PUBLIC NOTICE
                                                                              
   Federal Communications Commission
   1919 M St., N.W.
   Washington, D.C. 20554

                                                                              

                                                                              
                                                                 DA 97-2712
                                                 Released December 29, 1997

                COMMON CARRIER BUREAU ANNOUNCES RELEASE OF
                             HCPM VERSION 2.0
                      CC Docket Nos. 96-45 and 97-160

 In the Universal Service Order released May 8, 1997, the Commission, acting on the
recommendation of the Federal-State Joint Board, concluded that universal service support
for non-rural carriers should be determined by subtracting a benchmark revenue amount from
the forward-looking economic cost of providing the supported services.  The Commission
concluded that it should continue to review two cost models, the Hatfield Model and the
Benchmark Cost Proxy Model (BCPM).  The Commission further concluded that it would
select the platform design features of a forward-looking economic cost mechanism by the
end of 1997 and select a complete mechanism, including input values, by August 1998.  In a
Further Notice of Proposed Rulemaking (FNPRM) in this proceeding, the Commission stated
that it would consider a hybrid mechanism, combining the best features of both models, and
might also "study alternative algorithms and approaches that could be submitted by parties
other than model sponsors or that could be generated internally by Commission staff."

 On October 31, 1997, the Common Carrier Bureau (Bureau) released an engineering
process mechanism, known as the Hybrid Cost Proxy Model (HCPM).  HCPM was
developed by Commission staff members William Sharkey of the Policy and Programming
Planning Division and Mark Kennet of the Competitive Pricing Division, Common Carrier
Bureau; C. Anthony Bush of the Competition Division, Office of the General Counsel; Jeff
Prisbrey of the Policy and Rules Division, Mass Media Bureau; and Commission contractor
Vaikunth Gupta of Panum Communications.  The HCPM represents these individuals' views
on potential approaches to customer location and outside plant design issues.  It is not an
official statement by the Commission or any FCC Commissioner and should not be
interpreted as a Commission decision or proposed Commission decision.  The HCPM
software was made available for public review via the World Wide Web on October 31,
1997, and comments were received on November 26, 1997.

 An updated version of HCPM, known as version 2.0, is now available.  This version
responds to the Bureau's general guidance to all model proponents on the proper structure for
customer location and outside plant design modules, and also makes various improvements
that the model developers described in the documentation with the October 31 release. 
Parties wishing to review the software may download it from the Bureau's World Wide Web
page at http://www.fcc.gov/ccb/universal_service/welcome.html.  Follow the link under the
heading "Forward-Looking Cost Methodologies."  Parties with substantive input regarding
the updated HCPM are requested to bring their information to the Bureau's attention through
ex parte presentations.

 For further information about the HCPM, contact William Sharkey, (202) 418-2743
(wsharkey@fcc.gov).

 Action by the Chief, Accounting and Audits Division, Common Carrier Bureau.