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File how2ftp (.txt & .wp) is in directory \pub\Public_Notices\Miscellaneous. ***************************************************************** ******** I.FOR RECORD ONLY $// NPRM Amendment of Part 36 of the Commission's Rules And Establishment of a Joint Board FCC 95-416 //$ $/ 36 Jurisdictional Separations Procedures; Standard Procedures for Separating Telecommunications Property Costs, Revenues, Expenses, Taxes and Reserves for Telecommunications Companies /$ $/ 36.601 General /$ Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 FCC 95-416 In the Matter of ) ) Amendment of Part 36 of The ) Commission's Rules And) CC Docket No. 80-286 Establishment of a Joint Board ) NOTICE OF PROPOSED RULEMAKING Adopted: October 2, 1995; Released: October 3, 1995 By the Commission: Comment Date: October 18, 1995 Reply Comment Date: October 27, 1995 I. INTRODUCTION 1. In this Notice of Proposed Rulemaking we propose extending the duration of the two-year indexed cap ("interim 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 our broader rulemaking revising the Part 36 jurisdictional separations rules governing the USF. We propose to extend the interim cap for an additional six months while we complete that rulemaking. 2. We request comment on our proposed extension of the interim cap. We also refer the proposed extension of the interim cap to the Federal-State Joint Board in this proceeding for a recommended decision, as required by Section 410(c) of the Communications Act of 1934, as amended. 3. 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. For this reason, and because we are proposing only to extend the current interim rules for a limited duration, we set a relatively short comment cycle. Comments will be due on October 18, 1995, and reply comments will be due on October 27, 1995. II. BACKGROUND 4. The USF rules were adopted in 1984 to promote universally available telephone services at reasonable rates. The rules allow local exchange carriers ("LECs") with an average unseparated loop cost per working loop ("average cost per loop") above the assistance threshold to allocate a percentage of these costs to the interstate jurisdiction. The current rules offer the most assistance to smaller LEC study areas with higher average cost per loop, although all study areas with average cost per loop above the assistance threshold receive some assistance. 5. In 1993, in response to pronounced and erratic growth in the total level of the USF, we stated our intention to reappraise the USF high-cost assistance mechanisms to determine whether changes were needed to better serve our underlying public policy goals. The completion of the eight-year USF phase-in period and "numerous regulatory, technological, and market changes in the telecommunications industry" also supported a reevaluation of the high-cost assistance mechanisms at that time. We intended to address possible changes in the Part 36 USF rules through a notice of proposed rulemaking. An indexed cap on the total level of the USF was imposed for the purpose of moderating growth in the USF for the anticipated duration of that rulemaking period. The interim cap expires on January 1, 1996. 6. In order to focus the issues in advance of the proposed rulemaking, we requested comments on several policy questions relating to the goals and effects of high-cost assistance. We also requested comment on two broad alternative approaches to the high-cost assistance mechanisms of Part 36. Under the first approach, assistance would be based on actual reported costs, as is the case under our present rules. Under the second, proxy factors reasonably correlated with either the need for assistance or with costs would be used to determine assistance. 7. On July 13, 1995, we issued a Notice of Proposed Rulemaking and Notice of Inquiry ("Notice") proposing revisions to our USF rules. The Notice requested comments by September 12 and reply comments by October 12. The Notice invited comment on three proposals for revising our USF rules. The first proposal presented three specific alternative modifications to the existing rules that would continue to base high-cost assistance on actual costs reported by LECs. Under the second proposal, assistance would be distributed on the basis of factors related to the cost of providing service rather than on the basis of actual reported costs. The third proposal suggested the distribution of assistance among the States, with State utility commissions deciding the allocation of assistance among the carriers serving the State under distribution plans developed under Commission guidelines and reviewed by the Commission. In addition to the three proposals, comment was solicited on the use of credits, or customer vouchers, directing assistance to LECs selected by the customer. Finally, the Notice invited comment on the abolition, revision, or combination with USF assistance of dial equipment minute ("DEM") weighting, which currently allows LEC study areas with fewer than 50,000 loops to allocate part of their local switching costs to the interstate jurisdiction. 