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A. 1. a.(1)(a) i) a)#)a [ PQXP# ## b, oT9 !#)a [ PQXP# ## b, oT9 !#)^ `> XiQXX#   Copyright  Portola Systems, Inc. 1987, 1988`e%APage  #)a [ PQXP# ## b, oT9 !#)a [ PQXP# ## b, oT9 !#)^ `> XiQXX#   Page `1e%&Copyright  Portola Systems, Inc. 1987, 1988 Style 3x(StDutch Roman 11.5 with Margins/TabsP"82f—+Gb<wx#)a [ PQXP# n  ## b, oT9 !Style 4x(StSwiss 8 Point with MarginsRK+GP"82f—+Gb=Gyz#Co> PQP# dd  #  2I>_G?G@mHAIStyle 1x(StDutch Roman 11.5 Font2,RK+GP"82f—+Gb>7{|#)a [ PQXP# dn Style 2x(StDutch Italic 11.5V2,RK+GP"82f—+Gb?'}~#)^ `> XiQXX#Style 5x(StDutch Bold 18 PointV2,RK+GP"82f—+Gb@''#T~> pQp##)a [ PQXP#Style 7x(StSwiss 11.5(GV2,RK+GP"82f—+GbA''#)ao> PQXP##)a [ PQXP#2zBICJDkZEEjStyle 6x(StDutch Roman 14 Point2,RK+GP"82f—+GbB''#w [ PQP##)a [ P QXP#Style 10x(StInitial Codes for AdvancedRK+GP"82f—+GbC#)a [ P!QXP# dn   #  [ b, oT9 ! I. A. 1. a.(1)(a) i) a)#)a [ P"QXP# ## b, oT9 !#)a [ P#QXP# ## b, oT9 !#)^ `> Xi$QXX#`Me%'Advanced Legal WordPerfect Learning Guide    I. 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P6Q,P-{,C8*XEVC*f9 xQX0J=.XEL&J*f9 xQ&X2A yO'P5 S4 #C\  P6Q/P##&I\  P6Q &P# Federal Communications Commission `~(#cDA 982587 ă   yxdddyP#XP\  P~QXP#fv #X\  P6G;/P#Before the\ FEDERAL COMMUNICATIONS COMMISSION  yO'd7Washington, D.C. 20054 ă  SX'#Xj\  P6G;XP##&a\  P6G; &P#  S'In the Matter of)  S')  S'National Exchange Carrier Association, Inc.)ppA %dM S %dM D 9896  S'Proposed Modifications to the 199899)  Sh'Interstate Average Schedule Formulas)  S 'm ORDER ă  Sx 'Adopted: December 22, 1998 qppReleased: December 22, 1998 By the Chief, Accounting Safeguards Division, Common Carrier Bureau:  S'P I. Introduction Đ\  S`'1. On October 1, 1998 the National Exchange Carrier Association, Inc. ("NECA") filed  S8'proposed modifications to the current universal service formulas for average schedule companies.xZ8  {O'#X\  P6G;/P#ЍSee 1999 NECA Modification of Average Schedule Universal Service Formulas, National Exchange Carrier Association, Inc., ASD 9896, October 1, 1998. NECA filed revised data to supplement its October 1, 1998 filing on October 14, 1998 and December 10, 1998 ("NECA Filing").x These formulas include a local switching support formula and a Universal Service Fund ("USF") expense adjustment formula. On October 23, 1998, the Accounting Safeguards Division ("Division") of the Common Carrier Bureau ("Bureau") issued a public notice soliciting comments on NECA's  S'Filing.  yO"'#X\  P6G;/P#эPleading Cycle Established for Comments on NECA's Proposed Modification to the Interstate Average Schedule Formulas, ASD 9896, DA 982126 (ASD, Com. Car. Bur. rel. October 23, 1998).X0Í ÍX0Í Two parties filed comments.X0ÍX0Í Í@XB  yOz'#X\  P6G;/P#эComments were filed in support of NECA's proposed formula revisions by the National Telephone Cooperative Association ("NTCA") and the Organization for the Promotion and Advancement of Small Telecommunications Companies ("OPASTCO").@ For reasons discussed below, we approve NECA's modified local switching support formula. At this time, however, due to the submission of new and additional information, further review of NECA's proposed revisions to the USF expense adjustment formula is necessary. Until this review is complete, we direct NECA to retain the current USF expense adjustment formula that was approved June 29, 1998.  S'2. The current average schedule universal service formulas used to calculate the interstate local switching support and USF expense adjustment were approved by the Commission in orders"b 0*|(|(dd"  S'dated December 24, 1997,$  {Oh'#X\  P6G;/P#эSee National Exchange Carrier Association, Inc., Proposed Modifications to the 1997 Interstate Average  yO2'Schedule Formulas and Proposed Further Modifications to the 199798 Interstate Average Schedule Formulas,  {O'Order on Reconsideration and Order, AAD 972, AAD 97109, DA 972710, December 24, 1997. The current local switching support formula is effective January 1, 1998 through December 31, 1998., and June 29, 1998,\  {OT'#X\  P6G;/P#эSee National Exchange Carrier Association, Inc., Proposed Modifications to the 199899 Interstate  {O'Average Schedule Formulas, Order, AAD 9820, DA 981297, June 29, 1998. The current USF expense adjustment formula is effective July 1, 1998 through December 31, 1998.  respectively. NECA proposes modifications to the two average schedule universal service formulas to take effect on January 1, 1999 and remain in effect through December 31, 1999.  