Establishment of a Joint Board

SUMMARY: These regulations enact a six-month extension of the interim

indexed cap on the total level of the Universal Service Fund (``USF'').

The cap was intended to be effective as an interim measure moderating

the growth of the USF during the pendency of a broader rulemaking that

revises the Part 36 jurisdictional separations rules governing the USF.

The interim cap is scheduled to expire on January 1, 1996. The

extension will maintain the interim cap while the rulemaking is

completed.

EFFECTIVE DATE: December 15, 1995.

FOR FURTHER INFORMATION CONTACT: Jeanine Poltronieri, (202) 418-0866,

Deborah A. Dupont, (202) 418-0873, Common Carrier Bureau, Accounting

and Audits Division.

SUPPLEMENTARY INFORMATION: This is a summary of the Federal

Communication Commission's Report and Order in Amendment of Part 36 of

the Commission's Rules and Establishment of a Joint Board, FCC 95-494,

CC Docket No. 80-286, adopted December 11, 1995, and released December

12, 1995. The Commission has made the full text of the Order available

for inspection and copying during normal business hours in the

Commission's Reference Center, Room 239, 1919 M Street, N.W.,

Washington, D.C. 20554, and will publish it in the FCC Record. The full

text of the Order may also be purchased from the Commission's

duplicating contractor, International Transcription Service, 2100 M

Street, N.W., Suite 140, Washington, D.C., (202) 857-3800.

The Commission adopted the two-year indexed cap for the purpose of

moderating growth in the USF during the pendency of a rulemaking that

addresses possible permanent changes to the Part 36 jurisdictional

separations rules. Previous changes to the rules had involved lengthy

phase-in periods to ease the transition for affected carriers. By

moderating the growth in the USF and consequently individual carriers'

draw from that fund, the interim cap was intended to enable the

Commission to implement new rules in a timely manner. The two-year

period was selected in the belief that the rulemaking would be

completed within that time. The interim cap is scheduled to expire on

January 1, 1996.

On August 30, 1994, the Commission released an initial Notice of

Inquiry, 59 FR 46606, Sept. 9, 1994, requesting comment on several

policy questions relating to the goals and effects of high-cost

assistance and on two alternative approaches to the high-cost

assistance mechanisms of Part 36. On July 13, 1995, the Commission

subsequently released a Notice of Proposed Rulemaking and Notice of

Inquiry (``Notice''), 60 FR 46803, Sept. 8, 1995, inviting comment on

proposals for revising the Part 36 jurisdictional separations rules. On

August 31, 1995, in response to requests from interested parties, the

deadlines for comments and reply comments on the issues raised in the

Notice were extended four additional weeks. In granting the extension,

the Commission explained that the extension would serve the public

interest by facilitating more detailed analysis by interested parties,

which should prove helpful to the ultimate resolution of the complex

issues presented in the Notice.

On October 3, 1995, we issued a notice of proposed rulemaking,

(``Extension Notice''), 60 FR 52359, Oct. 6, 1995, proposing the

extension of the interim cap for an additional six months. We referred

the issues raised in the Extension Notice to the Joint Board for a

recommended decision. In the Extension Notice, we noted that we had

limited the duration of the interim cap to two years in the belief that

two years would be sufficient for the completion of the Part 36 USF

jurisdictional separations rulemaking. We also emphasized that because

of the complexity of the issues in the rulemaking, the rulemaking would

take more time than the anticipated two years to complete, despite

diligent effort by the Commission and Joint Board staff and interested

parties. The Joint Board has recently released a recommended decision

recommending that the Commission extend the interim cap. In view of the

scope of the proposals under consideration in the current rulemaking,

the process may conclude with new USF rules retargeting assistance.

Consequently, the rationale articulated by the Commission in support of

the original interim cap during the pendency of the rulemaking remains

valid. Given the progress in the rulemaking process to date, the

Commission believes that an additional six months should be sufficient

to complete it and that the extension is essential to allow full

analysis of the complex issues raised in this rulemaking. We believe

that extending the interim cap for an additional six months will allow

growth in the USF to be moderated while the rulemaking revising the USF

jurisdictional separations rules is completed. To continue to moderate

the growth of the USF effectively during the entire rulemaking period,

the six-month extension must be effective by the January 1, 1996,

expiration of the interim cap. In addition, the Commission has reserved

the discretion to consider a longer extension of the interim cap,

without further notice, if it becomes clear that the rulemaking will

not be completed by July 1, 1996, on the basis of the record already

developed.

These rule changes will become effective immediately upon their

publication in the Federal Register. Pursuant to 5 U.S.C. 553 (d)(3)

the Commission found good cause to have the rule amendments take effect

immediately upon publication in the Federal Register. The revised rules

must be effective in less than 30 days so that the extended interim cap

is in place by the expiration date of the interim cap, January 1, 1996.

Accordingly, pursuant to Sections 1, (4)(i), 221(c), and 410(c) of

the Communications Act of 1934, as amended, 47 U.S.C. 151, 154(i),

221(c), and 410(c), it is ordered That Part 36 of the Commission's

Rules and Regulations, 47 C.F.R. Part 36, Subpart F--Universal Service

Fund, is amended as shown in the rule changes below.

List of Subjects in 47 CFR Part 36

Communications common carriers, Jurisdictional separations

procedures, Reporting and recordkeeping requirements, Telephone,

Universal System of Accounts.

Federal Communications Commission.

William F. Caton,

Acting Secretary.

Rule Changes

Parts 36 of Title 47 of the Code of Federal Regulations is amended

as follows:

PART 36--[AMENDED]

1. The authority citation for Part 36 continues to read as follows:

Authority: 47 U.S.C. Secs. 151, 154(i) and (j), 205, 221(c), 403

and 410.

2. Section 36.601 is amended by revising paragraph (c) to read as

follows:

Sec. 36.601 General.

* * * * *

(c) During an interim period commencing on January 1, 1996, and

terminating on July 1, 1996, the annual amount of the total Universal

Service

[[Page 65012]]

Fund shall not exceed the amount of the total Universal Service Fund

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 June filing. The total Universal Service

Fund shall consist of the Universal Service expense adjustments,

including amounts calculated pursuant to Secs. 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 year preceding the June filing and the number of total working

loops on December 31 of the second year preceding that filing, both

calculated pursuant to Sec. 36.611(a)(8).

3. Section 36.622 is amended by revising the first sentence of

paragraph (a) and paragraph (c) to read as follows:

Sec. 36.622 National and study area average unseparated loop costs.

(a) National Average Unseparated Loop Cost per Working Loop. Except

as provided in paragraph (c) of this section, this is equal to the sum

of the Loop Costs for each study area in the country as calculated

pursuant to Sec. 36.621(a) divided by the sum of the working loops

reported in Sec. 36.611(a)(8) for each study area in the country. * * *

* * * * *

(c) During an interim period commencing on January 1, 1996, and

terminating on July 1, 1996, the National Average Unseparated Loop Cost

per Working Loop shall be the greater of:

(1) The amount calculated pursuant to the method described in

paragraph (a) of this section; or

(2) An amount calculated to produce the maximum total Universal

Service Fund allowable pursuant to Sec. 36.601(c).

[FR Doc. 95-30548 Filed 12-14-95; 8:45 am]

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