[Title 47 CFR ]
[Code of Federal Regulations (annual edition) - October 1, 2008 Edition]
[From the U.S. Government Printing Office]



[[Page i]]

          

          47


          Parts 40 to 69

          Revised as of October 1, 2008


          Telecommunication
          



________________________

          Containing a codification of documents of general 
          applicability and future effect

          As of October 1, 2008
          With Ancillaries
                    Published by
                    Office of the Federal Register
                    National Archives and Records
                    Administration
                    A Special Edition of the Federal Register

[[Page ii]]

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                            Table of Contents



                                                                    Page
  Explanation.................................................       v

  Title 47:
          Chapter I--Federal Communications Commission 
          (Continued)                                                3
  Finding Aids:
      Material Approved for Incorporation by Reference........     449
      Table of CFR Titles and Chapters........................     451
      Alphabetical List of Agencies Appearing in the CFR......     471
      Table of OMB Control Numbers............................     481
      List of CFR Sections Affected...........................     489

[[Page iv]]





                     ----------------------------

                     Cite this Code: CFR
                     To cite the regulations in 
                       this volume use title, 
                       part and section number. 
                       Thus, 47 CFR 42.01 refers 
                       to title 47, part 42, 
                       section 01.

                     ----------------------------

[[Page v]]



                               EXPLANATION

    The Code of Federal Regulations is a codification of the general and 
permanent rules published in the Federal Register by the Executive 
departments and agencies of the Federal Government. The Code is divided 
into 50 titles which represent broad areas subject to Federal 
regulation. Each title is divided into chapters which usually bear the 
name of the issuing agency. Each chapter is further subdivided into 
parts covering specific regulatory areas.
    Each volume of the Code is revised at least once each calendar year 
and issued on a quarterly basis approximately as follows:

Title 1 through Title 16.................................as of January 1
Title 17 through Title 27..................................as of April 1
Title 28 through Title 41...................................as of July 1
Title 42 through Title 50................................as of October 1

    The appropriate revision date is printed on the cover of each 
volume.

LEGAL STATUS

    The contents of the Federal Register are required to be judicially 
noticed (44 U.S.C. 1507). The Code of Federal Regulations is prima facie 
evidence of the text of the original documents (44 U.S.C. 1510).

HOW TO USE THE CODE OF FEDERAL REGULATIONS

    The Code of Federal Regulations is kept up to date by the individual 
issues of the Federal Register. These two publications must be used 
together to determine the latest version of any given rule.
    To determine whether a Code volume has been amended since its 
revision date (in this case, October 1, 2008), consult the ``List of CFR 
Sections Affected (LSA),'' which is issued monthly, and the ``Cumulative 
List of Parts Affected,'' which appears in the Reader Aids section of 
the daily Federal Register. These two lists will identify the Federal 
Register page number of the latest amendment of any given rule.

EFFECTIVE AND EXPIRATION DATES

    Each volume of the Code contains amendments published in the Federal 
Register since the last revision of that volume of the Code. Source 
citations for the regulations are referred to by volume number and page 
number of the Federal Register and date of publication. Publication 
dates and effective dates are usually not the same and care must be 
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instances where the effective date is beyond the cut-off date for the 
Code a note has been inserted to reflect the future effective date. In 
those instances where a regulation published in the Federal Register 
states a date certain for expiration, an appropriate note will be 
inserted following the text.

OMB CONTROL NUMBERS

    The Paperwork Reduction Act of 1980 (Pub. L. 96-511) requires 
Federal agencies to display an OMB control number with their information 
collection request.

[[Page vi]]

Many agencies have begun publishing numerous OMB control numbers as 
amendments to existing regulations in the CFR. These OMB numbers are 
placed as close as possible to the applicable recordkeeping or reporting 
requirements.

OBSOLETE PROVISIONS

    Provisions that become obsolete before the revision date stated on 
the cover of each volume are not carried. Code users may find the text 
of provisions in effect on a given date in the past by using the 
appropriate numerical list of sections affected. For the period before 
January 1, 1986, consult either the List of CFR Sections Affected, 1949-
1963, 1964-1972, or 1973-1985, published in seven separate volumes. For 
the period beginning January 1, 1986, a ``List of CFR Sections 
Affected'' is published at the end of each CFR volume.

INCORPORATION BY REFERENCE

    What is incorporation by reference? Incorporation by reference was 
established by statute and allows Federal agencies to meet the 
requirement to publish regulations in the Federal Register by referring 
to materials already published elsewhere. For an incorporation to be 
valid, the Director of the Federal Register must approve it. The legal 
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if it were published in full in the Federal Register (5 U.S.C. 552(a)). 
This material, like any other properly issued regulation, has the force 
of law.
    What is a proper incorporation by reference? The Director of the 
Federal Register will approve an incorporation by reference only when 
the requirements of 1 CFR part 51 are met. Some of the elements on which 
approval is based are:
    (a) The incorporation will substantially reduce the volume of 
material published in the Federal Register.
    (b) The matter incorporated is in fact available to the extent 
necessary to afford fairness and uniformity in the administrative 
process.
    (c) The incorporating document is drafted and submitted for 
publication in accordance with 1 CFR part 51.
    Properly approved incorporations by reference in this volume are 
listed in the Finding Aids at the end of this volume.
    What if the material incorporated by reference cannot be found? If 
you have any problem locating or obtaining a copy of material listed in 
the Finding Aids of this volume as an approved incorporation by 
reference, please contact the agency that issued the regulation 
containing that incorporation. If, after contacting the agency, you find 
the material is not available, please notify the Director of the Federal 
Register, National Archives and Records Administration, Washington DC 
20408, or call 202-741-6010.

CFR INDEXES AND TABULAR GUIDES

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separate volume, revised annually as of January 1, entitled CFR Index 
and Finding Aids. This volume contains the Parallel Table of Statutory 
Authorities and Agency Rules (Table I). A list of CFR titles, chapters, 
and parts and an alphabetical list of agencies publishing in the CFR are 
also included in this volume.
    An index to the text of ``Title 3--The President'' is carried within 
that volume.
    The Federal Register Index is issued monthly in cumulative form. 
This index is based on a consolidation of the ``Contents'' entries in 
the daily Federal Register.
    A List of CFR Sections Affected (LSA) is published monthly, keyed to 
the revision dates of the 50 CFR titles.

[[Page vii]]


REPUBLICATION OF MATERIAL

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in the Code of Federal Regulations.

INQUIRIES

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the top of odd-numbered pages.
    For inquiries concerning CFR reference assistance, call 202-741-6000 
or write to the Director, Office of the Federal Register, National 
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ELECTRONIC SERVICES

    The full text of the Code of Federal Regulations, the LSA (List of 
CFR Sections Affected), The United States Government Manual, the Federal 
Register, Public Laws, Public Papers, Weekly Compilation of Presidential 
Documents and the Privacy Act Compilation are available in electronic 
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mail, gpoaccess@gpo.gov.
    The Office of the Federal Register also offers a free service on the 
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register. The NARA site also contains links to GPO Access.

    Raymond A. Mosley,
    Director,
    Office of the Federal Register.
    October 1, 2008.







[[Page ix]]



                               THIS TITLE

    Title 47--Telecommunication is composed of five volumes. The parts 
in these volumes are arranged in the following order: Parts 0-19, parts 
20-39, parts 40-69, parts 70-79, and part 80 to End, chapter I--Federal 
Communications Commission. The last volume, part 80 to End, also 
includes chapter II--Office of Science and Technology Policy and 
National Security Council, and chapter III--National Telecommunications 
and Information Administration, Department of Commerce. The contents of 
these volumes represent all current regulations codified under this 
title of the CFR as of October 1, 2008.

    Part 73 contains a numerical designation of FM broadcast channels 
(Sec.  73.201) and a table of FM allotments designated for use in 
communities in the United States, its territories, and possessions 
(Sec.  73.202). Part 73 also contains a numerical designation of 
television channels (Sec.  73.603) and a table of allotments which 
contain channels designated for the listed communities in the United 
States, its territories, and possessions (Sec.  73.606).

    The OMB control numbers for the Federal Communications Commission, 
appear in Sec.  0.408 of chapter I. For the convenience of the user 
Sec.  0.408 is reprinted in the Finding Aids section of the second 
through fifth volumes.

    For this volume, Michele Bugenhagen was Chief Editor. The Code of 
Federal Regulations publication program is under the direction of 
Michael L. White, assisted by Ann Worley.


[[Page 1]]



                       TITLE 47--TELECOMMUNICATION




                   (This book contains parts 40 to 69)

  --------------------------------------------------------------------
                                                                    Part

chapter i--Federal Communications Commission (Continued)....          42

[[Page 3]]



        CHAPTER I--FEDERAL COMMUNICATIONS COMMISSION (CONTINUED)




  --------------------------------------------------------------------

            SUBCHAPTER B--COMMON CARRIER SERVICES (CONTINUED)
Part                                                                Page
42              Preservation of records of communication 
                    common carriers.........................           5
43              Reports of communication common carriers and 
                    certain affiliates......................           7
51              Interconnection.............................          15
52              Numbering...................................          68
53              Special provisions concerning Bell operating 
                    companies...............................          94
54              Universal service...........................          99
59              Infrastructure sharing......................         184
61              Tariffs.....................................         185
63              Extension of lines, new lines, and 
                    discontinuance, reduction, outage and 
                    impairment of service by common 
                    carriers; and grants of recognized 
                    private operating agency status.........         226
64              Miscellaneous rules relating to common 
                    carriers................................         257
65              Interstate rate of return prescription 
                    procedures and methodologies............         358
68              Connection of terminal equipment to the 
                    telephone network.......................         367
69              Access charges..............................         401

Supplementary Publications: Annual Reports of the Federal Communications 
  Commission to Congress.

  Federal Communications Commission Reports of Orders and Decisions.

  Communications Act of 1934 (with amendments and index thereto), Recap. 
Version, May 1989.

  Study Guide and Reference Material for Commercial Radio Operator 
Examinations, May 1979 edition.

[[Page 5]]



            SUBCHAPTER B_COMMON CARRIER SERVICES (CONTINUED)





PART 42_PRESERVATION OF RECORDS OF COMMUNICATION COMMON
CARRIERS--Table of Contents




                              Applicability

Sec.
42.01 Applicability.

                          General Instructions

42.1 Scope of the regulations in this part.
42.2 Designation of a supervisory official.
42.3 Protection and storage of records.
42.4 Index of records.
42.5 Preparation and preservation of reproductions of original records.
42.6 Retention of telephone toll records.
42.7 Retention of other records.

   Specific Instructions for Carriers Offering Interexchange Services

42.10 Public availability of information concerning interexchange 
          services.
42.11 Retention of information concerning detariffed interexchange 
          services.

    Authority: Sec. 4(i), 48 Stat. 1066, as amended, 47 U.S.C. 154(i). 
Interprets or applies secs. 219 and 220, 48 Stat. 1077-78, 47 U.S.C. 
219, 220.

    Source: 51 FR 32653, Sept. 15, 1986, unless otherwise noted.

                              Applicability



Sec. 42.01  Applicability.

    This part prescribes the regulations governing the preservation of 
records of communication common carriers that are fully subject to the 
jurisdiction of the Commission.

                          General Instructions



Sec. 42.1  Scope of the regulations in this part.

    (a) The regulations in this part apply to all accounts, records, 
memoranda, documents, papers, and correspondence prepared by or on 
behalf of the carrier as well as those which come into its possession in 
connection with the acquisition of property, such as by purchase, 
consolidation, merger, etc.
    (b) The regulations in this part shall not be construed as requiring 
the preparation of accounts, records, or memoranda not required to be 
prepared by other regulations, such as the Uniform System of Accounts, 
except as provided hereinafter.
    (c) The regulations in this part shall not be construed as excusing 
compliance with any other lawful requirement for the preservation of 
records.



Sec. 42.2  Designation of a supervisory official.

    Each carrier subject to the regulations in this part shall designate 
one or more officials to supervise the preservation of its records.



Sec. 42.3  Protection and storage of records.

    The carrier shall protect records subject to the regulations in this 
part from damage from fires, and other hazards and, in the selection of 
storage spaces, safeguard the records from unnecessary exposure to 
deterioration.



Sec. 42.4  Index of records.

    Each carrier shall maintain at its operating company headquarters a 
master index of records. The master index shall identify the records 
retained, the related retention period, and the locations where the 
records are maintained. The master index shall be subject to review by 
Commission staff and the Commission shall reserve the right to add 
records, or lengthen retention periods upon finding that retention 
periods may be insufficient for its regulatory purposes. When any 
records are lost or destroyed before expiration of the retention period 
set forth in the master index, a certified statement shall be added to 
the master index, as soon as practicable, listing, as far as may be 
determined, the records lost or destroyed and describing the 
circumstances of the premature loss or destruction. At each office of 
the carrier where records are kept or stored, the carrier shall arrange, 
file, and currently index the records on site so that they may be 
readily identified and made available to representatives of the 
Commission.

[[Page 6]]



Sec. 42.5  Preparation and preservation of reproductions of
original records.

    (a) Each carrier may use a retention medium of its choice to 
preserve records in lieu of original records, provided that they observe 
the requirements of paragraphs (b) and (c) of this section.
    (b) A paper or microfilm record need not be created to satisfy the 
requirements of this part if the record is initially prepared in 
machine-readable medium such as punched cards, magnetic tapes, and 
disks. Each record kept in a machine-readable medium shall be 
accompanied by a statement clearly indicating the type of data included 
in the record and certifying that the information contained in it has 
been accurately duplicated. This statement shall be executed by a person 
duplicating the records. The records shall be indexed and retained in 
such a manner that they are easily accessible, and the carrier shall 
have the facilities available to locate, identify and reproduce the 
records in readable form without loss of clarity.
    (c) Records may be retained on microfilm provided they meet the 
requirements of the Federal Business Records Act (28 U.S.C. 1732).



Sec. 42.6  Retention of telephone toll records.

    Each carrier that offers or bills toll telephone service shall 
retain for a period of 18 months such records as are necessary to 
provide the following billing information about telephone toll calls: 
the name, address, and telephone number of the caller, telephone number 
called, date, time and length of the call. Each carrier shall retain 
this information for toll calls that it bills whether it is billing its 
own toll service customers for toll calls or billing customers for 
another carrier.

[51 FR 39536, Oct. 29, 1986]



Sec. 42.7  Retention of other records.

    Except as specified in Sec. 42.6, each carrier shall retain records 
identified in its master index of records for the period established 
therein. Records relevant to complaint proceedings not already contained 
in the index of records should be added to the index as soon as a 
complaint is filed and retained until final disposition of the 
complaint. Records a carrier is directed to retain as the result of a 
proceeding or inquiry by the Commission to the extent not already 
contained in the index will also be added to the index and retained 
until final disposition of the proceeding or inquiry.

   Specific Instructions for Carriers Offering Interexchange Services



Sec. 42.10  Public availability of information concerning 
interexchange services.

    (a) A nondominant interexchange carrier (IXC) shall make available 
to any member of the public, in at least one location, during regular 
business hours, information concerning its current rates, terms and 
conditions for all of its international and interstate, domestic, 
interexchange services. Such information shall be made available in an 
easy to understand format and in a timely manner. Following an inquiry 
or complaint from the public concerning rates, terms and conditions for 
such services, a carrier shall specify that such information is 
available and the manner in which the public may obtain the information.
    (b) In addition, a nondominant IXC that maintains an Internet 
website shall make such rate and service information specified in 
paragraph (a) of this section available on-line at its Internet website 
in a timely and easily accessible manner, and shall update this 
information regularly.

[64 FR 19725, Apr. 22, 1999, as amended at 66 FR 16879, Mar. 28, 2001]



Sec. 42.11  Retention of information concerning detariffed 
interexchange services.

    (a) A nondominant IXC shall maintain, for submission to the 
Commission and to state regulatory commissions upon request, price and 
service information regarding all of the carrier's international and 
interstate, domestic, interexchange service offerings. A commercial 
mobile radio service (CMRS) provider shall maintain such price and 
service information only about its international common carrier service 
offerings and only for those routes on

[[Page 7]]

which the CMRS provider is classified as dominant under Sec. 63.10 of 
this Chapter due to an affiliation with a foreign carrier that collects 
settlement payments from U.S. carriers for terminating U.S. 
international switched traffic at the foreign end of the route. Such a 
CMRS provider is not required to maintain its price and service 
information, however, on any such affiliated route if it provides 
service on that route solely through the resale of an unaffiliated 
facilities-based provider's international switched services. The price 
and service information maintained for purposes of this paragraph shall 
include documents supporting the rates, terms, and conditions of the 
carrier's international and interstate, domestic, interexchange 
offerings. The information maintained pursuant to this section shall be 
maintained in a manner that allows the carrier to produce such records 
within ten business days. For purposes of this paragraph, affiliated and 
foreign carrier are defined in Sec. 63.09 of this chapter.
    (b) The price and service information maintained pursuant to this 
section shall be retained for a period of at least two years and six 
months following the date the carrier ceases to provide services 
pursuant to such rates, terms and conditions.

[61 FR 59366, Nov. 22, 1996, as amended at 62 FR 59604, Nov. 4, 1997; 64 
FR 19725, Apr. 22, 1999; 66 FR 16879, Mar. 28, 2001]



PART 43_REPORTS OF COMMUNICATION COMMON CARRIERS AND CERTAIN 
AFFILIATES--Table of Contents




Sec.
43.01 Applicability.
43.11 Reports of local exchange competition data.
43.21 Transactions with affiliates.
43.41 [Reserved]
43.43 Reports of proposed changes in depreciation rates.
43.51 Contracts and concessions.
43.53 Reports regarding division of international toll communication 
          charges.
43.61 Reports of international telecommunications traffic.
43.72 [Reserved]
43.82 International circuit status reports.

    Authority: 47 U.S.C. 154; Telecommunications Act of 1996, Pub. L. 
104-104, secs. 402 (b)(2)(B), (c), 110 Stat. 56 (1996) as amended unless 
otherwise noted. 47 U.S.C. 211, 219, 220 as amended.

    Source: 28 FR 13214, Dec. 5, 1963, unless otherwise noted.



Sec. 43.01  Applicability.

    (a) The sections in this part include requirements which have been 
promulgated under authority of sections 211 and 219 of the 
Communications Act of 1934, as amended, with respect to the filing by 
communication common carriers and certain of their affiliates of 
periodic reports and certain other data, but do not include certain 
requirements relating to the filing of information with respect to 
specific services, accounting systems and other matters incorporated in 
other parts of this chapter.
    (b) Except as provided in paragraphs (c) and (d) of this section, 
carriers becoming subject to the provisions of the several sections of 
this part for the first time, shall, within thirty (30) days of becoming 
subject, file the required data as set forth in the various sections of 
this part.
    (c) Carriers becoming subject to the provisions of Sec. Sec. 43.21 
and 43.43 for the first time, because their annual operating revenues 
equal or exceed the indexed revenue threshold for a given year, shall 
begin collecting data pursuant to such provisions in the calendar year 
following the publication of that indexed revenue threshold in the 
Federal Register. With respect to such initial filing of reports by any 
carrier, pursuant to the provisions of Sec. 43.21 (d), (e), (f), (g), 
(h), (i), (j), and (k), the carrier is to begin filing data for the 
calendar year following the publication of that indexed revenue 
threshold in the Federal Register by April 1 of the second calendar year 
following publication of that indexed revenue threshold in the Federal 
Register.
    (d) Common carriers subject to the provisions of Sec. 43.11 shall 
file data semi-annually. Reports shall be filed each year on or before 
March 1st (reporting data about their deployment of local exchange 
services as of December 31 of the prior year) and September 1st 
(reporting data about their deployment of local exchange services as of 
June 31 of the current year). Common carriers becoming subject to the 
provisions of

[[Page 8]]

Sec. 43.11 for the first time within a calendar year shall file data 
for the reporting period in which they become eligible and semi-annually 
thereafter. Common carriers subject to the provisions of Sec. 43.11 
shall make an initial filing of the FCC Form 477 on May 15, 2000 
(reporting data about their deployment of local exchange services as of 
December 31, 1999).

[28 FR 13214, Dec. 5, 1963, as amended at 62 FR 39778, July 24, 1997; 65 
FR 19685, Apr. 12, 2000]



Sec. 43.11  Reports of local exchange competition data

    (a) All common carriers and their affiliates (as defined in 47 
U.S.C. 153(1)) providing telephone exchange or exchange access service 
(as defined in 47 U.S.C. 153(16) and (47)), commercial mobile radio 
service (CMRS) providers offering mobile telephony (as defined in Sec. 
20.15(b)(1) of this chapter), and Interconnected Voice over IP service 
providers (as defined in Sec. 9.3 of this chapter), shall file with the 
Commission a completed FCC Form 477, in accordance with the Commission's 
rules and the instructions to the FCC Form 477, for each state in which 
they provide service.
    (b) Respondents identified in paragraph (a) of this section shall 
include in each report a certification signed by an appropriate official 
of the respondent (as specified in the instructions to FCC Form 477).
    (c) Respondents may make requests for Commission non-disclosure of 
provider-specific data contained in the Form 477 under Sec. 0.459 of 
this chapter by so indicating on the Form 477 at the time that the 
subject data are submitted. The Commission shall make all decisions 
regarding non-disclosure of provider-specific information, except that 
the Chief of the Wireline Competition Bureau may release provider-
specific information to a state commission, provided that the state 
commission has protections in place that would preclude disclosure of 
any confidential information.
    (d) Respondents identified in paragraph (b) of this section shall 
file a revised version of FCC Form 477 if and when they discover a 
significant error in their filed FCC Form 477. For counts, a difference 
amounting to 5 percent of the filed number is considered significant. 
For percentages, a difference of 5 percentage points is considered 
significant.
    (e) Failure to file FCC Form 477 in accordance with the Commission's 
rules and the instructions to Form 477 may lead to enforcement action 
pursuant to the Act and any other applicable law.

[65 FR 19685, Apr. 12, 2000, as amended at 69 FR 77938, Dec. 29, 2004; 
73 FR 37881, July 2, 2008]

    Effective Date Note: At 73 FR 37881, July 2, 2008, Sec. 43.11 was 
amended by revising paragraphs (a), (b), and (c). This section contains 
information collection and recordkeeping requirements and will not 
become effective until approval has been given by the Office of 
Management and Budget.



Sec. 43.21  Transactions with affiliates.

    (a) Communication common carriers having annual operating revenues 
in excess of the indexed revenue threshold, as defined in Sec. 32.9000, 
and certain companies (as indicated in paragraph (b) of this section) 
directly or indirectly controlling such carriers shall file with the 
Commission annual reports or an annual letter as provided in this 
section. Except as provided in paragraph (b) of this section, each 
annual report required by this section shall be filed no later than 
April 1 of each year, covering the preceding calendar year. It shall be 
filed on the appropriate report form prescribed by the Commission (see 
Sec. 1.785 of this chapter) and shall contain full and specific answers 
to all questions propounded and information requested in the currently 
effective report forms. The number of copies to be filed shall be 
specified in the applicable report form. At least one copy of this 
report shall be signed on the signature page by the responsible 
accounting officer. A copy of each annual report shall be as retained in 
the principal office of the respondent and shall be filed in such manner 
to be readily available for reference and inspection.
    (b) Each company, not itself a communication common carrier, that 
directly or indirectly controls any communication common carrier that 
has annual operating revenues equal to or

[[Page 9]]

above the indexed revenue threshold, as defined in Sec. 32.9000, shall 
file annually with the Commission, not later than the date prescribed by 
the Securities and Exchange Commission for its purposes, two complete 
copies of any annual report Forms 10-K (or any superseding form) filed 
with that Commission.
    (c) Each miscellaneous common carrier (as defined by Sec. 21.2 of 
this chapter) with operating revenues for a calendar year in excess of 
the indexed revenue threshold, as defined in Sec. 32.9000, shall file 
with the Common Carrier Bureau Chief a letter showing its operating 
revenues for that year and the value of its total communications plant 
at the end of that year. This letter must be filed no later than April 1 
of the following year. Those miscellaneous common carriers with annual 
operating revenues that equal or surpass the indexed revenue threshold 
for the first time may file the letter up to one month after publication 
of the adjusted revenue threshold in the Federal Register, but in no 
event shall such carriers be required to file the letter prior to April 
1.
    (d) Each communications common carrier required by order to file a 
manual allocating its costs between regulated and nonregulated 
operations shall file, on or before April 1:
    (1) A three-year forecast of regulated and nonregulated use of 
network plant for the current calendar year and the two calendar years 
following, and investment pool projections and allocations for the 
current calendar year; and
    (2) A report of the actual use of network plant investment for the 
prior calendar year.
    (e) Each incumbent local exchange carrier, except mid-sized 
incumbent local exchange carriers, as defined by Sec. 32.9000 with 
annual operating revenues equal to or above the indexed revenue 
threshold shall file, no later than April 1 of each year:
    (1) Its revenues, expenses and investment for all accounts 
established in part 32 of this chapter, on an operating company basis,
    (2) The same part 32 of this chapter, on a study area basis, with 
data for regulated and nonregulated operations for those accounts which 
are related to the carrier's revenue requirement, and
    (3) The separations categories on a study area basis, with each 
category further divided into access elements and a nonaccess interstate 
category.
    (f) Each incumbent local exchange carrier with operating revenues 
for the preceding year that equal or exceed the indexed revenue 
threshold shall file, no later than April 1 of each year, a report 
showing for the previous calendar year its revenues, expenses, taxes, 
plant in service, other investment and depreciation reserves, and other 
such data as are required by the Commission, on computer media 
prescribed by the Commission. The total operating results shall be 
allocated between regulated and nonregulated operations, and the 
regulated data shall be further divided into the following categories: 
State and interstate, and the interstate will be further divided into 
common line, traffic sensitive access, special access, and nonaccess.
    (g) Each incumbent local exchange carrier for whom price cap 
regulation is mandatory and every incumbent local exchange carrier that 
elects to be covered by the price cap rules shall file, by April 1 of 
each year, a report designed to capture trends in service quality under 
price cap regulation. The report shall contain data relative to network 
measures of service quality, as defined by the Wireline Competition 
Bureau, from the previous calendar year on a study area basis.
    (h) Each incumbent local exchange carrier for whom price cap 
regulation is mandatory shall file, by April 1 of each year, a report 
designed to capture trends in service quality under price cap 
regulation. The report shall contain data relative to customer measures 
of service quality, as defined by the Wireline Competition Bureau, from 
the previous calendar year a study area basis.
    (i) Each incumbent local exchange carrier for whom price regulation 
is mandatory shall file, by April 1 of each year, a report containing 
data from the previous calendar year on a study area basis that are 
designed to capture trends in telephone industry infrastructure 
development under price cap regulation.

[[Page 10]]

    (j) Each incumbent local exchange carrier with annual operating 
revenues that equal or exceed the indexed revenue threshold shall file, 
no later than April 1 of each year, a report containing data from the 
previous calendar year on an operating company basis. Such report shall 
combine statistical data designed to monitor network growth, usage, and 
reliability.
    (k) Each designated interstate carrier with operating revenues for 
the preceding year that equal or exceed the indexed revenue threshold 
shall file, no later than April 1 of each year, a report showing for the 
previous calendar year its revenues, expenses, taxes, plant in service, 
other investments and depreciation reserves, and such other data as are 
required by the Commission, on computer media prescribed by the 
Commission. The total operating results shall be allocated between 
regulated and nonregulated operations, and the regulated data shall be 
further divided into the following categories: State and interstate, and 
the interstate will be further divided into common line, traffic 
sensitive access, special access, and nonaccess.

[28 FR 13214, Dec. 5, 1963, as amended at 49 FR 10122, Mar. 19, 1984; 50 
FR 41153, Oct. 9, 1985; 51 FR 37024, Oct. 17, 1986; 52 FR 35918, Sept. 
24, 1987; 58 FR 36143, July 6, 1993; 61 FR 50245, Sept. 25, 1996; 62 FR 
39778, July 24, 1997; 67 FR 5700, Feb. 6, 2002; 67 FR 13225, Mar. 21, 
2002]



Sec. 43.41  [Reserved]



Sec. 43.43  Reports of proposed changes in depreciation rates.

    (a) Each communication common carrier with annual operating expenses 
that equal or exceed the indexed revenue threshold, as defined in Sec. 
32.9000, and that has been found by this Commission to be a dominant 
carrier with respect to any communications service shall, before making 
any changes in the depreciation rates applicable to its operated plant, 
file with the Commission a report furnishing the data described in the 
subsequent paragraphs of this section, and also comply with the other 
requirements thereof.
    (b) Each such report shall contain the following:
    (1) A schedule showing for each class and subclass of plant (whether 
or not the depreciation rate is proposed to be changed) an appropriate 
designation therefor, the depreciation rate currently in effect, the 
proposed rate, and the service-life and net-salvage estimates underlying 
both the current and proposed depreciation rates;
    (2) An additional schedule showing for each class and subclass, as 
well as the totals for all depreciable plant, (i) the book cost of plant 
at the most recent date available, (ii) the estimated amount of 
depreciation accruals determined by applying the currently effective 
rate to the amount of such book cost, (iii) the estimated amount of 
depreciation accruals determined by applying the rate proposed to be 
used to the amount of such book cost, and (iv) the difference between 
the amounts determined in paragraphs (b)(2) (ii) and (iii) of this 
section;
    (3) A statement giving the reasons for the proposed change in each 
rate;
    (4) A statement describing the method or methods employed in the 
development of the service-life and salvage estimates underlying each 
proposed change in a depreciation rate; and
    (5) The date as of which the revised rates are proposed to be made 
effective in the accounts.
    (c) Except as specified in paragraphs (c)(1) and (c)(3) of this 
section, when the change in the depreciation rate proposed for any class 
or subclass of plant (other than one occasioned solely by a shift in the 
relative investment in the several subclasses of the class of plant) 
amounts to twenty percent (20%) or more of the rate currently applied 
thereto, or when the proposed change will produce an increase or 
decrease of one percent (1%) or more of the aggregate depreciation 
charges for all depreciable plant (based on the amounts determined in 
compliance with paragraph (b)(2) of this section) the carrier shall 
supplement the data required by paragraph (b) of this section) with 
copies of the underlying studies, including calculations and charts, 
developed by the carrier to support service-life and net-salvage 
estimates. If a carrier must submit data of a repetitive nature to 
comply with this requirement, the carrier need only submit a fully 
illustrative portion thereof.

[[Page 11]]

    (1) A Local Exchange Carrier regulated under price caps, pursuant to 
Sec. Sec. 61.41 through 61.49 of this chapter, is not required to 
submit the supplemental information described in paragraph (c) 
introductory text of this section for a specific account if: The 
carrier's currently prescribed depreciation rate for the specific 
accounts derived from basic factors that fall within the basic factor 
ranges established for that same account; and the carrier's proposed 
depreciation rate for the specific account would also be derived from 
basic factors that fall within the basic factor ranges for the same 
account.
    (2) Local Exchange Carriers that are regulated under price caps, 
pursuant to Sec. Sec. 61.41 through 61.49 of this chapter, and have 
selected basic factors that fall within the basic factor ranges for all 
accounts are exempt from paragraphs (b)(3), (b)(4), and (c) introductory 
text of this section. They shall instead comply with paragraphs (b)(1), 
(b)(2) and (b)(5) of this section and provide a book and theoretical 
reserve summary and a summary of basic factors underlying proposed rates 
by account.
    (3) Interexchange carriers regulated under price caps, pursuant to 
Sec. Sec. 61.41 through 61.49 of this chapter, are exempted from 
submitting the supplemental information as described in paragraph (c) 
introductory text of this section. They shall instead submit: Generation 
data, a summary of basic factors underlying proposed depreciation rates 
by account and a short narrative supporting those basic factors, 
including company plans of forecasted retirements and additions, recent 
annual retirements, salvage and cost of removal.
    (d) Each report shall be filed in duplicate and the original shall 
be signed by the responsible official to whom correspondence related 
thereto should be addressed.
    (e) Unless otherwise directed or approved by the Commission, the 
following shall be observed: Proposed changes in depreciation rates 
shall be filed at least ninety (90) days prior to the last day of the 
month with respect to which the revised rates are first to be applied in 
the accounts (e.g., if the new rates are to be first applied in the 
depreciation accounts for September, they must be filed on or before 
July 1). Such rates may be made retroactive to a date not prior to the 
beginning of the year in which the filing is made: Provided however, 
that in no event shall a carrier for which the Commission has prescribed 
depreciation rates make any changes in such rates unless the changes are 
prescribed by the Commission. Carriers who select basic factors that 
fall within the basic factor ranges for all accounts are exempt from 
depreciation rate prescription by the Commission.
    (f) Any changes in depreciation rates that are made under the 
provisions of paragraph (e) of this section shall not be construed as 
having been approved by the Commission unless the carrier has been 
specifically so informed.

[28 FR 13214, Dec. 5, 1963, as amended at 30 FR 3223, Mar. 9, 1965; 53 
FR 49987, Dec. 13, 1988; 58 FR 58790, Nov. 4, 1993; 61 FR 50246, Sept. 
25, 1996; 62 FR 39779, July 24, 1997; 65 FR 18931, Apr. 10, 2000]



Sec. 43.51  Contracts and concessions.

    (a)(1) Any communication common carrier described in paragraph (b) 
of this section must file with the Commission, within thirty (30) days 
of execution, a copy of each contract, agreement, concession, license, 
authorization, operating agreement or other arrangement to which it is a 
party and amendments thereto with respect to the following:
    (i) The exchange of services; and,
    (ii) The interchange or routing of traffic and matters concerning 
rates, accounting rates, division of tolls, or the basis of settlement 
of traffic balances, except as provided in paragraph (c) of this 
section.
    (2) If the contract, agreement, concession, license, authorization, 
operating agreement or other arrangement and amendments thereto is made 
other than in writing, a certified statement covering all details 
thereof must be filed by at least one of the parties to the agreement. 
Each other party to the agreement which is also subject to these 
provisions may, in lieu of also filing a copy of the agreement, file a 
certified statement referencing the filed document. The Commission may, 
at any time and upon reasonable request,

[[Page 12]]

require any communication common carrier not subject to the provisions 
of this section to submit the documents referenced in this section.
    (b) The following communication common carriers must comply with the 
requirements of paragraph (a) of this section:
    (1) A carrier that is engaged in domestic communications and has not 
been classified as non-dominant pursuant to Sec. 61.3 of this Chapter,
    (2) A carrier that is engaged in foreign communications and that has 
been classified as dominant for any service on any of the U.S.-
international routes included in the contract, except for a carrier 
classified as dominant on a particular route due only to a foreign 
carrier affiliation under Sec. 63.10 of this chapter, or
    (3) A carrier, other than a provider of commercial mobile radio 
services, that is engaged in foreign communications and enters into a 
contract, agreement, concession, license, authorization, operating 
agreement or other arrangement and amendments thereto with a foreign 
carrier that does not qualify for the presumption, set forth in Note 3 
to this section, that it lacks market power on the foreign end of one or 
more of the U.S.-international routes included in the contract, unless 
the route appears on the Commission's list of U.S.-international routes 
that the Commission has exempted from the international settlements 
policy set forth in Sec. 64.1002 of this chapter.
    (c) With respect to contracts coming within the scope of paragraph 
(a)(1)(ii) of this section between subject telephone carriers and 
connecting carriers, except those contracts related to communications 
with foreign or overseas points, such documents shall not be filed with 
the Commission; but each subject telephone carrier shall maintain a copy 
of such contracts to which it is a party in appropriate files at a 
central location upon its premises, copies of which shall be readily 
accessible to Commission staff and members of the public upon reasonable 
request therefor; and upon request by the Commission, a subject 
telephone carrier shall promptly forward individual contracts to the 
Commission.
    (d) Any U.S. carrier that interconnects to the U.S. public switched 
network an international private line that extends between the United 
States and a country that the Commission has not exempted from the 
international settlements policy shall file annually with the Chief of 
the International Bureau a certified statement containing the number and 
type (e.g., a 64-kbps circuit) of private lines interconnected at the 
carrier's own switch, including any switch in which the carrier holds a 
leasehold interest. The certified statement shall specify the number and 
type of interconnected private lines on a country specific basis. The 
identity of the customer need not be reported, and the Commission will 
treat the country of origin information as confidential. Carriers need 
not file their contracts for such interconnections, unless they are 
specifically requested to do so. These reports shall be filed on a 
consolidated basis on February 1 (covering international private lines 
interconnected during the preceding January 1 to December 31 period) of 
each year. International private lines to countries which the Commission 
has exempted from the international settlements policy, set forth in 
Sec. 64.1002 of this chapter, at any time during a particular reporting 
period are exempt from this filing requirement.
    (e) Other filing requirements for carriers providing service on 
U.S.-international routes that are subject to the international 
settlements policy.
    (1) For routes subject to the international settlements policy set 
forth in Sec. 64.1002 of this chapter, if a U.S. carrier files an 
operating or other agreement with a foreign carrier pursuant to 
paragraph (a) of this section to begin providing switched voice, telex, 
telegraph, or packet-switched service between the United States and a 
foreign point, the carrier must also file with the International Bureau 
a modification request under Sec. 64.1001 of this chapter. The 
operating or other agreement cannot become effective until the 
modification request has been granted under paragraph Sec. 64.1001(e) 
of this chapter.
    (2) For routes subject to the international settlements policy, if a 
carrier files an amendment, pursuant to

[[Page 13]]

paragraph (a) of this section, to an existing operating or other 
agreement with a foreign carrier to provide switched voice, telex, 
telegraph, or packet-switched service between the United States and a 
foreign point, and the amendment relates to the exchange of services, 
interchange or routing of traffic and matters concerning rates, 
accounting rates, division of tolls, the allocation of return traffic, 
or the basis of settlement of traffic balances, the carrier must also 
file with the International Bureau a modification request under Sec. 
64.1001 of this chapter. The amendment to the operating or other 
agreement cannot become effective until the modification request has 
been granted under Sec. 64.1001(e) of this chapter.
    (f) Confidential treatment. (1) A carrier providing service on an 
international route that is exempt from the international settlements 
policy under paragraph (e)(3) of this section, but that is otherwise 
required by paragraphs (a) and (b) of this section to file a contract 
covering service on that route with the Commission, may request 
confidential treatment under Sec. 0.457 of this Chapter for the rates, 
terms and conditions that govern the settlement of U.S. international 
traffic.
    (2) Carriers requesting confidential treatment under this paragraph 
must include the information specified in Sec. 64.1001(c) of this 
Chapter. Such filings shall be made with the Commission, with a copy to 
the Chief, International Bureau. The transmittal letter accompanying the 
confidential filing shall clearly identify the filing as responsive to 
Sec. 43.51(f).

    Note 1 to Sec. 43.51: For purposes of this section, affiliated and 
foreign carrier are defined in Sec. 63.09 of this chapter.
    Note 2 to Sec. 43.51: To the extent that a foreign government 
provides telecommunications services directly through a governmental 
organization, body or agency, it shall be treated as a foreign carrier 
for the purposes of this section.
    Note 3 to Sec. 43.51: Carriers shall rely on the Commission's list 
of foreign carriers that do not qualify for the presumption that they 
lack market power in particular foreign points for purposes of 
determining which of their foreign carrier contracts are subject to the 
contract filing requirements set forth in this section. The Commission's 
list of foreign carriers that do not qualify for the presumption that 
they lack market power in particular foreign points is available from 
the International Bureau's World Wide Web site at http://www.fcc.gov/ib. 
The Commission will include on the list of foreign carriers that do not 
qualify for the presumption that they lack market power in particular 
foreign points any foreign carrier that has 50 percent or more market 
share in the international transport or local access markets of a 
foreign point. A party that seeks to remove such a carrier from the 
Commission's list bears the burden of submitting information to the 
Commission sufficient to demonstrate that the foreign carrier lacks 50 
percent market share in the international transport and local access 
markets on the foreign end of the route or that it nevertheless lacks 
sufficient market power on the foreign end of the route to affect 
competition adversely in the U.S. market. A party that seeks to add a 
carrier to the Commission's list bears the burden of submitting 
information to the Commission sufficient to demonstrate that the foreign 
carrier has 50 percent or more market share in the international 
transport or local access markets on the foreign end of the route or 
that it nevertheless has sufficient market power to affect competition 
adversely in the U.S. market.
    Note 4 to Sec. 43.51: The Commission's list of international routes 
exempted from the international settlements policy is available on the 
International Bureau's World Wide Web site at http://www.fcc.gov/ib.

[66 FR 16879, Mar. 28, 2001, as amended at 69 FR 23153, Apr. 28, 2004]



Sec. 43.53  Reports regarding division of international toll 
communication charges.

    (a) Each communication common carrier engaged directly in the 
transmission or reception of telegraph communications between the 
continental United States and any foreign country (other than one to 
which the domestic word-count applies) shall file a report with the 
Commission within thirty (30) days of the date of any arrangement 
concerning the division of the total telegraph charges on such 
communications other than transiting. A carrier first becoming subject 
to the provisions of this section must, within thirty (30) days 
thereafter, file with the Commission a report covering any such existing 
arrangements.
    (b) In the event that any change is made which affects data 
previously filed, a revised page incorporating such change or changes 
must be filed with

[[Page 14]]

the Commission not later than thirty (30) days from the date the change 
is made, provided, however, that any change in the amount of foreign 
participation in charges for outbound communications or in the 
respondent's participation in charges for inbound communications must be 
filed not later than thirty (30) days from the date the change is agreed 
upon.
    (c) A single copy of each such report must be filed in a format that 
contains a clear, concise and definite statement of the arrangements.

[51 FR 45891, Dec. 23, 1986, as amended at 52 FR 8453, Mar. 18, 1987]



Sec. 43.61  Reports of international telecommunications traffic.

    (a) Each common carrier engaged in providing international 
telecommunications service between the area comprising the continental 
United States, Alaska, Hawaii, and off-shore U.S. points and any country 
or point outside that area shall file a report with the Commission not 
later than July 31 of each year for service actually provided in the 
preceding calendar year.
    (1) The information contained in the reports shall include actual 
traffic and revenue data for each and every service provided by a common 
carrier, divided among service billed in the United States, service 
billed outside the United States, and service transiting the United 
States.
    (2) Each common carrier shall submit a revised report by October 31 
identifying and correcting any inaccuracies included in the annual 
report exceeding five percent of the reported figure.
    (3) The information required under this section shall be furnished 
in conformance with the instructions and reporting requirements prepared 
under the direction of the Chief, Wireline Competition Bureau, prepared 
and published as a manual, in consultation and coordination with the 
Chief, International Bureau.
    (b) Quarterly Traffic Reports. (1) Each common carrier engaged in 
providing international telecommunicaitons service between the area 
comprising the continental United States, Alaska, Hawaii, and off-shore 
U.S. points and any country or point outside that area shall file with 
the Commission, in addition to the report required by paragraph (a) of 
this section, actual traffic and revenue data for each calendar quarter 
in which the carrier's quarterly minutes exceed the corresponding 
minutes for all carriers by one or more of the following tests:
    (i) The carrier's aggregate minutes of facilities-based or 
facilities resale switched telephone traffic for service billed in the 
United States are greater than 1.0 percent of the total of such minutes 
of international traffic for all U.S. carriers published in the 
Commission's most recent Sec. 43.61 annual report of international 
telecommunications traffic;
    (ii) The carrier's aggragate minutes of facilities-based or 
facilities resale switched telephone traffic for service billed outside 
the United States are greater than 1.0 percent of the total of such 
minutes of international traffic for all U.S. carriers published in the 
Commission's most recent Sec. 43.61 annual report of international 
telecommunications traffic;
    (iii) The carrier's aggregate minutes of facilities-based or 
facilities switched telephone traffic for service billed in the United 
States for any foreign country are greater than 2.5 percent of the total 
of such minutes of international traffic for that country for all U.S. 
carriers published in the Commission's most recent Sec. 43.61 annual 
report of international telecommunications traffic; or
    (iv) The carrier's aggregate minutes of facilities-based or 
facilities resale switched telephone traffic for service billed outside 
the United States for any foreign country are greater than 2.5 percent 
of the total of such minutes of international traffic for that country 
for all U.S. carriers published in the Commission's most recent Sec. 
43.61 annual report of international telecommunications traffic.
    (2) Except as provided in this paragraph, the quarterly reports 
required by paragraph (b)(1) of this section shall be filed in the same 
format as, and in conformance with, the filing procedures for the annual 
reports required by paragraph (a) of this section.
    (i) Carriers filing quarterly reports shall include in those reports 
only their provision of switched, facilities-

[[Page 15]]

based telephone service and switched, facilities resale telephone 
service.
    (ii) The quarterly reports required by paragraph (b)(1) of this 
section shall be filed with the Commission no later than April 30 for 
the prior January through March quarter; no later than July 31 for the 
prior April through June quarter; no later than October 31 for the prior 
July through September quarter; and no later than January 31 for the 
prior October through December period.
    (c) Each common carrier engaged in the resale of international 
switched services that is affiliated with a foreign carrier that has 
sufficient market power on the foreign end of an international route to 
affect competition adversely in the U.S. market and that collects 
settlement payments from U.S. carriers shall file a quarterly version of 
the report required in paragraph (a) of this section for its switched 
resale services on the dominant route within 90 days from the end of 
each calendar quarter. Commercial Mobile Radio Service (CMRS) carriers, 
as defined in Sec. 20.9 of this chapter, are not required to file 
reports pursuant to this paragraph. For purposes of this paragraph, 
affiliated and foreign carrier are defined in Sec. 63.09 of this 
chapter.

[57 FR 8580, Mar. 11, 1992, as amended at 60 FR 5333, Jan. 27, 1995; 62 
FR 5541, Feb. 6, 1997; 62 FR 45761, Aug. 29, 1997; 64 FR 19061, Apr. 19, 
1999; 66 FR 67112, Dec. 28, 2001; 67 FR 13225, Mar. 21, 2002; 67 FR 
45390, July 9, 2002]



Sec. 43.72  [Reserved]



Sec. 43.82  International circuit status reports.

    (a) Each facilities-based common carrier engaged in providing 
international telecommunications service between the area comprising the 
continental United States, Alaska, Hawaii, and off-shore U.S. points and 
any country or point outside that area shall file a circuit status 
report with the Chief, International Bureau, not later than March 31 
each year showing the status of its circuits used to provide 
international services as of December 31 of the preceding calendar year.
    (b) The information contained in the reports shall include the total 
number of activated and the total number of idle circuits by the 
categories of submarine cable, satellite and terrestrial facilities to 
geographic points outside the United States for the services designated 
by the Chief, International Bureau.
    (c) The information required under this section shall be furnished 
in conformance with instructions and reporting requirements prepared 
under the direction of the Chief, International Bureau, prepared and 
published as a manual.
    (d) Authority is hereby delegated to the Chief, International Bureau 
to prepare instructions and reporting requirements for the filing of the 
annual international circuit status reports.

[60 FR 51368, Oct. 2, 1995]



PART 51_INTERCONNECTION--Table of Contents




                      Subpart A_General Information

Sec.
51.1 Basis and purpose.
51.3 Applicability to negotiated agreements.
51.5 Terms and definitions.

                  Subpart B_Telecommunications Carriers

51.100 General duty.

          Subpart C_Obligations of All Local Exchange Carriers

51.201 Resale.
51.203 Number portability.
51.205 Dialing parity: General.
51.207 Local dialing parity.
51.209 Toll dialing parity.
51.213 Toll dialing parity implementation plans.
51.215 Dialing parity: Cost recovery.
51.217 Nondiscriminatory access: Telephone numbers, operator services, 
          directory assistance services, and directory listings.
51.219 Access to rights of way.
51.221 Reciprocal compensation.
51.223 Application of additional requirements.
51.230 Presumption of acceptability for deployment of an advanced 
          services loop technology.
51.231 Provision of information on advanced services deployment.
51.232 Binder group management.
51.233 Significant degradation of services caused by deployment of 
          advanced services.

[[Page 16]]

  Subpart D_Additional Obligations of Incumbent Local Exchange Carriers

51.301 Duty to negotiate.
51.303 Preexisting agreements.
51.305 Interconnection.
51.307 Duty to provide access on an unbundled basis to network elements.
51.309 Use of unbundled network elements.
51.311 Nondiscriminatory access to unbundled network elements.
51.313 Just, reasonable and nondiscriminatory terms and conditions for 
          the provision of unbundled network elements.
51.315 Combination of unbundled network elements.
51.316 Conversion of unbundled network elements and services.
51.317 Standards for requiring the unbundling of network elements.
51.318 Eligibility criteria for access to certain unbundled network 
          elements.
51.319 Specific unbundling requirements.
51.320 Assumption of responsibility by the Commission.
51.321 Methods of obtaining interconnection and access to unbundled 
          elements under section 251 of the Act.
51.323 Standards for physical collocation and virtual collocation.
51.325 Notice of network changes: Public notice requirement.
51.327 Notice of network changes: Content of notice.
51.329 Notice of network changes: Methods for providing notice.
51.331 Notice of network changes: Timing of notice.
51.333 Notice of network changes: Short term notice, objections thereto 
          and objections to retirement of copper loops or copper 
          subloops.
51.335 Notice of network changes: Confidential or proprietary 
          information.

Subpart E_Exemptions, Suspensions, and Modifications of Requirements of 
                         Section 251 of the Act

51.401 State authority.
51.403 Carriers eligible for suspension or modification under section 
          251(f)(2) of the Act.
51.405 Burden of proof.

                      Subpart F_Pricing of Elements

51.501 Scope.
51.503 General pricing standard.
51.505 Forward-looking economic cost.
51.507 General rate structure standard.
51.509 Rate structure standards for specific elements.
51.511 Forward-looking economic cost per unit.
51.513 Proxies for forward-looking economic cost.
51.515 Application of access charges.

                            Subpart G_Resale

51.601 Scope of resale rules.
51.603 Resale obligation of all local exchange carriers.
51.605 Additional obligations of incumbent local exchange carriers.
51.607 Wholesale pricing standard.
51.609 Determination of avoided retail costs.
51.611 Interim wholesale rates.
51.613 Restrictions on resale.
51.615 Withdrawal of services.
51.617 Assessment of end user common line charge on resellers.

   Subpart H_Reciprocal Compensation for Transport and Termination of 
                       Telecommunications Traffic

51.701 Scope of transport and termination pricing rules.
51.703 Reciprocal compensation obligation of LECs.
51.705 Incumbent LECs' rates for transport and termination.
51.707 Default proxies for incumbent LECs' transport and termination 
          rates.
51.709 Rate structure for transport and termination.
51.711 Symmetrical reciprocal compensation.
51.713 Bill-and-keep arrangements for reciprocal compensation.
51.715 Interim transport and termination pricing.
51.717 Renegotiation of existing non-reciprocal arrangements.

    Subpart I_Procedures for Implementation of Section 252 of the Act

51.801 Commission action upon a state commission's failure to act to 
          carry out its responsibility under section 252 of the Act.
51.803 Procedures for Commission notification of a state commission's 
          failure to act.
51.805 The Commission's authority over proceedings and matters.
51.807 Arbitration and mediation of agreements by the Commission 
          pursuant to section 252(e)(5) of the Act.
51.809 Availability of provisions of agreements to other 
          telecommunications carriers under section 252(i) of the Act.

    Authority: Sections 1-5, 7, 201-05, 207-09, 218, 225-27, 251-54, 
256, 271, 303(r), 332, 48 Stat. 1070, as amended, 1077; 47 U.S.C. 151-
55, 157, 201-05, 207-09, 218, 225-27, 251-54, 256, 271, 303(r), 332, 47 
U.S.C. 157 note, unless otherwise noted.

    Source: 61 FR 45619, Aug. 29, 1996, unless otherwise noted.

[[Page 17]]



                      Subpart A_General Information



Sec. 51.1  Basis and purpose.

    (a) Basis. These rules are issued pursuant to the Communications Act 
of 1934, as amended.
    (b) Purpose. The purpose of these rules is to implement sections 251 
and 252 of the Communications Act of 1934, as amended, 47 U.S.C. 251 and 
252.



Sec. 51.3  Applicability to negotiated agreements.

    To the extent provided in section 252(e)(2)(A) of the Act, a state 
commission shall have authority to approve an interconnection agreement 
adopted by negotiation even if the terms of the agreement do not comply 
with the requirements of this part.



Sec. 51.5  Terms and definitions.

    Terms used in this part have the following meanings:
    Act. The Communications Act of 1934, as amended.
    Advanced intelligent network. Advanced intelligent network is a 
telecommunications network architecture in which call processing, call 
routing, and network management are provided by means of centralized 
databases located at points in an incumbent local exchange carrier's 
network.
    Advanced services. The term ``advanced services'' is defined as high 
speed, switched, broadband, wireline telecommunications capability that 
enables users to originate and receive high-quality voice, data, 
graphics or video telecommunications using any technology.
    Arbitration, final offer. Final offer arbitration is a procedure 
under which each party submits a final offer concerning the issues 
subject to arbitration, and the arbitrator selects, without 
modification, one of the final offers by the parties to the arbitration 
or portions of both such offers. ``Entire package final offer 
arbitration,'' is a procedure under which the arbitrator must select, 
without modification, the entire proposal submitted by one of the 
parties to the arbitration. ``Issue-by-issue final offer arbitration,'' 
is a procedure under which the arbitrator must select, without 
modification, on an issue-by-issue basis, one of the proposals submitted 
by the parties to the arbitration.
    Billing. Billing involves the provision of appropriate usage data by 
one telecommunications carrier to another to facilitate customer billing 
with attendant acknowledgements and status reports. It also involves the 
exchange of information between telecommunications carriers to process 
claims and adjustments.
    Binder or binder group. Copper pairs bundled together, generally in 
groups of 25, 50 or 100.
    Business line. A business line is an incumbent LEC-owned switched 
access line used to serve a business customer, whether by the incumbent 
LEC itself or by a competitive LEC that leases the line from the 
incumbent LEC. The number of business lines in a wire center shall equal 
the sum of all incumbent LEC business switched access lines, plus the 
sum of all UNE loops connected to that wire center, including UNE loops 
provisioned in combination with other unbundled elements. Among these 
requirements, business line tallies:
    (1) Shall include only those access lines connecting end-user 
customers with incumbent LEC end-offices for switched services,
    (2) Shall not include non-switched special access lines,
    (3) Shall account for ISDN and other digital access lines by 
counting each 64 kbps-equivalent as one line. For example, a DS1 line 
corresponds to 24 64 kbps-equivalents, and therefore to 24 ``business 
lines.''
    Commercial Mobile Radio Service (CMRS). CMRS has the same meaning as 
that term is defined in Sec. 20.3 of this chapter.
    Commingling. Commingling means the connecting, attaching, or 
otherwise linking of an unbundled network element, or a combination of 
unbundled network elements, to one or more facilities or services that a 
requesting telecommunications carrier has obtained at wholesale from an 
incumbent LEC, or the combining of an unbundled network element, or a 
combination of unbundled network elements, with one or more such 
facilities or services. Commingle means the act of commingling.

[[Page 18]]

    Commission. Commission refers to the Federal Communications 
Commission.
    Day. Day means calendar day.
    Dialing parity. The term dialing parity means that a person that is 
not an affiliate of a local exchange carrier is able to provide 
telecommunications services in such a manner that customers have the 
ability to route automatically, without the use of any access code, 
their telecommunications to the telecommunications service provider of 
the customer's designation from among 2 or more telecommunications 
service providers (including such local exchange carrier).
    Directory assistance service. Directory assistance service includes, 
but is not limited to, making available to customers, upon request, 
information contained in directory listings.
    Directory listings. Directory listings are any information:
    (1) Identifying the listed names of subscribers of a 
telecommunications carrier and such subscriber's telephone numbers, 
addresses, or primary advertising classifications (as such 
classifications are assigned at the time of the establishment of such 
service), or any combination of such listed names, numbers, addresses or 
classifications; and
    (2) That the telecommunications carrier or an affiliate has 
published, caused to be published, or accepted for publication in any 
directory format.
    Downstream database. A downstream database is a database owned and 
operated by an individual carrier for the purpose of providing number 
portability in conjunction with other functions and services.
    Enhanced extended link. An enhanced extended link or EEL consists of 
a combination of an unbundled loop and unbundled dedicated transport, 
together with any facilities, equipment, or functions necessary to 
combine those network elements.
    Equipment necessary for interconnection or access to unbundled 
network elements. For purposes of section 251(c)(2) of the Act, the 
equipment used to interconnect with an incumbent local exchange 
carrier's network for the transmission and routing of telephone exchange 
service, exchange access service, or both. For the purposes of section 
251(c)(3) of the Act, the equipment used to gain access to an incumbent 
local exchange carrier's unbundled network elements for the provision of 
a telecommunications service.
    Fiber-based collocator. A fiber-based collocator is any carrier, 
unaffiliated with the incumbent LEC, that maintains a collocation 
arrangement in an incumbent LEC wire center, with active electrical 
power supply, and operates a fiber-optic cable or comparable 
transmission facility that
    (1) Terminates at a collocation arrangement within the wire center;
    (2) Leaves the incumbent LEC wire center premises; and
    (3) Is owned by a party other than the incumbent LEC or any 
affiliate of the incumbent LEC, except as set forth in this paragraph. 
Dark fiber obtained from an incumbent LEC on an indefeasible right of 
use basis shall be treated as non-incumbent LEC fiber-optic cable. Two 
or more affiliated fiber-based collocators in a single wire center shall 
collectively be counted as a single fiber-based collocator. For purposes 
of this paragraph, the term affiliate is defined by 47 U.S.C. 153(1) and 
any relevant interpretation in this Title.
    Incumbent Local Exchange Carrier (Incumbent LEC). With respect to an 
area, the local exchange carrier that:
    (1) On February 8, 1996, provided telephone exchange service in such 
area; and
    (2)(i) On February 8, 1996, was deemed to be a member of the 
exchange carrier association pursuant to Sec. 69.601(b) of this 
chapter; or
    (ii) Is a person or entity that, on or after February 8, 1996, 
became a successor or assign of a member described in paragraph (2)(i) 
of this section.
    Information services. The term information services means the 
offering of a capability for generating, acquiring, storing, 
transforming, processing, retrieving, utilizing, or making available 
information via telecommunications, and includes electronic publishing, 
but does not include any use of any such capability for the management, 
control, or operation of a telecommunications system or the management 
of a telecommunications service.

[[Page 19]]

    Interconnection. Interconnection is the linking of two networks for 
the mutual exchange of traffic. This term does not include the transport 
and termination of traffic.
    Known disturber. An advanced services technology that is prone to 
cause significant interference with other services deployed in the 
network.
    Intermodal. The term intermodal refers to facilities or technologies 
other than those found in traditional telephone networks, but that are 
utilized to provide competing services. Intermodal facilities or 
technologies include, but are not limited to, traditional or new cable 
plant, wireless technologies, and power line technologies.
    Local Access and Transport Area (LATA). A Local Access and Transport 
Area is a contiguous geographic area--
    (1) Established before February 8, 1996 by a Bell operating company 
such that no exchange area includes points within more than 1 
metropolitan statistical area, consolidated metropolitan statistical 
area, or State, except as expressly permitted under the AT&T Consent 
Decree; or
    (2) Established or modified by a Bell operating company after 
February 8, 1996 and approved by the Commission.
    Local Exchange Carrier (LEC). A LEC is any person that is engaged in 
the provision of telephone exchange service or exchange access. Such 
term does not include a person insofar as such person is engaged in the 
provision of a commercial mobile service under section 332(c) of the 
Act, except to the extent that the Commission finds that such service 
should be included in the definition of the such term.
    Maintenance and repair. Maintenance and repair involves the exchange 
of information between telecommunications carriers where one initiates a 
request for maintenance or repair of existing products and services or 
unbundled network elements or combination thereof from the other with 
attendant acknowledgements and status reports.
    Meet point. A meet point is a point of interconnection between two 
networks, designated by two telecommunications carriers, at which one 
carrier's responsibility for service begins and the other carrier's 
responsibility ends.
    Meet point interconnection arrangement. A meet point interconnection 
arrangement is an arrangement by which each telecommunications carrier 
builds and maintains its network to a meet point.
    Mobile wireless service. A mobile wireless service is any mobile 
wireless telecommunications service, including any commercial mobile 
radio service.
    Multi-functional equipment. Multi-functional equipment is equipment 
that combines one or more functions that are necessary for 
interconnection or access to unbundled network elements with one or more 
functions that would not meet that standard as stand-alone functions.
    Network element. A network element is a facility or equipment used 
in the provision of a telecommunications service. Such term also 
includes, but is not limited to, features, functions, and capabilities 
that are provided by means of such facility or equipment, including but 
not limited to, subscriber numbers, databases, signaling systems, and 
information sufficient for billing and collection or used in the 
transmission, routing, or other provision of a telecommunications 
service.
    Operator services. Operator services are any automatic or live 
assistance to a consumer to arrange for billing or completion of a 
telephone call. Such services include, but are not limited to, busy line 
verification, emergency interrupt, and operator-assisted directory 
assistance services.
    Physical collocation. Physical collocation is an offering by an 
incumbent LEC that enables a requesting telecommunications carrier to:
    (1) Place its own equipment to be used for interconnection or access 
to unbundled network elements within or upon an incumbent LEC's 
premises;
    (2) Use such equipment to interconnect with an incumbent LEC's 
network facilities for the transmission and routing of telephone 
exchange service, exchange access service, or both, or to gain access to 
an incumbent LEC's unbundled network elements for the provision of a 
telecommunications service;

[[Page 20]]

    (3) Enter those premises, subject to reasonable terms and 
conditions, to install, maintain, and repair equipment necessary for 
interconnection or access to unbundled elements; and
    (4) Obtain reasonable amounts of space in an incumbent LEC's 
premises, as provided in this part, for the equipment necessary for 
interconnection or access to unbundled elements, allocated on a first-
come, first-served basis.
    Premises. Premises refers to an incumbent LEC's central offices and 
serving wire centers; all buildings or similar structures owned, leased, 
or otherwise controlled by an incumbent LEC that house its network 
facilities; all structures that house incumbent LEC facilities on public 
rights-of-way, including but not limited to vaults containing loop 
concentrators or similar structures; and all land owned, leased, or 
otherwise controlled by an incumbent LEC that is adjacent to these 
central offices, wire centers, buildings, and structures.
    Pre-ordering and ordering. Pre-ordering and ordering includes the 
exchange of information between telecommunications carriers about: 
current or proposed customer products and services; or unbundled network 
elements, or some combination thereof. This information includes loop 
qualification information, such as the composition of the loop material, 
including but not limited to: fiber optics or copper; the existence, 
location and type of any electronic or other equipment on the loop, 
including but not limited to, digital loop carrier or other remote 
concentration devices, feeder/distribution interfaces, bridge taps, load 
coils, pair-gain devices, disturbers in the same or adjacent binder 
groups; the loop length, including the length and location of each type 
of transmission media; the wire gauge(s) of the loop; and the electrical 
parameters of the loop, which may determine the suitability of the loop 
for various technologies.
    Provisioning. Provisioning involves the exchange of information 
between telecommunications carriers where one executes a request for a 
set of products and services or unbundled network elements or 
combination thereof from the other with attendant acknowledgements and 
status reports.
    Rural telephone company. A rural telephone company is a LEC 
operating entity to the extent that such entity:
    (1) Provides common carrier service to any local exchange carrier 
study area that does not include either:
    (i) Any incorporated place of 10,000 inhabitants or more, or any 
part thereof, based on the most recently available population statistics 
of the Bureau of the Census; or
    (ii) Any territory, incorporated or unincorporated, included in an 
urbanized area, as defined by the Bureau of the Census as of August 10, 
1993;
    (2) Provides telephone exchange service, including exchange access, 
to fewer than 50,000 access lines;
    (3) Provides telephone exchange service to any local exchange 
carrier study area with fewer than 100,000 access lines; or
    (4) Has less than 15 percent of its access lines in communities of 
more than 50,000 on February 8, 1996.
    Service control point. A service control point is a computer 
database in the public switched network which contains information and 
call processing instructions needed to process and complete a telephone 
call.
    Service creation environment. A service creation environment is a 
computer containing generic call processing software that can be 
programmed to create new advanced intelligent network call processing 
services.
    Service provider. A service provider is a provider of 
telecommunications services or a provider of information services.
    Signal transfer point. A signal transfer point is a packet switch 
that acts as a routing hub for a signaling network and transfers 
messages between various points in and among signaling networks.
    State. The term state includes the District of Columbia and the 
Territories and possessions.
    State commission. A state commission means the commission, board, or 
official (by whatever name designated) which under the laws of any state 
has regulatory jurisdiction with respect to intrastate operations of 
carriers. As referenced in this part, this term may

[[Page 21]]

include the Commission if it assumes responsibility for a proceeding or 
matter, pursuant to section 252(e)(5) of the Act or Sec. 51.320. This 
term shall also include any person or persons to whom the state 
commission has delegated its authority under sections 251 and 252 of the 
Act and this part.
    State proceeding. A state proceeding is any administrative 
proceeding in which a state commission may approve or prescribe rates, 
terms, and conditions including, but not limited to, compulsory 
arbitration pursuant to section 252(b) of the Act, review of a Bell 
operating company statement of generally available terms pursuant to 
section 252(f) of the Act, and a proceeding to determine whether to 
approve or reject an agreement adopted by arbitration pursuant to 
section 252(e) of the Act.
    Technically feasible. Interconnection, access to unbundled network 
elements, collocation, and other methods of achieving interconnection or 
access to unbundled network elements at a point in the network shall be 
deemed technically feasible absent technical or operational concerns 
that prevent the fulfillment of a request by a telecommunications 
carrier for such interconnection, access, or methods. A determination of 
technical feasibility does not include consideration of economic, 
accounting, billing, space, or site concerns, except that space and site 
concerns may be considered in circumstances where there is no 
possibility of expanding the space available. The fact that an incumbent 
LEC must modify its facilities or equipment to respond to such request 
does not determine whether satisfying such request is technically 
feasible. An incumbent LEC that claims that it cannot satisfy such 
request because of adverse network reliability impacts must prove to the 
state commission by clear and convincing evidence that such 
interconnection, access, or methods would result in specific and 
significant adverse network reliability impacts.
    Telecommunications carrier. A telecommunications carrier is any 
provider of telecommunications services, except that such term does not 
include aggregators of telecommunications services (as defined in 
section 226 of the Act). A telecommunications carrier shall be treated 
as a common carrier under the Act only to the extent that it is engaged 
in providing telecommunications services, except that the Commission 
shall determine whether the provision of fixed and mobile satellite 
service shall be treated as common carriage. This definition includes 
CMRS providers, interexchange carriers (IXCs) and, to the extent they 
are acting as telecommunications carriers, companies that provide both 
telecommunications and information services. Private Mobile Radio 
Service providers are telecommunications carriers to the extent they 
provide domestic or international telecommunications for a fee directly 
to the public.
    Telecommunications service. The term telecommunications service 
refers to the offering of telecommunications for a fee directly to the 
public, or to such classes of users as to be effectively available 
directly to the public, regardless of the facilities used.
    Telephone exchange service. A telephone exchange service is:
    (1) A service within a telephone exchange, or within a connected 
system of telephone exchanges within the same exchange area operated to 
furnish to subscribers intercommunicating service of the character 
ordinarily furnished by a single exchange, and which is covered by the 
exchange service charge, or
    (2) A comparable service provided through a system of switches, 
transmission equipment, or other facilities (or combination thereof) by 
which a subscriber can originate and terminate a telecommunications 
service.
    Telephone toll service. The term telephone toll service refers to 
telephone service between stations in different exchange areas for which 
there is made a separate charge not included in contracts with 
subscribers for exchange service.
    Unreasonable dialing delay. For the same type of calls, dialing 
delay is ``unreasonable'' when the dialing delay experienced by the 
customer of a competing provider is greater than that experienced by a 
customer of the LEC providing dialing parity, or nondiscriminatory 
access to operator services or directory assistance.

[[Page 22]]

    Triennial Review Order. The Triennial Review Order means the 
Commission's Report and Order and Order on Remand and Further Notice of 
Proposed Rulemaking in CC Docket Nos. 01-338, 96-98, and 98-147.
    Triennial Review Remand Order. The Triennial Review Remand Order is 
the Commission's Order on Remand in CC Docket Nos. 01-338 and 04-313 
(released February 4, 2005).
    Virtual collocation. Virtual collocation is an offering by an 
incumbent LEC that enables a requesting telecommunications carrier to:
    (1) Designate or specify equipment to be used for interconnection or 
access to unbundled network elements to be located within or upon an 
incumbent LEC's premises, and dedicated to such telecommunications 
carrier's use;
    (2) Use such equipment to interconnect with an incumbent LEC's 
network facilities for the transmission and routing of telephone 
exchange service, exchange access service, or both, or for access to an 
incumbent LEC's unbundled network elements for the provision of a 
telecommunications service; and
    (3) Electronically monitor and control its communications channels 
terminating in such equipment.
    Wire center. A wire center is the location of an incumbent LEC local 
switching facility containing one or more central offices, as defined in 
the Appendix to part 36 of this chapter. The wire center boundaries 
define the area in which all customers served by a given wire center are 
located.

[61 FR 45619, Aug. 29, 1996, as amended at 61 FR 47348, Sept. 6, 1996; 
64 FR 23241, Apr. 30, 1999; 65 FR 1344, Jan. 10, 2000; 65 FR 2550, Jan. 
18, 2000; 65 FR 54438, Sept. 8, 2000; 66 FR 43521, Aug. 20, 2001; 68 FR 
52293, Sept. 2, 2003; 70 FR 8952, Feb. 24, 2005]



                  Subpart B_Telecommunications Carriers



Sec. 51.100  General duty.

    (a) Each telecommunications carrier has the duty:
    (1) To interconnect directly or indirectly with the facilities and 
equipment of other telecommunications carriers; and
    (2) To not install network features, functions, or capabilities that 
do not comply with the guidelines and standards as provided in the 
Commission's rules or section 255 or 256 of the Act.
    (b) A telecommunication carrier that has interconnected or gained 
access under sections 251(a)(1), 251(c)(2), or 251(c)(3) of the Act, may 
offer information services through the same arrangement, so long as it 
is offering telecommunications services through the same arrangement as 
well.



          Subpart C_Obligations of All Local Exchange Carriers



Sec. 51.201  Resale.

    The rules governing resale of services by an incumbent LEC are set 
forth in subpart G of this part.



Sec. 51.203  Number portability.

    The rules governing number portability are set forth in part 52, 
subpart C of this chapter.



Sec. 51.205  Dialing parity: General.

    A local exchange carrier (LEC) shall provide local and toll dialing 
parity to competing providers of telephone exchange service or telephone 
toll service, with no unreasonable dialing delays. Dialing parity shall 
be provided for all originating telecommunications services that require 
dialing to route a call.

[61 FR 47349, Sept. 6, 1996]



Sec. 51.207  Local dialing parity.

    A LEC shall permit telephone exchange service customers within a 
local calling area to dial the same number of digits to make a local 
telephone call notwithstanding the identity of the customer's or the 
called party's telecommunications service provider.

[61 FR 47349, Sept. 6, 1996]



Sec. 51.209  Toll dialing parity.

    (a) A LEC shall implement throughout each state in which it offers 
telephone exchange service intraLATA and interLATA toll dialing parity 
based on LATA boundaries. When a single LATA covers more than one state, 
the LEC

[[Page 23]]

shall use the implementation procedures that each state has approved for 
the LEC within that state's borders.
    (b) A LEC shall implement toll dialing parity through a 
presubscription process that permits a customer to select a carrier to 
which all designated calls on a customer's line will be routed 
automatically. LECs shall allow a customer to presubscribe, at a 
minimum, to one telecommunications carrier for all interLATA toll calls 
and to presubscribe to the same or to another telecommunications carrier 
for all intraLATA toll calls.
    (c) A LEC may not assign automatically a customer's intraLATA toll 
traffic to itself, to its subsidiaries or affiliates, to the customer's 
presubscribed interLATA or interstate toll carrier, or to any other 
carrier, except when, in a state that already has implemented 
intrastate, intraLATA toll dialing parity, the subscriber has selected 
the same presubscribed carrier for both intraLATA and interLATA toll 
calls.
    (d) Notwithstanding the requirements of paragraphs (a) and (b) of 
this section, states may require that toll dialing parity be based on 
state boundaries if it deems that the provision of intrastate and 
interstate toll dialing parity is procompetitive and otherwise in the 
public interest.

[61 FR 47349, Sept. 6, 1996]



Sec. 51.213  Toll dialing parity implementation plans.

    (a) A LEC must file a plan for providing intraLATA toll dialing 
parity throughout each state in which it offers telephone exchange 
service. A LEC cannot offer intraLATA toll dialing parity within a state 
until the implementation plan has been approved by the appropriate state 
commission or the Commission.
    (b) A LEC's implementation plan must include:
    (1) A proposal that explains how the LEC will offer intraLATA toll 
dialing parity for each exchange that the LEC operates in the state, in 
accordance with the provisions of this section, and a proposed time 
schedule for implementation; and
    (2) A proposal for timely notification of its subscribers and the 
methods it proposes to use to enable subscribers to affirmatively select 
an intraLATA toll service provider.
    (3) A LEC that is not a BOC also shall identify the LATA with which 
it will associate for the purposes of providing intraLATA and interLATA 
toll dialing parity under this subpart.

[61 FR 47349, Sept. 6, 1996, as amended at 71 FR 65750, Nov. 9, 2006]



Sec. 51.215  Dialing parity: Cost recovery.

    (a) A LEC may recover the incremental costs necessary for the 
implementation of toll dialing parity. The LEC must recover such costs 
from all providers of telephone exchange service and telephone toll 
service in the area served by the LEC, including that LEC. The LEC shall 
use a cost recovery mechanism established by the state.
    (b) Any cost recovery mechanism for the provision of toll dialing 
parity pursuant to this section that a state adopts must not:
    (1) Give one service provider an appreciable cost advantage over 
another service provider, when competing for a specific subscriber 
(i.e., the recovery mechanism may not have a disparate effect on the 
incremental costs of competing service providers seeking to serve the 
same customer); or
    (2) Have a disparate effect on the ability of competing service 
providers to earn a normal return on their investment.

[61 FR 47350, Sept. 6, 1996]



Sec. 51.217  Nondiscriminatory access: Telephone numbers, operator 
services, directory assistance services, and directory listings.

    (a) Definitions. As used in this section, the following definitions 
apply:
    (1) Competing provider. A ``competing provider'' is a provider of 
telephone exchange or telephone toll services that seeks 
nondiscriminatory access from a local exchange carrier (LEC) in that 
LEC's service area.
    (2) Nondiscriminatory access. ``Nondiscriminatory access'' refers to 
access to telephone numbers, operator services, directory assistance and 
directory listings that is at least equal to the access that the 
providing local exchange carrier (LEC) itself receives. 
Nondiscriminatory access includes, but is not limited to:

[[Page 24]]

    (i) Nondiscrimination between and among carriers in the rates, 
terms, and conditions of the access provided; and
    (ii) The ability of the competing provider to obtain access that is 
at least equal in quality to that of the providing LEC.
    (3) Providing local exchange carrier (LEC). A ``providing local 
exchange carrier'' is a local exchange carrier (LEC) that is required to 
permit nondiscriminatory access to a competing provider.
    (b) General rule. A local exchange carrier (LEC) that provides 
operator services, directory assistance services or directory listings 
to its customers, or provides telephone numbers, shall permit competing 
providers of telephone exchange service or telephone toll service to 
have nondiscriminatory access to that service or feature, with no 
unreasonable dialing delays.
    (c) Specific requirements. A LEC subject to paragraph (b) of this 
section must also comply with the following requirements:
    (1) Telephone numbers. A LEC shall permit competing providers to 
have access to telephone numbers that is identical to the access that 
the LEC provides to itself.
    (2) Operator services. A LEC must permit telephone service customers 
to connect to the operator services offered by that customer's chosen 
local service provider by dialing ``0,'' or ``0'' plus the desired 
telephone number, regardless of the identity of the customer's local 
telephone service provider.
    (3) Directory assistance services and directory listings--(i) Access 
to directory assistance. A LEC shall permit competing providers to have 
access to its directory assistance services, including directory 
assistance databases, so that any customer of a competing provider can 
obtain directory listings, except as provided in paragraph (c)(3)(iv) of 
this section, on a nondiscriminatory basis, notwithstanding the identity 
of the customer's local service provider, or the identity of the 
provider for the customer whose listing is requested. A LEC must supply 
access to directory assistance in the manner specified by the competing 
provider, including transfer of the LECs' directory assistance databases 
in readily accessible magnetic tape, electronic or other convenient 
format, as provided in paragraph (c)(3)(iii) of this section. Updates to 
the directory assistance database shall be made in the same format as 
the initial transfer (unless the requesting LEC requests otherwise), and 
shall be performed in a timely manner, taking no longer than those made 
to the providing LEC's own database. A LEC shall accept the listings of 
those customers served by competing providers for inclusion in its 
directory assistance/operator services databases.
    (ii) Access to directory listings. A LEC that compiles directory 
listings shall share directory listings with competing providers in the 
manner specified by the competing provider, including readily accessible 
tape or electronic formats, as provided in paragraph (c)(3)(iii) of this 
section. Such data shall be provided in a timely fashion.
    (iii) Format. A LEC shall provide access to its directory assistance 
services, including directory assistance databases, and to its directory 
listings in any format the competing provider specifies, if the LEC's 
internal systems can accommodate that format.
    (A) If a LEC's internal systems do not permit it provide directory 
assistance or directory listings in the format the specified by the 
competing provider, the LEC shall:
    (1) Within thirty days of receiving the request, inform the 
competing provider that the requested format cannot be accommodated and 
tell the requesting provider which formats can be accommodated; and
    (2) Provide the requested directory assistance or directory listings 
in the format the competing provider chooses from among the available 
formats.
    (B) [Reserved]
    (iv) Unlisted numbers. A LEC shall not provide access to unlisted 
telephone numbers, or other information that its customer has asked the 
LEC not to make available, with the exception of customer name and 
address. The LEC shall ensure that access is permitted to the same 
directory information, including customer name and address, that is 
available to its own directory assistance customers.

[[Page 25]]

    (v) Adjuncts to services. Operator services and directory assistance 
services must be made available to competing providers in their 
entirety, including access to any adjunct features (e.g., rating tables 
or customer information databases) necessary to allow competing 
providers full use of these services.
    (d) Branding of operator services and directory assistance services. 
The refusal of a providing local exchange carrier (LEC) to comply with 
the reasonable request of a competing provider that the providing LEC 
rebrand its operator services and directory assistance, or remove its 
brand from such services, creates a presumption that the providing LEC 
is unlawfully restricting access to its operator services and directory 
assistance. The providing LEC can rebut this presumption by 
demonstrating that it lacks the capability to comply with the competing 
provider's request.
    (e) Disputes--(1) Disputes involving nondiscriminatory access. In 
disputes involving nondiscriminatory access to operator services, 
directory assistance services, or directory listings, a providing LEC 
shall bear the burden of demonstrating with specificity:
    (i) That it is permitting nondiscriminatory access, and
    (ii) That any disparity in access is not caused by factors within 
its control. ``Factors within its control'' include, but are not limited 
to, physical facilities, staffing, the ordering of supplies or 
equipment, and maintenance.
    (2) Disputes involving unreasonable dialing delay. In disputes 
between providing local exchange carriers (LECs) and competing providers 
involving unreasonable dialing delay in the provision of access to 
operator services and directory assistance, the burden of proof is on 
the providing LEC to demonstrate with specificity that it is processing 
the calls of the competing provider's customers on terms equal to that 
of similar calls from the providing LEC's own customers.