S`'T II. Discussion Đ\  S'3. Local Switching Support Formula. The local switching support formula is used to determine the amount of support for switching cost that will be recovered from universal service support mechanisms. This support, which is now explicit, was formerly provided implicitly in switched access rates under the Commission's Dial Equipment Minutes (DEM) weighting rules in Part  Sr'36.20 r  yO'#X\  P6G;/P#эThe Commission has recognized that smaller telephone companies have higher local switching costs than larger incumbent local exchange carriers (ILECs) because the smaller companies cannot take advantage of certain economies of scale. Thus, our rules have included a support mechanism known as DEM weighting, which was designed to assign a greater proportion of local switching costs to the interstate jurisdiction than larger ILECs could allocate. DEM weighting assistance was an implicit support mechanism recovered through switched access rates charged to interexchange carriers by those ILECs serving fewer than 50,000 lines. Beginning January 1, 1998, however, the Commission adopted new rules requiring that support corresponding in amount to that  {Ob'generated formerly by DEM weighting be recovered from the new universal service support mechanisms.  See 47  {O,'C.F.R.  36.125(f). See also, FederalState Joint Board on Universal Service, CC Docket No. 9645, FCC 97 {O'157, 12 FCC Rcd 8776, May 8, 1997 ("Order"); FederalState Joint Board on Universal Service, Access Charge Reform, Price Cap Performance Review for Local Exchange Carriers, Transport Rate Structure and Pricing, End  {O'User Common Line Charge, Fourth Order on Reconsideration in CC Docket No. 9645, Report and Order in CC Docket Nos. 9645, 96262, 941, 91213, 9572, FCC 97420, 13 FCC Rcd 5318, December 30, 1997.2 NECA proposes minor modifications to the current local switching support formula which, if approved, would decrease the local switching support for average schedule companies by  S" 'approximately $1 million per month.\"   {O'#X\  P6G;/P#эSee NECA Filing at II11. The local switching support is a portion of the settlements that average schedule companies receive for providing interstate local switching access service. The remainder of settlements  {O$ 'continue to be recovered through NECA's local switching access charges.  Id. at II1. We have reviewed NECA's proposed changes to this formula and find it consistent with our requirements. We therefore approve it.  S '4. USF Expense Adjustment Formula: NECA proposes revisions to the current USF expense adjustment formula. Under the proposed formula, USF expense adjustment payments would increase  S\'approximately 33 percent, from $13.8 million received in 1998 to $18.4 million.w\  {O%'#X\  P6G;/P#эSee NECA Filing at III8.w  S '5. Based on data contained in NECA's filing, our review found apparent inconsistencies" 0*|(|(dd" between amounts derived under NECA's proposed USF expense adjustment formula for average schedule companies and amounts received by cost companies. We expressed our concern to NECA that its proposed average schedule formula may not simulate the disbursement process for comparable  S'cost companies as required by our rules.    {O'#X\  P6G;/P#эSee 47 C.F.R. 69.606(a). Average schedule formulas are required to simulate the disbursements that would be received by a cost company that is representative of average schedule companies.  NECA submitted further information and data for our review on December 16 and 17, 1998.  S'6. Further review and examination of the recent data submitted by NECA is necessary before we can determine whether revisions to the current USF expense adjustment formula are warranted. To maintain stability in USF expense adjustment payments to average schedule companies while we complete our review, we direct NECA to retain the current USF expense adjustment formula that we approved on June 29, 1998. Our review will proceed expeditiously so that any revised formula, if appropriate, will be implemented promptly.  S 'u8 III. Ordering Clauses ă  S '7. Accordingly, IT IS ORDERED, pursuant to Sections 0.91 and 0.291 of the Commission rules, 47 C.F.R.  0.91, 9.291, that the average schedule formula proposed by the National Exchange Carriers Association, Inc. on October 1, 1998, for local switching support is adopted and SHALL BECOME EFFECTIVE January 1, 1998.  S'8. IT IS FURTHER ORDERED, pursuant to Sections 0.91 and 0.291 of the Commission rules, 47 C.F.R.  0.91, 9.291, that the current Universal Service Fund expense adjustment formula approved by the Commission on June 29, 1998, SHALL REMAIN IN EFFECT after December 31, 1998.  S'9. IT IS FURTHER ORDERED, pursuant to Section 4(i) of the Communications Act of 1934, as amended, 47 U.S.C.  154(i), and Sections 0.91, 0.291, 1.103 and 1.4(b)(2) of the Commission's rules, 47 C.F.R.  0.91, 0.291, 1.103 and 1.4(b)(2) that THIS ORDER IS EFFECTIVE UPON ITS RELEASE. ` `  hhCFEDERAL COMMUNICATIONS COMMISSION ` `  hhC ` `  hhCKenneth P. Moran ` `  hhCChief, Accounting Safeguards Division