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Rule

Federal-State Joint Board on Universal Service

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Information about this document as published in the Federal Register.

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AGENCY:

Federal Communications Commission.

ACTION:

Final rule; petition for reconsideration.

SUMMARY:

In this document, the Commission updates line count input values for the high-cost universal service support mechanism for non-rural carriers for purposes of calculating and targeting support amounts for the year 2002. Specifically, the Commission shall use updated line count data in the universal service cost model to estimate non-rural carriers' forward-looking economic costs of providing the services supported by the federal high-cost mechanism. The Commission further updates the company-specific data used in the model to calculate investment in general support facilities and switching costs.

DATES:

Effective February 22, 2002.

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FOR FURTHER INFORMATION CONTACT:

Katie King or Thomas Buckley, Attorneys, Common Carrier Bureau, Accounting Policy Division, (202) 418-7400.

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SUPPLEMENTARY INFORMATION:

This is a summary of the Commission's Order and Order on Reconsideration in CC Docket No. 96-45 released on December 18, 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. Order

1. 2000 Line Counts. Consistent with the framework adopted in the Twentieth Reconsideration Order, 66 FR 26513, May 8, 2000, and the 2001 Line Counts Update Order, 65 FR 81759, December 27, 2000, the Commission concludes the cost model should use year-end 2000 line counts filed July 31, 2001, as input values for purposes of estimating average forward-looking costs and determining support for the year 2002. The Commission also concludes that line counts should be allocated to the classes of service used in the model based on the line count data filed pursuant to the 1999 Data Request. The Commission further concludes that special access line counts should be allocated on the basis of the 1999 Data Request data and trued-up to 2000 43-08 ARMIS special line counts. In addition, the Commission will adjust support amounts every quarter to reflect the lines reported by carriers, according to the methodology set forth in the Twentieth Reconsideration Order, 66 FR 26513, May 8, 2000. The Commission also stated that it plans to initiate a proceeding to study how often line counts and other input values should be updated.

2. Further, consistent with its action in the 2001 Line Counts Update Order, 65 FR 81759, December 27, 2000, and because an updated customer location and road data set remains unavailable at this time, the Commission will not update customer location and road data at this time. Although the Commission recognizes that a new source of year 2000 Census data may be useful in creating an updated customer location and road data set in the future, such information is not in a usable data set format for purposes of determining support for 2002. The Commission, therefore, defers the issue of using these data in the model until the Commission initiates a comprehensive proceeding to study revisions and changes to the model inputs and model platform. In the meantime, all new lines should be treated as if they were located at existing locations in the model.

3. Class of Service Allocations. The Commission finds that using the methodology employed in the 2001 Line Counts Update Order, 65 FR 81759, December 27, 2000, which used year-end wire center line count data filed pursuant to the 1999 Data Request, remains a reasonable method for allocating line counts to the classes of service used in the model. The Commission believes this methodology is a preferable approach because it remains a reasonably accurate process for disaggregating line counts without imposing burdensome reporting requirements on carriers. For purposes of 2002 support, the Commission therefore shall allocate line counts to the classes of service used in the model by dividing the year-end 2000 lines reported by non-rural carriers into business lines, residential lines, payphone lines, and single line business lines for each wire center in the same proportion as the lines filed pursuant to the 1999 Data Request (year-end 1998 lines). Start Printed Page 3119

4. The Commission also finds that estimating special line growth for purposes of calculating 2002 support can be accurately determined by dividing the 2000 ARMIS special access lines among wire centers in the same proportion as the special lines from the 1999 Data Request. The Commission finds that this methodology continues to be a reasonable approach to estimating special line growth for calculating support for 2002.

5. Matching Wire Centers. The Commission will use the same methodology employed in the 2001 Line Counts Update Order, 65 FR 81759, December 27, 2000, to match wire centers reported by carriers in their quarterly line count filings with wire centers found in the 1999 Data Request and in the model's customer location data.

6. General Support Facilities. In addition to line counts, the model uses other types of data that are updated annually under current Commission rules and procedures. Among other things, the model uses company-specific ARMIS data to calculate investment in general support facilities (GSF). GSF investment includes buildings, motor vehicles, and general purpose computers. A portion of GSF investment must be added to the model's estimate of outside plant, switching, and transport investment to adequately reflect the cost providing the supported services. The Commission finds that updating the tables used in the model with 2000 ARMIS data used to compute GSF investment will improve the model's cost estimates by taking into account the current costs of GSF investment associated with supported services.