[61 FR 47350, Sept. 6, 1996, as amended at 64 FR 51911, Sept. 27, 1999]

    Effective Date Note: At 64 FR 51911, Sept. 27, 1999, Sec. 51.217 
was amended by revising paragraph (c)(3). This paragraph contains 
information collection and recordkeeping requirements and will not 
become effective until approval has been given by the Office of 
Management and Budget.



Sec. 51.219  Access to rights of way.

    The rules governing access to rights of way are set forth in part 1, 
subpart J of this chapter.



Sec. 51.221  Reciprocal compensation.

    The rules governing reciprocal compensation are set forth in subpart 
H of this part.



Sec. 51.223  Application of additional requirements.

    (a) A state may not impose the obligations set forth in section 
251(c) of the Act on a LEC that is not classified as an incumbent LEC as 
defined in section 251(h)(1) of the Act, unless the Commission issues an 
order declaring that such LECs or classes or categories of LECs should 
be treated as incumbent LECs.
    (b) A state commission, or any other interested party, may request 
that the Commission issue an order declaring that a particular LEC be 
treated as an incumbent LEC, or that a class or category of LECs be 
treated as incumbent LECs, pursuant to section 251(h)(2) of the Act.



Sec. 51.230  Presumption of acceptability for deployment of an 
advanced services loop technology.

    (a) An advanced services loop technology is presumed acceptable for 
deployment under any one of the following circumstances, where the 
technology:
    (1) Complies with existing industry standards; or
    (2) Is approved by an industry standards body, the Commission, or 
any state commission; or
    (3) Has been successfully deployed by any carrier without 
significantly degrading the performance of other services.
    (b) An incumbent LEC may not deny a carrier's request to deploy a 
technology that is presumed acceptable for deployment unless the 
incumbent LEC demonstrates to the relevant state commission that 
deployment of the particular technology will significantly degrade the 
performance of other advanced services or traditional voiceband 
services.

[[Page 26]]

    (c) Where a carrier seeks to establish that deployment of a 
technology falls within the presumption of acceptability under paragraph 
(a)(3) of this section, the burden is on the requesting carrier to 
demonstrate to the state commission that its proposed deployment meets 
the threshold for a presumption of acceptability and will not, in fact, 
significantly degrade the performance of other advanced services or 
traditional voice band services. Upon a successful demonstration by the 
requesting carrier before a particular state commission, the deployed 
technology shall be presumed acceptable for deployment in other areas.

[65 FR 1345, Jan. 10, 2000]



Sec. 51.231  Provision of information on advanced services deployment.

    (a) An incumbent LEC must provide to requesting carriers that seek 
access to a loop or high frequency portion of the loop to provide 
advanced services:
    (1) Uses in determining which services can be deployed; and 
information with respect to the spectrum management procedures and 
policies that the incumbent LEC.
    (2) Information with respect to the rejection of the requesting 
carrier's provision of advanced services, together with the specific 
reason for the rejection; and
    (3) Information with respect to the number of loops using advanced 
services technology within the binder and type of technology deployed on 
those loops.
    (b) A requesting carrier that seeks access to a loop or a high 
frequency portion of a loop to provide advanced services must provide to 
the incumbent LEC information on the type of technology that the 
requesting carrier seeks to deploy.
    (1) Where the requesting carrier asserts that the technology it 
seeks to deploy fits within a generic power spectral density (PSD) mask, 
it also must provide Spectrum Class information for the technology.
    (2) Where a requesting carrier relies on a calculation-based 
approach to support deployment of a particular technology, it must 
provide the incumbent LEC with information on the speed and power at 
which the signal will be transmitted.
    (c) The requesting carrier also must provide the information 
required under paragraph (b) of this section when notifying the 
incumbent LEC of any proposed change in advanced services technology 
that the carrier uses on the loop.

[65 FR 1345, Jan. 10, 2000]



Sec. 51.232  Binder group management.

    (a) With the exception of loops on which a known disturber is 
deployed, the incumbent LEC shall be prohibited from designating, 
segregating or reserving particular loops or binder groups for use 
solely by any particular advanced services loop technology.
    (b) Any party seeking designation of a technology as a known 
disturber should file a petition for declaratory ruling with the 
Commission seeking such designation, pursuant to Sec. 1.2 of this 
chapter.

[65 FR 1346, Jan. 10, 2000]



Sec. 51.233  Significant degradation of services caused by deployment
of advanced services.

    (a) Where a carrier claims that a deployed advanced service is 
significantly degrading the performance of other advanced services or 
traditional voiceband services, that carrier must notify the deploying 
carrier and allow the deploying carrier a reasonable opportunity to 
correct the problem. Where the carrier whose services are being degraded 
does not know the precise cause of the degradation, it must notify each 
carrier that may have caused or contributed to the degradation.
    (b) Where the degradation asserted under paragraph (a) of this 
section remains unresolved by the deploying carrier(s) after a 
reasonable opportunity to correct the problem, the carrier whose 
services are being degraded must establish before the relevant state 
commission that a particular technology deployment is causing the 
significant degradation.
    (c) Any claims of network harm presented to the deploying carrier(s) 
or, if subsequently necessary, the relevant state commission, must be 
supported

[[Page 27]]

with specific and verifiable information.
    (d) Where a carrier demonstrates that a deployed technology is 
significantly degrading the performance of other advanced services or 
traditional voice band services, the carrier deploying the technology 
shall discontinue deployment of that technology and migrate its 
customers to technologies that will not significantly degrade the 
performance of other such services.
    (e) Where the only degraded service itself is a known disturber, and 
the newly deployed technology satisfies at least one of the criteria for 
a presumption that it is acceptable for deployment under Sec. 51.230, 
the degraded service shall not prevail against the newly-deployed 
technology.

[65 FR 1346, Jan. 10, 2000]



  Subpart D_Additional Obligations of Incumbent Local Exchange Carriers



Sec. 51.301  Duty to negotiate.

    (a) An incumbent LEC shall negotiate in good faith the terms and 
conditions of agreements to fulfill the duties established by sections 
251 (b) and (c) of the Act.
    (b) A requesting telecommunications carrier shall negotiate in good 
faith the terms and conditions of agreements described in paragraph (a) 
of this section.
    (c) If proven to the Commission, an appropriate state commission, or 
a court of competent jurisdiction, the following actions or practices, 
among others, violate the duty to negotiate in good faith:
    (1) Demanding that another party sign a nondisclosure agreement that 
precludes such party from providing information requested by the 
Commission, or a state commission, or in support of a request for 
arbitration under section 252(b)(2)(B) of the Act;
    (2) Demanding that a requesting telecommunications carrier attest 
that an agreement complies with all provisions of the Act, federal 
regulations, or state law;
    (3) Refusing to include in an arbitrated or negotiated agreement a 
provision that permits the agreement to be amended in the future to take 
into account changes in Commission or state rules;
    (4) Conditioning negotiation on a requesting telecommunications 
carrier first obtaining state certifications;
    (5) Intentionally misleading or coercing another party into reaching 
an agreement that it would not otherwise have made;
    (6) Intentionally obstructing or delaying negotiations or 
resolutions of disputes;
    (7) Refusing throughout the negotiation process to designate a 
representative with authority to make binding representations, if such 
refusal significantly delays resolution of issues; and
    (8) Refusing to provide information necessary to reach agreement. 
Such refusal includes, but is not limited to:
    (i) Refusal by an incumbent LEC to furnish information about its 
network that a requesting telecommunications carrier reasonably requires 
to identify the network elements that it needs in order to serve a 
particular customer; and
    (ii) Refusal by an incumbent LEC to furnish cost data that would be 
relevant to setting rates if the parties were in arbitration.

[61 FR 45619, Aug. 29, 1996, as amended at 68 FR 52294, Sept. 2, 2003]



Sec. 51.303  Preexisting agreements.

    (a) All interconnection agreements between an incumbent LEC and a 
telecommunications carrier, including those negotiated before February 
8, 1996, shall be submitted by the parties to the appropriate state 
commission for approval pursuant to section 252(e) of the Act.
    (b) Interconnection agreements negotiated before February 8, 1996, 
between Class A carriers, as defined by Sec. 32.11(a)(1) of this 
chapter, shall be filed by the parties with the appropriate state 
commission no later than June 30, 1997, or such earlier date as the 
state commission may require.
    (c) If a state commission approves a preexisting agreement, it shall 
be made available to other parties in accordance with section 252(i) of 
the Act and Sec. 51.809 of this part. A state commission may reject a 
preexisting agreement on the grounds that it is inconsistent with

[[Page 28]]

the public interest, or for other reasons set forth in section 
252(e)(2)(A) of the Act.



Sec. 51.305  Interconnection.

    (a) An incumbent LEC shall provide, for the facilities and equipment 
of any requesting telecommunications carrier, interconnection with the 
incumbent LEC's network:
    (1) For the transmission and routing of telephone exchange traffic, 
exchange access traffic, or both;
    (2) At any technically feasible point within the incumbent LEC's 
network including, at a minimum:
    (i) The line-side of a local switch;
    (ii) The trunk-side of a local switch;
    (iii) The trunk interconnection points for a tandem switch;
    (iv) Central office cross-connect points;
    (v) Out-of-band signaling transfer points necessary to exchange 
traffic at these points and access call-related databases; and
    (vi) The points of access to unbundled network elements as described 
in Sec. 51.319;
    (3) That is at a level of quality that is equal to that which the 
incumbent LEC provides itself, a subsidiary, an affiliate, or any other 
party. At a minimum, this requires an incumbent LEC to design 
interconnection facilities to meet the same technical criteria and 
service standards that are used within the incumbent LEC's network. This 
obligation is not limited to a consideration of service quality as 
perceived by end users, and includes, but is not limited to, service 
quality as perceived by the requesting telecommunications carrier; and
    (4) On terms and conditions that are just, reasonable, and 
nondiscriminatory in accordance with the terms and conditions of any 
agreement, the requirements of sections 251 and 252 of the Act, and the 
Commission's rules including, but not limited to, offering such terms 
and conditions equally to all requesting telecommunications carriers, 
and offering such terms and conditions that are no less favorable than 
the terms and conditions upon which the incumbent LEC provides such 
interconnection to itself. This includes, but is not limited to, the 
time within which the incumbent LEC provides such interconnection.
    (b) A carrier that requests interconnection solely for the purpose 
of originating or terminating its interexchange traffic on an incumbent 
LEC's network and not for the purpose of providing to others telephone 
exchange service, exchange access service, or both, is not entitled to 
receive interconnection pursuant to section 251(c)(2) of the Act.
    (c) Previous successful interconnection at a particular point in a 
network, using particular facilities, constitutes substantial evidence 
that interconnection is technically feasible at that point, or at 
substantially similar points, in networks employing substantially 
similar facilities. Adherence to the same interface or protocol 
standards shall constitute evidence of the substantial similarity of 
network facilities.
    (d) Previous successful interconnection at a particular point in a 
network at a particular level of quality constitutes substantial 
evidence that interconnection is technically feasible at that point, or 
at substantially similar points, at that level of quality.
    (e) An incumbent LEC that denies a request for interconnection at a 
particular point must prove to the state commission that interconnection 
at that point is not technically feasible.
    (f) If technically feasible, an incumbent LEC shall provide two-way 
trunking upon request.
    (g) An incumbent LEC shall provide to a requesting 
telecommunications carrier technical information about the incumbent 
LEC's network facilities sufficient to allow the requesting carrier to 
achieve interconnection consistent with the requirements of this 
section.

[61 FR 45619, Aug. 29, 1996, as amended at 61 FR 47351, Sept. 6, 1996; 
68 FR 52294, Sept. 2, 2003]



Sec. 51.307  Duty to provide access on an unbundled basis to network
elements.

    (a) An incumbent LEC shall provide, to a requesting 
telecommunications carrier for the provision of a telecommunications 
service, nondiscriminatory access to network elements on

[[Page 29]]

an unbundled basis at any technically feasible point on terms and 
conditions that are just, reasonable, and nondiscriminatory in 
accordance with the terms and conditions of any agreement, the 
requirements of sections 251 and 252 of the Act, and the Commission's 
rules.
    (b) The duty to provide access to unbundled network elements 
pursuant to section 251(c)(3) of the Act includes a duty to provide a 
connection to an unbundled network element independent of any duty to 
provide interconnection pursuant to this part and section 251(c)(2) of 
the Act.
    (c) An incumbent LEC shall provide a requesting telecommunications 
carrier access to an unbundled network element, along with all of the 
unbundled network element's features, functions, and capabilities, in a 
manner that allows the requesting telecommunications carrier to provide 
any telecommunications service that can be offered by means of that 
network element.
    (d) An incumbent LEC shall provide a requesting telecommunications 
carrier access to the facility or functionality of a requested network 
element separate from access to the facility or functionality of other 
network elements, for a separate charge.
    (e) An incumbent LEC shall provide to a requesting 
telecommunications carrier technical information about the incumbent 
LEC's network facilities sufficient to allow the requesting carrier to 
achieve access to unbundled network elements consistent with the 
requirements of this section.

[61 FR 45619, Aug. 29, 1996, as amended at 61 FR 47351, Sept. 6, 1996]



Sec. 51.309  Use of unbundled network elements.

    (a) Except as provided in Sec. 51.318, an incumbent LEC shall not 
impose limitations, restrictions, or requirements on requests for, or 
the use of, unbundled network elements for the service a requesting 
telecommunications carrier seeks to offer.
    (b) A requesting telecommunications carrier may not access an 
unbundled network element for the exclusive provision of mobile wireless 
services or interexchange services.
    (c) A telecommunications carrier purchasing access to an unbundled 
network facility is entitled to exclusive use of that facility for a 
period of time, or when purchasing access to a feature, function, or 
capability of a facility, a telecommunications carrier is entitled to 
use of that feature, function, or capability for a period of time. A 
telecommunications carrier's purchase of access to an unbundled network 
element does not relieve the incumbent LEC of the duty to maintain, 
repair, or replace the unbundled network element.
    (d) A requesting telecommunications carrier that accesses and uses 
an unbundled network element consistent with paragraph (b) of this 
section may provide any telecommunications services over the same 
unbundled network element.
    (e) Except as provided in Sec. 51.318, an incumbent LEC shall 
permit a requesting telecommunications carrier to commingle an unbundled 
network element or a combination of unbundled network elements with 
wholesale services obtained from an incumbent LEC.
    (f) Upon request, an incumbent LEC shall perform the functions 
necessary to commingle an unbundled network element or a combination of 
unbundled network elements with one or more facilities or services that 
a requesting telecommunications carrier has obtained at wholesale from 
an incumbent LEC.
    (g) An incumbent LEC shall not deny access to an unbundled network 
element or a combination of unbundled network elements on the grounds 
that one or more of the elements:
    (1) Is connected to, attached to, linked to, or combined with, a 
facility or service obtained from an incumbent LEC; or
    (2) Shares part of the incumbent LEC's network with access services 
or inputs for mobile wireless services and/or interexchange services.

[61 FR 45619, Aug. 29, 1996, as amended at 68 FR 52294, Sept. 2, 2003; 
70 FR 8952, Feb. 24, 2005]



Sec. 51.311  Nondiscriminatory access to unbundled network elements.

    (a) The quality of an unbundled network element, as well as the 
quality of

[[Page 30]]

the access to the unbundled network element, that an incumbent LEC 
provides to a requesting telecommunications carrier shall be the same 
for all telecommunications carriers requesting access to that network 
element.
    (b) To the extent technically feasible, the quality of an unbundled 
network element, as well as the quality of the access to such unbundled 
network element, that an incumbent LEC provides to a requesting 
telecommunications carrier shall be at least equal in quality to that 
which the incumbent LEC provides to itself. If an incumbent LEC fails to 
meet this requirement, the incumbent LEC must prove to the state 
commission that it is not technically feasible to provide the requested 
unbundled network element, or to provide access to the requested 
unbundled network element, at a level of quality that is equal to that 
which the incumbent LEC provides to itself.
    (c) Previous successful access to an unbundled element at a 
particular point in a network, using particular facilities, is 
substantial evidence that access is technically feasible at that point, 
or at substantially similar points, in networks employing substantially 
similar facilities. Adherence to the same interface or protocol 
standards shall constitute evidence of the substantial similarity of 
network facilities.
    (d) Previous successful provision of access to an unbundled element 
at a particular point in a network at a particular level of quality is 
substantial evidence that access is technically feasible at that point, 
or at substantially similar points, at that level of quality.

[61 FR 45619, Aug. 29, 1996, as amended at 68 FR 52294, Sept. 2, 2003]



Sec. 51.313  Just, reasonable and nondiscriminatory terms and 
conditions for the provision of unbundled network elements.

    (a) The terms and conditions pursuant to which an incumbent LEC 
provides access to unbundled network elements shall be offered equally 
to all requesting telecommunications carriers.
    (b) Where applicable, the terms and conditions pursuant to which an 
incumbent LEC offers to provide access to unbundled network elements, 
including but not limited to, the time within which the incumbent LEC 
provisions such access to unbundled network elements, shall, at a 
minimum, be no less favorable to the requesting carrier than the terms 
and conditions under which the incumbent LEC provides such elements to 
itself.
    (c) An incumbent LEC must provide a carrier purchasing access to 
unbundled network elements with the pre-ordering, ordering, 
provisioning, maintenance and repair, and billing functions of the 
incumbent LEC's operations support systems.



Sec. 51.315  Combination of unbundled network elements.

    (a) An incumbent LEC shall provide unbundled network elements in a 
manner that allows requesting telecommunications carriers to combine 
such network elements in order to provide a telecommunications service.
    (b) Except upon request, an incumbent LEC shall not separate 
requested network elements that the incumbent LEC currently combines.
    (c) Upon request, an incumbent LEC shall perform the functions 
necessary to combine unbundled network elements in any manner, even if 
those elements are not ordinarily combined in the incumbent LEC's 
network, provided that such combination:
    (1) Is technically feasible; and
    (2) Would not undermine the ability of other carriers to obtain 
access to unbundled network elements or to interconnect with the 
incumbent LEC's network.
    (d) Upon request, an incumbent LEC shall perform the functions 
necessary to combine unbundled network elements with elements possessed 
by the requesting telecommunications carrier in any technically feasible 
manner.
    (e) An incumbent LEC that denies a request to combine elements 
pursuant to paragraph (c)(1) or paragraph (d) of this section must prove 
to the state commission that the requested combination is not 
technically feasible.
    (f) An incumbent LEC that denies a request to combine unbundled 
network elements pursuant to paragraph (c)(2) of this section must 
demonstrate to the state commission that the requested combination would 
undermine

[[Page 31]]

the ability of other carriers to obtain access to unbundled network 
elements or to interconnect with the incumbent LEC's network.

[61 FR 45619, Aug. 29, 1996, as amended at 68 FR 52294, Sept. 2, 2003]



Sec. 51.316  Conversion of unbundled network elements and services.

    (a) Upon request, an incumbent LEC shall convert a wholesale 
service, or group of wholesale services, to the equivalent unbundled 
network element, or combination of unbundled network elements, that is 
available to the requesting telecommunications carrier under section 
251(c)(3) of the Act and this part.
    (b) An incumbent LEC shall perform any conversion from a wholesale 
service or group of wholesale services to an unbundled network element 
or combination of unbundled network elements without adversely affecting 
the service quality perceived by the requesting telecommunications 
carrier's end-user customer.
    (c) Except as agreed to by the parties, an incumbent LEC shall not 
impose any untariffed termination charges, or any disconnect fees, re-
connect fees, or charges associated with establishing a service for the 
first time, in connection with any conversion between a wholesale 
service or group of wholesale services and an unbundled network element 
or combination of unbundled network elements.

[68 FR 52294, Sept. 2, 2003]



Sec. 51.317  Standards for requiring the unbundling of network elements.

    (a) Proprietary network elements. A network element shall be 
considered to be proprietary if an incumbent LEC can demonstrate that it 
has invested resources to develop proprietary information or 
functionalities that are protected by patent, copyright or trade secret 
law. The Commission shall undertake the following analysis to determine 
whether a proprietary network element should be made available for 
purposes of section 251(c)(3) of the Act:
    (1) Determine whether access to the proprietary network element is 
``necessary.'' A network element is ``necessary'' if, taking into 
consideration the availability of alternative elements outside the 
incumbent LEC's network, including self-provisioning by a requesting 
telecommunications carrier or acquiring an alternative from a third-
party supplier, lack of access to the network element precludes a 
requesting telecommunications carrier from providing the services that 
it seeks to offer. If access is ``necessary,'' the Commission may 
require the unbundling of such proprietary network element.
    (2) In the event that such access is not ``necessary,'' the 
Commission may require unbundling if it is determined that:
    (i) The incumbent LEC has implemented only a minor modification to 
the network element in order to qualify for proprietary treatment;
    (ii) The information or functionality that is proprietary in nature 
does not differentiate the incumbent LEC's services from the requesting 
telecommunications carrier's services; or
    (iii) Lack of access to such element would jeopardize the goals of 
the Act.
    (b) Non-proprietary network elements. The Commission shall determine 
whether a non-proprietary network element should be made available for 
purposes of section 251(c)(3) of the Act by analyzing, at a minimum, 
whether lack of access to a non-proprietary network element ``impairs'' 
a requesting carrier's ability to provide the service it seeks to offer. 
A requesting carrier's ability to provide service is ``impaired'' if, 
taking into consideration the availability of alternative elements 
outside the incumbent LEC's network, including elements self-provisioned 
by the requesting carrier or acquired as an alternative from a third-
party supplier, lack of access to that element poses a barrier or 
barriers to entry, including operational and economic barriers, that are 
likely to make entry into a market by a reasonably efficient competitor 
uneconomic.

[70 FR 8952, Feb. 24, 2005]



Sec. 51.318  Eligibility criteria for access to certain unbundled
network elements.

    (a) Except as provided in paragraph (b) of this section, an 
incumbent LEC

[[Page 32]]

shall provide access to unbundled network elements and combinations of 
unbundled network elements without regard to whether the requesting 
telecommunications carrier seeks access to the elements to establish a 
new circuit or to convert an existing circuit from a service to 
unbundled network elements.
    (b) An incumbent LEC need not provide access to an unbundled DS1 
loop in combination, or commingled, with a dedicated DS1 transport or 
dedicated DS3 transport facility or service, or to an unbundled DS3 loop 
in combination, or commingled, with a dedicated DS3 transport facility 
or service, or an unbundled dedicated DS1 transport facility in 
combination, or commingled, with an unbundled DS1 loop or a DS1 channel 
termination service, or to an unbundled dedicated DS3 transport facility 
in combination, or commingled, with an unbundled DS1 loop or a DS1 
channel termination service, or to an unbundled DS3 loop or a DS3 
channel termination service, unless the requesting telecommunications 
carrier certifies that all of the following conditions are met:
    (1) The requesting telecommunications carrier has received state 
certification to provide local voice service in the area being served 
or, in the absence of a state certification requirement, has complied 
with registration, tariffing, filing fee, or other regulatory 
requirements applicable to the provision of local voice service in that 
area.
    (2) The following criteria are satisfied for each combined circuit, 
including each DS1 circuit, each DS1 enhanced extended link, and each 
DS1-equivalent circuit on a DS3 enhanced extended link:
    (i) Each circuit to be provided to each customer will be assigned a 
local number prior to the provision of service over that circuit;
    (ii) Each DS1-equivalent circuit on a DS3 enhanced extended link 
must have its own local number assignment, so that each DS3 must have at 
least 28 local voice numbers assigned to it;
    (iii) Each circuit to be provided to each customer will have 911 or 
E911 capability prior to the provision of service over that circuit;
    (iv) Each circuit to be provided to each customer will terminate in 
a collocation arrangement that meets the requirements of paragraph (c) 
of this section;
    (v) Each circuit to be provided to each customer will be served by 
an interconnection trunk that meets the requirements of paragraph (d) of 
this section;
    (vi) For each 24 DS1 enhanced extended links or other facilities 
having equivalent capacity, the requesting telecommunications carrier 
will have at least one active DS1 local service interconnection trunk 
that meets the requirements of paragraph (d) of this section; and
    (vii) Each circuit to be provided to each customer will be served by 
a switch capable of switching local voice traffic.
    (c) A collocation arrangement meets the requirements of this 
paragraph if it is:
    (1) Established pursuant to section 251(c)(6) of the Act and located 
at an incumbent LEC premises within the same LATA as the customer's 
premises, when the incumbent LEC is not the collocator; and
    (2) Located at a third party's premises within the same LATA as the 
customer's premises, when the incumbent LEC is the collocator.
    (d) An interconnection trunk meets the requirements of this 
paragraph if the requesting telecommunications carrier will transmit the 
calling party's number in connection with calls exchanged over the 
trunk.

[68 FR 52295, Sept. 2, 2003, as amended at 68 FR 64000, Nov. 12, 2003]



Sec. 51.319  Specific unbundling requirements.

    (a) Local loops. An incumbent LEC shall provide a requesting 
telecommunications carrier with nondiscriminatory access to the local 
loop on an unbundled basis, in accordance with section 251(c)(3) of the 
Act and this part and as set forth in paragraphs (a)(1) through (a)(9) 
of this section. The local loop network element is defined as a 
transmission facility between a distribution frame (or its equivalent) 
in an incumbent LEC central office and the loop demarcation point at an 
end-

[[Page 33]]

user customer premises. This element includes all features, functions, 
and capabilities of such transmission facility, including the network 
interface device. It also includes all electronics, optronics, and 
intermediate devices (including repeaters and load coils) used to 
establish the transmission path to the end-user customer premises as 
well as any inside wire owned or controlled by the incumbent LEC that is 
part of that transmission path.
    (1) Copper loops. An incumbent LEC shall provide a requesting 
telecommunications carrier with nondiscriminatory access to the copper 
loop on an unbundled basis. A copper loop is a stand-alone local loop 
comprised entirely of copper wire or cable. Copper loops include two-
wire and four-wire analog voice-grade copper loops, digital copper loops 
(e.g., DS0s and integrated services digital network lines), as well as 
two-wire and four-wire copper loops conditioned to transmit the digital 
signals needed to provide digital subscriber line services, regardless 
of whether the copper loops are in service or held as spares. The copper 
loop includes attached electronics using time division multiplexing 
technology, but does not include packet switching capabilities as 
defined in paragraph (a)(2)(i) of this section. The availability of DS1 
and DS3 copper loops is subject to the requirements of paragraphs (a)(4) 
and (a)(5) of this section.
    (i) Line sharing. Beginning on the effective date of the 
Commission's Triennial Review Order, the high frequency portion of a 
copper loop shall no longer be required to be provided as an unbundled 
network element, subject to the transitional line sharing conditions in 
paragraphs (a)(1)(i)(A) and (a)(1)(i)(B) of this section. Line sharing 
is the process by which a requesting telecommunications carrier provides 
digital subscriber line service over the same copper loop that the 
incumbent LEC uses to provide voice service, with the incumbent LEC 
using the low frequency portion of the loop and the requesting 
telecommunications carrier using the high frequency portion of the loop. 
The high frequency portion of the loop consists of the frequency range 
on the copper loop above the range that carries analog circuit-switched 
voice transmissions. This portion of the loop includes the features, 
functions, and capabilities of the loop that are used to establish a 
complete transmission path on the high frequency range between the 
incumbent LEC's distribution frame (or its equivalent) in its central 
office and the demarcation point at the end-user customer premises, and 
includes the high frequency portion of any inside wire owned or 
controlled by the incumbent LEC.
    (A) Line sharing customers before the effective date of the 
Commission's Triennial Review Order. An incumbent LEC shall provide a 
requesting telecommunications carrier with the ability to engage in line 
sharing over a copper loop where, prior to the effective date of the 
Commission's Triennial Review Order, the requesting telecommunications 
carrier began providing digital subscriber line service to a particular 
end-user customer and has not ceased providing digital subscriber line 
service to that customer. Until such end-user customer cancels or 
otherwise discontinues its subscription to the digital subscriber line 
service of the requesting telecommunications carrier, or its successor 
or assign, an incumbent LEC shall continue to provide access to the high 
frequency portion of the loop at the same rate that the incumbent LEC 
charged for such access prior to the effective date of the Commission's 
Triennial Review Order.
    (B) Line sharing customers on or after the effective date of the 
Commission's Triennial Review Order. An incumbent LEC shall provide a 
requesting telecommunications carrier with the ability to engage in line 
sharing over a copper loop, between the effective date of the 
Commission's Triennial Review Order and three years after that effective 
date, where the requesting telecommunications carrier began providing 
digital subscriber line service to a particular end-user customer on or 
before the date one year after that effective date. Beginning three 
years after the effective date of the Commission's Triennial Review 
Order, the incumbent LEC is no longer required to provide a requesting 
telecommunications carrier with the ability to engage in line sharing 
for this end-user

[[Page 34]]

customer or any new end-user customer. Between the effective date of the 
Commission's Triennial Review Order and three years after that effective 
date, an incumbent LEC shall provide a requesting telecommunications 
carrier with access to the high frequency portion of a copper loop in 
order to serve line sharing customers obtained between the effective 
date of the Commission's Triennial Review Order and one year after that 
effective date in the following manner:
    (1) During the first year following the effective date of the 
Commission's Triennial Review Order, the incumbent LEC shall provide 
access to the high frequency portion of a copper loop at 25 percent of 
the state-approved monthly recurring rate, or 25 percent of the monthly 
recurring rate set forth in the incumbent LEC's and requesting 
telecommunications carrier's interconnection agreement, for access to a 
copper loop in effect on that date.
    (2) Beginning one year plus one day after the effective date of the 
Commission's Triennial Review Order until two years after that effective 
date, the incumbent LEC shall provide access to the high frequency 
portion of a copper loop at 50 percent of the state-approved monthly 
recurring rate, or 50 percent of the monthly recurring rate set forth in 
the incumbent LEC's and requesting telecommunications carrier's 
interconnection agreement, for access to a copper loop in effect on the 
effective date of the Commission's Triennial Review Order.
    (3) Beginning two years plus one day after effective date of the 
Commission's Triennial Review Order until three years after that 
effective date, the incumbent LEC shall provide access to the high 
frequency portion of a copper loop at 75 percent of the state-approved 
monthly recurring rate, or 75 percent of the monthly recurring rate set 
forth in the incumbent LEC's and requesting telecommunications carrier's 
interconnection agreement, for access to a copper loop in effect on the 
effective date of the Commission's Triennial Review Order.
    (ii) Line splitting. An incumbent LEC shall provide a requesting 
telecommunications carrier that obtains an unbundled copper loop from 
the incumbent LEC with the ability to engage in line splitting 
arrangements with another competitive LEC using a splitter collocated at 
the central office where the loop terminates into a distribution frame 
or its equivalent. Line splitting is the process in which one 
competitive LEC provides narrowband voice service over the low frequency 
portion of a copper loop and a second competitive LEC provides digital 
subscriber line service over the high frequency portion of that same 
loop.
    (A) An incumbent LEC's obligation, under paragraph (a)(1)(ii) of 
this section, to provide a requesting telecommunications carrier with 
the ability to engage in line splitting applies regardless of whether 
the carrier providing voice service provides its own switching or 
obtains local circuit switching as an unbundled network element pursuant 
to paragraph (d) of this section.
    (B) An incumbent LEC must make all necessary network modifications, 
including providing nondiscriminatory access to operations support 
systems necessary for pre-ordering, ordering, provisioning, maintenance 
and repair, and billing for loops used in line splitting arrangements.
    (iii) Line conditioning. The incumbent LEC shall condition a copper 
loop at the request of the carrier seeking access to a copper loop under 
paragraph (a)(1) of this section, the high frequency portion of a copper 
loop under paragraph (a)(1)(i) of this section, or a copper subloop 
under paragraph (b) of this section to ensure that the copper loop or 
copper subloop is suitable for providing digital subscriber line 
services, including those provided over the high frequency portion of 
the copper loop or copper subloop, whether or not the incumbent LEC 
offers advanced services to the end-user customer on that copper loop or 
copper subloop. If the incumbent LEC seeks compensation from the 
requesting telecommunications carrier for line conditioning, the 
requesting telecommunications carrier has the option of refusing, in 
whole or in part, to have the line conditioned; and a requesting 
telecommunications carrier's refusal of some or all aspects of line 
conditioning will not diminish any right it may

[[Page 35]]

have, under paragraphs (a) and (b) of this section, to access the copper 
loop, the high frequency portion of the copper loop, or the copper 
subloop.
    (A) Line conditioning is defined as the removal from a copper loop 
or copper subloop of any device that could diminish the capability of 
the loop or subloop to deliver high-speed switched wireline 
telecommunications capability, including digital subscriber line 
service. Such devices include, but are not limited to, bridge taps, load 
coils, low pass filters, and range extenders.
    (B) Incumbent LECs shall recover the costs of line conditioning from 
the requesting telecommunications carrier in accordance with the 
Commission's forward-looking pricing principles promulgated pursuant to 
section 252(d)(1) of the Act and in compliance with rules governing 
nonrecurring costs in Sec. 51.507(e).
    (C) Insofar as it is technically feasible, the incumbent LEC shall 
test and report troubles for all the features, functions, and 
capabilities of conditioned copper lines, and may not restrict its 
testing to voice transmission only.
    (D) Where the requesting telecommunications carrier is seeking 
access to the high frequency portion of a copper loop or copper subloop 
pursuant to paragraphs (a) or (b) of this section and the incumbent LEC 
claims that conditioning that loop or subloop will significantly 
degrade, as defined in Sec. 51.233, the voiceband services that the 
incumbent LEC is currently providing over that loop or subloop, the 
incumbent LEC must either:
    (1) Locate another copper loop or copper subloop that has been or 
can be conditioned, migrate the incumbent LEC's voiceband service to 
that loop or subloop, and provide the requesting telecommunications 
carrier with access to the high frequency portion of that alternative 
loop or subloop; or
    (2) Make a showing to the state commission that the original copper 
loop or copper subloop cannot be conditioned without significantly 
degrading voiceband services on that loop or subloop, as defined in 
Sec. 51.233, and that there is no adjacent or alternative copper loop 
or copper subloop available that can be conditioned or to which the end-
user customer's voiceband service can be moved to enable line sharing.
    (E) If, after evaluating the incumbent LEC's showing under paragraph 
(a)(1)(iii)(D)(2) of this section, the state commission concludes that a 
copper loop or copper subloop cannot be conditioned without 
significantly degrading the voiceband service, the incumbent LEC cannot 
then or subsequently condition that loop or subloop to provide advanced 
services to its own customers without first making available to any 
requesting telecommunications carrier the high frequency portion of the 
newly conditioned loop or subloop.
    (iv) Maintenance, repair, and testing. (A) An incumbent LEC shall 
provide, on a nondiscriminatory basis, physical loop test access points 
to a requesting telecommunications carrier at the splitter, through a 
cross-connection to the requesting telecommunications carrier's 
collocation space, or through a standardized interface, such as an 
intermediate distribution frame or a test access server, for the purpose 
of testing, maintaining, and repairing copper loops and copper subloops.
    (B) An incumbent LEC seeking to utilize an alternative physical 
access methodology may request approval to do so from the state 
commission, but must show that the proposed alternative method is 
reasonable and nondiscriminatory, and will not disadvantage a requesting 
telecommunications carrier's ability to perform loop or service testing, 
maintenance, or repair.
    (v) Control of the loop and splitter functionality. In situations 
where a requesting telecommunications carrier is obtaining access to the 
high frequency portion of a copper loop either through a line sharing or 
line splitting arrangement, the incumbent LEC may maintain control over 
the loop and splitter equipment and functions, and shall provide to the 
requesting telecommunications carrier loop and splitter functionality 
that is compatible with any transmission technology that the requesting 
telecommunications carrier seeks to deploy using the high frequency 
portion of the loop, as defined in paragraph (a)(1)(i) of this section, 
provided that such transmission technology is presumed to be deployable 
pursuant to Sec. 51.230.

[[Page 36]]

    (2) Hybrid loops. A hybrid loop is a local loop composed of both 
fiber optic cable, usually in the feeder plant, and copper wire or 
cable, usually in the distribution plant.
    (i) Packet switching facilities, features, functions, and 
capabilities. An incumbent LEC is not required to provide unbundled 
access to the packet switched features, functions and capabilities of 
its hybrid loops. Packet switching capability is the routing or 
forwarding of packets, frames, cells, or other data units based on 
address or other routing information contained in the packets, frames, 
cells or other data units, and the functions that are performed by the 
digital subscriber line access multiplexers, including but not limited 
to the ability to terminate an end-user customer's copper loop (which 
includes both a low-band voice channel and a high-band data channel, or 
solely a data channel); the ability to forward the voice channels, if 
present, to a circuit switch or multiple circuit switches; the ability 
to extract data units from the data channels on the loops; and the 
ability to combine data units from multiple loops onto one or more 
trunks connecting to a packet switch or packet switches.
    (ii) Broadband services. When a requesting telecommunications 
carrier seeks access to a hybrid loop for the provision of broadband 
services, an incumbent LEC shall provide the requesting 
telecommunications carrier with nondiscriminatory access to the time 
division multiplexing features, functions, and capabilities of that 
hybrid loop, including DS1 or DS3 capacity (where impairment has been 
found to exist), on an unbundled basis to establish a complete 
transmission path between the incumbent LEC's central office and an end 
user's customer premises. This access shall include access to all 
features, functions, and capabilities of the hybrid loop that are not 
used to transmit packetized information.
    (iii) Narrowband services. When a requesting telecommunications 
carrier seeks access to a hybrid loop for the provision of narrowband 
services, the incumbent LEC may either:
    (A) Provide nondiscriminatory access, on an unbundled basis, to an 
entire hybrid loop capable of voice-grade service (i.e., equivalent to 
DS0 capacity), using time division multiplexing technology; or
    (B) Provide nondiscriminatory access to a spare home-run copper loop 
serving that customer on an unbundled basis.
    (3) Fiber loops. (i) Definitions. (A) Fiber-to-the-home loops. A 
fiber-to-the-home loop is a local loop consisting entirely of fiber 
optic cable, whether dark or lit, serving an end user's customer 
premises or, in the case of predominantly residential multiple dwelling 
units (MDUs), a fiber optic cable, whether dark or lit, that extends to 
the multiunit premises' minimum point of entry (MPOE).
    (B) Fiber-to-the-curb loops. A fiber-to-the-curb loop is a local 
loop consisting of fiber optic cable connecting to a copper distribution 
plant that is not more than 500 feet from the customer's premises or, in 
the case of predominantly residential MDUs, not more than 500 feet from 
the MDU's MPOE. The fiber optic cable in a fiber-to-the-curb loop must 
connect to a copper distribution plant at a serving area interface from 
which every other copper distribution subloop also is not more than 500 
feet from the respective customer's premises.
    (ii) New builds. An incumbent LEC is not required to provide 
nondiscriminatory access to a fiber-to-the-home loop or a fiber-to-the-
curb loop on an unbundled basis when the incumbent LEC deploys such a 
loop to an end user's customer premises that previously has not been 
served by any loop facility.
    (iii) Overbuilds. An incumbent LEC is not required to provide 
nondiscriminatory access to a fiber-to-the-home loop or a fiber-to-the-
curb loop on an unbundled basis when the incumbent LEC has deployed such 
a loop parallel to, or in replacement of, an existing copper loop 
facility, except that:
    (A) The incumbent LEC must maintain the existing copper loop 
connected to the particular customer premises after deploying the fiber-
to-the-home loop or the fiber-to-the-curb loop and provide 
nondiscriminatory access to that copper loop on an unbundled basis 
unless the incumbent LEC retires the

[[Page 37]]

copper loops pursuant to paragraph (a)(3)(iv) of this section.
    (B) An incumbent LEC that maintains the existing copper loops 
pursuant to paragraph (a)(3)(iii)(A) of this section need not incur any 
expenses to ensure that the existing copper loop remains capable of 
transmitting signals prior to receiving a request for access pursuant to 
that paragraph, in which case the incumbent LEC shall restore the copper 
loop to serviceable condition upon request.
    (C) An incumbent LEC that retires the copper loop pursuant to 
paragraph (a)(3)(iv) of this section shall provide nondiscriminatory 
access to a 64 kilobits per second transmission path capable of voice 
grade service over the fiber-to-the-home loop or fiber-to-the-curb loop 
on an unbundled basis.
    (iv) Retirement of copper loops or copper subloops. Prior to 
retiring any copper loop or copper subloop that has been replaced with a 
fiber-to-the-home loop or a fiber-to-the-curb loop, an incumbent LEC 
must comply with:
    (A) The network disclosure requirements set forth in section 
251(c)(5) of the Act and in Sec. 51.325 through Sec. 51.335; and
    (B) Any applicable state requirements.
    (4) DS1 loops. (i) Subject to the cap described in paragraph 
(a)(4)(ii) of this section, an incumbent LEC shall provide a requesting 
telecommunications carrier with nondiscriminatory access to a DS1 loop 
on an unbundled basis to any building not served by a wire center with 
at least 60,000 business lines and at least four fiber-based 
collocators. Once a wire center exceeds both of these thresholds, no 
future DS1 loop unbundling will be required in that wire center. A DS1 
loop is a digital local loop having a total digital signal speed of 
1.544 megabytes per second. DS1 loops include, but are not limited to, 
two-wire and four-wire copper loops capable of providing high-bit rate 
digital subscriber line services, including T1 services.
    (ii) Cap on unbundled DS1 loop circuits. A requesting 
telecommunications carrier may obtain a maximum of ten unbundled DS1 
loops to any single building in which DS1 loops are available as 
unbundled loops.
    (iii) Transition period for DS1 loop circuits. For a 12-month period 
beginning on the effective date of the Triennial Review Remand Order, 
any DS1 loop UNEs that a competitive LEC leases from the incumbent LEC 
as of that date, but which the incumbent LEC is not obligated to 
unbundle pursuant to paragraphs (a)(4)(i) or (a)(4)(ii) of this section, 
shall be available for lease from the incumbent LEC at a rate equal to 
the higher of 115% of the rate the requesting carrier paid for the loop 
element on June 15, 2004, or, 115% of the rate the state commission has 
established or establishes, if any, between June 16, 2004, and the 
effective date of the Triennial Review Remand Order, for that loop 
element. Where incumbent LECs are not required to provide unbundled DS1 
loops pursuant to paragraphs (a)(4)(i) or (a)(4)(ii) of this section, 
requesting carriers may not obtain new DS1 loops as unbundled network 
elements.
    (5) DS3 loops. (i) Subject to the cap described in paragraph 
(a)(5)(ii) of this section, an incumbent LEC shall provide a requesting 
telecommunications carrier with nondiscriminatory access to a DS3 loop 
on an unbundled basis to any building not served by a wire center with 
at least 38,000 business lines and at least four fiber-based 
collocators. Once a wire center exceeds both of these thresholds, no 
future DS3 loop unbundling will be required in that wire center. A DS3 
loop is a digital local loop having a total digital signal speed of 
44.736 megabytes per second.
    (ii) Cap on unbundled DS3 loop circuits. A requesting 
telecommunications carrier may obtain a maximum of a single unbundled 
DS3 loop to any single building in which DS3 loops are available as 
unbundled loops.
    (iii) Transition period for DS3 loop circuits. For a 12-month period 
beginning on the effective date of the Triennial Review Remand Order, 
any DS3 loop UNEs that a competitive LEC leases from the incumbent LEC 
as of that date, but which the incumbent LEC is not obligated to 
unbundle pursuant to paragraphs (a)(5)(i) or (a)(5)(ii) of this section, 
shall be available for lease from the incumbent LEC at a rate equal to 
the higher of 115% of the rate

[[Page 38]]

the requesting carrier paid for the loop element on June 15, 2004, or, 
115% of the rate the state commission has established or establishes, if 
any, between June 16, 2004, and the effective date of the Triennial 
Review Remand Order, for that loop element. Where incumbent LECs are not 
required to provide unbundled DS3 loops pursuant to paragraphs (a)(5)(i) 
or (a)(5)(ii) of this section, requesting carriers may not obtain new 
DS3 loops as unbundled network elements.
    (6) Dark fiber loops. (i) An incumbent LEC is not required to 
provide requesting telecommunications carriers with access to a dark 
fiber loop on an unbundled basis. Dark fiber is fiber within an existing 
fiber optic cable that has not yet been activated through optronics to 
render it capable of carrying communications services.
    (ii) Transition period for dark fiber loop circuits. For an 18-month 
period beginning on the effective date of the Triennial Review Remand 
Order, any dark fiber loop UNEs that a competitive LEC leases from the 
incumbent LEC as of that date shall be available for lease from the 
incumbent LEC at a rate equal to the higher of 115% of the rate the 
requesting carrier paid for the loop element on June 15, 2004, or, 115% 
of the rate the state commission has established or establishes, if any, 
between June 16, 2004, and the effective date of the Triennial Review 
Remand Order, for that loop element. Requesting carriers may not obtain 
new dark fiber loops as unbundled network elements.
    (7) Routine network modifications. (i) An incumbent LEC shall make 
all routine network modifications to unbundled loop facilities used by 
requesting telecommunications carriers where the requested loop facility 
has already been constructed. An incumbent LEC shall perform these 
routine network modifications to unbundled loop facilities in a 
nondiscriminatory fashion, without regard to whether the loop facility 
being accessed was constructed on behalf, or in accordance with the 
specifications, of any carrier.
    (ii) A routine network modification is an activity that the 
incumbent LEC regularly undertakes for its own customers. Routine 
network modifications include, but are not limited to, rearranging or 
splicing of cable; adding an equipment case; adding a doubler or 
repeater; adding a smart jack; installing a repeater shelf; adding a 
line card; deploying a new multiplexer or reconfiguring an existing 
multiplexer; and attaching electronic and other equipment that the 
incumbent LEC ordinarily attaches to a DS1 loop to activate such loop 
for its own customer. They also include activities needed to enable a 
requesting telecommunications carrier to obtain access to a dark fiber 
loop. Routine network modifications may entail activities such as 
accessing manholes, deploying bucket trucks to reach aerial cable, and 
installing equipment casings. Routine network modifications do not 
include the construction of a new loop, or the installation of new 
aerial or buried cable for a requesting telecommunications carrier.
    (8) Engineering policies, practices, and procedures. An incumbent 
LEC shall not engineer the transmission capabilities of its network in a 
manner, or engage in any policy, practice, or procedure, that disrupts 
or degrades access to a local loop or subloop, including the time 
division multiplexing-based features, functions, and capabilities of a 
hybrid loop, for which a requesting telecommunications carrier may 
obtain or has obtained access pursuant to paragraph (a) of this section.
    (b) Subloops. An incumbent LEC shall provide a requesting 
telecommunications carrier with nondiscriminatory access to subloops on 
an unbundled basis in accordance with section 251(c)(3) of the Act and 
this part and as set forth in paragraph (b) of this section.
    (1) Copper subloops. An incumbent LEC shall provide a requesting 
telecommunications carrier with nondiscriminatory access to a copper 
subloop on an unbundled basis. A copper subloop is a portion of a copper 
loop, or hybrid loop, comprised entirely of copper wire or copper cable 
that acts as a transmission facility between any point of technically 
feasible access in an incumbent LEC's outside plant, including inside 
wire owned or controlled by the incumbent LEC, and the end-user customer 
premises. A copper

[[Page 39]]

subloop includes all intermediate devices (including repeaters and load 
coils) used to establish a transmission path between a point of 
technically feasible access and the demarcation point at the end-user 
customer premises, and includes the features, functions, and 
capabilities of the copper loop. Copper subloops include two-wire and 
four-wire analog voice-grade subloops as well as two-wire and four-wire 
subloops conditioned to transmit the digital signals needed to provide 
digital subscriber line services, regardless of whether the subloops are 
in service or held as spares.
    (i) Point of technically feasible access. A point of technically 
feasible access is any point in the incumbent LEC's outside plant where 
a technician can access the copper wire within a cable without removing 
a splice case. Such points include, but are not limited to, a pole or 
pedestal, the serving area interface, the network interface device, the 
minimum point of entry, any remote terminal, and the feeder/distribution 
interface. An incumbent LEC shall, upon a site-specific request, provide 
access to a copper subloop at a splice near a remote terminal. The 
incumbent LEC shall be compensated for providing this access in 
accordance with Sec. Sec. 51.501 through 51.515.
    (ii) Rules for collocation. Access to the copper subloop is subject 
to the Commission's collocation rules at Sec. Sec. 51.321 and 51.323.
    (2) Subloops for access to multiunit premises wiring. An incumbent 
LEC shall provide a requesting telecommunications carrier with 
nondiscriminatory access to the subloop for access to multiunit premises 
wiring on an unbundled basis regardless of the capacity level or type of 
loop that the requesting telecommunications carrier seeks to provision 
for its customer. The subloop for access to multiunit premises wiring is 
defined as any portion of the loop that it is technically feasible to 
access at a terminal in the incumbent LEC's outside plant at or near a 
multiunit premises. One category of this subloop is inside wire, which 
is defined for purposes of this section as all loop plant owned or 
controlled by the incumbent LEC at a multiunit customer premises between 
the minimum point of entry as defined in Sec. 68.105 of this chapter 
and the point of demarcation of the incumbent LEC's network as defined 
in Sec. 68.3 of this chapter.
    (i) Point of technically feasible access. A point of technically 
feasible access is any point in the incumbent LEC's outside plant at or 
near a multiunit premises where a technician can access the wire or 
fiber within the cable without removing a splice case to reach the wire 
or fiber within to access the wiring in the multiunit premises. Such 
points include, but are not limited to, a pole or pedestal, the network 
interface device, the minimum point of entry, the single point of 
interconnection, and the feeder/distribution interface.
    (ii) Single point of interconnection. Upon notification by a 
requesting telecommunications carrier that it requests interconnection 
at a multiunit premises where the incumbent LEC owns, controls, or 
leases wiring, the incumbent LEC shall provide a single point of 
interconnection that is suitable for use by multiple carriers. This 
obligation is in addition to the incumbent LEC's obligations, under 
paragraph (b)(2) of this section, to provide nondiscriminatory access to 
a subloop for access to multiunit premises wiring, including any inside 
wire, at any technically feasible point. If the parties are unable to 
negotiate rates, terms, and conditions under which the incumbent LEC 
will provide this single point of interconnection, then any issues in 
dispute regarding this obligation shall be resolved in state proceedings 
under section 252 of the Act.
    (3) Other subloop provisions--(i) Technical feasibility. If parties 
are unable to reach agreement through voluntary negotiations as to 
whether it is technically feasible, or whether sufficient space is 
available, to unbundle a copper subloop or subloop for access to 
multiunit premises wiring at the point where a telecommunications 
carrier requests, the incumbent LEC shall have the burden of 
demonstrating to the state commission, in state proceedings under 
section 252 of the Act, that there is not sufficient space available, or 
that it is not technically feasible to

[[Page 40]]

unbundle the subloop at the point requested.
    (ii) Best practices. Once one state commission has determined that 
it is technically feasible to unbundle subloops at a designated point, 
an incumbent LEC in any state shall have the burden of demonstrating to 
the state commission, in state proceedings under section 252 of the Act, 
that it is not technically feasible, or that sufficient space is not 
available, to unbundle its own loops at such a point.
    (c) Network interface device. Apart from its obligation to provide 
the network interface device functionality as part of an unbundled loop 
or subloop, an incumbent LEC also shall provide nondiscriminatory access 
to the network interface device on an unbundled basis, in accordance 
with section 251(c)(3) of the Act and this part. The network interface 
device element is a stand-alone network element and is defined as any 
means of interconnection of customer premises wiring to the incumbent 
LEC's distribution plant, such as a cross-connect device used for that 
purpose. An incumbent LEC shall permit a requesting telecommunications 
carrier to connect its own loop facilities to on-premises wiring through 
the incumbent LEC's network interface device, or at any other 
technically feasible point.
    (d) Local circuit switching. An incumbent LEC shall provide a 
requesting telecommunications carrier with nondiscriminatory access to 
local circuit switching, including tandem switching, on an unbundled 
basis, in accordance with section 251(c)(3) of the Act and this part and 
as set forth in paragraph (d) of this section.
    (1) Definition. Local circuit switching is defined as follows:
    (i) Local circuit switching encompasses all line-side and trunk-side 
facilities, plus the features, functions, and capabilities of the 
switch. The features, functions, and capabilities of the switch shall 
include the basic switching function of connecting lines to lines, lines 
to trunks, trunks to lines, and trunks to trunks.
    (ii) Local circuit switching includes all vertical features that the 
switch is capable of providing, including custom calling, custom local 
area signaling services features, and Centrex, as well as any 
technically feasible customized routing functions.
    (2) DS0 capacity (i.e., mass market) determinations. (i) An 
incumbent LEC is not required to provide access to local circuit 
switching on an unbundled basis to requesting telecommunications 
carriers for the purpose of serving end-user customers using DS0 
capacity loops.
    (ii) Each requesting telecommunications carrier shall migrate its 
embedded base of end-user customers off of the unbundled local circuit 
switching element to an alternative arrangement within 12 months of the 
effective date of the Triennial Review Remand Order.
    (iii) Notwithstanding paragraph (d)(2)(i) of this section, for a 12-
month period from the effective date of the Triennial Review Remand 
Order, an incumbent LEC shall provide access to local circuit switching 
on an unbundled basis for a requesting carrier to serve its embedded 
base of end-user customers. The price for unbundled local circuit 
switching in combination with unbundled DS0 capacity loops and shared 
transport obtained pursuant to this paragraph shall be the higher of the 
rate at which the requesting carrier obtained that combination of 
network elements on June 15, 2004 plus one dollar, or, the rate the 
state public utility commission establishes, if any, between June 16, 
2004, and the effective date of the Triennial Review Remand Order, for 
that combination of network elements, plus one dollar. Requesting 
carriers may not obtain new local switching as an unbundled network 
element.
    (3) DS1 capacity and above (i.e., enterprise market) determinations. 
An incumbent LEC is not required to provide access to local circuit 
switching on an unbundled basis to requesting telecommunications 
carriers for the purpose of serving end-user customers using DS1 
capacity and above loops except where the state commission petitions 
this Commission for waiver of this finding in accordance with the 
conditions set forth in paragraph (d)(3)(i) of this section and the 
Commission grants such waiver.

[[Page 41]]

    (i) State commission inquiry. In its petition, a state commission 
wishing to rebut the Commission's finding should petition the Commission 
to show that requesting telecommunications carriers are impaired without 
access to local circuit switching to serve end users using DS1 capacity 
and above loops in a particular geographic market as defined in 
accordance with paragraph (d)(2)(i) of this section if it finds that 
operational or economic barriers exist in that market.
    (A) In making this showing, the state commission shall consider the 
following operational characteristics: incumbent LEC performance in 
provisioning loops; difficulties associated with obtaining collocation 
space due to lack of space or delays in provisioning by the incumbent 
LEC; and the difficulties associated with obtaining cross-connects in 
the incumbent LEC's wire center.
    (B) In making this showing, the state commission shall consider the 
following economic characteristics: the cost of entry into a particular 
market, including those caused by both operational and economic barriers 
to entry; requesting telecommunications carriers' potential revenues 
from serving enterprise customers in that market, including all likely 
revenues to be gained from entering that market; the prices requesting 
telecommunications carriers are likely to be able to charge in that 
market, based on a consideration of the prevailing retail rates the 
incumbent LEC charges to the different classes of customers in the 
different parts of the state.
    (ii) Transitional four-line carve-out. Until the state commission 
completes the review described in paragraph (b)(2)(iii)(B)(4) of this 
section, an incumbent LEC shall comply with the four-line ``carve-out'' 
for unbundled switching established in Implementation of the Local 
Competition Provisions of the Telecommunications Act of 1996, CC Docket 
No. 96-98, Third Report and Order and Fourth Further Notice of Proposed 
Rulemaking, 15 FCC Rcd 3822-31, paras. 276-98 (1999), reversed and 
remanded in part sub. nom. United States Telecom Ass'n v. FCC, 290 F.3d 
415 (D.C. Cir. 2002).
    (A) DS1 capacity and above end-user transition. Each requesting 
telecommunications carrier shall transfer its end-user customers served 
using DS1 and above capacity loops and unbundled local circuit switching 
to an alternative arrangement within 90 days from the end of the 90-day 
state commission consideration period set forth in paragraph (d)(5)(i), 
unless a longer period is necessary to comply with a ``change of law'' 
provision in an applicable interconnection agreement.
    (4) Other elements to be unbundled. Elements relating to the local 
circuit switching element shall be made available on an unbundled basis 
to a requesting carrier to the extent that the requesting carrier is 
entitled to unbundled local circuit switching as set forth in paragraph 
(d)(2) of this section.
    (i) An incumbent LEC shall provide a requesting telecommunications 
carrier with nondiscriminatory access to signaling, call-related 
databases, and shared transport facilities on an unbundled basis, in 
accordance with section 251(c)(3) of the Act and this part, to the 
extent that local circuit switching is required to be made available 
pursuant to paragraph (d)(2)(iii) of this section. These elements are 
defined as follows:
    (A) Signaling networks. Signaling networks include, but are not 
limited to, signaling links and signaling transfer points.
    (B) Call-related databases. Call-related databases are defined as 
databases, other than operations support systems, that are used in 
signaling networks for billing and collection, or the transmission, 
routing, or other provision of a telecommunications service. Where a 
requesting telecommunications carrier purchases unbundled local circuit 
switching from an incumbent LEC, an incumbent LEC shall allow a 
requesting telecommunications carrier to use the incumbent LEC's service 
control point element in the same manner, and via the same signaling 
links, as the incumbent LEC itself.
    (1) Call-related databases include, but are not limited to, the 
calling name database, 911 database, E911 database, line information 
database, toll

[[Page 42]]

free calling database, advanced intelligent network databases, and 
downstream number portability databases by means of physical access at 
the signaling transfer point linked to the unbundled databases.
    (2) Service management systems are defined as computer databases or 
systems not part of the public switched network that interconnect to the 
service control point and send to the service control point information 
and call processing instructions needed for a network switch to process 
and complete a telephone call, and provide a telecommunications carrier 
with the capability of entering and storing data regarding the 
processing and completing of a telephone call. Where a requesting 
telecommunications carrier purchases unbundled local circuit switching 
from an incumbent LEC, the incumbent LEC shall allow a requesting 
telecommunications carrier to use the incumbent LEC's service management 
systems by providing a requesting telecommunications carrier with the 
information necessary to enter correctly, or format for entry, the 
information relevant for input into the incumbent LEC's service 
management system, including access to design, create, test, and deploy 
advanced intelligent network-based services at the service management 
system, through a service creation environment, that the incumbent LEC 
provides to itself.
    (3) An incumbent LEC shall not be required to unbundle the services 
created in the advanced intelligent network platform and architecture 
that qualify for proprietary treatment.
    (C) Shared transport. Shared transport is defined as the 
transmission facilities shared by more than one carrier, including the 
incumbent LEC, between end office switches, between end office switches 
and tandem switches, and between tandem switches, in the incumbent LEC 
network.
    (ii) An incumbent LEC shall provide a requesting telecommunications 
carrier nondiscriminatory access to operator services and directory 
assistance on an unbundled basis, in accordance with section 251(c)(3) 
of the Act and this part, to the extent that local circuit switching is 
required to be unbundled by a state commission, if the incumbent LEC 
does not provide that requesting telecommunications carrier with 
customized routing, or a compatible signaling protocol, necessary to use 
either a competing provider's operator services and directory assistance 
platform or the requesting telecommunications carrier's own platform. 
Operator services are any automatic or live assistance to a customer to 
arrange for billing or completion, or both, of a telephone call. 
Directory assistance is a service that allows subscribers to retrieve 
telephone numbers of other subscribers.
    (5) State commission proceedings. A state commission shall complete 
the proceedings necessary to satisfy the requirements in paragraphs 
(d)(2) and (d)(3) of this section in accordance with paragraphs 
(d)(5)(i) and (d)(5)(ii) of this section.
    (i) Timing. A state commission shall complete any initial review 
applying the triggers and criteria in paragraph (d)(2) of this section 
within nine months from the effective date of the Commission's Triennial 
Review Order. A state commission wishing to rebut the Commission's 
finding of non-impairment for DS1 and above enterprise switches must 
file a petition with the Commission in accordance with paragraph (d)(3) 
of this section within 90 days from that effective date.
    (ii) Continuing review. A state commission shall complete any 
subsequent review applying these triggers and criteria within six months 
of the filing of a petition or other pleading to conduct such a review.
    (e) Dedicated transport. An incumbent LEC shall provide a requesting 
telecommunications carrier with nondiscriminatory access to dedicated 
transport on an unbundled basis, in accordance with section 251(c)(3) of 
the Act and this part, as set forth in paragraphs (e) through (e)(4) of 
this section. A ``route'' is a transmission path between one of an 
incumbent LEC's wire centers or switches and another of the incumbent 
LEC's wire centers or switches. A route between two points (e.g., wire 
center or switch ``A'' and wire center or switch ``Z'') may pass through 
one or more intermediate wire centers or switches (e.g., wire center or

[[Page 43]]

switch ``X''). Transmission paths between identical end points (e.g., 
wire center or switch ``A'' and wire center or switch ``Z'') are the 
same ``route,'' irrespective of whether they pass through the same 
intermediate wire centers or switches, if any.
    (1) Definition. For purposes of this section, dedicated transport 
includes incumbent LEC transmission facilities between wire centers or 
switches owned by incumbent LECs, or between wire centers or switches 
owned by incumbent LECs and switches owned by requesting 
telecommunications carriers, including, but not limited to, DS1-, DS3-, 
and OCn-capacity level services, as well as dark fiber, dedicated to a 
particular customer or carrier.
    (2) Availability. (i) Entrance facilities. An incumbent LEC is not 
obligated to provide a requesting carrier with unbundled access to 
dedicated transport that does not connect a pair of incumbent LEC wire 
centers.
    (ii) Dedicated DS1 transport. Dedicated DS1 transport shall be made 
available to requesting carriers on an unbundled basis as set forth 
below. Dedicated DS1 transport consists of incumbent LEC interoffice 
transmission facilities that have a total digital signal speed of 1.544 
megabytes per second and are dedicated to a particular customer or 
carrier.
    (A) General availability of DS1 transport. Incumbent LECs shall 
unbundle DS1 transport between any pair of incumbent LEC wire centers 
except where, through application of tier classifications described in 
paragraph (e)(3) of this section, both wire centers defining the route 
are Tier 1 wire centers. As such, an incumbent LEC must unbundle DS1 
transport if a wire center at either end of a requested route is not a 
Tier 1 wire center, or if neither is a Tier 1 wire center.
    (B) Cap on unbundled DS1 transport circuits. A requesting 
telecommunications carrier may obtain a maximum of ten unbundled DS1 
dedicated transport circuits on each route where DS1 dedicated transport 
is available on an unbundled basis.
    (C) Transition period for DS1 transport circuits. For a 12-month 
period beginning on the effective date of the Triennial Review Remand 
Order, any DS1 dedicated transport UNE that a competitive LEC leases 
from the incumbent LEC as of that date, but which the incumbent LEC is 
not obligated to unbundle pursuant to paragraphs (e)(2)(ii)(A) or 
(e)(2)(ii)(B) of this section, shall be available for lease from the 
incumbent LEC at a rate equal to the higher of 115 percent of the rate 
the requesting carrier paid for the dedicated transport element on June 
15, 2004, or, 115 percent of the rate the state commission has 
established or establishes, if any, between June 16, 2004, and the 
effective date of the Triennial Review Remand Order, for that dedicated 
transport element. Where incumbent LECs are not required to provide 
unbundled DS1 transport pursuant to paragraphs (e)(2)(ii)(A) or 
(e)(2)(ii)(B) of this section, requesting carriers may not obtain new 
DS1 transport as unbundled network elements.
    (iii) Dedicated DS3 transport. Dedicated DS3 transport shall be made 
available to requesting carriers on an unbundled basis as set forth 
below. Dedicated DS3 transport consists of incumbent LEC interoffice 
transmission facilities that have a total digital signal speed of 44.736 
megabytes per second and are dedicated to a particular customer or 
carrier.
    (A) General availability of DS3 transport. Incumbent LECs shall 
unbundle DS3 transport between any pair of incumbent LEC wire centers 
except where, through application of tier classifications described in 
paragraph (e)(3) of this section, both wire centers defining the route 
are either Tier 1 or Tier 2 wire centers. As such, an incumbent LEC must 
unbundle DS3 transport if a wire center on either end of a requested 
route is a Tier 3 wire center.
    (B) Cap on unbundled DS3 transport circuits. A requesting 
telecommunications carrier may obtain a maximum of 12 unbundled DS3 
dedicated transport circuits on each route where DS3 dedicated transport 
is available on an unbundled basis.
    (C) Transition period for DS3 transport circuits. For a 12-month 
period beginning on the effective date of the Triennial Review Remand 
Order, any DS3

[[Page 44]]

dedicated transport UNE that a competitive LEC leases from the incumbent 
LEC as of that date, but which the incumbent LEC is not obligated to 
unbundle pursuant to paragraphs (e)(2)(iii)(A) or (e)(2)(iii)(B) of this 
section, shall be available for lease from the incumbent LEC at a rate 
equal to the higher of 115 percent of the rate the requesting carrier 
paid for the dedicated transport element on June 15, 2004, or, 115 
percent of the rate the state commission has established or establishes, 
if any, between June 16, 2004, and the effective date of the Triennial 
Review Remand Order, for that dedicated transport element. Where 
incumbent LECs are not required to provide unbundled DS3 transport 
pursuant to paragraphs (e)(2)(iii)(A) or (e)(2)(iii)(B) of this section, 
requesting carriers may not obtain new DS3 transport as unbundled 
network elements.
    (iv) Dark fiber transport. Dedicated dark fiber transport shall be 
made available to requesting carriers on an unbundled basis as set forth 
below. Dark fiber transport consists of unactivated optical interoffice 
transmission facilities.
    (A) General availability of dark fiber transport. Incumbent LECs 
shall unbundle dark fiber transport between any pair of incumbent LEC 
wire centers except where, though application of tier classifications 
described in paragraph (e)(3) of this section, both wire centers 
defining the route are either Tier 1 or Tier 2 wire centers. As such, an 
incumbent LEC must unbundle dark fiber transport if a wire center on 
either end of a requested route is a Tier 3 wire center.
    (B) Transition period for dark fiber transport circuits. For an 18-
month period beginning on the effective date of the Triennial Review 
Remand Order, any dark fiber dedicated transport UNE that a competitive 
LEC leases from the incumbent LEC as of that date, but which the 
incumbent LEC is not obligated to unbundle pursuant to paragraphs 
(e)(2)(iv)(A) or (e)(2)(iv)(B) of this section, shall be available for 
lease from the incumbent LEC at a rate equal to the higher of 115 
percent of the rate the requesting carrier paid for the dedicated 
transport element on June 15, 2004, or, 115 percent of the rate the 
state commission has established or establishes, if any, between June 
16, 2004, and the effective date of the Triennial Review Remand Order, 
for that dedicated transport element. Where incumbent LECs are not 
required to provide unbundled dark fiber transport pursuant to 
paragraphs (e)(2)(iv)(A) or (e)(2)(iv)(B) of this section, requesting 
carriers may not obtain new dark fiber transport as unbundled network 
elements.
    (3) Wire center tier structure. For purposes of this section, 
incumbent LEC wire centers shall be classified into three tiers, defined 
as follows:
    (i) Tier 1 wire centers are those incumbent LEC wire centers that 
contain at least four fiber-based collocators, at least 38,000 business 
lines, or both. Tier 1 wire centers also are those incumbent LEC tandem 
switching locations that have no line-side switching facilities, but 
nevertheless serve as a point of traffic aggregation accessible by 
competitive LECs. Once a wire center is determined to be a Tier 1 wire 
center, that wire center is not subject to later reclassification as a 
Tier 2 or Tier 3 wire center.
    (ii) Tier 2 wire centers are those incumbent LEC wire centers that 
are not Tier 1 wire centers, but contain at least 3 fiber-based 
collocators, at least 24,000 business lines, or both. Once a wire center 
is determined to be a Tier 2 wire center, that wire center is not 
subject to later reclassification as a Tier 3 wire center.
    (iii) Tier 3 wire centers are those incumbent LEC wire centers that 
do not meet the criteria for Tier 1 or Tier 2 wire centers.
    (4) Routine network modifications. (i) An incumbent LEC shall make 
all routine network modifications to unbundled dedicated transport 
facilities used by requesting telecommunications carriers where the 
requested dedicated transport facilities have already been constructed. 
An incumbent LEC shall perform all routine network modifications to 
unbundled dedicated transport facilities in a nondiscriminatory fashion, 
without regard to whether the facility being accessed was constructed on 
behalf, or in accordance with the specifications, of any carrier.

[[Page 45]]

    (ii) A routine network modification is an activity that the 
incumbent LEC regularly undertakes for its own customers. Routine 
network modifications include, but are not limited to, rearranging or 
splicing of cable; adding an equipment case; adding a doubler or 
repeater; installing a repeater shelf; and deploying a new multiplexer 
or reconfiguring an existing multiplexer. They also include activities 
needed to enable a requesting telecommunications carrier to light a dark 
fiber transport facility. Routine network modifications may entail 
activities such as accessing manholes, deploying bucket trucks to reach 
aerial cable, and installing equipment casings. Routine network 
modifications do not include the installation of new aerial or buried 
cable for a requesting telecommunications carrier.
    (f) 911 and E911 databases. An incumbent LEC shall provide a 
requesting telecommunications carrier with nondiscriminatory access to 
911 and E911 databases on an unbundled basis, in accordance with section 
251(c)(3) of the Act and this part.
    (g) Operations support systems. An incumbent LEC shall provide a 
requesting telecommunications carrier with nondiscriminatory access to 
operations support systems on an unbundled basis, in accordance with 
section 251(c)(3) of the Act and this part. Operations support system 
functions consist of pre-ordering, ordering, provisioning, maintenance 
and repair, and billing functions supported by an incumbent LEC's 
databases and information. An incumbent LEC, as part of its duty to 
provide access to the pre-ordering function, shall provide the 
requesting telecommunications carrier with nondiscriminatory access to 
the same detailed information about the loop that is available to the 
incumbent LEC.

[68 FR 52295, Sept. 4, 2003, as amended at 68 FR 64000, Nov. 12, 2003; 
69 FR 54591, Sept. 9, 2004; 69 FR 77953, Dec. 29, 2004; 70 FR 8953, Feb. 
24, 2005]



Sec. 51.320  Assumption of responsibility by the Commission.

    If a state commission fails to exercise its authority under Sec. 
51.319, any party seeking that the Commission step into the role of the 
state commission shall file with the Commission and serve on the state 
commission a petition that explains with specificity the bases for the 
petition and information that supports the claim that the state 
commission has failed to act. Subsequent to the Commission's issuing a 
public notice and soliciting comments on the petition from interested 
parties, the Commission will rule on the petition within 90 days of the 
date of the public notice. If it agrees that the state commission has 
failed to act, the Commission will assume responsibility for the 
proceeding, and within nine months from the date it assumed 
responsibility for the proceeding, make any findings in accordance with 
the Commission's rules.

[68 FR 52305, Sept. 2, 2003]



Sec. 51.321  Methods of obtaining interconnection and access to 
unbundled elements under section 251 of the Act.

    (a) Except as provided in paragraph (e) of this section, an 
incumbent LEC shall provide, on terms and conditions that are just, 
reasonable, and nondiscriminatory in accordance with the requirements of 
this part, any technically feasible method of obtaining interconnection 
or access to unbundled network elements at a particular point upon a 
request by a telecommunications carrier.
    (b) Technically feasible methods of obtaining interconnection or 
access to unbundled network elements include, but are not limited to:
    (1) Physical collocation and virtual collocation at the premises of 
an incumbent LEC; and
    (2) Meet point interconnection arrangements.
    (c) A previously successful method of obtaining interconnection or 
access to unbundled network elements at a particular premises or point 
on any incumbent LEC's network is substantial evidence that such method 
is technically feasible in the case of substantially similar network 
premises or points. A requesting telecommunications carrier seeking a 
particular collocation arrangement, either physical or virtual, is 
entitled to a presumption that such arrangement is

[[Page 46]]

technically feasible if any LEC has deployed such collocation 
arrangement in any incumbent LEC premises.
    (d) An incumbent LEC that denies a request for a particular method 
of obtaining interconnection or access to unbundled network elements on 
the incumbent LEC's network must prove to the state commission that the 
requested method of obtaining interconnection or access to unbundled 
network elements at that point is not technically feasible.
    (e) An incumbent LEC shall not be required to provide for physical 
collocation of equipment necessary for interconnection or access to 
unbundled network elements at the incumbent LEC's premises if it 
demonstrates to the state commission that physical collocation is not 
practical for technical reasons or because of space limitations. In such 
cases, the incumbent LEC shall be required to provide virtual 
collocation, except at points where the incumbent LEC proves to the 
state commission that virtual collocation is not technically feasible. 
If virtual collocation is not technically feasible, the incumbent LEC 
shall provide other methods of interconnection and access to unbundled 
network elements to the extent technically feasible.
    (f) An incumbent LEC shall submit to the state commission, subject 
to any protective order as the state commission may deem necessary, 
detailed floor plans or diagrams of any premises where the incumbent LEC 
claims that physical collocation is not practical because of space 
limitations. These floor plans or diagrams must show what space, if any, 
the incumbent LEC or any of its affiliates has reserved for future use, 
and must describe in detail the specific future uses for which the space 
has been reserved and the length of time for each reservation. An 
incumbent LEC that contends space for physical collocation is not 
available in an incumbent LEC premises must also allow the requesting 
carrier to tour the entire premises in question, not only the area in 
which space was denied, without charge, within ten days of the receipt 
of the incumbent's denial of space. An incumbent LEC must allow a 
requesting telecommunications carrier reasonable access to its selected 
collocation space during construction.
    (g) An incumbent LEC that is classified as a Class A company under 
Sec. 32.11 of this chapter and that is not a National Exchange Carrier 
Association interstate tariff participant as provided in part 69, 
subpart G, shall continue to provide expanded interconnection service 
pursuant to interstate tariff in accordance with Sec. Sec. 64.1401, 
64.1402, 69.121 of this chapter, and the Commission's other 
requirements.
    (h) Upon request, an incumbent LEC must submit to the requesting 
carrier within ten days of the submission of the request a report 
describing in detail the space that is available for collocation in a 
particular incumbent LEC premises. This report must specify the amount 
of collocation space available at each requested premises, the number of 
collocators, and any modifications in the use of the space since the 
last report. This report must also include measures that the incumbent 
LEC is taking to make additional space available for collocation. The 
incumbent LEC must maintain a publicly available document, posted for 
viewing on the incumbent LEC's publicly available Internet site, 
indicating all premises that are full, and must update such a document 
within ten days of the date at which a premises runs out of physical 
collocation space.
    (i) An incumbent LEC must, upon request, remove obsolete unused 
equipment from their premises to increase the amount of space available 
for collocation.

[61 FR 45619, Aug. 28, 1996, as amended at 64 FR 23241, Apr. 30, 1999; 
65 FR 54438, Sept. 8, 2000; 66 FR 43521, Aug. 20, 2001]



Sec. 51.323  Standards for physical collocation and virtual collocation.

