support amounts on a study area basis.

HC8: Interstate access support by state
This appendix provides projected interstate access support amounts by state. Rural and non-rural support amounts are shown separately, and a statewide total is also provided.

HC9: Interstate access support per line
This appendix provides projected per-line interstate access support amounts. The projected support amounts are broken down by UNE zone and, within each zone, are further broken down by residential/single-line business and multi-line business support amounts.

HC10: High cost model support by wire center
This appendix provides projected forward-looking support amounts for non-rural carriers on a wire center basis.

HC11: High cost model support by study area
This appendix provides forward-looking support amounts for non-rural carriers on a study area basis. It contains support provided pursuant to the model, as well as the interim hold harmless calculations.

HC12: High cost model support per line
This appendix provides high cost support for non-rural carriers on a per-line basis.

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New USAC Board Member Appointed

The Chairman of the FCC has nominated Karen Buller to the USAC Board to represent Low Income stakeholders. The USAC Board elected Ms. Buller to the Board and appointed her to the High Cost and Low Income Committee. Ms. Buller is very active in her state and in particular with the FCC's tribal lands initiative. She currently works at the National Indian Telecommunications Institute in Sante Fe, New Mexico.

Read more about Ms. Buller

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On May 23, 2001, the Federal Communications Commission released an order that modified its existing universal service support mechanism for rural local exchange companies to ensure that telephone service is affordable and reasonably comparable throughout the country [Fourteenth Report and Order, 1.87MB].

Specifically, the Commission adopted an interim embedded, or historical, cost mechanism for a five-year period that provides predictable levels of support to rural carriers so that they can continue to provide affordable phone service and make needed investments in their networks.

The Commission took the following actions in response to the Rural Task Force's recommended reforms to rural high cost universal service support:

• Adopted the Rural Task Force's recommendation to re-base the high cost loop support fund for rural telephone companies and retained an indexed cap on the fund.
• Adopted 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.
• Adopted the Rural Task Force's recommendation to freeze the national average loop cost at $240.00.
• Revised the corporate operations expense limitation calculation so that the dollar values in the formula are re-based and indexed by the GDP-CPI.
• Raised the minimum cap in the revised corporate operations expense limitation formula from $300,000 to $600,000, permitting 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.
• Adopted a modified version of the Rural Task Force's proposed "safety net additive" so that a carrier will receive 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.
• Retained section 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. Modified the rule to provide a "safety valve" that provides support for additional investment made in the acquired exchanges.
• Declined 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. In the attached Further Notice of Proposed Rulemaking, invited comment on possible alternative measures.
• Addressed the Rural Task Force's concerns regarding frequency of reporting and the lag in support in study areas with competitive eligible telecommunications carriers.
  • First, required all eligible telecommunications carriers serving such areas to report updated line counts on a regular quarterly basis.
  • Second, clarified that competitive eligible telecommunications carriers may submit data and receive high-cost loop support on a regular quarterly basis.
• Adopted, with certain modifications, the three paths for the disaggregation and targeting of high-cost universal service support proposed by the Rural Task Force. Adopted the general requirements that the Rural Task Force proposed for all disaggregation plans.
• Found 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.
• Adopted the use of a wireless mobile customer's billing address as the basis for determining the customer's location for purposes of delivering high-cost universal service support.
• Concluded 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.
• Committed to further consideration of the Rural Task Force's proposed "no barriers to advanced services" policy in the future.
• Found 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. Recognized the importance of completing access reform for rate-of-return carriers and stated its intent to act expeditiously to resolve issues raised in the Multi-Association Group (MAG) proceeding.

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Rural High Cost Order Released

On May 23, 2001, the Federal Communications Commission released an order that modified its existing universal service support mechanism for rural local exchange companies to ensure that telephone service is affordable and reasonably comparable throughout the country. Specifically, the Commission adopted an interim embedded, or historical, cost mechanism for a five-year period that provides predictable levels of support to rural carriers so that they can continue to provide affordable phone service and make needed investments in their networks. Read more

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May 2, 2001: Quarterly Filing Released

On May 2, 2001, USAC made its quarterly filing with the FCC. This filing contains the fund size projections and contribution base for the third quarter of 2001. There are 13 high cost appendices to the filing, and the following list provides a roadmap to their contents:

HC1: High cost support by state by study area.
This appendix provides the projected amount of individual company for high cost loop, interstate access, long term support, and local switching support. The data is segregated by rural and non-rural status of the companies.

HC2: High cost support by state.
This appendix provides projected 2001 annual high cost support for each state or territory.