8. On August 31, we granted requests from interested parties, including the Alaska Public Utilities Commission, for an extension of time for the filing of comments and reply comments, because we were persuaded that an extension would serve the public interest. We noted that an extension would encourage more detailed analysis by interested parties of the complex issues presented in the Notice for their consideration. The new deadlines for filing comments are October 10 and November 9, 1995. III. DISCUSSION 9. We proposed the interim cap for the purpose of moderating growth in the total level of the USF for the duration of an intended rulemaking that would address possible permanent changes to the USF rules. In imposing the interim cap, we noted that previous changes to the jurisdictional separations rules involved lengthy phase-in periods to ease the transition for affected carriers. Since the intended rulemaking could result in new USF rules retargeting assistance, we concluded that the interim cap would facilitate our ability to implement the new rules in a timely manner. 10. We note that the Commission 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 rulemaking. We specifically stated that should rulemaking conclude prior to the expiration of the cap, the new rules would replace the interim cap. The issues addressed in this rulemaking are complex, however, and despite diligent effort by the Commission staff and interested parties, it is now clear that their resolution will take more time than the anticipated two years. 11. In view of the progress in the rulemaking process to date, we believe that an additional six months should be sufficient to complete it. Given the scope of the proposals presently under consideration for amending the jurisdictional separations rules, we conclude that the extension of the interim cap for the purpose of continuing to moderate the growth of the USF for the remainder of the rulemaking period is prudent. We propose extending the interim cap for an additional six months while we complete the rulemaking. We seek comment on this proposed extension of the interim rules. We also invite interested parties to propose longer or shorter extensions, with accompanying justifications for the length of time proposed. IV. PROCEDURAL MATTERS A. EX PARTE 12. This is a non-restricted notice and comment rulemaking proceeding. Ex parte presentations are permitted, except during the Sunshine Agenda period, provided they are disclosed as provided in the Commission's rules. B. REGULATORY FLEXIBILITY 13. We certify that the Regulatory Flexibility Act of 1980 does not apply to this rulemaking proceeding because if the proposals in this proceeding are adopted, there will not be a significant economic impact on a substantial number of small business entities, as defined by Section 601(3) of the Regulatory Flexibility Act. Because of the nature of local exchange and access service, the Commission has concluded that LECs, including small LECs, are dominant in their fields of operation and therefore are not "small entities" as defined by that act. The Secretary shall send a copy of this Notice of Proposed Rulemaking, including the certification, to the Chief Counsel for Advocacy of the Small Business Administration in accordance with Section 603(a) of that act. C. COMMENT DATES 14. We invite comment on the proposals and tentative conclusions set forth above. Pursuant to applicable procedures set forth in Sections 1.415 and 1.419 of the Commission's Rules, interested parties may file comments on or before October 18, 1995, and reply comments on or before October 27, 1995. To file formally in this proceeding, you must file an original and four copies of all comments, reply comments, and supporting comments. If you want each Commissioner to receive a personal copy of your comments, you must file an original plus nine copies. You should send comments and reply comments to Office of the Secretary, Federal Communications Commission, Washington, D.C. 20554. Parties should send one copy of any documents filed in this docket to the Commission's copy contractor, International Transcription Service (ITS), 2100 M Street, N.W., Suite 140, Washington, D.C. 20037. We also ask that parties send a copy of their comments to each member of the Federal State Joint Board and its staff, as indicated in the attached service list. Comments and reply comments will be available for public inspection during regular business hours in the FCC Reference Center, Room 239, 1919 M Street, N.W., Washington, D.C. 20554. V. ORDERING CLAUSES 15. Accordingly, IT IS ORDERED that, pursuant to Sections 1, 4(i), 4(j), and 403 of the Communications Act of 1934, as amended, 47 U.S.C.  151, 154(i), 154(j), and 403, NOTICE IS HEREBY GIVEN of proposed interim amendments to Part 36, Subpart F of the Commission's Rules, 47 C.F.R. Part 36, Subpart F, as described in the Notice of Proposed Rulemaking. 