    (a) An incumbent LEC shall provide physical collocation and virtual 
collocation to requesting telecommunications carriers.
    (b) An incumbent LEC shall permit the collocation and use of any 
equipment necessary for interconnection or access to unbundled network 
elements.
    (1) Equipment is necessary for interconnection if an inability to 
deploy that equipment would, as a practical,

[[Page 47]]

economic, or operational matter, preclude the requesting carrier from 
obtaining interconnection with the incumbent LEC at a level equal in 
quality to that which the incumbent obtains within its own network or 
the incumbent provides to any affiliate, subsidiary, or other party.
    (2) Equipment is necessary for access to an unbundled network 
element if an inability to deploy that equipment would, as a practical, 
economic, or operational matter, preclude the requesting carrier from 
obtaining nondiscriminatory access to that unbundled network element, 
including any of its features, functions, or capabilities.
    (3) Multi-functional equipment shall be deemed necessary for 
interconnection or access to an unbundled network element if and only if 
the primary purpose and function of the equipment, as the requesting 
carrier seeks to deploy it, meets either or both of the standards set 
forth in paragraphs (b)(1) and (b)(2) of this section. For a piece of 
equipment to be utilized primarily to obtain equal in quality 
interconnection or nondiscriminatory access to one or more unbundled 
network elements, there also must be a logical nexus between the 
additional functions the equipment would perform and the 
telecommunication services the requesting carrier seeks to provide to 
its customers by means of the interconnection or unbundled network 
element. The collocation of those functions of the equipment that, as 
stand-alone functions, do not meet either of the standards set forth in 
paragraphs (b)(1) and (b)(2) of this section must not cause the 
equipment to significantly increase the burden on the incumbent's 
property.
    (c) Whenever an incumbent LEC objects to collocation of equipment by 
a requesting telecommunications carrier for purposes within the scope of 
section 251(c)(6) of the Act, the incumbent LEC shall prove to the state 
commission that the equipment is not necessary for interconnection or 
access to unbundled network elements under the standards set forth in 
paragraph (b) of this section. An incumbent LEC may not object to the 
collocation of equipment on the grounds that the equipment does not 
comply with safety or engineering standards that are more stringent than 
the safety or engineering standards that the incumbent LEC applies to 
its own equipment. An incumbent LEC may not object to the collocation of 
equipment on the ground that the equipment fails to comply with Network 
Equipment and Building Specifications performance standards or any other 
performance standards. An incumbent LEC that denies collocation of a 
competitor's equipment, citing safety standards, must provide to the 
competitive LEC within five business days of the denial a list of all 
equipment that the incumbent LEC locates at the premises in question, 
together with an affidavit attesting that all of that equipment meets or 
exceeds the safety standard that the incumbent LEC contends the 
competitor's equipment fails to meet. This affidavit must set forth in 
detail: the exact safety requirement that the requesting carrier's 
equipment does not satisfy; the incumbent LEC's basis for concluding 
that the requesting carrier's equipment does not meet this safety 
requirement; and the incumbent LEC's basis for concluding why 
collocation of equipment not meeting this safety requirement would 
compromise network safety.
    (d) When an incumbent LEC provides physical collocation, virtual 
collocation, or both, the incumbent LEC shall:
    (1) Provide an interconnection point or points, physically 
accessible by both the incumbent LEC and the collocating 
telecommunications carrier, at which the fiber optic cable carrying an 
interconnector's circuits can enter the incumbent LEC's premises, 
provided that the incumbent LEC shall designate interconnection points 
as close as reasonably possible to its premises;
    (2) Provide at least two such interconnection points at each 
incumbent LEC premises at which there are at least two entry points for 
the incumbent LEC's cable facilities, and at which space is available 
for new facilities in at least two of those entry points;
    (3) Permit interconnection of copper or coaxial cable if such 
interconnection is first approved by the state commission; and

[[Page 48]]

    (4) Permit physical collocation of microwave transmission facilities 
except where such collocation is not practical for technical reasons or 
because of space limitations, in which case virtual collocation of such 
facilities is required where technically feasible.
    (e) When providing virtual collocation, an incumbent LEC shall, at a 
minimum, install, maintain, and repair collocated equipment meeting the 
standards set forth in paragraph (b) of this section within the same 
time periods and with failure rates that are no greater than those that 
apply to the performance of similar functions for comparable equipment 
of the incumbent LEC itself.
    (f) An incumbent LEC shall provide space for the collocation of 
equipment meeting the standards set forth in paragraph (b) of this 
section in accordance with the following requirements:
    (1) An incumbent LEC shall make space available within or on its 
premises to requesting telecommunications carriers on a first-come, 
first-served basis, provided, however, that the incumbent LEC shall not 
be required to lease or construct additional space to provide for 
physical collocation when existing space has been exhausted;
    (2) To the extent possible, an incumbent LEC shall make contiguous 
space available to requesting telecommunications carriers that seek to 
expand their existing collocation space;
    (3) When planning renovations of existing facilities or constructing 
or leasing new facilities, an incumbent LEC shall take into account 
projected demand for collocation of equipment;
    (4) An incumbent LEC may retain a limited amount of floor space for 
its own specific future uses, provided, however, that neither the 
incumbent LEC nor any of its affiliates may reserve space for future use 
on terms more favorable than those that apply to other 
telecommunications carriers seeking to reserve collocation space for 
their own future use;
    (5) An incumbent LEC shall relinquish any space held for future use 
before denying a request for virtual collocation on the grounds of space 
limitations, unless the incumbent LEC proves to the state commission 
that virtual collocation at that point is not technically feasible; and
    (6) An incumbent LEC may impose reasonable restrictions on the 
warehousing of unused space by collocating telecommunications carriers, 
provided, however, that the incumbent LEC shall not set maximum space 
limitations applicable to such carriers unless the incumbent LEC proves 
to the state commission that space constraints make such restrictions 
necessary.
    (7) An incumbent LEC must assign collocation space to requesting 
carriers in a just, reasonable, and nondiscriminatory manner. An 
incumbent LEC must allow each carrier requesting physical collocation to 
submit space preferences prior to assigning physical collocation space 
to that carrier. At a minimum, an incumbent LEC's space assignment 
policies and practices must meet the following principles:
    (A) An incumbent LEC's space assignment policies and practices must 
not materially increase a requesting carrier's collocation costs.
    (B) An incumbent LEC's space assignment policies and practices must 
not materially delay a requesting carrier occupation and use of the 
incumbent LEC's premises.
    (C) An incumbent LEC must not assign physical collocation space that 
will impair the quality of service or impose other limitations on the 
service a requesting carrier wishes to offer.
    (D) An incumbent LEC's space assignment policies and practices must 
not reduce unreasonably the total space available for physical 
collocation or preclude unreasonably physical collocation within the 
incumbent's premises.
    (g) An incumbent LEC shall permit collocating telecommunications 
carriers to collocate equipment and connect such equipment to unbundled 
network transmission elements obtained from the incumbent LEC, and shall 
not require such telecommunications carriers to bring their own 
transmission facilities to the incumbent LEC's premises in which they 
seek to collocate equipment.
    (h) As described in paragraphs (1) and (2) of this section, an 
incumbent LEC

[[Page 49]]

shall permit a collocating telecommunications carrier to interconnect 
its network with that of another collocating telecommunications carrier 
at the incumbent LEC's premises and to connect its collocated equipment 
to the collocated equipment of another telecommunications carrier within 
the same premises, provided that the collocated equipment is also used 
for interconnection with the incumbent LEC or for access to the 
incumbent LEC's unbundled network elements.
    (1) An incumbent LEC shall provide, at the request of a collocating 
telecommunications carrier, a connection between the equipment in the 
collocated spaces of two or more telecommunications carriers, except to 
the extent the incumbent LEC permits the collocating parties to provide 
the requested connection for themselves or a connection is not required 
under paragraph (h)(2) of this section. Where technically feasible, the 
incumbent LEC shall provide the connection using copper, dark fiber, lit 
fiber, or other transmission medium, as requested by the collocating 
telecommunications carrier.
    (2) An incumbent LEC is not required to provide a connection between 
the equipment in the collocated spaces of two or more telecommunications 
carriers if the connection is requested pursuant to section 201 of the 
Act, unless the requesting carrier submits to the incumbent LEC a 
certification that more than 10 percent of the amount of traffic to be 
transmitted through the connection will be interstate. The incumbent LEC 
cannot refuse to accept the certification, but instead must provision 
the service promptly. Any incumbent LEC may file a section 208 complaint 
with the Commission challenging the certification if it believes that 
the certification is deficient. No such certification is required for a 
request for such connection under section 251 of the Act.
    (i) As provided herein, an incumbent LEC may require reasonable 
security arrangements to protect its equipment and ensure network 
reliability. An incumbent LEC may only impose security arrangements that 
are as stringent as the security arrangements that the incumbent LEC 
maintains at its own premises for its own employees or authorized 
contractors. An incumbent LEC must allow collocating parties to access 
their collocated equipment 24 hours a day, seven days a week, without 
requiring either a security escort of any kind or delaying a 
competitor's employees' entry into the incumbent LEC's premises. An 
incumbent LEC may require a collocating carrier to pay only for the 
least expensive, effective security option that is viable for the 
physical collocation space assigned. Reasonable security measures that 
the incumbent LEC may adopt include:
    (1) Installing security cameras or other monitoring systems; or
    (2) Requiring competitive LEC personnel to use badges with 
computerized tracking systems; or
    (3) Requiring competitive LEC employees to undergo the same level of 
security training, or its equivalent, that the incumbent's own 
employees, or third party contractors providing similar functions, must 
undergo; provided, however, that the incumbent LEC may not require 
competitive LEC employees to receive such training from the incumbent 
LEC itself, but must provide information to the competitive LEC on the 
specific type of training required so the competitive LEC's employees 
can conduct their own training.
    (4) Restricting physical collocation to space separated from space 
housing the incumbent LEC's equipment, provided that each of the 
following conditions is met:
    (i) Either legitimate security concerns, or operational constraints 
unrelated to the incumbent's or any of its affiliates' or subsidiaries 
competitive concerns, warrant such separation;
    (ii) Any physical collocation space assigned to an affiliate or 
subsidiary of the incumbent LEC is separated from space housing the 
incumbent LEC's equipment;
    (iii) The separated space will be available in the same time frame 
as, or a shorter time frame than, non-separated space;
    (iv) The cost of the separated space to the requesting carrier will 
not be

[[Page 50]]

materially higher than the cost of non-separated space; and
    (v) The separated space is comparable, from a technical and 
engineering standpoint, to non-separated space.
    (5) Requiring the employees and contractors of collocating carriers 
to use a central or separate entrance to the incumbent's building, 
provided, however, that where an incumbent LEC requires that the 
employees or contractors of collocating carriers access collocated 
equipment only through a separate entrance, employees and contractors of 
the incumbent LEC's affiliates and subsidiaries must be subject to the 
same restriction.
    (6) Constructing or requiring the construction of a separate 
entrance to access physical collocation space, provided that each of the 
following conditions is met:
    (i) Construction of a separate entrance is technically feasible;
    (ii) Either legitimate security concerns, or operational constraints 
unrelated to the incumbent's or any of its affiliates' or subsidiaries 
competitive concerns, warrant such separation;
    (iii) Construction of a separate entrance will not artificially 
delay collocation provisioning; and
    (iv) Construction of a separate entrance will not materially 
increase the requesting carrier's costs.
    (j) An incumbent LEC shall permit a collocating telecommunications 
carrier to subcontract the construction of physical collocation 
arrangements with contractors approved by the incumbent LEC, provided, 
however, that the incumbent LEC shall not unreasonably withhold approval 
of contractors. Approval by an incumbent LEC shall be based on the same 
criteria it uses in approving contractors for its own purposes.
    (k) An incumbent LEC's physical collocation offering must include 
the following:
    (1) Shared collocation cages. A shared collocation cage is a caged 
collocation space shared by two or more competitive LECs pursuant to 
terms and conditions agreed to by the competitive LECs. In making shared 
cage arrangements available, an incumbent LEC may not increase the cost 
of site preparation or nonrecurring charges above the cost for 
provisioning such a cage of similar dimensions and material to a single 
collocating party. In addition, the incumbent must prorate the charge 
for site conditioning and preparation undertaken by the incumbent to 
construct the shared collocation cage or condition the space for 
collocation use, regardless of how many carriers actually collocate in 
that cage, by determining the total charge for site preparation and 
allocating that charge to a collocating carrier based on the percentage 
of the total space utilized by that carrier. An incumbent LEC must make 
shared collocation space available in single-bay increments or their 
equivalent, i.e., a competing carrier can purchase space in increments 
small enough to collocate a single rack, or bay, of equipment.
    (2) Cageless collocation. Incumbent LECs must allow competitors to 
collocate without requiring the construction of a cage or similar 
structure. Incumbent LECs must permit collocating carriers to have 
direct access to their equipment. An incumbent LEC may not require 
competitors to use an intermediate interconnection arrangement in lieu 
of direct connection to the incumbent's network if technically feasible. 
An incumbent LEC must make cageless collocation space available in 
single-bay increments, meaning that a competing carrier can purchase 
space in increments small enough to collocate a single rack, or bay, of 
equipment.
    (3) Adjacent space collocation. An incumbent LEC must make 
available, where physical collocation space is legitimately exhausted in 
a particular incumbent LEC structure, collocation in adjacent controlled 
environmental vaults, controlled environmental huts, or similar 
structures located at the incumbent LEC premises to the extent 
technically feasible. The incumbent LEC must permit a requesting 
telecommunications carrier to construct or otherwise procure such an 
adjacent structure, subject only to reasonable safety and maintenance 
requirements. The incumbent must provide power and physical collocation 
services and facilities, subject to the same nondiscrimination 
requirements as applicable to any other physical collocation

[[Page 51]]

arrangement. The incumbent LEC must permit the requesting carrier to 
place its own equipment, including, but not limited to, copper cables, 
coaxial cables, fiber cables, and telecommunications equipment, in 
adjacent facilities constructed by the incumbent LEC, the requesting 
carrier, or a third-party. If physical collocation space becomes 
available in a previously exhausted incumbent LEC structure, the 
incumbent LEC must not require a carrier to move, or prohibit a 
competitive LEC from moving, a collocation arrangement into that 
structure. Instead, the incumbent LEC must continue to allow the carrier 
to collocate in any adjacent controlled environmental vault, controlled 
environmental vault, or similar structure that the carrier has 
constructed or otherwise procured.
    (l) An incumbent LEC must offer to provide and provide all forms of 
physical collocation (i.e., caged, cageless, shared, and adjacent) 
within the following deadlines, except to the extent a state sets its 
own deadlines or the incumbent LEC has demonstrated to the state 
commission that physical collocation is not practical for technical 
reasons or because of space limitations.
    (1) Within ten days after receiving an application for physical 
collocation, an incumbent LEC must inform the requesting carrier whether 
the application meets each of the incumbent LEC's established 
collocation standards. A requesting carrier that resubmits a revised 
application curing any deficiencies in an application for physical 
collocation within ten days after being informed of them retains its 
position within any collocation queue that the incumbent LEC maintains 
pursuant to paragraph (f)(1) of this section.
    (2) Except as stated in paragraphs (l)(3) and (l)(4) of this 
section, an incumbent LEC must complete provisioning of a requested 
physical collocation arrangement within 90 days after receiving an 
application that meets the incumbent LEC's established collocation 
application standards.
    (3) An incumbent LEC need not meet the deadline set forth in 
paragraph (l)(2) of this section if, after receipt of any price 
quotation provided by the incumbent LEC, the telecommunications carrier 
requesting collocation does not notify the incumbent LEC that physical 
collocation should proceed.
    (4) If, within seven days of the requesting carrier's receipt of any 
price quotation provided by the incumbent LEC, the telecommunications 
carrier requesting collocation does not notify the incumbent LEC that 
physical collocation should proceed, then the incumbent LEC need not 
complete provisioning of a requested physical collocation arrangement 
until 90 days after receiving such notification from the requesting 
telecommunications carrier.

[61 FR 45619, Aug. 28, 1996, as amended at 64 FR 23242, Apr. 30, 1999; 
65 FR 54439, Sept. 8, 2000; 66 FR 43521, Aug. 20, 2001]



Sec. 51.325  Notice of network changes: Public notice requirement.

    (a) An incumbent local exchange carrier (``LEC'') must provide 
public notice regarding any network change that:
    (1) Will affect a competing service provider's performance or 
ability to provide service;
    (2) Will affect the incumbent LEC's interoperability with other 
service providers; or
    (3) Will affect the manner in which customer premises equipment is 
attached to the interstate network.
    (4) Will result in the retirement of copper loops or copper 
subloops, and the replacement of such loops with fiber-to-the-home loops 
or fiber-to-the-curb loops, as those terms are defined in Sec. 
51.319(a)(3).
    (b) For purposes of this section, interoperability means the ability 
of two or more facilities, or networks, to be connected, to exchange 
information, and to use the information that has been exchanged.
    (c) Until public notice has been given in accordance with Sec. Sec. 
51.325 through 51.335, an incumbent LEC may not disclose to separate 
affiliates, separated affiliates, or unaffiliated entities (including 
actual or potential competing service providers or competitors), 
information about planned network changes that are subject to this 
section.
    (d) For the purposes of Sec. Sec. 51.325 through 51.335, the term 
services means

[[Page 52]]

telecommunications services or information services.

[61 FR 47351, Sept. 6, 1996, as amended at 64 FR 14148, Mar. 24, 1999; 
68 FR 52305, Sept. 2, 2003; 69 FR 77954, Dec. 29, 2004]



Sec. 51.327  Notice of network changes: Content of notice.

    (a) Public notice of planned network changes must, at a minimum, 
include:
    (1) The carrier's name and address;
    (2) The name and telephone number of a contact person who can supply 
additional information regarding the planned changes;
    (3) The implementation date of the planned changes;
    (4) The location(s) at which the changes will occur;
    (5) A description of the type of changes planned (Information 
provided to satisfy this requirement must include, as applicable, but is 
not limited to, references to technical specifications, protocols, and 
standards regarding transmission, signaling, routing, and facility 
assignment as well as references to technical standards that would be 
applicable to any new technologies or equipment, or that may otherwise 
affect interconnection); and
    (6) A description of the reasonably foreseeable impact of the 
planned changes.
    (b) The incumbent LEC also shall follow, as necessary, procedures 
relating to confidential or proprietary information contained in Sec. 
51.335.

[61 FR 47351, Sept. 6, 1996]



Sec. 51.329  Notice of network changes: Methods for providing notice.

    (a) In providing the required notice to the public of network 
changes, an incumbent LEC may use one of the following methods:
    (1) Filing a public notice with the Commission; or
    (2) Providing public notice through industry fora, industry 
publications, or the carrier's publicly accessible Internet site. If an 
incumbent LEC uses any of the methods specified in paragraph (a)(2) of 
this section, it also must file a certification with the Commission that 
includes:
    (i) A statement that identifies the proposed changes;
    (ii) A statement that public notice has been given in compliance 
with Sec. Sec. 51.325 through 51.335; and
    (iii) A statement identifying the location of the change information 
and describing how this information can be obtained.
    (b) Until the planned change is implemented, an incumbent LEC must 
keep the notice available for public inspection, and amend the notice to 
keep the information complete, accurate and up-to-date.
    (c) Specific filing requirements. Commission filings under this 
section must be made as follows:
    (1) The public notice or certification must be labeled with one of 
the following titles, as appropriate: ``Public Notice of Network Change 
Under Rule 51.329(a),'' ``Certification of Public Notice of Network 
Change Under Rule 51.329(a),'' ``Short Term Public Notice Under Rule 
51.333(a),'' or ``Certification of Short Term Public Notice Under Rule 
51.333(a).''
    (2) Two paper copies of the incumbent LEC's public notice or 
certification, required under paragraph (a) of this section, must be 
sent to ``Secretary, Federal Communications Commission, Washington, DC 
20554.'' The date on which this filing is received by the Secretary is 
considered the official filing date.

[61 FR 47351, Sept. 6, 1996, as amended at 67 FR 13225, Mar. 21, 2002; 
71 FR 65750, Nov. 9, 2006]



Sec. 51.331  Notice of network changes: Timing of notice.

    (a) An incumbent LEC shall give public notice of planned changes at 
the make/buy point, as defined in paragraph (b) of this section, but at 
least 12 months before implementation, except as provided below:
    (1) If the changes can be implemented within twelve months of the 
make/buy point, public notice must be given at the make/buy point, but 
at least six months before implementation.
    (2) If the changes can be implemented within six months of the make/
buy point, public notice may be given pursuant to the short term notice 
procedures provided in Sec. 51.333.
    (b) For purposes of this section, the make/buy point is the time at 
which an

[[Page 53]]

incumbent LEC decides to make for itself, or to procure from another 
entity, any product the design of which affects or relies on a new or 
changed network interface. If an incumbent LEC's planned changes do not 
require it to make or to procure a product, then the make/buy point is 
the point at which the incumbent LEC makes a definite decision to 
implement a network change.
    (1) For purposes of this section, a product is any hardware r 
software for use in an incumbent LEC's network or in conjunction with 
its facilities that, when installed, could affect the compatibility of 
an interconnected service provider's network, facilities or services 
with an incumbent LEC's existing telephone network, facilities or 
services, or with any of an incumbent carrier's services or 
capabilities.
    (2) For purposes of this section a definite decision is reached when 
an incumbent LEC determines that the change is warranted, establishes a 
timetable for anticipated implementation, and takes any action toward 
implementation of the change within its network.
    (c) Competing service providers may object to incumbent LEC notice 
of retirement of copper loops or copper subloops and replacement with 
fiber-to-the-home loops or fiber-to-the-curb loops in the manner set 
forth in Sec. 51.333(c).

[61 FR 47352, Sept. 6, 1996, as amended at 68 FR 52305, Sept. 2, 2003; 
69 FR 77954, Dec. 29, 2004]



Sec. 51.333  Notice of network changes: Short term notice, objections
thereto and objections to retirement of copper loops or copper subloops.

    (a) Certificate of service. If an incumbent LEC wishes to provide 
less than six months notice of planned network changes, the public 
notice or certification that it files with the Commission must include a 
certificate of service in addition to the information required by Sec. 
51.327(a) or Sec. 51.329(a)(2), as applicable. The certificate of 
service shall include:
    (1) A statement that, at least five business days in advance of its 
filing with the Commission, the incumbent LEC served a copy of its 
public notice upon each telephone exchange service provider that 
directly interconnects with the incumbent LEC's network; and
    (2) The name and address of each such telephone exchange service 
provider upon which the notice was served.
    (b) Implementation date. The Commission will release a public notice 
of filings of such short term notices or notices of replacement of 
copper loops or copper subloops with fiber-to-the-home loops or fiber-
to-the-curb loops. The effective date of the network changes referenced 
in those filings shall be subject to the following requirements:
    (1) Short term notice. Short term notices shall be deemed final on 
the tenth business day after the release of the Commission's public 
notice, unless an objection is filed pursuant to paragraph (c) of this 
section.
    (2) Replacement of copper loops or copper subloops with fiber-to-
the-home loops or fiber-to-the-curb loops. Notices of replacement of 
copper loops or copper subloops with fiber-to-the-home loops or fiber-
to-the-curb loops shall be deemed approved on the 90th day after the 
release of the Commission's public notice of the filing, unless an 
objection is filed pursuant to paragraph (c) of this section. Incumbent 
LEC notice of intent to retire any copper loops or copper subloops and 
replace such loops or subloops with fiber-to-the-home loops or fiber-to-
the-curb loops shall be subject to the short term notice provisions of 
this section, but under no circumstances may an incumbent LEC provide 
less than 90 days notice of such a change.
    (c) Objection procedures for short term notice and notices of 
replacement of copper loops or copper subloops with fiber-to-the-home 
loops or fiber-to-the-curb loops. An objection to an incumbent LEC's 
short term notice or to its notice that it intends to retire copper 
loops or copper subloops and replace such loops or subloops with fiber-
to-the-home loops or fiber-to-the-curb loops may be filed by an 
information service provider or telecommunications service provider that 
directly interconnects with the incumbent LEC's network. Such objections 
must be filed with the Commission, and served on the incumbent LEC, no 
later than the ninth business

[[Page 54]]

day following the release of the Commission's public notice. All 
objections filed under this section must:
    (1) State specific reasons why the objector cannot accommodate the 
incumbent LEC's changes by the date stated in the incumbent LEC's public 
notice and must indicate any specific technical information or other 
assistance required that would enable the objector to accommodate those 
changes;
    (2) List steps the objector is taking to accommodate the incumbent 
LEC's changes on an expedited basis;
    (3) State the earliest possible date (not to exceed six months from 
the date the incumbent LEC gave its original public notice under this 
section) by which the objector anticipates that it can accommodate the 
incumbent LEC's changes, assuming it receives the technical information 
or other assistance requested under paragraph (c)(1) of this section;
    (4) Provide any other information relevant to the objection; and
    (5) Provide the following affidavit, executed by the objector's 
president, chief executive officer, or other corporate officer or 
official, who has appropriate authority to bind the corporation, and 
knowledge of the details of the objector's inability to adjust its 
network on a timely basis:

    ``I, (name and title), under oath and subject to penalty for 
perjury, certify that I have read this objection, that the statements 
contained in it are true, that there is good ground to support the 
objection, and that it is not interposed for purposes of delay. I have 
appropriate authority to make this certification on behalf of (objector) 
and I agree to provide any information the Commission may request to 
allow the Commission to evaluate the truthfulness and validity of the 
statements contained in this objection.''

    (d) Response to objections. If an objection is filed, an incumbent 
LEC shall have until no later than the fourteenth business day following 
the release of the Commission's public notice to file with the 
Commission a response to the objection and to serve the response on all 
parties that filed objections. An incumbent LEC's response must:
    (1) Provide information responsive to the allegations and concerns 
identified by the objectors;
    (2) State whether the implementation date(s) proposed by the 
objector(s) are acceptable;
    (3) Indicate any specific technical assistance that the incumbent 
LEC is willing to give to the objectors; and
    (4) Provide any other relevant information.
    (e) Resolution. If an objection is filed pursuant to paragraph (c) 
of this section, then the Chief, Wireline Competition Bureau, will issue 
an order determining a reasonable public notice period, provided 
however, that if an incumbent LEC does not file a response within the 
time period allotted, or if the incumbent LEC's response accepts the 
latest implementation date stated by an objector, then the incumbent 
LEC's public notice shall be deemed amended to specify the 
implementation date requested by the objector, without further 
Commission action. An incumbent LEC must amend its public notice to 
reflect any change in the applicable implementation date pursuant to 
Sec. 51.329(b).
    (f) Resolution of objections to replacement of copper loops or 
copper subloops with fiber-to-the-home loops or fiber-to-the-curb loops. 
An objection to a notice that an incumbent LEC intends to retire any 
copper loops or copper subloops and replace such loops or subloops with 
fiber-to-the-home loops or fiber-to-the-curb loops shall be deemed 
denied 90 days after the date on which the Commission releases public 
notice of the incumbent LEC filing, unless the Commission rules 
otherwise within that time. Until the Commission has either ruled on an 
objection or the 90-day period for the Commission's consideration has 
expired, an incumbent LEC may not retire those copper loops or copper 
subloops at issue for replacement with fiber-to-the-home loops or fiber-
to-the-curb loops.

[61 FR 47352, Sept. 6, 1996, as amended at 67 FR 13226, Mar. 21, 2002; 
68 FR 52305, Sept. 2, 2003; 69 FR 77954; Dec. 29, 2004]



Sec. 51.335  Notice of network changes: Confidential or proprietary
information.

    (a) If an incumbent LEC claims that information otherwise required 
to be disclosed is confidential or proprietary, the incumbent LEC's 
public notice

[[Page 55]]

must include, in addition to the information identified in Sec. 
51.327(a), a statement that the incumbent LEC will make further 
information available to those signing a nondisclosure agreement.
    (b) Tolling the public notice period. Upon receipt by an incumbent 
LEC of a competing service provider's request for disclosure of 
confidential or proprietary information, the applicable public notice 
period will be tolled until the parties agree on the terms of a 
nondisclosure agreement. An incumbent LEC receiving such a request must 
amend its public notice as follows:
    (1) On the date it receives a request from a competing service 
provider for disclosure of confidential or proprietary information, to 
state that the notice period is tolled; and
    (2) On the date the nondisclosure agreement is finalized, to specify 
a new implementation date.

[61 FR 47352, Sept. 6, 1996]



Subpart E_Exemptions, Suspensions, and Modifications of Requirements of 
                         Section 251 of the Act



Sec. 51.401  State authority.

    A state commission shall determine whether a telephone company is 
entitled, pursuant to section 251(f) of the Act, to exemption from, or 
suspension or modification of, the requirements of section 251 of the 
Act. Such determinations shall be made on a case-by-case basis.



Sec. 51.403  Carriers eligible for suspension or modification under
section 251(f)(2) of the Act.

    A LEC is not eligible for a suspension or modification of the 
requirements of section 251(b) or section 251(c) of the Act pursuant to 
section 251(f)(2) of the Act if such LEC, at the holding company level, 
has two percent or more of the subscriber lines installed in the 
aggregate nationwide.



Sec. 51.405  Burden of proof.

    (a) Upon receipt of a bona fide request for interconnection, 
services, or access to unbundled network elements, a rural telephone 
company must prove to the state commission that the rural telephone 
company should be entitled, pursuant to section 251(f)(1) of the Act, to 
continued exemption from the requirements of section 251(c) of the Act.
    (b) A LEC with fewer than two percent of the nation's subscriber 
lines installed in the aggregate nationwide must prove to the state 
commission, pursuant to section 251(f)(2) of the Act, that it is 
entitled to a suspension or modification of the application of a 
requirement or requirements of section 251(b) or 251(c) of the Act.
    (c) In order to justify continued exemption under section 251(f)(1) 
of the Act once a bona fide request has been made, an incumbent LEC must 
offer evidence that the application of the requirements of section 
251(c) of the Act would be likely to cause undue economic burden beyond 
the economic burden that is typically associated with efficient 
competitive entry.
    (d) In order to justify a suspension or modification under section 
251(f)(2) of the Act, a LEC must offer evidence that the application of 
section 251(b) or section 251(c) of the Act would be likely to cause 
undue economic burden beyond the economic burden that is typically 
associated with efficient competitive entry.



                      Subpart F_Pricing of Elements



Sec. 51.501  Scope.

    (a) The rules in this subpart apply to the pricing of network 
elements, interconnection, and methods of obtaining access to unbundled 
elements, including physical collocation and virtual collocation.
    (b) As used in this subpart, the term ``element'' includes network 
elements, interconnection, and methods of obtaining interconnection and 
access to unbundled elements.



Sec. 51.503  General pricing standard.

    (a) An incumbent LEC shall offer elements to requesting 
telecommunications carriers at rates, terms, and conditions that are 
just, reasonable, and nondiscriminatory.
    (b) An incumbent LEC's rates for each element it offers shall comply 
with the rate structure rules set forth

[[Page 56]]

in Sec. Sec. 51.507 and 51.509, and shall be established, at the 
election of the state commission--
    (1) Pursuant to the forward-looking economic cost-based pricing 
methodology set forth in Sec. Sec. 51.505 and 51.511; or
    (2) Consistent with the proxy ceilings and ranges set forth in Sec. 
51.513.
    (c) The rates that an incumbent LEC assesses for elements shall not 
vary on the basis of the class of customers served by the requesting 
carrier, or on the type of services that the requesting carrier 
purchasing such elements uses them to provide.



Sec. 51.505  Forward-looking economic cost.

    (a) In general. The forward-looking economic cost of an element 
equals the sum of:
    (1) The total element long-run incremental cost of the element, as 
described in paragraph (b); and
    (2) A reasonable allocation of forward-looking common costs, as 
described in paragraph (c).
    (b) Total element long-run incremental cost. The total element long-
run incremental cost of an element is the forward-looking cost over the 
long run of the total quantity of the facilities and functions that are 
directly attributable to, or reasonably identifiable as incremental to, 
such element, calculated taking as a given the incumbent LEC's provision 
of other elements.
    (1) Efficient network configuration. The total element long-run 
incremental cost of an element should be measured based on the use of 
the most efficient telecommunications technology currently available and 
the lowest cost network configuration, given the existing location of 
the incumbent LEC's wire centers.
    (2) Forward-looking cost of capital. The forward-looking cost of 
capital shall be used in calculating the total element long-run 
incremental cost of an element.
    (3) Depreciation rates. The depreciation rates used in calculating 
forward-looking economic costs of elements shall be economic 
depreciation rates.
    (c) Reasonable allocation of forward-looking common costs--(1) 
Forward-looking common costs. Forward-looking common costs are economic 
costs efficiently incurred in providing a group of elements or services 
(which may include all elements or services provided by the incumbent 
LEC) that cannot be attributed directly to individual elements or 
services.
    (2) Reasonable allocation. (i) The sum of a reasonable allocation of 
forward-looking common costs and the total element long-run incremental 
cost of an element shall not exceed the stand-alone costs associated 
with the element. In this context, stand-alone costs are the total 
forward-looking costs, including corporate costs, that would be incurred 
to produce a given element if that element were provided by an efficient 
firm that produced nothing but the given element.
    (ii) The sum of the allocation of forward-looking common costs for 
all elements and services shall equal the total forward-looking common 
costs, exclusive of retail costs, attributable to operating the 
incumbent LEC's total network, so as to provide all the elements and 
services offered.
    (d) Factors that may not be considered. The following factors shall 
not be considered in a calculation of the forward-looking economic cost 
of an element:
    (1) Embedded costs. Embedded costs are the costs that the incumbent 
LEC incurred in the past and that are recorded in the incumbent LEC's 
books of accounts;
    (2) Retail costs. Retail costs include the costs of marketing, 
billing, collection, and other costs associated with offering retail 
telecommunications services to subscribers who are not 
telecommunications carriers, described in Sec. 51.609;
    (3) Opportunity costs. Opportunity costs include the revenues that 
the incumbent LEC would have received for the sale of telecommunications 
services, in the absence of competition from telecommunications carriers 
that purchase elements; and
    (4) Revenues to subsidize other services. Revenues to subsidize 
other services include revenues associated with elements or 
telecommunications service offerings other than the element for which a 
rate is being established.
    (e) Cost study requirements. An incumbent LEC must prove to the 
state commission that the rates for each element

[[Page 57]]

it offers do not exceed the forward-looking economic cost per unit of 
providing the element, using a cost study that complies with the 
methodology set forth in this section and Sec. 51.511.
    (1) A state commission may set a rate outside the proxy ranges or 
above the proxy ceilings described in Sec. 51.513 only if that 
commission has given full and fair effect to the economic cost based 
pricing methodology described in this section and Sec. 51.511 in a 
state proceeding that meets the requirements of paragraph (e)(2) of this 
section.
    (2) Any state proceeding conducted pursuant to this section shall 
provide notice and an opportunity for comment to affected parties and 
shall result in the creation of a written factual record that is 
sufficient for purposes of review. The record of any state proceeding in 
which a state commission considers a cost study for purposes of 
establishing rates under this section shall include any such cost study.



Sec. 51.507  General rate structure standard.

    (a) Element rates shall be structured consistently with the manner 
in which the costs of providing the elements are incurred.
    (b) The costs of dedicated facilities shall be recovered through 
flat-rated charges.
    (c) The costs of shared facilities shall be recovered in a manner 
that efficiently apportions costs among users. Costs of shared 
facilities may be apportioned either through usage-sensitive charges or 
capacity-based flat-rated charges, if the state commission finds that 
such rates reasonably reflect the costs imposed by the various users.
    (d) Recurring costs shall be recovered through recurring charges, 
unless an incumbent LEC proves to a state commission that such recurring 
costs are de minimis. Recurring costs shall be considered de minimis 
when the costs of administering the recurring charge would be excessive 
in relation to the amount of the recurring costs.
    (e) State commissions may, where reasonable, require incumbent LECs 
to recover nonrecurring costs through recurring charges over a 
reasonable period of time. Nonrecurring charges shall be allocated 
efficiently among requesting telecommunications carriers, and shall not 
permit an incumbent LEC to recover more than the total forward-looking 
economic cost of providing the applicable element.
    (f) State commissions shall establish different rates for elements 
in at least three defined geographic areas within the state to reflect 
geographic cost differences.
    (1) To establish geographically-deaveraged rates, state commissions 
may use existing density-related zone pricing plans described in Sec. 
69.123 of this chapter, or other such cost-related zone plans 
established pursuant to state law.
    (2) In states not using such existing plans, state commissions must 
create a minimum of three cost-related rate zones.

[61 FR 45619, Aug. 29, 1996, as amended at 64 FR 32207, June 16, 1999; 
64 FR 68637, Dec. 8, 1999]



Sec. 51.509  Rate structure standards for specific elements.

    In addition to the general rules set forth in Sec. 51.507, rates 
for specific elements shall comply with the following rate structure 
rules.
    (a) Local loop and subloop. Loop and subloop costs shall be 
recovered through flat-rated charges.
    (b) Local switching. Local switching costs shall be recovered 
through a combination of a flat-rated charge for line ports and one or 
more flat-rated or per-minute usage charges for the switching matrix and 
for trunk ports.
    (c) Dedicated transmission links. Dedicated transmission link costs 
shall be recovered through flat-rated charges.
    (d) Shared transmission facilities between tandem switches and end 
offices. The costs of shared transmission facilities between tandem 
switches and end offices may be recovered through usage-sensitive 
charges, or in another manner consistent with the manner that the 
incumbent LEC incurs those costs.
    (e) Tandem switching. Tandem switching costs may be recovered 
through usage-sensitive charges, or in another manner consistent with 
the manner that the incumbent LEC incurs those costs.

[[Page 58]]

    (f) Signaling and call-related database services. Signaling and 
call-related database service costs shall be usage-sensitive, based on 
either the number of queries or the number of messages, with the 
exception of the dedicated circuits known as signaling links, the cost 
of which shall be recovered through flat-rated charges.
    (g) Collocation. Collocation costs shall be recovered consistent 
with the rate structure policies established in the Expanded 
Interconnection proceeding, CC Docket No. 91-141.
    (h) Network interface device. An incumbent LEC must establish a 
price for the network interface device when that unbundled network 
element is purchased on a stand-alone basis pursuant to Sec. 51.319(c).

[61 FR 45619, Aug. 29, 1996, as amended at 68 FR 52306, Sept. 2, 2003]



Sec. 51.511  Forward-looking economic cost per unit.

    (a) The forward-looking economic cost per unit of an element equals 
the forward-looking economic cost of the element, as defined in Sec. 
51.505, divided by a reasonable projection of the sum of the total 
number of units of the element that the incumbent LEC is likely to 
provide to requesting telecommunications carriers and the total number 
of units of the element that the incumbent LEC is likely to use in 
offering its own services, during a reasonable measuring period.
    (b)(1) With respect to elements that an incumbent LEC offers on a 
flat-rate basis, the number of units is defined as the discrete number 
of elements (e.g., local loops or local switch ports) that the incumbent 
LEC uses or provides.
    (2) With respect to elements that an incumbent LEC offers on a 
usage-sensitive basis, the number of units is defined as the unit of 
measurement of the usage (e.g., minutes of use or call-related database 
queries) of the element.



Sec. 51.513  Proxies for forward-looking economic cost.

    (a) A state commission may determine that the cost information 
available to it with respect to one or more elements does not support 
the adoption of a rate or rates that are consistent with the 
requirements set forth in Sec. Sec. 51.505 and 51.511. In that event, 
the state commission may establish a rate for an element that is 
consistent with the proxies specified in this section, provided that:
    (1) Any rate established through use of such proxies shall be 
superseded once the state commission has completed review of a cost 
study that complies with the forward-looking economic cost based pricing 
methodology described in Sec. Sec. 51.505 and 51.511, and has concluded 
that such study is a reasonable basis for establishing element rates; 
and
    (2) The state commission sets forth in writing a reasonable basis 
for its selection of a particular rate for the element.
    (b) The constraints on proxy-based rates described in this section 
apply on a geographically averaged basis. For purposes of determining 
whether geographically deaveraged rates for elements comply with the 
provisions of this section, a geographically averaged proxy-based rate 
shall be computed based on the weighted average of the actual, 
geographically deaveraged rates that apply in separate geographic areas 
in a state.
    (c) Proxies for specific elements--(1) Local loops. For each state 
listed below, the proxy-based monthly rate for unbundled local loops, on 
a statewide weighted average basis, shall be no greater than the figures 
listed in the table below. (The Commission has not established a default 
proxy ceiling for loop rates in Alaska.)

                                  Table
------------------------------------------------------------------------
                                                                  Proxy
                             State                               ceiling
------------------------------------------------------------------------
Alabama.......................................................    $17.25
Arizona.......................................................     12.85
Arkansas......................................................     21.18
California....................................................     11.10
Colorado......................................................     14.97
Connecticut...................................................     13.23
Delaware......................................................     13.24
District of Columbia..........................................     10.81
Florida.......................................................     13.68
Georgia.......................................................     16.09
Hawaii........................................................     15.27
Idaho.........................................................     20.16
Illinois......................................................     13.12
Indiana.......................................................     13.29
Iowa..........................................................     15.94
Kansas........................................................     19.85
Kentucky......................................................     16.70
Louisiana.....................................................     16.98
Maine.........................................................     18.69

[[Page 59]]

 
Maryland......................................................     13.36
Massachusetts.................................................      9.83
Michigan......................................................     15.27
Minnesota.....................................................     14.81
Mississippi...................................................     21.97
Missouri......................................................     18.32
Montana.......................................................     25.18
Nebraska......................................................     18.05
Nevada........................................................     18.95
New Hampshire.................................................     16.00
New Jersey....................................................     12.47
New Mexico....................................................     18.66
New York......................................................     11.75
North Carolina................................................     16.71
North Dakota..................................................     25.36
Ohio..........................................................     15.73
Oklahoma......................................................     17.63
Oregon........................................................     15.44
Pennsylvania..................................................     12.30
Puerto Rico...................................................     12.47
Rhode Island..................................................     11.48
South Carolina................................................     17.07
South Dakota..................................................     25.33
Tennessee.....................................................     17.41
Texas.........................................................     15.49
Utah..........................................................     15.12
Vermont.......................................................     20.13
Virginia......................................................     14.13
Washington....................................................     13.37
West Virginia.................................................     19.25
Wisconsin.....................................................     15.94
Wyoming.......................................................     25.11
------------------------------------------------------------------------

    (2) Local switching. (i) The blended proxy-based rate for the usage-
sensitive component of the unbundled local switching element, including 
the switching matrix, the functionalities used to provide vertical 
features, and the trunk ports, shall be no greater than 0.4 cents 
($0.004) per minute, and no less than 0.2 cents ($0.002) per minute, 
except that, where a state commission has, before August 8, 1996, 
established a rate less than or equal to 0.5 cents ($0.005) per minute, 
that rate may be retained pending completion of a forward-looking 
economic cost study. If a flat-rated charge is established for these 
components, it shall be converted to a per-minute rate by dividing the 
projected average minutes of use per flat-rated subelement, for purposes 
of assessing compliance with this proxy. A weighted average of such 
flat-rate or usage-sensitive charges shall be used in appropriate 
circumstances, such as when peak and off-peak charges are used.
    (ii) The blended proxy-based rate for the line port component of the 
local switching element shall be no less than $1.10, and no more than 
$2.00, per line port per month for ports used in the delivery of basic 
residential and business exchange services.
    (3) Dedicated transmission links. The proxy-based rates for 
dedicated transmission links shall be no greater than the incumbent 
LEC's tariffed interstate charges for comparable entrance facilities or 
direct-trunked transport offerings, as described in Sec. Sec. 69.110 
and 69.112 of this chapter.
    (4) Shared transmission facilities between tandem switches and end 
offices. The proxy-based rates for shared transmission facilities 
between tandem switches and end offices shall be no greater than the 
weighted per-minute equivalent of DS1 and DS3 interoffice dedicated 
transmission link rates that reflects the relative number of DS1 and DS3 
circuits used in the tandem to end office links (or a surrogate based on 
the proportion of copper and fiber facilities in the interoffice 
network), calculated using a loading factor of 9,000 minutes per month 
per voice-grade circuit, as described in Sec. 69.112 of this chapter.
    (5) Tandem switching. The proxy-based rate for tandem switching 
shall be no greater than 0.15 cents ($0.0015) per minute of use.
    (6) Collocation. To the extent that the incumbent LEC offers a 
comparable form of collocation in its interstate expanded 
interconnection tariffs, as described in Sec. Sec. 64.1401 and 69.121 
of this chapter, the proxy-based rates for collocation shall be no 
greater than the effective rates for equivalent services in the 
interstate expanded interconnection tariff. To the extent that the 
incumbent LEC does not offer a comparable form of collocation in its 
interstate expanded interconnection tariffs, a state commission may, in 
its discretion, establish a proxy-based rate, provided that the state 
commission sets forth in writing a reasonable basis for concluding that 
its rate would approximate the result of a forward-looking economic cost 
study, as described in Sec. 51.505.
    (7) Signaling, call-related database, and other elements. To the 
extent that the incumbent LEC has established rates for offerings 
comparable to other elements in its interstate access tariffs, and has 
provided cost support for those

[[Page 60]]

rates pursuant to Sec. 61.49(h) of this chapter, the proxy-based rates 
for those elements shall be no greater than the effective rates for 
equivalent services in the interstate access tariffs. In other cases, 
the proxy-based rate shall be no greater than a rate based on direct 
costs plus a reasonable allocation of overhead loadings, pursuant to 
Sec. 61.49(h) of this chapter.

[61 FR 45619, Aug. 29, 1996, as amended at 61 FR 52709, Oct. 8, 1996]



Sec. 51.515  Application of access charges.

    (a) [Reserved]
    (b) [Reserved]
    (c) Notwithstanding Sec. Sec. 51.505, 51.511, and 51.513(d)(2) and 
paragraph (a) of this section, an incumbent LEC may assess upon 
telecommunications carriers that purchase unbundled local switching 
elements, as described in Sec. 51.319(c)(1), for intrastate toll 
minutes of use traversing such unbundled local switching elements, 
intrastate access charges comparable to those listed in paragraph (b) 
and any explicit intrastate universal service mechanism based on access 
charges, only until the earliest of the following, and not thereafter:
    (1) June 30, 1997;
    (2) The effective date of a state commission decision that an 
incumbent LEC may not assess such charges; or
    (3) With respect to a Bell operating company only, the date on which 
that company is authorized to offer in-region interLATA service in the 
state pursuant to section 271 of the Act. The end date for Bell 
operating companies that are authorized to offer interLATA service shall 
apply only to the recovery of access charges in those states in which 
the Bell operating company is authorized to offer such service.
    (d) Interstate access charges described in part 69 shall not be 
assessed by incumbent LECs on each element purchased by requesting 
carriers providing both telephone exchange and exchange access services 
to such requesting carriers' end users.

[61 FR 45619, Aug. 29, 1996, as amended at 62 FR 45587, Aug. 28, 1997; 
71 FR 65750, Nov. 9, 2006]



                            Subpart G_Resale



Sec. 51.601  Scope of resale rules.

    The provisions of this subpart govern the terms and conditions under 
which LECs offer telecommunications services to requesting 
telecommunications carriers for resale.



Sec. 51.603  Resale obligation of all local exchange carriers.

    (a) A LEC shall make its telecommunications services available for 
resale to requesting telecommunications carriers on terms and conditions 
that are reasonable and non-discriminatory.
    (b) A LEC must provide services to requesting telecommunications 
carriers for resale that are equal in quality, subject to the same 
conditions, and provided within the same provisioning time intervals 
that the LEC provides these services to others, including end users.



Sec. 51.605  Additional obligations of incumbent local 
exchange carriers.

    (a) An incumbent LEC shall offer to any requesting 
telecommunications carrier any telecommunications service that the 
incumbent LEC offers on a retail basis to subscribers that are not 
telecommunications carriers for resale at wholesale rates that are, at 
the election of the state commission--
    (1) Consistent with the avoided cost methodology described in 
Sec. Sec. 51.607 and 51.609; or
    (2) Interim wholesale rates, pursuant to Sec. 51.611.
    (b) For purposes of this subpart, exchange access services, as 
defined in section 3 of the Act, shall not be considered to be 
telecommunications services that incumbent LECs must make available for 
resale at wholesale rates to requesting telecommunications carriers.
    (c) For purposes of this subpart, advanced telecommunications 
services sold to Internet Service Providers as an input component to the 
Internet Service Providers' retail Internet service offering shall not 
be considered to be telecommunications services offered on a retail 
basis that incumbent LECs must make available for resale at

[[Page 61]]

wholesale rates to requesting telecommunications carriers.
    (d) Notwithstanding paragraph (b) of this section, advanced 
telecommunications services that are classified as exchange access 
services are subject to the obligations of paragraph (a) of this section 
if such services are sold on a retail basis to residential and business 
end-users that are not telecommunications carriers.
    (e) Except as provided in Sec. 51.613, an incumbent LEC shall not 
impose restrictions on the resale by a requesting carrier of 
telecommunications services offered by the incumbent LEC.

[61 FR 45619, Aug. 29, 1996, as amended at 65 FR 6915, Feb. 11, 2000]



Sec. 51.607  Wholesale pricing standard.

    The wholesale rate that an incumbent LEC may charge for a 
telecommunications service provided for resale to other 
telecommunications carriers shall equal the rate for the 
telecommunications service, less avoided retail costs, as described in 
section 51.609. For purposes of this subpart, exchange access services, 
as defined in section 3 of the Act, shall not be considered to be 
telecommunications services that incumbent LECs must make available for 
resale at wholesale rates to requesting telecommunications carriers.

[65 FR 6915, Feb. 11, 2000]



Sec. 51.609  Determination of avoided retail costs.

    (a) Except as provided in Sec. 51.611, the amount of avoided retail 
costs shall be determined on the basis of a cost study that complies 
with the requirements of this section.
    (b) Avoided retail costs shall be those costs that reasonably can be 
avoided when an incumbent LEC provides a telecommunications service for 
resale at wholesale rates to a requesting carrier.
    (c) For incumbent LECs that are designated as Class A companies 
under Sec. 32.11 of this chapter, except as provided in paragraph (d) 
of this section, avoided retail costs shall:
    (1) Include as direct costs, the costs recorded in USOA accounts 
6611 (product management and sales), 6613 (product advertising), 6621 
(call completion services), 6622, (number services), and 6623 (customer 
services) (Sec. Sec. 32.6611, 32.6613, 32.6621, 32.6622, and 32.6623 of 
this chapter);
    (2) Include, as indirect costs, a portion of the costs recorded in 
USOA accounts 6121-6124 (general support expenses), 6720 (corporate 
operations expenses), and uncollectible telecommunications revenue 
included in 5300 (uncollectible revenue) (Secs. 32.6121 through 32.6124, 
32.6720 and 32.5300 of this chapter); and
    (3) Not include plant-specific expenses and plant non-specific 
expenses, other than general support expenses (Sec. Sec. 32.6112-6114, 
32.6211-6565 of this chapter).
    (d) Costs included in accounts 6611, 6613 and 6621-6623 described in 
paragraph (c) of this section (Sec. Sec. 32.6611, 32.6613, and 32.6621-
6623 of this chapter) may be included in wholesale rates only to the 
extent that the incumbent LEC proves to a state commission that specific 
costs in these accounts will be incurred and are not avoidable with 
respect to services sold at wholesale, or that specific costs in these 
accounts are not included in the retail prices of resold services. Costs 
included in accounts 6112-6114 and 6211-6565 described in paragraph (c) 
of this section (Sec. Sec. 32.6112-32.6114, 32.6211-32.6565 of this 
chapter) may be treated as avoided retail costs, and excluded from 
wholesale rates, only to the extent that a party proves to a state 
commission that specific costs in these accounts can reasonably be 
avoided when an incumbent LEC provides a telecommunications service for 
resale to a requesting carrier.
    (e) For incumbent LECs that are designated as Class B companies 
under Sec. 32.11 of this chapter and that record information in summary 
accounts instead of specific USOA accounts, the entire relevant summary 
accounts may be used in lieu of the specific USOA accounts listed in 
paragraphs (c) and (d) of this section.

[61 FR 45619, Aug. 29, 1996, as amended at 67 FR 5700, Feb. 6, 2002; 69 
FR 53652, Sept. 2, 2004]

[[Page 62]]



Sec. 51.611  Interim wholesale rates.

    (a) If a state commission cannot, based on the information available 
to it, establish a wholesale rate using the methodology prescribed in 
Sec. 51.609, then the state commission may elect to establish an 
interim wholesale rate as described in paragraph (b) of this section.
    (b) The state commission may establish interim wholesale rates that 
are at least 17 percent, and no more than 25 percent, below the 
incumbent LEC's existing retail rates, and shall articulate the basis 
for selecting a particular discount rate. The same discount percentage 
rate shall be used to establish interim wholesale rates for each 
telecommunications service.
    (c) A state commission that establishes interim wholesale rates 
shall, within a reasonable period of time thereafter, establish 
wholesale rates on the basis of an avoided retail cost study that 
complies with Sec. 51.609.



Sec. 51.613  Restrictions on resale.

    (a) Notwithstanding Sec. 51.605(b), the following types of 
restrictions on resale may be imposed:
    (1) Cross-class selling. A state commission may permit an incumbent 
LEC to prohibit a requesting telecommunications carrier that purchases 
at wholesale rates for resale, telecommunications services that the 
incumbent LEC makes available only to residential customers or to a 
limited class of residential customers, from offering such services to 
classes of customers that are not eligible to subscribe to such services 
from the incumbent LEC.
    (2) Short term promotions. An incumbent LEC shall apply the 
wholesale discount to the ordinary rate for a retail service rather than 
a special promotional rate only if:
    (i) Such promotions involve rates that will be in effect for no more 
than 90 days; and
    (ii) The incumbent LEC does not use such promotional offerings to 
evade the wholesale rate obligation, for example by making available a 
sequential series of 90-day promotional rates.
    (b) With respect to any restrictions on resale not permitted under 
paragraph (a), an incumbent LEC may impose a restriction only if it 
proves to the state commission that the restriction is reasonable and 
nondiscriminatory.
    (c) Branding. Where operator, call completion, or directory 
assistance service is part of the service or service package an 
incumbent LEC offers for resale, failure by an incumbent LEC to comply 
with reseller unbranding or rebranding requests shall constitute a 
restriction on resale.
    (1) An incumbent LEC may impose such a restriction only if it proves 
to the state commission that the restriction is reasonable and 
nondiscriminatory, such as by proving to a state commission that the 
incumbent LEC lacks the capability to comply with unbranding or 
rebranding requests.
    (2) For purposes of this subpart, unbranding or rebranding shall 
mean that operator, call completion, or directory assistance services 
are offered in such a manner that an incumbent LEC's brand name or other 
identifying information is not identified to subscribers, or that such 
services are offered in such a manner that identifies to subscribers the 
requesting carrier's brand name or other identifying information.



Sec. 51.615  Withdrawal of services.

    When an incumbent LEC makes a telecommunications service available 
only to a limited group of customers that have purchased such a service 
in the past, the incumbent LEC must also make such a service available 
at wholesale rates to requesting carriers to offer on a resale basis to 
the same limited group of customers that have purchased such a service 
in the past.



Sec. 51.617  Assessment of end user common line charge on resellers.

    (a) Notwithstanding the provision in Sec. 69.104(a) of this chapter 
that the end user common line charge be assessed upon end users, an 
incumbent LEC shall assess this charge, and the charge for changing the 
designated primary interexchange carrier, upon requesting carriers that 
purchase telephone exchange service for resale. The specific end user 
common line charge to be assessed will depend upon the identity of the 
end user served by the requesting carrier.

[[Page 63]]

    (b) When an incumbent LEC provides telephone exchange service to a 
requesting carrier at wholesale rates for resale, the incumbent LEC 
shall continue to assess the interstate access charges provided in part 
69 of this chapter, other than the end user common line charge, upon 
interexchange carriers that use the incumbent LEC's facilities to 
provide interstate or international telecommunications services to the 
interexchange carriers' subscribers.



   Subpart H_Reciprocal Compensation for Transport and Termination of 
                       Telecommunications Traffic

    Editorial Note: Nomenclature changes to subpart H appear at 66 FR 
26806, May 15, 2001.



Sec. 51.701  Scope of transport and termination pricing rules.

    (a) The provisions of this subpart apply to reciprocal compensation 
for transport and termination of telecommunications traffic between LECs 
and other telecommunications carriers.
    (b) Telecommunications traffic. For purposes of this subpart, 
telecommunications traffic means:
    (1) Telecommunications traffic exchanged between a LEC and a 
telecommunications carrier other than a CMRS provider, except for 
telecommunications traffic that is interstate or intrastate exchange 
access, information access, or exchange services for such access (see 
FCC 01-131, paragraphs 34, 36, 39, 42-43); or
    (2) Telecommunications traffic exchanged between a LEC and a CMRS 
provider that, at the beginning of the call, originates and terminates 
within the same Major Trading Area, as defined in Sec. 24.202(a) of 
this chapter.
    (c) Transport. For purposes of this subpart, transport is the 
transmission and any necessary tandem switching of telecommunications 
traffic subject to section 251(b)(5) of the Act from the interconnection 
point between the two carriers to the terminating carrier's end office 
switch that directly serves the called party, or equivalent facility 
provided by a carrier other than an incumbent LEC.
    (d) Termination. For purposes of this subpart, termination is the 
switching of telecommunications traffic at the terminating carrier's end 
office switch, or equivalent facility, and delivery of such traffic to 
the called party's premises.
    (e) Reciprocal compensation. For purposes of this subpart, a 
reciprocal compensation arrangement between two carriers is one in which 
each of the two carriers receives compensation from the other carrier 
for the transport and termination on each carrier's network facilities 
of telecommunications traffic that originates on the network facilities 
of the other carrier.

[61 FR 45619, Aug. 29, 1996, as amended at 66 FR 26806, May 15, 2001]



Sec. 51.703  Reciprocal compensation obligation of LECs.

    (a) Each LEC shall establish reciprocal compensation arrangements 
for transport and termination of telecommunications traffic with any 
requesting telecommunications carrier.
    (b) A LEC may not assess charges on any other telecommunications 
carrier for telecommunications traffic that originates on the LEC's 
network.



Sec. 51.705  Incumbent LECs' rates for transport and termination.

    (a) An incumbent LEC's rates for transport and termination of 
telecommunications traffic shall be established, at the election of the 
state commission, on the basis of:
    (1) The forward-looking economic costs of such offerings, using a 
cost study pursuant to Sec. Sec. 51.505 and 51.511;
    (2) Default proxies, as provided in Sec. 51.707; or
    (3) A bill-and-keep arrangement, as provided in Sec. 51.713.
    (b) In cases where both carriers in a reciprocal compensation 
arrangement are incumbent LECs, state commissions shall establish the 
rates of the smaller carrier on the basis of the larger carrier's 
forward-looking costs, pursuant to Sec. 51.711.

[[Page 64]]



Sec. 51.707  Default proxies for incumbent LECs' transport and 
termination rates.

    (a) A state commission may determine that the cost information 
available to it with respect to transport and termination of 
telecommunications traffic does not support the adoption of a rate or 
rates for an incumbent LEC that are consistent with the requirements of 
Sec. Sec. 51.505 and 51.511. In that event, the state commission may 
establish rates for transport and termination of telecommunications 
traffic, or for specific components included therein, that are 
consistent with the proxies specified in this section, provided that:
    (1) Any rate established through use of such proxies is superseded 
once that state commission establishes rates for transport and 
termination pursuant to Sec. Sec. 51.705(a)(1) or 51.705(a)(3); and
    (2) The state commission sets forth in writing a reasonable basis 
for its selection of a particular proxy for transport and termination of 
telecommunications traffic, or for specific components included within 
transport and termination.
    (b) If a state commission establishes rates for transport and 
termination of telecommunications traffic on the basis of default 
proxies, such rates must meet the following requirements:
    (1) Termination. The incumbent LEC's rates for the termination of 
telecommunications traffic shall be no greater than 0.4 cents ($0.004) 
per minute, and no less than 0.2 cents ($0.002) per minute, except that, 
if a state commission has, before August 8, 1996, established a rate 
less than or equal to 0.5 cents ($0.005) per minute for such calls, that 
rate may be retained pending completion of a forward-looking economic 
cost study.
    (2) Transport. The incumbent LEC's rates for the transport of 
telecommunications traffic, under this section, shall comply with the 
proxies described in Sec. 51.513(c) (3), (4), and (5) of this part that 
apply to the analogous unbundled network elements used in transporting a 
call to the end office that serves the called party.

[61 FR 45619, Aug. 29, 1996, as amended at 61 FR 52709, Oct. 8, 1996]



Sec. 51.709  Rate structure for transport and termination.

    (a) In state proceedings, a state commission shall establish rates 
for the transport and termination of telecommunications traffic that are 
structured consistently with the manner that carriers incur those costs, 
and consistently with the principles in Sec. Sec. 51.507 and 51.509.
    (b) The rate of a carrier providing transmission facilities 
dedicated to the transmission of traffic between two carriers' networks 
shall recover only the costs of the proportion of that trunk capacity 
used by an interconnecting carrier to send traffic that will terminate 
on the providing carrier's network. Such proportions may be measured 
during peak periods.



Sec. 51.711  Symmetrical reciprocal compensation.

    (a) Rates for transport and termination of telecommunications 
traffic shall be symmetrical, except as provided in paragraphs (b) and 
(c) of this section.
    (1) For purposes of this subpart, symmetrical rates are rates that a 
carrier other than an incumbent LEC assesses upon an incumbent LEC for 
transport and termination of telecommunications traffic equal to those 
that the incumbent LEC assesses upon the other carrier for the same 
services.
    (2) In cases where both parties are incumbent LECs, or neither party 
is an incumbent LEC, a state commission shall establish the symmetrical 
rates for transport and termination based on the larger carrier's 
forward-looking costs.
    (3) Where the switch of a carrier other than an incumbent LEC serves 
a geographic area comparable to the area served by the incumbent LEC's 
tandem switch, the appropriate rate for the carrier other than an 
incumbent LEC is the incumbent LEC's tandem interconnection rate.
    (b) A state commission may establish asymmetrical rates for 
transport and termination of telecommunications traffic only if the 
carrier other than the incumbent LEC (or the smaller of two incumbent 
LECs) proves to the state commission on the basis of a cost

[[Page 65]]

study using the forward-looking economic cost based pricing methodology 
described in Sec. Sec. 51.505 and 51.511, that the forward-looking 
costs for a network efficiently configured and operated by the carrier 
other than the incumbent LEC (or the smaller of two incumbent LECs), 
exceed the costs incurred by the incumbent LEC (or the larger incumbent 
LEC), and, consequently, that such that a higher rate is justified.
    (c) Pending further proceedings before the Commission, a state 
commission shall establish the rates that licensees in the Paging and 
Radiotelephone Service (defined in part 22, subpart E of this chapter), 
Narrowband Personal Communications Services (defined in part 24, subpart 
D of this chapter), and Paging Operations in the Private Land Mobile 
Radio Services (defined in part 90, subpart P of this chapter) may 
assess upon other carriers for the transport and termination of 
telecommunications traffic based on the forward-looking costs that such 
licensees incur in providing such services, pursuant to Sec. Sec. 
51.505 and 51.511. Such licensees' rates shall not be set based on the 
default proxies described in Sec. 51.707.



Sec. 51.713  Bill-and-keep arrangements for reciprocal compensation.

    (a) For purposes of this subpart, bill-and-keep arrangements are 
those in which neither of the two interconnecting carriers charges the 
other for the termination of telecommunications traffic that originates 
on the other carrier's network.
    (b) A state commission may impose bill-and-keep arrangements if the 
state commission determines that the amount of telecommunications 
traffic from one network to the other is roughly balanced with the 
amount of telecommunications traffic flowing in the opposite direction, 
and is expected to remain so, and no showing has been made pursuant to 
Sec. 51.711(b).
    (c) Nothing in this section precludes a state commission from 
presuming that the amount of telecommunications traffic from one network 
to the other is roughly balanced with the amount of telecommunications 
traffic flowing in the opposite direction and is expected to remain so, 
unless a party rebuts such a presumption.



Sec. 51.715  Interim transport and termination pricing.

    (a) Upon request from a telecommunications carrier without an 
existing interconnection arrangement with an incumbent LEC, the 
incumbent LEC shall provide transport and termination of 
telecommunications traffic immediately under an interim arrangement, 
pending resolution of negotiation or arbitration regarding transport and 
termination rates and approval of such rates by a state commission under 
sections 251 and 252 of the Act.
    (1) This requirement shall not apply when the requesting carrier has 
an existing interconnection arrangement that provides for the transport 
and termination of telecommunications traffic by the incumbent LEC.
    (2) A telecommunications carrier may take advantage of such an 
interim arrangement only after it has requested negotiation with the 
incumbent LEC pursuant to Sec. 51.301.
    (b) Upon receipt of a request as described in paragraph (a) of this 
section, an incumbent LEC must, without unreasonable delay, establish an 
interim arrangement for transport and termination of telecommunications 
traffic at symmetrical rates.
    (1) In a state in which the state commission has established 
transport and termination rates based on forward-looking economic cost 
studies, an incumbent LEC shall use these state-determined rates as 
interim transport and termination rates.
    (2) In a state in which the state commission has established 
transport and termination rates consistent with the default price ranges 
and ceilings described in Sec. 51.707, an incumbent LEC shall use these 
state-determined rates as interim rates.
    (3) In a state in which the state commission has neither established 
transport and termination rates based on forward-looking economic cost 
studies nor established transport and termination rates consistent with 
the default price ranges described in Sec. 51.707, an incumbent LEC 
shall set interim transport and termination rates at the default 
ceilings for end-office switching (0.4 cents per minute of use), tandem 
switching (0.15 cents per minute of

[[Page 66]]

use), and transport (as described in Sec. 51.707(b)(2)).
    (c) An interim arrangement shall cease to be in effect when one of 
the following occurs with respect to rates for transport and termination 
of telecommunications traffic subject to the interim arrangement:
    (1) A voluntary agreement has been negotiated and approved by a 
state commission;
    (2) An agreement has been arbitrated and approved by a state 
commission; or
    (3) The period for requesting arbitration has passed with no such 
request.
    (d) If the rates for transport and termination of telecommunications 
traffic in an interim arrangement differ from the rates established by a 
state commission pursuant to Sec. 51.705, the state commission shall 
require carriers to make adjustments to past compensation. Such 
adjustments to past compensation shall allow each carrier to receive the 
level of compensation it would have received had the rates in the 
interim arrangement equalled the rates later established by the state 
commission pursuant to Sec. 51.705.



Sec. 51.717  Renegotiation of existing non-reciprocal arrangements.

    (a) Any CMRS provider that operates under an arrangement with an 
incumbent LEC that was established before August 8, 1996 and that 
provides for non-reciprocal compensation for transport and termination 
of telecommunications traffic is entitled to renegotiate these 
arrangements with no termination liability or other contract penalties.
    (b) From the date that a CMRS provider makes a request under 
paragraph (a) of this section until a new agreement has been either 
arbitrated or negotiated and has been approved by a state commission, 
the CMRS provider shall be entitled to assess upon the incumbent LEC the 
same rates for the transport and termination of telecommunications 
traffic that the incumbent LEC assesses upon the CMRS provider pursuant 
to the pre-existing arrangement.



    Subpart I_Procedures for Implementation of Section 252 of the Act



Sec. 51.801  Commission action upon a state commission's failure
to act to carry out its responsibility under section 252 of the Act.

    (a) If a state commission fails to act to carry out its 
responsibility under section 252 of the Act in any proceeding or other 
matter under section 252 of the Act, the Commission shall issue an order 
preempting the state commission's jurisdiction of that proceeding or 
matter within 90 days after being notified (or taking notice) of such 
failure, and shall assume the responsibility of the state commission 
under section 252 of the Act with respect to the proceeding or matter 
and shall act for the state commission.
    (b) For purposes of this part, a state commission fails to act if 
the state commission fails to respond, within a reasonable time, to a 
request for mediation, as provided for in section 252(a)(2) of the Act, 
or for a request for arbitration, as provided for in section 252(b) of 
the Act, or fails to complete an arbitration within the time limits 
established in section 252(b)(4)(C) of the Act.
    (c) A state shall not be deemed to have failed to act for purposes 
of section 252(e)(5) of the Act if an agreement is deemed approved under 
section 252(e)(4) of the Act.



Sec. 51.803  Procedures for Commission notification of a state
commission's failure to act.

    (a) Any party seeking preemption of a state commission's 
jurisdiction, based on the state commission's failure to act, shall 
notify the Commission in accordance with following procedures:
    (1) Such party shall file with the Secretary of the Commission a 
petition, supported by an affidavit, that states with specificity the 
basis for the petition and any information that supports the claim that 
the state has failed to act, including, but not limited to, the 
applicable provisions of the Act and the factual circumstances 
supporting a finding that the state commission has failed to act;

[[Page 67]]

    (2) Such party shall ensure that the state commission and the other 
parties to the proceeding or matter for which preemption is sought are 
served with the petition required in paragraph (a)(1) of this section on 
the same date that the petitioning party serves the petition on the 
Commission; and
    (3) Within fifteen days from the date of service of the petition 
required in paragraph (a)(1) of this section, the applicable state 
commission and parties to the proceeding may file with the Commission a 
response to the petition.
    (b) The party seeking preemption must prove that the state has 
failed to act to carry out its responsibilities under section 252 of the 
Act.
    (c) The Commission, pursuant to section 252(e)(5) of the Act, may 
take notice upon its own motion that a state commission has failed to 
act. In such a case, the Commission shall issue a public notice that the 
Commission has taken notice of a state commission's failure to act. The 
applicable state commission and the parties to a proceeding or matter in 
which the Commission has taken notice of the state commission's failure 
to act may file, within fifteen days of the issuance of the public 
notice, comments on whether the Commission is required to assume the 
responsibility of the state commission under section 252 of the Act with 
respect to the proceeding or matter.
    (d) The Commission shall issue an order determining whether it is 
required to preempt the state commission's jurisdiction of a proceeding 
or matter within 90 days after being notified under paragraph (a) of 
this section or taking notice under paragraph (c) of this section of a 
state commission's failure to carry out its responsibilities under 
section 252 of the Act.



Sec. 51.805  The Commission's authority over proceedings and matters.

    (a) If the Commission assumes responsibility for a proceeding or 
matter pursuant to section 252(e)(5) of the Act, the Commission shall 
retain jurisdiction over such proceeding or matter. At a minimum, the 
Commission shall approve or reject any interconnection agreement adopted 
by negotiation, mediation or arbitration for which the Commission, 
pursuant to section 252(e)(5) of the Act, has assumed the state's 
commission's responsibilities.
    (b) Agreements reached pursuant to mediation or arbitration by the 
Commission pursuant to section 252(e)(5) of the Act are not required to 
be submitted to the state commission for approval or rejection.



Sec. 51.807  Arbitration and mediation of agreements by the 
Commission pursuant to section 252(e)(5) of the Act.

    (a) The rules established in this section shall apply only to 
instances in which the Commission assumes jurisdiction under section 
252(e)(5) of the Act.
    (b) When the Commission assumes responsibility for a proceeding or 
matter pursuant to section 252(e)(5) of the Act, it shall not be bound 
by state laws and standards that would have applied to the state 
commission in such proceeding or matter.
    (c) In resolving, by arbitration under section 252(b) of the Act, 
any open issues and in imposing conditions upon the parties to the 
agreement, the Commission shall:
    (1) Ensure that such resolution and conditions meet the requirements 
of section 251 of the Act, including the rules prescribed by the 
Commission pursuant to that section;
    (2) Establish any rates for interconnection, services, or network 
elements according to section 252(d) of the Act, including the rules 
prescribed by the Commission pursuant to that section; and
    (3) Provide a schedule for implementation of the terms and 
conditions by the parties to the agreement.
    (d) An arbitrator, acting pursuant to the Commission's authority 
under section 252(e)(5) of the Act, shall use final offer arbitration, 
except as otherwise provided in this section:
    (1) At the discretion of the arbitrator, final offer arbitration may 
take the form of either entire package final offer arbitration or issue-
by-issue final offer arbitration.
    (2) Negotiations among the parties may continue, with or without the 
assistance of the arbitrator, after final

[[Page 68]]

arbitration offers are submitted. Parties may submit subsequent final 
offers following such negotiations.
    (3) To provide an opportunity for final post-offer negotiations, the 
arbitrator will not issue a decision for at least fifteen days after 
submission to the arbitrator of the final offers by the parties.
    (e) Final offers submitted by the parties to the arbitrator shall be 
consistent with section 251 of the Act, including the rules prescribed 
by the Commission pursuant to that section.
    (f) Each final offer shall:
    (1) Meet the requirements of section 251, including the rules 
prescribed by the Commission pursuant to that section;
    (2) Establish rates for interconnection, services, or access to 
unbundled network elements according to section 252(d) of the Act, 
including the rules prescribed by the Commission pursuant to that 
section; and
    (3) Provide a schedule for implementation of the terms and 
conditions by the parties to the agreement. If a final offer submitted 
by one or more parties fails to comply with the requirements of this 
section or if the arbitrator determines in unique circumstances that 
another result would better implement the Communications Act, the 
arbitrator has discretion to take steps designed to result in an 
arbitrated agreement that satisfies the requirements of section 252(c) 
of the Act, including requiring parties to submit new final offers 
within a time frame specified by the arbitrator, or adopting a result 
not submitted by any party that is consistent with the requirements of 
section 252(c) of the Act, and the rules prescribed by the Commission 
pursuant to that section.
    (g) Participation in the arbitration proceeding will be limited to 
the requesting telecommunications carrier and the incumbent LEC, except 
that the Commission will consider requests by third parties to file 
written pleadings.
    (h) Absent mutual consent of the parties to change any terms and 
conditions adopted by the arbitrator, the decision of the arbitrator 
shall be binding on the parties.

[61 FR 45619, Aug. 29, 1996, as amended at 66 FR 8520, Feb. 1, 2001]



Sec. 51.809  Availability of agreements to other telecommunications 
carriers under section 252(i) of the Act.

    (a) An incumbent LEC shall make available without unreasonable delay 
to any requesting telecommunications carrier any agreement in its 
entirety to which the incumbent LEC is a party that is approved by a 
state commission pursuant to section 252 of the Act, upon the same 
rates, terms, and conditions as those provided in the agreement. An 
incumbent LEC may not limit the availability of any agreement only to 
those requesting carriers serving a comparable class of subscribers or 
providing the same service (i.e., local, access, or interexchange) as 
the original party to the agreement.
    (b) The obligations of paragraph (a) of this section shall not apply 
where the incumbent LEC proves to the state commission that:
    (1) The costs of providing a particular agreement to the requesting 
telecommunications carrier are greater than the costs of providing it to 
the telecommunications carrier that originally negotiated the agreement, 
or
    (2) The provision of a particular agreement to the requesting 
carrier is not technically feasible.
    (c) Individual agreements shall remain available for use by 
telecommunications carriers pursuant to this section for a reasonable 
period of time after the approved agreement is available for public 
inspection under section 252(h) of the Act.

[69 FR 43771, July 22, 2004]



PART 52_NUMBERING--Table of Contents




                      Subpart A_Scope and Authority

Sec.
52.1 Basis and purpose.
52.3 General.
52.5 Definitions.

                        Subpart B_Administration

52.7 Definitions.
52.9 General requirements.
52.11 North American Numbering Council.

[[Page 69]]

52.12 North American Numbering Plan Administrator and B&C Agent.
52.13 North American Numbering Plan Administrator.
52.15 Central office code administration.
52.16 Billing and Collection Agent.
52.17 Costs of number administration.
52.19 Area code relief.

                      Subpart C_Number Portability

52.20 Thousands-block number pooling.
52.21 Definitions.
52.23 Deployment of long-term database methods for number portability by 
          LECs.
52.25 Database architecture and administration.
52.26 NANC Recommendations on Local Number Portability Administration.
52.31 Deployment of long-term database methods for number portability by 
          CMRS providers.
52.32 Allocation of the shared costs of long-term number portability.
52.33 Recovery of carrier-specific costs directly related to providing 
          long-term number portability.
52.34 Obligations regarding local number porting to and from 
          interconnected VoIP or Internet-based TRS providers.
52.35-52.99 [Reserved]

                       Subpart D_Toll Free Numbers

52.101 General definitions.
52.103 Lag times.
52.105 Warehousing.
52.107 Hoarding.
52.109 Permanent cap on number reservations.
52.111 Toll free number assignment.

Appendix to Part 52--Deployment Schedule for Long-Term Database Methods 
          for Local Number Portability

    Authority: Secs. 1, 2, 4, 5, 48 Stat. 1066, as amended; 47 U.S.C. 
151, 152, 154 and 155 unless otherwise noted. Interpret or apply secs. 
3, 4, 201-05, 207-09, 218, 225-27, 251-52, 271 and 332, 48 Stat. 1070, 
as amended, 1077; 47 U.S.C. 153, 154, 201-05, 207-09, 218, 225-27, 251-
52, 271 and 332 unless otherwise noted.

    Source: 61 FR 38637, July 25, 1996, unless otherwise noted.



                      Subpart A_Scope and Authority

    Source: 61 FR 47353, Sept. 6, 1996, unless otherwise noted.



Sec. 52.1  Basis and purpose.

    (a) Basis. These rules are issued pursuant to the Communications Act 
of 1934, as amended, 47 U.S.C. 151 et. seq.
    (b) Purpose. The purpose of these rules is to establish, for the 
United States, requirements and conditions for the administration and 
use of telecommunications numbers for provision of telecommunications 
services.



Sec. 52.3  General.

    The Commission shall have exclusive authority over those portions of 
the North American Numbering Plan (NANP) that pertain to the United 
States. The Commission may delegate to the States or other entities any 
portion of such jurisdiction.



Sec. 52.5  Definitions.

    As used in this part:
    (a) Incumbent local exchange carrier. With respect to an area, an 
``incumbent local exchange carrier'' is a local exchange carrier that:
    (1) On February 8, 1996, provided telephone exchange service in such 
area; and
    (2)(i) On February 8, 1996, was deemed to be a member of the 
exchange carrier association pursuant to Sec. 69.601(b) of this chapter 
(47 CFR 69.601(b)); or
    (ii) Is a person or entity that, on or after February 8, 1996, 
became a successor or assign of a member described in paragraph 
(a)(2)(i) of this section.
    (b) North American Numbering Council (NANC). The ``North American 
Numbering Council'' is an advisory committee created under the Federal 
Advisory Committee Act, 5 U.S.C., App (1988), to advise the Commission 
and to make recommendations, reached through consensus, that foster 
efficient and impartial number administration.
    (c) North American Numbering Plan (NANP). The ``North American 
Numbering Plan'' is the basic numbering scheme for the 
telecommunications networks located in American Samoa, Anguilla, 
Antigua, Bahamas, Barbados, Bermuda, British Virgin Islands, Canada, 
Cayman Islands, Dominica, Dominican Republic, Grenada, Jamaica, 
Montserrat, St. Kitts & Nevis, St. Lucia, St. Vincent, Turks & Caicos 
Islands, Trinidad & Tobago, and the United States (including Puerto 
Rico, the U.S. Virgin Islands, Guam, the Commonwealth of the Northern 
Mariana Islands).

[[Page 70]]

    (d) State. The term ``state'' includes the District of Columbia and 
the Territories and possessions.
    (e) State commission. The term ``state commission'' means the 
commission, board, or official (by whatever name designated) which under 
the laws of any state has regulatory jurisdiction with respect to 
intrastate operations of carriers.
    (f) Telecommunications. ``Telecommunications'' means the 
transmission, between or among points specified by the user, of 
information of the user's choosing, without change in the form or 
content of the information as sent and received.
    (g) Telecommunications carrier. A ``telecommunications carrier'' is 
any provider of telecommunications services, except that such term does 
not include aggregators of telecommunications services (as defined in 47 
U.S.C. 226(a)(2)).
    (h) Telecommunications service. The term ``telecommunications 
service'' refers to the offering of telecommunications for a fee 
directly to the public, or to such classes of users as to be effectively 
available directly to the public, regardless of the facilities used.
    (i) Service provider. The term ``service provider'' refers to a 
telecommunications carrier or other entity that receives numbering 
resources from the NANPA, a Pooling Administrator or a 
telecommunications carrier for the purpose of providing or establishing 
telecommunications service.

[61 FR 47353, Sept. 6, 1996, as amended at 65 FR 37707, June 16, 2000; 
71 FR 65750, Nov. 9, 2006]



                        Subpart B_Administration

    Source: 61 FR 47353, Sept. 6, 1996, unless otherwise noted.



Sec. 52.7  Definitions.

    As used in this subpart:
    (a) Area code or numbering plan area (NPA). The term ``area code or 
numbering plan area'' refers to the first three digits (NXX) of a ten-
digit telephone number in the form NXX-NXX-XXXX, where N represents any 
one of the numbers 2 through 9 and X represents any one of the numbers 0 
through 9.
    (b) Area code relief. The term ``area code relief'' refers to the 
process by which central office codes are made available when there are 
few or no unassigned central office codes remaining in an existing area 
code and a new area code is introduced. Area code relief includes 
planning for area code ``jeopardy,'' which is a situation where central 
office codes may become exhausted before an area code relief plan can be 
implemented.
    (c) Central office (CO) code. The term ``central office code'' 
refers to the second three digits (NXX) of a ten-digit telephone number 
in the form NXX-NXX-XXXX, where N represents any one of the numbers 2 
through 9 and X represents any one of the numbers 0 through 9.
    (d) Central office (CO) code administrator. The term ``central 
office code administrator'' refers to the entity or entities responsible 
for managing central office codes in each area code.
    (e) North American Numbering Plan Administrator (NANPA). The term 
``North American Numbering Plan Administrator'' refers to the entity or 
entities responsible for managing the NANP.
    (f) Billing and Collection Agent. The term ``Billing & Collection 
Agent'' (``B&C Agent'') refers to the entity responsible for the 
collection of funds to support numbering administration for 
telecommunications services from the United States telecommunications 
industry and NANP member countries.
    (g) Pooling Administrator (PA). The term ``Pooling Administrator'' 
refers to the entity or entities responsible for administering a 
thousands-block number pool.
    (h) Contamination. Contamination occurs when at least one telephone 
number within a block of telephone numbers is not available for 
assignment to end users or customers. For purposes of this provision, a 
telephone number is ``not available for assignment'' if it is classified 
as administrative, aging, assigned, intermediate, or reserved as defined 
in Sec. 52.15(f)(1).
    (i) Donation. The term ``donation'' refers to the process by which 
carriers are required to contribute telephone numbers to a thousands-
block number pool.

