WPC^ 2BJ  Courier3|caCG Omega Bold PE37PCG Timeset 4 LPT2 257_1)HPLA4ADD.PRSx  @\X@2n6 FP Z3|c "i~'K2^18MSS888S8888SSSSSSSSSS88Jxir{icx{8Aui{x`xoYi{xxxl888SS8JSJSJ8SS..S.SSSS>A.SSxSSJJSJS+SSSSS8SSSSSSSSS.xJxJxJxJxJorJiJiJiJiJ8.8.8.8.{SxSxSxSxS{S{S{S{SxSxJ{SxSxSxS{S`SxIxSxIqIqIrSrS{dgIiSiSgIxSxSxSxSxS{S{S8.SSSS8Sz]SSuSg/gZ4DKICG TimesCG OmegaCG Omega BoldTimes New RomanTimes New Roman BoldOOVJCVV).VJjVVCVOCJVVqVVJ)")7<)5<5<5)<<""<"^<<<<)."<,?2?2>,H2H2H2H2H2J2J2!2222!2I822F2>>$?2@>J2:J2J2H2H2YHB$B$C26&6&6&62>$>?2J2J2J2J2J2J2^HH2@,@,@,J2?2J262?2H2<!22!!!WddddddddddddddddddddddddddddddddddddddddddddddddxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxNHHH222!,))22X222YY2#2222Y#!!442Ydd22==Ld2d2H2;SS88Y!42^x#"ddddHHddd2Hdd4HHYYddd2YYddd Y2!!dddddH=dYHHHHHHHHHH!d2H282YdHdC2!2H,29HNAddHHHHHHHHHHddddd.dHHHHdddddddddddddddddddHHddddddSC=NdHddd+;HHHHddddddHHH2HHdHHdddHHH,HHHH,HHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHH!HHH!HHH!HHH!HHHHHHHHHHHHHH=?8=8C,?'A,J2H,!F,C8[8J,C2H,H=92=22?,H,C=H8N===H?J!2HHH=,====I!!2222HJ222HHH=!92,!ddhrZz.lZrrvvnFFZ8) xPy-ԍ47 U.S.C.  410(c).>  X-  X-x` ` 3. To continue to moderate the growth of the USF effectively during the entire rulemaking period, the sixmonth extension must be effective by the January 1, 1996  X-expirationAX) xP-ԍ47 C.F.R.  36.601(c).A 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.  X -  g II. BACKGROUND ĐTP x` ` 4. The USF rules were adopted in 1984 to promote universally available  X -telephone services at reasonable rates. ) xPn-ԍAmendment of Part 67 of the Commission's Rules and Establishment of a Joint Board, Decision and Order, 96 FCC 2d 781, 794, para. 29 (1984). The rules allow local exchange carriers ("LECs") with  X -an average unseparated loop cost per working loop  @) xP-ԍThe costs included in the unseparated loop costs are enumerated in 47 C.F.R.  36.621(a) (1994). The number of working loops within a LEC study area is defined in 47 C.F.R.  36.611(a)(8) (1994). The average unseparated loop cost per working loop and national average unseparated loop cost per working loop are defined in 47 C.F.R.  36.622 (1994). ("average cost per loop") above the  X -assistance threshold to allocate a percentage of these costs to the interstate jurisdiction.  ( ) xP-ԍLECs with average cost per loop above 115% of the national average cost per loop can allocate a specified percentage of these costs to the interstate jurisdiction. 47 C.F.R.  36.631(c), (d) (1994). This allocation is in  xP-addition to the interstate allocation allowed under our general jurisdictional separations rules. See 47 C.F.R.  36.154(c) (1994). The  X-current rules offer the most assistance to smaller LEC study areas) xPQ-ԍCompare 47 C.F.R.  36.631(c) (allowing LEC study areas with 200,000 or fewer working loops to  zP-allocate to the interstate jurisdiction 65% or more of their average cost per loop above 115% of the national  zP-average cost per loop) with  36.631(d) (allowing LEC study areas with greater than 200,000 working loops to  zP -allocate to the interstate jurisdiction 60% or more of their average cost per loop above 200% of the national  zPw!-average cost per loop and 10% to 30% of their average cost per loop above 115% and at or below 200% of the  zPA"-national average cost per loop). with higher average cost "0*(("Ԍ X-Ԋper loop, ; xPy-ԍCompare 47 C.F.R.  36.631(c)(1) (allowing LEC study areas with 200,000 or fewer working loops to  zPA-allocate to the interstate jurisdiction 65% of their average cost per loop above 115% and at or below 150% of  zP -the national average cost per loop ) with  36.631(c)(2) (allowing LEC study areas with 200,000 or fewer  zP-working loops to allocate to the interstate jurisdiction 75% of their average cost per loop above 150% of the  zP-national average cost per loop); compare  36.631(d)(1) (allowing LEC study areas with greater than 200,000  zPi-working loops to allocate to the interstate jurisdiction 10% of their average cost per loop above 115% and at or  zP3-below 160% of the national average cost per loop) with  36.631(d)(4) (allowing LEC study areas with greater  zP-than 200,000 working loops to allocate to the interstate jurisdiction 75% of their average cost per loop above  zP-250% of the national average cost per loop). although all study areas with average cost per loop above the assistance threshold  X-receive some assistance. ; xPB -ԍLECs of any size with average cost per loop above 115% of the national average cost per loop can allocate some portion of these costs to the interstate jurisdiction. 