16. IT IS FURTHER ORDERED, pursuant to Section 410(c) of the Communications Act of 1934, as amended, 47 U.S.C.  410(c), that the issues relating to interim amendments to Part 36, Subpart F of the Commission's Rules, 47 C.F.R. Part 36, Subpart F, as described in the Notice of Proposed Rulemaking, shall be and hereby are referred to the Federal State Joint Board established in this proceeding for a recommended decision. FEDERAL COMMUNICATIONS COMMISSION William F. Caton Acting Secretary FEDERAL-STATE JOINT BOARD SERVICE LIST The Honorable Sharon L. Nelson, Chairman Washington Utilities and Transportation Commission Chandler Plaza Building 1300 South Evergreen Park Drive, S.W. Olympia, Washington 98504-7250 The Honorable Cheryl L. Parrino, Chair Wisconsin Public Service Commission Post Office Box 7854 Madison, Wisconsin 53707-7854 The Honorable Stephen O. Hewlett, Commissioner Tennessee Public Service Commission 460 James Robertson Parkway Nashville, Tennessee 37243-0505 The Honorable Laska Schoenfelder, Chairman South Dakota Public Utilities Commission State Capitol Building Pierre, South Dakota 57501-5070 The Honorable Reed E. Hundt, Chairman Federal Communications Commission 1919 M Street, N.W. - Room 814 Washington, D.C. 20554 The Honorable Andrew C. Barrett, Commissioner Federal Communications Commission 1919 M Street, N.W. - Room 826, Stop 0105 Washington, D.C. 20554 The Honorable Susan Ness, Commissioner Federal Communications Commission 1919 M Street, N.W. - Room 832 Washington, D.C. 20554 Deborah A. Dupont, FCC Joint Board Staff Chair Federal Communications Commission Common Carrier Bureau - Accounting & Audits Div. 2000 L Street, N.W. - Room 257 Washington, D.C. 20036 Teresa Pitts, State Joint Board Staff Chair Washington Utilities and Transportation Commission 1300 South Evergreen Park Drive, S.W. Olympia, Washington 98504-7250 Charles Bolles South Dakota Public Utilities Commission State Capitol Building Pierre, South Dakota 57501-5070 Elton Calder Georgia Public Service Commission 162 State Office Building 244 Washington Street, S.W. Atlanta, Georgia 30334 Ronald Choura Michigan Public Service Commission 6545 Mercantile Way Lansing, Michigan 48910 Rowland Curry Texas Public Utility Commission 7800 Shoal Creek Blvd. - Suite 400N Austin, Texas 78757 Ann Dean Maryland Public Service Commission 6 St. Paul Centre Baltimore, Maryland 21202 Dean Evans California Public Utilities Commission 505 Van Ness Avenue - Room 4004 San Francisco, California 94102 William Howden Federal Communications Commission Common Carrier Bureau - Accounting & Audits Div. 2000 L Street, N.W. - Room 812 Washington, D.C. 20036 George Johnson Federal Communications Commission Common Carrier Bureau - Accounting & Audits Div. 2000 L Street, N.W. - Room 257 Washington, D.C. 20036 Chris Klein Tennessee Public Service Commission 460 James Robertson Parkway Nashville, Tennessee 37243-0505 Robert Loube Public Service Commission of District of Columbia 450 Fifth Street, N.W. Washington, D.C. 20001 Sam Loudenslager Arkansas Public Service Commission 1000 Center Street Post Office Box C-400 Little Rock, Arkansas 72203 Rafi Mohammed Federal Communications Commission Common Carrier Bureau - Accounting and Audits Div. 2000 L Street - Room 812 Washington, D.C. 20036 Paul Pederson Missouri Public Service Commission Post Office Box 360 Jefferson City, Missouri 65102 James Bradford Ramsay National Association of Regulatory Utility Commissioners 1102 ICC Building Constitution Avenue & 12th Street, N.W. Post Office Box 684 Washington, D.C. 20044 Jonathan Reel Federal Communications Commission Common Carrier Bureau - Accounting and Audits Div. 2000 L Street, N.W. - Room 257 Washington, D.C. 20036 Jeff Richter Wisconsin Public Service Commission Post Office Box 7854 Madison, Wisconsin 53707-7854 Gary Seigel Federal Communications Commission Common Carrier Bureau - Accounting & Audits Div. 2000 L Street, N.W. - Room 812 Washington, D.C. 20036 Joel B. Shifman Maine Public Utilities Commission State House Station # 18 Augusta, Maine 04333 Fred Sistarenik New York Public Service Commission 3 Empire State Plaza Albany, New York 12223 Mary Steele North Carolina Utilities Commission Box 29510 Raleigh, North Carolina 27626-0510