[[Page 71]]

    (j) Inventory. The term ``inventory'' refers to all telephone 
numbers distributed, assigned or allocated:
    (1) To a service provider; or
    (2) To a pooling administrator for the purpose of establishing or 
maintaining a thousands-block number pool.

[61 FR 47353, Sept. 6, 1996, as amended at 62 FR 55180, Oct. 23, 1997; 
65 FR 37707, June 16, 2000]



Sec. 52.9  General requirements.

    (a) To ensure that telecommunications numbers are made available on 
an equitable basis, the administration of telecommunications numbers 
shall, in addition to the specific requirements set forth in this 
subpart:
    (1) Facilitate entry into the telecommunications marketplace by 
making telecommunications numbering resources available on an efficient, 
timely basis to telecommunications carriers;
    (2) Not unduly favor or disfavor any particular telecommunications 
industry segment or group of telecommunications consumers; and
    (3) Not unduly favor one telecommunications technology over another.
    (b) If the Commission delegates any telecommunications numbering 
administration functions to any State or other entity pursuant to 47 
U.S.C. 251(e)(1), such State or entity shall perform these functions in 
a manner consistent with this part.



Sec. 52.11  North American Numbering Council.

    The duties of the North American Numbering Council (NANC), may 
include, but are not limited to:
    (a) Advising the Commission on policy matters relating to the 
administration of the NANP in the United States;
    (b) Making recommendations, reached through consensus, that foster 
efficient and impartial number administration;
    (c) Initially resolving disputes, through consensus, that foster 
efficient and impartial number administration in the United States by 
adopting and utilizing dispute resolution procedures that provide 
disputants, regulators, and the public notice of the matters at issue, a 
reasonable opportunity to make oral and written presentations, a 
reasoned recommended solution, and a written report summarizing the 
recommendation and the reasons therefore;
    (d) [Reserved]
    (e) Recommending to the Commission an appropriate mechanism for 
recovering the costs of NANP administration in the United States, 
consistent with Sec. 52.17;
    (f) Carrying out the duties described in Sec. 52.25; and
    (g) Carrying out this part as directed by the Commission;
    (h) Monitoring the performance of the NANPA and the B&C Agent on at 
least an annual basis; and
    (i) Implementing, at the direction of the Commission, any action 
necessary to correct identified problems with the performance of the 
NANPA and the B&C Agent, as deemed necessary.

[61 FR 47353, Sept. 6, 1996, as amended at 62 FR 55180, Oct. 23, 1997; 
71 FR 65750, Nov. 9, 2006]



Sec. 52.12  North American Numbering Plan Administrator and B&C Agent.

    The North American Numbering Plan Administrator (``NANPA'') and the 
associated ``B&C Agent'' will conduct their respective operations in 
accordance with this section. The NANPA and the B&C Agent will conduct 
their respective operations with oversight from the Federal 
Communications Commission (the ``Commission'') and with recommendations 
from the North American Numbering Council (``NANC'').
    (a)(1) Neutrality. The NANPA and the B&C Agent shall be non-
governmental entities that are impartial and not aligned with any 
particular telecommunication industry segment. Accordingly, while 
conducting their respective operations under this section, the NANPA and 
B&C Agent shall ensure that they comply with the following neutrality 
criteria:
    (i) The NANPA and B&C Agent may not be an affiliate of any 
telecommunications service provider(s) as defined in the 
Telecommunications Act of 1996, or an affiliate of any interconnected 
VoIP provider as that term is defined in Sec. 52.21(h). ``Affiliate'' 
is a person who controls, is controlled by, or is under

[[Page 72]]

the direct or indirect common control with another person. A person 
shall be deemed to control another if such person possesses, directly or 
indirectly--
    (A) An equity interest by stock, partnership (general or limited) 
interest, joint venture participation, or member interest in the other 
person ten (10%) percent or more of the total outstanding equity 
interests in the other person, or
    (B) The power to vote ten (10%) percent or more of the securities 
(by stock, partnership (general or limited) interest, joint venture 
participation, or member interest) having ordinary voting power for the 
election of directors, general partner, or management of such other 
person, or
    (C) The power to direct or cause the direction of the management and 
policies of such other person, whether through the ownership of or right 
to vote voting rights attributable to the stock, partnership (general or 
limited) interest, joint venture participation, or member interest) of 
such other person, by contract (including but not limited to stockholder 
agreement, partnership (general or limited) agreement, joint venture 
agreement, or operating agreement), or otherwise;
    (ii) The NANPA and B&C Agent, and any affiliate thereof, may not 
issue a majority of its debt to, nor may it derive a majority of its 
revenues from, any telecommunications service provider. ``Majority'' 
shall mean greater than 50 percent, and ``debt'' shall mean stocks, 
bonds, securities, notes, loans or any other instrument of indebtedness; 
and
    (iii) Notwithstanding the neutrality criteria set forth in 
paragraphs (a)(1) (i) and (ii) of this section, the NANPA and B&C Agent 
may be determined to be or not to be subject to undue influence by 
parties with a vested interest in the outcome of numbering 
administration and activities. NANC may conduct an evaluation to 
determine whether the NANPA and B&C Agent meet the undue influence 
criterion.
    (2) Any subcontractor that performs--
    (i) NANP administration and central office code administration, or
    (ii) Billing and Collection functions, for the NANPA or for the B&C 
Agent must also meet the neutrality criteria described in paragraph 
(a)(1).
    (b) Term of administration. The NANPA shall provide numbering 
administration, including central office code administration, for the 
United States portion of the North American Numbering Plan (``NANP'') 
for an initial period of five (5) years. At any time prior to the 
termination of the initial or subsequent term of administration, such 
term may be renewed for up to five (5) years with the approval of the 
Commission and the agreement of the NANPA. The B&C Agent shall provide 
billing and collection functions for an initial period of five (5) 
years. At any time prior to the termination of the initial or subsequent 
term of administration, such term may be renewed for up to five (5) 
years with the approval of the Commission and the agreement of the B&C 
Agent.
    (c) Changes to regulations, rules, guidelines or directives. In the 
event that regulatory authorities or industry groups (including, for 
example, the Industry Numbering Committee--INC, or its successor) issue 
rules, requirements, guidelines or policy directives which may affect 
the functions performed by the NANPA and the B&C Agent, the NANPA and 
the B&C Agent shall, within 10 business days from the date of official 
notice of such rules, requirements, guidelines or policy directives, 
assess the impact on its operations and advise the Commission of any 
changes required. NANPA and the B&C Agent shall provide written 
explanation why such changes are required. To the extent the Commission 
deems such changes are necessary, the Commission will recommend to the 
NANP member countries appropriate cost recovery adjustments, if 
necessary.
    (d) Performance review process. NANPA and the B&C Agent shall 
develop and implement an internal, documented performance monitoring 
mechanism and shall provide such performance review on request of the 
Commission on at least an annual basis. The annual assessment process 
will not preclude telecommunications industry participants from 
identifying performance problems to the NANPA, the B&C Agent and the 
NANC as they occur, and from seeking expeditious resolution. If

[[Page 73]]

performance problems are identified by a telecommunications industry 
participant, the NANC, B&C Agent or NANPA shall investigate and report 
within 10 business days of notice to the participant of corrective 
action, if any, taken or to be taken. The NANPA, B&C Agent or NANC (as 
appropriate) shall be permitted reasonable time to take corrective 
action, including the necessity of obtaining the required consent of the 
Commission.
    (e) Termination. If the Commission determines at any time that the 
NANPA or the B&C Agent fails to comply with the neutrality criteria set 
forth in paragraph (a) of this section or substantially or materially 
defaults in the performance of its obligations, the Commission shall 
advise immediately the NANPA or the B&C Agent of said failure or 
default, request immediate corrective action, and permit the NANPA or 
B&C Agent reasonable time to correct such failure or default. If the 
NANPA or B&C Agent is unwilling or unable to take corrective action, the 
Commission may, in a manner consistent with the requirements of the 
Administrative Procedure Act and the Communications Act of 1934, as 
amended, take any action that it deems appropriate, including 
termination of the NANPA's or B&C Agent's term of administration.
    (f) Required and optional enterprise services. Enterprise Services, 
which are services beyond those described in Sec. 52.13 that may be 
provided by the new NANPA for specified fees, may be offered with prior 
approval of the Commission.
    (1) Required Enterprise Services. At the request of a code holder, 
the NANPA shall, in accordance with industry standards and for 
reasonable fees, enter certain routing and rating information, into the 
industry-approved database(s) for dissemination of such information. 
This task shall include reviewing the information and assisting in its 
preparation.
    (2) Optional Enterprise Services. The NANPA may, subject to prior 
approval and for reasonable fees, offer ``Optional Enterprise Services'' 
which are any services not described elsewhere in this section.
    (3) Annual report. NANPA shall identify and record all direct costs 
associated with providing Enterprise Services separately from the costs 
associated with the non-enterprise NANPA functions. The NANPA shall 
submit an annual report to the NANC summarizing the revenues and costs 
for providing each Enterprise Service. NANPA shall be audited by an 
independent auditor after the first year of operations and every two 
years thereafter, and submit the report to the Commission for 
appropriate review and action.

[63 FR 55180, Oct. 23, 1997, as amended at 73 FR 9481, Feb. 21, 2008]



Sec. 52.13  North American Numbering Plan Administrator.

    (a) The North American Numbering Plan Administrator (NANPA) shall be 
an independent and impartial non-government entity.
    (b) The NANPA shall administer the numbering resources identified in 
paragraph (d) of this section. It shall assign and administer NANP 
resources in an efficient, effective, fair, unbiased, and non-
discriminatory manner consistent with industry-developed guidelines and 
Commission regulations. It shall support the Commission's efforts to 
accommodate current and future numbering needs. It shall perform 
additional functions, including but not limited to:
    (1) Ensuring the efficient and effective administration and 
assignment of numbering resources by performing day-to-day number 
resource assignment and administrative activities;
    (2) Planning for the long-term need for NANP resources to ensure the 
continued viability of the NANP by implementing a plan for number 
resource administration that uses effective forecasting and management 
skills in order to make the industry aware of the availability of 
numbering resources and to meet the current and future needs of the 
industry;
    (3) Complying with guidelines of the North American Industry 
Numbering Committee (INC) or its successor, related industry 
documentation, Commission regulations and orders, and the guidelines of 
other appropriate policy-making authorities;

[[Page 74]]

    (4) Providing management supervision for all of the services it 
provides, including responsibility for achieving performance measures 
established by the NANC and the INC in industry guidelines;
    (5) Participating in the NANC annual performance review as described 
in Sec. Sec. 52.11 and 52.12;
    (6) Establishing and maintaining relationships with current 
governmental and regulatory bodies, and their successors, including the 
United States Federal Communications Commission, Industry Canada, the 
Canadian Radio-television and Telecommunications Commission, and other 
United States, Canadian, and Caribbean numbering authorities and 
regulatory agencies, and addressing policy directives from these bodies;
    (7) Cooperating with and actively participating in numbering 
standards bodies and industry fora, such as INC and, upon request, the 
Canadian Steering Committee on Numbering (CSCN);
    (8) Representing the NANP to national and international numbering 
bodies;
    (9) Developing and maintaining communications channels with other 
countries who also participate in the NANP to ensure that numbering 
needs of all countries served by the NANP are met;
    (10) Attending United States Study Group A meetings and maintaining 
a working knowledge of Study Group 2 International Telecommunications 
Union activities on behalf of the United States telecommunications 
industry;
    (11) Reviewing requests for all numbering resources to implement new 
applications and services and making assignments in accordance with 
industry-developed resource planning and assignment guidelines;
    (12) Referring requests for particular numbering resources to the 
appropriate industry body where guidelines do not exist for those 
resources;
    (13) Participating in industry activities to determine whether, when 
new telecommunications services requiring numbers are proposed, NANP 
numbers are appropriate and what level of resource is required (e.g., 
line numbers, central office codes, NPA codes);
    (14) Maintaining necessary administrative staff to handle the legal, 
financial, technical, staffing, industry, and regulatory issues relevant 
to the management of all numbering resources, as well as maintaining the 
necessary equipment, facilities, and proper billing arrangements 
associated with day-to-day management of all numbering resources;
    (15) Managing the NANP in accordance with published guidelines 
adopted in conjunction with the industry and the appropriate NANP member 
countries' governing agencies, and referring issues to the appropriate 
industry body for resolution when they have not been addressed by the 
industry;
    (16) Responding to requests from the industry and from regulators 
for information about the NANP and its administration, as the primary 
repository for numbering information in the industry;
    (17) Providing upon request information regarding how to obtain 
current documents related to NANP administration;
    (18) Providing assistance to users of numbering resources and 
suggesting numbering administration options, when possible, that will 
optimize number resource utilization;
    (19) Coordinating its numbering resource activities with the 
Canadian Number Administrator and other NANP member countries' 
administrators to ensure efficient and effective management of NANP 
numbering resources; and
    (20) Determining the final allocation methodology for sharing costs 
between NANP countries.
    (c) In performing the functions outlined in paragraph (b) of this 
section, the NANPA shall:
    (1) Ensure that the interests of all NANP member countries are 
considered;
    (2) Assess fairly requests for assignments of NANP numbering 
resources and ensure the assignment of numbering resources to 
appropriate service providers;
    (3) Develop, operate and maintain the computer hardware, software 
(database) and mechanized systems required

[[Page 75]]

to perform the NANPA and central office (CO) Code Administration 
functions;
    (4) Manage projects such as Numbering Plan Area (NPA) relief (area 
code relief) planning, Numbering Resource Utilization and Forecast 
(NRUF) data collection, and NPA and NANP exhaust projection;
    (5) Facilitate NPA relief planning meetings;
    (6) Participate in appropriate industry activities;
    (7) Manage proprietary data and competitively sensitive information 
and maintain the confidentiality thereof;
    (8) Act as an information resource for the industry concerning all 
aspects of numbering (i.e., knowledge and experience in numbering 
resource issues, International Telecommunications Union (ITU) 
Recommendation E.164, the North American Numbering Plan (NANP), NANP 
Administration, INC, NANP area country regulatory issues affecting 
numbering, number resource assignment guidelines, central office code 
administration, relief planning, international numbering issues, etc.); 
and
    (9) Ensure that any action taken with respect to number 
administration is consistent with this part.
    (d) The NANPA and, to the extent applicable, the B&C Agent, shall 
administer numbering resources in an efficient and non-discriminatory 
manner, in accordance with Commission rules and regulations and the 
guidelines developed by the INC and other industry groups pertaining to 
administration and assignment of numbering resources, including, but not 
limited to:
    (1) Numbering Plan Area (NPA) codes,
    (2) Central Office codes for the 809 area,
    (3) International Inbound NPA 456 NXX codes,
    (4) (NPA) 500 NXX codes,
    (5) (NPA) 900 NXX codes,
    (6) N11 Service codes,
    (7) 855-XXXX line numbers,
    (8) 555-XXXX line numbers,
    (9) Carrier Identification Codes,
    (10) Vertical Service Codes,
    (11) ANI Information Integer (II) Digit Pairs,
    (12) Non Dialable Toll Points, and
    (13) New numbering resources as may be defined.
    (e) Relationships with other NANP member countries' administrators 
and authorities. The NANPA shall address policy directives from other 
NANP member countries' governmental and regulatory authorities and 
coordinate its activities with other NANP member countries' 
administrators, if any, to ensure efficient and effective management of 
NANP resources.
    (f) Transition plan. The NANPA shall implement a transition plan, 
subject to Commission approval, leading to its assumption of NANPA 
functions within 90 days of the effective date of a Commission order 
announcing the selection of the NANPA.
    (g) Transfer of intellectual property. The new NANPA must make 
available any and all intellectual property and associated hardware 
resulting from its activities as numbering administrator including, but 
not limited to, systems and the data contained therein, software, 
interface specifications and supporting documentation and make such 
property available to whomever NANC directs free of charge. The new 
NANPA must specify any intellectual property it proposes to exclude from 
the provisions of this paragraph based on the existence of such property 
prior to its selection as NANPA.

[61 FR 47353, Sept. 6, 1996, as amended at 62 FR 55181, Oct. 23, 1997; 
71 FR 65750, Nov. 9, 2006]



Sec. 52.15  Central office code administration.

    (a) Central Office Code Administration shall be performed by the 
NANPA, or another entity or entities, as designated by the Commission.
    (b) Duties of the entity or entities performing central office code 
administration may include, but are not limited to:
    (1) Processing central office code assignment applications and 
assigning such codes in a manner that is consistent with this part;
    (2) Accessing and maintaining central office code assignment 
databases;
    (3) Conducting the Numbering Resource Utilization and Forecast 
(NRUF) data collection;

[[Page 76]]

    (4) Monitoring the use of central office codes within each area code 
and forecasting the date by which all central office codes within that 
area code will be assigned; and
    (5) Planning for and initiating area code relief, consistent with 
Sec. 52.19.
    (c) [Reserved]
    (d) Central Office (CO) Code Administration functional requirements. 
The NANPA shall manage the United States CO code numbering resource, 
including CO code request processing, NPA code relief and jeopardy 
planning, and industry notification functions. The NANPA shall perform 
its CO Code administration functions in accordance with the published 
industry numbering resource administration guidelines and Commission 
orders and regulations of 47 CFR chapter I.
    (e) [Reserved]
    (f) Mandatory reporting requirements--(1) Number use categories. 
Numbering resources must be classified in one of the following 
categories:
    (i) Administrative numbers are numbers used by telecommunications 
carriers to perform internal administrative or operational functions 
necessary to maintain reasonable quality of service standards.
    (ii) Aging numbers are disconnected numbers that are not available 
for assignment to another end user or customer for a specified period of 
time. Numbers previously assigned to residential customers may be aged 
for no more than 90 days. Numbers previously assigned to business 
customers may be aged for no more than 365 days.
    (iii) Assigned numbers are numbers working in the Public Switched 
Telephone Network under an agreement such as a contract or tariff at the 
request of specific end users or customers for their use, or numbers not 
yet working but having a customer service order pending. Numbers that 
are not yet working and have a service order pending for more than five 
days shall not be classified as assigned numbers.
    (iv) Available numbers are numbers that are available for assignment 
to subscriber access lines, or their equivalents, within a switching 
entity or point of interconnection and are not classified as assigned, 
intermediate, administrative, aging, or reserved.
    (v) Intermediate numbers are numbers that are made available for use 
by another telecommunications carrier or non-carrier entity for the 
purpose of providing telecommunications service to an end user or 
customer. Numbers ported for the purpose of transferring an established 
customer's service to another service provider shall not be classified 
as intermediate numbers.
    (vi) Reserved numbers are numbers that are held by service providers 
at the request of specific end users or customers for their future use. 
Numbers held for specific end users or customers for more than 180 days 
shall not be classified as reserved numbers.
    (2) Reporting carrier. The term ``reporting carrier'' refers to a 
telecommunications carrier that receives numbering resources from the 
NANPA, a Pooling Administrator or another telecommunications carrier.
    (3) Data collection procedures. (i) Reporting carriers shall report 
utilization and forecast data to the NANPA.
    (ii) Reporting shall be by separate legal entity and must include 
company name, company headquarters address, Operating Company Number 
(OCN), parent company OCN, and the primary type of business in which the 
reporting carrier is engaged. The term ``parent company'' refers to the 
highest related legal entity located within the state for which the 
reporting carrier is reporting data.
    (iii) All data shall be filed electronically in a format approved by 
the Common Carrier Bureau.
    (4) Forecast data reporting. (i) Reporting carriers shall submit to 
the NANPA a five-year forecast of their yearly numbering resource 
requirements.
    (ii) In areas where thousands-block number pooling has been 
implemented:
    (A) Reporting carriers that are required to participate in 
thousands-block number pooling shall report forecast data at the 
thousands-block (NXX-X) level per rate center;
    (B) Reporting carriers that are not required to participate in 
thousands-block number pooling shall report forecast data at the central 
office code (NXX) level per rate center.

[[Page 77]]

    (iii) In areas where thousands-block number pooling has not been 
implemented, reporting carriers shall report forecast data at the 
central office code (NXX) level per NPA.
    (iv) Reporting carriers shall identify and report separately initial 
numbering resources and growth numbering resources.
    (5) Utilization data reporting. (i) Reporting carriers shall submit 
to the NANPA a utilization report of their current inventory of 
numbering resources. The report shall classify numbering resources in 
the following number use categories: assigned, intermediate, reserved, 
aging, and administrative.
    (ii) Rural telephone companies, as defined in the Communications Act 
of 1934, as amended, 47 U.S.C. 153(37), that provide telecommunications 
service in areas where local number portability has not been implemented 
shall report utilization data at the central office code (NXX) level per 
rate center in those areas.
    (iii) All other reporting carriers shall report utilization data at 
the thousands-block (NXX-X) level per rate center.
    (6) Reporting frequency. (i) Reporting carriers shall file forecast 
and utilization reports semi-annually on or before February 1 for the 
preceding reporting period ending on December 31, and on or before 
August 1 for the preceding reporting period ending on June 30. Mandatory 
reporting shall commence August 1, 2000.
    (ii) State commissions may reduce the reporting frequency for NPAs 
in their states to annual. Reporting carriers operating in such NPAs 
shall file forecast and utilization reports annually on or before August 
1 for the preceding reporting period ending on June 30, commencing 
August 1, 2000.
    (iii) A state commission seeking to reduce the reporting frequency 
pursuant to paragraph (f) (6)(ii) of this section shall notify the 
Wireline Competition Bureau and the NANPA in writing prior to reducing 
the reporting frequency.
    (7) Access to data and confidentiality--States shall have access to 
data reported to the NANPA provided that they have appropriate 
protections in place to prevent public disclosure of disaggregated, 
carrier-specific data.
    (g) Applications for numbering resources--(1) General requirements. 
All applications for numbering resources must include the company name, 
company headquarters address, OCN, parent company's OCN(s), and the 
primary type of business in which the numbering resources will be used.
    (2) Initial numbering resources. Applications for initial numbering 
resources shall include evidence that:
    (i) The applicant is authorized to provide service in the area for 
which the numbering resources are being requested; and
    (ii) The applicant is or will be capable of providing service within 
sixty (60) days of the numbering resources activation date.
    (3) Growth numbering resources. (i) Applications for growth 
numbering resources shall include:
    (A) A Months-to-Exhaust Worksheet that provides utilization by rate 
center for the preceding six months and projected monthly utilization 
for the next twelve (12) months; and
    (B) The applicant's current numbering resource utilization level for 
the rate center in which it is seeking growth numbering resources.
    (ii) The numbering resource utilization level shall be calculated by 
dividing all assigned numbers by the total numbering resources in the 
applicant's inventory and multiplying the result by 100. Numbering 
resources activated in the Local Exchange Routing Guide (LERG) within 
the preceding 90 days of reporting utilization levels may be excluded 
from the utilization calculation.
    (iii) All service providers shall maintain no more than a six-month 
inventory of telephone numbers in each rate center or service area in 
which it provides telecommunications service.
    (iv) The NANPA shall withhold numbering resources from any U.S. 
carrier that fails to comply with the reporting and numbering resource 
application requirements established in this part. The NANPA shall not 
issue numbering resources to a carrier without an OCN. The NANPA must 
notify the carrier in writing of its decision to withhold numbering 
resources within ten (10)

[[Page 78]]

days of receiving a request for numbering resources. The carrier may 
challenge the NANPA's decision to the appropriate state regulatory 
commission. The state commission may affirm or overturn the NANPA's 
decision to withhold numbering resources from the carrier based on its 
determination of compliance with the reporting and numbering resource 
application requirements herein.
    (4) Non-compliance. The NANPA shall withhold numbering resources 
from any U.S. carrier that fails to comply with the reporting and 
numbering resource application requirements established in this part. 
The NANPA shall not issue numbering resources to a carrier without an 
Operating Company Number (OCN). The NANPA must notify the carrier in 
writing of its decision to withhold numbering resources within ten (10) 
days of receiving a request for numbering resources. The carrier may 
challenge the NANPA's decision to the appropriate state regulatory 
commission. The state commission may affirm, or may overturn, the 
NANPA's decision to withhold numbering resources from the carrier based 
on its determination that the carrier has complied with the reporting 
and numbering resource application requirements herein. The state 
commission also may overturn the NANPA's decision to withhold numbering 
resources from the carrier based on its determination that the carrier 
has demonstrated a verifiable need for numbering resources and has 
exhausted all other available remedies.
    (5) State access to applications. State regulatory commissions shall 
have access to service provider's applications for numbering resources. 
The state commissions should request copies of such applications from 
the service providers operating within their states, and service 
providers must comply with state commission requests for copies of 
numbering resource applications. Carriers that fail to comply with a 
state commission request for numbering resource application materials 
shall be denied numbering resources.
    (h) National utilization threshold. All applicants for growth 
numbering resources shall achieve a 60% utilization threshold, 
calculated in accordance with paragraph (g)(3)(ii) of this section, for 
the rate center in which they are requesting growth numbering resources. 
This 60% utilization threshold shall increase by 5% on June 30, 2002, 
and annually thereafter until the utilization threshold reaches 75%.
    (i) Reclamation of numbering resources. (1) Reclamation refers to 
the process by which service providers are required to return numbering 
resources to the NANPA or the Pooling Administrator.
    (2) State commissions may investigate and determine whether service 
providers have activated their numbering resources and may request proof 
from all service providers that numbering resources have been activated 
and assignment of telephone numbers has commenced.
    (3) Service providers may be required to reduce contamination levels 
to facilitate reclamation and/or pooling.
    (4) State commissions shall provide service providers an opportunity 
to explain the circumstances causing the delay in activating and 
commencing assignment of their numbering resources prior to initiating 
reclamation.
    (5) The NANPA and the Pooling Administrator shall abide by the state 
commission's determination to reclaim numbering resources if the state 
commission is satisfied that the service provider has not activated and 
commenced assignment to end users of their numbering resources within 
six months of receipt.
    (6) The NANPA and Pooling Administrator shall initiate reclamation 
within sixty days of expiration of the service provider's applicable 
activation deadline.
    (7) If a state commission declines to exercise the authority 
delegated to it in this paragraph, the entity or entities designated by 
the Commission to serve as the NANPA shall exercise this authority with 
respect to NXX codes and the Pooling Administrator shall exercise this 
authority with respect to thousands-blocks. The NANPA and the Pooling 
Administrator shall consult with the Wireline Competition Bureau prior 
to exercising the authority delegated to it in this provision.
    (j) Sequential number assignment. (1) All service providers shall 
assign all available telephone numbers within an

[[Page 79]]

opened thousands-block before assigning telephone numbers from an 
uncontaminated thousands-block, unless the available numbers in the 
opened thousands-block are not sufficient to meet a specific customer 
request. This requirement shall apply to a service provider's existing 
numbering resources as well as any new numbering resources it obtains in 
the future.
    (2) A service provider that opens an uncontaminated thousands-block 
prior to assigning all available telephone numbers within an opened 
thousands-block should be prepared to demonstrate to the state 
commission:
    (i) A genuine request from a customer detailing the specific need 
for telephone numbers; and
    (ii) The service provider's inability to meet the specific customer 
request for telephone numbers from the available numbers within the 
service provider's opened thousands-blocks.
    (3) Upon a finding by a state commission that a service provider 
inappropriately assigned telephone numbers from an uncontaminated 
thousands-block, the NANPA or the Pooling Administrator shall suspend 
assignment or allocation of any additional numbering resources to that 
service provider in the applicable NPA until the service provider 
demonstrates that it does not have sufficient numbering resources to 
meet a specific customer request.
    (k) Numbering audits. (1) All telecommunications service providers 
shall be subject to ``for cause'' and random audits to verify carrier 
compliance with Commission regulations and applicable industry 
guidelines relating to numbering administration.
    (2) The Enforcement Bureau will oversee the conduct and scope of all 
numbering audits conducted under the Commission's jurisdiction, and 
determine the audit procedures necessary to perform the audit. Numbering 
audits performed by independent auditors pursuant to this section shall 
be conducted in accordance with generally accepted auditing standards 
and the American Institute of Certified Public Accountants' standards 
for compliance attestation engagements, as supplemented by the guidance 
and direction of the Chief of the Enforcement Bureau.
    (3) Requests for ``for cause'' audits shall be forwarded to the 
Chief of the Enforcement Bureau, with a copy to the Chief of the Common 
Carrier Bureau. Requests must state the reason for which a ``for cause'' 
audit is being requested and include documentation of the alleged 
anomaly, inconsistency, or violation of the Commission rules or orders 
or applicable industry guidelines. The Chief of the Enforcement Bureau 
will provide carriers up to 30 days to provide a written response to a 
request for a ``for cause'' audit.

[61 FR 47353, Sept. 6, 1996, as amended at 62 FR 55182, Oct. 23, 1997; 
65 FR 37707, June 16, 2000; 66 FR 9531, Feb. 8, 2001; 67 FR 6434, Feb. 
12, 2002; 67 FR 13226, Mar. 21, 2002; 68 FR 25843, May 14, 2003; 71 FR 
65750, Nov. 9, 2006]



Sec. 52.16  Billing and Collection Agent.

    The B&C Agent shall:
    (a) Calculate, assess, bill and collect payments for all numbering 
administration functions and distribute funds to the NANPA, or other 
agent designated by the Common Carrier Bureau that performs functions 
related to numbering administration, on a monthly basis;
    (b) Distribute to carriers the ``Telecommunications Reporting 
Worksheet,'' described in Sec. 52.17(b).
    (c) Keep confidential all data obtained from carriers and not 
disclose such data in company-specific form unless authorized by the 
Commission. Subject to any restrictions imposed by the Chief of the 
Wireline Competition Bureau, the B & C Agent may share data obtained 
from carriers with the administrators of the universal service support 
mechanism (See 47 CFR 54.701 of this chapter), the TRS Fund (See 47 CFR 
64.604(c)(4)(iii)(H) of this chapter), and the local number portability 
cost recovery (See 47 CFR 52.32). The B & C Agent shall keep 
confidential all data obtained from other administrators. The B & C 
Agent shall use such data, from carriers or administrators, only for 
calculating, collecting and verifying payments. The Commission shall 
have access to all data reported to the Administrator. Contributors may 
make requests for Commission

[[Page 80]]

nondisclosure of company-specific revenue information under Sec. 0.459 
of this chapter by so indicating on the Telecommunications Reporting 
Worksheet at the time that the subject data are submitted. The 
Commission shall make all decisions regarding nondisclosure of company-
specific information.
    (d) Develop procedures to monitor industry compliance with reporting 
requirements and propose specific procedures to address reporting 
failures and late payments;
    (e) File annual reports with the appropriate regulatory authorities 
of the NANP member countries as requested; and
    (f) Obtain an audit from an independent auditor after the first year 
of operations and annually thereafter, which shall evaluate the validity 
of calculated payments. The B&C Agent shall submit the audit report to 
the Commission for appropriate review and action.
    (g) For the purposes of this rule, the term ``carrier(s)'' shall 
include interconnected VoIP providers as that term is defined in Sec. 
52.21(h).

[62 FR 55183, Oct. 23, 1997, as amended at 64 FR 41330, July 30, 1999; 
66 FR 9532, Feb. 8, 2001; 67 FR 13226, Mar. 21, 2002; 73 FR 9481, Feb. 
21, 2008]



Sec. 52.17  Costs of number administration.

    All telecommunications carriers in the United States shall 
contribute on a competitively neutral basis to meet the costs of 
establishing numbering administration.
    (a) Contributions to support numbering administration shall be the 
product of the contributors' end-user telecommunications revenues for 
the prior calendar year and a contribution factor determined annually by 
the Chief of the Common Carrier Bureau; such contributions to be no less 
than twenty-five dollars ($25). The contribution factor shall be based 
on the ratio of expected number administration expenses to end-user 
telecommunications revenues. Carriers that have no end-user 
telecommunications revenues shall contribute twenty-five dollars ($25). 
In the event that contributions exceed or are inadequate to cover 
administrative costs, the contribution factor for the following year 
shall be adjusted by an appropriate amount.
    (b) All telecommunications carriers in the United States shall 
complete and submit a ``Telecommunications Reporting Worksheet'' (as 
published by the Commission in the Federal Register), which sets forth 
the information needed to calculate contributions referred to in 
paragraph (a) of this section. The worksheet shall be certified to by an 
officer of the contributor, and subject to verification by the 
Commission or the B & C Agent at the discretion of the Commission. The 
Chief of the Common Carrier Bureau may waive, reduce, modify, or 
eliminate contributor reporting requirements that prove unnecessary and 
require additional reporting requirements that the Bureau deems 
necessary to the sound and efficient administration of the number 
administration cost recovery.
    (c) For the purposes of this section, the term ``telecommunications 
carrier'' or ``carrier'' shall include interconnected VoIP providers as 
that term is defined in Sec. 52.21(h).

[64 FR 41331, July 30, 1999, as amended at 73 FR 9481, Feb. 21, 2008]



Sec. 52.19  Area code relief.

    (a) State commissions may resolve matters involving the introduction 
of new area codes within their states. Such matters may include, but are 
not limited to: Directing whether area code relief will take the form of 
a geographic split, an overlay area code, or a boundary realignment; 
establishing new area code boundaries; establishing necessary dates for 
the implementation of area code relief plans; and directing public 
education efforts regarding area code changes.
    (b) State commissions may perform any or all functions related to 
initiation and development of area code relief plans, so long as they 
act consistently with the guidelines enumerated in this part, and 
subject to paragraph (b)(2) of this section. For the purposes of this 
paragraph, initiation and development of area code relief planning 
encompasses all functions related to the implementation of new area 
codes that were performed by central office code administrators prior to 
February 8,

[[Page 81]]

1996. Such functions may include: declaring that the area code relief 
planning process should begin; convening and conducting meetings to 
which the telecommunications industry and the public are invited on area 
code relief for a particular area code; and developing the details of a 
proposed area code relief plan or plans.
    (1) The entity or entities designated by the Commission to serve as 
central office code administrator(s) shall initiate and develop area 
code relief plans for each area code in each state that has not notified 
such entity or entities, pursuant to paragraph (b)(2) of this section, 
that the state will handle such functions.
    (2) Pursuant to paragraph (b)(1) of this section, a state commission 
must notify the entity or entities designated by the Commission to serve 
as central office code administrator(s) for its state that such state 
commission intends to perform matters related to initiation and 
development of area code relief planning efforts in its state. 
Notification shall be written and shall include a description of the 
specific functions the state commission intends to perform. Where the 
NANP Administrator serves as the central office code administrator, such 
notification must be made within 120 days of the selection of the NANP 
Administrator.
    (c) New area codes may be introduced through the use of:
    (1) A geographic area code split, which occurs when the geographic 
area served by an area code in which there are few or no central office 
codes left for assignment is split into two or more geographic parts;
    (2) An area code boundary realignment, which occurs when the 
boundary lines between two adjacent area codes are shifted to allow the 
transfer of some central office codes from an area code for which 
central office codes remain unassigned to an area code for which few or 
no central office codes are left for assignment; or
    (3) An all services area code overlay, which occurs when a new area 
code is introduced to serve the same geographic area as one or more 
existing area code(s), subject to the following conditions:
    (i) No all services area code overlay may be implemented unless all 
numbering resources in the new overlay area code are assigned to those 
entities requesting assignment on a first-come, first-serve basis, 
regardless of the identity of, technology used by, or type of service 
provided by that entity, except to the extent that a technology- or 
service-specific overlay is authorized by the Commission. No group of 
telecommunications carriers shall be excluded from assignment of 
numbering resources in the existing area code, or be assigned such 
resources only from the all services overlay area code, based solely on 
that group's provision of a specific type of telecommunications service 
or use of a particular technology; and
    (ii) No area code overlay may be implemented unless there exists, at 
the time of implementation, mandatory ten-digit dialing for every 
telephone call within and between all area codes in the geographic area 
covered by the overlay area code.
    (4) A technology-specific or service-specific overlay, which occurs 
when a new area code is introduced to serve the same geographic area as 
one or more existing area code(s) and numbering resources in the new 
area code overlay are assigned to a specific technology(ies) or 
service(s). State commissions may not implement a technology-specific or 
service-specific overlay without express authority from the Commission.

[61 FR 47353, Sept. 6, 1996, as amended at 64 FR 63617, Nov. 16, 1998; 
64 FR 62984, Nov. 18, 1999; 67 FR 6434, Feb. 12, 2002]

    Effective Date Note: At 67 FR 6434, Feb. 12, 2002, Sec. 52.19 was 
amended by revising paragraph (c)(3)(i) and adding paragraph (c)(4). 
These paragraphs contain information collection requirements and will 
not become effective until approval has been given by the Office of 
Management and Budget.



                      Subpart C_Number Portability

    Source: 61 FR 38637, July 25, 1996, unless otherwise noted. 
Redesignated at 61 FR 47353, Sept. 6, 1996.

[[Page 82]]



Sec. 52.20  Thousands-block number pooling.

    (a) Definition. Thousands-block number pooling is a process by which 
the 10,000 numbers in a central office code (NXX) are separated into ten 
sequential blocks of 1,000 numbers each (thousands-blocks), and 
allocated separately within a rate center.
    (b) General requirements. Pursuant to the Commission's adoption of 
thousands-block number pooling as a mandatory nationwide numbering 
resource optimization strategy, all carriers, except those exempted by 
the Commission, must participate in thousands-block number pooling where 
it is implemented and in accordance with the national thousands-block 
number pooling framework and implementation schedule established by the 
Commission.
    (c) Donation of thousands-blocks. (1) All service providers required 
to participate in thousands-block number pooling shall donate thousands-
blocks with ten percent or less contamination to the thousands-block 
number pool for the rate center within which the numbering resources are 
assigned.
    (2) All service providers required to participate in thousands-block 
number pooling shall be allowed to retain at least one thousands-block 
per rate center, even if the thousands-block is ten percent or less 
contaminated, as an initial block or footprint block.
    (d) Thousands-Block Pooling Administrator. (1) The Pooling 
Administrator shall be a non-governmental entity that is impartial and 
not aligned with any particular telecommunication industry segment, and 
shall comply with the same neutrality requirements that the NANPA is 
subject to under this part.
    (2) The Pooling Administrator shall maintain no more than a six-
month inventory of telephone numbers in each thousands-block number 
pool.

[65 FR 37709, June 16, 2000, as amended at 66 FR 9532, Feb. 8, 2001; 68 
FR 43009, July 21, 2003]



Sec. 52.21  Definitions.

    As used in this subpart:
    (a) The term 100 largest MSAs includes the 100 largest MSAs as 
identified in the 1990 U.S. Census reports, as set forth in the Appendix 
to this part, as well as those areas identified as one of the largest 
100 MSAs on subsequent updates to the U.S. Census reports.
    (b) The term broadband PCS has the same meaning as that term is 
defined in Sec. 24.5 of this chapter.
    (c) The term cellular service has the same meaning as that term is 
defined in Sec. 22.99 of this chapter.
    (d) The term covered CMRS means broadband PCS, cellular, and 800/900 
MHz SMR licensees that hold geographic area licenses or are incumbent 
SMR wide area licensees, and offer real-time, two-way switched voice 
service, are interconnected with the public switched network, and 
utilize an in-network switching facility that enables such CMRS systems 
to reuse frequencies and accomplish seamless hand-offs of subscriber 
calls.
    (e) The term database method means a number portability method that 
utilizes one or more external databases for providing called party 
routing information.
    (f) The term downstream database means a database owned and operated 
by an individual carrier for the purpose of providing number portability 
in conjunction with other functions and services.
    (g) The term incumbent wide area SMR licensee has the same meaning 
as that term is defined in Sec. 20.3 of this chapter.
    (h) The term ``interconnected VoIP provider'' is an entity that 
provides interconnected VoIP service as that term is defined in 47 CFR 
9.3.
    (i) The term IP Relay provider means an entity that provides IP 
Relay as defined by 47 CFR 64.601.
    (j) The term local exchange carrier means any person that is engaged 
in the provision of telephone exchange service or exchange access. For 
purposes of this subpart, such term does not include a person insofar as 
such person is engaged in the provision of a commercial mobile service 
under 47 U.S.C. 332(c).
    (k) The term local number portability administrator (LNPA) means an 
independent, non-governmental entity, not aligned with any particular 
telecommunications industry segment, whose duties are determined by the 
NANC.

[[Page 83]]

    (l) The term location portability means the ability of users of 
telecommunications services to retain existing telecommunications 
numbers without impairment of quality, reliability, or convenience when 
moving from one physical location to another.
    (m) The term long-term database method means a database method that 
complies with the performance criteria set forth in Sec. 52.3(a).
    (n) The term number portability means the ability of users of 
telecommunications services to retain, at the same location, existing 
telecommunications numbers without impairment of quality, reliability, 
or convenience when switching from one telecommunications carrier to 
another.
    (o) The term regional database means an SMS database or an SMS/SCP 
pair that contains information necessary for carriers to provide number 
portability in a region as determined by the NANC.
    (p) The term Registered Internet-based TRS User has the meaning set 
forth in 47 CFR 64.601.
    (q) The term service control point (SCP) means a database in the 
public switched network which contains information and call processing 
instructions needed to process and complete a telephone call. The 
network switches access an SCP to obtain such information. Typically, 
the information contained in an SCP is obtained from the SMS.
    (r) The term service management system (SMS) means a database or 
computer system not part of the public switched network that, among 
other things:
    (1) Interconnects to an SCP and sends to that SCP the information 
and call processing instructions needed for a network switch to process 
and complete a telephone call; and
    (2) Provides telecommunications carriers with the capability of 
entering and storing data regarding the processing and completing of a 
telephone call.
    (s) The term service portability means the ability of users of 
telecommunications services to retain existing telecommunications 
numbers without impairment of quality, reliability, or convenience when 
switching from one telecommunications service to another, without 
switching from one telecommunications carrier to another.
    (t) The term service provider portability means the ability of users 
of telecommunications services to retain, at the same location, existing 
telecommunications numbers without impairment of quality, reliability, 
or convenience when switching from one telecommunications carrier to 
another.
    (u) The term transitional number portability measure means a method 
that allows one local exchange carrier to transfer telephone numbers 
from its network to the network of another telecommunications carrier, 
but does not comply with the performance criteria set forth in 52.3(a). 
Transitional number portability measures are technically feasible 
methods of providing number portability including Remote Call Forwarding 
(RCF), Direct Inward Dialing (DID), Route Indexing--Portability Hub (RI-
PH), Directory Number Route Indexing (DNRI) and other comparable 
methods.
    (v) The term VRS provider means an entity that provides VRS as 
defined by 47 CFR 64.601.

[61 FR 38637, July 25, 1996. Redesignated at 61 FR 47353, Sept. 6, 1996, 
as amended at 61 FR 47355, Sept. 6, 1996; 63 FR 68203, Dec. 10, 1998; 67 
FR 6435, Feb. 12, 2002; 68 FR 43009, July 21, 2003; 73 FR 9481, Feb. 21, 
2008; 73 FR 41293, July 18, 2008]



Sec. 52.23  Deployment of long-term database methods for number
portability by LECs.

    (a) Subject to paragraphs (b) and (c) of this section, all local 
exchange carriers (LECs) must provide number portability in compliance 
with the following performance criteria:
    (1) Supports network services, features, and capabilities existing 
at the time number portability is implemented, including but not limited 
to emergency services, CLASS features, operator and directory assistance 
services, and intercept capabilities;
    (2) Efficiently uses numbering resources;
    (3) Does not require end users to change their telecommunications 
numbers;

[[Page 84]]

    (4) Does not result in unreasonable degradation in service quality 
or network reliability when implemented;
    (5) Does not result in any degradation in service quality or network 
reliability when customers switch carriers;
    (6) Does not result in a carrier having a proprietary interest;
    (7) Is able to migrate to location and service portability; and
    (8) Has no significant adverse impact outside the areas where number 
portability is deployed.
    (b)(1) All LECs must provide a long-term database method for number 
portability in the 100 largest Metropolitan Statistical Areas (MSAs), as 
defined in Sec. 52.21(k), in switches for which another carrier has 
made a specific request for the provision of number portability, subject 
to paragraph (b)(2) of this section.
    (2) Any procedure to identify and request switches for deployment of 
number portability must comply with the following criteria:
    (i) Any wireline carrier that is certified (or has applied for 
certification) to provide local exchange service in a state, or any 
licensed CMRS provider, must be permitted to make a request for 
deployment of number portability in that state;
    (ii) Carriers must submit requests for deployment at least nine 
months before the deployment deadline for the MSA;
    (iii) A LEC must make available upon request to any interested 
parties a list of its switches for which number portability has been 
requested and a list of its switches for which number portability has 
not been requested; and
    (iv) After the deadline for deployment of number portability in an 
MSA in the 100 largest MSAs, according to the deployment schedule set 
forth in the appendix to this part, a LEC must deploy number portability 
in that MSA in additional switches upon request within the following 
time frames:
    (A) For remote switches supported by a host switch equipped for 
portability (``Equipped Remote Switches''), within 30 days;
    (B) For switches that require software but not hardware changes to 
provide portability (``Hardware Capable Switches''), within 60 days;
    (C) For switches that require hardware changes to provide 
portability (``Capable Switches Requiring Hardware''), within 180 days; 
and
    (D) For switches not capable of portability that must be replaced 
(``Non-Capable Switches''), within 180 days.
    (c) Beginning January 1, 1999, all LECs must make a long-term 
database method for number portability available within six months after 
a specific request by another telecommunications carrier in areas in 
which that telecommunications carrier is operating or plans to operate.
    (d) The Chief, Common Carrier Bureau, may waive or stay any of the 
dates in the implementation schedule, as the Chief determines is 
necessary to ensure the efficient development of number portability, for 
a period not to exceed 9 months (i.e., no later than September 30, 
1999).
    (e) In the event a LEC is unable to meet the Commission's deadlines 
for implementing a long-term database method for number portability, it 
may file with the Commission at least 60 days in advance of the deadline 
a petition to extend the time by which implementation in its network 
will be completed. A LEC seeking such relief must demonstrate through 
substantial, credible evidence the basis for its contention that it is 
unable to comply with the deployment schedule set forth in the appendix 
to this part 52. Such requests must set forth:
    (1) The facts that demonstrate why the carrier is unable to meet the 
Commission's deployment schedule;
    (2) A detailed explanation of the activities that the carrier has 
undertaken to meet the implementation schedule prior to requesting an 
extension of time;
    (3) An identification of the particular switches for which the 
extension is requested;
    (4) The time within which the carrier will complete deployment in 
the affected switches; and
    (5) A proposed schedule with milestones for meeting the deployment 
date.
    (f) The Chief, Wireline Competition Bureau, shall monitor the 
progress of local exchange carriers implementing number portability, and 
may direct

[[Page 85]]

such carriers to take any actions necessary to ensure compliance with 
the deployment schedule set forth in the appendix to this part 52.
    (g) Carriers that are members of the Illinois Local Number 
Portability Workshop must conduct a field test of any technically 
feasible long-term database method for number portability in the 
Chicago, Illinois, area. The carriers participating in the test must 
jointly file with the Common Carrier Bureau a report of their findings 
within 30 days following completion of the test. The Chief, Common 
Carrier Bureau, shall monitor developments during the field test, and 
may adjust the field test completion deadline as necessary.
    (h)(1) Porting from a wireline carrier to a wireless carrier is 
required where the requesting wireless carrier's ``coverage area,'' as 
defined in paragraph (h)(2) of this section, overlaps the geographic 
location in which the customer's wireline number is provisioned, 
provided that the porting-in carrier maintains the number's original 
rate center designation following the port.
    (2) The wireless ``coverage area'' is defined as the area in which 
wireless service can be received from the wireless carrier.

[61 FR 38637, July 25, 1996, as amended at 62 FR 18294, Apr. 15, 1997; 
67 FR 13226, Mar. 21, 2002; 68 FR 43009, July 21, 2003; 73 FR 9481, Feb. 
21, 2008]



Sec. 52.25  Database architecture and administration.

    (a) The North American Numbering Council (NANC) shall direct 
establishment of a nationwide system of regional SMS databases for the 
provision of long-term database methods for number portability.
    (b) All telecommunications carriers shall have equal and open access 
to the regional databases.
    (c) The NANC shall select a local number portability 
administrator(s) (LNPA(s)) to administer the regional databases within 
seven months of the initial meeting of the NANC.
    (d) The NANC shall determine whether one or multiple 
administrator(s) should be selected, whether the LNPA(s) can be the same 
entity selected to be the North American Numbering Plan Administrator, 
how the LNPA(s) should be selected, the specific duties of the LNPA(s), 
the geographic coverage of the regional databases, the technical 
interoperability and operational standards, the user interface between 
telecommunications carriers and the LNPA(s), the network interface 
between the SMS and the downstream databases, and the technical 
specifications for the regional databases.
    (e) Once the NANC has selected the LNPA(s) and determined the 
locations of the regional databases, it must report its decisions to the 
Commission.
    (f) The information contained in the regional databases shall be 
limited to the information necessary to route telephone calls to the 
appropriate telecommunications carriers. The NANC shall determine what 
specific information is necessary.
    (g) Any state may opt out of its designated regional database and 
implement a state-specific database. A state must notify the Wireline 
Competition Bureau and NANC that it plans to implement a state-specific 
database within 60 days from the release date of the Public Notice 
issued by the Chief, Wireline Competition Bureau, identifying the 
administrator selected by the NANC and the proposed locations of the 
regional databases. Carriers may challenge a state's decision to opt out 
of the regional database system by filing a petition with the 
Commission.
    (h) Individual state databases must meet the national requirements 
and operational standards recommended by the NANC and adopted by the 
Commission. In addition, such state databases must be technically 
compatible with the regional system of databases and must not interfere 
with the scheduled implementation of the regional databases.
    (i) Individual carriers may download information necessary to 
provide number portability from the regional databases into their own 
downstream databases. Individual carriers may mix information needed to 
provide other services or functions with the information downloaded from 
the regional databases at their own downstream databases. Carriers may 
not withhold any

[[Page 86]]

information necessary to provide number portability from the regional 
databases on the grounds that such data has been combined with other 
information in its downstream database.

[61 FR 38637, July 25, 1996. Redesignated at 61 FR 47353, Sept. 6, 1996, 
as amended at 67 FR 13226, Mar. 21, 2002]



Sec. 52.26  NANC Recommendations on Local Number Portability
Administration.

    (a) Local number portability administration shall comply with the 
recommendations of the North American Numbering Council (NANC) as set 
forth in the report to the Commission prepared by the NANC's Local 
Number Portability Administration Selection Working Group, dated April 
25, 1997 (Working Group Report) and its appendices, which are 
incorporated by reference pursuant to 5 U.S.C. 552(a) and 1 CFR part 51. 
Except that: Section 7.10 of Appendix D of the Working Group Report is 
not incorporated herein.
    (b) In addition to the requirements set forth in the Working Group 
Report, the following requirements are established:
    (1) If a telecommunictions carrier transmits a telephone call to a 
local exchange carrier's switch that contains any ported numbers, and 
the telecommunications carrier has failed to perform a database query to 
determine if the telephone number has been ported to another local 
exchange carrier, the local exchange carrier may block the unqueried 
call only if performing the database query is likely to impair network 
reliability;
    (2) The regional limited liability companies (LLCs), already 
established by telecommunications carriers in each of the original Bell 
Operating Company regions, shall manage and oversee the local number 
portability administrators, subject to review by the NANC, but only on 
an interim basis, until the conclusion of a rulemaking to examine the 
issue of local number portability administrator oversight and management 
and the question of whether the LLCs should continue to act in this 
capacity; and
    (3) The NANC shall provide ongoing oversight of number portability 
administration, including oversight of the regional LLCs, subject to 
Commission review. Parties shall attempt to resolve issues regarding 
number portability deployment among themselves and, if necessary, under 
the auspices of the NANC. If any party objects to the NANC's proposed 
resolution, the NANC shall issue a written report summarizing the 
positions of the parties and the basis for the recommendation adopted by 
the NANC. The NANC Chair shall submit its proposed resolution of the 
dispuited issue to the Chief of the Wireline Competition Bureau as a 
recommendation for Commission review. The Chief of the Wireline 
Competition Bureau will place the NANC's proposed resolution on public 
notice. Recommendations adopted by the NANC and forwarded to the Bureau 
may be implemented by the parties pending review of the recommendation. 
Within 90 days of the conclusion of the comment cycle, the Chief of the 
Wireline Competition Bureau may issue an order adopting, modifying, or 
rejecting the recommendation. If the Chief does not act within 90 days 
of the conclusion of the comment cycle, the recommendation will be 
deemed to have been adopted by the Bureau.
    (c) The Director of the Federal Register approves this incorporation 
by reference in accordance with 5 U.S.C. 552(a) and 1 CFR part 51. 
Copies of the Working Group Report and its appendices can be obtained 
from the Commission's contract copier, International Transcription 
Service, Inc., 1231 20th St., N.W., Washington, D.C. 20036, and can be 
inspected during normal business hours at the following locations; 
Reference Information Center, 445 12th Street, SW., Room CY--A257, 
Washington, D.C. 20554 or at the National Archives and Records 
Administration (NARA). For information on the availability of this 
material at NARA, call 202-741-6030, or go to: http://www.archives.gov/
federal--register/code--of--federal--regulations/ibr--locations.html. 
The Working Group Report and its appendices are also available in the 
Internet at http://www.fcc.gov/ccb/Nanc/.

[62 FR 48786, Sept. 17, 1997, as amended at 65 FR 58466, Sept. 29, 2000; 
67 FR 13226, Mar. 21, 2002; 69 FR 18803, Apr. 9, 2004]

[[Page 87]]



Sec. 52.31  Deployment of long-term database methods for number 
portability by CMRS providers.

    (a) By November 24, 2003, all covered CMRS providers must provide a 
long-term database method for number portability, including the ability 
to support roaming, in the 100 largest MSAs, as defined in Sec. 
52.21(k), in compliance with the performance criteria set forth in 
section 52.23(a) of this part, in switches for which another carrier has 
made a specific request for the provision of number portability, subject 
to paragraph (a)(1) of this section. A licensee may have more than one 
CMRS system, but only the systems that satisfy the definition of covered 
CMRS are required to provide number portability.
    (1) Any procedure to identify and request switches for development 
of number portability must comply with the following criteria:
    (i) Any wireline carrier that is certified (or has applied for 
certification) to provide local exchange service in a state, or any 
licensed CMRS provider, must be permitted to make a request for 
deployment of number portability in that state;
    (ii) Carries requesting deployment in the 100 largest MSAs by 
November 24, 2003 must submit requests by February 24, 2003.
    (iii) A covered CMRS provider must make available upon request to 
any interested parties a list of its switches for which number 
portability has been requested and a list of its switches for which 
number portability has not been requested;
    (iv) After November 24, 2003, a covered CMRS provider must deploy 
number portability in additional switches serving the 100 largest MSAs 
upon request within the following time frames:
    (A) For remote switches supported by a host switch equipped for 
portability (``Equipped Remote Switches''), within 30 days;
    (B) For switches that require software but not hardware changes to 
provide portability (``Hardware Capable Switches''), within 60 days;
    (C) For switches that require hardware changes to provide 
portability (``Capable Switches Requiring Hardware''), within 180 days; 
and
    (D) For switches not capable of portability that must be replaced 
(``Non-Capable Switches''), within 180 days.
    (v) Carriers must be able to request deployment in any wireless 
switch that serves any area within the MSA, even if the wireless switch 
is outside that MSA, or outside any of the MSAs identified in the 
Appendix to this part.
    (2) By November 24, 2002, all covered CMRS providers must be able to 
support roaming nationwide.
    (b) By December 31, 1998, all covered CMRS providers must have the 
capability to obtain routing information, either by querying the 
appropriate database themselves or by making arrangements with other 
carriers that are capable of performing database queries, so that they 
can deliver calls from their networks to any party that has retained its 
number after switching from one telecommunications carrier to another.
    (c) [Reserved]
    (d) In the event a carrier subject to paragraphs (a) and (b) of this 
section is unable to meet the Commission's deadlines for implementing a 
long-term number portability method, it may file with the Commission at 
least 60 days in advance of the deadline a petition to extend the time 
by which implementation in its network will be completed. A carrier 
seeking such relief must demonstrate through substantial, credible 
evidence the basis for its contention that it is unable to comply with 
paragraphs (a) and (b) of this section. Such requests must set forth:
    (1) The facts that demonstrate why the carrier is unable to meet our 
deployment schedule;
    (2) A detailed explanation of the activities that the carrier has 
undertaken to meet the implementation schedule prior to requesting an 
extension of time;
    (3) An identification of the particular switches for which the 
extension is requested;
    (4) The time within which the carrier will complete deployment in 
the affected switches; and
    (5) A proposed schedule with milestones for meeting the deployment 
date.

[[Page 88]]

    (e) The Chief, Wireless Telecommunications Bureau, may establish 
reporting requirements in order to monitor the progress of covered CMRS 
providers implementing number portability, and may direct such carriers 
to take any actions necessary to ensure compliance with this deployment 
schedule.

[61 FR 38637, July 25, 1996, as amended at 62 FR 18295, Apr. 15, 1997; 
63 FR 68204, Dec. 10, 1998; 64 FR 22563, Apr. 27, 1999; 68 FR 43009, 
July 21, 2003; 71 FR 65750, Nov. 9, 2006]



Sec. 52.32  Allocation of the shared costs of long-term 
number portability.

    (a) The local number portability administrator, as defined in Sec. 
52.21(h), of each regional database, as defined in Sec. 52.21(1), shall 
recover the shared costs of long-term number portability attributable to 
that regional database from all telecommunications carriers providing 
telecommunications service in areas that regional database serves. 
Pursuant to its duties under Sec. 52.26, the local number portability 
administrator shall collect sufficient revenues to fund the operation of 
the regional database by:
    (1) Assessing a $100 yearly contribution on each telecommunications 
carrier identified in paragraph (a) introductory text that has no 
intrastate, interstate, or international end-user telecommunications 
revenue derived from providing telecommunications service in the areas 
that regional database serves, and
    (2) Assessing on each of the other telecommunications carriers 
providing telecommunications service in areas that regional database 
serves, a charge that recovers the remaining shared costs of long-term 
number portability attributable to that regional database in proportion 
to the ratio of:
    (i) The sum of the intrastate, interstate, and international end-
user telecommunications revenues that such telecommunications carrier 
derives from providing telecommunications service in the areas that 
regional database serves, ii) to the sum of the intrastate, interstate, 
and international end-user telecommunications revenues that all 
telecommunications carriers derive from providing telecommunications 
service in the areas that regional database serves.
    (b) All telecommunications carriers providing service in the United 
States shall complete and submit a ``Telecommunications Reporting 
Worksheet'' (as published by the Commission in the Federal Register), 
which sets forth the information needed to calculate contributions 
referred to in paragraph (a) of this section. The worksheet shall be 
certified to by an officer of the contributor, and subject to 
verification by the Commission or the administrator at the discretion of 
the Commission. The Chief of the Wireline Competition Bureau may waive, 
reduce, modify, or eliminate contributor reporting requirements that 
prove unnecessary and require additional reporting requirements that the 
Bureau deems necessary to the sound and efficient administration of 
long-term number portability.
    (c) Local number portability administrators shall keep all data 
obtained from contributors confidential and shall not disclose such data 
in company-specific form unless directed to do so by the Commission. 
Subject to any restrictions imposed by the Chief of the Wireline 
Competition Bureau, the local number portability administrators may 
share data obtained from carriers with the administrators of the 
universal service support mechanism (See 47 CFR 54.701 of this chapter), 
the TRS Fund (See 47 CFR 64.604(c)(4)(iii)(H) of this chapter), and the 
North American Numbering Plan cost recovery (See 47 CFR 52.16). The 
local number portability administrators shall keep confidential all data 
obtained from other administrators. The administrators shall use such 
data, from carriers or administrators, only for purposes of 
administering local number portability. The Commission shall have access 
to all data reported to the Administrator. Contributors may make 
requests for Commission nondisclosure of company-specific revenue 
information under Sec. 0.459 of this chapter by so indicating on the 
Telecommunications Reporting Worksheet at the time that the subject data 
are submitted. The Commission shall make all decisions regarding 
nondisclosure of company-specific information.

[[Page 89]]

    (d) Once a telecommunications carrier has been allocated, pursuant 
to paragraph (a)(1) or (a)(2) of this section, its portion of the shared 
costs of long-term number portability attributable to a regional 
database, the carrier shall treat that portion as a carrier-specific 
cost directly related to providing number portability.
    (e) For the purposes of this section, the term ``telecommunications 
carrier'' shall include interconnected VoIP providers as that term is 
defined in Sec. 52.21(h); and ``telecommunications service'' shall 
include ``interconnected VoIP service'' as that term is defined in 47 
CFR 9.3.

[63 FR 35160, June 29, 1998, as amended at 64 FR 41331, July 30, 1999; 
67 FR 13226, Mar. 21, 2002; 73 FR 9481, Feb. 21, 2008]



Sec. 52.33  Recovery of carrier-specific costs directly related to 
providing long-term number portability.

    (a) Incumbent local exchange carriers may recover their carrier-
specific costs directly related to providing long-term number 
portability by establishing in tariffs filed with the Federal 
Communications Commission a monthly number-portability charge, as 
specified in paragraph (a)(1) of this section, a number portability 
query-service charge, as specified in paragraph (a)(2) of this section, 
and a monthly number-portability query/administration charge, as 
specified in paragraph (a)(3) of this section.
    (1) The monthly number-portability charge may take effect no earlier 
than February 1, 1999, on a date the incumbent local exchange carrier 
selects, and may end no later than 5 five years after the incumbent 
local exchange carrier's monthly number-portability charge takes effect.
    (i) An incumbent local exchange carrier may assess each end user it 
serves in the 100 largest metropolitan statistical areas, and each end 
user it serves from a number-portability-capable switch outside the 100 
largest metropolitan statistical areas, one monthly number-portability 
charge per line except that:
    (A) One PBX trunk shall receive nine monthly number-portability 
charges.
    (B) One PRI ISDN line shall receive five monthly number-portability 
charges.
    (C) Lifeline Assistance Program customers shall not receive the 
monthly number-portability charge.
    (ii) An incumbent local exchange carrier may assess on carriers that 
purchase the incumbent local exchange carrier's switching ports as 
unbundled network elements under section 251 of the Communications Act, 
and/or Feature Group A access lines, and resellers of the incumbent 
local exchange carrier's local service, the same charges as described in 
paragraph (a)(1)(i) of this section, as if the incumbent local exchange 
carrier were serving those carriers' end users.
    (iii) An incumbent local exchange carrier may not assess a monthly 
number-portability charge for local loops carriers purchase as unbundled 
network elements under section 251.
    (iv) The incumbent local exchange carrier shall levelize the monthly 
number-portability charge over five years by setting a rate for the 
charge at which the present value of the revenue recovered by the charge 
does not exceed the present value of the cost being recovered, using a 
discount rate equal to the rate of return on investment which the 
Commission has prescribed for interstate access services pursuant to 
Part 65 of the Commission's Rules.
    (2) The number portability query-service charge may recover only 
carrier-specific costs directly related to providing long-term number 
portability that the incumbent local exchange carrier incurs to provide 
long-term number portability query service to carriers on a prearranged 
and default basis.
    (3) An incumbent local exchange carrier serving an area outside the 
100 largest metropolitan statistical areas that is not number-
portability capable but that participates in an extended area service 
calling plan with any one of the 100 largest metropolitan statistical 
areas or with an adjacent number portability-capable local exchange 
carrier may assess each end user it serves one monthly number-
portability query/administration charge per line to recover the costs of 
queries, as specified in paragraph (a)(2) of this section, and

[[Page 90]]

carrier-specific costs directly related to the carrier's allocated share 
of the regional local number portability administrator's costs, except 
that per-line monthly number-portability query/administration charges 
shall be assigned as specified in paragraph (a)(1) of this section with 
respect to monthly number-portability charges.
    (i) Such incumbent local exchange carriers may assess a separate 
monthly number-portability charge as specified in paragraph (a)(1) of 
this section but such charge may recover only the costs incurred to 
implement number portability functionality and shall not include costs 
recovered through the monthly number-portability query/administration 
charge.
    (ii) The monthly number-portability query/administration charge may 
end no later than five years after the incumbent local exchange 
carrier's monthly number-portability query/administration charge takes 
effect. The monthly number-portability query/administration charge may 
be collected over a different five-year period than the monthly number-
portability charge. These five-year periods may run either consecutively 
or concurrently, in whole or in part.
    (b) All interconnected VoIP providers and telecommunications 
carriers other than incumbent local exchange carriers may recover their 
number portability costs in any manner consistent with applicable state 
and federal laws and regulations.

[63 FR 35161, June 29, 1998, as amended at 67 FR 40620, June 13, 2002; 
73 FR 9481, Feb. 21, 2008]

    Effective Date Notes: 1. At 63 FR 35161, June 29, 1998, Sec. 52.33 
was added. Paragraph (a)(1) contains information collection requirements 
and will not become effective until approval has been given by the 
Office of Management and Budget.
    2. At 67 FR 40620, June 13, 2002, Sec. 52.33 was amended by adding 
paragraph (a)(3), which contains information collection requirements and 
will not become effective until approval has been given by the Office of 
Management and Budget.



Sec. 52.34  Obligations regarding local number porting to and from 
interconnected VoIP or Internet-based TRS providers.

    (a) An interconnected VoIP or VRS or IP Relay provider must 
facilitate an end-user customer's or a Registered Internet-based TRS 
User's valid number portability request, as it is defined in this 
subpart, either to or from a telecommunications carrier or an 
interconnected VoIP or VRS or IP Relay provider. ``Facilitate'' is 
defined as the interconnected VoIP or VRS or IP Relay provider's 
affirmative legal obligation to take all steps necessary to initiate or 
allow a port-in or port-out itself or through the telecommunications 
carriers, if any, that it relies on to obtain numbering resources, 
subject to a valid port request, without unreasonable delay or 
unreasonable procedures that have the effect of delaying or denying 
porting of the NANP-based telephone number.
    (b) An interconnected VoIP or VRS or IP Relay provider may not enter 
into any agreement that would prohibit an end-user customer or a 
Registered Internet-based TRS User from porting between interconnected 
VoIP or VRS or IP Relay providers, or to or from a telecommunications 
carrier.

[73 FR 9481, Feb. 21, 2008, as amended at 73 FR 41294, July 18, 2008]



Sec. Sec. 52.35-52.99  [Reserved]



                       Subpart D_Toll Free Numbers

    Source: 62 FR 20127, Apr. 25, 1997, unless otherwise noted.



Sec. 52.101  General definitions.

    As used in this part:
    (a) Number Administration and Service Center (``NASC''). The entity 
that provides user support for the Service Management System database 
and administers the Service Management System database on a day-to-day 
basis.
    (b) Responsible Organization (``RespOrg''). The entity chosen by a 
toll free subscriber to manage and administer the appropriate records in 
the toll free Service Management System for the toll free subscriber.

[[Page 91]]

    (c) Service Control Points. The regional databases in the toll free 
network.
    (d) Service Management System Database (``SMS Database''). The 
administrative database system for toll free numbers. The Service 
Management System is a computer system that enables Responsible 
Organizations to enter and amend the data about toll free numbers within 
their control. The Service Management System shares this information 
with the Service Control Points. The entire system is the SMS database.
    (e) Toll Free Subscriber. The entity that requests a Responsible 
Organization to reserve a toll free number from the SMS database.
    (f) Toll Free Number. A telephone number for which the toll charges 
for completed calls are paid by the toll free subscriber. The toll free 
subscriber's specific geographic location has no bearing on what toll 
free number it can obtain from the SMS database.



Sec. 52.103  Lag times.

    (a) Definitions. As used in this section, the following definitions 
apply:
    (1) Assigned Status. A toll free number record that has specific 
subscriber routing information entered by the Responsible Organization 
in the Service Management System database and is pending activation in 
the Service Control Points.
    (2) Disconnect Status. The toll free number has been discontinued 
and an exchange carrier intercept recording is being provided.
    (3) Lag Time. The interval between a toll free number's reservation 
in the Service Management System database and its conversion to working 
status, as well as the period of time between disconnection or 
cancellation of a toll free number and the point at which that toll free 
number may be reassigned to another toll free subscriber.
    (4) Reserved Status. The toll free number has been reserved from the 
Service Management System database by a Responsible Organization for a 
toll free subscriber.
    (5) Seasonal Numbers. Toll free numbers held by toll free 
subscribers who do not have a year-round need for a toll free number.
    (6) Spare Status. The toll free number is available for assignment 
by a Responsible Organization.
    (7) Suspend Status. The toll free service has been temporarily 
disconnected and is scheduled to be reactivated.
    (8) Unavailable Status. The toll free number is not available for 
assignment due to an unusual condition.
    (9) Working Status. The toll free number is loaded in the Service 
Control Points and is being utilized to complete toll free service 
calls.
    (b) Reserved Status. Toll free numbers may remain in reserved status 
for up to 45 days. There shall be no extension of the reservation period 
after expiration of the initial 45-day interval.
    (c) Assigned Status. Toll free numbers may remain in assigned status 
until changed to working status or for a maximum of 6 months, whichever 
occurs first. Toll free numbers that, because of special circumstances, 
require that they be designated for a particular subscriber far in 
advance of their actual usage shall not be placed in assigned status, 
but instead shall be placed in unavailable status.
    (d) Disconnect Status. Toll free numbers may remain in disconnect 
status for up to 4 months. No requests for extension of the 4-month 
disconnect interval shall be granted. All toll free numbers in 
disconnect status must go directly into the spare category upon 
expiration of the 4-month disconnect interval. Responsible Organizations 
shall not retrieve a toll free number from disconnect status and return 
that number directly to working status at the expiration of the 4-month 
disconnect interval.
    (e) Suspend Status. Toll free numbers may remain in suspend status 
until changed to working status or for a maximum of 8 months, whichever 
occurs first. Only numbers involved in billing disputes shall be 
eligible for suspend status.
    (f) Unavailable Status. (1) Written requests to make a specific toll 
free number unavailable must be submitted to DSMI by the Responsible 
Organization managing the records of the toll free number. The request 
shall include the appropriate documentation of the reason for the 
request. DSMI is the only entity that can assign this status to or

[[Page 92]]

remove this status from a number. Responsible Organizations that have a 
toll free subscriber with special circumstances requiring that a toll 
free number be designated for that particular subscriber far in advance 
of its actual usage may request that DSMI place such a number in 
unavailable status.
    (2) Seasonal numbers shall be placed in unavailable status. The 
Responsible Organization for a toll free subscriber who does not have a 
year round need for a toll free number shall follow the procedures 
outlined in Sec. 52.103(f)(1) of these rules if it wants DSMI to place 
a particular toll free number in unavailable status.



Sec. 52.105  Warehousing.

    (a) As used in this section, warehousing is the practice whereby 
Responsible Organizations, either directly or indirectly through an 
affiliate, reserve toll free numbers from the Service Management System 
database without having an actual toll free subscriber for whom those 
numbers are being reserved.
    (b) Responsible Organizations shall not warehouse toll free numbers. 
There shall be a rebuttable presumption that a Responsible Organization 
is warehousing toll free numbers if:
    (1) The Responsible Organization does not have an identified toll 
free subscriber agreeing to be billed for service associated with each 
toll free number reserved from the Service Management System database; 
or
    (2) The Responsible Organization does not have an identified toll 
free subscriber agreeing to be billed for service associated with a toll 
free number before switching that toll free number from reserved or 
assigned to working status.
    (c) Responsible Organizations shall not maintain a toll free number 
in reserved status if there is not a prospective toll free subscriber 
requesting that toll free number.
    (d) A Responsible Organization's act of reserving a number from the 
Service Management System database shall serve as that Responsible 
Organization's certification that there is an identified toll free 
subscriber agreeing to be billed for service associated with the toll 
free number.
    (e) Tariff Provision. The following provision shall be included in 
the Service Management System tariff and in the local exchange carriers' 
toll free database access tariffs:

    [T]he Federal Communications Commission (``FCC'') has concluded that 
warehousing, which the FCC defines as Responsible Organizations, either 
directly or indirectly through an affiliate, reserving toll free numbers 
from the SMS database without having an identified toll free subscriber 
from whom those numbers are being reserved, is an unreasonable practice 
under Sec. 201(b) of the Communications Act and is inconsistent with 
the Commission's obligation under Sec. 251(e) of the Communications Act 
to ensure that numbers are made available on an equitable basis; and if 
a Responsible Organization does not have an identified toll free 
subscriber agreeing to be billed for service associated with each toll 
free number reserved from the database, or if a Responsible Organization 
does not have an identified, billed toll free subscriber before 
switching a number from reserved or assigned to working status, then 
there is a rebuttable presumption that the Responsible Organization is 
warehousing numbers. Responsible Organizations that warehouse numbers 
will be subject to penalties.



Sec. 52.107  Hoarding.

    (a) As used in this section, hoarding is the acquisition by a toll 
free subscriber from a Responsible Organization of more toll free 
numbers than the toll free subscriber intends to use for the provision 
of toll free service. The definition of hoarding also includes number 
brokering, which is the selling of a toll free number by a private 
entity for a fee.
    (1) Toll free subscribers shall not hoard toll free numbers.
    (2) No person or entity shall acquire a toll free number for the 
purpose of selling the toll free number to another entity or to a person 
for a fee.
    (3) Routing multiple toll free numbers to a single toll free 
subscriber will create a rebuttable presumption that the toll free 
subscriber is hoarding or brokering toll free numbers.
    (b) Tariff Provision. The following provision shall be included in 
the Service Management System tariff and in the local exchange carriers' 
toll free database access tariffs:


[[Page 93]]


    [T]he Federal Communications Commission (``FCC'') has concluded that 
hoarding, defined as the acquisition of more toll free numbers than one 
intends to use for the provision of toll free service, as well as the 
sale of a toll free number by a private entity for a fee, is contrary to 
the public interest in the conservation of the scarce toll free number 
resource and contrary to the FCC's responsibility to promote the orderly 
use and allocation of toll free numbers.



Sec. 52.109  Permanent cap on number reservations.

    (a) A Responsible Organization may have in reserve status, at any 
one time, either 2000 toll free numbers or 7.5 percent of that 
Responsible Organization's numbers in working status, whichever is 
greater.
    (b) A Responsible Organization shall never reserve more than 3 
percent of the quantity of toll free numbers in spare status as of the 
previous Sunday at 12:01 a.m. Eastern Time.
    (c) The Wireline Competition Bureau shall modify the quantity of 
numbers a Responsible Organization may have in reserve status or the 
percentage of numbers in the spare poll that a Responsible Organization 
may reserve when exigent circumstances make such action necessary. The 
Wireline Competition Bureau shall establish, modify, and monitor toll 
free number conservation plans when exigent circumstances necessitate 
such action.

[62 FR 20127, Apr. 25, 1997, as amended at 67 FR 13226, Mar. 21, 2002]



Sec. 52.111  Toll free number assignment.

    Toll free numbers shall be made available on a first-come, first-
served basis unless otherwise directed by the Commission.

[63 FR 16441, Apr. 3, 1998]



  Sec. Appendix to Part 52--Deployment Schedule for Long-Term Database 
                  Methods for Local Number Portability

    Implementation must be completed by the carriers in the relevant 
MSAs during the periods specified below:

                        Phase I--10/1/97-3/31/98
 
Chicago, IL...................................................         3
Philadelphia, PA..............................................         4
Atlanta, GA...................................................         8
New York, NY..................................................         2
Los Angeles, CA...............................................         1
Houston, TX...................................................         7
Minneapolis, MN...............................................        12
 
                        Phase II--1/1/98-5/15/98
 
Detroit, MI...................................................         6
Cleveland, OH.................................................        20
Washington, DC................................................         5
Baltimore, MD.................................................        18
Miami, FL.....................................................        24
Fort Lauderdale, FL...........................................        39
Orlando, FL...................................................        40
Cincinnati, OH................................................        30
Tampa, FL.....................................................        23
Boston, MA....................................................         9
Riverside, CA.................................................        10
San Diego, CA.................................................        14
Dallas, TX....................................................        11
St. Louis, MO.................................................        16
Phoenix, AZ...................................................        17
Seattle, WA...................................................        22
 
                        Phase III--4/1/98-6/30/98
 
Indianapolis, IN..............................................        34
Milwaukee, WI.................................................        35
Columbus, OH..................................................        38
Pittsburgh, PA................................................        19
Newark, NJ....................................................        25
Norfolk, VA...................................................        32
New Orleans, LA...............................................        41
Charlotte, NC.................................................        43
Greensboro, NC................................................        48
Nashville, TN.................................................        51
Las Vegas, NV.................................................        50
Nassau, NY....................................................        13
Buffalo, NY...................................................        44
Orange Co, CA.................................................        15
Oakland, CA...................................................        21
San Francisco, CA.............................................        29
Rochester, NY.................................................        49
Kansas City, KS...............................................        28
Fort Worth, TX................................................        33
Hartford, CT..................................................        46
Denver, CO....................................................        26
Portland, OR..................................................        27
 
                        Phase IV--7/1/98-9/30/98
 
Grand Rapids, MI..............................................        56
Dayton, OH....................................................        61
Akron, OH.....................................................        73
Gary, IN......................................................        80
Bergen, NJ....................................................        42
Middlesex, NJ.................................................        52
Monmouth, NJ..................................................        54
Richmond, VA..................................................        63
Memphis, TN...................................................        53
Louisville, KY................................................        57
Jacksonville, FL..............................................        58
Raleigh, NC...................................................        59
West Palm Beach, FL...........................................        62
Greenville, SC................................................        66

[[Page 94]]

 
Honolulu, HI..................................................        65
Providence, RI................................................        47
Albany, NY....................................................        64
San Jose, CA..................................................        31
Sacramento, CA................................................        36
Fresno, CA....................................................        68
San Antonio, TX...............................................        37
Oklahoma City, OK.............................................        55
Austin, TX....................................................        60
Salt Lake City, UT............................................        45
Tucson, AZ....................................................        71
 
                        Phase V--10/1/98-12/31/98
 
Toledo, OH....................................................        81
Youngstown, OH................................................        85
Ann Arbor, MI.................................................        95
Fort Wayne, IN................................................       100
Scranton, PA..................................................        78
Allentown, PA.................................................        82
Harrisburg, PA................................................        83
Jersey City, NJ...............................................        88
Wilmington, DE................................................        89
Birmingham, AL................................................        67
Knoxville, KY.................................................        79
Baton Rouge, LA...............................................        87
Charleston, SC................................................        92
Sarasota, FL..................................................        93
Mobile, AL....................................................        96
Columbia, SC..................................................        98
Tulsa, OK.....................................................        70
Syracuse, NY..................................................        69
Springfield, MA...............................................        86
Ventura, CA...................................................        72
Bakersfield, CA...............................................        84
Stockton, CA..................................................        94
Vallejo, CA...................................................        99
El Paso, TX...................................................        74
Little Rock, AR...............................................        90
Wichita, KS...................................................        97
New Haven, CT.................................................        91
Omaha, NE.....................................................        75
Albuquerque, NM...............................................        76
Tacoma, WA....................................................        77
 


[62 FR 18295, Apr. 15, 1997]



PART 53_SPECIAL PROVISIONS CONCERNING BELL OPERATING
COMPANIES--Table of Contents




                      Subpart A_General Information

Sec.
53.1 Basis and purpose.
53.3 Terms and definitions.