47 C.F.R.  36.631(c), (d). x  X-  x` ` 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 highcost assistance mechanisms to  X-determine whether changes were needed to better serve our underlying public policy goals.  ; xP>-ԍAmendment of Part 36 of The Commission's Rules And Establishment of a Joint Board, Notice of  xP-Proposed Rulemaking, 8 FCC Rec 7114, 711415, paras. 2, 1115 (1993) (Interim Notice). The completion of the eightyear USF phasein period and "numerous regulatory, technological, and market changes in the telecommunications industry" also supported a  XH-reevaluation of the highcost assistance mechanisms at that time.b HX ; xPQ-ԍInterim Order, supra note 1, at 305, para. 15.b We intended to address  X1-possible changes in the Part 36 USF rules through a notice of proposed rulemaking.E 1; xP-ԍId. at 303, paras. 12.E An indexed cap on the total level of the USF was imposed for the purpose of moderating growth  X -in the USF for the anticipated duration of that rulemaking period.B x; xP,-ԍId. at 303, para. 1.B The interim cap expires  X -on January 1, 1996.A ; xP-ԍ47 C.F.R.  36.601(c).A  X -  X -x` ` 6. In order to focus the issues in advance of the proposed rulemaking, ; xP"-ԍAmendment of Part 36 of The Commission's Rules And Establishment of a Joint Board, Notice of Inquiry,  xP"-9 FCC Rec 7404, 7406 n.5 (1994). we requested comments on several policy questions relating to the goals and effects of highcost  X-assistance.C; xP1&-ԍId. at 7406, para. 2.C We also requested comment on two broad alternative approaches to the highcost"0*(("  X-assistance mechanisms of Part 36.1; xPy-ԍId.1 Under the first approach, assistance would be based on  X-actual reported costs, as is the case under our present rules.GX; xP-ԍId. at 741415, para. 26.G Under the second, proxy factors reasonably correlated with either the need for assistance or with costs would be used to  X-determine assistance.K; xPT-ԍId. at 742627, paras. 6164.K x` ` 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  X_-by September 12 and reply comments by October 12._x; xP -ԍAmendment of Part 36 of The Commission's Rules And Establishment of a Joint Board, CC Docket No. 80286, FCC 95282, 36, para. 91 (released July 13, 1995). The Notice invited comment on three  XH-proposals for revising our USF rules.BH; xP-ԍId. at 10, para. 17.B The first proposal presented three specific alternative modifications to the existing rules that would continue to base highcost assistance on actual  X -costs reported by LECs.k ` ; xP+-ԍId. at 17, paras. 3738, at 22, para. 47, at 2324, para. 51.k 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  X -reported costs.I ; xP-ԍId. at 2531, paras. 5675.I 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  X -the Commission.F ; xP-ԍId. at 32, paras. 7677.F In addition to the three proposals, comment was solicited on the use of  X-credits, or customer vouchers, directing assistance to LECs selected by the customer.B; xPQ-ԍId. at 10, para. 17.B 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  X4-interstate jurisdiction.F4; xP#-ԍId. at 79, paras. 912.F x` ` 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"00*((c" reply comments, because we were persuaded that an extension would serve the public  X-interest.; xPy-ԍAmendment of Part 36 of the Commission's Rules and Establishment of a Joint Board, Order, CC Docket No. 80286, DA 951876, 2, para. 4 (released September 1, 1995). We noted that an extension would encourage more detailed analysis by interested  X-parties of the complex issues presented in the Notice for their consideration.17; xP-ԍId.1 The new  X-deadlines for filing comments are October 10 and November 9, 1995.