Federal-State Joint Board; Extension of Indexed Cap on Total Level of Universal Service Fund

SUMMARY: The Federal-State Joint Board recommends the extension of the

duration of the interim indexed cap on the total level of the Universal

Service Fund (USF) for an additional six months. The cap was intended

as an interim measure moderating the growth of the USF during the

pendency of a broader rulemaking revising the Part 36 jurisdictional

separations rules governing the USF. The Federal-State Joint Board

recommends the extension of the interim cap, which expires January 1,

1996, for an additional six months while that rulemaking is completed.

FOR FURTHER INFORMATION CONTACT: Clara Kuehn, 202-418-0844, Deborah A.

Dupont, 202-418-0873, Accounting and Audits Division, Common Carrier

Bureau.

SUPPLEMENTARY INFORMATION: This is a summary of the Federal-State Joint

Board's Recommended Decision CC Docket No. 80-286, FCC 95J-1, adopted

December 7, 1995, and released December 8, 1995.

The full text of Recommended Decisions of the Joint Board are

available for inspection and copying during normal business hours in

the FCC Dockets Branch (room 230), 1919 M Street, NW, Washington DC.

The full text of this Recommended Decision may also be purchased from

the Commission's copy contractors, International Transcription Service,

(202) 857-3800, 2100 M Street, NW, Suite 140, Washington DC 20037.

Summary of Recommended Decision

In 1993, the Commission imposed a two-year indexed cap (cap) on the

total level of the Universal Service Fund (USF) for the purpose of

moderating growth in the USF during the pendency of a planned

rulemaking that would address permanent changes in the Commission's

rules governing the USF. 58 FR 69239, Dec. 30, 1993. On October 3,

1995, the Commission issued a Notice of Proposed Rulemaking, proposing

a six-month extension of the cap in order to continue to moderate

growth in the USF while the Commission completed its USF rulemaking. 60

FR 52359, Oct. 6, 1995. The Commission explained that the duration of

the cap had been limited to two years in the belief that the USF

rulemaking would be completed within that period and that an additional

six months would be sufficient to complete the USF rulemaking in view

of the progress made to date. Id. at 52361. The Commission referred the

issues raised in its Notice of Proposed Rulemaking to the Federal-State

Joint Board for a Recommended Decision and invited interested parties

to propose extensions of the cap for longer or shorter periods than six

months. Id. at 52360-61.

Following review of comments and reply comments filed by interested

parties, the Joint Board recommends that the cap be extended for an

additional six months in order to continue to moderate growth in the

USF while the USF rulemaking is completed. The Joint Board reiterates

its conclusion, stated during earlier deliberations in the same

proceeding, that the cap would minimize dislocation should the

Commission's ongoing USF rulemaking result in revisions to the USF

rules. In response to contentions of the parties that the proposed

extension is unnecessary, because recent NECA submissions showed total

USF payments in 1996 below the level of the USF as limited by an

extension of the cap, the Joint Board explains that no one would be

harmed if total claims for USF assistance remain below an extended cap,

but that an extended cap would protect against unanticipated and

unwanted growth in the fund during the pendency of the USF rulemaking

should total claims substantially exceed NECA's current calculations.

The Joint Board reiterates its concerns, stated earlier in the

proceeding, regarding the pattern of growth and the overall rate of

growth in the USF, explaining that moderating the level of the USF

during the pendency of the USF rulemaking would serve the public

interest.

The Joint Board concludes that six months should be sufficient to

complete the USF rulemaking and recommends an extension of the cap for

six additional months. The Joint Board rejects arguments to broaden the

scope of the USF rulemaking as beyond the scope of the Notice of

Proposed Rulemaking.

Ordering Clause

28. For all of the reasons discussed in this Recommended Decision,

this Federal-State Joint Board recommends, pursuant to Section 410(c)

of the Communications Act of 1934, as amended, 47 U.S.C. 410(c), that

the Federal Communications Commission extend, until July 1, 1996, the

current interim rules prescribing an indexed cap on the total level of

the Universal Service Fund, 47 CFR 36.601, 36.622.

List of Subjects in 47 CFR Part 36

Communications common carriers, Reporting and recordkeeping

requirements, Telephone, Uniform System of Accounts.

Federal Communications Commission.

William F. Caton,

Acting Secretary.

[FR Doc. 95-30453 Filed 12-14-95; 8:45 am]

BILLING CODE 6712-01-P