Subpart B--Bell Operating Company Entry into InterLATA Services

                Subpart C_Separate Affiliate; Safeguards

53.201 Services for which a section 272 affiliate is required.
53.203 Structural and transactional requirements.
53.205 Fulfillment of certain requests. [Reserved]
53.207 Successor or assign.
53.209 Biennial audit.
53.211 Audit planning.
53.213 Audit analysis and evaluation.

           Subpart D_Manufacturing by Bell Operating Companies

53.301 [Reserved]

       Subpart E_Electronic Publishing by Bell Operating Companies

53.401 [Reserved]

                   Subpart F_Alarm Monitoring Services

53.501 [Reserved]

    Authority: Sections 1-5, 7, 201-05, 218, 251, 253, 271-75, 48 Stat. 
1070, as amended, 1077; 47 U.S.C. 151-55, 157, 201-05, 218, 251, 253, 
271-75, unless otherwise noted.

    Source: 62 FR 2967, Jan. 21, 1997, unless otherwise noted.



                      Subpart A_General Information



Sec. 53.1  Basis and purpose.

    (a) Basis. The rules in this part are issued pursuant to the 
Communications Act of 1934, as amended.
    (b) Purpose. The purpose of the rules in this part is to implement 
sections 271 and 272 of the Communications Act of 1934, as amended, 47 
U.S.C. 271 and 272.



Sec. 53.3  Terms and definitions.

    Terms used in this part have the following meanings:
    Act. The Act means the Communications Act of 1934, as amended.
    Affiliate. An affiliate is a person that (directly or indirectly) 
owns or controls, is owned or controlled by, or is under common 
ownership or control with, another person. For purposes of this part, 
the term ``own'' means to own an equity interest (or the equivalent 
thereof) of more than 10 percent.
    AT&T Consent Decree. The AT&T Consent Decree is the order entered 
August 24, 1982, in the antitrust action styled United States v. Western 
Electric, Civil

[[Page 95]]

Action No. 82-0192, in the United States District Court for the District 
of Columbia, and any judgment or order with respect to such action 
entered on or after August 24, 1982.
    Bell Operating Company (BOC). The term Bell operating company
    (1) Means any of the following companies: Bell Telephone Company of 
Nevada, Illinois Bell Telephone Company, Indiana Bell Telephone Company, 
Incorporated, Michigan Bell Telephone Company, New England Telephone and 
Telegraph Company, New Jersey Bell Telephone Company, New York Telephone 
Company, U S West Communications Company, South Central Bell Telephone 
Company, Southern Bell Telephone and Telegraph Company, Southwestern 
Bell Telephone Company, The Bell Telephone Company of Pennsylvania, The 
Chesapeake and Potomac Telephone Company, The Chesapeake and Potomac 
Telephone Company of Maryland, The Chesapeake and Potomac Telephone 
Company of Virginia, The Chesapeake and Potomac Telephone Company of 
West Virginia, The Diamond State Telephone Company, The Ohio Bell 
Telephone Company, The Pacific Telephone and Telegraph Company, or 
Wisconsin Telephone Company; and
    (2) Includes any successor or assign of any such company that 
provides wireline telephone exchange service; but
    (3) Does not include an affiliate of any such company, other than an 
affiliate described in paragraphs (1) or (2) of this definition.
    In-Region InterLATA service. In-region interLATA service is 
interLATA service that originates in any of a BOC's in-region states, 
which are the states in which the BOC or any of its affiliates was 
authorized to provide wireline telephone exchange service pursuant to 
the reorganization plan approved under the AT&T Consent Decree, as in 
effect on February 7, 1996. For the purposes of this part, 800 service, 
private line service, or equivalent services that terminate in a BOC's 
in-region state and allow the called party to determine the interLATA 
carrier are considered to be in-region interLATA service.
    InterLATA Information Service. An interLATA information service is 
an information service that incorporates as a necessary, bundled element 
an interLATA telecommunications transmission component, provided to the 
customer for a single charge.
    InterLATA Service. An interLATA service is a service that involves 
telecommunications between a point located in a LATA and a point located 
outside such area. The term ``interLATA service'' includes both 
interLATA telecommunications services and interLATA information 
services.
    Local Access and Transport Area (LATA). A LATA is a contiguous 
geographic area:
    (1) Established before February 8, 1996 by a BOC such that no 
exchange area includes points within more than one metropolitan 
statistical area, consolidated metropolitan statistical area, or state, 
except as expressly permitted under the AT&T Consent Decree; or
    (2) Established or modified by a BOC after February 8, 1996 and 
approved by the Commission.
    Local Exchange Carrier (LEC). A LEC is any person that is engaged in 
the provision of telephone exchange service or exchange access. Such 
term does not include a person insofar as such person is engaged in the 
provision of commercial mobile service under section 332(c) of the Act, 
except to the extent that the Commission finds that such service should 
be included in the definition of such term.
    Out-of-Region InterLATA service. Out-of-region interLATA service is 
interLATA service that originates outside a BOC's in-region states.
    Section 272 affiliate. A section 272 affiliate is a BOC affiliate 
that complies with the separate affiliate requirements of section 272(b) 
of the Act and the regulations contained in this part.

Subpart B--Bell Operating Company Entry Into InterLATA Services

[[Page 96]]



                Subpart C_Separate Affiliate; Safeguards



Sec. 53.201  Services for which a section 272 affiliate is required.

    For the purposes of applying section 272(a)(2) of the Act:
    (a) Previously authorized activities. When providing previously 
authorized activities described in section 271(f) of the Act, a BOC 
shall comply with the following:
    (1) A BOC shall provide previously authorized interLATA information 
services and manufacturing activities through a section 272 affiliate no 
later than February 8, 1997.
    (2) A BOC shall provide previously authorized interLATA 
telecommunications services in accordance with the terms and conditions 
of the orders entered by the United States District Court for the 
District of Columbia pursuant to section VII or VIII(C) of the AT&T 
Consent Decree that authorized such services.
    (b) InterLATA information services. A BOC shall provide an interLATA 
information service through a section 272 affiliate when it provides the 
interLATA telecommunications transmission component of the service 
either over its own facilities, or by reselling the interLATA 
telecommunications services of an interexchange provider.
    (c) Out-of-region interLATA information services. A BOC shall 
provide out-of-region interLATA information services through a section 
272 affiliate.



Sec. 53.203  Structural and transactional requirements.

    (a) Operational independence. A section 272 affiliate and the BOC of 
which it is an affiliate shall not jointly own transmission and 
switching facilities or the land and buildings where those facilities 
are located.
    (b) Separate books, records, and accounts. A section 272 affiliate 
shall maintain books, records, and accounts, which shall be separate 
from the books, records, and accounts maintained by the BOC of which it 
is an affiliate.
    (c) Separate officers, directors, and employees. A section 272 
affiliate shall have separate officers, directors, and employees from 
the BOC of which it is an affiliate.
    (d) Credit arrangements. A section 272 affiliate shall not obtain 
credit under any arrangement that would permit a creditor, upon default, 
to have recourse to the assets of the BOC of which it is an affiliate.
    (e) Arm's-length transactions. A section 272 affiliate shall conduct 
all transactions with the BOC of which it is an affiliate on an arm's 
length basis, pursuant to the accounting rules described in Sec. 32.27 
of this chapter, with any such transactions reduced to writing and 
available for public inspection.

[62 FR 2967, Jan. 21, 1997, as amended at 69 FR 16496, Mar. 30, 2004; 70 
FR 55302, Sept. 21, 2005]

    Effective Date Note: At 62 FR 2967, Jan. 21, 1997, Sec. 53.203 was 
added. Paragraphs (b) and (e) of this section contain information 
collection requirements and will not become effective until approval has 
been given by the Office of Management and Budget.



Sec. 53.205  Fulfillment of certain requests. [Reserved]



Sec. 53.207  Successor or assign.

    If a BOC transfers to an affiliated entity ownership of any network 
elements that must be provided on an unbundled basis pursuant to section 
251(c)(3) of the Act, such entity will be deemed to be an ``assign'' of 
the BOC under section 3(4) of the Act with respect to such transferred 
network elements. A BOC affiliate shall not be deemed a ``successor or 
assign'' of a BOC solely because it obtains network elements from the 
BOC pursuant to section 251(c)(3) of the Act.

[62 FR 2967, Jan. 21, 1997; 63 FR 34604, June 25, 1998]



Sec. 53.209  Biennial audit.

    (a) A Bell operating company required to operate a separate 
affiliate under section 272 of the Act shall obtain and pay for a 
Federal/State joint audit every two years conducted by an independent 
auditor to determine whether the Bell operating company has complied 
with the rules promulgated under section 272 and particularly the audit 
requirements listed in paragraph (b) of this section.

[[Page 97]]

    (b) The independent audit shall determine:
    (1) Whether the separate affiliate required under section 272 of the 
Act has:
    (i) Operated independently of the Bell operating company;
    (ii) Maintained books, records, and accounts in the manner 
prescribed by the Commission that are separate from the books, records 
and accounts maintained by the Bell operating company;
    (iii) Officers, directors and employees that are separate from those 
of the Bell operating company;
    (iv) Not obtained credit under any arrangement that would permit a 
creditor, upon default, to have recourse to the assets of the Bell 
operating company; and
    (v) Conducted all transactions with the Bell operating company on an 
arm's length basis with the transactions reduced to writing and 
available for public inspection.
    (2) Whether or not the Bell operating company has:
    (i) Discriminated between the separate affiliate and any other 
entity in the provision or procurement of goods, services, facilities, 
and information, or the establishment of standards;
    (ii) Accounted for all transactions with the separate affiliate in 
accordance with the accounting principles and rules approved by the 
Commission.
    (3) Whether or not the Bell operating company and an affiliate 
subject to section 251(c) of the Act:
    (i) Have fulfilled requests from unaffiliated entities for telephone 
exchange service and exchange access within a period no longer than the 
period in which it provides such telephone exchange service and exchange 
access to itself or its affiliates;
    (ii) Have made available facilities, services, or information 
concerning its provision of exchange access to other providers of 
interLATA services on the same terms and conditions as it has to its 
affiliate required under section 272 that operates in the same market;
    (iii) Have charged its separate affiliate under section 272, or 
imputed to itself (if using the access for its provision of its own 
services), an amount for access to its telephone exchange service and 
exchange access that is no less than the amount charged to any 
unaffiliated interexchange carriers for such service; and
    (iv) Have provided any interLATA or intraLATA facilities or services 
to its interLATA affiliate and made available such services or 
facilities to all carriers at the same rates and on the same terms and 
conditions, and allocated the associated costs appropriately.
    (c) An independent audit shall be performed on the first full year 
of operations of the separate affiliate required under section 272 of 
the Act, and biennially thereafter.
    (d) The Chief, Enforcement Bureau, shall work with the regulatory 
agencies in the states having jurisdiction over the Bell operating 
company's local telephone services, to attempt to form a Federal/State 
joint audit team with the responsibility for overseeing the planning of 
the audit as specified in Sec. 53.211 and the analysis and evaluation 
of the audit as specified in Sec. 53.213. The Federal/State joint audit 
team may direct the independent auditor to take any actions necessary to 
ensure compliance with the audit requirements listed in paragraph (b) of 
this section. If the state regulatory agencies having jurisdiction 
choose not to participate in the Federal/State joint audit team, the 
Chief, Enforcement Bureau, shall establish an FCC audit team to oversee 
and direct the independent auditor to take any actions necessary to 
ensure compliance with the audit requirements in paragraph (b) of this 
section.

[62 FR 2926, Jan. 21, 1997, as amended at 67 FR 13226, Mar. 21, 2002]



Sec. 53.211  Audit planning.

    (a) Before selecting an independent auditor, the Bell operating 
company shall submit preliminary audit requirements, including the 
proposed scope of the audit and the extent of compliance and substantive 
testing, to the Federal/State joint audit team organized pursuant to 
Sec. 53.209(d);
    (b) The Federal/State joint audit team shall review the preliminary 
audit requirements to determine whether it is adequate to meet the audit 
requirements in Sec. 53.209 (b). The Federal/State joint audit shall 
have 30 days to review the audit requirements and determine any 
modifications that

[[Page 98]]

shall be incorporated into the final audit requirements.
    (c) After the audit requirements have been approved by the Federal/
State joint audit team, the Bell operating company shall engage within 
30 days an independent auditor to conduct the biennial audit. In making 
its selection, the Bell operating company shall not engage any 
independent auditor who has been instrumental during the past two years 
in designing any of the accounting or reporting systems under review in 
the biennial audit.
    (d) The independent auditor selected by the Bell operating company 
to conduct the audit shall develop a detailed audit program based on the 
final audit requirements and submit it to the Federal/State joint audit 
team. The Federal/State joint audit team shall have 30 days to review 
the audit program and determine any modifications that shall be 
incorporated into the final audit program.
    (e) During the course of the biennial audit, the independent 
auditor, among other things, shall:
    (1) Inform the Federal/State joint audit team of any revisions to 
the final audit program or to the scope of the audit.
    (2) Notify the Federal/State joint audit team of any meetings with 
the Bell operating company or its separate affiliate in which audit 
findings are discussed.
    (3) Submit to the Chief, Enforcement Bureau, any accounting or rule 
interpretations necessary to complete the audit.

[62 FR 2926, Jan. 21, 1997, as amended at 67 FR 13226, Mar. 21, 2002]



Sec. 53.213  Audit analysis and evaluation.

    (a) Within 60 dates after the end of the audit period, but prior to 
discussing the audit findings with the Bell operating company or the 
separate affiliate, the independent auditor shall submit a draft of the 
audit report to the Federal/State joint audit team.
    (1) The Federal/State joint audit team shall have 45 days to review 
the audit findings and audit workpapers, and offer its recommendations 
concerning the conduct of the audit or the audit findings to the 
independent auditor. Exceptions of the Federal/State joint audit team to 
the finding and conclusions of the independent auditor that remain 
unresolved shall be included in the final audit report.
    (2) Within 15 days after receiving the Federal/State joint audit 
team's recommendations and making appropriate revisions to the audit 
report, the independent auditor shall submit the audit report to the 
Bell operating company for its response to the audit findings and send a 
copy to the Federal/State joint audit team. The independent auditor may 
request additional time to perform additional audit work as recommended 
by the Federal/State joint audit team.
    (b) Within 30 days after receiving the audit report, the Bell 
operating company will respond to the audit findings and send a copy of 
its response to the Federal/State joint audit team. The Bell operating 
company's response shall be included as part of the final audit report 
along with any reply that the independent auditor wishes to make to the 
response.
    (c) Within 10 days after receiving the response of the Bell 
operating company, the independent auditor shall make available for 
public inspection the final audit report by filing it with the 
Commission and the state regulatory agencies participating on the joint 
audit team.
    (d) Interested parties may file comments with the Commission within 
60 days after the audit report is made available for public inspection.

[62 FR 2927, Jan. 21, 1997]

[[Page 99]]



           Subpart D_Manufacturing by Bell Operating Companies



Sec. 53.301  [Reserved]



       Subpart E_Electronic Publishing by Bell Operating Companies



Sec. 53.401  [Reserved]



                   Subpart F_Alarm Monitoring Services



Sec. 53.501  [Reserved]



PART 54_UNIVERSAL SERVICE--Table of Contents




                      Subpart A_General Information

Sec.
54.1 Basis and purpose.
54.5 Terms and definitions.
54.7 Intended use of federal universal service support.
54.8 Prohibition on participation: suspension and debarment.

                Subpart B_Services Designated for Support

54.101 Supported services for rural, insular and high cost areas.

        Subpart C_Carriers Eligible for Universal Service Support

54.201 Definition of eligible telecommunications carriers, generally.
54.202 Additional requirements for Commission designation of eligible 
          telecommunications carriers.
54.203 Designation of eligible telecommunications carriers for unserved 
          areas.
54.205 Relinquishment of universal service.
54.207 Service areas.
54.209 Annual reporting requirements for designated eligible 
          telecommunications carriers.

         Subpart D_Universal Service Support for High Cost Areas

54.301 Local switching support.
54.303 Long term support.
54.305 Sale or transfer of exchanges.
54.307 Support to a competitive eligible telecommunications carrier.
54.309 Calculation and distribution of forward-looking support for non-
          rural carriers.
54.311 Interim hold-harmless support for non-rural carriers.
54.313 State certification of support for non-rural carriers.
54.314 State certification of support for rural carriers.
54.315 Disaggregation and targeting of high-cost support.
54.316 Rate comparability review and certification for areas served by 
          non-rural carriers.

      Subpart E_Universal Service Support for Low Income Consumers

54.400 Terms and definitions.
54.401 Lifeline defined.
54.403 Lifeline support amount.
54.405 Carrier obligation to offer Lifeline.
54.407 Reimbursement for offering Lifeline.
54.409 Consumer qualification for Lifeline.
54.410 Certification and Verification of Consumer Qualification for 
          Lifeline.
54.411 Link Up program defined.
54.413 Reimbursement for revenue forgone in offering a Link Up program.
54.415 Consumer qualification for Link Up.
54.416 Certification of consumer Qualification for Link Up.
54.417 Recordkeeping requirements.
54.418 Digital television transition notices by eligible 
          telecommunications carriers.

      Subpart F_Universal Service Support for Schools and Libraries

54.500 Terms and definitions.
54.501 Eligibility for services provided by telecommunications carriers.
54.502 Supported telecommunications services.
54.503 Other supported special services.
54.504 Requests for services.
54.505 Discounts.
54.506 Internal connections.
54.507 Cap.
54.508 Technology plans.
54.509 Adjustments to the discount matrix.
54.511 Ordering services.
54.513 Resale and transfer of services.
54.514 Payment for discounted service.
54.515 Distributing support.
54.516 Auditing.
54.517 Services provided by non-telecommunications carriers.
54.518 Support for wide area networks.
54.519 State telecommunications networks.
54.520 Children's Internet Protection Act certifications required from 
          recipients of discounts under the federal universal service 
          support mechanism for schools and libraries.
54.522 Eligible services list.
54.523 Payment for the non-discount portion of supported services.

      Subpart G_Universal Service Support for Health Care Providers

54.601 Eligibility.
54.603 Competitive bid requirements.

[[Page 100]]

54.604 Existing contracts.
54.605 Determining the urban rate.
54.607 Determining the rural rate.
54.609 Calculating support.
54.611 Distributing support.
54.613 Limitations on supported services for rural health care 
          providers.
54.615 Obtaining services.
54.617 Resale.
54.619 Audits and recordkeeping.
54.621 Access to advanced telecommunications and information services.
54.623 Cap.
54.625 Support for services beyond the maximum supported distance for 
          rural health care providers.

                        Subpart H_Administration

54.701 Administrator of universal service support mechanisms.
54.702 Administrator's functions and responsibilities.
54.703 The Administrator's Board of Directors.
54.704 The Administrator's Chief Executive Officer.
54.705 Committees of the Administrator's Board of Directors.
54.706 Contributions.
54.707 Audit controls.
54.708 De minimis exemption.
54.709 Computations of required contributions to universal service 
          support mechanisms.
54.711 Contributor reporting requirements.
54.712 Contributor recovery of universal service costs from end users.
54.713 Contributors' failure to report or to contribute.
54.715 Administrative expenses of the Administrator.
54.717 Audits of the Administrator.

        Subpart I_Review of Decisions Issued by the Administrator

54.719 Parties permitted to seek review of Administrator decisions.
54.720 Filing deadlines.
54.721 General filing requirements.
54.722 Review by the Wireline Competition Bureau or the Commission.
54.723 Standard of review.
54.724 Time periods for Commission approval of Administrator decisions.
54.725 Universal service disbursements during pendency of a request for 
          review and Administrator decision.

     Subpart J_Interstate Access Universal Service Support Mechanism

54.800 Terms and definitions.
54.801 General.
54.802 Obligations of local exchange carriers and the Administrator.
54.803 Universal service zones.
54.804 Preliminary minimum access universal service support for a study 
          area calculated by the Administrator.
54.805 Zone and study area above benchmark revenues calculated by the 
          Administrator.
54.806 Calculation by the Administrator of interstate access universal 
          service support for areas served by price cap local exchange 
          carriers.
54.807 Interstate access universal service support.
54.808 Transition provisions and periodic calculation.
54.809 Carrier certification.

 Subpart K_Interstate Common Line Support Mechanism for Rate-of-Return 
                                Carriers

54.901 Calculation of Interstate Common Line Support.
54.902 Calculation of Interstate Common Line Support for transferred 
          exchanges.
54.903 Obligations of rate-of-return carriers and the Administrator.
54.904 Carrier certification.

    Authority: 47 U.S.C. 151, 154(i), 201, 205, 214, and 254 unless 
otherwise noted.

    Source: 62 FR 32948, June 17, 1997, unless otherwise noted.



                      Subpart A_General Information



Sec. 54.1  Basis and purpose.

    (a) Basis. These rules are issued pursuant to the Communications Act 
of 1934, as amended.
    (b) Purpose. The purpose of these rules is to implement section 254 
of the Communications Act of 1934, as amended, 47 USC 254.



Sec. 54.5  Terms and definitions.

    Terms used in this part have the following meanings:
    Act. The term ``Act'' refers to the Communications Act of 1934, as 
amended.
    Administrator. The term ``Administrator'' shall refer to the 
Universal Service Administrative Company that is an independent 
subsidiary of the National Exchange Carrier Association, Inc., and that 
has been appointed the permanent Administrator of the federal universal 
service support mechanisms.
    Competitive eligible telecommunications carrier. A ``competitive 
eligible telecommunications carrier'' is a carrier

[[Page 101]]

that meets the definition of an ``eligible telecommunications carrier'' 
below and does not meet the definition of an ``incumbent local exchange 
carrier'' in Sec. 51.5 of this chapter.
    Contributor. The term ``contributor'' shall refer to an entity 
required to contribute to the universal service support mechanisms 
pursuant to Sec. 54.706.
    Eligible telecommunications carrier. ``Eligible telecommunications 
carrier'' means a carrier designated as such by a state commission 
pursuant to Sec. 54.201.
    Incumbent local exchange carrier. ``Incumbent local exchange 
carrier'' or ``ILEC'' has the same meaning as that term is defined in 
Sec. 51.5 of this chapter.
    Information service. ``Information service'' is the offering of a 
capability for generating, acquiring, storing, transforming, processing, 
retrieving, utilizing, or making available information via 
telecommunications, and includes electronic publishing, but does not 
include any use of any such capability for the management, control, or 
operation of a telecommunications system or the management of a 
telecommunications service.
    Interconnected VoIP Provider. An ``interconnected VoIP provider'' is 
an entity that provides interconnected VoIP service, as that term is 
defined in section 9.3 of these rules.
    Internet access. ``Internet access'' includes the following 
elements:
    (1) The transmission of information as common carriage;
    (2) The transmission of information as part of a gateway to an 
information service, when that transmission does not involve the 
generation or alteration of the content of information, but may include 
data transmission, address translation, protocol conversion, billing 
management, introductory information content, and navigational systems 
that enable users to access information services, and that do not affect 
the presentation of such information to users; and
    (3) Electronic mail services (e-mail).
    Interstate telecommunication. ``Interstate telecommunication'' is a 
communication or transmission:
    (1) From any State, Territory, or possession of the United States 
(other than the Canal zone), or the District of Columbia, to any other 
State, Territory, or possession of the United States (other than the 
Canal Zone), or the District of Columbia,
    (2) From or to the United States to or from the Canal Zone, insofar 
as such communication or transmission takes place within the United 
States, or
    (3) Between points within the United States but through a foreign 
country.
    Interstate transmission. ``Interstate transmission'' is the same as 
interstate telecommunication.
    Intrastate telecommunication. ``Intrastate telecommunication'' is a 
communication or transmission from within any State, Territory, or 
possession of the United States, or the District of Columbia to a 
location within that same State, Territory, or possession of the United 
States, or the District of Columbia.
    Intrastate transmission. ``Intrastate transmission'' is the same as 
intrastate telecommunication.
    LAN. ``LAN'' is a local area network, which is a set of high-speed 
links connecting devices, generally computers, on a single shared 
medium, usually on the user's premises.
    Rate-of-return carrier. ``Rate-of-return carrier'' shall refer to 
any incumbent local exchange carrier not subject to price cap regulation 
as that term is defined in Sec. 61.3(x) of this chapter.
    Rural area. For purposes of the schools and libraries universal 
support mechanism, a ``rural area'' is a nonmetropolitan county or 
county equivalent, as defined in the Office of Management and Budget's 
(OMB) Revised Standards for Defining Metropolitan Areas in the 1990s and 
identifiable from the most recent Metropolitan Statistical Area (MSA) 
list released by OMB, or any contiguous non-urban Census Tract or Block 
Numbered Area within an MSA-listed metropolitan county identified in the 
most recent Goldsmith Modification published by the Office of Rural 
Health Policy of the U.S. Department of Health and Human Services. For 
purposes of the rural health care universal service support mechanism, a 
``rural area'' is an area that is entirely outside of a Core Based 
Statistical Area; is within a Core Based Statistical Area that does not 
have any Urban Area with a population of 25,000

[[Page 102]]

or greater; or is in a Core Based Statistical Area that contains an 
Urban Area with a population of 25,000 or greater, but is within a 
specific census tract that itself does not contain any part of a Place 
or Urban Area with a population of greater than 25,000. ``Core Based 
Statistical Area'' and ``Urban Area'' are as defined by the Census 
Bureau and ``Place'' is as identified by the Census Bureau.
    Rural incumbent local exchange carrier. ``Rural incumbent local 
exchange carrier'' is a carrier that meets the definitions of ``rural 
telephone company'' and ``incumbent local exchange carrier,'' as those 
terms are defined in Sec. 51.5 of this chapter.
    Rural telephone company. ``Rural telephone company'' has the same 
meaning as that term is defined in Sec. 51.5 of this chapter.
    State commission. The term ``state commission'' means the 
commission, board or official (by whatever name designated) that, under 
the laws of any state, has regulatory jurisdiction with respect to 
intrastate operations of carriers.
    Technically feasible. ``Technically feasible'' means capable of 
accomplishment as evidenced by prior success under similar 
circumstances. For example, preexisting access at a particular point 
evidences the technical feasibility of access at substantially similar 
points. A determination of technical feasibility does not consider 
economic, accounting, billing, space or site except that space and site 
may be considered if there is no possibility of expanding available 
space.
    Telecommunications. ``Telecommunications'' is the transmission, 
between or among points specified by the user, of information of the 
user's choosing, without change in the form or content of the 
information as sent and received.
    Telecommunications carrier. A ``telecommunications carrier'' is any 
provider of telecommunications services, except that such term does not 
include aggregators of telecommunications services as defined in section 
226 of the Act. A telecommunications carrier shall be treated as a 
common carrier under the Act only to the extent that it is engaged in 
providing telecommunications services, except that the Commission shall 
determine whether the provision of fixed and mobile satellite service 
shall be treated as common carriage. This definition includes cellular 
mobile radio service (CMRS) providers, interexchange carriers (IXCs) 
and, to the extent they are acting as telecommunications carriers, 
companies that provide both telecommunications and information services. 
Private mobile radio service (PMRS) providers are telecommunications 
carriers to the extent they provide domestic or international 
telecommunications for a fee directly to the public.
    Telecommunications channel. ``Telecommunications channel'' means a 
telephone line, or, in the case of wireless communications, a 
transmittal line or cell site.
    Telecommunications service. ``Telecommunications service'' is the 
offering of telecommunications for a fee directly to the public, or to 
such classes of users as to be effectively available directly to the 
public, regardless of the facilities used.
    Website. The term ``website'' shall refer to any websites operated 
by the Administrator in connection with the schools and libraries 
support mechanism, the rural health care support mechanism, the high 
cost mechanism, and the low income mechanism.
    Wire center. A wire center is the location of a local switching 
facility containing one or more central offices, as defined in the 
Appendix to part 36 of this chapter. The wire center boundaries define 
the area in which all customers served by a given wire center are 
located.

[62 FR 32948, June 17, 1997, as amended at 62 FR 41303, Aug. 1, 1997; 63 
FR 70571, Dec. 21, 1998; 64 FR 67431, Dec. 1, 1999; 66 FR 30087, June 5, 
2001; 66 FR 59726, Nov. 30, 2001; 70 FR 6372, Feb. 7, 2005; 71 FR 38796, 
July 10, 2006]

    Effective Date Note: At 71 FR 38796, July 10, 2006, Sec. 54.5 was 
amended by revising the definition of ``contributor'' and adding the 
definition of ``interconnected VoIP provider'' in alphabetical order. 
This text contains information collection and recordkeeping requirements 
and will not become effective until approval has been given by the 
Office of Management and Budget.

[[Page 103]]



Sec. 54.7  Intended use of federal universal service support.

    A carrier that receives federal universal service support shall use 
that support only for the provision, maintenance, and upgrading of 
facilities and services for which the support is intended.



Sec. 54.8  Prohibition on participation: suspension and debarment.

    (a) Definitions--(1) Activities associated with or related to the 
schools and libraries support mechanism, the high-cost support 
mechanism, the rural health care support mechanism, and the low-income 
support mechanism. Such matters include the receipt of funds or 
discounted services through one or more of these support mechanisms, or 
consulting with, assisting, or advising applicants or service providers 
regarding one or more of these support mechanisms.
    (2) Civil liability. The disposition of a civil action by any court 
of competent jurisdiction, whether entered by verdict, decision, 
settlement with admission of liability, stipulation, or otherwise 
creating a civil liability for the wrongful acts complained of, or a 
final determination of liability under the Program Fraud Civil Remedies 
Act of 1988 (31 U.S.C. 3801-12).
    (3) Consultant. A person that for consideration advises or consults 
a person regarding the schools and libraries support mechanism, but who 
is not employed by the person receiving the advice or consultation.
    (4) Conviction. A judgment or conviction of a criminal offense by 
any court of competent jurisdiction, whether entered by verdict or a 
plea, including a plea of nolo contendere.
    (5) Debarment. Any action taken by the Commission in accordance with 
these regulations to exclude a person from activities associated with or 
relating to the schools and libraries support mechanism, the high-cost 
support mechanism, the rural health care support mechanism, and the low-
income support mechanism. A person so excluded is ``debarred.''
    (6) Person. Any individual, group of individuals, corporation, 
partnership, association, unit of government or legal entity, however 
organized.
    (7) Suspension. An action taken by the Commission in accordance with 
these regulations that immediately excludes a person from activities 
associated with or relating to the schools and libraries support 
mechanism, the high-cost support mechanism, the rural health care 
support mechanism, and the low-income support mechanism for a temporary 
period, pending completion of the debarment proceedings. A person so 
excluded is ``suspended.''
    (b) Suspension and debarment in general. The Commission shall 
suspend and debar a person for any of the causes in paragraph (c) of 
this section using procedures established in this section, absent 
extraordinary circumstances.
    (c) Causes for suspension and debarment. Causes for suspension and 
debarment are conviction of or civil judgment for attempt or commission 
of criminal fraud, theft, embezzlement, forgery, bribery, falsification 
or destruction of records, making false statements, receiving stolen 
property, making false claims, obstruction of justice and other fraud or 
criminal offense arising out of activities associated with or related to 
the schools and libraries support mechanism, the high-cost support 
mechanism, the rural health care support mechanism, and the low-income 
support mechanism.
    (d) Effect of suspension and debarment. Unless otherwise ordered, 
any persons suspended or debarred shall be excluded from activities 
associated with or related to the schools and libraries support 
mechanism, the high-cost support mechanism, the rural health care 
support mechanism, and the low-income support mechanism. Suspension and 
debarment of a person other than an individual constitutes suspension 
and debarment of all divisions and/or other organizational elements from 
participation in the program for the suspension and debarment period, 
unless the notice of suspension and proposed debarment is limited by its 
terms to one or more specifically identified individuals, divisions, or 
other organizational elements or to specific types of transactions.
    (e) Procedures for suspension and debarment. The suspension and 
debarment process shall proceed as follows:

[[Page 104]]

    (1) Upon evidence that there exists cause for suspension and 
debarment, the Commission shall provide prompt notice of suspension and 
proposed debarment to the person. Suspension shall be effective upon the 
earlier of receipt of notification or publication in the Federal 
Register.
    (2) The notice shall:
    (i) Give the reasons for the proposed debarment in terms sufficient 
to put a person on notice of the conduct or transaction(s) upon which it 
is based and the cause relied upon, namely, the entry of a criminal 
conviction or civil judgment arising out of activities associated with 
or related to the schools and libraries support mechanism, the high-cost 
support mechanism, the rural health care support mechanism, and the low-
income support mechanism;
    (ii) Explain the applicable debarment procedures;
    (iii) Describe the effect of debarment.
    (3) A person subject to proposed debarment, or who has an existing 
contract with a person subject to proposed debarment or intends to 
contract with such a person to provide or receive services in matters 
arising out of activities associated with or related to the schools and 
libraries support mechanism, the high-cost support mechanism, the rural 
health care support mechanism, and the low-income support mechanism may 
contest debarment or the scope of the proposed debarment. A person 
contesting debarment or the scope of proposed debarment must file 
arguments and any relevant documentation within thirty (30) calendar 
days of receipt of notice or publication in the Federal Register, 
whichever is earlier.
    (4) A person subject to proposed debarment, or who has an existing 
contract with a person subject to proposed debarment or intends to 
contract with such a person to provide or receive services in matters 
arising out of activities associated with or related to the schools and 
libraries support mechanism, the high-cost support mechanism, the rural 
health care support mechanism, and the low-income support mechanism may 
also contest suspension or the scope of suspension, but such action will 
not ordinarily be granted. A person contesting suspension or the scope 
of suspension must file arguments and any relevant documentation within 
thirty (30) calendar days of receipt of notice or publication in the 
Federal Register, whichever is earlier.
    (5) Within ninety (90) days of receipt of any information submitted 
by the respondent, the Commission, in the absence of extraordinary 
circumstances, shall provide the respondent prompt notice of the 
decision to debar. Debarment shall be effective upon the earlier of 
receipt of notice or publication in the Federal Register.
    (f) Reversal or limitation of suspension or debarment. The 
Commission may reverse a suspension or debarment, or limit the scope or 
period of suspension or debarment, upon a finding of extraordinary 
circumstances, after due consideration following the filing of a 
petition by an interested party or upon motion by the Commission. 
Reversal of the conviction or civil judgment upon which the suspension 
and debarment was based is an example of extraordinary circumstances.
    (g) Time period for debarment. A debarred person shall be prohibited 
from involvement with the schools and libraries support mechanism for 
three (3) years from the date of debarment. The Commission may, if 
necessary to protect the public interest, set a longer period of 
debarment or extend the existing period of debarment. If multiple 
convictions or judgments have been rendered, the Commission shall 
determine based on the facts before it whether debarments shall run 
concurrently or consecutively.

[68 FR 36943, June 20, 2003. Redesignated and amended at 72 FR 54218, 
Sept. 24, 2007]



                Subpart B_Services Designated for Support



Sec. 54.101  Supported services for rural, insular and high cost areas.

    (a) Services designated for support. The following services or 
functionalities shall be supported by federal universal service support 
mechanisms:
    (1) Voice grade access to the public switched network. ``Voice grade 
access'' is defined as a functionality that enables a user of 
telecommunications

[[Page 105]]

services to transmit voice communications, including signalling the 
network that the caller wishes to place a call, and to receive voice 
communications, including receiving a signal indicating there is an 
incoming call. For the purposes of this part, bandwidth for voice grade 
access should be, at a minimum, 300 to 3,000 Hertz;
    (2) Local usage. ``Local usage'' means an amount of minutes of use 
of exchange service, prescribed by the Commission, provided free of 
charge to end users;
    (3) Dual tone multi-frequency signaling or its functional 
equivalent. ``Dual tone multi-frequency'' (DTMF) is a method of 
signaling that facilitates the transportation of signaling through the 
network, shortening call set-up time;
    (4) Single-party service or its functional equivalent. ``Single-
party service'' is telecommunications service that permits users to have 
exclusive use of a wireline subscriber loop or access line for each call 
placed, or, in the case of wireless telecommunications carriers, which 
use spectrum shared among users to provide service, a dedicated message 
path for the length of a user's particular transmission;
    (5) Access to emergency services. ``Access to emergency services'' 
includes access to services, such as 911 and enhanced 911, provided by 
local governments or other public safety organizations. 911 is defined 
as a service that permits a telecommunications user, by dialing the 
three-digit code ``911,'' to call emergency services through a Public 
Service Access Point (PSAP) operated by the local government. ``Enhanced 
911'' is defined as 911 service that includes the ability to provide 
automatic numbering information (ANI), which enables the PSAP to call 
back if the call is disconnected, and automatic location information 
(ALI), which permits emergency service providers to identify the 
geographic location of the calling party. ``Access to emergency 
services'' includes access to 911 and enhanced 911 services to the 
extent the local government in an eligible carrier's service area has 
implemented 911 or enhanced 911 systems;
    (6) Access to operator services. ``Access to operator services'' is 
defined as access to any automatic or live assistance to a consumer to 
arrange for billing or completion, or both, of a telephone call;
    (7) Access to interexchange service. ``Access to interexchange 
service'' is defined as the use of the loop, as well as that portion of 
the switch that is paid for by the end user, or the functional 
equivalent of these network elements in the case of a wireless carrier, 
necessary to access an interexchange carrier's network;
    (8) Access to directory assistance. ``Access to directory 
assistance'' is defined as access to a service that includes, but is not 
limited to, making available to customers, upon request, information 
contained in directory listings; and
    (9) Toll limitation for qualifying low-income consumers. Toll 
limitation for qualifying low-income consumers is described in subpart E 
of this part.
    (b) Requirement to offer all designated services. An eligible 
telecommunications carrier must offer each of the services set forth in 
paragraph (a) of this section in order to receive federal universal 
service support.
    (c) Additional time to complete network upgrades. A state commission 
may grant the petition of a telecommunications carrier that is otherwise 
eligible to receive universal service support under Sec. 54.201 
requesting additional time to complete the network upgrades needed to 
provide single-party service, access to enhanced 911 service, or toll 
limitation. If such petition is granted, the otherwise eligible 
telecommunications carrier will be permitted to receive universal 
service support for the duration of the period designated by the state 
commission. State commissions should grant such a request only upon a 
finding that exceptional circumstances prevent an otherwise eligible 
telecommunications carrier from providing single-party service, access 
to enhanced 911 service, or toll limitation. The period should extend 
only as long as the relevant state commission finds that exceptional 
circumstances exist and should not extend beyond the time that the state 
commission deems necessary for that eligible telecommunications carrier 
to complete network upgrades. An otherwise eligible telecommunications 
carrier that is incapable of offering one or more of

[[Page 106]]

these three specific universal services must demonstrate to the state 
commission that exceptional circumstances exist with respect to each 
service for which the carrier desires a grant of additional time to 
complete network upgrades.

[62 FR 32948, June 17, 1997, as amended at 63 FR 2125, Jan. 13, 1998; 63 
FR 33585, June 19, 1998]



        Subpart C_Carriers Eligible for Universal Service Support



Sec. 54.201  Definition of eligible telecommunications 
carriers, generally.

    (a) Carriers eligible to receive support. (1) Beginning January 1, 
1998, only eligible telecommunications carriers designated under 
paragraphs (b) through (d) of this section shall receive universal 
service support distributed pursuant to part 36 and part 69 of this 
chapter, and subparts D and E of this part.
    (2) [Reserved]
    (3) This paragraph does not apply to offset or reimbursement support 
distributed pursuant to subpart G of this part.
    (4) This paragraph does not apply to support distributed pursuant to 
subpart F of this part.
    (b) A state commission shall upon its own motion or upon request 
designate a common carrier that meets the requirements of paragraph (d) 
of this section as an eligible telecommunications carrier for a service 
area designated by the state commission.
    (c) Upon request and consistent with the public interest, 
convenience, and necessity, the state commission may, in the case of an 
area served by a rural telephone company, and shall, in the case of all 
other areas, designate more than one common carrier as an eligible 
telecommunications carrier for a service area designated by the state 
commission, so long as each additional requesting carrier meets the 
requirements of paragraph (d) of this section. Before designating an 
additional eligible telecommunications carrier for an area served by a 
rural telephone company, the state commission shall find that the 
designation is in the public interest.
    (d) A common carrier designated as an eligible telecommunications 
carrier under this section shall be eligible to receive universal 
service support in accordance with section 254 of the Act and shall, 
throughout the service area for which the designation is received:
    (1) Offer the services that are supported by federal universal 
service support mechanisms under subpart B of this part and section 
254(c) of the Act, either using its own facilities or a combination of 
its own facilities and resale of another carrier's services (including 
the services offered by another eligible telecommunications carrier); 
and
    (2) Advertise the availability of such services and the charges 
therefore using media of general distribution.
    (e) For the purposes of this section, the term facilities means any 
physical components of the telecommunications network that are used in 
the transmission or routing of the services that are designated for 
support pursuant to subpart B of this part.
    (f) For the purposes of this section, the term ``own facilities'' 
includes, but is not limited to, facilities obtained as unbundled 
network elements pursuant to part 51 of this chapter, provided that such 
facilities meet the definition of the term ``facilities'' under this 
subpart.
    (g) A state commission shall not require a common carrier, in order 
to satisfy the requirements of paragraph (d)(1) of this section, to use 
facilities that are located within the relevant service area, as long as 
the carrier uses facilities to provide the services designated for 
support pursuant to subpart B of this part within the service area.
    (h) A state commission shall designate a common carrier that meets 
the requirements of this section as an eligible telecommunications 
carrier irrespective of the technology used by such carrier.
    (i) A state commission shall not designate as an eligible 
telecommunications carrier a telecommunications carrier that offers the 
services supported by federal universal service support mechanisms 
exclusively through the resale of another carrier's services.

[62 FR 32948, June 17, 1997, as amended at 63 FR 2125, Jan. 13, 1998; 64 
FR 62123, Nov. 16, 1999; 71 FR 65750, Nov. 9, 2006]

[[Page 107]]



Sec. 54.202  Additional requirements for Commission designation
of eligible telecommunications carriers.

    (a) In order to be designated an eligible telecommunications carrier 
under section 214(e)(6), any common carrier in its application must:
    (1) (i) Commit to provide service throughout its proposed designated 
service area to all customers making a reasonable request for service. 
Each applicant shall certify that it will:
    (A) Provide service on a timely basis to requesting customers within 
the applicant's service area where the applicant's network already 
passes the potential customer's premises; and
    (B) Provide service within a reasonable period of time, if the 
potential customer is within the applicant's licensed service area but 
outside its existing network coverage, if service can be provided at 
reasonable cost by:
    (1) Modifying or replacing the requesting customer's equipment;
    (2) Deploying a roof-mounted antenna or other equipment;
    (3) Adjusting the nearest cell tower;
    (4) Adjusting network or customer facilities;
    (5) Reselling services from another carrier's facilities to provide 
service; or
    (6) Employing, leasing or constructing an additional cell site, cell 
extender, repeater, or other similar equipment.
    (ii) Submit a five-year plan that describes with specificity 
proposed improvements or upgrades to the applicant's network on a wire 
center-by-wire center basis throughout its proposed designated service 
area. Each applicant shall demonstrate how signal quality, coverage or 
capacity will improve due to the receipt of high-cost support; the 
projected start date and completion date for each improvement and the 
estimated amount of investment for each project that is funded by high-
cost support; the specific geographic areas where the improvements will 
be made; and the estimated population that will be served as a result of 
the improvements. If an applicant believes that service improvements in 
a particular wire center are not needed, it must explain its basis for 
this determination and demonstrate how funding will otherwise be used to 
further the provision of supported services in that area.
    (2) Demonstrate its ability to remain functional in emergency 
situations, including a demonstration that it has a reasonable amount of 
back-up power to ensure functionality without an external power source, 
is able to reroute traffic around damaged facilities, and is capable of 
managing traffic spikes resulting from emergency situations.
    (3) Demonstrate that it will satisfy applicable consumer protection 
and service quality standards. A commitment by wireless applicants to 
comply with the Cellular Telecommunications and Internet Association's 
Consumer Code for Wireless Service will satisfy this requirement. Other 
commitments will be considered on a case-by-case basis.
    (4) Demonstrate that it offers a local usage plan comparable to the 
one offered by the incumbent LEC in the service areas for which it seeks 
designation.
    (5) Certify that the carrier acknowledges that the Commission may 
require it to provide equal access to long distance carriers in the 
event that no other eligible telecommunications carrier is providing 
equal access within the service area.
    (b) Any common carrier that has been designated under section 
214(e)(6) as an eligible telecommunications carrier or that has 
submitted its application for designation under section 214(e)(6) before 
the effective date of these rules must submit the information required 
by paragraph (a) of this section no later than October 1, 2006, as part 
of its annual reporting requirements under Sec. 54.209.
    (c) Public Interest Standard. Prior to designating an eligible 
telecommunications carrier pursuant to section 214(e)(6), the Commission 
determines that such designation is in the public interest. In doing so, 
the Commission shall consider the benefits of increased consumer choice, 
and the unique advantages and disadvantages of the applicant's service 
offering. In instances where an eligible telecommunications carrier 
applicant seeks designation below the study area level of a rural 
telephone company, the Commission

[[Page 108]]

shall also conduct a creamskimming analysis that compares the population 
density of each wire center in which the eligible telecommunications 
carrier applicant seeks designation against that of the wire centers in 
the study area in which the eligible telecommunications carrier 
applicant does not seek designation. In its creamskimming analysis, the 
Commission shall consider other factors, such as disaggregation of 
support pursuant to Sec. 54.315 by the incumbent local exchange 
carrier.
    (d) A common carrier seeking designation as an eligible 
telecommunications carrier under section 214(e)(6) for any part of 
tribal lands shall provide a copy of its petition to the affected tribal 
government and tribal regulatory authority, as applicable, at the time 
it files its petition with the Federal Communications Commission. In 
addition, the Commission shall send the relevant public notice seeking 
comment on any petition for designation as an eligible 
telecommunications carrier on tribal lands, at the time it is released, 
to the affected tribal government and tribal regulatory authority, as 
applicable, by overnight express mail.
    (e) All eligible telecommunications carriers shall retain all 
records required to demonstrate to auditors that the support received 
was consistent with the universal service high-cost program rules. These 
records should include the following: data supporting line count 
filings; historical customer records; fixed asset property accounting 
records; general ledgers; invoice copies for the purchase and 
maintenance of equipment; maintenance contracts for the upgrade or 
equipment; and any other relevant documentation. This documentation must 
be maintained for at least five years from the receipt of funding.

[70 FR 29978, May 25, 2005, as amended at 72 FR 54217, Sept. 24, 2007]



Sec. 54.203  Designation of eligible telecommunications carriers
for unserved areas.

    (a) If no common carrier will provide the services that are 
supported by federal universal service support mechanisms under section 
254(c) of the Act and subpart B of this part to an unserved community or 
any portion thereof that requests such service, the Commission, with 
respect to interstate services, or a state commission, with respect to 
intrastate services, shall determine which common carrier or carriers 
are best able to provide such service to the requesting unserved 
community or portion thereof and shall order such carrier or carriers to 
provide such service for that unserved community or portion thereof.
    (b) Any carrier or carriers ordered to provide such service under 
this section shall meet the requirements of section 54.201(d) and shall 
be designated as an eligible telecommunications carrier for that 
community or portion thereof.



Sec. 54.205  Relinquishment of universal service.

    (a) A state commission shall permit an eligible telecommunications 
carrier to relinquish its designation as such a carrier in any area 
served by more than one eligible telecommunications carrier. An eligible 
telecommunications carrier that seeks to relinquish its eligible 
telecommunications carrier designation for an area served by more than 
one eligible telecommunications carrier shall give advance notice to the 
state commission of such relinquishment.
    (b) Prior to permitting a telecommunications carrier designated as 
an eligible telecommunications carrier to cease providing universal 
service in an area served by more than one eligible telecommunications 
carrier, the state commission shall require the remaining eligible 
telecommunications carrier or carriers to ensure that all customers 
served by the relinquishing carrier will continue to be served, and 
shall require sufficient notice to permit the purchase or construction 
of adequate facilities by any remaining eligible telecommunications 
carrier. The state commission shall establish a time, not to exceed one 
year after the state commission approves such relinquishment under this 
section, within which such purchase or construction shall be completed.

[[Page 109]]



Sec. 54.207  Service areas.

    (a) The term service area means a geographic area established by a 
state commission for the purpose of determining universal service 
obligations and support mechanisms. A service area defines the overall 
area for which the carrier shall receive support from federal universal 
service support mechanisms.
    (b) In the case of a service area served by a rural telephone 
company, service area means such company's ``study area'' unless and 
until the Commission and the states, after taking into account 
recommendations of a Federal-State Joint Board instituted under section 
410(c) of the Act, establish a different definition of service area for 
such company.
    (c) If a state commission proposes to define a service area served 
by a rural telephone company to be other than such company's study area, 
the Commission will consider that proposed definition in accordance with 
the procedures set forth in this paragraph.
    (1) A state commission or other party seeking the Commission's 
agreement in redefining a service area served by a rural telephone 
company shall submit a petition to the Commission. The petition shall 
contain:
    (i) The definition proposed by the state commission; and
    (ii) The state commission's ruling or other official statement 
presenting the state commission's reasons for adopting its proposed 
definition, including an analysis that takes into account the 
recommendations of any Federal-State Joint Board convened to provide 
recommendations with respect to the definition of a service area served 
by a rural telephone company.
    (2) The Commission shall issue a Public Notice of any such petition 
within fourteen (14) days of its receipt.
    (3) The Commission may initiate a proceeding to consider the 
petition within ninety (90) days of the release date of the Public 
Notice.
    (i) If the Commission initiates a proceeding to consider the 
petition, the proposed definition shall not take effect until both the 
state commission and the Commission agree upon the definition of a rural 
service area, in accordance with paragraph (b) of this section and 
section 214(e)(5) of the Act.
    (ii) If the Commission does not act on the petition within ninety 
(90) days of the release date of the Public Notice, the definition 
proposed by the state commission will be deemed approved by the 
Commission and shall take effect in accordance with state procedures.
    (d) The Commission may, on its own motion, initiate a proceeding to 
consider a definition of a service area served by a rural telephone 
company that is different from that company's study area. If it proposes 
such different definition, the Commission shall seek the agreement of 
the state commission according to this paragraph.
    (1) The Commission shall submit a petition to the state commission 
according to that state commission's procedures. The petition submitted 
to the relevant state commission shall contain:
    (i) The definition proposed by the Commission; and
    (ii) The Commission's decision presenting its reasons for adopting 
the proposed definition, including an analysis that takes into account 
the recommendations of any Federal-State Joint Board convened to provide 
recommendations with respect to the definition of a service area served 
by a rural telephone company.
    (2) The Commission's proposed definition shall not take effect until 
both the state commission and the Commission agree upon the definition 
of a rural service area, in accordance with paragraph (b) of this 
section and section 214(e)(5) of the Act.
    (e) The Commission delegates its authority under paragraphs (c) and 
(d) of this section to the Chief, Wireline Competition Bureau.

[62 FR 32948, June 17, 1997, as amended at 67 FR 13226, Mar. 21, 2002]



Sec. 54.209  Annual reporting requirements for designated eligible
telecommunications carriers.

    (a) A common carrier designated under section 214(e)(6) as an 
eligible telecommunications carrier shall provide:

[[Page 110]]

    (1) A progress report on its five-year service quality improvement 
plan, including maps detailing its progress towards meeting its plan 
targets, an explanation of how much universal service support was 
received and how it was used to improve signal quality, coverage, or 
capacity, and an explanation regarding any network improvement targets 
that have not been fulfilled. The information shall be submitted at the 
wire center level;
    (2) Detailed information on any outage, as that term is defined in 
47 CFR 4.5, of at least 30 minutes in duration for each service area in 
which an eligible telecommunications carrier is designated for any 
facilities it owns, operates, leases, or otherwise utilizes that 
potentially affect
    (i) At least ten percent of the end users served in a designated 
service area; or
    (ii) A 911 special facility, as defined in 47 CFR 4.5(e).
    (iii) Specifically, the eligible telecommunications carrier's annual 
report must include information detailing:
    (A) The date and time of onset of the outage;
    (B) A brief description of the outage and its resolution;
    (C) The particular services affected;
    (D) The geographic areas affected by the outage;
    (E) Steps taken to prevent a similar situation in the future; and
    (F) The number of customers affected.
    (3) The number of requests for service from potential customers 
within the eligible telecommunications carrier's service areas that were 
unfulfilled during the past year. The carrier shall also detail how it 
attempted to provide service to those potential customers, as set forth 
in Sec. 54.202(a)(1)(i);
    (4) The number of complaints per 1,000 handsets or lines;
    (5) Certification that it is complying with applicable service 
quality standards and consumer protection rules;
    (6) Certification that the carrier is able to function in emergency 
situations as set forth in Sec. 54.201(a)(2);
    (7) Certification that the carrier is offering a local usage plan 
comparable to that offered by the incumbent LEC in the relevant service 
areas; and
    (8) Certification that the carrier acknowledges that the Commission 
may require it to provide equal access to long distance carriers in the 
event that no other eligible telecommunications carrier is providing 
equal access within the service area.
    (b) Filing deadlines. In order for a common carrier designated under 
section 214(e)(6) to continue to receive support for the following 
calendar year, or retain its eligible telecommunications carrier 
designation, it must submit the annual reporting information in 
paragraph (a) no later than October 1, 2006, and thereafter annually by 
October 1 of each year. Eligible telecommunications carriers that file 
their reports after the October 1 deadline shall receive support 
pursuant to the following schedule:
    (1) Eligible telecommunication carriers that file no later than 
January 1 of the subsequent year shall receive support for the second, 
third and fourth quarters of the subsequent year.
    (2) Eligible telecommunication carriers that file no later than 
April 1 of the subsequent year shall receive support for the third and 
fourth quarters of the subsequent year.
    (3) Eligible telecommunication carriers that file no later than July 
1 of the subsequent year shall receive support for the fourth quarter of 
the subsequent year.

[70 FR 29978, May 25, 2005]



         Subpart D_Universal Service Support for High Cost Areas



Sec. 54.301  Local switching support.

    (a) Calculation of local switching support. (1) Beginning January 1, 
1998, an incumbent local exchange carrier that has been designated an 
eligible telecommunications carrier and that serves a study area with 
50,000 or fewer access lines shall receive support for local switching 
costs using the following formula: the carrier's projected annual 
unseparated local switching revenue requirement, calculated pursuant to 
paragraph (d) of this section, shall be multiplied by the local 
switching support factor. For purposes of this

[[Page 111]]

section, local switching costs shall be defined as Category 3 local 
switching costs under part 36 of this chapter.
    (2) Local switching support factor. (i) The local switching support 
factor shall be defined as the difference between the 1996 weighted 
interstate DEM factor, calculated pursuant to Sec. 36.125(f) of this 
chapter, and the 1996 unweighted interstate DEM factor.
    (ii) If the number of a study area's access lines increases such 
that, under Sec. 36.125(f) of this chapter, the weighted interstate DEM 
factor for 1997 or any successive year would be reduced, that lower 
weighted interstate DEM factor shall be applied to the carrier's 1996 
unweighted interstate DEM factor to derive a new local switching support 
factor.
    (3) Beginning January 1, 1998, the sum of the unweighted interstate 
DEM factor, as defined in Sec. 36.125(a)(5) of this chapter, and the 
local switching support factor shall not exceed 0.85. If the sum of 
those two factors would exceed 0.85, the local switching support factor 
shall be reduced to a level that would reduce the sum of the factors to 
0.85.
    (b) Submission of data to the Administrator. Each incumbent local 
exchange carrier that has been designated an eligible telecommunications 
carrier and that serves a study area with 50,000 or fewer access lines 
shall, for each study area, provide the Administrator with the projected 
total unseparated dollar amount assigned to each account listed below 
for the calendar year following each filing. This information must be 
provided to the Administrator no later than October 1 of each year. The 
Administrator shall use this information to calculate the projected 
annual unseparated local switching revenue requirement pursuant to 
paragraph (d) of this section.

                                   I
Telecommunications Plant in    Account 2001
 Service (TPIS).
Telecommunications Plant--     Accounts 2002, 2003, 2005
 Other.
General Support Assets.......  Account 2110
Central Office Assets........  Accounts 2210, 2220, 2230
Central Office-switching,      Account 2210, Category 3
 Category 3 (local switching).
Information Origination/       Account 2310
 termination Assets.
Cable and Wire Facilities      Account 2410
 Assets.
Amortizable Tangible Assets..  Account 2680
Intangibles..................  Account 2690
                                   II
Rural Telephone Bank (RTB)     Included in Account 1410
 Stock.
Materials and Supplies.......  Account 1220.1
Cash Working Capital.........  Defined in 47 CFR 65.820(d)
 
                                  III
Accumulated Depreciation.....  Account 3100
Accumulated Amortization.....  Included in Accounts 2005, 2680, 2690,
                                3410
Net Deferred Operating Income  Accounts 4100, 4340
 Taxes.
Network Support Expenses.....  Account 6110
General Support Expenses.....  Account 6120
Central Office Switching,      Accounts 6210, 6220, 6230
 Operator Systems, and
 Central Office Transmission
 Expenses.
Information Origination/       Account 6310
 Termination Expenses.
Cable and Wire Facilities      Account 6410
 Expenses.
Other Property, Plant and      Account 6510
 Equipment Expenses.
Network Operations Expenses..  Account 6530
Access Expense...............  Account 6540
Depreciation and Amortization  Account 6560
 Expense.
Marketing Expense............  Account 6610
Services Expense.............  Account 6620
Corporate Operations Expense.  Account 6720
Operating Taxes..............  Accounts 7230, 7240

[[Page 112]]

 
Federal Investment Tax         Account 7210
 Credits.
Provision for Deferred         Account 7250
 Operating Income Taxes-Net.
Allowance for Funds Used       Included in Account 7300
 During Construction.
Charitable Contributions.....  Included in Account 7300
Interest and Related Items...  Account 7500
                                   IV
Other Non-Current Assets.....  Included in Account 1410
Deferred Maintenance and       Included in Account 1438
 Retirements.
Deferred Charges.............  Included in Account 1438
Other Jurisdictional Assets    Accounts 1500, 4370
 and Liabilities.
Customers' Deposits..........  Account 4040
Other Long-Term Liabilities..  Included in Account 4300
 

    (c) Allocation of accounts to switching. The Administrator shall 
allocate to local switching, the accounts reported pursuant to paragraph 
(b) of this section as prescribed in this paragraph.
    (1) General Support Assets (Account 2110); Amortizable Tangible 
Assets (Account 2680); Intangibles (Account 2690); and General Support 
Expenses (Account 6120) shall be allocated according to the following 
factor:

Account 2210 Category/3 (Account 2210 + Account 2220 + Account 2230 + 
Account 2310 + Account 2410).

    (2) Telecommunications Plant--Other (Accounts 2002, 2003, 2005); 
Rural Telephone Bank (RTB) Stock (included in Account 1410); Materials 
and Supplies (Account 1220.1); Cash Working Capital (Sec. 65.820(d) of 
this chapter); Accumulated Amortization (Included in Accounts 2005, 
2680, 2690, 3410); Net Deferred Operating Income Taxes (Accounts 4100, 
4340); Network Support Expenses (Account 6110); Other Property, Plant 
and Equipment Expenses (Account 6510); Network Operations Expenses 
(Account 6530); Marketing Expense (Account 6610); Services Expense 
(Account 6620); Operating Taxes (Accounts 7230, 7240); Federal 
Investment Tax Credits (Accounts 7210); Provision for Deferred Operating 
Income Taxes--Net (Account 7250); Interest and Related Items (Account 
7500); Allowance for Funds Used During Construction (Included in Account 
7300); Charitable Contributions (included in Account 7300); Other Non-
current Assets (Included in Account 1410); Other Jurisdictional Assets 
and Liabilities (Accounts 1500, 4370); Customer Deposits (Account 4040); 
Other Long-term Liabilities (Included in Account 4300); and Deferred 
Maintenance and Retirements (Included in Account 1438) shall be 
allocated according to the following factor:

Account 2210 Category 3 Account 2001.

    (3) Accumulated Depreciation for Central Office--switching (Account 
3100 associated with Account 2210) and Depreciation and Amortization 
Expense for Central Office--switching (Account 6560 associated with 
Account 2210) shall be allocated according to the following factor:

Account 2210 Category 3/Account 2210.

    (4) Accumulated Depreciation for General Support Assets (Account 
3100 associated with Account 2110) and Depreciation and Amortization 
Expense for General Support Assets (Account 6560 associated with Account 
2110) shall be allocated according to the following factor:

Account 2210 Category 3 / Account 2001.

    (5) Corporate Operations Expenses (Account 6720) shall be allocated 
according to the following factor:

[[Account 2210 Category 3 (Account 2210 + Account 2220 + Account 2230)]] 
x (Account 6210 + Account 6220 + Account 6230)] + [(Account 6530 + 
Account 6610 + Account 6620) x (Account 2210 Category 3 Account 2001)] 
(Account 6210 + Account 6220 + Account 6230 + Account 6310 + Account 
6410 + Account 6530 + Account 6610 + Account 6620).

    (6) Central Office Switching, Operator Systems, and Central Office 
Transmission Expenses (Account 6210, Account 6220, Account 6230) shall 
be allocated according to the following factor:


[[Page 113]]


Account 2210 Category 3 / (Accounts 2210 + 2220 + 2230).

    (d) Calculation of the projected annual unseparated local switching 
revenue requirement. The Administrator shall calculate the projected 
annual unseparated local switching revenue requirement by summing the 
components listed in this paragraph.
    (1) Return on Investment attributable to COE Category 3 shall be 
obtained by multiplying the average projected unseparated local 
switching net investment by the authorized interstate rate of return. 
Projected unseparated local switching net investment shall be calculated 
as of each December 31 by deducting the accumulated reserves, deferrals 
and customer deposits attributable to the COE Category 3 investment from 
the gross investment attributable to COE Category 3. The average 
projected unseparated local switching net investment shall be calculated 
by summing the projected unseparated local switching net investment as 
of December 31 of the calendar year following the filing year and such 
investment as of December 31 of the filing year and dividing by 2.
    (2) Depreciation expense attributable to COE Category 3 investment, 
allocated pursuant to paragraph (c) of this section.
    (3) All expenses, excluding depreciation expense, collected in 
paragraph (b) of this section, allocated pursuant to paragraph (c) of 
this section.
    (4) Federal income tax attributable to COE Category 3 shall be 
calculated using the following formula; the accounts listed shall be 
allocated pursuant to paragraph (c) of this section:

[Return on Investment attributable to COE Category 3--Included in 
Account 7300--Account 7500-Account 7210)] x [Federal Income Tax Rate 
(1--Federal Income Tax Rate)].

    (e) True-up adjustment--(1) Submission of true-up data. Each 
incumbent local exchange carrier that has been designated an eligible 
telecommunications carrier and that serves a study area with 50,000 or 
fewer access lines shall, for each study area, provide the Administrator 
with the historical total unseparated dollar amount assigned to each 
account listed in paragraph (b) of this section for each calendar year 
no later than 12 months after the end of such calendar year.
    (2) Calculation of true-up adjustment. (i) The Administrator shall 
calculate the historical annual unseparated local switching revenue 
requirement for each carrier when historical data for each calendar year 
are submitted.
    (ii) The Administrator shall calculate each carrier's local 
switching support payment, calculated pursuant to 54.301(a), using its 
historical annual unseparated local switching revenue requirement.
    (iii) For each carrier receiving local switching support, the 
Administrator shall calculate the difference between the support payment 
calculated pursuant to paragraph (e)(2)(ii) of this section and its 
support payment calculated using its projected annual unseparated local 
switching revenue requirement.
    (iv) The Administrator shall adjust each carrier's local switching 
support payment by the difference calculated in paragraph (e)(2)(iii) of 
this section no later than 15 months after the end of the calendar year 
for which historical data are submitted.
    (f) Calculation of the local switching revenue requirement for 
average schedule companies. (1) The local switching revenue requirement 
for average schedule companies, as defined in Sec. 69.605(c) of this 
chapter, shall be calculated in accordance with a formula approved or 
modified by the Commission. The Administrator shall submit to the 
Commission and the Common Carrier Bureau for review and approval a 
formula that simulates the disbursements that would be received pursuant 
to this section by a company that is representative of average schedule 
companies. For each annual period, the Administrator shall submit the 
formula, any proposed revisions of such formula, or a certification that 
no revisions to the formula are warranted on or before December 31 of 
each year.
    (2) The Commission delegates its authority to review, modify, and 
approve the formula submitted by the Administrator pursuant to this 
paragraph to

[[Page 114]]

the Chief, Wireline Competition Bureau.

[63 FR 2126, Jan. 13, 1998; 63 FR 33585, June 19, 1998, as amended at 67 
FR 13226, Mar. 21, 2002; 67 FR 5701, Feb. 6, 2002]



Sec. 54.303  Long term support.

    (a) Beginning January 1, 1998, an eligible telecommunications 
carrier that participates in the association Common Line pool shall 
receive Long Term Support. Beginning July 1, 2004, no carrier shall 
receive Long Term Support.
    (b) Long Term Support shall be calculated as prescribed in this 
paragraph.
    (1) To calculate the unadjusted base-level of Long Term Support for 
1998, the Administrator shall calculate the difference between the 
projected Common Line revenue requirement of association Common Line 
tariff participants projected to be recovered in 1997 and the sum of end 
user common line charges and the 1997 projected revenue recovered by the 
association Carrier Common Line charge as calculated pursuant to Sec. 
69.105(b)(2) of this chapter.
    (2) To calculate Long Term Support for calendar year 1998, the 
Administrator shall adjust the base-level of Long Term Support 
calculated in paragraph (b)(1) of this section to reflect the annual 
percentage change in the actual nationwide average unseparated loop cost 
per working loop as filed by the Administrator in the previous calendar 
year, pursuant to Sec. 36.622 of this chapter.
    (3) To calculate Long Term Support for calendar year 1999, the 
Administrator shall adjust the level of support calculated in paragraph 
(b)(2) of this section to reflect the annual percentage change in the 
actual nationwide average unseparated loop cost per working loop as 
filed by the Administrator in the previous calendar year, pursuant to 
Sec. 36.622 of this chapter.
    (4) Beginning January 1, 2000, the Administrator shall calculate 
Long Term Support annually by adjusting the previous year's level of 
support to reflect the annual percentage change in the Department of 
Commerce's Gross Domestic Product-Chained Price Index (GDP-CPI).
    (5)(i) Beginning July 1, 2002, each carrier will be eligible to 
receive LTS equal to the lesser of:
    (A) The LTS for which the carrier would be eligible pursuant to 
paragraph (b)(4) of this section, or
    (B) Its common line revenue requirement as calculated in accordance 
with part 69 of this chapter, minus:
    (1) The study area revenues obtained from end-user common line 
charges at their allowable maximum as determined by Sec. Sec. 69.104(n) 
and 69.104(o) of this chapter;
    (2) The carrier common line charge revenues to be phased out 
pursuant to Sec. 69.105 of this chapter;
    (3) The special access surcharges pursuant to Sec. 69.114 of this 
chapter; and
    (4) The line port costs in excess of basic analog service pursuant 
to Sec. 69.130 of this chapter.
    (ii) Under no circumstance shall a carrier have LTS that is less 
than zero.
    (iii) In calculating an LTS amount pursuant to paragraph 
(b)(5)(i)(B) of this section, the Administrator shall use data filed 
pursuant to Sec. 54.903 of this chapter.

[63 FR 2128, Jan. 13, 1998; 63 FR 33586, June 19, 1998, as amended at 67 
FR 42506, June 24, 2002; 67 FR 70702, Nov. 26, 2002; 69 FR 25336, May 6, 
2004]



Sec. 54.305  Sale or transfer of exchanges.

    (a) The provisions of this section are not applicable to the sale or 
transfer of exchanges between non-rural carriers after the complete 
phase-down of interim hold-harmless support, pursuant to Sec. 54.311, 
for the non-rural carriers subject to the transaction.
    (b) Except as provided in paragraph (c) of this section, a carrier 
that acquires telephone exchanges from an unaffiliated carrier shall 
receive universal service support for the acquired exchanges at the same 
per-line support levels for which those exchanges were eligible prior to 
the transfer of the exchanges. If the acquired exchanges are 
incorporated into an existing rural incumbent local exchange carrier 
study area, the rural incumbent local exchange carrier shall maintain 
the costs associated with the acquired exchanges separate from the costs 
associated with its pre-acquisition study area. The transferred 
exchanges may be eligible

[[Page 115]]

for safety valve support for loop related costs pursuant to paragraph 
(d) of this section.
    (c) A carrier that has entered into a binding agreement to buy or 
acquire exchanges from an unaffiliated carrier prior to May 7, 1997 will 
receive universal service support for the newly acquired lines based 
upon the average cost of all of its lines, both those newly acquired and 
those it had prior to execution of the sales agreement.
    (d) Transferred exchanges in study areas operated by rural telephone 
companies that are subject to the limitations on loop-related universal 
service support in paragraph (b) of this section may be eligible for a 
safety valve loop cost expense adjustment based on the difference 
between the rural incumbent local exchange carrier's index year expense 
adjustment and subsequent year loop cost expense adjustments for the 
acquired exchanges. Safety valve loop cost expense adjustments shall 
only be available to rural incumbent local exchange carriers that, in 
the absence of restrictions on high-cost loop support in Sec. 
54.305(b), would qualify for high-cost loop support for the acquired 
exchanges under Sec. 36.631 of this chapter.
    (1) For carriers that buy or acquire telephone exchanges on or after 
January 10, 2005 from an unaffiliated carrier, the index year expense 
adjustment for the acquiring carrier's first year of operation shall 
equal the selling carrier's loop-related expense adjustment for the 
transferred exchanges for the 12-month period prior to the transfer of 
the exchanges. At the acquiring carrier's option, the first year of 
operation for the transferred exchanges, for purposes of calculating 
safety valve support, shall commence at the beginning of either the 
first calendar year or the next calendar quarter following the transfer 
of exchanges. For the first year of operation, a loop cost expense 
adjustment, using the costs of the acquired exchanges submitted in 
accordance with Sec. Sec. 36.611 and 36.612 of this chapter, shall be 
calculated pursuant to Sec. 36.631 of this chapter and then compared to 
the index year expense adjustment. Safety valve support for the first 
period of operation will then be calculated pursuant to paragraph (d)(3) 
of this section. The index year expense adjustment for years after the 
first year of operation shall be determined using cost data for the 
first year of operation of the transferred exchanges. Such cost data for 
the first year of operation shall be calculated in accordance with 
Sec. Sec. 36.611, 36.612 and 36.631 of this chapter. For each year, 
ending on the same calendar quarter as the first year of operation, a 
loop cost expense adjustment, using the loop costs of the acquired 
exchanges, shall be submitted and calculated pursuant to Sec. Sec. 
36.611, 36.612, and 36.631 of this chapter and will be compared to the 
index year expense adjustment. Safety valve support for the second year 
of operation and thereafter will then be calculated pursuant to 
paragraph (d)(3) of this section.
    (2) For carriers that bought or acquired exchanges from an 
unaffiliated carrier before January 10, 2005, and are not subject to the 
exception in paragraph (c) of this section, the index year expense 
adjustment for acquired exchange(s) shall be equal to the rural 
incumbent local exchange carrier's high-cost loop expense adjustment for 
the acquired exchanges calculated for the carrier's first year of 
operation of the acquired exchange(s). At the carrier's option, the 
first year of operation of the transferred exchanges shall commence at 
the beginning of either the first calendar year or the next calendar 
quarter following the transfer of exchanges. The index year expense 
adjustment shall be determined using cost data for the acquired 
exchange(s) submitted in accordance with Sec. Sec. 36.611 and 36.612 of 
this chapter and shall be calculated in accordance with Sec. 36.631 of 
this chapter. The index year expense adjustment for rural telephone 
companies that have operated exchanges subject to this section for more 
than a full year on the effective date of this paragraph shall be based 
on loop cost data submitted in accordance with Sec. 36.612 of this 
chapter for the year ending on the nearest calendar quarter following 
the effective date of this paragraph. For each subsequent year, ending 
on the same calendar quarter as the index year, a loop cost expense 
adjustment, using the costs of the acquired exchanges, will be 
calculated pursuant to

[[Page 116]]

Sec. 36.631 of this chapter and will be compared to the index year 
expense adjustment. Safety valve support is calculated pursuant to 
paragraph (d)(3) of this section.
    (3) Up to fifty (50) percent of any positive difference between the 
transferred exchanges loop cost expense adjustment and the index year 
expense adjustment will be designated as the transferred exchange's 
safety valve loop cost expense adjustment and will be available in 
addition to the per-line loop-related support transferred from the 
selling carrier to the acquiring carrier pursuant to Sec. 54.305(b). In 
no event shall a study area's safety valve loop cost expense adjustment 
exceed the difference between the carrier's study area loop cost expense 
adjustment calculated pursuant to Sec. 36.631 of this chapter and 
transferred support amounts available to the acquired exchange(s) under 
paragraph (b) of this section. Safety valve support shall not transfer 
with acquired exchanges.
    (e) The sum of the safety valve loop cost expense adjustment for all 
eligible study areas operated by rural telephone companies shall not 
exceed five (5) percent of the total rural incumbent local exchange 
carrier portion of the annual nationwide loop cost expense adjustment 
calculated pursuant to Sec. 36.603 of this chapter. The five (5) 
percent cap on the safety valve mechanism shall be based on the lesser 
of the rural incumbent local exchange carrier portion of the annual 
nationwide loop cost expense adjustment calculated pursuant to Sec. 
36.603 of this chapter or the sum of rural incumbent local exchange 
carrier expense adjustments calculated pursuant to Sec. 36.631 of this 
chapter. The percentage multiplier used to derive study area safety 
valve loop cost expense adjustments for rural telephone companies shall 
be the lesser of fifty (50) percent or a percentage calculated to 
produce the maximum total safety valve loop cost expense adjustment for 
all eligible study areas pursuant to this paragraph. The safety valve 
loop cost expense adjustment of an individual rural incumbent local 
exchange carrier also may be further reduced as described in paragraph 
(d)(3) of this section.
    (f) Once an acquisition is complete, the acquiring rural incumbent 
local exchange carrier shall provide written notice to the Administrator 
that it has acquired access lines that may be eligible for safety valve 
support. Rural telephone companies also shall provide written notice to 
the Administrator defining their index year for those years after the 
first year of operation for purposes of calculating the safety valve 
loop cost expense adjustment.

[70 FR 10060, Mar. 2, 2005]



Sec. 54.307  Support to a competitive eligible telecommunications carrier.

    (a) Calculation of support. A competitive eligible 
telecommunications carrier shall receive universal service support to 
the extent that the competitive eligible telecommunications carrier 
captures the subscriber lines of an incumbent local exchange carrier 
(LEC) or serves new subscriber lines in the incumbent LEC's service 
area.
    (1) A competitive eligible telecommunications carrier serving loops 
in the service area of a rural incumbent local exchange carrier, as that 
term is defined in Sec. 54.5 of this chapter, shall receive support for 
each line it serves in a particular service area based on the support 
the incumbent LEC would receive for each such line, disaggregated by 
cost zone if disaggregation zones have been established within the 
service area pursuant to Sec. 54.315 of this subpart. A competitive 
eligible telecommunications carrier serving loops in the service area of 
a non-rural incumbent local exchange carrier shall receive support for 
each line it serves in a particular wire center based on the support the 
incumbent LEC would receive for each such line. A competitive eligible 
telecommunications carrier serving loops in the service area of a rate-
of-return carrier shall be eligible to receive Interstate Common Line 
Support for each line it serves in the service area in accordance with 
the formula in Sec. 54.901.
    (2) A competitive eligible telecommunications carrier that uses 
switching purchased as unbundled network elements pursuant to Sec. 
51.307 of this chapter to provide the supported services shall receive 
the lesser of the unbundled network element price for

[[Page 117]]

switching or the per-line DEM support of the incumbent LEC, if any. A 
competitive eligible telecommunications carrier that uses loops 
purchased as unbundled network elements pursuant to Sec. 51.307 of this 
chapter to provide the supported services shall receive the lesser of 
the unbundled network element price for the loop or the incumbent LEC's 
per-line payment from the high-cost loop support, LTS, and Interstate 
Common Line Support mechanisms, if any. The incumbent LEC providing 
nondiscriminatory access to unbundled network elements to such 
competitive eligible telecommunications carrier shall receive the 
difference between the level of universal service support provided to 
the competitive eligible telecommunications carrier and the per-customer 
level of support that the incumbent LEC would have received.
    (3) A competitive eligible telecommunications carrier that provides 
the supported services using neither unbundled network elements 
purchased pursuant to Sec. 51.307 of this chapter nor wholesale service 
purchased pursuant to section 251(c)(4) of the Act will receive the full 
amount of universal service support that the incumbent LEC would have 
received for that customer.
    (b) In order to receive support pursuant to this subpart, a 
competitive eligible telecommunications carrier must report to the 
Administrator the number of working loops it serves in a service area 
pursuant to the schedule set forth in paragraph (c) of this section. For 
a competitive eligible telecommunications carrier serving loops in the 
service area of a rural incumbent local exchange carrier, as that term 
is defined in Sec. 54.5, the carrier must report, by customer class, 
the number of working loops it serves in the service area, disaggregated 
by cost zone if disaggregation zones have been established within the 
service area pursuant to Sec. 54.315. For a competitive eligible 
telecommunications carrier serving loops in the service area of a non-
rural telephone company, the carrier must report the number of working 
loops it serves in the service area, by customer class if the non-rural 
telephone company receives Interstate Common Line Support pursuant to 
Sec. 54.901 and by disaggregation zone if disaggregation zones have 
been established within the service area pursuant to Sec. 54.315 of 
this subpart, and the number of working loops it serves in each wire 
center in the service area. For universal service support purposes, 
working loops are defined as the number of working Exchange Line C&WF 
loops used jointly for exchange and message telecommunications service, 
including C&WF subscriber lines associated with pay telephones in C&WF 
Category 1, but excluding WATS closed end access and TWX service. 
Competitive eligible telecommunications carriers providing mobile 
wireless service in an incumbent LEC's service area shall use the 
customer's billing address for purposes of identifying the service 
location of a mobile wireless customer in a service area.
    (c) A competitive eligible telecommunications carrier must submit 
the data required pursuant to paragraph (b) of this section according to 
the schedule.
    (1) No later than July 31st of each year, submit data as of December 
31st of the previous calendar year;
    (2) No later than September 30th of each year, submit data as of 
March 31st of the existing calendar year;
    (3) No later than December 30th of each year, submit data as of June 
30th of the existing calendar year;
    (4) No later than March 30th of each year, submit data as of 
September 30th of the previous calendar year.
    (d) Newly designated eligible telecommunications carriers. 
Notwithstanding the deadlines in paragraph (c) of this section, a 
carrier shall be eligible to receive support as of the effective date of 
its designation as an eligible telecommunications carrier under section 
214(e)(2) or (e)(6), provided that it submits the data required pursuant 
to paragraph (b) of this section within 60 days of that effective date. 
Thereafter, the eligible telecommunications carrier must submit the data 
required

[[Page 118]]

in paragraph (b) of this section pursuant to the schedule in paragraph 
(c) of this section.