HC3: High cost support disaggregated for Washington state.
This appendix provides results of disaggregated support in Washington state in accordance with the waiver approving the disaggregation methodology proposed for rural companies by the Washington Utilities and Telecommunications Commission. The appendix provides support amounts for the first, second, and third quarters of 2001.

HC4: High cost loop support by state by study area.
This appendix provides projected monthly high cost loop payments by study area for 3Q2001 in accordance with the FCC's hold harmless provisions. High cost loop support projected for non-rural carriers receiving forward-looking support is superceded by the projections listed in appendices HC11 and HC12.

HC5: Local switching support by study area.
This appendix provides individual study area local switching support amounts per month.

HC6: Local switching support final 1999 results.
This appendix provides final local switching support amounts for 1999.

HC7: Long term support by study area.
This appendix provides monthly and 3Q2001 long term support amounts on a study area basis.

HC8: Interstate access support by study area.
This appendix provides projected monthly and annual interstate access support amounts on a study area basis.

HC9: Interstate access support by state.
This appendix provides projected interstate access support amounts by state. Rural and non-rural support amounts are shown separately, and a statewide total is also provided.

HC10: Interstate access support per line.
This appendix provides projected per-line interstate access support amounts. The projected support amounts are broken down by UNE zone and, within each zone, are further broken down by residential/single-line business and multi-line business support amounts.

HC11: High cost model support by wire center.
This appendix provides projected forward-looking support amounts for non-rural carriers on a wire center basis.

HC12: High cost model support by study area.
This appendix provides forward-looking support amounts for non-rural carriers on a study area basis. It contains support provided pursuant to the model, as well as the interim hold harmless calculations.

HC13: High cost model support per line.
This appendix provides high cost support for non-rural carriers on a per-line basis.

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High Cost and Low Income Committee Meeting Minutes, April 23, 2001

The quarterly meeting of the High Cost & Low Income (HCLI) Committee of the Universal Service Administrative Company (USAC) Board of Directors was held at the Westin Grand, 2350 M Street, N.W., Washington, DC, on Monday, April 23, 2001. Ms. Martha Hogerty, Chair of the Committee, called the meeting to order at 1:31 p.m. Eastern Time. View Meeting Minutes (draft).

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Upcoming Committee Meeting

The High Cost and Low Income Committee quarterly meeting has been scheduled for April 23, 2001 from 1:30 p.m. to 3:00 p.m., EST. The meeting will be held at the Westin Grand, 2350 M Street, N.W., Washington, DC and is open to the public. The Board of Directors and its committees meet on a regular quarterly basis. View quarterly meeting schedule.

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New Chair and Vice Chair of High Cost and Low Income Committee Announced

During the January Board meeting, the USAC Board of Directors approved the USAC High Cost & Low Income Committee's recommendation to elect Ms. Martha Hogerty as Chair and Mr. Edwin Eichler as Vice Chair of the USAC High Cost & Low Income Committee for the term of one year. The term began at the conclusion of the January 2001 Board meeting and shall conclude at the close of the January 2002 Board meeting.
More information on Martha Hogerty.
More Information on Edwin Eichler.

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High Cost and Low Income Committee Minutes, January 29, 2001

The quarterly meeting of the High Cost & Low Income (HCLI) Committee of the Universal Service Administrative Company (USAC) Board of Directors was held at the Westin Grand, 2350 M Street, NW, Washington, DC, on Monday, January 29, 2001. Ms. Heather Gold, Chair of the Committee, called the meeting to order at 1:35 p.m. Eastern Time. The Committee Minutes in draft are now available. View meeting minutes.

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New Contribution Methodology and Carrier Reporting Requirements

The Federal Communications Commission (FCC) recently modified the Universal Service Fund (USF) contribution methodology to reduce the interval between the accrual of revenues and the assessment of universal service contributions based on those revenues. Currently, contributions to the USF are based on a carrier's interstate and international end-user revenue generated 12 months prior. The new methodology shortens the lag from 12 months to six months.

In order to administer this change, the Order modifies reporting requirements for USF contributors. Going forward, the FCC eliminated the semi-annual September 1 FCC Form 499-S. However, in addition to the annual FCC Form 499-A due each April, four quarterly FCC Form 499-Q worksheets will be filed throughout the year. Form due dates, revenue data reported and invoicing time period are summarized below:

*For subsequent years, the first quarter revenue reporting will be due on May 1.

Telecommunications providers qualifying for the USF De Minimis Exemption (using process outlined on page 5 of the Form 499-Q instructions) do not need to complete the Form 499-Q. However, for all other USF contributors, the first Form 499-Q must be submitted to USAC by Friday May 11, 2001. We advise each carrier to review the instructions prior to completing the form. The FCC has made significant changes in the format and content of customer information reported.

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