@; xP3-ԍId. at 2, para. 5.@    x` `  Xv- III. DISCUSSION Đ@P  XH-x` ` 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  X -address possible permanent changes to the USF rules.g W xP"-ԍInterim Notice, supra note 11, at 7114, paras. 12.g In imposing the interim cap,   we noted that previous changes to the jurisdictional separations rules involved lengthy  X -phasein periods to ease the transition for affected carriers.f  xP-ԍInterim Order, supra note 1, at 305, paras. 1718.f 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  X -manner.G! w xP-ԍId. at 305, paras. 1618.G x` `  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  XK-completion of the rulemaking.d"K  xP-ԍInterim Notice, supra note 11, at 7114, para. 4.d We specifically stated that should rulemaking conclude prior to the expiration of the cap, the new rules would replace the interim  X-cap.x#  xPe -ԍId. at 7114 n.2; Interim Order, supra note 1 at 306, para. 24.x 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. x` `  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  X-scope of the proposals presently under consideration for amending the jurisdictional"' #0*(("  X-separations rules,@$ xPy-ԍSee supra para. 7.@ 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.  XH-(  IV. PROCEDURAL MATTERS Đ@P  X -x A.` ` EX PARTE  X -x` `  12. This is a nonrestricted notice and comment rulemaking proceeding.  X -Ex parte presentations are permitted, except during the Sunshine Agenda period,  X -provided they are disclosed as provided in the Commission's rules.p% X xP-ԍSee generally 47 C.F.R.  1.1202, 1.1203, 1.1206(a) (1994).p  X-x B.` ` REGULATORY FLEXIBILITY x` `  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  X-Act.C& xP-ԍ5 U.S.C.  601(3).C 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  X-operation and therefore are not "small entities" as defined by that act.n'x xP-ԍSee MTS and WATS Market Structure, 93 FCC 2d 241, 33839 (1983).n 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  X-with Section 603(a) of that act.=( xPL!-ԍ5 U.S.C.  603(a).=  Xe-x C.` ` COMMENT DATES x` `  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" (0*(("  X-of the Commission's Rules,O) xPy-ԍ47 C.F.R.  1.415, 1.419 (1994).O 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. x` ` x  X-  V. ORDERING CLAUSES Đ@P  Xb-x` ` 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.  X-x` ` 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  Xe-recommended decision.  x  X -x` `  FEDERAL COMMUNICATIONS COMMISSION  X- x  X!-x` `  William F. Caton  X"-x` `  Acting Secretary""X)0*((!"  Y-   EE  EE x` ` #Xw5 P7mXP#  FEDERALSTATE JOINT BOARD SERVICE LIST ă The Honorable Sharon L. Nelson, Chairman Washington Utilities and Transportation Commission Chandler Plaza Building 1300 South Evergreen Park Drive, S.W. Olympia, Washington 985047250 The Honorable Cheryl L. Parrino, Chair Wisconsin Public Service Commission Post Office Box 7854 Madison, Wisconsin 537077854 The Honorable Stephen O. Hewlett, Commissioner Tennessee Public Service Commission 460 James Robertson Parkway Nashville, Tennessee 372430505 The Honorable Laska Schoenfelder, Chairman South Dakota Public Utilities Commission State Capitol Building Pierre, South Dakota 575015070 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 "()0*0*0*'"ԌTeresa Pitts, State Joint Board Staff Chair Washington Utilities and Transportation Commission 1300 South Evergreen Park Drive, S.W. Olympia, Washington 985047250 Charles Bolles South Dakota Public Utilities Commission State Capitol Building Pierre, South Dakota 575015070 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 EE  :EEx` ` 17.: "#' )0*((%"ԌGeorge 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 372430505 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 C400 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  EE  x1EE` ` 17.1 x1EE` ` 17.1"#' )0*((%"ԌJonathan 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 537077854 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 276260510