[62 FR 32948, June 17, 1997, as amended at 63 FR 2128, Jan. 13, 1998; 64 
FR 67431, Dec. 1, 1999; 65 FR 26516, May 8, 2000; 66 FR 30087, June 5, 
2001; 66 FR 59726, Nov. 30, 2001; 68 FR 31623, May 28, 2003; 69 FR 
34602, June 22, 2004; 70 FR 29979, May 25, 2005]



Sec. 54.309  Calculation and distribution of forward-looking support
for non-rural carriers.

    (a) Calculation of total support available per state. Beginning 
January 1, 2000, non-rural incumbent local exchange carriers, and 
eligible telecommunications carriers serving lines in the service areas 
of non-rural incumbent local exchange carriers, shall receive universal 
service support for the forward-looking economic costs of providing 
supported services in high-cost areas, provided that the State in which 
the lines served by the carrier are located has complied with the 
certification requirements in Sec. 54.313. The total amount of forward-
looking support available in each State shall be determined according to 
the following methodology:
    (1) For each State, the Commission's cost model shall determine the 
statewide average forward-looking economic cost (FLEC) per line of 
providing the supported services. The statewide average FLEC per line 
shall equal the total FLEC for non-rural carriers to provide the 
supported services in the State, divided by the number of switched lines 
used in the Commission's cost model. The total FLEC shall equal average 
FLEC multiplied by the number of switched lines used in the Commission's 
cost model.
    (2) The Commission's cost model shall determine the national average 
FLEC per line of providing the supported services. The national average 
FLEC per line shall equal the total FLEC for non-rural carriers to 
provide the supported services in all States, divided by the total 
number of switched lines in all States used in the Commission's cost 
model.
    (3) The national cost benchmark shall equal two weighted standard 
deviations above the national average FLEC per line.
    (4) Support calculated pursuant to this section shall be provided to 
non-rural carriers in each State where the statewide average FLEC per 
line exceeds the national cost benchmark. The total amount of support 
provided to non-rural carriers in each State where the statewide average 
FLEC per line exceeds the national cost benchmark shall equal 76 percent 
of the amount of the statewide average FLEC per line that exceeds the 
national cost benchmark, multiplied by the number of lines reported 
pursuant to Sec. 36.611, Sec. 36.612, and Sec. 54.307 of this 
chapter.
    (5) In the event that a State's statewide average FLEC per line does 
not exceed the national cost benchmark, non-rural carriers in such State 
shall be eligible for support pursuant to Sec. 54.311. In the event 
that a State's statewide average FLEC per line exceeds the national cost 
benchmark, but the amount of support otherwise provided to a non-rural 
carrier in that State pursuant to this section is less than the amount 
that would be provided pursuant to Sec. 54.311, the carrier shall be 
eligible for support pursuant to Sec. 54.311.
    (b) Distribution of total support available per state. The total 
amount of support available per State calculated pursuant to paragraph 
(a) of this section shall be distributed to non-rural incumbent local 
exchange carriers, and eligible telecommunications carriers serving 
lines in the service areas of non-rural incumbent local exchange 
carriers, in the following manner:
    (1) The Commission's cost model shall determine the percentage of 
the total amount of support available in the State for each wire center 
by calculating the ratio of the wire center's FLEC above the national 
cost benchmark to the total FLEC above the national cost benchmark of 
all wire centers within the State. A wire center's FLEC above the 
national cost benchmark shall be equal to the wire center's average FLEC 
per line above the national cost benchmark, multiplied by the number of 
switched lines in the wire center used in the Commission's cost model;
    (2) The total amount of support distributed to each wire center 
shall be equal to the percentage calculated for

[[Page 119]]

the wire center pursuant to paragraph (b)(1) of this section multiplied 
by the total amount of support available in the state;
    (3) The total amount of support for each wire center pursuant to 
paragraph (b)(2) of this section shall be divided by the number of lines 
in the wire center reported pursuant to Sec. 36.611, Sec. 36.612, and 
Sec. 54.307 of this chapter to determine the per-line amount of 
forward-looking support for that wire center;
    (4) The per-line amount of support for each wire center pursuant to 
paragraph (b)(3) of this section shall be multiplied by the number of 
lines served by a non-rural incumbent local exchange carrier in that 
wire center, or by an eligible telecommunications carrier in that wire 
center, as reported pursuant to Sec. 36.611, Sec. 36.612, and Sec. 
54.307 of this chapter, to determine the amount of forward-looking 
support to be provided to that carrier.
    (5) The total amount of support calculated for each wire center 
pursuant to paragraph (b)(4) of this section shall be divided by the 
number of lines in the wire center to determine the per-line amount of 
forward-looking support for that wire center;
    (6) The per-line amount of support for a wire center calculated 
pursuant to paragraph (b)(5) of the section shall be multiplied by the 
number of lines served by a non-rural incumbent local exchange carrier 
in that wire center, or by an eligible telecommunications carrier in 
that wire center, to determine the amount of forward-looking support to 
be provided to that carrier.
    (c) Petition for waiver. Pursuant to section 1.3 of this chapter, 
any State may file a petition for waiver of paragraph (b) of this 
section, asking the Commission to distribute support calculated pursuant 
to paragraph (a) of this section to a geographic area different than the 
wire center. Such petition must contain a description of the particular 
geographic level to which the State desires support to be distributed, 
and an explanation of how waiver of paragraph (b) of this section will 
further the preservation and advancement of universal service within the 
State.

[64 FR 67431, Dec. 1, 1999, as amended at 65 FR 26516, May 8, 2000; 68 
FR 69626, Dec. 15, 2003]



Sec. 54.311  Interim hold-harmless support for non-rural carriers.

    (a) Interim hold-harmless support. The total amount of interim hold-
harmless support provided to a non-rural incumbent local exchange 
carrier shall equal the amount of support calculated for that carrier 
pursuant to part 36 of this chapter. The total amount of interim hold-
harmless support provided to a non-rural incumbent local exchange 
carrier shall also include Long Term Support provided pursuant to Sec. 
54.303, to the extent that the carrier would otherwise be eligible for 
such support. Beginning on January 1, 2000, in the event that a State's 
statewide average FLEC per line, calculated pursuant to Sec. 54.309(a), 
does not exceed the national cost benchmark, non-rural incumbent local 
exchange carriers in such State shall receive interim hold-harmless 
support calculated pursuant to part 36, and, if applicable, Sec. 
54.303. In the event that a State's statewide average FLEC per line, 
calculated pursuant to Sec. 54.309(a), exceeds the national cost 
benchmark, but the amount of support that would be provided to a non-
rural incumbent local exchange carrier in such State pursuant to Sec. 
54.309(b) is less than the amount that would be provided pursuant to 
part 36 and, if applicable, Sec. 54.303, the carrier shall be eligible 
for support pursuant to part 36 and, if applicable, Sec. 54.303. To the 
extent that an eligible telecommunications carrier serves lines in the 
service area of a non-rural incumbent local exchange carrier receiving 
interim hold-harmless support, the eligible telecommunications carrier 
shall also be entitled to interim hold-harmless support in an amount per 
line equal to the amount per line provided to the non-rural incumbent 
local exchange carrier pursuant to paragraph (b) of this section.
    (b) Distribution of Interim Hold-Harmless Support Amounts. Until the 
third quarter of 2000, interim hold-harmless support shall be 
distributed pursuant to part 36 and, if applicable, Sec. 54.303 of this 
subpart. Beginning in the third quarter of 2000, the total amount of 
interim hold-harmless support provided to each non-rural incumbent local 
exchange carrier within a particular State pursuant to paragraph (a) 
shall

[[Page 120]]

be distributed first to the carrier's wire center with the highest wire 
center average FLEC per line until that wire center's average FLEC per 
line, net of support, equals the average FLEC per line in the second 
most high-cost wire center. Support shall then be distributed to the 
carrier's wire center with the highest and second highest wire center 
average FLEC per line until those wire center's average FLECs per line, 
net of support, equal the average FLEC per line in the third most high-
cost wire center. This process shall continue in a cascading fashion 
until all of the interim hold-harmless support provided to the carrier 
has been exhausted.
    (c) Petition for waiver. Pursuant to section 1.3 of this chapter, a 
State may file a petition for waiver of paragraph (b) of this section, 
asking the Commission to distribute interim hold-harmless support to a 
geographic area different than the wire center. Such petition must 
contain a description of the particular geographic level to which the 
State desires interim hold-harmless support to be distributed, and an 
explanation of how waiver of paragraph (b) of this section will further 
the preservation and advancement of universal service within the State.
    (d) Phase down of interim hold-harmless support. Beginning January 
1, 2001, the interim hold-harmless support for which a non-rural 
incumbent local exchange carrier qualifies under paragraph (a) of this 
section, excluding Long Term Support, shall be phased down through 
annual $1.00 reductions in average monthly, per-line support. Applicable 
annual reductions shall be subtracted from the total amount of interim 
hold-harmless support that a non-rural incumbent local exchange carrier 
otherwise would be eligible to receive on an ongoing, quarterly basis. 
The provisions of paragraph (b) of this section shall apply to the total 
amount of phased-down interim hold-harmless support provided to each 
non-rural incumbent local exchange carrier.
    (1) Interim hold-harmless support for a wire center transferred to a 
carrier that does not meet the definition of rural telephone company in 
Sec. 51.5 of this chapter shall be phased down following the transfer 
over the same time period as the seller's support would have been phased 
down, by an equal percentage for each year of the phase-down period.
    (2) Interim hold-harmless support for a wire center transferred to a 
carrier that meets the definition of rural telephone company in Sec. 
51.5 of this chapter shall remain frozen at the per-line support level 
as of the sale date.

[64 FR 67432, Dec. 1, 1999, as amended at 64 FR 73428, Dec. 30, 1999; 65 
FR 78992, Dec. 18, 2000]



Sec. 54.313  State certification of support for non-rural carriers.

    (a) Certification. States that desire non-rural incumbent local 
exchange carriers and/or eligible telecommunications carriers serving 
lines in the service area of a non-rural incumbent local exchange 
carrier within their jurisdiction to receive support pursuant to 
Sec. Sec. 54.309 and/or 54.311 must file an annual certification with 
the Administrator and the Commission stating that all federal high-cost 
support provided to such carriers within that State will be used only 
for the provision, maintenance, and upgrading of facilities and services 
for which the support is intended. Support provided pursuant to 
Sec. Sec. 54.309 and/or 54.311 shall only be provided to the extent 
that the State has filed the requisite certification pursuant to this 
section.
    (b) Carriers not subject to State jurisdiction. A non-rural 
incumbent local exchange carrier not subject to the jurisdiction of a 
state or an eligible telecommunications carrier not subject to the 
jurisdiction of a state serving lines in the service area of a non-rural 
incumbent local exchange carrier that desires to receive support 
pursuant to Sec. Sec. 54.309 and/or 54.311 of this subpart must file an 
annual certification with the Administrator and the Commission stating 
that all federal high-cost support provided to such carriers will be 
used only for the provision, maintenance, and upgrading of facilities 
and services for which the support is intended. Support provided 
pursuant to Sec. Sec. 54.309 and/or 54.311 of this subpart shall only 
be provided to the extent that the carrier has filed the requisite 
certification pursuant to this section.

[[Page 121]]

    (c) Certification format. A certification pursuant to this section 
may be filed in the form of a letter from the appropriate regulatory 
authority for the State, and must be filed with both the Office of the 
Secretary of the Commission clearly referencing CC Docket No. 96-45, and 
with the Administrator of the high-cost universal service support 
mechanism, on or before the deadlines set forth in paragraph (d) of this 
section. If provided by the appropriate regulatory authority for the 
state, the annual certification must identify which carriers in the 
State are eligible to receive federal support during the applicable 12-
month period, and must certify that those carriers will only use support 
for the provision, maintenance, and upgrading of facilities and services 
for which support is intended. A State may file a supplemental 
certification for carriers not subject to the State's annual 
certification. All certificates filed by a State pursuant to this 
section shall become part of the public record maintained by the 
Commission. Non-rural incumbent local exchange carriers not subject to 
the jurisdiction of a state or eligible telecommunications carrier not 
subject to the jurisdiction of a state serving lines in the service area 
of a non-rural incumbent local exchange carrier, shall file a sworn 
affidavit executed by a corporate officer attesting to the use of the 
support for the provision, maintenance, and upgrading of facilities and 
services for which support is intended. The affidavit must be filed with 
both the Office of the Secretary of the Commission clearly referencing 
CC Docket No. 96-45, and with the Administrator of the high-cost 
universal service support mechanism, on or before the deadlines set 
forth in paragraph (d) of this section. All affidavits filed pursuant to 
this section shall become part of the public record maintained by the 
Commission.
    (d) Filing deadlines. In order for a non-rural incumbent local 
exchange carrier in a particular State, and/or an eligible 
telecommunications carrier serving lines in the service area of a non-
rural incumbent local exchange carrier, to receive federal high-cost 
support, the State must file an annual certification, as described in 
paragraph (c) of this section, with both the Administrator and the 
Commission. Support shall be provided in accordance with the following 
schedule:
    (1) [Reserved]
    (2) [Reserved]
    (3) Subsequent program years (January 1-December 31). During the 
program years subsequent to the second program year (January 1, 2001-
December 31, 2001), a carrier in a particular State shall not receive 
support pursuant to Sec. 54.309 or Sec. 54.311 until such time as the 
State files the certification described in this section. Upon the filing 
of the certification described in this section, support shall be 
provided pursuant to the following schedule:
    (i) Certifications filed on or before October 1. Carriers subject to 
certifications filed on or before October 1 shall receive support 
pursuant to Sec. 54.309 or Sec. 54.311, whichever is applicable, in 
the first, second, third, and fourth quarters of the succeeding year.
    (ii) Certifications filed on or before January 1. Carriers subject 
to certifications filed on or before January 1 shall receive support 
pursuant to Sec. 54.309 or Sec. 54.311, whichever is applicable, in 
the second, third, and fourth quarters of that year. Such carriers shall 
not receive support pursuant to Sec. 54.309 or Sec. 54.311, whichever 
is applicable, in the first quarter of that year.
    (iii) Certifications filed on or before April 1. Carriers subject to 
certifications filed on or before April 1 shall receive support pursuant 
to Sec. 54.309 or Sec. 54.311, whichever is applicable, in the third 
and fourth quarters of that year. Such carriers shall not receive 
support pursuant to Sec. 54.309 or Sec. 54.311, whichever is 
applicable, in the first or second quarters of that year.
    (iv) Certifications filed on or before July 1. Carriers subject to 
certifications filed on or before July 1 shall receive support pursuant 
to Sec. 54.309 or Sec. 54.311, whichever is applicable, beginning in 
the fourth quarter of that year. Such carriers shall not receive support 
pursuant to Sec. 54.309 or Sec. 54.311, whichever is applicable, in 
the first, second, or third quarters of that year.
    (v) Certifications filed after July 1. Carriers subject to 
certifications filed after July 1 shall not receive support

[[Page 122]]

pursuant to Sec. 54.309 or Sec. 54.311, whichever is applicable, in 
that year.
    (vi) Newly designated eligible telecommunications carriers. 
Notwithstanding the deadlines in paragraph (d) of this section, a 
carrier shall be eligible to receive support pursuant to Sec. 54.309 or 
Sec. 54.311, whichever is applicable, as of the effective date of its 
designation as an eligible telecommunications carrier under section 
214(e)(2) or (e)(6), provided that it files the certification described 
in paragraph (b) of this section or the state commission files the 
certification described in paragraph (a) of this section within 60 days 
of the effective date of the carrier's designation as an eligible 
telecommunications carrier. Thereafter, the certification required by 
paragraphs (a) or (b) of this section must be submitted pursuant to the 
schedule in paragraph (d) of this section.

[64 FR 67432, Dec. 1, 1999, as amended at 64 FR 73428, Dec. 30, 1999; 66 
FR 30088, June 5, 2001; 67 FR 13094, Mar. 21, 2002; 70 FR 29979, May 25, 
2005; 71 FR 65750, Nov. 9, 2006]



Sec. 54.314  State certification of support for rural carriers.

    (a) State certification. States that desire rural incumbent local 
exchange carriers and/or eligible telecommunications carriers serving 
lines in the service area of a rural incumbent local exchange carrier 
within their jurisdiction to receive support pursuant to Sec. Sec. 
54.301, 54.305, and/or 54.307 and/or part 36, subpart F of this chapter 
must file an annual certification with the Administrator and the 
Commission stating that all federal high-cost support provided to such 
carriers within that State will be used only for the provision, 
maintenance, and upgrading of facilities and services for which the 
support is intended. Support provided pursuant to Sec. Sec. 54.301, 
54.305, and/or 54.307 and/or part 36, subpart F of this chapter shall 
only be provided to the extent that the State has filed the requisite 
certification pursuant to this section.
    (b) Carriers not subject to State jurisdiction. A rural incumbent 
local exchange carrier not subject to the jurisdiction of a state or an 
eligible telecommunications carrier not subject to the jurisdiction of a 
state serving lines in the service area of a rural incumbent local 
exchange carrier that desires to receive support pursuant to Sec. Sec. 
54.301, 54.305, and/or 54.307 and/or part 36, subpart F of this chapter 
shall file an annual certification with the Administrator and the 
Commission stating that all federal high-cost support provided to such 
carriers will be used only for the provision, maintenance, and upgrading 
of facilities and services for which the support is intended. Support 
provided pursuant to Sec. Sec. 54.301, 54.305, and/or 54.307 and/or 
part 36, subpart F of this chapter shall only be provided to the extent 
that the carrier has filed the requisite certification pursuant to this 
section.
    (c) Certification format. A certification pursuant to this section 
may be filed in the form of a letter from the appropriate regulatory 
authority for the State, and shall be filed with both the Office of the 
Secretary of the Commission clearly referencing CC Docket No. 96-45, and 
with the Administrator of the high-cost universal service support 
mechanism, on or before the deadlines set forth in paragraph (d) of this 
section. If provided by the appropriate regulatory authority for the 
state, the annual certification must identify which carriers in the 
State are eligible to receive federal support during the applicable 12-
month period, and must certify that those carriers will only use support 
for the provision, maintenance, and upgrading of facilities and services 
for which support is intended. A State may file a supplemental 
certification for carriers not subject to the State's annual 
certification. All certificates filed by a State pursuant to this 
section shall become part of the public record maintained by the 
Commission. Rural incumbent local exchange carriers not subject to the 
jurisdiction of a state or eligible telecommunications carriers not 
subject to the jurisdiction of a state serving lines in the service area 
of a rural incumbent local exchange carrier, shall file a sworn 
affidavit executed by a corporate officer attesting to the use of the 
support for the provision, maintenance, and upgrading of facilities and 
services for which support is intended. The affidavit must be filed with 
both the Office of the Secretary of the Commission clearly referencing 
CC Docket No. 96-45, and with the Administrator of the

[[Page 123]]

high-cost universal service support mechanism, on or before the 
deadlines set forth in paragraph (d) of this section. All affidavits 
filed pursuant to this section shall become part of the public record 
maintained by the Commission.
    (d) Filing deadlines. Upon the filing of the certification described 
in paragraph (c) of this section, support shall be provided pursuant to 
the following schedule:
    (1) Certifications filed on or before October 1. Carriers for which 
certifications are filed on or before October 1 shall receive support 
pursuant to Sec. Sec. 54.301, 54.305, and/or 54.307 and/or part 36, 
subpart F of this chapter, in the first, second, third, and fourth 
quarters of the succeeding year.
    (2) Certifications filed on or before January 1. Carriers for which 
certifications are filed on or before January 1 shall receive support 
pursuant to Sec. Sec. 54.301, 54.305, and/or 54.307 and/or part 36, 
subpart F of this chapter, in the second, third, and fourth quarters of 
that year. Such carriers shall not receive support pursuant to 
Sec. Sec. 54.301, 54.305, and/or 54.307 and/or part 36, subpart F of 
this chapter in the first quarter of that year.
    (3) Certifications filed on or before April 1. Carriers for which 
certifications are filed on or before April 1 shall receive support 
pursuant to Sec. Sec. 54.301, 54.305, and/or 54.307 and/or part 36, 
subpart F of this chapter, in the third and fourth quarters of that 
year. Such carriers shall not receive support pursuant to Sec. Sec. 
54.301, 54.305, and/or 54.307 and/or part 36, subpart F of this chapter 
in the first and second quarters of that year.
    (4) Certifications filed on or before July 1. Carriers for which 
certifications are filed on or before July 1 shall receive support 
pursuant to Sec. Sec. 54.301, 54.305, and/or 54.307 and/or part 36, 
subpart F of this chapter, in the fourth quarter of that year. Such 
carriers shall not receive support pursuant to Sec. Sec. 54.301, 
54.305, and/or 54.307 and/or part 36, subpart F of this chapter in the 
first, second, or third quarters of that year.
    (5) Certifications filed after July 1. Carriers for which 
certifications are filed after July 1 shall not receive support pursuant 
to Sec. Sec. 54.301, 54.305, and/or 54.307 and/or part 36, subpart F of 
this chapter, in that year.
    (6) Newly designated eligible telecommunications carriers. 
Notwithstanding the deadlines in paragraph (d) of this section, a 
carrier shall be eligible to receive support pursuant to Sec. Sec. 
54.301, 54.305, or Sec. 54.307 or part 36 subpart F of this chapter, 
whichever is applicable, as of the effective date of its designation as 
an eligible telecommunications carrier under section 214(e)(2) or 
(e)(6), provided that it files the certification described in paragraph 
(b) of this section or the state commission files the certification 
described in paragraph (a) of this section within 60 days of the 
effective date of the carrier's designation as an eligible 
telecommunications carrier. Thereafter, the certification required by 
paragraphs (a) or (b) of this section must be submitted pursuant to the 
schedule in paragraph (d) of this section.

[66 FR 30088, June 5, 2001, as amended at 70 FR 29979, May 25, 2005]



Sec. 54.315  Disaggregation and targeting of high-cost support.

    (a) On or before May 15, 2002, all rural incumbent local exchange 
carriers and rate-of-return carriers for which high-cost universal 
service support pursuant to Sec. Sec. 54.301, 54.303, and/or 54.305 of 
this subpart, subpart K of this part, and/or part 36 subpart F is 
available must select a disaggregation path as described in paragraphs 
(b), (c), or (d) of this section. In study areas in which a competitive 
carrier was designated as a competitive eligible telecommunications 
carrier prior to June 19, 2001, the rural incumbent local exchange 
carrier or rate-of-return carrier may only disaggregate support pursuant 
to paragraphs (b), (c), or (d)(1)(iii) of this section. A rural 
incumbent local exchange carrier or rate-of-return carrier failing to 
select a disaggregation path as described in paragraphs (b), (c), or (d) 
of this section by May 15, 2002, will not be permitted to disaggregate 
and target federal high-cost support unless ordered to do so by a state 
commission as that term is defined in Sec. 54.5.
    (b) Path 1: Carriers Not Disaggregating and Targeting High-Cost 
Support:

[[Page 124]]

    (1) A carrier may certify to the state commission that it will not 
disaggregate and target high-cost universal service support.
    (2) A carrier's election of this path becomes effective upon 
certification by the carrier to the state commission.
    (3) This path shall remain in place for such carrier for at least 
four years from the date of certification to the state commission except 
as provided in paragraph (b)(4) of this section.
    (4) A state commission may require, on its own motion, upon petition 
by an interested party, or upon petition by the rural incumbent local 
exchange carrier or rate-of-return carrier, the disaggregation and 
targeting of support under paragraphs (c) or (d) of this section.
    (5) A carrier not subject to the jurisdiction of a state, e.g., 
certain tribally owned carriers, may select Path 1, but must certify to 
the Federal Communications Commission as described in paragraphs (1) 
through (4) of this section.
    (c) Path 2: Carriers Seeking Prior Regulatory Approval for the 
Disaggregation and Targeting of Support:
    (1) A carrier electing to disaggregate and target support under this 
paragraph must file a disaggregation and targeting plan with the state 
commission.
    (2) Under this paragraph a carrier may propose any method of 
disaggregation and targeting of support consistent with the general 
requirements detailed in paragraph (e) of this section.
    (3) A disaggregation and targeting plan under this paragraph becomes 
effective upon approval by the state commission.
    (4) A carrier shall disaggregate and target support under this path 
for at least four years from the date of approval by the state 
commission except as provided in paragraph (c)(5) of this section.
    (5) A state commission may require, on its own motion, upon petition 
by an interested party, or upon petition by the rural incumbent local 
exchange carrier or rate-of-return carrier, the disaggregation and 
targeting of support in a different manner.
    (6) A carrier not subject to the jurisdiction of a state, e.g., 
certain tribally owned carriers, may select Path 2, but must seek 
approval from the Federal Communications Commission as described in 
paragraphs (c)(1) through (5) of this section.
    (d) Path 3: Self-Certification of the Disaggregation and Targeting 
of Support:
    (1) A carrier may file a disaggregation and targeting plan with the 
state commission along with a statement certifying each of the 
following:
    (i) It has disaggregated support to the wire center level; or
    (ii) It has disaggregated support into no more than two cost zones 
per wire center; or
    (iii) That the carrier's disaggregation plan complies with a prior 
regulatory determination made by the state commission.
    (2) Any disaggregation plan submitted pursuant to this paragraph 
must meet the following requirements:
    (i) The plan must be supported by a description of the rationale 
used, including the methods and data relied upon to develop the 
disaggregation zones, and a discussion of how the plan complies with the 
requirements of this paragraph. Such filing must provide information 
sufficient for interested parties to make a meaningful analysis of how 
the carrier derived its disaggregation plan.
    (ii) The plan must be reasonably related to the cost of providing 
service for each disaggregation zone within each disaggregated category 
of support.
    (iii) The plan must clearly specify the per-line level of support 
for each category of high-cost universal service support provided 
pursuant to Sec. Sec. 54.301, 54.303, and/or 54.305 and/or part 36, 
subpart F of this chapter in each disaggregation zone.
    (iv) If the plan uses a benchmark, the carrier must provide detailed 
information explaining what the benchmark is and how it was determined. 
The benchmark must be generally consistent with how the total study area 
level of support for each category of costs is derived to enable a 
competitive eligible

[[Page 125]]

telecommunications carrier to compare the disaggregated costs used to 
determine support for each cost zone.
    (3) A carrier's election of this path becomes effective upon 
certification by the carrier to the state commission.
    (4) A carrier shall disaggregate and target support under this path 
for at least four years from the date of certification to the state 
commission except as provided in paragraph (d)(5) of this section.
    (5) A state commission may require, on its own motion, upon petition 
by an interested party, or upon petition by the rural incumbent local 
exchange carrier, modification to the disaggregation and targeting of 
support selected under this path.
    (6) A carrier not subject to the jurisdiction of a state, e.g., 
certain tribally owned carriers, may select Path 3, but must certify to 
the Federal Communications Commission as described in paragraphs (d)(1) 
through (5) of this section.
    (e) Additional Procedures Governing the Operation of Path 2 and Path 
3: Disaggregation and targeting plan adopted under paragraphs (c) or (d) 
of this section shall be subject to the following general requirements:
    (1) Support available to the carrier's study area under its 
disaggregation plan shall equal the total support available to the study 
area without disaggregation.
    (2) The ratio of per-line support between disaggregation zones for 
each disaggregated category of support shall remain fixed over time, 
except as changes are allowed pursuant to paragraph (c) and (d) of this 
section.
    (3) The ratio of per-line support shall be publicly available.
    (4) Per-line support amounts for each disaggregation zone shall be 
recalculated whenever the carrier's total annual support amount changes 
using the changed support amount and lines at that point in time.
    (5) Per-line support for each category of support in each 
disaggregation zone shall be determined such that the ratio of support 
between disaggregation zones is maintained and that the product of all 
of the carrier's lines for each disaggregation zone multiplied by the 
per-line support for those zones when added together equals the sum of 
the carrier's total support.
    (6) Until a competitive eligible telecommunications carrier is 
certified in a study area, monthly payments to the incumbent carrier 
will be made based on total annual amounts for its study area divided by 
12.
    (7) When a competitive eligible telecommunications carrier is 
certified in a study area, per-line amounts used to determine the 
competitive eligible telecommunications carrier's disaggregated support 
shall be based on the incumbent carrier's then-current total support 
levels, lines, disaggregated support relationships, and, in the case of 
support calculated under subpart K of this part, customer classes.
    (f) Submission of Information to the Administrator:
    (1) A carrier certifying under paragraph (b) of this section that it 
will not disaggregate and target high-cost universal service support 
shall submit to the Administrator a copy of the certification submitted 
to the state commission, or the Federal Communications Commission, when 
not subject to state jurisdiction.
    (2) A carrier electing to disaggregate and target support under 
paragraph (c) of this section shall submit to the Administrator a copy 
of the order approving the disaggregation and targeting plan submitted 
by the carrier to the state commission, or the Federal Communications 
Commission, when not subject to state jurisdiction, and a copy of the 
disaggregation and targeting plan approved by the state commission or 
the Federal Communications Commission.
    (3) A carrier electing to disaggregate and target support under 
paragraph (d) of this section shall submit to the Administrator a copy 
of the self-certification plan including the information submitted to 
the state commission pursuant to paragraphs (d)(2)(i) and (d)(2)(iv) of 
this section or the Federal Communications Commission.
    (4) A carrier electing to disaggregate and target support under 
paragraph (c) or (d) of this section must submit to the Administrator 
maps which precisely identify the boundaries of the

[[Page 126]]

designated disaggregation zones of support within the carrier's study 
area.

[66 FR 30089, June 5, 2001, as amended at 66 FR 59727, Nov. 30, 2001]



Sec. 54.316  Rate comparability review and certification for areas
served by non-rural carriers.

    (a) Certification. Each state will be required annually to review 
the comparability of residential rates in rural areas of the state 
served by non-rural incumbent local exchange carriers to urban rates 
nationwide, and to certify to the Commission and the Administrator as to 
whether the rates are reasonably comparable, for purposes of section 
254(b)(3) of the Telecommunications Act of 1996. If a state does not 
rely on the safe harbor described in paragraph (b) of this section, or 
certifies that the rates are not reasonably comparable, the state must 
fully explain its rate comparability analysis and provide data 
supporting its certification, including but not limited to residential 
rate data for rural areas within the state served by non-rural incumbent 
local exchange carriers. If a state certifies that the rates are not 
reasonably comparable, it must also explain why the rates are not 
reasonably comparable and explain what action it intends to take to 
achieve rate comparability.
    (b) Safe harbor. For the purposes of its certification, a state may 
presume that the residential rates in rural areas served by non-rural 
incumbent local exchange carriers are reasonably comparable to urban 
rates nationwide if the rates are below the nationwide urban rate 
benchmark. The nationwide urban rate benchmark shall equal the most 
recent average urban rate plus two weighted standard deviations. The 
benchmark shall be calculated using the average urban rate and standard 
deviation shown in the most recent annual Reference Book of Rates, Price 
Indices, and Expenditures for Telephone Service published by the 
Wireline Competition Bureau. To the extent that a state relies on the 
safe harbor, the rates that it compares to the nationwide urban rate 
benchmark shall include the access charges and other mandatory monthly 
rates included in the rate survey published in the most recent annual 
Reference Book of Rates, Price Indices, and Expenditures for Telephone 
Service. The Reference Book of Rates, Price Indices, and Expenditures 
for Telephone Service is available for public inspection at the 
Commission's Reference Center at 445 12th Street, S.W., Washington, D.C. 
20554 and on the Commission Web site at www.fcc.gov/wcb/iatd/lec.html.
    (c) Definition of ``rural area.'' For the purposes of this section, 
a ``rural area'' is a non-metropolitan county or county equivalent, as 
defined in the Office of Management and Budget's (OMB) Revised Standards 
for Defining Metropolitan Areas in the 1990s and identifiable from the 
most recent Metropolitan Statistical Area (MSA) list released by OMB. At 
a state's discretion, a ``rural area'' may also include any wire center 
designated by the state as rural for the purposes of this section. In 
the event that a state designates a wire center as rural, it must 
provide an explanation supporting such designation in its certification 
pursuant to paragraph (a) of this section.
    (d) Schedule for certification. Annual certifications are required 
on the schedule set forth in Sec. 54.313(d)(3), beginning October 1, 
2004. Certifications due on October 1 of each year shall pertain to 
rates as of the prior July 1. Certifications filed during the remainder 
of the schedule set forth in Sec. 54.313(d)(3) shall pertain to the 
same date as if they had been filed on October 1.
    (e) Effect of failure to certify. In the event that a state fails to 
certify, no eligible telecommunications carrier in the state shall 
receive support pursuant to Sec. 54.309.

[68 FR 69626, Dec. 15, 2003]



      Subpart E_Universal Service Support for Low-Income Consumers



Sec. 54.400  Terms and definitions.

    As used in this subpart, the following terms shall be defined as 
follows:
    (a) Qualifying low-income consumer. A ``qualifying low-income 
consumer'' is a consumer who meets the qualifications for Lifeline, as 
specified in Sec. 54.409.
    (b) Toll blocking. ``Toll blocking'' is a service provided by 
carriers that lets

[[Page 127]]

consumers elect not to allow the completion of outgoing toll calls from 
their telecommunications channel.
    (c) Toll control. ``Toll control'' is a service provided by carriers 
that allows consumers to specify a certain amount of toll usage that may 
be incurred on their telecommunications channel per month or per billing 
cycle.
    (d) Toll limitation. ``Toll limitation'' denotes either toll 
blocking or toll control for eligible telecommunications carriers that 
are incapable of providing both services. For eligible 
telecommunications carriers that are capable of providing both services, 
``toll limitation'' denotes both toll blocking and toll control.
    (e) Eligible resident of Tribal lands. An ``eligible resident of 
Tribal lands'' is a ``qualifying low-income consumer,'' as defined in 
paragraph (a) of this section, living on or near a reservation. A 
``reservation'' is defined as any federally recognized Indian tribe's 
reservation, pueblo, or colony, including former reservations in 
Oklahoma, Alaska Native regions established pursuant to the Alaska 
Native Claims Settlement Act (85 Stat. 688), and Indian allotments. 
``Near reservation'' is defined as those areas or communities adjacent 
or contiguous to reservations which are designated by the Department of 
Interior's Commission of Indian Affairs upon recommendation of the local 
Bureau of Indian Affairs Superintendent, which recommendation shall be 
based upon consultation with the tribal governing body of those 
reservations, as locales appropriate for the extension of financial 
assistance and/or social services, on the basis of such general criteria 
as: Number of Indian people native to the reservation residing in the 
area; a written designation by the tribal governing body that members of 
their tribe and family members who are Indian residing in the area, are 
socially, culturally and economically affiliated with their tribe and 
reservation; geographical proximity of the area to the reservation, and 
administrative feasibility of providing an adequate level of services to 
the area.

    Note to paragraph (e): The Commission stayed implementation of 
paragraph (e) as applied to qualifying low-income consumers living 
``near reservations'' on August 31, 2000 (15 FCC Rcd 17112).

    (f) Income. ``Income'' is all income actually received by all 
members of the household. This includes salary before deductions for 
taxes, public assistance benefits, social security payments, pensions, 
unemployment compensation, veteran's benefits, inheritances, alimony, 
child support payments, worker's compensation benefits, gifts, lottery 
winnings, and the like. The only exceptions are student financial aid, 
military housing and cost-of-living allowances, irregular income from 
occasional small jobs such as baby-sitting or lawn mowing, and the like.

[62 FR 32952, June 17, 1997, as amended at 63 FR 2128, Jan. 13, 1998; 65 
FR 47905, Aug. 4, 2000; 65 FR 58663, Oct. 2, 2000; 68 FR 41941, July 16, 
2003; 69 FR 34600, June 22, 2004]



Sec. 54.401  Lifeline defined.

    (a) As used in this subpart, Lifeline means a retail local service 
offering:
    (1) That is available only to qualifying low-income consumers;
    (2) For which qualifying low-income consumers pay reduced charges as 
a result of application of the Lifeline support amount described in 
Sec. 54.403; and
    (3) That includes the services or functionalities enumerated in 
Sec. 54.101 (a)(1) through (a)(9). The carriers shall offer toll 
limitation to all qualifying low-income consumers at the time such 
consumers subscribe to Lifeline service. If the consumer elects to 
receive toll limitation, that service shall become part of that 
consumer's Lifeline service.
    (b) [Reserved
    (c) Eligible telecommunications carriers may not collect a service 
deposit in order to initiate Lifeline service, if the qualifying low-
income consumer voluntarily elects toll limitation service from the 
carrier, where available. If toll limitation services are unavailable, 
the carrier may charge a service deposit.
    (d) The state commission shall file or require the eligible 
telecommunications carrier to file information with the Administrator 
demonstrating that the carrier's Lifeline plan meets the criteria set 
forth in this subpart and stating the number of qualifying low-income 
consumers and the amount of

[[Page 128]]

state assistance. Eligible telecommunications carriers not subject to 
state commission jurisdiction also shall make such a filing with the 
Administrator. Lifeline assistance shall be made available to qualifying 
low-income consumers as soon as the Administrator certifies that the 
carrier's Lifeline plan satisfies the criteria set out in this subpart.
    (e) Consistent with Sec. 52.33(a)(1)(i)(C), eligible 
telecommunications carriers may not charge Lifeline customers a monthly 
number-portability charge.

[62 FR 32948, June 17, 1997, as amended at 63 FR 2128, Jan. 13, 1998; 64 
FR 60358, Nov. 5, 1999; 65 FR 47905, Aug. 4, 2000; 69 FR 34600, June 22, 
2004]



Sec. 54.403  Lifeline support amount.

    (a) The Federal Lifeline support amount for all eligible 
telecommunications carriers shall equal:
    (1) Tier One. The tariffed rate in effect for the primary 
residential End User Common Line charge of the incumbent local exchange 
carrier serving the area in which the qualifying low-income consumer 
receives service, as determined in accordance with Sec. 69.104 or 
Sec. Sec. 69.152(d)(1) and 69.152(q) of this chapter, whichever is 
applicable;
    (2) Tier Two. Additional federal Lifeline support in the amount of 
$1.75 per month will be made available to the eligible 
telecommunications carrier providing Lifeline service to the qualifying 
low-income consumer, if that carrier certifies to the Administrator that 
it will pass through the full amount of Tier-Two support to its 
qualifying, low-income consumers and that it has received any non-
federal regulatory approvals necessary to implement the required rate 
reduction.
    (3) Tier Three. Additional federal Lifeline support in an amount 
equal to one-half the amount of any state-mandated Lifeline support or 
Lifeline support otherwise provided by the carrier, up to a maximum of 
$1.75 per month in federal support, will be made available to the 
carrier providing Lifeline service to a qualifying low-income consumer 
if the carrier certifies to the Administrator that it will pass through 
the full amount of Tier-Three support to its qualifying low-income 
consumers and that it has received any non-federal regulatory approvals 
necessary to implement the required rate reduction.
    (4) Tier Four. Additional federal Lifeline support of up to $25 per 
month will be made available to an eligible telecommunications carrier 
providing Lifeline service to an eligible resident of Tribal lands, as 
defined in Sec. 54.400(e), to the extent that:
    (i) This amount does not bring the basic local residential rate 
(including any mileage, zonal, or other non-discretionary charges 
associated with basic residential service) below $1 per month per 
qualifying low-income subscribers; and
    (ii) The eligible telecommunications carrier certifies to the 
Administrator that it will pass through the full Tier-Four amount to 
qualifying eligible residents of Tribal lands and that it has received 
any non-federal regulatory approvals necessary to implement the required 
rate reduction.
    (b) For a qualifying low-income consumer who is not an eligible 
resident of Tribal lands, as defined in Sec. 54.400(e), the federal 
Lifeline support amount shall not exceed $3.50 plus the tariffed rate in 
effect for the primary residential End User Common Line charge of the 
incumbent local exchange carrier serving the area in which the 
qualifying low-income consumer receives service, as determined in 
accordance with Sec. 69.104 or Sec. 69.152(d) and (q) of this chapter, 
whichever is applicable. For an eligible resident of Tribal lands, the 
federal Lifeline support amount shall not exceed $28.50 plus that same 
End User Common Line charge. Eligible telecommunications carriers that 
charge federal End User Common Line charges or equivalent federal 
charges shall apply Tier-One federal Lifeline support to waive the 
federal End-User Common Line charges for Lifeline consumers. Such 
carriers shall apply any additional federal support amount to a 
qualifying low-income consumer's intrastate rate, if the carrier has 
received the non-federal regulatory approvals necessary to implement the 
required rate reduction. Other eligible telecommunications carriers 
shall apply the Tier-One federal Lifeline support amount, plus any 
additional support amount, to reduce their lowest

[[Page 129]]

tariffed (or otherwise generally available) residential rate for the 
services enumerated in Sec. 54.101(a)(1) through (a)(9), and charge 
Lifeline consumers the resulting amount.
    (c) Lifeline support for providing toll limitation shall equal the 
eligible telecommunications carrier's incremental cost of providing 
either toll blocking or toll control, whichever is selected by the 
particular consumer.

[62 FR 32948, June 17, 1997, as amended at 63 FR 2128, Jan. 13, 1998; 65 
FR 38689, June 21, 2000; 65 FR 47905, Aug. 4, 2000]



Sec. 54.405  Carrier obligation to offer Lifeline.

    All eligible telecommunications carriers shall:
    (a) Make available Lifeline service, as defined in Sec. 54.401, to 
qualifying low-income consumers, and
    (b) Publicize the availability of Lifeline service in a manner 
reasonably designed to reach those likely to qualify for the service.
    (c) Notify Lifeline subscribers of impending termination of Lifeline 
service if the carrier has a reasonable basis to believe that the 
subscriber no longer meets the Lifeline-qualifying criteria, as 
described in Sec. 54.409. Notification of impending termination shall 
be in the form of a letter separate from the subscriber's monthly bill. 
A carrier providing Lifeline service in a state that has dispute 
resolution procedures applicable to Lifeline termination, that requires, 
at a minimum, written notification of impending termination, must comply 
with the applicable state requirements.
    (d) Allow subscribers 60 days following the date of the impending 
termination letter required in paragraph (c) of this section in which to 
demonstrate continued eligibility. Subscribers making such a 
demonstration must present proof of continued eligibility to the carrier 
consistent with applicable state or federal verification requirements, 
as described in Sec. 54.410(c). Carriers must terminate subscribers who 
fail to demonstrate continued eligibility within the 60-day time period. 
A carrier providing Lifeline service in a state that has dispute 
resolution procedures applicable to Lifeline termination must comply 
with the applicable state requirements.

[65 FR 47905, Aug. 4, 2000, as amended at 69 FR 34600, June 22, 2004]

    Effective Date Note: At 69 FR 34600, June 22, 2004, Sec. 54.405, 
paragraphs (c) and (d) were added. These paragraphs contain information 
collection and recordkeeping requirements and will not become effective 
until approval has been given by the Office of Management and Budget.



Sec. 54.407  Reimbursement for offering Lifeline.

    (a) Universal service support for providing Lifeline shall be 
provided directly to the eligible telecommunications carrier, based on 
the number of qualifying low-income consumers it serves, under 
administrative procedures determined by the Administrator.
    (b) The eligible telecommunications carrier may receive universal 
service support reimbursement for each qualifying low-income consumer 
served. For each consumer receiving Lifeline service, the reimbursement 
amount shall equal the federal support amount, including the support 
amount described in Sec. 54.403(c). The eligible telecommunications 
carrier's universal service support reimbursement shall not exceed the 
carrier's standard, non-Lifeline rate.
    (c) In order to receive universal service support reimbursement, the 
eligible telecommunications carrier must keep accurate records of the 
revenues it forgoes in providing Lifeline in conformity with Sec. 
54.401. Such records shall be kept in the form directed by the 
Administrator and provided to the Administrator at intervals as directed 
by the Administrator or as provided in this Subpart.



Sec. 54.409  Consumer qualification for Lifeline.

    (a) To qualify to receive Lifeline service in a state that mandates 
state Lifeline support, a consumer must meet the eligibility criteria 
established by the state commission for such support. The state 
commission shall establish narrowly targeted qualification criteria that 
are based solely on income or factors directly related to income. A 
state containing geographic

[[Page 130]]

areas included in the definition of ``reservation'' and ``near 
reservation,'' as defined in Sec. 54.400(e), must ensure that its 
qualification criteria are reasonably designed to apply to low-income 
individuals living in such areas.
    (b) To qualify to receive Lifeline service in a state that does not 
mandate state Lifeline support, a consumer's income, as defined in Sec. 
54.400(f), must be at or below 135% of the Federal Poverty Guidelines or 
a consumer must participate in one of the following federal assistance 
programs: Medicaid; Food Stamps; Supplemental Security Income; Federal 
Public Housing Assistance (Section 8); Low-Income Home Energy Assistance 
Program; National School Lunch Program's free lunch program; or 
Temporary Assistance for Needy Families.
    (c) A consumer that lives on a reservation or near a reservation, 
but does not meet the qualifications for Lifeline specified in 
paragraphs (a) and (b) of this section, nonetheless shall be a 
``qualifying low-income consumer'' as defined in Sec. 54.400(a) and 
thus an ``eligible resident of Tribal lands'' as defined in Sec. 
54.400(e) and shall qualify to receive Tiers One, Two, and Four Lifeline 
service if the individual participates in one of the following federal 
assistance programs: Bureau of Indian Affairs general assistance; 
Tribally administered Temporary Assistance for Needy Families; Head 
Start (only those meeting its income qualifying standard); or National 
School Lunch Program's free lunch program. Such qualifying low-income 
consumer shall also qualify for Tier-Three Lifeline support, if the 
carrier offering the Lifeline service is not subject to the regulation 
of the state and provides carrier-matching funds, as described in Sec. 
54.403(a)(3). To receive Lifeline support under this paragraph for the 
eligible resident of Tribal lands, the eligible telecommunications 
carrier offering the Lifeline service to such consumer must obtain the 
consumer's signature on a document certifying under penalty of perjury 
that the consumer receives benefits from at least one of the programs 
mentioned in this paragraph or paragraph (b) of this section, and lives 
on or near a reservation, as defined in Sec. 54.400(e). In addition to 
identifying in that document the program or programs from which that 
consumer receives benefits, an eligible resident of Tribal lands also 
must agree to notify the carrier if that consumer ceases to participate 
in the program or programs. Such qualifying low-income consumer shall 
also qualify for Tier-Three Lifeline support, if the carrier offering 
the Lifeline service is not subject to the regulation of the state and 
provides carrier-matching funds, as described in Sec. 54.403(a)(3).
    (d) In a state that does not mandate state Lifeline support, each 
eligible telecommunications carrier providing Lifeline service to a 
qualifying low-income consumer pursuant to paragraphs (b) or (c) of this 
section must obtain that consumer's signature on a document certifying 
under penalty of perjury that:
    (1) The consumer receives benefits from one of the programs listed 
in paragraphs (b) or (c) of this section, and identifying the program or 
programs from which that consumer receives benefits, or
    (2) The consumer's household meets the income requirement of 
paragraph (b) of this section, and that the presented documentation of 
income, as described in Sec. Sec. 54.400(f), 54.410(a)(ii), accurately 
represents the consumer's household income; and
    (3) The consumer will notify the carrier if that consumer ceases to 
participate in the program or programs or if the consumer's income 
exceeds 135% of the Federal Poverty Guidelines.

[65 FR 47905, Aug. 4, 2000, as amended at 68 FR 41942, July 16, 2003; 69 
FR 34600, June 22, 2004]

    Effective Date Note: At 69 FR 34600, June 22, 2004, Sec. 54.409 
paragraph (d) was added. This paragraph contains information collection 
and recordkeeping requirements and will not become effective until 
approval has been given by the Office of Management and Budget.



Sec. 54.410  Certification and Verification of Consumer Qualification
for Lifeline.

    (a) Certification of income. Consumers qualifying under an income-
based criterion must present documentation of their household income 
prior to enrollment in Lifeline.

[[Page 131]]

    (1) By one year from the effective date of these rules, eligible 
telecommunications carriers in states that mandate state Lifeline 
support must comply with state certification procedures to document 
consumer income-based eligibility for Lifeline prior to that consumer's 
enrollment if the consumer is qualifying under an income-based 
criterion.
    (2) By one year from the effective date of these rules, eligible 
telecommunications carriers in states that do not mandate state Lifeline 
support must implement certification procedures to document consumer-
income-based eligibility for Lifeline prior to that consumer's 
enrollment if the consumer is qualifying under the income-based 
criterion specified in Sec. 54.409(b). Acceptable documentation of 
income eligibility includes the prior year's state, federal, or tribal 
tax return, current income statement from an employer or paycheck stub, 
a Social Security statement of benefits, a Veterans Administration 
statement of benefits, a retirement/pension statement of benefits, an 
Unemployment/Workmen's Compensation statement of benefits, federal or 
tribal notice letter of participation in General Assistance, a divorce 
decree, child support, or other official document. If the consumer 
presents documentation of income that does not cover a full year, such 
as current pay stubs, the consumer must present three consecutive months 
worth of the same types of document within that calendar year.
    (b) Self-certifications. After income certification procedures are 
implemented, eligible telecommunications carriers and consumers are 
required to make certain self-certifications, under penalty of perjury, 
relating to the Lifeline program. Eligible telecommunications carriers 
must retain records of their self-certifications and those made by 
consumers.
    (1) An officer of the eligible telecommunications carrier in a state 
that mandates state Lifeline support must certify that the eligible 
telecommunications carrier is in compliance with state Lifeline income 
certification procedures and that, to the best of his/her knowledge, 
documentation of income was presented.
    (2) An officer of the eligible telecommunications carrier in a state 
that does not mandate state Lifeline support must certify that the 
eligible telecommunications carrier has procedures in place to review 
income documentation and that, to the best of his/her knowledge, the 
carrier was presented with documentation of the consumer's household 
income.
    (3) Consumers qualifying for Lifeline under an income-based 
criterion must certify the number of individuals in their households on 
the document required in Sec. 54.409(d).
    (c) Verification of Continued Eligibility. Consumers qualifying for 
Lifeline may be required to verify continued eligibility on an annual 
basis.
    (1) By one year from the effective date of these rules, eligible 
telecommunications carriers in states that mandate state Lifeline 
support must comply with state verification procedures to validate 
consumers' continued eligibility for Lifeline. The eligible 
telecommunications carrier must be able to document that it is complying 
with state regulations and verification requirements.
    (2) By one year from the effective date of these rules, eligible 
telecommunications carriers in states that do not mandate state Lifeline 
support must implement procedures to verify annually the continued 
eligibility of a statistically valid random sample of their Lifeline 
subscribers. Eligible telecommunications carriers may verify directly 
with a state that particular subscribers continue to be eligible by 
virtue of participation in a qualifying program or income level. To the 
extent eligible telecommunications carriers cannot obtain the necessary 
information from the state, they may survey subscribers directly and 
provide the results of the sample to the Administrator. Subscribers who 
are subject to this verification and qualify under program-based 
eligibility criteria must prove their continued eligibility by 
presenting in person or sending a copy of their Lifeline-qualifying 
public assistance card and self-certifying, under penalty of perjury, 
that they continue to participate in the Lifeline-qualifying public 
assistance program. Subscribers who are subject to this

[[Page 132]]

verification and qualify under the income-based eligibility criteria 
must prove their continued eligibility by presenting current income 
documentation consistent with the income-certification process in Sec. 
54.410(a)(2). These subscribers must also self-certify, under penalty of 
perjury, the number of individuals in their household and that the 
documentation presented accurately represents their annual household 
income. An officer of the eligible telecommunications carrier must 
certify, under penalty of perjury, that the company has income 
verification procedures in place and that, to the best of his or her 
knowledge, the company was presented with corroborating documentation. 
The eligible telecommunications carrier must retain records of these 
certifications.

[69 FR 34600, June 22, 2004, as amended at 73 FR 42274, July 21, 2008]

    Effective Date Note: At 69 FR 34600, June 22, 2004, Sec. 54.410 was 
added. This section contains information collection and recordkeeping 
requirements and will not become effective until approval has been given 
by the Office of Management and Budget.



Sec. 54.411  Link Up program defined.

    (a) For purposes of this subpart, the term ``Link Up'' shall 
describe the following assistance program for qualifying low-income 
consumers, which an eligible telecommunications carrier shall offer as 
part of its obligation set forth in Sec. Sec. 54.101(a)(9) and 
54.101(b):
    (1) A reduction in the carrier's customary charge for commencing 
telecommunications service for a single telecommunications connection at 
a consumer's principal place of residence. The reduction shall be half 
of the customary charge or $30.00, whichever is less; and
    (2) A deferred schedule for payment of the charges assessed for 
commencing service, for which the consumer does not pay interest. The 
interest charges not assessed to the consumer shall be for connection 
charges of up to $200.00 that are deferred for a period not to exceed 
one year. Charges assessed for commencing service include any charges 
that the carrier customarily assesses to connect subscribers to the 
network. These charges do not include any permissible security deposit 
requirements.
    (3) For an eligible resident of Tribal lands, a reduction of up to 
$70, in addition to the reduction in paragraph (a)(1) of this section, 
to cover 100 percent of the charges between $60 and $130 assessed for 
commencing telecommunications service at the principal place of 
residence of the eligible resident of Tribal lands. For purposes of this 
paragraph, charges assessed for commencing telecommunications services 
shall include any charges that the carrier customarily assesses to 
connect subscribers to the network, including facilities-based charges 
associated with the extension of lines or construction of facilities 
needed to initiate service. The reduction shall not apply to charges 
assessed for facilities or equipment that fall on the customer side of 
demarcation point, as defined in Sec. 68.3 of this chapter.
    (b) A qualifying low-income consumer may choose one or both of the 
programs set forth in paragraphs (a)(1) and (a)(2) of this section. An 
eligible resident of Tribal lands may participate in paragraphs (a)(1), 
(a)(2), and (a)(3) of this section.
    (c) A carrier's Link Up program shall allow a consumer to receive 
the benefit of the Link Up program for a second or subsequent time only 
for a principal place of residence with an address different from the 
residence address at which the Link Up assistance was provided 
previously.
    (d) An eligible telecommunications carrier shall publicize the 
availability of Link Up support in a manner reasonably designed to reach 
those likely to qualify for the support.

[62 FR 32948, June 17, 1997, as amended at 65 FR 47906, Aug. 4, 2000]



Sec. 54.413  Reimbursement for revenue forgone in offering 
a Link Up program.

    (a) Eligible telecommunications carriers may receive universal 
service support reimbursement for the revenue they forgo in reducing 
their customary charge for commencing telecommunications service and for 
providing a deferred schedule for payment of the charges assessed for 
commencing service for which the consumer does not

[[Page 133]]

pay interest, in conformity with Sec. 54.411.
    (b) In order to receive universal service support reimbursement for 
providing Link Up, eligible telecommunications carriers must keep 
accurate records of the revenues they forgo in reducing their customary 
charge for commencing telecommunications service and for providing a 
deferred schedule for payment of the charges assessed for commencing 
service for which the consumer does not pay interest, in conformity with 
Sec. 54.411. Such records shall be kept in the form directed by the 
Administrator and provided to the Administrator at intervals as directed 
by the Administrator or as provided in this subpart. The forgone 
revenues for which the eligible telecommunications carrier may receive 
reimbursement shall include only the difference between the carrier's 
customary connection or interest charges and the charges actually 
assessed to the participating low-income consumer.



Sec. 54.415  Consumer qualification for Link Up.

    (a) In a state that mandates state Lifeline support, the consumer 
qualification criteria for Link Up shall be the same as the criteria 
that the state established for Lifeline qualification in accord with 
Sec. 54.409(a).
    (b) In a state that does not mandate state Lifeline support, the 
consumer qualification criteria for Link Up shall be the criteria set 
forth in Sec. 54.409(b).
    (c) Notwithstanding paragraphs (a) and (b) of this section, an 
eligible resident of Tribal lands, as defined in Sec. 54.400(e), shall 
qualify to receive Link Up support.

[65 FR 47906, Aug. 4, 2000]



Sec. 54.416  Certification of consumer Qualification for Link Up.

    Consumers qualifying under an income-based criterion must present 
documentation of their household income prior to enrollment in Link Up 
consistent with requirements set forth in Sec. Sec. 54.410(a) and (b).

[69 FR 34601, June 22, 2004]

    Effective Date Note: At 69 FR 34601, June 22, 2004, Sec. 54.416 was 
added. This section contains information collection and recordkeeping 
requirements and will not become effective until approval has been given 
by the Office of Management and Budget.



Sec. 54.417  Recordkeeping requirements.

    (a) Eligible telecommunications carriers must maintain records to 
document compliance with all Commission and state requirements governing 
the Lifeline/Link Up programs for the three full preceding calendar 
years and provide that documentation to the Commission or Administrator 
upon request.
    Notwithstanding the preceding sentence, eligible telecommunications 
carriers must maintain the documentation required in Sec. Sec. 
54.409(d) and 54.410(b)(3) for as long as the consumer receives Lifeline 
service from that eligible telecommunications carrier
    (b) Non-eligible-telecommunications-carrier resellers that purchase 
Lifeline discounted wholesale services to offer discounted services to 
low-income consumers must maintain records to document compliance with 
all Commission requirements governing the Lifeline/Link Up programs for 
the three full preceding calendar years and provide that documentation 
to the Commission or Administrator upon request. To the extent such a 
reseller provides discounted services to low-income consumers, it 
constitutes the eligible telecommunications carrier referenced in 
Sec. Sec. 54.405(c), 54.405(d), 54.409(d), 54.410, and 54.416.

[69 FR 34601, June 22, 2004, as amended at 72 FR 54218, Sept. 24, 2007]



Sec. 54.418  Digital Television Transition Notices by Eligible 
Telecommunications Carriers.

    (a) Eligible telecommunications carriers (ETCs) that receive federal 
universal service funds shall provide their Lifeline or Link-Up 
customers with notices about the transition for over-the-air full power 
broadcasting from analog to digital service (the ``DTV Transition'') in 
the monthly bills or bill notices received by such customers, or as a 
monthly stand-alone mailer (e.g., postcard, brochure), beginning April 
30, 2008, and concluding in March 2009.
    (b) The notice must be provided as part of an information section on 
the

[[Page 134]]

bill or bill notice itself or on a secondary document mailed with the 
bill or bill notice, or as part of a monthly stand-alone mailer (e.g., 
postcard, brochure) in the same language or languages as the customer's 
bill or bill notice. These notices must:
    (1) Be in clear and conspicuous print;
    (2) Convey at least the following information about the DTV 
transition:
    (i) After February 17, 2009, a television receiver with only an 
analog broadcast tuner will require a converter box to receive full 
power over-the-air broadcasts with an antenna because of the Nation's 
transition to digital broadcasting. Analog-only TVs should continue to 
work as before to receive low power, Class A or translator television 
stations and with cable and satellite TV services, gaming consoles, 
VCRs, DVD players, and similar products.
    (ii) Information about the DTV transition is available from http://
www.DTV.gov, and from http://www.dtv2009.gov or 1-888-DTV-2009 for 
information about subsidized coupons for digital-to-analog converter 
boxes;
    (c) If an ETC's Lifeline or Link-Up customer does not receive paper 
versions of either a bill or a notice of billing, then that customer 
must be provided with equivalent monthly notices in whatever medium they 
receive information about their monthly bill or as a monthly stand-alone 
mailer (e.g., postcard, brochure).
    (d) ETCs that receive federal universal service funds shall provide 
information on the DTV Transition that is equivalent to the information 
provided pursuant to paragraph (b)(2) of this section as part of any 
Lifeline or Link-Up publicity campaigns conducted by the ETC between 
March 27, 2008, and March 31, 2009.

[73 FR 28732, May 19, 2008]



      Subpart F_Universal Service Support for Schools and Libraries



Sec. 54.500  Terms and definitions.

    (a) Billed entity. A ``billed entity'' is the entity that remits 
payment to service providers for services rendered to eligible schools 
and libraries.
    (b) Educational purposes. For purposes of this subpart, activities 
that are integral, immediate, and proximate to the education of 
students, or in the case of libraries, integral, immediate and proximate 
to the provision of library services to library patrons, qualify as 
``educational purposes.'' Activities that occur on library or school 
property are presumed to be integral, immediate, and proximate to the 
education of students or the provision of library services to library 
patrons.
    (c) Elementary school. An ``elementary school'' is a non-profit 
institutional day or residential school, including a public elementary 
charter school, that provides elementary education, as determined under 
state law.
    (d) Library. A ``library'' includes:
    (1) A public library;
    (2) A public elementary school or secondary school library;
    (3) An academic library;
    (4) A research library, which for the purpose of this section means 
a library that:
    (i) Makes publicly available library services and materials suitable 
for scholarly research and not otherwise available to the public; and
    (ii) Is not an integral part of an institution of higher education; 
and
    (5) A private library, but only if the state in which such private 
library is located determines that the library should be considered a 
library for the purposes of this definition.
    (e) Library consortium. A ``library consortium'' is any local, 
statewide, regional, or interstate cooperative association of libraries 
that provides for the systematic and effective coordination of the 
resources of schools, public, academic, and special libraries and 
information centers, for improving services to the clientele of such 
libraries. For the purposes of these rules, references to library will 
also refer to library consortium.
    (f) Lowest corresponding price. ``Lowest corresponding price'' is 
the lowest price that a service provider charges to non-residential 
customers who are similarly situated to a particular school, library, or 
library consortium for similar services.
    (g) Master contract. A ``master contract'' is a contract negotiated 
with a

[[Page 135]]

service provider by a third party, the terms and conditions of which are 
then made available to an eligible school, library, rural health care 
provider, or consortium that purchases directly from the service 
provider.
    (h) Minor contract modification. A ``minor contract modification'' 
is a change to a universal service contract that is within the scope of 
the original contract and has no effect or merely a negligible effect on 
price, quantity, quality, or delivery under the original contract.
    (i) National school lunch program. The ``national school lunch 
program'' is a program administered by the U.S. Department of 
Agriculture and state agencies that provides free or reduced price 
lunches to economically disadvantaged children. A child whose family 
income is between 130 percent and 185 percent of applicable family size 
income levels contained in the nonfarm poverty guidelines prescribed by 
the Office of Management and Budget is eligible for a reduced price 
lunch. A child whose family income is 130 percent or less of applicable 
family size income levels contained in the nonfarm income poverty 
guidelines prescribed by the Office of Management and Budget is eligible 
for a free lunch.
    (j) Pre-discount price. The ``pre-discount price'' means, in this 
subpart, the price the service provider agrees to accept as total 
payment for its telecommunications or information services. This amount 
is the sum of the amount the service provider expects to receive from 
the eligible school or library and the amount it expects to receive as 
reimbursement from the universal service support mechanisms for the 
discounts provided under this subpart.
    (k) Secondary school. A ``secondary school'' is a non-profit 
institutional day or residential school that provides secondary 
education, as determined under state law. A secondary school does not 
offer education beyond grade 12.
    (l) State telecommunications network. A ``state telecommunications 
network'' is a state government entity that procures, among other 
things, telecommunications offerings from multiple service providers and 
bundles such offerings into packages available to schools, libraries, or 
rural health care providers that are eligible for universal service 
support, or a state government entity that provides, using its own 
facilities, such telecommunications offerings to such schools, 
libraries, and rural health care providers.
    (m) Wide area network. For purposes of this subpart, a ``wide area 
network'' is a voice or data network that provides connections from one 
or more computers within an eligible school or library to one or more 
computers or networks that are external to such eligible school or 
library. Excluded from this definition is a voice or data network that 
provides connections between or among instructional buildings of a 
single school campus or between or among non-administrative buildings of 
a single library branch.

[63 FR 2128, Jan. 13, 1998, as amended at 68 FR 36942, June 20, 2003]



Sec. 54.501  Eligibility for services provided by telecommunications
carriers.

    (a) Telecommunications carriers shall be eligible for universal 
service support under this subpart for providing supported services to 
eligible schools, libraries, and consortia including those entities.
    (b) Schools. (1) Only schools meeting the statutory definitions of 
``elementary school,'' as defined in 20 U.S.C. 7801(18), or ``secondary 
school,'' as defined in 20 U.S.C. 7801(38), and not excluded under 
paragraphs (b)(2) or (b)(3) of this section shall be eligible for 
discounts on telecommunications and other supported services under this 
subpart.
    (2) Schools operating as for-profit businesses shall not be eligible 
for discounts under this subpart.
    (3) Schools with endowments exceeding $50,000,000 shall not be 
eligible for discounts under this subpart.
    (c) Libraries. (1) Only libraries eligible for assistance from a 
State library administrative agency under the Library Services and 
Technology Act (Public Law 104-208) and not excluded under paragraphs 
(c)(2) or (c)(3) of this section shall be eligible for discounts under 
this subpart.

[[Page 136]]

    (2) A library's eligibility for universal service funding shall 
depend on its funding as an independent entity. Only libraries whose 
budgets are completely separate from any schools (including, but not 
limited to, elementary and secondary schools, colleges, and 
universities) shall be eligible for discounts as libraries under this 
subpart.
    (3) Libraries operating as for-profit businesses shall not be 
eligible for discounts under this subpart.
    (d) Consortia. (1) For purposes of seeking competitive bids for 
telecommunications services, schools and libraries eligible for support 
under this subpart may form consortia with other eligible schools and 
libraries, with health care providers eligible under subpart G, and with 
public sector (governmental) entities, including, but not limited to, 
state colleges and state universities, state educational broadcasters, 
counties, and municipalities, when ordering telecommunications and other 
supported services under this subpart. With one exception, eligible 
schools and libraries participating in consortia with ineligible private 
sector members shall not be eligible for discounts for interstate 
services under this subpart. A consortium may include ineligible private 
sector entities if the pre-discount prices of any services that such 
consortium receives from ILECs are generally tariffed rates.
    (2) For consortia, discounts under this subpart shall apply only to 
the portion of eligible telecommunications and other supported services 
used by eligible schools and libraries.
    (3) Service providers shall keep and retain records of rates charged 
to and discounts allowed for eligible schools and libraries--on their 
own or as part of a consortium. Such records shall be available for 
public inspection.

[62 FR 32948, June 17, 1997, as amended at 63 FR 2129, Jan. 13, 1998; 68 
FR 36942, June 20, 2003]



Sec. 54.502  Supported telecommunications services.

    For purposes of this subpart, supported telecommunications services 
provided by telecommunications carriers include all commercially 
available telecommunications services in addition to all reasonable 
charges that are incurred by taking such services, such as state and 
federal taxes. Charges for termination liability, penalty surcharges, 
and other charges not included in the cost of taking such service shall 
not be covered by the universal service support mechanisms.

[63 FR 2129, Jan. 13, 1998]



Sec. 54.503  Other supported special services.

    For the purposes of this subpart, other supported special services 
provided by telecommunications carriers include Internet access and 
installation and maintenance of internal connections in addition to all 
reasonable charges that are incurred by taking such services, such as 
state and federal taxes. Charges for termination liability, penalty 
surcharges, and other charges not included in the cost of taking such 
services shall not be covered by the universal service support 
mechanisms.

[63 FR 2129, Jan. 13, 1998, 68 FR 36942, June 20, 2003]



Sec. 54.504  Requests for services.

    (a) Competitive bid requirements. Except as provided in Sec. 
54.511(c), an eligible school, library, or consortium that includes an 
eligible school or library shall seek competitive bids, pursuant to the 
requirements established in this subpart, for all services eligible for 
support under Sec. Sec. 54.502 and 54.503. These competitive bid 
requirements apply in addition to state and local competitive bid 
requirements and are not intended to preempt such state or local 
requirements.
    (b) Posting of FCC Form 470. (1) An eligible school, library, or 
consortium that includes an eligible school or library seeking to 
receive discounts for eligible services under this subpart, shall submit 
a completed FCC Form 470 to the Administrator. FCC Form 470 shall 
include, at a minimum, the following information, to the extent 
applicable with respect to the services requested:

[[Page 137]]

    (i) The computer equipment currently available or budgeted for 
purchase for the current, next, or other future academic years, as well 
as whether the computers have modems and, if so, what speed modems;
    (ii) The internal connections, if any, that the school or library 
has in place or has budgeted to install in the current, next, or future 
academic years, or any specific plans for an organized voluntary effort 
to connect the classrooms;
    (iii) The computer software necessary to communicate with other 
computers over an internal network and over the public 
telecommunications network currently available or budgeted for purchase 
for the current, next, or future academic years;
    (iv) The experience of, and training received by, the relevant staff 
in the use of the equipment to be connected to the telecommunications 
network and training programs for which funds are committed for the 
current, next, or future academic years;
    (v) Existing or budgeted maintenance contracts to maintain 
computers; and
    (vi) The capacity of the school's or library's electrical system in 
terms of how many computers can be operated simultaneously without 
creating a fire hazard.
    (2) FCC Form 470 shall be signed by the person authorized to order 
telecommunications and other supported services for the eligible school, 
library, or consortium and shall include that person's certification 
under oath that:
    (i) The schools meet the statutory definition of elementary and 
secondary schools found under section 254(h) of the Act, as amended in 
the No Child Left Behind Act of 2001, 20 U.S.C. 7801(18) and (38), do 
not operate as for-profit businesses, and do not have endowments 
exceeding $50 million;
    (ii) The libraries or library consortia eligible for assistance from 
a State library administrative agency under the Library Services and 
Technology Act of 1996 do not operate as for-profit businesses and whose 
budgets are completely separate from any school (including, but not 
limited to, elementary and secondary schools, colleges, and 
universities).
    (iii) All of the individual schools, libraries, and library 
consortia receiving services are covered by:
    (A) Individual technology plans for using the services requested in 
the application; and/or
    (B) Higher-level technology plans for using the services requested 
in the application; or
    (C) No technology plan needed because application requests basic 
local and/or long distance service and/or voicemail only.
    (iv) The technology plan(s) has/have been approved by a state or 
other authorized body; the technology plan(s) will be approved by a 
state or other authorized body; or no technology plan needed because 
applicant is applying for basic local, cellular, PCS, and/or long 
distance telephone service and/or voicemail only.
    (v) The services the applicant purchases at discounts will be used 
solely for educational purposes and will not be sold, resold, or 
transferred in consideration for money or any other thing of value.
    (vi) Support under this support mechanism is conditional upon the 
school(s) and library(ies) securing access to all of the resources, 
including computers, training, software, maintenance, internal 
connections, and electrical connections necessary to use the services 
purchased effectively.
    (vii) All bids submitted will be carefully considered and the bid 
selected will be for the most cost-effective service or equipment 
offering, with price being the primary factor, and will be the most 
cost-effective means of meeting educational needs and technology plan 
goals.
    (3) The Administrator shall post each FCC Form 470 that it receives 
from an eligible school, library, or consortium that includes an 
eligible school or library on its website designated for this purpose.
    (4) After posting on the Administrator's website an eligible 
school's, library's, or consortium's FCC Form 470, the Administrator 
shall send confirmation of the posting to the entity requesting service. 
That entity shall then wait at least four weeks from the date on which 
its description of services is posted on the Administrator's

[[Page 138]]

website before making commitments with the selected providers of 
services. The confirmation from the Administrator shall include the date 
after which the requestor may sign a contract with its chosen 
provider(s).
    (c) Filing of FCC Form 471. An eligible school, library, or 
consortium that includes an eligible school or library seeking to 
receive discounts for eligible services under this subpart, shall, upon 
signing a contract for eligible services, submit a completed FCC Form 
471 to the Administrator. A commitment of support is contingent upon the 
filing of FCC Form 471.
    (1) FCC Form 471 shall be signed by the person authorized to order 
telecommunications and other supported services for the eligible school, 
library, or consortium and shall include that person's certification 
under oath that:
    (i) The schools meet the statutory definition of elementary and 
secondary schools found under section 254(h) of the Act, as amended in 
the No Child Left Behind Act of 2001, 20 U.S.C. 7801(18) and (38), do 
not operate as for-profit businesses, and do not have endowments 
exceeding $50 million.
    (ii) The libraries or library consortia eligible for assistance from 
a State library administrative agency under the Library Services and 
Technology Act of 1996 do not operate as for-profit businesses and whose 
budgets are completely separate from any school (including, but not 
limited to, elementary and secondary schools, colleges, and 
universities).
    (iii) The entities listed on the FCC Form 471 application have 
secured access to all of the resources, including computers, training, 
software, maintenance, internal connections, and electrical connections, 
necessary to make effective use of the services purchased, as well as to 
pay the discounted charges for eligible services from funds to which 
access has been secured in the current funding year. The billed entity 
will pay the non-discount portion of the cost of the goods and services 
to the service provider(s).
    (iv) All of the schools and libraries listed on the FCC Form 471 
application are covered by:
    (A) An individual technology plan for using the services requested 
in the application; and/or
    (B) Higher-level technology plan(s) for using the services requested 
in the FCC Form 471 application; or
    (C) No technology plan needed; applying for basic local and long 
distance telephone service only.
    (v) Status of technology plan(s) has/have been approved; will be 
approved by a state or other authorized body; or no technology plan is 
needed because applicant is applying for basic local, cellular, PCS, 
and/or long distance telephone service and/or voicemail only.
    (vi) The entities listed on the FCC Form 471 application have 
complied with all applicable state and local laws regarding procurement 
of services for which support is being sought.
    (vii) The services the applicant purchases at discounts will be used 
solely for educational purposes and will not be sold, resold, or 
transferred in consideration for money or any other thing of value.
    (viii) The entities listed in the application have complied with all 
program rules and acknowledge that failure to do so may result in denial 
of discount funding and/or recovery of funding.
    (ix) The applicant understands that the discount level used for 
shared services is conditional, for future years, upon ensuring that the 
most disadvantaged schools and libraries that are treated as sharing in 
the service, receive an appropriate share of benefits from those 
services.
    (x) The applicant recognizes that it may be audited pursuant to its 
application, that it will retain for five years any and all worksheets 
and other records relied upon to fill out its application, and that, if 
audited, it will make such records available to the Administrator.
    (xi) All bids submitted were carefully considered and the most cost-
effective bid for services or equipment was selected, with price being 
the primary factor considered, and is the most cost-effective means of 
meeting educational needs and technology plan goals.
    (2) [Reserved]
    (d) Mixed eligibility requests. If 30 percent or more of a request 
for discounts

[[Page 139]]

made in an FCC Form 471 is for ineligible services, the request shall be 
denied in its entirety.
    (e) Rate disputes. Schools, libraries, and consortia including those 
entities, and service providers may have recourse to the Commission, 
regarding interstate rates, and to state commissions, regarding 
intrastate rates, if they reasonably believe that the lowest 
corresponding price is unfairly high or low.
    (1) Schools, libraries, and consortia including those entities may 
request lower rates if the rate offered by the carrier does not 
represent the lowest corresponding price.
    (2) Service providers may request higher rates if they can show that 
the lowest corresponding price is not compensatory, because the relevant 
school, library, or consortium including those entities is not similarly 
situated to and subscribing to a similar set of services to the customer 
paying the lowest corresponding price.
    (f) Service substitution. (1) The Administrator shall grant a 
request by an applicant to substitute a service or product for one 
identified on its FCC Form 471 where:
    (i) The service or product has the same functionality;
    (ii) The substitution does not violate any contract provisions or 
state or local procurement laws;
    (iii) The substitution does not result in an increase in the 
percentage of ineligible services or functions; and
    (iv) The applicant certifies that the requested change is within the 
scope of the controlling FCC Form 470, including any associated Requests 
for Proposal, for the original services.
    (2) In the event that a service substitution results in a change in 
the pre-discount price for the supported service, support shall be based 
on the lower of either the pre-discount price of the service for which 
support was originally requested or the pre-discount price of the new, 
substituted service.
    (3) For purposes of this rule, the broad categories of eligible 
services (telecommunications service, Internet access, and internal 
connections) are not deemed to have the same functionality with one 
another.
    (g) Mixed eligibility services. A request for discounts for a 
product or service that includes both eligible and ineligible components 
must allocate the cost of the contract to eligible and ineligible 
components.
    (1) Ineligible components. If a product or service contains 
ineligible components, costs must be allocated to the extent that a 
clear delineation can be made between the eligible and ineligible 
components. The delineation must have a tangible basis, and the price 
for the eligible portion must be the most cost-effective means of 
receiving the eligible service.
    (2) Ancillary ineligible components. If a product or service 
contains ineligible components that are ancillary to the eligible 
components, and the product or service is the most cost-effective means 
of receiving the eligible component functionality, without regard to the 
value of the ineligible component, costs need not be allocated between 
the eligible and ineligible components. Discounts shall be provided on 
the full cost of the product or service. An ineligible component is 
``ancillary'' if a price for the ineligible component cannot be 
determined separately and independently from the price of the eligible 
components, and the specific package remains the most cost-effective 
means of receiving the eligible services, without regard to the value of 
the ineligible functionality.
    (3) The Administrator shall utilize the cost allocation requirements 
of this subparagraph in evaluating mixed eligibility requests under 
Sec. 54.504(d)(1).
    (h) Filing of FCC Form 473. All service providers eligible to 
provide telecommunications and other supported services under this 
subpart shall submit annually a completed FCC Form 473 to the 
Administrator. FCC Form 473 shall be signed by an authorized person and 
shall include that person's certification under oath that:
    (1) The prices in any offer that this service provider makes 
pursuant to the schools and libraries universal service support program 
have been arrived at independently, without, for the purpose

[[Page 140]]

of restricting competition, any consultation, communication, or 
agreement with any other offeror or competitor relating to those prices, 
the intention to submit an offer, or the methods or factors used to 
calculate the prices offered;
    (2) The prices in any offer that this service provider makes 
pursuant to the schools and libraries universal service support program 
will not be knowingly disclosed by this service provider, directly or 
indirectly, to any other offeror or competitor before bid opening (in 
the case of a sealed bid solicitation) or contract award (in the case of 
a negotiated solicitation) unless otherwise required by law; and
    (3) No attempt will be made by this service provider to induce any 
other concern to submit or not to submit an offer for the purpose of 
restricting competition.

[62 FR 32948, June 17, 1997, as amended at 62 FR 41304, Aug. 1, 1997; 63 
FR 2129, Jan. 13, 1998; 63 FR 70572, Dec. 21, 1998; 68 FR 36942, June 
20, 2003; 69 FR 6190, Feb. 10, 2004, 69 FR 55109, Sept. 13, 2004; 69 FR 
59145, Oct. 4, 2004]



Sec. 54.505  Discounts.