7. Switching. The model also uses company-specific data in determining switching costs. A wire center's switch directs both interstate and intrastate traffic. Universal service support, however, is only provided for the portion of the switch used to direct intrastate traffic. Therefore, to determine the amount of a wire center's switch that is eligible for support, the model needs to determine the percentage of the switch used to direct intrastate service. The model currently uses 1998 ARMIS Dial Equipment Minutes (DEM) data to determine the overall switch usage. Then, because the ARMIS DEM data do not distinguish between local and intrastate toll usage, the model uses 1997 traffic parameter data filed with the National Exchange Carrier Association (NECA) which, in addition to identifying intrastate and interstate switch usage, identifies the local DEM to compute the portion of non-interstate local usage. Therefore, the model currently uses data sources from different years to determine the portion of the switch used to direct intrastate traffic. The Commission further concludes that it should update the tables in the model with the most recent traffic parameters available from NECA to determine the percentage of the switch allocated to supported services and the switch port requirement for interoffice transport. The Commission finds that using only NECA data for switch allocation, which are only one year behind the ARMIS data but contain all the data necessary to serve as the sole source for switch apportionment is a preferable alternative than using two different sources of data. Further, the Commission will continue to use ARMIS traffic parameter data for estimating signaling costs.

8. Model Platform. The Commission defers, until a later date, the question of whether and when to transition to the Delphi version of the forward-looking cost model. The Delphi version posted on the Commission's web site contained certain modifications, in addition to translation to the Delphi computer language. Commenters have noted that some of the cost estimates generated by this modified version of the cost model of the cost model significantly differ with the results from the previous year's Turbo-Pascal version. This may warrant further investigation of whether the total amount of universal service support can vary substantially with small changes in inputs due to technical corrections to the model. In addition, numerous commenters have recommended use of the cost model in Visual Basic computer language in lieu of the Delphi version. They contend that Visual Basic is a preferable computer language because it is: (1) More widely used than Delphi; and (2) part of the cost model already uses Visual Basic and therefore, transition here would make the cost model more uniform. In order to permit an opportunity for further consideration and analysis of these issues, the Commission will use a Turbo-Pascal version of the model, at present, to calculate support for non-rural carriers for calculating 2002 cost estimates. The Commission anticipates that a number of technical corrections will ultimately be made to the cost model. Upon further examination of proposed modifications, the Commission may revise its calculations of support for future quarters in 2002.

II. Order on Reconsideration

9. The Commission denies Sprint Corporation's (Sprint) petition for reconsideration of the 2001 Line Counts Update Order, 65 FR 81759, December 27, 2000. Specifically, after review of the arguments presented on reconsideration, the Commission concludes that Sprint has not provided any new information or arguments that requires it to alter its decision to update line counts without updating customer location data for purposes of calculating support for 2001. As the Commission explained in the 2001 Line Counts Update Order, updated line count data were available for the model's inputs, but updated customer location data were not. Consequently, the Commission concluded that, on balance, it was better to update the model with available line count data at that time than wait until a customer location data set could be obtained.

10. Relying on that same analysis and reasoning, the Commission has decided to use updated line count data in the universal service cost model for purposes of calculating support for non-rural carriers for 2002 without updating customer location data. Again, because an updated customer location and road data set remains unavailable for use at this time, the Commission finds that, on balance, it is best not to delay updating line counts. In addition, the Commission has noted that it intends to initiate, at a later date, a proceeding to study proposed revisions and changes to the model inputs and model platform.

VI. Order Clauses

11. It is ordered pursuant to the authority contained in sections 1-4, 201-205, 214, 218-220, 254, 303(r), 403, and 410 of the Communications Act of 1934, as amended, 47 U.S.C. 151-154, 201-205, 214, 218-220, 254, 303(r), 403, and 410, and section 1.108 of the Commission's rules, 47 CFR 0.91(f), this Order is adopted. Specifically, the Commission updates line count input values for the high-cost universal service support mechanism for non-rural carriers for purposes of calculating and targeting support amounts for the year 2002. Therefore, the Commission shall use updated line count data in the universal service cost model to estimate non-rural carriers' forward-looking economic costs of providing the services supported by the federal high-cost mechanism. In addition, non-rural support amounts will continue to be adjusted each quarter to account for line growth based on the wire center line count data reported quarterly by non-rural carriers. The Commission further updates the company-specific data used in the model to calculate investment in general support facilities and switching costs. Start Printed Page 3120

12. It is further ordered that, pursuant to sections 4, 201-205, 218-220, 303(r), and 405 of the Communications Act of 1934, as amended, 47 U.S.C. 154, 201-205, 218-220, 303(r), and 405 of the Communications Act of 1934, as amended, and sections 1.106 and 1.429 of the Commission's rules, 47 CFR 1.106, 1.429, that the petition for reconsideration filed January 26, 2001, by Sprint Corporation is denied.

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Federal Communications Commission.

William F. Caton,

Deputy Secretary.

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[FR Doc. 02-1567 Filed 1-22-02; 8:45 am]

BILLING CODE 6712-01-P