    (a) Discount mechanism. Discounts for eligible schools and libraries 
shall be set as a percentage discount from the pre-discount price.
    (b) Discount percentages. The discounts available to eligible 
schools and libraries shall range from 20 percent to 90 percent of the 
pre-discount price for all eligible services provided by eligible 
providers, as defined in this subpart. The discounts available to a 
particular school, library, or consortium of only such entities shall be 
determined by indicators of poverty and high cost.
    (1) For schools and school districts, the level of poverty shall be 
measured by the percentage of their student enrollment that is eligible 
for a free or reduced price lunch under the national school lunch 
program or a federally-approved alternative mechanism. School districts 
applying for eligible services on behalf of their individual schools may 
calculate the district-wide percentage of eligible students using a 
weighted average. For example, a school district would divide the total 
number of students in the district eligible for the national school 
lunch program by the total number of students in the district to compute 
the district-wide percentage of eligible students. Alternatively, the 
district could apply on behalf of individual schools and use the 
respective percentage discounts for which the individual schools are 
eligible.
    (2) For libraries and library consortia, the level of poverty shall 
be based on the percentage of the student enrollment that is eligible 
for a free or reduced price lunch under the national school lunch 
program or a federally-approved alternative mechanism in the public 
school district in which they are located. If the library is not in a 
school district then its level of poverty shall be based on an average 
of the percentage of students eligible for the national school lunch 
program in each of the school districts that children living in the 
library's location attend. Library systems applying for discounted 
services on behalf of their individual branches shall calculate the 
system-wide percentage of eligible families using an unweighted average 
based on the percentage of the student enrollment that is eligible for a 
free or reduced price lunch under the national school lunch program in 
the public school district in which they are located for each of their 
branches or facilities.
    (3) The Administrator shall classify schools and libraries as 
``urban'' or ``rural'' based on location in an urban or rural area, 
according to the following desigantions.
    (i) Schools and libraries located in metropolitan counties, as 
measured by the Office of Management and Budget's Metropolitan 
Statistical Area method, shall be designated as urban, except for those 
schools and libraries located within metropolitan counties identified by 
census block or tract in the Goldsmith Modification.
    (ii) Schools and libraries located in non-metropolitan counties, as 
measured by the Office of Management and Budget's Metropolitan 
Statistical Area method, shall be designated as rural. Schools and 
libraries located in rural areas within metropolitan counties identified 
by census block or tract in the Goldsmith Modification shall also be 
designated as rural.

[[Page 141]]

    (4) School districts, library systems, or other billed entities 
shall calculate discounts on supported services described in Sec. 
54.502 or other supported special services described in Sec. 54.503 
that are shared by two or more of their schools, libraries, or consortia 
members by calculating an average based on the applicable discounts of 
all member schools and libraries. School districts, library systems, or 
other billed entities shall ensure that, for each year in which an 
eligible school or library is included for purposes of calculating the 
aggregate discount rate, that eligible school or library shall receive a 
proportionate share of the shared services for which support is sought. 
For schools, the average discount shall be a weighted average of the 
applicable discount of all schools sharing a portion of the shared 
services, with the weighting based on the number of students in each 
school. For libraries, the average discount shall be a simple average of 
the applicable discounts to which the libraries sharing a portion of the 
shared services are entitled.
    (c) Matrix. The Administrator shall use the following matrix to set 
a discount rate to be applied to eligible interstate services purchased 
by eligible schools, school districts, libraries, or library consortia 
based on the institution's level of poverty and location in an ``urban'' 
or ``rural'' area.

----------------------------------------------------------------------------------------------------------------
                   Schools and Libraries discount matrix                               Discount level
----------------------------------------------------------------------------------------------------------------
                            How disadvantaged?
---------------------------------------------------------------------------   Urban discount     Rural discount
         % of students eligible for national school lunch program
----------------------------------------------------------------------------------------------------------------
<1........................................................................                 20                 25
1-19......................................................................                 40                 50
20-34.....................................................................                 50                 60
35-49.....................................................................                 60                 70
50-74.....................................................................                 80                 80
75-100....................................................................                 90                 90
----------------------------------------------------------------------------------------------------------------

    (d) [Reserved]
    (e) Interstate and intrastate services. Federal universal service 
support for schools and libraries shall be provided for both interstate 
and intrastate services.
    (1) Federal universal service support under this subpart for 
eligible schools and libraries in a state is contingent upon the 
establishment of intrastate discounts no less than the discounts 
applicable for interstate services.
    (2) A state may, however, secure a temporary waiver of this latter 
requirement based on unusually compelling conditions.
    (f) State support. Federal universal service discounts shall be 
based on the price of a service prior to the application of any state 
provided support for schools or libraries.

[62 FR 32948, June 17, 1997, as amended at 62 FR 41304, Aug. 1, 1997; 63 
FR 2130, Jan. 13, 1998; 63 FR 70572, Dec. 21, 1998]



Sec. 54.506  Internal connections.

    (a) A service is eligible for support as a component of an 
institution's internal connections if such service is necessary to 
transport information within one or more instructional buildings of a 
single school campus or within one or more non-administrative buildings 
that comprise a single library branch. Discounts are not available for 
internal connections in non-instructional buildings of a school or 
school district, or in administrative buildings of a library, to the 
extent that a library system has separate administrative buildings, 
unless those internal connections are essential for the effective 
transport of information to an instructional building of a school or to 
a non-administrative building of a library. Internal connections do not 
include connections that extend beyond a single school campus or single 
library branch. There is a rebuttable presumption that a connection does 
not constitute an internal connection if it crosses a public right-of-
way.
    (b) Basic maintenance services. Basic maintenance services shall be 
eligible as an internal connections service if, but for the maintenance 
at issue, the internal connection would not function and serve its 
intended purpose with the

[[Page 142]]

degree of reliability ordinarily provided in the marketplace to entities 
receiving such services. Basic maintenance services do not include 
services that maintain equipment that is not supported or that enhance 
the utility of equipment beyond the transport of information, or 
diagnostic services in excess of those necessary to maintain the 
equipment's ability to transport information.
    (c) Frequency of discounts for internal connections services. Each 
eligible school or library shall be eligible for support for internal 
connections services, except basic maintenance services, no more than 
twice every five funding years. For the purpose of determining 
eligibility, the five-year period begins in any funding year, starting 
with Funding Year 2005, in which the school or library receives 
discounted internal connections services other than basic maintenance 
services. If a school or library receives internal connections services 
other than basic maintenance services that are shared with other schools 
or libraries (for example, as part of a consortium), the shared services 
will be attributed the school or library in determining whether it is 
eligible for support.

[69 FR 6191, Feb. 10, 2004]



Sec. 54.507  Cap.

    (a) Amount of the annual cap. The annual funding cap on federal 
universal service support for schools and libraries shall be $2.25 
billion per funding year. All funding authority for a given funding year 
that is unused in that funding year shall be carried forward into 
subsequent funding years for use in accordance with demand. All funds 
collected that are unused shall be applied to stabilize universal 
service contributions in accordance with the public interest and 
consistent with Sec. 54.709(b) for no more than three quarters, 
beginning with third quarter 2002. Beginning no later than second 
quarter 2003, all funds collected that are unused shall be carried 
forward into subsequent funding years for use in the schools and 
libraries support mechanism in accordance with the public interest and 
notwithstanding the annual cap.
    (1) Amount of unused funds. The Administrator shall report to the 
Commission, on a quarterly basis, funding that is unused from prior 
years of the schools and libraries support mechanism.
    (2) Application of unused funds. On an annual basis, in the second 
quarter of each calendar year, all funds that are collected and that are 
unused from prior years shall be available for use in the next full 
funding year of the schools and libraries mechanism in accordance with 
the public interest and notwithstanding the annual cap, as described in 
paragraph (a) of this section.
    (b) A funding year for purposes of the schools and libraries cap 
shall be the period July 1 through June 30.
    (c) Requests. Funds shall be available to fund discounts for 
eligible schools and libraries and consortia of such eligible entities 
on a first-come-first-served basis, with requests accepted beginning on 
the first of July prior to each funding year. The Administrator shall 
maintain on the Administrator's website a running tally of the funds 
already committed for the existing funding year. The Administrator shall 
implement an initial filing period that treats all schools and libraries 
filing within that period as if their applications were simultaneously 
received. The initial filing period shall begin on the date that the 
Administrator begins to receive applications for support, and shall 
conclude on a date to be determined by the Administrator. The 
Administrator may implement such additional filing periods as it deems 
necessary.
    (d) Annual filing requirement. Schools and libraries, and consortia 
of such eligible entities shall file new funding requests for each 
funding year no sooner than the July 1 prior to the start of that 
funding year. Schools, libraries, and eligible consortia must use 
recurring services for which discounts have been committed by the 
Administrator within the funding year for which the discounts were 
sought. The deadline for implementation of non-recurring services will 
be September 30 following the close of the funding year. An applicant 
may request and receive from the Administrator an extension of the 
implementation deadline for non-recurring

[[Page 143]]

services if it satisfies one of the following criteria:
    (1) The applicant's funding commitment decision letter is issued by 
the Administrator on or after March 1 of the funding year for which 
discounts are authorized;
    (2) The applicant receives a service provider change authorization 
or service substitution authorization from the Administrator on or after 
March 1 of the funding year for which discounts are authorized;
    (3) The applicant's service provider is unable to complete 
implementation for reasons beyond the service provider's control; or
    (4) The applicant's service provider is unwilling to complete 
installation because funding disbursements are delayed while the 
Administrator investigates their application for program compliance.
    (e) Long term contracts. If schools and libraries enter into long 
term contracts for eligible services, the Administrator shall only 
commit funds to cover the pro rata portion of such a long term contract 
scheduled to be delivered during the funding year for which universal 
service support is sought.
    (f) Date services must be supplied. The Administrator shall not 
approve funding for services received by a school or library before 
January 1, 1998.
    (g) Rules of priority. Administrator shall act in accordance with 
paragraph (g)(1) of this section with respect to applicants that file a 
Form 471, as described in Sec. 54.504(c) of this part, when a filing 
period described in paragraph (c) of this section is in effect. 
Administrator shall act in accordance with paragraph (g)(2) of this 
section with respect to applicants that file a Form 471, as described in 
Sec. 54.504(c) of this part, at all times other than within a filing 
period described in paragraph (c) of this section.
    (1) When the filing period described in paragraph (c) of this 
section closes, Administrator shall calculate the total demand for 
support submitted by applicants during the filing period. If total 
demand exceeds the total support available for that funding year, 
Administrator shall take the following steps:
    (i) Schools and Libraries Corporation shall first calculate the 
demand for telecommunications services, voice mail, and Internet access 
for all discount categories, as determined by the schools and libraries 
discount matrix in Sec. 54.505(c). These services shall receive first 
priority for the available funding.
    (ii) Schools and Libraries Corporation shall then calculate the 
amount of available funding remaining after providing support for all 
telecommunications services, voice mail, and Internet access for all 
discount categories. Schools and Libraries Corporation shall allocate 
the remaining funds to the requests for support for internal 
connections, beginning with the most economically disadvantaged schools 
and libraries, as determined by the schools and libraries discount 
matrix in Sec. 54.505(c) of this part. Schools and libraries eligible 
for a 90 percent discount shall receive first priority for the remaining 
funds, and those funds will be applied to their requests for internal 
connections.
    (iii) To the extent that funds remain after the allocation described 
in Sec. 54.507(g)(1) (i) and (ii), Schools and Libraries Corporation 
shall next allocate funds toward the requests for internal connections 
submitted by schools and libraries eligible for an 80 percent discount, 
then for a 70 percent discount, and shall continue committing funds for 
internal connections in the same manner to the applicants at each 
descending discount level until there are no funds remaining.

    Note to paragraph (g)(l)(iii): To the extent that there are single 
discount percentage levels associated with ``shared services'' under 
Sec. 54.505(b)(4), the Administrator shall allocate funds for internal 
connections beginning at the ninety percent discount level, then for the 
eighty-nine percent discount, then for the eighty-eight percent 
discount, and shall continue committing funds for internal connections 
in the same manner to the applicants at each descending discount level 
until there are no funds remaining.

    (iv) If the remaining funds are not sufficient to support all of the 
funding requests within a particular discount level, Schools and 
Libraries Corporation shall divide the total amount of remaining support 
available by the amount of support requested within the particular 
discount level to produce a pro-rata factor. Schools and

[[Page 144]]

Libraries Corporation shall reduce the support level for each applicant 
within the particular discount level, by multiplying each applicant's 
requested amount of support by the pro-rata factor.
    (v) Schools and Libraries Corporation shall commit funds to all 
applicants consistent with the calculations described herein.
    (2) Rules of priority. When expenditures in any funding year reach 
the level where only $250 million remains before the cap will be 
reached, funds shall be distributed in accordance to the following rules 
of priority:
    (i) The Administrator or the Administrator's subcontractor shall 
post a message on the Administrator's website, notify the Commission, 
and take reasonable steps to notify the educational and library 
communities that commitments for the remaining $250 million of support 
will only be made to the most economically disadvantaged schools and 
libraries (those in the two most disadvantaged categories) for the next 
30 days or the remainder of the funding year, whichever is shorter.
    (ii) The most economically disadvantaged schools and libraries 
(those in the two most disadvantaged categories) that have not received 
discounts from the universal service support mechanism in the previous 
or current funding years shall have exclusive rights to secure 
commitments for universal service support under this subpart for a 30-
day period or the remainder of the funding year, whichever is shorter. 
If such schools and libraries have received universal service support 
only for basic telephone service in the previous or current funding 
years, they shall remain eligible for the highest priority once spending 
commitments leave only $250 million remaining before the funding cap is 
reached.
    (iii) Other economically disadvantaged schools and libraries (those 
in the two most disadvantaged categories) that have received discounts 
from the universal service support mechanism in the previous or current 
funding years shall have the next highest priority, if additional funds 
are available at the end of the 30-day period or the funding year, 
whichever is shorter.
    (iv) After all requests submitted by schools and libraries described 
in paragraphs (g)(2) and (g)(3) of this section during the 30-day period 
have been met, the Administrator shall allocate the remaining available 
funds to all other eligible schools and libraries in the order in which 
their requests have been received by the Administrator, until the $250 
million is exhausted or the funding year ends.

[62 FR 32948, June 17, 1997, as amended at 62 FR 40748, July 30, 1997; 
62 FR 41304, Aug. 1, 1997; 62 FR 56120, Oct. 29, 1997; 63 FR 2130, Jan. 
13, 1998; 63 FR 3832, Jan. 27, 1998; 63 FR 45958, Aug. 28, 1998; 63 FR 
70572, Dec. 21, 1998; 64 FR 22810, Apr. 28, 1999; 64 FR 30442, June 8, 
1999; 64 FR 33788, June 24, 1999; 66 FR 38378, July 24, 2001; 67 FR 
41866, June 20, 2002; 68 FR 36942, June 20, 2003; 69 FR 6191, Feb. 10, 
2004; 71 FR 65750, Nov. 9, 2006]



Sec. 54.508  Technology plans.

    (a) Contents. The technology plans referred to in this subpart must 
include the following five elements:
    (1) A clear statement of goals and a realistic strategy for using 
telecommunications and information technology to improve education or 
library services;
    (2) A professional development strategy to ensure that the staff 
understands how to use these new technologies to improve education or 
library services;
    (3) An assessment of the telecommunication services, hardware, 
software, and other services that will be needed to improve education or 
library services;
    (4) A budget sufficient to acquire and support the non-discounted 
elements of the plan: the hardware, software, professional development, 
and other services that will be needed to implement the strategy; and
    (5) An evaluation process that enables the school or library to 
monitor progress toward the specified goals and make mid-course 
corrections in response to new developments and opportunities as they 
arise.
    (b) Relevance of approval under Enhancing Education through 
Technology. Technology plans that meet the standards of the Department 
of Education's Enhancing Education Through Technology (EETT), 20 U.S.C. 
6764, are sufficient for satisfying paragraphs (a)(1),

[[Page 145]]

(a)(2), (a)(3) and (a)(5) of this section, but applicants must 
supplement such plans with an analysis demonstrating that they meet the 
budgetary requirement described in paragraph (a)(4) of this section. 
Furthermore, to the extent that the Department of Education adopts 
future technology plan requirements that require one or more of the five 
elements described in paragraph (a) of this section, such plans will be 
acceptable for satisfying those elements of paragraph (a) of this 
section. Applicants with such plans will only need to supplement such 
plans with the analysis needed to satisfy those elements of paragraph 
(a) of this section not covered by the future Department of Education 
technology plan requirements.
    (c) Timing of certification. As required under 54.504(b)(2)(vii) and 
(c)(1)(v), applicants must certify that they have prepared any required 
technology plans. They must also confirm, in FCC Form 486, that their 
plan was approved before they began receiving services pursuant to it.
    (d) Parties qualified to approve technology plans required in this 
subpart. Applicants required to prepare and obtain approval of 
technology plans under this subpart must obtain such approval from 
either their state, the Administrator, or an independent entity approved 
by the Commission or certified by the Administrator as qualified to 
provide such approval. All parties who will provide such approval must 
apply the standards set forth in paragraphs (a) and (b) of this section.

[69 FR 55110, Sept. 13, 2004; 69 FR 59145, Oct. 4, 2004]



Sec. 54.509  Adjustments to the discount matrix.

    (a) Estimating future spending requests. When submitting their 
requests for specific amounts of funding for a funding year, schools, 
libraries, library consortia, and consortia including such entities 
shall also estimate their funding requests for the following funding 
year to enable the Administrator, to estimate funding demand for the 
following year.
    (b) Reduction in percentage discounts. At all times other than 
within a filing period described in Sec. 54.507(c), if the estimates 
schools and libraries make of their future funding needs lead the 
Administrator to predict that total funding request for a funding year 
will exceed the available funding, the Administrator shall calculate the 
percentage reduction to all schools and libraries, except those in the 
two most disadvantaged categories, necessary to permit all requests in 
the next funding year to be fully funded.
    (c) Remaining funds. If funds remain under the cap at the end of the 
funding year in which discounts have been reduced below those set in the 
matrices, the Administrator shall consult with the Commission to 
establish the best way to distribute those funds.

[62 FR 32948, June 17, 1997, as amended at 62 FR 41304, Aug. 1, 1997; 63 
FR 70572, Dec. 21, 1998; 69 FR 6191, Feb. 10, 2004]



Sec. 54.511  Ordering services.

    (a) Selecting a provider of eligible services. In selecting a 
provider of eligible services, schools, libraries, library consortia, 
and consortia including any of those entities shall carefully consider 
all bids submitted and must select the most cost-effective service 
offering. In determining which service offering is the most cost-
effective, entities may consider relevant factors other than the pre-
discount prices submitted by providers but price should be the primary 
factor considered.
    (b) Lowest corresponding price. Providers of eligible services shall 
not charge schools, school districts, libraries, library consortia, or 
consortia including any of these entities a price above the lowest 
corresponding price for supported services, unless the Commission, with 
respect to interstate services or the state commission with respect to 
intrastate services, finds that the lowest corresponding price is not 
compensatory. Promotional rates offered by a service provider for a 
period of more than 90 days must be included among the comparable rates 
upon which the lowest corresponding price is determined.
    (c) Existing contracts. (1) A signed contract for services eligible 
for discounts pursuant to this subpart between an eligible school or 
library as defined under Sec. 54.501 or consortium that includes an 
eligible school or library and

[[Page 146]]

a service provider shall be exempt from the requirements set forth in 
Sec. 54.504(a), (b)(3), and (b)(4) as follows:
    (i) A contract signed on or before July 10, 1997 is exempt from the 
competitive bid requirements for the life of the contract; or
    (ii) A contract signed after July 10, 1997, but before the date on 
which the universal service competitive bid system described in Sec. 
54.504 is operational, is exempt from the competitive bid requirements 
only with respect to services that are provided under such contract 
between January 1, 1998 and December 31, 1998.
    (2) For a school, library, or consortium that includes an eligible 
school or library that takes service under or pursuant to a master 
contract, the date of execution of that master contract represents the 
applicable date for purposes of determining whether and to what extent 
the school, library, or consortium is exempt from the competitive bid 
requirements.
    (3) The competitive bid system will be deemed to be operational when 
the Administrator is ready to accept and post FCC Form 470 from schools 
and libraries on a website and that website is available for use by 
service providers.
    (d)(1) The exemption from the competitive bid requirements set forth 
in paragraph (c) of this section shall not apply to voluntary extensions 
or renewals of existing contracts, with the exception that an eligible 
school or library as defined under Sec. 54.501 or consortium that 
includes an eligible school or library, that filed an application within 
the 75-day initial filing window for 1998 (January 30, 1998-April 15, 
1998), may voluntarily extend or renew, to a date no later than June 30, 
1999, an existing contract that otherwise would terminate between April 
15, 1998 and June 30, 1999.
    (2) For the 1998-1999 funding year, a contract exempt from the 
competitive bid requirement, as described in paragraph (c) of this 
section, may be voluntarily extended to September 30, 1999 only to the 
extent necessary to permit delivery of the nonrecurring services subject 
to that contract and for which discounts have been approved.

[62 FR 32948, June 17, 1997, as amended at 63 FR 2130, Jan. 13, 1998; 63 
FR 33586, June 19, 1998; 63 FR 43097, Aug. 12, 1998; 63 FR 70572, Dec. 
21, 1998; 64 FR 22810, Apr. 28, 1999; 68 FR 36942, June 20, 2003]



Sec. 54.513  Resale and transfer of services.

    (a) Prohibition on resale. Eligible services purchased at a discount 
under this subpart shall not be sold, resold, or transferred in 
consideration of money or any other thing of value.
    (b) Permissible fees. This prohibition on resale shall not bar 
schools, school districts, libraries, and library consortia from 
charging either computer lab fees or fees for classes in how to navigate 
over the Internet. There is no prohibition on the resale of services 
that are not purchased pursuant to the discounts provided in this 
subpart.
    (c) Eligible services and equipment components of eligible services 
purchased at a discount under this subpart shall not be transferred, 
with or without consideration of money or any other thing of value, for 
a period of three years after purchase, except that eligible services 
and equipment components of eligible services may be transferred to 
another eligible school or library in the event that the particular 
location where the service originally was received is permanently or 
temporarily closed. If an eligible service or equipment component of a 
service is transferred due to the permanent or temporary closure of a 
school or library, the transferor must notify the Administrator of the 
transfer, and both the transferor and recipient must maintain detailed 
records documenting the transfer and the reason for the transfer for a 
period of five years.

[62 FR 32948, June 17, 1997, as amended at 69 FR 6191, Feb. 10, 2004]

    Effective Date Note: At 69 FR 6191, Feb. 10, 2004, Sec. 54.513 was 
amended by revising the section heading and adding paragraph (c), 
effective Mar. 11, 2004. Paragraph (c) contains information collection 
and recordkeeping requirements and will not become effective until 
approval has been given by the Office of Management and Budget.

[[Page 147]]



Sec. 54.514  Payment for discounted service.

    (a) Choice of payment method. Service providers providing discounted 
services under this subpart in any funding year shall, prior to the 
submission the Form 471, permit the billed entity to choose the method 
of payment for the discounted services from those methods approved by 
the Administrator, including by making a full, undiscounted payment and 
receiving subsequent reimbursement of the discount amount from the 
service provider.
    (b) Deadline for remittance of reimbursement checks. Service 
providers that receive discount reimbursement checks from the 
Administrator after having received full payment from the billed entity 
must remit the discount amount to the billed entity no later than 20 
business days after receiving the reimbursement check.

[68 FR 36942, June 20, 2003]

    Effective Date Note: At 68 FR 36942, June 20, 2003, as corrected at 
68 FR 39471, July 2, 2003, Sec. 54.514 was added, effective July 21, 
2003, except for paragraph (a), which is effective July 1, 2004. In 
addition, paragraph (b) contains information collection and 
recordkeeping requirements and will not become effective until approval 
has been given by the Office of Management and Budget.



Sec. 54.515  Distributing support.

    (a) A telecommunications carrier providing services eligible for 
support under this subpart to eligible schools and libraries may, at the 
election of the carrier, treat the amount eligible for support under 
this subpart as an offset against the carrier's universal service 
contribution obligation for the year in which the costs for providing 
eligible services were incurred or receive a direct reimbursement from 
the Administrator for that amount. Carriers shall elect in January of 
each year the method by which they will be reimbursed and shall remain 
subject to that method for the duration of the calendar year. Any 
support amount that is owed a carrier that fails to remit its monthly 
universal service contribution obligation, however, shall first be 
applied as an offset to that carrier's contribution obligation. Such a 
carrier shall remain subject to the offsetting method for the remainder 
of the calendar year in which it failed to remit their monthly universal 
service obligation. A carrier that continues to be in arrears on its 
universal service contribution obligations at the end of a calendar year 
shall remain subject to the offsetting method for the next calendar 
year.
    (b) If a telecommunications carrier elects to treat the amount 
eligible for support under this subpart as an offset against the 
carrier's universal service contribution obligation and the total amount 
of support owed to the carrier exceeds its universal service obligation, 
calculated on an annual basis, the carrier shall receive a direct 
reimbursement in the amount of the difference. Any such reimbursement 
due a carrier shall be submitted to that carrier no later than the end 
of the first quarter of the calendar year following the year in which 
the costs were incurred and the offset against the carrier's universal 
service obligation was applied.

[63 FR 67009, Dec. 4, 1998]



Sec. 54.516  Auditing.

    (a) Recordkeeping requirements--(1) Schools and libraries. Schools 
and libraries shall retain all documents related to the application for, 
receipt, and delivery of discounted telecommunications and other 
supported services for at least 5 years after the last day of service 
delivered in a particular Funding Year. Any other document that 
demonstrates compliance with the statutory or regulatory requirements 
for the schools and libraries mechanism shall be retained as well. 
Schools and libraries shall maintain asset and inventory records of 
equipment purchased as components of supported internal connections 
services sufficient to verify the actual location of such equipment for 
a period of five years after purchase.
    (2) Service providers. Service providers shall retain documents 
related to the delivery of discounted telecommunications and other 
supported services for at least 5 years after the last day of the 
delivery of discounted services. Any other document that demonstrates 
compliance with the statutory or regulatory requirements for the schools 
and

[[Page 148]]

libraries mechanism shall be retained as well.
    (b) Production of records. Schools, libraries, and service providers 
shall produce such records at the request of any representative 
(including any auditor) appointed by a state education department, the 
Administrator, the FCC, or any local, state or federal agency with 
jurisdiction over the entity.
    (c) Audits. Schools, libraries, and service providers shall be 
subject to audits and other investigations to evaluate their compliance 
with the statutory and regulatory requirements for the schools and 
libraries universal service support mechanism, including those 
requirements pertaining to what services and products are purchased, 
what services and products are delivered, and how services and products 
are being used. Schools and libraries receiving discounted services must 
provide consent before a service provider releases confidential 
information to the auditor, reviewer, or other representative.

[69 FR 55111, Sept. 13, 2004]



Sec. 54.517  Services provided by non-telecommunications carriers.

    (a) Non-telecommunications carriers shall be eligible for universal 
service support under this subpart for providing the supported services 
described in paragraph (b) of this section for eligible schools, 
libraries, and consortia including those entities.
    (b) Supported services. Non-telecommunications carriers shall be 
eligible for universal service support under this subpart for providing 
voice mail, Internet access, and installation and maintenance of 
internal connections.
    (c) Requirements. Such services provided by non-telecommunications 
carriers shall be subject to all the provisions of this subpart, except 
Sec. Sec. 54.501(a), 54.502, 54.503, 54.515.

[62 FR 32948, June 17, 1997, as amended at 63 FR 2131, Jan. 13, 1998; 68 
FR 36942, June 20, 2003]



Sec. 54.518  Support for wide area networks.

    To the extent that states, schools, or libraries build or purchase a 
wide area network to provide telecommunications services, the cost of 
such wide area networks shall not be eligible for universal service 
discounts provided under this subpart.

[63 FR 2131, Jan. 13, 1998]



Sec. 54.519  State telecommunications networks.

    (a) Telecommunications services. State telecommunications networks 
may secure discounts under the universal service support mechanisms on 
supported telecommunications services (as described in Sec. 54.502) on 
behalf of eligible schools and libraries (as described in Sec. 54.501) 
or consortia that include an eligible school or library. Such state 
telecommunications networks shall pass on such discounts to eligible 
schools and libraries and shall:
    (1) Maintain records listing each eligible school and library and 
showing the basis for each eligibility determination;
    (2) Maintain records demonstrating the discount amount to which each 
eligible school and library is entitled and the basis for such 
determination;
    (3) Take reasonable steps to ensure that each eligible school or 
library receives a proportionate share of the shared services;
    (4) Request that service providers apply the appropriate discount 
amounts on the portion of the supported services used by each school or 
library;
    (5) Direct eligible schools and libraries to pay the discounted 
price; and
    (6) Comply with the competitive bid requirements set forth in Sec. 
54.504(a).
    (b) Internet access and installation and maintenance of internal 
connections. State telecommunications networks either may secure 
discounts on Internet access and installation and maintenance of 
internal connections in the manner described in paragraph (a) of this 
section with regard to telecommunications, or shall be eligible, 
consistent with Sec. 54.517(b), to receive universal service support 
for providing such services to eligible schools, libraries, and 
consortia including those entities.

[63 FR 2131, Jan. 13, 1998; 63 FR 33586, June 19, 1998]

[[Page 149]]



Sec. 54.520  Children's Internet Protection Act certifications 
required from recipients of discounts under the federal universal

service support mechanism for 
          schools and libraries.

    (a) Definitions.
    (1) School. For the purposes of the certification requirements of 
this rule, school means school, school district, local education agency 
or other authority responsible for administration of a school.
    (2) Library. For the purposes of the certification requirements of 
this rule, library means library, library board or authority responsible 
for administration of a library.
    (3) Billed entity. Billed entity is defined in Sec. 54.500. In the 
case of a consortium, the billed entity is the lead member of the 
consortium.
    (4) Statutory definitions. The terms ``minor,'' ``obscene,'' ``child 
pornography,'' ``harmful to minors'' and ``technology protection 
measure'' as used in this section, are defined in the Children's 
Internet Protection Act section 1721(c).
    (b) Who is required to make certifications? (1) A school or library 
that receives discounts for Internet access and internal connections 
services under the federal universal service support mechanism for 
schools and libraries, must make such certifications as described in 
paragraph (c) of this section. The certifications required and described 
in paragraph (c) of this section must be made in each funding year.
    (2) Schools and libraries that only receive discounts for 
telecommunications services under the federal universal service support 
mechanism for schools and libraries are not subject to the requirements 
47 U.S.C. 254(h) and (l), but must indicate, pursuant to the 
certification requirements in paragraph (c) of this section, that they 
only receive discounts for telecommunications services.
    (c) Certifications required under 47 U.S.C. 254(h) and (l)--(1) 
Schools. The billed entity for a school that receives discounts for 
Internet access or internal connections must certify on FCC Form 486 
that an Internet safety policy is being enforced. If the school is an 
eligible member of a consortium but is not the billed entity for the 
consortium, the school must certify instead on FCC Form 479 
(``Certification to Consortium Leader of Compliance with the Children's 
Internet Protection Act'') that an Internet safety policy is being 
enforced.
    (i) The Internet safety policy adopted and enforced pursuant to 47 
U.S.C. 254(h) must include a technology protection measure that protects 
against Internet access by both adults and minors to visual depictions 
that are obscene, child pornography, or, with respect to use of the 
computers by minors, harmful to minors. This Internet safety policy must 
also include monitoring the online activities of minors.
    (ii) The Internet safety policy adopted and enforced pursuant to 47 
U.S.C. 254(l) must address all of the following issues:
    (A) Access by minors to inappropriate matter on the Internet and 
World Wide Web,
    (B) The safety and security of minors when using electronic mail, 
chat rooms, and other forms of direct electronic communications,
    (C) Unauthorized access, including so-called ``hacking,'' and other 
unlawful activities by minors online;
    (D) Unauthorized disclosure, use, and dissemination of personal 
information regarding minors; and
    (E) Measures designed to restrict minors' access to materials 
harmful to minors.
    (iii) A school must satisfy its obligations to make certifications 
by making one of the following certifications required by paragraph 
(c)(1) of this section on FCC Form 486:
    (A) The recipient(s) of service represented in the Funding Request 
Number(s) on this Form 486 has (have) complied with the requirements of 
the Children's Internet Protection Act, as codified at 47 U.S.C. 254(h) 
and (l).
    (B) Pursuant to the Children's Internet Protection Act, as codified 
at 47 U.S.C. 254(h) and (l), the recipient(s) of service represented in 
the Funding Request Number(s) on this Form 486 is (are) undertaking such 
actions, including any necessary procurement procedures, to comply with 
the requirements of CIPA for the next funding year, but

[[Page 150]]

has (have) not completed all requirements of CIPA for this funding year.
    (C) The Children's Internet Protection Act, as codified at 47 U.S.C. 
254(h) and (l), does not apply because the recipient(s) of service 
represented in the Funding Request Number(s) on this Form 486 is (are) 
receiving discount services only for telecommunications services.
    (2) Libraries. The billed entity for a library that receives 
discounts for Internet access and internal connections must certify, on 
FCC Form 486, that an Internet safety policy is being enforced. If the 
library is an eligible member of a consortium but is not the billed 
entity for the consortium, the library must instead certify on FCC Form 
479 (``Certification to Consortium Leader of Compliance with the 
Children's Internet Protection Act'') that an Internet safety policy is 
being enforced.
    (i) The Internet safety policy adopted and enforced pursuant to 47 
U.S.C. 254 (h) must include a technology protection measure that 
protects against Internet access by both adults and minors to visual 
depictions that are obscene, child pornography, or, with respect to use 
of the computers by minors, harmful to minors.
    (ii) The Internet safety policy adopted and enforced pursuant to 47 
U.S.C. 254(l) must address all of the following issues:
    (A) Access by minors to inappropriate matter on the Internet and 
World Wide Web;
    (B) The safety and security of minors when using electronic mail, 
chat rooms, and other forms of direct electronic communications;
    (C) Unauthorized access, including so-called ``hacking,'' and other 
unlawful activities by minors online;
    (D) Unauthorized disclosure, use, and dissemination of personal 
information regarding minors; and
    (E) Measures designed to restrict minors' access to materials 
harmful to minors.
    (iii) A library must satisfy its obligations to make certifications 
by making one of the following certifications required by paragraph 
(c)(2) of this section on FCC Form 486:
    (A) The recipient(s) of service represented in the Funding Request 
Number(s) on this Form 486 has (have) complied with the requirements of 
the Children's Internet Protection Act, as codified at 47 U.S.C. 254(h) 
and (l).
    (B) Pursuant to the Children's Internet Protection Act (CIPA), as 
codified at 47 U.S.C. 254(h) and (l), the recipient(s) of service 
represented in the Funding Request Number(s) on this Form 486 is (are) 
undertaking such actions, including any necessary procurement 
procedures, to comply with the requirements of CIPA for the next funding 
year, but has (have) not completed all requirements of CIPA for this 
funding year.
    (C) The Children's Internet Protection Act, as codified at 47 U.S.C. 
254(h) and (l), does not apply because the recipient(s) of service 
represented in the Funding Request Number(s) on this Form 486 is (are) 
receiving discount services only for telecommunications services.
    (3) Certifications required from consortia members and billed 
entities for consortia. (i) The billed entity of a consortium, as 
defined in paragraph (a)(3) of this section, other than one requesting 
only discounts on telecommunications services for consortium members, 
must collect from the authority for each of its school and library 
members, one of the following signed certifications on FCC Form 479 
(``Certification to Consortium Leader of Compliance with the Children's 
Internet Protection Act''), which must be submitted to the billed entity 
consistent with paragraph (c)(1) or paragraph (c)(2) of this section:
    (A) The recipient(s) of service under my administrative authority 
and represented in the Funding Request Number(s) for which you have 
requested or received Funding Commitments has (have) complied with the 
requirements of the Children's Internet Protection Act, as codified at 
47 U.S.C. 254(h) and (l).
    (B) Pursuant to the Children's Internet Protection Act, as codified 
at 47 U.S.C. 254(h) and (l), the recipient(s) of service under my 
administrative authority and represented in the Funding Request 
Number(s) for which you have

[[Page 151]]

requested or received Funding Commitments is (are) undertaking such 
actions, including any necessary procurement procedures, to comply with 
the requirements of CIPA for the next funding year, but has (have) not 
completed all requirements of CIPA for this funding year.
    (C) The Children's Internet Protection Act, as codified at 47 U.S.C. 
254(h) and (l), does not apply because the recipient(s) of service under 
my administrative authority and represented in the Funding Request 
Number(s) for which you have requested or received Funding Commitments 
is (are) receiving discount services only for telecommunications 
services; and
    (ii) The billed entity for a consortium, as defined in paragraph 
(a)(3) of this section, must make one of the following two 
certifications on FCC Form 486: ``I certify as the Billed Entity for the 
consortium that I have collected duly completed and signed Forms 479 
from all eligible members of the consortium.''; or I certify ``as the 
Billed Entity for the consortium that the only services that I have been 
approved for discounts under the universal service support on behalf of 
eligible members of the consortium are telecommunications services, and 
therefore the requirements of the Children's Internet Protection Act, as 
codified at 47 U.S.C. 254(h) and (l), do not apply.''; and
    (iii) The billed entity for a consortium, as defined in paragraph 
(a)(3) of this section, who filed an FCC Form 471 as a ``consortium 
application'' and who is also a recipient of services as a member of 
that consortium must select one of the certifications under paragraph 
(c)(3)(i) of this section on FCC Form 486.
    (d) Failure to provide certifications--(1) Schools and libraries. A 
school or library that knowingly fails to submit certifications as 
required by this section, shall not be eligible for discount services 
under the federal universal service support mechanism for schools and 
libraries until such certifications are submitted.
    (2) Consortia. A billed entity's knowing failure to collect the 
required certifications from its eligible school and library members or 
knowing failure to certify that it collected the required certifications 
shall render the entire consortium ineligible for discounts under the 
federal universal service support mechanism for school and libraries.
    (3) Reestablishing eligibility. At any time, a school or library 
deemed ineligible for discount services under the federal universal 
service support mechanism for schools and libraries because of failure 
to submit certifications required by this section, may reestablish 
eligibility for discounts by providing the required certifications to 
the Administrator and the Commission.
    (e) Failure to comply with the certifications--(1) Schools and 
libraries. A school or library that knowingly fails to ensure the use of 
computers in accordance with the certifications required by this 
section, must reimburse any funds and discounts received under the 
federal universal service support mechanism for schools and libraries 
for the period in which there was noncompliance.
    (2) Consortia. In the case of consortium applications, the 
eligibility for discounts of consortium members who ensure the use of 
computers in accordance with the certification requirements of this 
section shall not be affected by the failure of other school or library 
consortium members to ensure the use of computers in accordance with 
such requirements.
    (3) Reestablishing compliance. At any time, a school or library 
deemed ineligible for discounts under the federal universal service 
support mechanism for schools and libraries for failure to ensure the 
use of computers in accordance with the certification requirements of 
this section and that has been directed to reimburse the program for 
discounts received during the period of noncompliance, may reestablish 
compliance by ensuring the use of its computers in accordance with the 
certification requirements under this section. Upon submittal to the 
Commission of a certification or other appropriate evidence of such 
remedy, the school or library shall be eligible for discounts under the 
universal service mechanism.
    (f) Waivers based on state or local procurement rules and 
regulations and competitive bidding requirements. Waivers

[[Page 152]]

shall be granted to schools and libraries when the authority responsible 
for making the certifications required by this section, cannot make the 
required certifications because its state or local procurement rules or 
regulations or competitive bidding requirements, prevent the making of 
the certification otherwise required. The waiver shall be granted upon 
the provision, by the authority responsible for making the 
certifications on behalf of schools or libraries, that the schools or 
libraries will be brought into compliance with the requirements of this 
section, for schools, before the start of the third program year after 
April 20, 2001 in which the school is applying for funds under this 
title, and, for libraries, before the start of Funding Year 2005 or the 
third program year after April 20, 2001, whichever is later.
    (g) Funding year certification deadlines. For Funding Year 2003 and 
for subsequent funding years, billed entities shall provide one of the 
certifications required under paragraph (c)(1), (c)(2) or (c)(3) of this 
section on an FCC Form 486 in accordance with the existing program 
guidelines established by the Administrator.

[66 FR 19396, Apr. 16, 2001; 66 FR 22133, May 3, 2001, as amended at 67 
FR 50603, Aug. 5, 2002; 68 FR 47255, Aug. 8, 2003]



Sec. 54.522  Eligible services list.

    The Administrator shall submit by June 30 of each year a draft list 
of services eligible for support, based on the Commission's rules, in 
the following funding year. The Commission will issue a Public Notice 
seeking comment on the Administrator's proposed eligible services list. 
At least 60 days prior to the opening of the window for the following 
funding year, the Commission shall release a Public Notice attaching the 
final eligible services list for the upcoming funding year.

[69 FR 6191, Feb. 10, 2004]



Sec. 54.523  Payment for the non-discount portion of supported
services.

    An eligible school, library, or consortium must pay the non-discount 
portion of services or products purchased with universal service 
discounts. An eligible school, library, or consortium may not receive 
rebates for services or products purchased with universal service 
discounts. For the purpose of this rule, the provision, by the provider 
of a supported service, of free services or products unrelated to the 
supported service or product constitutes a rebate of the non-discount 
portion of the supported services.

[69 FR 6192, Feb. 10, 2004]



      Subpart G_Universal Service Support for Health Care Providers



Sec. 54.601  Eligibility.

    (a) Health care providers. (1) Except with regard to those services 
provided under Sec. 54.621(b), only an entity that is either a public 
or non-profit rural health care provider, as defined in this section, 
shall be eligible to receive supported services under this subpart.
    (2) For purposes of this subpart, a ``health care provider'' is any:
    (i) Post-secondary educational institution offering health care 
instruction, including a teaching hospital or medical school;
    (ii) Community health center or health center providing health care 
to migrants;
    (iii) Local health department or agency;
    (iv) Community mental health center;
    (v) Not-for-profit hospital;
    (vi) Rural health clinic; or
    (vii) Consortium of health care providers consisting of one or more 
entities described in paragraphs (a)(2)(i) through (a)(2)(vi) of this 
section.
    (3) For purposes of this subpart, a rural health care provider is a 
public or non-profit health care provider located in a rural area, as 
defined in this subpart.
    (i) Any health care provider that was located in a rural area under 
the definition used by the Commission prior to July 1, 2005, and that 
had received a funding commitment from USAC since 1998, remain eligible 
for support under this subpart though the funding year ending on June 
30, 2011.
    (ii) [Reserved]
    (4) Each separate site or location of a health care provider shall 
be considered an individual health care provider

[[Page 153]]

for purposes of calculating and limiting support under this subpart.
    (b) Consortia. (1) An eligible health care provider may join a 
consortium with other eligible health care providers; with schools, 
libraries, and library consortia eligible under Subpart F; and with 
public sector (governmental) entities to order telecommunications 
services. With one exception, eligible health care providers 
participating in consortia with ineligible private sector members shall 
not be eligible for supported services under this subpart. A consortium 
may include ineligible private sector entities if such consortium is 
only receiving services at tariffed rates or at market rates from those 
providers who do not file tariffs.
    (2) For consortia, universal service support under this subpart 
shall apply only to the portion of eligible services used by an eligible 
health care provider.
    (c) Services. (1) Any telecommunications service that is the subject 
of a properly completed bona fide request by a rural health care 
provider shall be eligible for universal service support, subject to the 
limitations described in this paragraph. The length of a supported 
telecommunications service may not exceed the distance between the 
health care provider and the point farthest from that provider on the 
jurisdictional boundary of the largest city in a state as defined in 
Sec. 54.625(a).
    (2) Internet access and limited toll-free access to internet. (i) 
For purposes of this subpart, eligible Internet access is an information 
service that enables rural health care providers to post their own data, 
interact with stored data, generate new data, or communicate over the 
World Wide Web.
    (ii) Internet access shall be eligible for universal service support 
under Sec. 54.621(a).
    (iii) Limited toll-free access to an Internet service provider shall 
be eligible for universal service support under Sec. 54.621(b).
    (3) Advanced telecommunications and information services as provided 
under Sec. 54.621.
    (d) Allocation of discounts. An eligible health care provider that 
engages in eligible and ineligible activities or that collocates with an 
entity that provides ineligible services shall allocate eligible and 
ineligible activities in order to receive a prorated discount for 
eligible activities. Health care providers shall choose a method of cost 
allocation that is based on objective criteria and reasonably reflects 
the eligible usage of the facilities.

[62 FR 32948, June 17, 1997, as amended at 64 FR 66787, Nov. 30, 1999; 
68 FR 74502, Dec. 24, 2003; 70 FR 6372, Feb. 7, 2005; 73 FR 19438, Apr. 
10, 2008]



Sec. 54.603  Competitive bid requirements.

    (a) Competitive bidding requirement. To select the 
telecommunications carriers that will provide services eligible for 
universal service support to it under this subpart, each eligible health 
care provider shall participate in a competitive bidding process 
pursuant to the requirements established in this subpart and any 
additional and applicable state, local, or other procurement 
requirements.
    (b) Posting of FCC Form 465. (1) An eligible health care provider 
seeking to receive telecommunications services eligible for universal 
service support under this subpart shall submit a completed FCC Form 465 
to the Rural Health Care Division. FCC Form 465 shall be signed by the 
person authorized to order telecommunications services for the health 
care provider and shall include, at a minimum, that person's 
certification under oath that:
    (i) The requester is a public or non-profit entity that falls within 
one of the seven categories set forth in the definition of health care 
provider, listed in Sec. 54.601(a);
    (ii) The requester is physically located in a rural area, unless the 
health care provider is requesting services provided under Sec. 54.621;
    (iii) If the health care provider is requesting services provided 
under Sec. 54.621, that the requester cannot obtain toll-free access to 
an Internet service provider;
    (iv) The requested service or services will be used solely for 
purposes reasonably related to the provision of health care services or 
instruction that the health care provider is legally authorized to 
provide under the law in the

[[Page 154]]

state in which such health care services or instruction are provided;
    (v) The requested service or services will not be sold, resold or 
transferred in consideration of money or any other thing of value; and
    (vi) If the service or services are being purchased as part of an 
aggregated purchase with other entities or individuals, the full details 
of any such arrangement, including the identities of all co-purchasers 
and the portion of the service or services being purchased by the health 
care provider.
    (2) The Rural Health Care Division shall post each FCC Form 465 that 
it receives from an eligible health care provider on its website 
designated for this purpose.
    (3) After posting an eligible health care providers FCC Form 465 on 
the Rural Health Care Corporation website, the Rural Health Care 
Division shall send confirmation of the posting to the entity requesting 
services. The health care provider shall wait at least 28 days from the 
date on which its FCC Form 465 is posted on the website before making 
commitments with the selected telecommunications carrier(s).
    (4) After selecting a telecommunications carrier, the health care 
provider shall certify to the Rural Health Care Division that the 
provider is selecting the most cost-effective method of providing the 
requested service or services, where the most cost-effective method of 
providing a service is defined as the method that costs the least after 
consideration of the features, quality of transmission, reliability, and 
other factors that the health care provider deems relevant to choosing a 
method of providing the required health care services. The health care 
provider shall submit to the Administrator paper copies of the responses 
or bids received in response to the requested services.
    (5) The confirmation from the Rural Health Care Division shall 
include the date after which the requester may sign a contract with its 
chosen telecommunications carrier(s).

[62 FR 32948, June 17, 1997, as amended at 62 FR 41304, Aug. 1, 1997; 63 
FR 2131, Jan. 13, 1998; 68 FR 74502, Dec. 24, 2003]



Sec. 54.604  Existing contracts.

    (a) Existing contracts. A signed contract for services eligible for 
support pursuant to this subpart between an eligible health care 
provider as defined under Sec. 54.601 and a telecommunications carrier 
shall be exempt from the competitive bid requirements set forth in Sec. 
54.603(a) as follows:
    (1) A contract signed on or before July 10, 1997 is exempt from the 
competitive bid requirement for the life of the contract.
    (2) [Reserved]
    (b) For rural health care providers that take service under or 
pursuant to a master contract, as defined in Sec. 54.500(f), the date 
of execution of that master contract represents the applicable date for 
purposes of determining whether and to what extent the rural health care 
provider is exempt from the competitive bid requirements.
    (c) The competitive bid system will be deemed to be operational when 
the Administrator is ready to accept and post FCC Form 465 from rural 
health care providers on a website and that website is available for use 
by telecommunications carriers.

[63 FR 2131, Jan. 13, 1998; 63 FR 33586, June 19, 1998, as amended at 63 
FR 70572, Dec. 21, 1998; 64 FR 22810, Apr. 28, 1999; 71 FR 65750, Nov. 
9, 2006]



Sec. 54.605  Determining the urban rate.

    (a) If a rural health care provider requests an eligible service to 
be provided over a distance that is less than or equal to the ``standard 
urban distance,'' as defined in paragraph (c) of this section, for the 
state in which it is located, the urban rate for that service shall be a 
rate no higher than the highest tariffed or publicly-available rate 
charged to a commercial customer for a functionally similar service in 
any city with a population of 50,000 or more in that state, calculated 
as if it were provided between two points within the city.
    (b) If a rural health care provider requests an eligible service to 
be provided over a distance that is greater than the ``standard urban 
distance,'' as defined in paragraph (c) of this section, for the state 
in which it is located, the urban rate for that service shall be a rate 
no higher than the highest tariffed

[[Page 155]]

or publicly-available rate charged to a commercial customer for a 
functionally similar service provided over the standard urban distance 
in any city with a population of 50,000 or more in that state, 
calculated as if the service were provided between two points within the 
city.
    (c) The ``standard urban distance'' for a state is the average of 
the longest diameters of all cities with a population of 50,000 or more 
within the state.
    (d) The Administrator shall calculate the ``standard urban 
distance'' and shall post the ``standard urban distance'' and the 
maximum supported distance for each state on its website.

[62 FR 32948, June 17, 1997, as amended at 63 FR 2131, Jan. 13, 1998; 63 
FR 70572, Dec. 21, 1998; 68 FR 74502, Dec. 24, 2003]



Sec. 54.607  Determining the rural rate.

    (a) The rural rate shall be the average of the rates actually being 
charged to commercial customers, other than health care providers, for 
identical or similar services provided by the telecommunications carrier 
providing the service in the rural area in which the health care 
provider is located. The rates included in this average shall be for 
services provided over the same distance as the eligible service. The 
rates averaged to calculate the rural rate must not include any rates 
reduced by universal service support mechanisms. The ``rural rate'' 
shall be used as described in this subpart to determine the credit or 
reimbursement due to a telecommunications carrier that provides eligible 
telecommunications services to eligible health care providers.
    (b) If the telecommunications carrier serving the health care 
provider is not providing any identical or similar services in the rural 
area, then the rural rate shall be the average of the tariffed and other 
publicly available rates, not including any rates reduced by universal 
service programs, charged for the same or similar services in that rural 
area over the same distance as the eligible service by other carriers. 
If there are no tariffed or publicly available rates for such services 
in that rural area, or if the carrier reasonably determines that this 
method for calculating the rural rate is unfair, then the carrier shall 
submit for the state commission's approval, for intrastate rates, or the 
Commission's approval, for interstate rates, a cost-based rate for the 
provision of the service in the most economically efficient, reasonably 
available manner.
    (1) The carrier must provide, to the state commission, or intrastate 
rates, or to the Commission, for interstate rates, a justification of 
the proposed rural rate, including an itemization of the costs of 
providing the requested service.
    (2) The carrier must provide such information periodically 
thereafter as required, by the state commission for intrastate rates or 
the Commission for interstate rates. In doing so, the carrier must take 
into account anticipated and actual demand for telecommunications 
services by all customers who will use the facilities over which 
services are being provided to eligible health care providers.



Sec. 54.609  Calculating support.

    (a) Except with regard to services provided under Sec. 54.621 and 
subject to the limitations set forth in this subpart, the amount of 
universal service support for an eligible service provided to a public 
or non-profit rural health care provider shall be the difference, if 
any, between the urban rate and the rural rate charged for the service, 
as defined herein. In addition, all reasonable charges that are incurred 
by taking such services, such as state and federal taxes shall be 
eligible for universal service support. Charges for termination 
liability, penalty surcharges, and other charges not included in the 
cost of taking such service shall not be covered by the universal 
service support mechanisms. Rural health care providers may choose one 
of the following two support options.
    (1) Distance based support. The Administrator shall consider the 
base rates for telecommunications services in rural areas to be 
reasonably comparable to the base rates charged for functionally similar 
telecommunications service in urban areas in that state, and, therefore, 
the Administrator shall not include these charges in calculating the 
support. The Administrator shall include, in the support calculation, 
all other charges specified,

[[Page 156]]

and all actual distance-based charges as follows:
    (i) If the requested service distance is less than or equal to the 
SUD for the state, the distance-based charges for the rural health care 
provider are reasonably comparable to those in urban areas, so the 
health care provider will not receive distance-based support.
    (ii) If the requested service distance is greater than the SUD for 
the state, but less than the maximum allowable distance, the distance-
based charge actually incurred for that service can be no higher than 
the distance-based charges for a functionally similar service in any 
city in that state with a population of 50,000 or more over the SUD.
    (iii) ``Distance-based charges'' are charges based on a unit of 
distance, such as mileage-based charges.
    (iv) Except with regard to services provided under Sec. 54.621, a 
telecommunications carrier that provides telecommunications service to a 
rural health care provider participating in an eligible health care 
consortium, and the consortium must establish the actual distance-based 
charges for the health care provider's portion of the shared 
telecommunications services.
    (2) Base rate support. If a telecommunications carrier, health care 
provider, and/or consortium of health care providers reasonably 
determines that the base rates for telecommunications services in rural 
areas are not reasonably comparable to the base rates charged for 
functionally similar telecommunications service in urban areas in that 
state, the telecommunications carrier, health care provider, and/or 
consortium of health care providers may request that the Administrator 
perform a more comprehensive support calculation. The requester shall 
provide to the Administrator the information to establish both the urban 
and rural rates consistent with Sec. 54.605 and Sec. 54.607, and 
submit to the Administrator with Form 466 all of the documentation 
necessary to substantiate the request.
    (3) Base rate support-consortium. Except with regard to services 
provided under Sec. 54.621, a telecommunications carrier that provides 
telecommunications service to a rural health care provider participating 
in an eligible health care consortium, and the consortium must establish 
the applicable rural base rates for telecommunications service for the 
health care provider's portion of the shared telecommunications 
services, as well as the applicable urban base rates for the 
telecommunications service.
    (b) Absent documentation justifying the amount of universal service 
support requested for health care providers participating in a 
consortium, the Administrator shall not allow telecommunications 
carriers to offset, or receive reimbursement for, the amount eligible 
for universal service support.
    (c) The universal service support mechanisms shall provide support 
for intrastate telecommunications services, as set forth in Sec. 
54.101(a), provided to rural health care providers as well as interstate 
telecommunications services.
    (d) Satellite services. (1) Rural public and non-profit health care 
providers may receive support for rural satellite services, even when 
another functionally similar terrestrial-based service is available in 
that rural area. Discounts for satellite services shall be capped at the 
amount the rural health care provider would have received if they 
purchased a functionally similar terrestrial-based alternative.
    (2) Rural health care providers seeking discounts for satellite 
services shall provide to the Administrator with the Form 466 
documentation of the urban and rural rates for the terrestrial-based 
alternatives.
    (3) Where a rural health care provider seeks a more expensive 
satellite-based service when a less expensive terrestrial-based 
alternative is available, the rural health care provider shall be 
responsible for the additional cost.
    (e) Mobile rural health care providers--(1) Calculation of support. 
Mobile rural health care providers may receive discounts for satellite 
services calculated by comparing the rate for the satellite service to 
the rate for an urban wireline service with a similar bandwidth. 
Discounts for satellite services shall not be capped at an amount of a 
functionally similar wireline alternative. Where the mobile rural health 
care provider provides service in more than one state, the calculation 
shall be

[[Page 157]]

based on the urban areas in each state, proportional to the number of 
locations served in each state.
    (2) Documentation of support. (i) Mobile rural health care providers 
shall provide to the Administrator documentation of the price of 
bandwidth equivalent wireline services in the urban area in the state or 
states where the service is provided. Mobile rural health care providers 
shall provide to the Administrator the number of sites the mobile health 
care provider will serve during the funding year.
    (ii) Where a mobile rural health care provider serves less than 
eight different sites per year, the mobile rural health care provider 
shall provide to the Administrator documentation of the price of 
bandwidth equivalent wireline services. In such case, the Administrator 
shall determine on a case-by-case basis whether the telecommunications 
service selected by the mobile rural health care provider is the most 
cost-effective option. Where a mobile rural health care provider seeks a 
more expensive satellite-based service when a less expensive wireline 
alternative is most cost-effective, the mobile rural health care 
provider shall be responsible for the additional cost.

[68 FR 74502, Dec. 24, 2003, as amended at 70 FR 6373, Feb. 7, 2005]

    Effective Date Notes: 1. At 68 FR 74502, Dec. 24, 2003, as corrected 
at 69 FR 3021, Jan. 22, 2004, Sec. 54.609 was revised, effective Jan. 
23, 2004. Paragraph (d)(2) contains information collection and 
recordkeeping requirements and will not become effective until approval 
has been given by the Office of Management and Budget.
    2. At 70 FR 6373, Feb. 7, 2005, Sec. 54.609 was amended by adding 
paragraph (e). Paragraph (e) contains information collection and 
recordkeeping requirements and will not become effective until approval 
has been given by the Office of Management and Budget.



Sec. 54.611  Distributing support.

    (a) A telecommunications carrier providing services eligible for 
support under this subpart to eligible health care providers shall treat 
the amount eligible for support under this subpart as an offset against 
the carrier's universal service support obligation for the year in which 
the costs for providing eligible services were incurred.
    (b) If the total amount of support owed to a carrier, as set forth 
in paragraph (a) of this section, exceeds its universal service 
obligation, calculated on an annual basis, the carrier may receive a 
direct reimbursement in the amount of the difference.
    (c) Any reimbursement due a carrier shall be made after the offset 
is credited against that carrier's universal service obligation.
    (d) Any reimbursement due a carrier shall be submitted to that 
carrier no later than the end of the first quarter of the calendar year 
following the year in which the costs were incurred and the offset 
against the carrier's universal service obligation was applied.



Sec. 54.613  Limitations on supported services for rural health care
providers.

    (a) Upon submitting a bona fide request to a telecommunications 
carrier, each eligible rural health care provider is entitled to receive 
the most cost-effective, commercially-available telecommunications 
service at a rate no higher than the highest urban rate, as defined in 
Sec. 54.605, at a distance not to exceed the distance between the 
eligible health care provider's site and the farthest point on the 
jurisdictional boundary of the city in that state with the largest 
population.
    (b) This section shall not affect a rural health care provider's 
ability to obtain supported services under Sec. 54.621.

[64 FR 66787, NOV. 30, 1999, as amended at 68 FR 74503, Dec. 24, 2003]



Sec. 54.615  Obtaining services.

    (a) Selecting a provider. In selecting a telecommunications carrier, 
a health care provider shall consider all bids submitted and select the 
most cost-effective alternative.
    (b) Receiving supported rate. Except with regard to services 
provided under Sec. 54.621, upon receiving a bona fide request for an 
eligible service from an eligible health care provider, as set forth in 
paragraph (c) of this section, a telecommunications carrier shall 
provide the service at a rate no higher than the urban rate, as defined 
in Sec. 54.605, subject to the limitations set forth in this Subpart.

[[Page 158]]

    (c) Bona fide request. In order to receive services eligible for 
universal service support under this subpart, an eligible health care 
provider must submit a request for services to the telecommunications 
carrier, Signed by an authorized officer of the health care provider, 
and shall include that person's certification under oath that:
    (1) The requester is a public or non-profit entity that falls within 
one of the seven categories set forth in the definition of health care 
provider, listed in Sec. 54.601(a);
    (2) The requester is physically located in a rural area, unless the 
health care provider is requesting services provided under Sec. 54.621; 
or, if the requester is a mobile rural health care provider requesting 
services under Sec. 54.609(e), that the requester has certified that it 
is serving eligible rural areas.
    (3) If the health care provider is requesting services provided 
under Sec. 54.621, that the requester cannot obtain toll-free access to 
an Internet service provider;
    (4) The requested service or services will be used solely for 
purposes reasonably related to the provision of health care services or 
instruction that the health care provider is legally authorized to 
provide under the law in the state in which such health care services or 
instruction are provided;
    (5) The requested service or services will not be sold, resold or 
transferred in consideration of money or any other thing of value;
    (6) If the service or services are being purchased as part of an 
aggregated purchase with other entities or individuals, the full details 
of any such arrangement, including the identities of all co-purchasers 
and the portion of the service or services being purchased by the health 
care provider; and
    (7) The requester is selecting the most cost-effective method of 
providing the requested service or services, where the most cost-
effective method of providing a service is defined as the method that 
costs the least after consideration of the features, quality of 
transmission, reliability, and other factors that the health care 
provider deems relevant to choosing a method of providing the required 
health care services.
    (d) Annual renewal. The certification set forth in paragraph (c) of 
this section shall be renewed annually.

[62 FR 32948, June 17, 1997, as amended at 70 FR 6373, Feb. 7, 2005]



Sec. 54.617  Resale.

    (a) Prohibition on resale. Services purchased pursuant to universal 
service support mechanisms under this subpart shall not be sold, resold, 
or transferred in consideration for money or any other thing of value.
    (b) Permissible fees. The prohibition on resale set forth in 
paragraph (a) of this section shall not prohibit a health care provider 
from charging normal fees for health care services, including 
instruction related to such services rendered via telecommunications 
services purchased under this subpart.



Sec. 54.619  Audits and recordkeeping.

    (a) Health care providers. (1) Health care providers shall maintain 
for their purchases of services supported under this subpart 
documentation for five years from the end of the funding year sufficient 
to establish compliance with all rules in this subpart. Documentation 
must include, among other things, records of allocations for consortia 
and entities that engage in eligible and ineligible activities, if 
applicable. Mobile rural health care providers shall maintain annual 
logs indicating: The date and locations of each clinic stop; and the 
number of patients served at each such clinic stop.
    (2) Mobile rural health care providers shall maintain its annual 
logs for a period of five years. Mobile rural health care providers 
shall make its logs available to the Administrator and the Commission 
upon request.
    (b) Production of records. Health care providers shall produce such 
records at the request of any auditor appointed by the Administrator or 
any other state or federal agency with jurisdiction.
    (c) Random audits. Health care providers shall be subject to random 
compliance audits to ensure that requesters are complying with the 
certification requirements set forth in Sec. 54.615(c) and are 
otherwise eligible to receive universal service support and

[[Page 159]]

that rates charged comply with the statute and regulations.
    (d) Service providers. Service providers shall retain documents 
related to the delivery of discounted telecommunications and other 
supported services for at least 5 years after the last day of the 
delivery of discounted services. Any other document that demonstrates 
compliance with the statutory or regulatory requirements for the rural 
health care mechanism shall be retained as well.

[68 FR 74503, Dec. 24, 2003, as amended at 69 FR 12087, Mar. 15, 2004; 
70 FR 6373, Feb. 7, 2005; 71 FR 13281, Mar. 15, 2006; 72 FR 54218, Sept. 
24, 2007]

    Effective Date Note: At 70 FR 6373, Feb. 7, 2005, Sec. 54.619 was 
amended by revising paragraph (a). This section contains information 
collection and recordkeeping requirements and will not become effective 
until approval has been given by the Office of Management and Budget.



Sec. 54.621  Access to advanced telecommunications and information 
services.

    (a) Twenty-five percent of the monthly cost of eligible Internet 
access shall be eligible for universal support. Health care providers 
shall certify that the Internet access selected is the most cost-
effective method for their health care needs as defined in Sec. 
54.615(c)(7), and that purchase of the Internet access is reasonably 
related to the health care needs of the rural health care provider.
    (b) Each eligible health care provider that cannot obtain toll-free 
access to an Internet service provider shall be entitled to receive the 
lesser of the toll charges incurred for 30 hours of access per month to 
an Internet service provider or $180 per month in toll charge credits 
for toll charges imposed for connecting to an Internet service provider.
    (c) Health care providers located in States that are entirely rural 
shall be eligible to receive universal service support equal to 50 
percent of the monthly cost of advanced telecommunications and 
information services reasonably related to the health care needs of the 
facility.

[68 FR 74503, Dec. 24, 2003, as amended at 70 FR 6373, Feb. 7, 2005]

    Effective Date Notes: At 68 FR 74503, Dec. 24, 2003, as corrected at 
69 FR 3021, Jan. 22, 2004, Sec. 54.621 was revised, effective Jan. 23, 
2004. Paragraph (a) contains information collection and recordkeeping 
requirements and will not become effective until approval has been given 
by the Office of Management and Budget.



Sec. 54.623  Cap.

    (a) Amount of the annual cap. The annual cap on federal universal 
service support for health care providers shall be $400 million per 
funding year, with the following exceptions.
    (b) Funding year. A funding year for purposes of the health care 
providers cap shall be the period July 1 through June 30.
    (c) Requests. Funds shall be available as follows:
    (1) Generally, funds shall be available to eligible health care 
providers on a first-come-first-served basis, with requests accepted 
beginning on the first of January prior to each funding year.
    (2) [Reserved]
    (3) [Reserved]
    (4) The Administrator shall implement a filing period that treats 
all rural health care providers filing within the period as if their 
applications were simultaneously received.
    (d) Annual filing requirement. Health care providers shall file new 
funding requests for each funding year.
    (e) Long term contracts. If health care providers enter into long 
term contracts for eligible services, the Administrator shall only 
commit funds to cover the portion of such a long term contract scheduled 
to be delivered during the funding year for which universal service 
support is sought.
    (f) Pro-rata reductions. Administrator shall act in accordance with 
this paragraph when a filing period described in paragraph (c) of this 
section is in effect. When a filing period described in paragraph (c) of 
this section closes, Administrator shall calculate the total demand for 
support submitted by all applicants during the filing window. If the 
total demand exceeds the total support available for the funding year, 
Administrator shall take the following steps:
    (1) Administrator shall divide the total funds available for the 
funding

[[Page 160]]

year by the total amount of support requested to produce a pro-rata 
factor.
    (2) Administrator shall calculate the amount of support requested by 
each applicant that has filed during the filing window.
    (3) Administrator shall multiply the pro-rata factor by the total 
dollar amount requested by each applicant. Administrator shall then 
commit funds to each applicant consistent with this calculation.

[62 FR 32948, June 17, 1997, as amended at 62 FR 56120, Oct. 29, 1997; 
63 FR 2132, Jan. 13, 1998; 63 FR 3832, Jan. 27, 1998; 63 FR 43097, Aug. 
12, 1998; 63 FR 70572, Dec. 21, 1998; 64 FR 2594, Jan. 15, 1999; 64 FR 
30442, June 8, 1999; 70 FR 6373, Feb. 7, 2005; 71 FR 65750, Nov. 9, 
2006]



Sec. 54.625  Support for services beyond the maximum supported 
distance for rural health care providers.

    (a) The maximum support distance is the distance from the health 
care provider to the farthest point on the jurisdictional boundary of 
the city in that state with the largest population, as calculated by the 
Administrator.
    (b) An eligible rural health care provider may purchase an eligible 
telecommunications service, as defined in Sec. 54.601(c)(1) through 
(c)(2), that is provided over a distance that exceeds the maximum 
supported distance.
    (c) If an eligible rural health care provider purchases an eligible 
telecommunications service, as defined in Sec. 54.601(c)(1) through 
(c)(2), that exceeds the maximum supported distance, the health care 
provider must pay the applicable rural rate for the distance that such 
service is carried beyond the maximum supported distance.

[63 FR 2132, Jan. 13, 1998, as amended at 63 FR 70572, Dec. 21, 1998; 68 
FR 74504, Dec. 24, 2003]



                        Subpart H_Administration



Sec. 54.701  Administrator of universal service support mechanisms.

    (a) The Universal Service Administrative Company is appointed the 
permanent Administrator of the federal universal service support 
mechanisms, subject to a review after one year by the Federal 
Communications Commission to determine that the Administrator is 
administering the universal service support mechanisms in an efficient, 
effective, and competitively neutral manner.
    (b) The Administrator shall establish a nineteen (19) member Board 
of Directors, as set forth in Sec. 54.703. The Administrator's Board of 
Directors shall establish three Committees of the Board of Directors, as 
set forth in Sec. 54.705: (1) the Schools and Libraries Committee, 
which shall oversee the schools and libraries support mechanism; (2) the 
Rural Health Care Committee, which shall oversee the rural health care 
support mechanism; and (3) the High Cost and Low Income Committee, which 
shall oversee the high cost and low income support mechanism. The Board 
of Directors shall not modify substantially the power or authority of 
the Committees of the Board without prior approval from the Federal 
Communications Commission.
    (c)(1) The Administrator shall establish three divisions:
    (i) The Schools and Libraries Division, which shall perform duties 
and functions in connection with the schools and libraries support 
mechanism under the direction of the Schools and Libraries Committee of 
the Board, as set forth in Sec. 54.705(a);
    (ii) The Rural Health Care Division, which shall perform duties and 
functions in connection with the rural health care support mechanism 
under the direction of the Rural Health Care Committee of the Board, as 
set forth in Sec. 54.705(b); and
    (iii) The High Cost and Low Income Division, which shall perform 
duties and functions in connection with the high cost and low income 
support mechanism, the interstate access universal service support 
mechanism for price cap carriers described in subpart J of this part, 
and the interstate common line support mechanism for rate-of-return 
carriers described in subpart K of this part, under the direction of the 
High Cost and Low Income Committee of the Board, as set forth in Sec. 
54.705(c).
    (2) As directed by the Committees of the Board set forth in Sec. 
54.705, these divisions shall perform the duties and functions unique to 
their respective support mechanisms.

[[Page 161]]

    (d) The Administrator shall be managed by a Chief Executive Officer, 
as set forth in Sec. 54.704. The Chief Executive Officer shall serve on 
the Committees of the Board established in Sec. 54.705.

[63 FR 70572, Dec. 21, 1998, as amended at 65 FR 38689, June 21, 2000; 
65 FR 57739, Sept. 26, 2000; 66 FR 59727, Nov. 30, 2001; 68 FR 36943, 
June 20, 2003]



Sec. 54.702  Administrator's functions and responsibilities.

    (a) The Administrator, and the divisions therein, shall be 
responsible for administering the schools and libraries support 
mechanism, the rural health care support mechanism, the high cost 
support mechanism, the low income support mechanism, the interstate 
access universal service support mechanism described in subpart J of 
this part, and the interstate common line support mechanism described in 
subpart K of this part.
    (b ) The Administrator shall be responsible for billing 
contributors, collecting contributions to the universal service support 
mechanisms, and disbursing universal service support funds.
    (c) The Administrator may not make policy, interpret unclear 
provisions of the statute or rules, or interpret the intent of Congress. 
Where the Act or the Commission's rules are unclear, or do not address a 
particular situation, the Administrator shall seek guidance from the 
Commission.
    (d) The Administrator may advocate positions before the Commission 
and its staff only on administrative matters relating to the universal 
service support mechanisms.
    (e) The Administrator shall maintain books of account separate from 
those of the National Exchange Carrier Association, of which the 
Administrator is an independent subsidiary. The Administrator's books of 
account shall be maintained in accordance with generally accepted 
accounting principles. The Administrator may borrow start up funds from 
the National Exchange Carrier Association. Such funds may not be drawn 
from the Telecommunications Relay Services (TRS) fund or TRS 
administrative expense accounts.
    (f) The Administrator shall create and maintain a website, as 
defined in Sec. 54.5, on which applications for services will be posted 
on behalf of schools, libraries and rural health care providers.
    (g) The Administrator shall file with the Commission and Congress an 
annual report by March 31 of each year. The report shall detail the 
Administrator's operations, activities, and accomplishments for the 
prior year, including information about participation in each of the 
universal service support mechanisms and administrative action intended 
to prevent waste, fraud, and abuse. The report also shall include an 
assessment of subcontractors' performance, and an itemization of monthly 
administrative costs that shall include all expenses, receipts, and 
payments associated with the administration of the universal service 
support programs. The Administrator shall consult each year with 
Commission staff to determine the scope and content of the annual 
report.
    (h) The Administrator shall report quarterly to the Commission on 
the disbursement of universal service support program funds. The 
Administrator shall keep separate accounts for the amounts of money 
collected and disbursed for eligible schools and libraries, rural health 
care providers, low-income consumers, interstate access universal 
service support, interstate common line support, and high-cost and 
insular areas.
    (i) Information based on the Administrator's reports will be made 
public by the Commission at least once a year as part of a Monitoring 
Report.
    (j) The Administrator shall provide the Commission full access to 
the data collected pursuant to the administration of the universal 
service support programs.
    (k) Pursuant to Sec. 64.903 of this chapter, the Administrator 
shall file with the Commission a cost allocation manual (CAM) that 
describes the accounts and procedures the Administrator will use to 
allocate the shared costs of administering the universal service support 
mechanisms and its other operations.
    (l) The Administrator shall make available to whomever the 
Commission directs, free of charge, any and all intellectual property, 
including, but not

[[Page 162]]

limited to, all records and information generated by or resulting from 
its role in administering the support mechanisms, if its participation 
in administering the universal service support mechanisms ends.
    (m) If its participation in administering the universal service 
support mechanisms ends, the Administrator shall be subject to close-out 
audits at the end of its term.
    (n) The Administrator shall account for the financial transactions 
of the Universal Service Fund in accordance with generally accepted 
accounting principles for federal agencies and maintain the accounts of 
the Universal Service Fund in accordance with the United States 
Government Standard General Ledger. When the Administrator, or any 
independent auditor hired by the Administrator, conducts audits of the 
beneficiaries of the Universal Service Fund, contributors to the 
Universal Service Fund, or any other providers of services under the 
universal service support mechanisms, such audits shall be conducted in 
accordance with generally accepted government auditing standards. In 
administering the Universal Service Fund, the Administrator shall also 
comply with all relevant and applicable federal financial management and 
reporting statutes.
    (o) The Administrator shall provide performance measurements 
pertaining to the universal service support mechanisms as requested by 
the Commission by order or otherwise.

[63 FR 70573, Dec. 21, 1998, as amended at 65 FR 38690, June 21, 2000; 
65 FR 57739, Sept. 26, 2000; 66 FR 59727, Nov. 30, 2001; 67 FR 11259, 
Mar. 13, 2002; 69 FR 5719, Feb. 6, 2004; 72 FR 54218, Sept. 24, 2007]



Sec. 54.703  The Administrator's Board of Directors.

    (a) The Administrator shall have a Board of Directors separate from 
the Board of Directors of the National Exchange Carrier Association. The 
National Exchange Carrier Association's Board of Directors shall be 
prohibited from participating in the functions of the Administrator.
    (b) Board composition. The independent subsidiary's Board of 
Directors shall consist of nineteen (19) directors:
    (1) Three directors shall represent incumbent local exchange 
carriers, with one director representing the Bell Operating Companies 
and GTE, one director representing ILECs (other than the Bell Operating 
Companies) with annual operating revenues in excess of $40 million, and 
one director representing ILECs (other than the Bell Operating 
Companies) with annual operating revenues of $40 million or less;
    (2) Two directors shall represent interexchange carriers, with one 
director representing interexchange carriers with more than $3 billion 
in annual operating revenues and one director representing interexchange 
carriers with annual operating revenues of $3 billion or less;
    (3) One director shall represent commercial mobile radio service 
(CMRS) providers;
    (4) One director shall represent competitive local exchange 
carriers;
    (5) One director shall represent cable operators;
    (6) One director shall represent information service providers;
    (7) Three directors shall represent schools that are eligible to 
receive discounts pursuant to Sec. 54.501;
    (8) One director shall represent libraries that are eligible to 
receive discounts pursuant to Sec. 54.501;
    (9) Two directors shall represent rural health care providers that 
are eligible to receive supported services pursuant to Sec. 54.601;
    (10) One director shall represent low-income consumers;
    (11) One director shall represent state telecommunications 
regulators;
    (12) One director shall represent state consumer advocates; and
    (13) The Chief Executive Officer of the Administrator.
    (c) Selection process for board of directors. (1) Sixty (60) days 
prior to the expiration of a director's term, the industry or non-
industry group that is represented by such director on the 
Administrator's Board of Directors, as specified in paragraph (b) of 
this section, shall nominate by consensus a new director. The industry 
or non-industry group shall submit the name of its nominee for a seat on 
the Administrator's Board of Directors, along with relevant professional 
and biographical

[[Page 163]]

information about the nominee, to the Chairman of the Federal 
Communications Commission. Only members of the industry or non-industry 
group that a Board member will represent may submit a nomination for 
that position.
    (2) The name of an industry or non-industry group's nominee shall be 
filed with the Office of the Secretary of the Federal Communications 
Commission in accordance with part 1 of this chapter. The document 
nominating a candidate shall be captioned ``In the matter of: Nomination 
for Universal Service Administrator's Board of Directors'' and shall 
reference FCC Docket Nos. 97-21 and 96-45. Each nomination shall specify 
the position on the Board of Directors for which such nomination is 
submitted. Two copies of the document nominating a candidate shall be 
submitted to the Wireline Competition Bureau's Telecommunications Access 
Policy Division.
    (3) The Chairman of the Federal Communications Commission shall 
review the nominations submitted by industry and non-industry groups and 
select each director of the Administrator's Board of Directors, as each 
director's term expires pursuant to paragraph (d) of this section. If an 
industry or non-industry group does not reach consensus on a nominee or 
fails to submit a nomination for a position on the Administrator's Board 
of Directors, the Chairman of the Federal Communications Commission 
shall select an individual to represent such group on the 
Administrator's Board of Directors.
    (d) Board member terms. The directors of the Administrator's Board 
shall be appointed for three-year terms, except that the Chief Executive 
Officer shall be a permanent member of the Board. Board member terms 
shall run from January 1 of the first year of the term to December 31 of 
the third year of the term, except that, for purposes of the term 
beginning on January 1, 1999, the terms of the six directors shall 
expire on December 31, 2000, the terms of another six directors on 
December 31, 2001, and the terms of the remaining six directors on 
December 31, 2002. Directors may be reappointed for subsequent terms 
pursuant to the initial nomination and appointment process described in 
paragraph (c) of this section. If a Board member vacates his or her seat 
prior to the completion of his or her term, the Administrator will 
notify the Wireline Competition Bureau of such vacancy, and a successor 
will be chosen pursuant to the nomination and appointment process 
described in paragraph (c) of this section.
    (e) All meetings of the Administrator's Board of Directors shall be 
open to the public and held in Washington, D.C.
    (f) Each member of the Administrator's Board of Directors shall be 
entitled to receive reimbursement for expenses directly incurred as a 
result of his or her participation on the Administrator's Board of 
Directors.

[63 FR 70573, Dec. 21, 1998, as amended at 67 FR 13226, Mar. 21, 2002]

    Effective Date Note: At 63 FR 70573, Dec. 21, 1998, Sec. 54.703 was 
revised. Paragraph (c) contains modified information collection and 
recordkeeping requirements and will not become effective until approval 
has been given by the Office of Management and Budget.



Sec. 54.704  The Administrator's Chief Executive Officer.

    (a) Chief Executive Officer's functions. (1) The Chief Executive 
Officer shall have management responsibility for the administration of 
the federal universal service support mechanisms.
    (2) The Chief Executive Officer shall have management responsibility 
for all employees of the Universal Service Administrative Company. The 
Chief Executive Officer may delegate such responsibility to heads of the 
divisions established in Sec. 54.701(g).
    (3) The Chief Executive Officer shall serve on the Administrator's 
Board of Directors as set forth in Sec. 54.703(b) and on the Committees 
of the Board established under Sec. 54.705.
    (b) Selection process for the Chief Executive Officer. (1) The 
members of the Board of Directors of the Administrator shall nominate by 
consensus a Chief Executive Officer. The Board of Directors shall submit 
the name of its nominee for Chief Executive Officer, along with relevant 
professional and biographical information about the nominee, to the 
Chairman of the Federal Communications Commission.

[[Page 164]]

    (2) The Chairman of the Federal Communications Commission shall 
review the nomination submitted by the Administrator's Board of 
Directors. Subject to the Chairman's approval, the nominee shall be 
appointed as the Administrator's Chief Executive Officer.
    (3) If the Board of Directors does not reach consensus on a nominee 
or fails to submit a nomination for the Chief Executive Officer, the 
Chairman of the Federal Communications Commission shall select a Chief 
Executive Officer.

[63 FR 70574, Dec. 21, 1998]



Sec. 54.705  Committees of the Administrator's Board of Directors.

    (a) Schools and Libraries Committee--(1) Committee functions. The 
Schools and Libraries Committee shall oversee the administration of the 
schools and libraries support mechanism by the Schools and Libraries 
Division. The Schools and Libraries Committee shall have the authority 
to make decisions concerning:
    (i) How the Administrator projects demand for the schools and 
libraries support mechanism;
    (ii) Development of applications and associated instructions as 
needed for the schools and libraries support mechanism;
    (iii) Administration of the application process, including 
activities to ensure compliance with Federal Communications Commission 
rules and regulations;
    (iv) Performance of outreach and education functions;
    (v) Review of bills for services that are submitted by schools and 
libraries;
    (vi) Monitoring demand for the purpose of determining when the $2 
billion trigger has been reached;
    (vii) Implementation of the rules of priority in accordance with 
Sec. 54.507(g) of this chapter;
    (viii) Review and certification of technology plans when a state 
agency has indicated that it will not be able to review such plans 
within a reasonable time;
    (ix) The classification of schools and libraries as urban or rural 
and the use of the discount matrix established in Sec. 54.505(c) of 
this chapter to set the discount rate to be applied to services 
purchased by eligible schools and libraries;
    (x) Performance of audits of beneficiaries under the schools and 
libraries support mechanism; and
    (xi) Development and implementation of other functions unique to the 
schools and libraries support mechanism.
    (2) Committee composition. The Schools and Libraries Committee shall 
consist of the following members of the Administrator's Board of 
Directors:
    (i) Three school representatives;
    (ii) One library representative;
    (iii) One service provider representative;
    (iv) One at-large representative elected by the Administrator's 
Board of Directors; and
    (v) The Administrator's Chief Executive Officer.
    (b) Rural Health Care Committee--(1) Committee functions. The Rural 
Health Care Committee shall oversee the administration of the rural 
health care support mechanism by the Rural Health Care Division. The 
Rural Health Care Committee shall have authority to make decisions 
concerning:
    (i) How the Administrator projects demand for the rural health care 
support mechanism;
    (ii) Development of applications and associated instructions as 
needed for the rural health care support mechanism;
    (iii) Administration of the application process, including 
activities to ensure compliance with Federal Communications Commission 
rules and regulations;
    (iv) Calculation of support levels under Sec. 54.609;
    (v) Performance of outreach and education functions;
    (vi) Review of bills for services that are submitted by rural health 
care providers;
    (vii) Monitoring demand for the purpose of determining when the $400 
million cap has been reached;
    (viii) Performance of audits of beneficiaries under the rural health 
care support mechanism; and
    (ix) Development and implementation of other functions unique to the 
rural health care support mechanism.

[[Page 165]]

    (2) Committee composition. The Rural Health Care Committee shall 
consist of the following members of the Administrator's Board of 
Directors:
    (i) Two rural health care representatives;
    (ii) One service provider representative;
    (iii) Two at-large representatives elected by the Administrator's 
Board of Directors;
    (iv) One State telecommunications regulator, one state consumer 
advocate; and
    (v) The Administrator's Chief Executive Officer.
    (c) High Cost and Low Income Committee--(1) Committee functions. The 
High Cost and Low Income Committee shall oversee the administration of 
the high cost and low income support mechanisms, the interstate access 
universal service support mechanism for price cap carriers described in 
subpart J of this part, and the interstate common line support mechanism 
for rate-of-return carriers described in subpart K of this part by the 
High Cost and Low Income Division. The High Cost and Low Income 
Committee shall have the authority to make decisions concerning:
    (i) How the Administrator projects demand for the high cost, low 
income, interstate access universal service, and interstate common line 
support mechanisms;
    (ii) Development of applications and associated instructions as 
needed for the high cost, low income, interstate access universal 
service, and interstate common line support mechanisms;
    (iii) Administration of the application process, including 
activities to ensure compliance with Federal Communications Commission 
rules and regulations;
    (iv) Performance of audits of beneficiaries under the high cost, low 
income, interstate access universal service and interstate common line 
support mechanisms; and
    (v) Development and implementation of other functions unique to the 
high cost, low income, interstate access universal service and 
interstate common line support mechanisms.
    (d) Binding Authority of Committees of the Board. (1) Any action 
taken by the Committees of the Board established in paragraphs (a) 
through (c) of this section shall be binding on the Board of Directors 
of the Administrator, unless such action is presented for review to the 
Board by the Administrator's Chief Executive Officer and the Board 
disapproves of such action by a two-thirds vote of a quorum of 
directors, as defined in the Administrator's by-laws.
    (2) The budgets prepared by each Committee shall be subject to Board 
review as part of the Administrator's combined budget. The Board shall 
not modify the budgets prepared by the Committees of the Board unless 
such modification is approved by a two-thirds vote of a quorum of the 
Board, as defined in the Administrator's by-laws.

[63 FR 70574, Dec. 21, 1998, as amended at 65 FR 38690, June 21, 2000; 
65 FR 57739, Sept. 26, 2000; 66 FR 59728, Nov. 30, 2001]



Sec. 54.706  Contributions.

    (a) Entities that provide interstate telecommunications to the 
public, or to such classes of users as to be effectively available to 
the public, for a fee will be considered telecommunications carriers 
providing interstate telecommunications services and must contribute to 
the universal service support mechanisms. Certain other providers of 
interstate telecommunications, such as payphone providers that are 
aggregators, providers of interstate telecommunications for a fee on a 
non-common carrier basis, and interconnected VoIP providers, also must 
contribute to the universal service support mechanisms. Interstate 
telecommunications include, but are not limited to:
    (1) Cellular telephone and paging services;
    (2) Mobile radio services;
    (3) Operator services;
    (4) Personal communications services (PCS);
    (5) Access to interexchange service;
    (6) Special access service;
    (7) WATS;
    (8) Toll-free service;
    (9) 900 service;
    (10) Message telephone service (MTS);
    (11) Private line service;
    (12) Telex;
    (13) Telegraph;

[[Page 166]]

    (14) Video services;
    (15) Satellite service;
    (16) Resale of interstate services;
    (17) Payphone services; and
    (18) Interconnected VoIP services.
    (19) Prepaid calling card providers.
    (b) Except as provided in paragraph (c) of this section, every 
entity required to contribute to the federal universal service support 
mechanisms under paragraph (a) of this section shall contribute on the 
basis of its projected collected interstate and international end-user 
telecommunications revenues, net of projected contributions.
    (c) Any entity required to contribute to the federal universal 
service support mechanisms whose projected collected interstate end-user 
telecommunications revenues comprise less than 12 percent of its 
combined projected collected interstate and international end-user 
telecommunications revenues shall contribute based only on such entity's 
projected collected interstate end-user telecommunications revenues, net 
of projected contributions. For purposes of this paragraph, an 
``entity'' shall refer to the entity that is subject to the universal 
service reporting requirements in Sec. 54.711 and shall include all of 
that entity's affiliated providers of interstate and international 
telecommunications and telecommunications services.
    (d) Entities providing open video systems (OVS), cable leased 
access, or direct broadcast satellite (DBS) services are not required to 
contribute on the basis of revenues derived from those services. The 
following entities will not be required to contribute to universal 
service: non-profit health care providers; broadcasters; systems 
integrators that derive less than five percent of their systems 
integration revenues from the resale of telecommunications. Prepaid 
calling card providers are not required to contribute on the basis of 
revenues derived from prepaid calling cards sold by, to, or pursuant to 
contract with the Department of Defense (DoD) or a DoD entity.
    (e) Any entity required to contribute to the federal universal 
service support mechanisms shall retain, for at least five years from 
the date of the contribution, all records that may be required to 
demonstrate to auditors that the contributions made were in compliance 
with the Commission's universal service rules. These records shall 
include without limitation the following: Financial statements and 
supporting documentation; accounting records; historical customer 
records; general ledgers; and any other relevant documentation. This 
document retention requirement also applies to any contractor or 
consultant working on behalf of the contributor.

[63 FR 70575, Dec. 21, 1998, as amended at 64 FR 60358, Nov. 5, 1999; 67 
FR 11260, Mar. 13, 2002; 67 FR 79532, Dec. 30, 2002; 71 FR 38796, July 
10, 2006; 71 FR 43673, Aug. 2, 2006; 72 FR 54218, Sept. 24, 2007]

    Effective Date Note: At 71 FR 38796, July 10, 2006, Sec. 54.706 was 
amended by revising paragraphs (a) introductory text, (a)(16), (a)(17), 
by adding paragraph (a)(18), and by revising paragraphs (b) and (c). 
This text contains information collection and recordkeeping requirements 
and will not become effective until approval has been given by the 
Office of Management and Budget.



Sec. 54.707  Audit controls.

    The Administrator shall have authority to audit contributors and 
carriers reporting data to the administrator. The Administrator shall 
establish procedures to verify discounts, offsets, and support amounts 
provided by the universal service support programs, and may suspend or 
delay discounts, offsets, and support amounts provided to a carrier if 
the carrier fails to provide adequate verification of discounts, 
offsets, or support amounts provided upon reasonable request, or if 
directed by the Commission to do so. The Administrator shall not provide 
reimbursements, offsets or support amounts pursuant to part 36 and Sec. 
69.116 through 69.117 of this chapter, and subparts D, E, and G of this 
part to a carrier until the carrier has provided to the Administrator a 
true and correct copy of the decision of a state commission designating 
that carrier as an eligible telecommunications carrier in accordance 
with Sec. 54.201.



Sec. 54.708  De minimis exemption.

    If a contributor's contribution to universal service in any given 
year is less than $10,000 that contributor will

[[Page 167]]

not be required to submit a contribution or Telecommunications Reporting 
Worksheet for that year unless it is required to do so to by our rules 
governing Telecommunications Relay Service (47 CFR 64.601 et seq. of 
this chapter), numbering administration (47 CFR 52.1 et seq. of this 
chapter), or shared costs of local number portability (47 CFR 52.21 et 
seq. of this chapter). The foregoing notwithstanding, all interconnected 
VoIP providers, including those whose contributions would be de minimis, 
must file the Telecommunications Reporting Worksheet. If a contributor 
improperly claims exemption from the contribution requirement, it will 
subject to the criminal provisions of sections 220(d) and (e) of the Act 
regarding willful false submissions and will be required to pay the 
amounts withheld plus interest.

[64 FR 41331, July 30, 1999, as amended at 71 FR 38797, July 10, 2006]

    Effective Date Note: At 71 FR 38797, July 10, 2006, Sec. 54.708 was 
amended by adding a new sentence after the first sentence. This text 
contains information collection and recordkeeping requirements and will 
not become effective until approval has been given by the Office of 
Management and Budget.



Sec. 54.709  Computations of required contributions to universal
service support mechanisms.

    (a) Prior to April 1, 2003, contributions to the universal service 
support mechanisms shall be based on contributors' end-user 
telecommunications revenues and on a contribution factor determined 
quarterly by the Commission. Contributions to the mechanisms beginning 
April 1, 2003 shall be based on contributors' projected collected end-
user telecommunications revenues, and on a contribution factor 
determined quarterly by the Commission.
    (1) For funding the federal universal service support mechanisms 
prior to April 1, 2003, the subject revenues will be contributors' 
interstate and international revenues derived from domestic end users 
for telecommunications or telecommunications services, net of prior 
period actual contributions. Beginning April 1, 2003, the subject 
revenues will be contributors' projected collected interstate and 
international revenues derived from domestic end users for 
telecommunications or telecommunications services, net of projected 
contributions.
    (2) Prior to April 1, 2003, the quarterly universal service 
contribution factor shall be determined by the Commission based on the 
ratio of total projected quarterly expenses of the universal service 
support mechanisms to the total end-user interstate and international 
telecommunications revenues, net of prior period actual contributions. 
Beginning April 1, 2003, the quarterly universal service contribution 
factor shall be determined by the Commission based on the ratio of total 
projected quarterly expenses of the universal service support mechanisms 
to the total projected collected end-user interstate and international 
telecommunications revenues, net of projected contributions. The 
Commission shall approve the Administrator's quarterly projected costs 
of the universal service support mechanisms, taking into account demand 
for support and administrative expenses. The total subject revenues 
shall be compiled by the Administrator based on information contained in 
the Telecommunications Reporting Worksheets described in Sec. 
54.711(a).
    (3) Total projected expenses for the federal universal service 
support mechanisms for each quarter must be approved by the Commission 
before they are used to calculate the quarterly contribution factor and 
individual contributions. For each quarter, the Administrator must 
submit its projections of demand for the federal universal service 
support mechanisms for high-cost areas, low-income consumers, schools 
and libraries, and rural health care providers, respectively, and the 
basis for those projections, to the Commission and the Office of the 
Managing Director at least sixty (60) calendar days prior to the start 
of that quarter. For each quarter, the Administrator must submit its 
projections of administrative expenses for the high-cost mechanism, the 
low-income mechanism, the schools and libraries mechanism and the rural 
health care mechanism and the basis for those projections to the 
Commission and the Office of the Managing Director at least sixty (60) 
calendar days prior to the start of

[[Page 168]]

that quarter. Based on data submitted to the Administrator on the 
Telecommunications Reporting Worksheets, the Administrator must submit 
the total contribution base to the Office of the Managing Director at 
least thirty (30) days before the start of each quarter. The projections 
of demand and administrative expenses and the contribution factor shall 
be announced by the Commission in a public notice and shall be made 
available on the Commission's website. The Commission reserves the right 
to set projections of demand and administrative expenses at amounts that 
the Commission determines will serve the public interest at any time 
within the fourteen-day period following release of the Commission's 
public notice. If the Commission take no action within fourteen (14) 
days of the date of release of the public notice announcing the 
projections of demand and administrative expenses, the projections of 
demand and administrative expenses, and the contribution factor shall be 
deemed approved by the Commission. Except as provided in Sec. 
54.706(c), the Administrator shall apply the quarterly contribution 
factor, once approved by the Commission, to contributor's interstate and 
international end-user telecommunications revenues to calculate the 
amount of individual contributions.
    (b) If the contributions received by the Administrator in a quarter 
exceed the amount of universal service support program contributions and 
administrative costs for that quarter, the excess payments will be 
carried forward to the following quarter. The contribution factors for 
the following quarter will take into consideration the projected costs 
of the support mechanisms for that quarter and the excess contributions 
carried over from the previous quarter.
    (c) If the contributions received by the Administrator in a quarter 
are inadequate to meet the amount of universal service support program 
payments and administrative costs for that quarter, the Administrator 
shall request authority from the Commission to borrow funds 
commercially, with such debt secured by future contributions. Subsequent 
contribution factors will take into consideration the projected costs of 
the support mechanisms and the additional costs associated with 
borrowing funds.
    (d) If a contributor fails to file a Telecommunications Reporting 
Worksheet by the date on which it is due, the Administrator shall bill 
that contributor based on whatever relevant data the Administrator has 
available, including, but not limited to, the number of lines 
presubscribed to the contributor and data from previous years, taking 
into consideration any estimated changes in such data.

[62 FR 41305, Aug. 1, 1997, as amended at 62 FR 65038, Dec. 10, 1997; 63 
FR 2132, Jan. 13, 1998; 63 FR 43098, Aug. 12, 1998; 63 FR 70576, Dec. 
21, 1998; 64 FR 41331, July 30, 1999; 64 FR 60358, Nov. 5, 1999; 66 FR 
16151, Mar. 23, 2001; 67 FR 11260, Mar. 13, 2002; 67 FR 13227, Mar. 21, 
2002; 67 FR 79533, Dec. 30, 2002; 68 FR 38642, June 30, 2003; 71 FR 
38267, July 6, 2006]



Sec. 54.711  Contributor reporting requirements.

    (a) Contributions shall be calculated and filed in accordance with 
the Telecommunications Reporting Worksheet which shall be published in 
the Federal Register. The Telecommunications Reporting Worksheet sets 
forth information that the contributor must submit to the Administrator 
on a quarterly and annual basis. The Commission shall announce by Public 
Notice published in the Federal Register and on its website the manner 
of payment and dates by which payments must be made. An executive 
officer of the contributor must certify to the truth and accuracy of 
historical data included in the Telecommunications Reporting Worksheet, 
and that any projections in the Telecommunications Reporting Worksheet 
represent a good-faith estimate based on the contributor's policies and 
procedures. The Commission or the Administrator may verify any 
information contained in the Telecommunications Reporting Worksheet. 
Contributors shall maintain records and documentation to justify 
information reported in the Telecommunications Reporting Worksheet, 
including the methodology used to determine projections, for three years 
and shall provide such records and documentation to the Commission or 
the

[[Page 169]]

Administrator upon request. Inaccurate or untruthful information 
contained in the Telecommunications Reporting Worksheet may lead to 
prosecution under the criminal provisions of Title 18 of the United 
States Code. The Administrator shall advise the Commission of any 
enforcement issues that arise and provide any suggested response.
    (b) The Commission shall have access to all data reported to the 
Administrator. Contributors may make requests for Commission 
nondisclosure of company-specific revenue information under Sec. 0.459 
of this chapter by so indicating on the Telecommunications Reporting 
Worksheet at the time that the subject data are submitted. The 
Commission shall make all decisions regarding nondisclosure of company-
specific information. The Administrator shall keep confidential all data 
obtained from contributors, shall not use such data except for purposes 
of administering the universal service support programs, and shall not 
disclose such data in company-specific form unless directed to do so by 
the Commission. Subject to any restrictions imposed by the Chief of the 
Wireline Competition Bureau, the Universal Service Administrator may 
share data obtained from contributors with the administrators of the 
North American Numbering Plan administration cost recovery (See 47 CFR 
52.16 of this chapter), the local number portability cost recovery (See 
47 CFR 52.32 of this chapter), and the TRS Fund (See 47 CFR 
64.604(c)(4)(iii)(H) of this chapter). The Administrator shall keep 
confidential all data obtained from other administrators and shall not 
use such data except for purposes of administering the universal service 
support mechanisms.
    (c) The Bureau may waive, reduce, modify, or eliminate contributor 
reporting requirements that prove unnecessary and require additional 
reporting requirements that the Bureau deems necessary to the sound and 
efficient administration of the universal service support mechanisms.

[64 FR 41332, July 30, 1999, as amended at 66 FR 16151, Mar. 23, 2001; 
67 FR 13227, Mar. 21, 2002; 67 FR 79533, Dec. 30, 2002]



Sec. 54.712  Contributor recovery of universal service costs from
end users.

    (a) Federal universal service contribution costs may be recovered 
through interstate telecommunications-related charges to end users. If a 
contributor chooses to recover its federal universal service 
contribution costs through a line item on a customer's bill the amount 
of the federal universal service line-item charge may not exceed the 
interstate telecommunications portion of that customer's bill times the 
relevant contribution factor.
    (b) [Reserved]

[67 FR 79533, Dec. 30, 2002, as amended at 68 FR 15672, Apr. 1, 2003; 71 
FR 38797, July 10, 2006]

    Effective Date Note: At 71 FR 38797, July 10, 2006, Sec. 54.712 was 
amended by revising the section heading and paragraph (a). This text 
contains information collection and recordkeeping requirements and will 
not become effective until approval has been given by the Office of 
Management and Budget.



Sec. 54.713  Contributors' failure to report or to contribute.

    (a) A contributor that fails to file a Telecommunications Reporting 
Worksheet and subsequently is billed by the Administrator shall pay the 
amount for which it is billed. The Administrator may bill a contributor 
a separate assessment for reasonable costs incurred because of that 
contributor's filing of an untruthful or inaccurate Telecommunications 
Reporting Worksheet, failure to file the Telecommunications Reporting 
Worksheet, or late payment of contributions. Failure to file the 
Telecommunications Reporting Worksheet or to submit required quarterly 
contributions may subject the contributor to the enforcement provisions 
of the Act and any other applicable law. The Administrator shall advise 
the Commission of any enforcement issues that arise and provide any 
suggested response. Once a contributor complies with the 
Telecommunications Reporting Worksheet filing requirements, the 
Administrator may refund any overpayments made by the contributor, less 
any fees, interest, or costs.
    (b) If a universal service fund contributor fails to make full 
payment on or before the date due of the monthly

[[Page 170]]

amount established by the contributor's applicable Form 499-A or Form 
499-Q, or the monthly invoice provided by the Administrator, the payment 
is delinquent. All such delinquent amounts shall incur from the date of 
delinquency, and until all charges and costs are paid in full, interest 
at the rate equal to the U.S. prime rate (in effect on the date of the 
delinquency) plus 3.5 percent, as well as administrative charges of 
collection and/or penalties and charges permitted by the applicable law 
(e.g., 31 U.S.C. 3717 and implementing regulations).
    (c) If a universal service fund contributor is more than 30 days 
delinquent in filing a Telecommunications Reporting Worksheet Form 499-A 
or 499-Q, the Administrator shall assess an administrative remedial 
collection charge equal to the greater of $100 or an amount computed 
using the rate of the U.S. prime rate (in effect on the date the 
applicable Worksheet is due) plus 3.5 percent, of the amount due per the 
Administrator's calculations. In addition, the contributor is 
responsible for administrative charges of collection and/or penalties 
and charges permitted by the applicable law (e.g., 31 U.S.C. 3717 and 
implementing regulations). The Commission may also pursue enforcement 
action against delinquent contributors and late filers, and assess costs 
for collection activities in addition to those imposed by the 
Administrator.
    (d) In the event a contributor fails both to file the Worksheet and 
to pay its contribution, interest will accrue on the greater of the 
amounts due, beginning with the earlier of the date of the failure to 
file or pay.
    (e) If a universal service fund contributor pays the Administrator a 
sum that is less than the amount due for the contributor's universal 
service contribution, the Administrator shall adhere to the ``American 
Rule'' whereby payment is applied first to outstanding penalty and 
administrative cost charges, next to accrued interest, and third to 
outstanding principal. In applying the payment to outstanding principal, 
the Administrator shall apply such payment to the contributor's oldest 
past due amounts first.

[72 FR 54219, Sept. 24, 2007]



Sec. 54.715  Administrative expenses of the Administrator.

    (a) The annual administrative expenses of the Administrator should 
be commensurate with the administrative expenses of programs of similar 
size, with the exception of the salary levels for officers and employees 
of the Administrator described in paragraph (b) of this section. The 
annual administrative expenses may include, but are not limited to, 
salaries of officers and operations personnel, the costs of borrowing 
funds, equipment costs, operating expenses, directors' expenses, and 
costs associated with auditing contributors of support recipients.
    (b) All officers and employees of the Administrator may be 
compensated at an annual rate of pay, including any non-regular 
payments, bonuses, or other compensation, in an amount not to exceed the 
rate of basic pay in effect for Level I of the Executive Schedule under 
5 U.S.C. 5312.

    Note to paragraph (b): The compensation to be included when 
calculating whether an employee's rate of pay exceeds Level I of the 
Executive Schedule does not include life insurance benefits, retirement 
benefits (including payments to 401(k) plans), health insurance 
benefits, or other similar benefits, provided that any such benefits are 
reasonably comparable to benefits that are provided to employees of the 
federal government.

    (c) The Administrator shall submit to the Commission projected 
quarterly budgets at least sixty (60) days prior to the start of every 
quarter. The Commission must approve the projected quarterly budgets 
before the Administrator disburses funds under the federal universal 
service support mechanisms. The administrative expenses incurred by the 
Administrator in connection with the schools and libraries support 
mechanism, the rural health care support mechanism, the high cost 
support mechanism, the low income support mechanism, the interstate 
access universal service support mechanism, and the interstate common 
line support mechanism shall be deducted from the annual funding of each 
respective support mechanism. The expenses deducted from the annual 
funding for each support mechanism also shall include the 
Administrator's joint and

[[Page 171]]

common costs allocated to each support mechanism pursuant to the cost 
allocation manual filed by the Administrator under Sec. 64.903 of this 
chapter.

[63 FR 70576, Dec. 21, 1998, as amended at 65 FR 38690, June 21, 2000; 
65 FR 57739, Sept. 26, 2000; 66 FR 59728, Nov. 30, 2001; 69 FR 5719, 
Feb. 6, 2004]



Sec. 54.717  Audits of the Administrator.

    The Administrator shall obtain and pay for an annual audit conducted 
by an independent auditor to examine its operations and books of account 
to determine, among other things, whether the Administrator is properly 
administering the universal service support mechanisms to prevent fraud, 
waste, and abuse:
    (a) Before selecting an independent auditor, the Administrator shall 
submit preliminary audit requirements, including the proposed scope of 
the audit and the extent of compliance and substantive testing, to the 
Office of Inspector General.
    (b) The Office of Inspector General shall review the preliminary 
audit requirements to determine whether they are adequate to meet the 
audit objectives. The Office of Inspector General shall prescribe 
modifications that shall be incorporated into the final audit 
requirements.
    (c) After the audit requirements have been approved by the Office of 
Inspector General, the Administrator shall engage within thirty (30) 
calendar days an independent auditor to conduct the annual audit 
required by this paragraph. In making its selection, the Administrator 
shall not engage any independent auditor who has been involved in 
designing any of the accounting or reporting systems under review in the 
audit.
    (d) The independent auditor selected by the Administrator to conduct 
the annual audit shall be instructed by the Administrator to develop a 
detailed audit program based on the final audit requirements and shall 
be instructed by the Administrator to submit the audit program to the 
Office of Inspector General. The Office of Inspector General shall 
review the audit program and make modifications, as needed, that shall 
be incorporated into the final audit program. During the course of the 
audit, the Office of Inspector General may direct the Administrator to 
direct the independent auditor to take any actions necessary to ensure 
compliance with the audit requirements.
    (e) During the course of the audit, the Administrator shall instruct 
the independent auditor to:
    (1) Inform the Office of Inspector General of any revisions to the 
final audit program or to the scope of the audit;
    (2) Notify the Office of Inspector General of any meetings with the 
Administrator in which audit findings are discussed; and
    (3) Submit to the Chief of the Wireline Competition Bureau any 
accounting or rule interpretations necessary to complete the audit.
    (f) Within 105 calendar days after the end of the audit period, but 
prior to discussing the audit findings with the Administrator, the 
independent auditor shall be instructed by the Administrator to submit a 
draft of the audit report to the Office of Inspector General Audit 
Staff.
    (g) The Office of Inspector General shall review the audit findings 
and audit workpapers and offer its recommendations concerning the 
conduct of the audit or the audit findings to the independent auditor. 
Exceptions of the Office of Inspector General to the findings and 
conclusions of the independent auditor that remain unresolved shall be 
included in the final audit report.
    (h) Within fifteen (15) calendar days after receiving the Office of 
Inspector General's recommendations and making any revisions to the 
audit report, the Administrator shall instruct the independent auditor 
to submit the audit report to the Administrator for its response to the 
audit findings. At this time the auditor also must send copies of its 
audit findings to the Office of Inspector General. The Administrator 
shall provide the independent auditor time to perform additional audit 
work recommended by the Office of Inspector General.
    (i) Within thirty (30) calendar days after receiving the audit 
report, the Administrator shall respond to the

[[Page 172]]

audit findings and send copies of its response to the Office of 
Inspector General. The Administrator shall instruct the independent 
auditor that any reply that the independent auditor wishes to make to 
the Administrator's responses shall be sent to the Office of Inspector 
General as well as the Administrator. The Administrator's response and 
the independent auditor's replies shall be included in the final audit 
report;
    (j) Within ten (10) calendar days after receiving the response of 
the Administrator, the independent auditor shall file with the 
Commission the final audit report.
    (k) Based on the final audit report, the Inspector General may take 
any action necessary to ensure that the universal service support 
mechanisms operate in a manner consistent with the requirements of this 
Part, as well as such other action as is deemed necessary and in the 
public interest.

[67 FR 13227, Mar. 21, 2002, as amended at 68 FR 18907, Apr. 17, 2003; 
71 FR 38267, July 6, 2006]



        Subpart I_Review of Decisions Issued by the Administrator



Sec. 54.719  Parties permitted to seek review of 
Administrator decisions.

    (a) Any person aggrieved by an action taken by a division of the 
Administrator, as defined in Sec. 54.701(g), may seek review from the 
appropriate Committee of the Board, as defined in Sec. 54.705.
    (b) Any person aggrieved by an action taken by the Administrator 
pertaining to a billing, collection or disbursement matter that falls 
outside the jurisdiction of the Committees of the Board may seek review 
from the Board of Directors of the Administrator, as defined in Sec. 
54.703.
    (c) Any person aggrieved by an action taken by a division of the 
Administrator, as defined in Sec. 54.701(g), a Committee of the Board 
of the Administrator, as defined in Sec. 54.705, or the Board of 
Directors of the Administrator, as defined in Sec. 54.703, may seek 
review from the Federal Communications Commission, as set forth in Sec. 
54.722.

[63 FR 70577, Dec. 21, 1998]



Sec. 54.720  Filing deadlines.

    (a) An affected party requesting review of an Administrator decision 
by the Commission pursuant to Sec. 54.719(c), shall file such a request 
within sixty (60) days of the issuance of the decision by a division or 
Committee of the Board of the Administrator.
    (b) An affected party requesting review of a division decision by a 
Committee of the Board pursuant to Sec. 54.719(a), shall file such 
request within sixty (60) days of issuance of the decision by the 
division.
    (c) An affected party requesting review by the Board of Directors 
pursuant to Sec. 54.719(b) regarding a billing, collection, or 
disbursement matter that falls outside the jurisdiction of the 
Committees of the Board shall file such request within sixty (60) days 
of issuance of the Administrator's decision.
    (d) The filing of a request for review with a Committee of the Board 
under Sec. 54.719(a) or with the full Board under Sec. 54.719(b), 
shall toll the time period for seeking review from the Federal 
Communications Commission. Where the time for filing an appeal has been 
tolled, the party that filed the request for review from a Committee of 
the Board or the full Board shall have sixty (60) days from the date the 
Committee or the Board issues a decision to file an appeal with the 
Commission.
    (e) In all cases of requests for review filed under Sec. 54.719, 
the request for review shall be deemed filed on the postmark date. If 
the postmark date cannot be determined, the applicant must file a sworn 
affidavit stating the date that the request for review was mailed.
    (f) Parties shall adhere to the time periods for filing oppositions 
and replies set forth in 47 CFR 1.45.

[63 FR 70577, Dec. 21, 1998, as amended at 68 FR 36943, June 20, 2003]



Sec. 54.721  General filing requirements.

    (a) Except as otherwise provided herein, a request for review of an 
Administrator decision by the Federal Communications Commission shall be 
filed with the Federal Communications Commission's Office of the 
Secretary

[[Page 173]]

in accordance with the general requirements set forth in part 1 of this 
chapter. The request for review shall be captioned ``In the matter of 
Request for Review by (name of party seeking review) of Decision of 
Universal Service Administrator'' and shall reference the applicable 
docket numbers.
    (b) A request for review pursuant to Sec. 54.719(a) through (c) 
shall contain:
    (1) A statement setting forth the party's interest in the matter 
presented for review;
    (2) A full statement of relevant, material facts with supporting 
affidavits and documentation;
    (3) The question presented for review, with reference, where 
appropriate, to the relevant Federal Communications Commission rule, 
Commission order, or statutory provision;
    (4) A statement of the relief sought and the relevant statutory or 
regulatory provision pursuant to which such relief is sought.
    (c) A copy of a request for review that is submitted to the Federal 
Communications Commission shall be served on the Administrator 
consistent with the requirement for service of documents set forth in 
Sec. 1.47 of this chapter.
    (d) If a request for review filed pursuant to Sec. 54.720(a) 
through (c) alleges prohibitive conduct on the part of a third party, 
such request for review shall be served on the third party consistent 
with the requirement for service of documents set forth in Sec. 1.47 of 
this chapter. The third party may file a response to the request for 
review. Any response filed by the third party shall adhere to the time 
period for filing replies set forth in Sec. 1.45 of this chapter and 
the requirement for service of documents set forth in Sec. 1.47 of this 
chapter.

[63 FR 70578, Dec. 21, 1998, as amended at 68 FR 36944, June 20, 2003]



Sec. 54.722  Review by the Wireline Competition Bureau
or the Commission.

    (a) Requests for review of Administrator decisions that are 
submitted to the Federal Communications Commission shall be considered 
and acted upon by the Wireline Competition Bureau; provided, however, 
that requests for review that raise novel questions of fact, law or 
policy shall be considered by the full Commission.
    (b) An affected party may seek review of a decision issued under 
delegated authority by the Common Carrier Bureau pursuant to the rules 
set forth in part 1 of this chapter.

[63 FR 70578, Dec. 21, 1998, as amended at 67 FR 13228, Mar. 21, 2002]



Sec. 54.723  Standard of review.

    (a) The Wireline Competition Bureau shall conduct de novo review of 
request for review of decisions issue by the Administrator.
    (b) The Federal Communications Commission shall conduct de novo 
review of requests for review of decisions by the Administrator that 
involve novel questions of fact, law, or policy; provided, however, that 
the Commission shall not conduct de novo review of decisions issued by 
the Wireline Competition Bureau under delegated authority.

[67 FR 13228, Mar. 21, 2002]



Sec. 54.724  Time periods for Commission approval of Administrator
decisions.

    (a) The Wireline Competition Bureau shall, within ninety (90) days, 
take action in response to a request for review of an Administrator 
decision that is properly before it. The Wireline Competition Bureau may 
extend the time period for taking action on a request for review of an 
Administrator decision for a period of up to ninety days. The Commission 
may also at any time, extend the time period for taking action of a 
request for review of an Administrator decision pending before the 
Wireline Competition Bureau.
    (b) The Commission shall issue a written decision in response to a 
request for review of an Administrator decision that involves novel 
questions of fact, law, or policy within ninety (90) days. The 
Commission may extend the time period for taking action on the request 
for review of an Administrator decision. The Wireline Competition Bureau 
also may extend action on a request for review of an Administrator 
decision for a period of up to ninety days.

[67 FR 13228, Mar. 21, 2002]

[[Page 174]]



Sec. 54.725  Universal service disbursements during pendency of a 
request for review and Administrator decision.

    (a) When a party has sought review of an Administrator decision 
under Sec. 54.719(a) through (c) in connection with the schools and 
libraries support mechanism or the rural health care support mechanism, 
the Administrator shall not reimburse a service provider for the 
provision of discounted services until a final decision has been issued 
either by the Administrator or by the Federal Communications Commission; 
provided, however, that the Administrator may disburse funds for any 
amount of support that is not the subject of an appeal.
    (b) When a party has sought review of an Administrator decision 
under Sec. 54.719(a) through (c) in connection with the high cost and 
low income support mechanisms, the Administrator shall not disburse 
support to a service provider until a final decision has been issued 
either by the Administrator or by the Federal Communications Commission; 
provided, however, that the Administrator may disburse funds for any 
amount of support that is not the subject of an appeal.



     Subpart J_Interstate Access Universal Service Support Mechanism



Sec. 54.800  Terms and definitions.

    (a) Average Price Cap CMT Revenue Per Line Month in a Study Area has 
the same meaning as that term is defined in Sec. 61.3(d) of this 
chapter, except that it includes exogenous changes in effect prior to 
the effective date of a calculation made pursuant to Sec. 54.808 and 
exogenous changes not yet effective related to the sale or acquisition 
of exchanges, but excludes any other exogenous changes or other changes 
made pursuant to Sec. 61.45(i)(4) of this chapter that are not yet 
effective.
    (b) Base Period Lines. For purposes of calculations pursuant to this 
subpart, Base Period Lines are the number of lines for a given study 
area or zone as of the end of the quarter ending 6 months prior to the 
effective date of a calculation pursuant to Sec. 54.808.
    (c) Interstate Access Universal Service Support Benchmark shall 
mean, for residential and single-line business lines, $7.00, and for 
multi-line business lines, $9.20.
    (d) Minimum Adjustment Amount (MAA) is defined in Sec. 54.806(f).
    (e) MAA Phase In Percentage is:
    50% as of July 1, 2000,
    75% as of July 1, 2001,
    100% as of July 1, 2002.
    (f) Minimum Delta (MD) is defined in Sec. 54.806(d).
    (g) Minimum Support Requirement (MSR) is defined in Sec. 54.806(g).
    (h) Nationwide Total Above Benchmark Revenues is defined in Sec. 
54.806(b).
    (i) Price Cap Local Exchange Carrier is defined in Sec. 61.3(aa) of 
this chapter.
    (j) Preliminary Minimum Access Universal Service Support for a Study 
Area is the amount calculated pursuant to Sec. 54.804.
    (k) Preliminary Study Area Universal Service Support (PSAUSS) is 
defined in Sec. 54.806(c).
    (l) Study Area Above Benchmark Revenues is the sum of all Zone Above 
Benchmark Revenues for all zones in the study area.
    (m) Study Area Access Universal Service Support (SAAUS) is defined 
in Sec. 54.806 (i) and (j).
    (n) Total National Minimum Delta (TNMD) is the nationwide sum of all 
study area Minimum Deltas.
    (o) Total National Minimum Support Requirement (TNMSR) is the sum of 
the MSR for all price cap local exchange carrier area study areas.
    (p) Zone Above Benchmark Revenues is defined in Sec. 54.805(a)(2).
    (q) Zone Average Revenue per Line. The amount calculated as follows:

Zone Average Revenue Per Line = (25% * (Loop + Port)) + U (Uniform 
    revenue per line adjustment)

Where:

Loop = the price for unbundled loops in a UNE zone.
Port = the price for switch ports in that UNE zone.
U = [(Average Price Cap CMT Revenue per Line month in a study area * 
price cap local exchange carrier Base Period Lines) - (25% * [Sigma] 
(price cap local exchange carrier Base Period Lines in a UNE Zone* 
((Loop + Port ) for all zones)))] + price cap

[[Page 175]]

local exchange carrier Base Period Lines in a study area.

[65 FR 38690, June 21, 2000; 65 FR 57739, Sept. 26, 2000]



Sec. 54.801  General.

    (a) The total amount of universal service support under this 
subpart, excluding administrative expenses, for areas served by price 
cap local exchange carriers as of June 30, 2000, is targeted to be $650 
million per year, if no exchanges, other than those offered for sale 
prior to January 1, 2000, are sold to non-price-cap local exchange 
carriers or purchased from non-price cap local exchange carriers by 
price cap local exchange carriers.
    (b) In the event that all or a portion of a study area served by a 
price cap local exchange carrier is sold to an entity other than a price 
cap local exchange carrier, and the study area or portion thereof was 
not offered for sale prior to January 1, 2000, then the support that 
would otherwise be provided under this subpart, had such study area or 
portion thereof not been sold, will not be distributed or collected. 
Subsequent calculations will use the last reported data for the study 
area or portion thereof that was sold to determine the amount that will 
not be distributed or collected.
    (c) In the event that a price cap local exchange carrier acquires 
additional exchanges, from an entity other than a price cap local 
exchange carrier, that acquisition should be reported to the 
Administrator pursuant to Sec. 54.802 and included in the determination 
of study area support pursuant to Sec. 54.806 for the areas served by 
the acquiring price cap LEC, beginning with the next support 
recalculation pursuant to Sec. 54.808.
    (d) In the event that a price cap local exchange carrier acquires 
additional exchanges from an entity that is also a price cap local 
exchange carrier, the acquiring price cap local exchange carrier will 
receive support under this subpart at the same level as the selling 
price cap local exchange carrier formerly received, and both carriers 
will adjust their line counts accordingly beginning with the next 
quarterly report to the Administrator. At the subsequent report to the 
Administrator for purposes of recalculating support as required by Sec. 
54.808, the acquiring and selling price cap local exchange carriers will 
reflect the acquired and sold lines, and will adjust the Average CMT 
Revenue per Line month for the affected study areas accordingly.
    (e) The Administrator for the fund created by this subpart shall be 
the Universal Service Administrative Company.

[65 FR 38690, June 21, 2000; 65 FR 57739, Sept. 26, 2000]



Sec. 54.802  Obligations of local exchange carriers and the 
Administrator.

    (a) Each Eligible Telecommunications Carrier that is providing 
service within an area served by a price cap local exchange carrier 
shall submit to the Administrator, on a quarterly basis on the last 
business day of March, June, September, and December of each year line 
count data showing the number of lines it serves for the period ending 
three months prior to the reporting date, within each price cap local 
exchange carrier study area disaggregated by UNE Zone if UNE Zones have 
been established within that study area, showing residential/single-line 
business and multi-line business line counts separately. For purposes of 
this report, and for purposes of computing support under this subpart, 
the aggregated residential/single-line business class lines reported 
include single and non-primary residential lines, single-line business 
lines, ISDN BRI and other related residential class lines. Similarly, 
the multi-line business class lines reported include multi-line 
business, centrex, ISDN PRI and other related business class lines 
assessed the End User Common Line charge pursuant to Sec. 69.152 of 
this chapter. For purposes of this report and for purposes of computing 
support under this subpart, lines served using resale of the price cap 
local exchange carrier's service pursuant to section 251(c)(4) of the 
Communications Act of 1934, as amended, shall be considered lines served 
by the price cap local exchange carrier only and must be reported 
accordingly.
    (b) In addition to the information submitted pursuant to paragraph 
(a) of

[[Page 176]]

this section, each price cap local exchange carrier must submit to the 
Administrator, on June 30, 2000, October 15, 2000, and April 16, 2001 
and annually thereafter or as determined by the Administrator according 
to Sec. 54.808:
    (1)(i) Average Price Cap CMT Revenue per Line month in a study area 
for each of its study areas;
    (ii) The rates established for UNE Loops and UNE Line Ports, by zone 
in those study areas where UNE Zones have been established as of the 
date of filing; and
    (iii) Make available information sufficient to determine the 
boundaries of each UNE Zone within each of its study areas where such 
zones have been established;
    (2) Provided, however, that after the June 30, 2000 filing, if there 
have been no changes since its previous filing a company may submit a 
statement that there have been no changes in lieu of such information, 
and further provided that, for study areas in which UNE Zones have been 
newly established since the last filing pursuant to this paragraph, the 
price cap local exchange carrier shall also report the information 
required by paragraphs (b)(1)(ii) and (b)(1)(iii) of this section to the 
Administrator on July 15, 2000, or January 15, 2001, as required.
    (c) An eligible telecommunications carrier shall be eligible for 
support pursuant to this subpart only after it has filed all of the 
information required by paragraphs (a) through (c) of this section, 
where applicable. An eligible telecommunications carrier shall receive 
payment of support pursuant to this subpart only for such months the 
carrier is actually providing service to the end user. The Administrator 
shall ensure that there is periodic reconciliation of support payments.
    (d) Upon receiving the information required to be filed in 
paragraphs (a) and (b) of this section, the Administrator shall:
    (1) Perform the calculations described in Sec. Sec. 54.804 through 
54.807 of this subpart;
    (2) Publish the results of these calculations showing Interstate 
Access Universal Service Support Per Line available in each price cap 
local exchange carrier study area, by UNE Zone and customer class;
    (3) Collect the funds necessary to provide support pursuant to this 
subpart in accordance with subpart H;
    (4) Distribute support calculated pursuant to the rules contained in 
this subpart; and
    (5) Report quarterly to the Commission on the collection and 
distribution of funds under this subpart as described in Sec. 
54.701(g). Fund distribution reporting will be by state and by eligible 
telecommunications carrier within the state.

[65 FR 38690, June 21, 2000; 65 FR 57739, 57740, Sept. 26, 2000]



Sec. 54.803  Universal service zones.

    (a) The zones used for determining interstate access universal 
service support shall be the same zones that would be used for End User 
Common Line (EUCL) charge deaveraging as described in Sec. 69.152(q)(2) 
of this chapter.
    (b) In a price cap study area where the price cap local exchange 
carrier has not established state-approved prices for UNE loops by zone, 
the Administrator shall develop an estimate of the local exchange 
carrier's Zone Above Benchmark Revenues for transitional purposes, in 
order to reserve a portion of the fund for that study area. This 
estimate will be included by the Administrator in the Nationwide Study 
Area Above Benchmark Revenues calculated pursuant to Sec. 54.806.
    (1) For the purpose of developing this transitional estimate, the 
loop and port costs estimated by the FCC cost model, or other substitute 
method if no model is available, shall be used.
    (2) For the purpose of developing this transitional estimate, the 
administrator shall construct three zones. Wire centers within the study 
area will be grouped into these zones in such a way that each zone is 
assigned approximately one third of local exchange carrier base period 
lines in the study area, with the lowest cost wire centers assigned to 
Zone 1, the highest cost wire centers assigned to Zone 3, and the 
remainder to Zone 2.

[65 FR 38690, June 21, 2000; 65 FR 57740, Sept. 26, 2000]

[[Page 177]]



Sec. 54.804  Preliminary minimum access universal service support for
a study area calculated by the Administrator.

    (a) If Average Price Cap CMT Revenue per Line month is greater than 
$9.20 then: Preliminary Minimum Access Universal Service Support (for a 
study area) = Average Price Cap CMT Revenue per Line month in a study 
area * price cap local exchange carrier Base Period Lines * 12)-(($7.00 
* price cap local exchange carrier Base Period Residential and Single-
Line Business Lines * 12) + ($9.20 * price cap local exchange carrier 
Base Period Multi-line Business Lines * 12)).
    (b) If Average Price Cap CMT Revenue per Line month in a study area 
is greater than $7.00 but less than $9.20 then: Preliminary Minimum 
Access Universal Service Support (for a study area) = (Average Price Cap 
CMT Revenue per Line month in a study area--$7.00) * (price cap local 
exchange carrier Base Period Residential and Single-Line Business Lines 
* 12).
    (c) If Average Price Cap CMT Revenue per Line month in a study area 
is less than $7.00 then the Preliminary Minimum Access Universal Service 
Support (for a study area) is zero.

[65 FR 57740, Sept. 26, 2000]



Sec. 54.805  Zone and study area above benchmark revenues calculated
by the Administrator.

    (a) The following steps shall be performed by the Administrator to 
determine Zone Above Benchmark Revenues for each price cap local 
exchange carrier.
    (1) Calculate Zone Average Revenue Per Line.
    (2) Calculate Zone Above Benchmark Revenues. Zone Above Benchmark 
Revenues is the sum of Zone Above Benchmark Revenues for Residential and 
Single-Line Business Lines and Zone Above Benchmark Revenues for Multi-
Line Business Lines. Zone Above Benchmark Revenues for Residential and 
Single-Line Business Lines is, within each zone, (Zone Average Revenue 
Per Line minus $7.00) multiplied by all eligible telecommunications 
carrier Base Period Residential and Single-Line Business Lines times 12. 
If negative, the Zone Above Benchmark Revenues for Residential and 
Single-Line Business Lines for the zone is zero. Zone Above Benchmark 
Revenues for Multi-line Business Lines is, within each zone, (Zone 
Average Revenue Per Line minus $9.20) multiplied by all eligible 
telecommunications carrier zone Base Period Multi-line Business Lines 
times 12. If negative, the Zone Above Benchmark Revenues for Multi-line 
Business Lines for the zone is zero.
    (b) Study Area Above Benchmark Revenues is the sum of Zone Above 
Benchmark Revenues for all zones in the study area.

[65 FR 38690, June 21, 2000; 65 FR 57740, Sept. 26, 2000]



Sec. 54.806  Calculation by the Administrator of interstate access
universal service support for areas served by price cap local

exchange carriers.

    (a) The Administrator, based on the calculations performed in 
Sec. Sec. 54.804 and 54.805, shall calculate the Interstate Access 
Universal Service Support for areas served by price cap local exchange 
carriers according to the following methodology:
    (b) Calculate Nationwide Total Above Benchmark Revenues. Nationwide 
Total Above Benchmark Revenues is the sum of all Study Area Above 
Benchmark Revenues for all study areas served by local exchange 
carriers.
    (c) Calculate Preliminary Study Area Universal Service Support 
(PSAUSS).
    (1) If the Nationwide Total Above Benchmark Revenues is greater than 
$650 million, then the Preliminary Study Area Universal Service Support 
(PSAUSS) equals the Study Area Above Benchmark Revenues multiplied by 
the ratio of $650 million to Nationwide Total Above Benchmark Revenues 
(i.e., Preliminary Study Area Universal Service Support = Study Area 
Above Benchmark Revenues *($650 Million/Nationwide Total Above Benchmark 
Revenues)).
    (2) If the Nationwide Total Above Benchmark Revenues is not greater 
than $650 million, PSAUSS equals the Study Area Above Benchmark 
Revenues.
    (d) Calculate the Minimum Delta (MD) by study area. Within each 
study area the Minimum Delta will be equal to the Preliminary Minimum 
Access

[[Page 178]]

Universal Service Support less the PSAUSS, if the difference is greater 
than zero. If the difference is less than or equal to zero, the MD is 
equal to zero.
    (e) Calculate the Total National Minimum Delta (TNMD) by summing all 
study area Minimum Deltas nationwide.
    (f) Calculate the Minimum Adjustment Amount. (1) If the TNMD is 
greater than $75 million, then the Minimum Adjustment Amount (MAA) 
equals the MAA Phase In Percentage times the MD by study area times the 
ratio of $75 million to TNMD.
    (2) If the TNMD is less than $75 million, then the MAA equals the 
product of the MAA Phase In Percentage and the MD by study area.
    (g) Calculate the Minimum Support Requirement (MSR). The Minimum 
Support Requirement for a study area equals the PSAUSS plus the MAA.
    (h) Calculate the Total National Minimum Support Requirement 
(TNMSR), which equals the sum of the MSR for all study areas in which 
the Preliminary Minimum Access Universal Service Support is greater than 
or equal to the PSAUSS.
    (i) Calculate Study Area Access Universal Service Support (SAAUS) 
for a study area in which the price cap local exchange carrier has 
geographically deaveraged state-approved rates for UNE loops:
    (1) For study areas in which the Preliminary Minimum Access 
Universal Service Support is greater than PSAUSS, and within which the 
price cap local exchange carrier has established geographically 
deaveraged state-approved rates for UNE loops, the SAAUS for that study 
area is the MSR.
    (2) For study areas in which the Preliminary Minimum Access 
Universal Service Support is less than PSAUSS, and within which the 
price cap local exchange carrier has established geographically 
deaveraged state-approved rates for UNE loops, the SAAUS for that study 
area is equal to:
    PSAUSS * ($650 million - TNMSR) / (the sum of PSAUSS of study areas 
where the Preliminary Minimum Access Universal Service Support is less 
than PSAUSS).
    (j) Calculate Study Area Access Universal Service Support (SAAUS) 
for a price cap local exchange carrier that has not established 
geographically deaveraged state-approved rates for UNE loops. In such 
study areas, the SAAUS shall be the lesser of the Preliminary Minimum 
Access Universal Service Support or:
    (1) For study areas in which the Preliminary Minimum Access 
Universal Service Support is greater than PSAUSS, and for which an 
estimate has been made for deaveraged UNE loop costs, the SAAUS for that 
study area is the MSR.
    (2) For study areas in which the Preliminary Minimum Access 
Universal Service Support is less than PSAUSS, and for which an estimate 
has been made for deaveraged UNE loop costs, the SAAUS for that study 
area is equal to:
    PSAUSS * ($650 million - TNMSR) / (the sum of PSAUSS of study areas 
where the Preliminary Minimum Access Universal Service Support is less 
than PSAUSS).

[65 FR 38690, June 21, 2000; 65 FR 57740, Sept. 26, 2000]



Sec. 54.807  Interstate access universal service support.

    (a) Each Eligible Telecommunications Carrier (ETC) that provides 
supported service within the study area of a price cap local exchange 
carrier shall receive Interstate Access Universal Service Support for 
each line that it serves within that study area.
    (b) In any study area within which the price cap local exchange 
carrier has not established state approved geographically deaveraged 
rates for UNE loops, the Administrator shall calculate the Interstate 
Access Universal Service Support Per Line by dividing Study Area Access 
Universal Service Support by twelve times all eligible 
telecommunications carriers' base period lines in that study area 
adjusted for growth during the relevant support period based on the 
average nationwide annual growth in eligible lines during the three 
previous years. For the purpose of calculating growth, the Administrator 
shall use a simple average of annual growth rates for total switched 
access lines for the three most recent

[[Page 179]]

years as reported in the Common Carrier Bureau Report, Statistics of 
Communications Common Carriers, Table 6.10--Selected Operating 
Statistics. Interested parties may obtain this report from the U.S. 
Government Printing Office or by downloading it from the Federal 
Communication Commission's website http://www.fcc.gov/ccb/stats.
    (c) In any study area within which the price cap local exchange 
carrier has established state approved geographically deaveraged rates 
for UNE loops, the Administrator shall calculate the Interstate Access 
Universal Service Support Per Line for each customer class and zone 
using all eligible telecommunications carriers' base period lines by 
customer class and zone adjusted for growth during the relevant support 
period based on the average nationwide annual growth in eligible lines 
during the three previous years. For the purpose of calculating growth, 
the Administrator shall use a simple average of annual growth rates for 
total switched access lines for the three most recent years as reported 
in the Wireline Competition Bureau Report, Statistics of Communications 
Common Carriers, Table 6.10--Selected Operating Statistics. Support 
shall be allocated to lines in the highest cost UNE zone first, and will 
``cascade'' to lines in lower cost UNE zones to the extent that 
sufficient funding is available. Beginning with the zone with the 
highest Zone Average Revenue Per Line, support will be applied in the 
following order of priority:
    (1) To all lines in the highest zone, to eliminate the amount per 
line by which Zone Average Revenue Per Line exceeds the higher of $9.20 
or the Average Revenue Per Line in the next highest zone;
    (2) If the Zone Average Revenue Per Line in the next highest zone is 
greater than $9.20, then to all lines in both zones to eliminate the 
amount per line by which Zone Average Revenue per Line exceeds $9.20 or 
the Zone Average Revenue Per Line in the third highest zone. This 
application of support will continue to additional zones in the same 
fashion until the amount per line by which Zone Average Revenue Per Line 
exceeds $9.20 has been eliminated in all zones, or until the available 
support has been exhausted;
    (3) To all residential and single-line business lines in the highest 
zone, to eliminate the remaining amount per line that Zone Average 
Revenue Per Line for these lines exceeds the higher of $7.00 or Zone 
Average Revenue Per Line in the next highest zone;
    (4) If the Zone Average Revenue per Line in the next highest zone is 
greater than $7.00, then to all residential and single-line business 
lines in both zones to eliminate the remaining amount per line by which 
Zone Average Revenue Per Line exceeds $7.00. This application of support 
will continue to additional zones in the same fashion until the 
difference between Zone Average Revenue Per Line and $7.00 has been 
eliminated in all zones, or until the available support has been 
exhausted.
    (d) Notwithstanding the provisions of Sec. 54.307(a)(2), the per-
line support amount determined within each zone by applicable customer 
class under paragraph (b) or (c) of this section is portable among all 
eligible telecommunications carriers providing service within that zone.

[65 FR 38690, June 21, 2000; 65 FR 57740, Sept. 26, 2000, as amended at 
67 FR 13228, Mar. 21, 2002]



Sec. 54.808  Transition provisions and periodic calculation.

    Study Area Access Universal Service Support amounts for the area 
served by each price cap local exchange carrier will be calculated as of 
July 1, 2000, January 1, 2001, July 1, 2001 and thereafter as determined 
by the Administrator, but at least annually.

[65 FR 38690, June 21, 2000; 65 FR 57740, Sept. 26, 2000]



Sec. 54.809  Carrier certification.

    (a) Certification. Carriers that desire to receive support pursuant 
to Sec. 54.807 must file a certification with the Administrator and the 
Commission stating that all interstate access universal service support 
provided to such carrier will be used only for the provision, 
maintenance, and upgrading of facilities and services for which the 
support is intended. Support provided pursuant to Sec. 54.807 shall 
only be provided to the extent that the carrier has filed the

[[Page 180]]

requisite certification pursuant to this section.
    (b) Certification format. A certification pursuant to this section 
may be filed in the form of a letter from an authorized representative 
for the carrier, and must be filed with both the Office of the Secretary 
of the Commission clearly referencing CC Docket No. 96-45, and with the 
Administrator of the interstate access universal service support 
mechanism, on or before the filing deadlines set forth in paragraph (c) 
of this section. All of the certifications filed by carriers pursuant to 
this section shall become part of the public record maintained by the 
Commission.
    (c) Filing deadlines. In order for a price cap local exchange 
carrier or an eligible telecommunications carrier serving lines in the 
service area of a price cap local exchange carrier to receive interstate 
access universal service support, such carrier shall file an annual 
certification, as described in paragraph (b) of this section, on the 
date that it first files its line count information pursuant to Sec. 
54.802, and thereafter on June 30 of each year. Such carrier that files 
its line count information after the June 30 deadline shall receive 
support pursuant to the following schedule:
    (1) Carriers that file no later than September 30 shall receive 
support for the fourth quarter of that year and the first and second 
quarters of the subsequent year.
    (2) Carriers that file no later than December 31 shall receive 
support for the first and second quarters of the subsequent year.
    (3) Carriers that file no later than March 31 of the subsequent year 
shall receive support for the second quarter of the subsequent year.

[65 FR 38690, June 21, 2000; 65 FR 57740, Sept. 26, 2000, as amended at 
70 FR 29979, May 25, 2005]



 Subpart K_Interstate Common Line Support Mechanism for Rate-of-Return 
                                Carriers

    Source: 66 FR 59728, Nov. 30, 2001, unless otherwise noted.



Sec. 54.901  Calculation of Interstate Common Line Support.

    (a) Interstate Common Line Support available to a rate-of-return 
carrier shall equal the Common Line Revenue Requirement per Study Area 
as calculated in accordance with part 69 of this chapter minus:
    (1) The study area revenues obtained from end user common line 
charges at their allowable maximum as determined by Sec. Sec. 69.104(n) 
and 69.104(o) of this chapter;
    (2) The carrier common line charge revenues to be phased out 
pursuant to Sec. 69.105 of this chapter;
    (3) The special access surcharge pursuant to Sec. 69.114 of this 
chapter;
    (4) The line port costs in excess of basic analog service pursuant 
to Sec. 69.130 of this chapter; and
    (5) Any Long Term Support for which the carrier is eligible or, if 
the carrier ceased participation in the NECA common line pool after 
October 11, 2001, any Long Term Support for which the carrier would have 
been eligible if it had not ceased its participation in the pool.
    (b) The per-line Interstate Common Line Support available to a 
competitive eligible telecommunications carrier serving lines in a study 
area served by a rate-of-return carrier shall be calculated by the 
Administrator as follows:
    (1) If the rate-of-return carrier has disaggregated the support it 
receives in the study area pursuant to Sec. 54.315, the Administrator 
shall calculate the amount of Interstate Common Line Support targeted to 
each disaggregation zone by the rate-of-return carrier (targeted 
Interstate Common Line Support). If the rate-of-return carrier has 
chosen not to disaggregate its support for a study area pursuant to 
Sec. 54.315, then the entirety of its Interstate Common Line Support 
for the study area shall be considered targeted Interstate Common Line 
Support for purposes of performing the calculations in this section.
    (2) In each disaggregation zone or undisaggregated study area, the 
Administrator shall calculate the Average

[[Page 181]]

Interstate Common Line Support by dividing the rate-of-return carrier's 
targeted Interstate Common Line Support by its total lines served.
    (3) The Administrator shall then calculate the Interstate Common 
Line Support available to the competitive eligible telecommunications 
carrier for each line it serves for each customer class in a 
disaggregation zone or undisaggregated study area by the following 
formula:
    (i) If the Average Interstate Common Line Support is greater than 
$2.70 multiplied by the number of residential and single-line business 
lines served by the rate-of-return carrier in the disaggregation zone or 
undisaggregated study area, then:
    (A) Interstate Common Line Support per Multi-Line Business Line = 
(Average Interstate Common Line Support - $2.70 x residential and 
single-line business lines served by the rate-of-return carrier) / 
(total lines served by the rate-of-return carrier); and
    (B) Interstate Common Line Support per Residential and Single-Line 
Business Line = Interstate Common Line Support per Multi-Line Business 
Line + $2.70.
    (ii) If the Average Interstate Common Line Support is less than or 
equal to $2.70 multiplied by residential and single-line business lines 
served by the rate-of-return carrier in the disaggregation zone or 
undisaggregated study area, but greater than $0, then:
    (A) Interstate Common Line Support per Multi-Line Business Line = 
$0; and
    (B) Interstate Common Line Support per Residential and Single-Line 
Business Line = Average Interstate Common Line Support / residential and 
single line business lines served by the rate-of-return carrier.
    (iii) If the Average Interstate Common Line Support is equal to $0, 
then the competitive eligible telecommunications carrier shall receive 
no Interstate Common Line Support for lines served in that 
disaggregation zone or undisaggregated study area.



Sec. 54.902  Calculation of Interstate Common Line Support for 
transferred exchanges.

    (a) In the event that a rate-of-return carrier acquires exchanges 
from an entity that is also a rate-of-return carrier, Interstate Common 
Line Support for the transferred exchanges shall be distributed as 
follows.
    (1) Each carrier may report its updated line counts to reflect the 
transfer in the next quarterly line count filing pursuant to Sec. 
54.903(a)(1) that applies to the period in which the transfer occurred. 
During a transition period from the filing of the updated line counts 
until the end of the funding year, the Administrator shall adjust the 
Interstate Common Line Support received by each carrier based on the 
updated line counts and the per-line Interstate Common Line Support, 
categorized by customer class and, if applicable, disaggregation zone, 
of the selling carrier. If the acquiring carrier does not file a 
quarterly update of its line counts, it will not receive Interstate 
Common Line Support for those lines during the transition period.
    (2) Each carrier's projected data for the following funding year 
filed pursuant to Sec. 54.903(a)(3) shall reflect the transfer of 
exchanges.
    (3) Each carrier's actual data filed pursuant to Sec. 54.903(a)(4) 
shall reflect the transfer of exchanges. All post-transaction Interstate 
Common Line Support shall be subject to true up by the Administrator 
pursuant to Sec. 54.903(b)(3).
    (b) In the event that a rate-of-return carrier acquires exchanges 
from a price cap carrier that are incorporated into one of the rate-of-
return carrier's existing study areas, Interstate Common Line Support 
for the transferred exchanges shall be distributed as follows.
    (1) The acquiring carrier may report its updated line counts for the 
study area into which the acquired lines are incorporated in the next 
quarterly line count filing pursuant to Sec. 54.903(a)(1) that applies 
to the period in which the transfer occurred. During a transition period 
from the filing of the updated line counts until the end of the funding 
year, the Administrator shall adjust the Interstate Common Line Support 
received by the acquiring carrier based on the updated line counts and 
the per-line amounts Interstate Common Line Support for the study area 
served by the acquiring carrier. If necessary, the Administrator shall 
develop an average

[[Page 182]]

per-line support amount to reflect various per-line amounts in multiple 
disaggregation zones served by the acquiring carrier. If the acquiring 
carrier does not file a quarterly update of its line counts, it will not 
receive Interstate Common Line Support for those lines during the 
transition period.
    (2) The acquiring carrier's projected data for the following funding 
year filed pursuant to Sec. 54.903(a)(3) shall reflect the transfer of 
exchanges.
    (3) The acquiring carrier's actual data filed pursuant to Sec. 
54.903(a)(4) shall reflect the transfer of exchanges. All post-
transaction Interstate Common Line Support shall be subject to true up 
by the Administrator pursuant to Sec. 54.903(b)(3).
    (c) In the event that a rate-of-return carrier acquires exchanges 
from a price cap carrier that are not incorporated into one of the rate-
of-return carrier's existing study areas, Interstate Common Line Support 
for the transferred exchanges shall be distributed as follows.
    (1) The acquiring rate-of-return may submit to the Administrator a 
projected Interstate Common Line Revenue Requirement for the acquired 
exchanges for the remainder of the funding year in the next quarterly 
report to the Administrator. The Administrator shall distribute 
Interstate Common Line Support pursuant to the partial year projected 
Interstate Common Line Revenue Requirement for the remainder of the 
funding year. If the acquiring carrier does not file a projected 
Interstate Common Line Revenue Requirement, it will not receive 
Interstate Common Line Support for those exchanges during the transition 
period.
    (2) The acquiring carrier's projected data for the following funding 
year filed pursuant to Sec. 54.903(a)(3) shall reflect the transfer of 
exchanges.
    (3) The acquiring carrier's actual data filed pursuant to Sec. 
54.903(a)(4) shall reflect the transfer of exchanges. All post-
transaction Interstate Common Line Support shall be subject to true up 
by the Administrator pursuant to Sec. 54.903(b)(3)
    (d) In the event that an entity other than a rate-of-return carrier 
acquires exchanges from a rate-of-return carrier, per-line Interstate 
Common Line Support will not transfer.
    (e) This section does not alter any Commission rule governing the 
sale or transfer of exchanges, including the definition of ``study 
area'' in part 36.

[66 FR 59728, Nov. 30, 2001, as amended at 68 FR 31623, May 28, 2003]



Sec. 54.903  Obligations of rate-of-return carriers
and the Administrator.

    (a) To be eligible for Interstate Common Line Support, each rate-of-
return carrier shall make the following filings with the Administrator.
    (1) On April 18, 2002, each rate-of-return carrier shall submit to 
the Administrator the number of lines it serves as of September 30, 
2001, within each rate-of-return carrier study area, by disaggregation 
zone if disaggregation zones have been established within that study 
area pursuant to Sec. 54.315, showing residential and single-line 
business line counts and multi-line business line counts separately. For 
purposes of this report, and for purposes of computing support under 
this subpart, the residential and single-line business class lines 
reported include lines assessed the residential and single-line business 
End User Common Line charge pursuant to Sec. 69.104 of this chapter, 
and the multi-line business class lines reported include lines assessed 
the multi-line business End User Common Line charge pursuant to Sec. 
69.104 of this chapter. For purposes of this report, and for purposes of 
computing support under this subpart, lines served using resale of the 
rate-of-return local exchange carrier's service pursuant to section 
251(c)(4) of the Communications Act of 1934, as amended, shall be 
considered lines served by the rate-of-return carrier only and must be 
reported accordingly. Beginning July 31, 2002, each rate-of-return 
carrier shall submit the information described in this paragraph in 
accordance with the schedule in Sec. 36.611 of this chapter.
    (2) Each rate-of-return carrier in service areas where a competitive 
eligible telecommunications carrier has initiated service and reported 
line count data pursuant to Sec. 54.307(c) shall submit the information 
in paragraph (a) of this

[[Page 183]]

section in accordance with the schedule in Sec. 36.612 of this chapter. 
A rate-of-return carrier may submit the information in paragraph (a) of 
this section in accordance with the schedule in Sec. 36.612 of this 
chapter, even if it is not required to do so. If a rate-of-return 
carrier makes a filing under this paragraph, it shall separately 
indicate any lines that it has acquired from another carrier that it has 
not previously reported pursuant to paragraph (a) of this section, 
identified by customer class and the carrier from which the lines were 
acquired.
    (3) Each rate-of-return carrier shall submit to the Administrator 
annually on March 31st projected data necessary to calculate the 
carrier's prospective Interstate Common Line Support, including common 
line cost and revenue data, for each of its study areas in the upcoming 
funding year. The funding year shall be July 1st of the current year 
through June 30th of the next year. Each rate-of-return carrier will be 
permitted to submit a correction to the projected data filed on March 
31st until June 30th for the upcoming funding year. On June 30th each 
rate-of-return carrier will be permitted to submit to the Administrator 
an update to the projected data for the funding year ending on that 
date.
    (4) Each rate-of-return carrier shall submit to the Administrator on 
December 31st of each year the data necessary to calculate a carrier's 
Interstate Common Line Support, including common line cost and revenue 
data, for the prior calendar year. Such data shall be used by the 
Administrator to make adjustments to monthly per-line Interstate Common 
Line Support amounts in the final two quarters of the following calendar 
year to the extent of any differences between the carrier's ICLS 
received based on projected common line cost and revenue data and the 
ICLS for which the carrier is ultimately eligible based on its actual 
common line cost and revenue data during the relevant period.
    (b) Upon receiving the information required to be filed in paragraph 
(a) of this section, the Administrator shall:
    (1) Perform the calculations described in Sec. 54.901;
    (2) Publish the results of these calculations showing Interstate 
Common Line Support Per Line available in each rate-of-return carrier 
study area, by Disaggregation Zone and customer class;
    (3) Perform periodic reconciliation of the Interstate Common Line 
Support provided to each carrier based on projected data filed pursuant 
to paragraph (a)(3) of this section and the Interstate Common Line 
Support for which each carrier is eligible based on actual data filed 
pursuant to paragraph (a)(4) of this section.
    (4) Collect the funds necessary to provide support pursuant to this 
subpart in accordance with subpart H of this part;
    (5) Distribute support calculated pursuant to the rules contained in 
this subpart; and
    (6) Report quarterly to the Commission on the collection and 
distribution of funds under this subpart as described in Sec. 
54.702(i). Fund distribution reporting will be by state and by eligible 
telecommunications carrier within the state.

[66 FR 59728, Nov. 30, 2001, as amended at 67 FR 15493, Apr. 2, 2002; 67 
FR 19809, Apr. 23, 2002; 68 FR 31623, May 28, 2003]



Sec. 54.904  Carrier certification.

    (a) Certification. Carriers that desire to receive support pursuant 
to this subpart shall file a certification with the Administrator and 
the Federal Communications Commission stating that all Interstate Common 
Line Support provided to such carrier will be used only for the 
provision, maintenance, and upgrading of facilities and services for 
which the support is intended. Support provided pursuant to this subpart 
shall only be provided to the extent that the carrier has filed the 
requisite certification pursuant to this section.
    (b) Certification format. A certification pursuant to this section 
may be filed in the form of a letter from an authorized representative 
for the carrier, and must be filed with both the Administrator and the 
Office of the Secretary of the Federal Communication Commission clearly 
referencing CC Docket No. 96-45, on or before the filing deadlines set 
forth in paragraph (d) of this section.

[[Page 184]]

    (c) All of the certifications filed by carriers pursuant to this 
section shall become part of the public record maintained by the 
Commission.
    (d) Filing deadlines. In order for a rate-of-return carrier, and/or 
an eligible telecommunications carrier serving lines in the service area 
of a rate-of-return carrier, to receive Interstate Common Line Support, 
such carrier must file an annual certification, as described in 
paragraph (b) of this section, on the date that it first files its line 
count information pursuant to Sec. 54.903, and thereafter on June 30th 
of each year.



PART 59_INFRASTRUCTURE SHARING--Table of Contents




Sec.
59.1 General duty.
59.2 Terms and conditions of infrastructure sharing.
59.3 Information concerning deployment of new services and equipment.
59.4 Definition of ``qualifying carrier''.

    Authority: 47 U.S.C. 154(i), 154(j), 201-205, 259, 303(r), 403.

    Source: 62 FR 9713, Mar. 4, 1997, unless otherwise noted.



Sec. 59.1  General duty.

    Incumbent local exchange carriers (as defined in 47 U.S.C. section 
251(h)) shall make available to any qualifying carrier such public 
switched network infrastructure, technology, information, and 
telecommunications facilities and functions as may be requested by such 
qualifying carrier for the purpose of enabling such qualifying carrier 
to provide telecommunications services, or to provide access to 
information services, in the service area in which such qualifying 
carrier has obtained designation as an eligible telecommunications 
carrier under section 214(e) of 47 U.S.C.



Sec. 59.2  Terms and conditions of infrastructure sharing.

    (a) An incumbent local exchange carrier subject to the requirements 
of section 59.1 shall not be required to take any action that is 
economically unreasonable or that is contrary to the public interest.
    (b) An incumbent local exchange carrier subject to the requirements 
of section 59.1 may, but shall not be required to, enter into joint 
ownership or operation of public switched network infrastructure, 
technology, information and telecommunications facilities and functions 
and services with a qualifying carrier as a method of fulfilling its 
obligations under section 59.1.
    (c) An incumbent local exchange carrier subject to the requirements 
of section 59.1 shall not be treated by the Commission or any State as a 
common carrier for hire or as offering common carrier services with 
respect to any public switched network infrastructure, technology, 
information, or telecommunications facilities, or functions made 
available to a qualifying carrier in accordance with regulations issued 
pursuant to this section.
    (d) An incumbent local exchange carrier subject to the requirements 
of section 59.1 shall make such public switched network infrastructure, 
technology, information, and telecommunications facilities, or functions 
available to a qualifying carrier on just and reasonable terms and 
pursuant to conditions that permit such qualifying carrier to fully 
benefit from the economies of scale and scope of such local exchange 
carrier. An incumbent local exchange carrier that has entered into an 
infrastructure sharing agreement pursuant to section 59.1 must give 
notice to the qualifying carrier at least sixty days before terminating 
such infrastructure sharing agreement.
    (e) An incumbent local exchange carrier subject to the requirements 
of section 59.1 shall not be required to engage in any infrastructure 
sharing agreement for any services or access which are to be provided or 
offered to consumers by the qualifying carrier in such local exchange 
carrier's telephone exchange area.
    (f) An incumbent local exchange carrier subject to the requirements 
of section 59.1 shall file with the State, or, if the State has made no 
provision to accept such filings, with the Commission, for public 
inspection, any tariffs, contracts, or other arrangements showing the 
rates, terms, and conditions under which such carrier is making 
available

[[Page 185]]

public switched network infrastructure, technology, information and 
telecommunications facilities and functions pursuant to this part.



Sec. 59.3  Information concerning deployment of new services 
and equipment.

    An incumbent local exchange carrier subject to the requirements of 
section 59.1 that has entered into an infrastructure sharing agreement 
under section 59.1 shall provide to each party to such agreement timely 
information on the planned deployment of telecommunications services and 
equipment, including any software or upgrades of software integral to 
the use or operation of such telecommunications equipment.



Sec. 59.4  Definition of ``qualifying carrier''.

    For purposes of this part, the term ``qualifying carrier'' means a 
telecommunications carrier that:
    (a) Lacks economies of scale or scope; and
    (b) Offers telephone exchange service, exchange access, and any 
other service that is included in universal service, to all consumers 
without preference throughout the service area for which such carrier 
has been designated as an eligible telecommunications carrier under 
section 214(e) of 47 U.S.C.



PART 61_TARIFFS--Table of Contents




                            Subpart A_General

Sec.
61.1 Purpose and application.
61.2 General tariff requirements.
61.3 Definitions.
61.11-61.12 [Reserved]

                  Subpart B_Rules for Electronic Filing

61.13 Scope.
61.14 Method of filing publications.
61.15 Letters of transmittal and cover letters.
61.16 Base documents.
61.17 Method of filing applications for special permission.

            Subpart C_General Rules for Nondominant Carriers

61.18 Scope.
61.19 Detariffing of international and interstate, domestic 
          interexchange services.
61.20 Method of filing publications.
61.21 Cover letters.
61.22 Composition of tariffs.
61.23 Notice requirements.
61.25 References to other instruments.
61.26 Tariffing of competitive interstate switched exchange access 
          services.

   Subpart D_General Tariff Rules for International Dominant Carriers

61.28 International dominant carrier tariff filing requirements.

              Subpart E_General Rules for Dominant Carriers

61.31 Scope.
61.32 Method of filing publications.
61.33 Letters of transmittal.
61.38 Supporting information to be submitted with letters of 
          transmittal.
61.39 Optional supporting information to be submitted with letters of 
          transmittal for Access Tariff filings effective on or after 
          April 1, 1989, by local exchange carriers serving 50,000 or 
          fewer access lines in a given study area that are described as 
          subset 3 carriers in Sec. 69.602.
61.40 Private line rate structure guidelines.
61.41 Price cap requirements generally.
61.42 Price cap baskets and service categories.
61.43 Annual price cap filings required.
61.44 [Reserved]
61.45 Adjustments to the PCI for Local Exchange Carriers.
61.46 Adjustments to the API.
61.47 Adjustments to the SBI; pricing bands.
61.48 Transition rules for price cap formula calculations.
61.49 Supporting information to be submitted with letters of transmittal 
          for tariffs of carriers subject to price cap regulation.
61.50-61.51 [Reserved]
61.52 Form, size, type, legibility, etc.
61.54 Composition of tariffs.
61.55 Contract-based tariffs.
61.58 Notice requirements.
61.59 Effective period required before changes.

    Subpart F_Specific Rules for Tariff Publications of Dominant and 
                          Nondominant Carriers

61.66 Scope.
61.68 Special notations.
61.69 Rejection.
61.72 Public information requirements.
61.73 Duplication of rates or regulations.
61.74 References to other instruments.
61.83 Consecutive numbering.
61.86 Supplements.
61.87 Cancellation of tariffs.

[[Page 186]]

                         Subpart G_Concurrences

61.131 Scope.
61.132 Method of filing concurrences.
61.133 Format of concurrences.
61.134 Concurrences for through services.
61.135 Concurrences for other purposes.
61.136 Revocation of concurrences.

              Subpart H_Applications for Special Permission

61.151 Scope.
61.152 Terms of applications and grants.
61.153 Method of filing applications.

    Subpart I_Adoption of Tariffs and Other Documents of Predecessor 
                                Carriers

61.171 Adoption notice.
61.172 Changes to be incorporated in tariffs of successor carrier.

                          Subpart J_Suspensions

61.191 Carrier to file supplement when notified of suspension.
61.192 Contents of supplement announcing suspension.
61.193 Vacation of suspension order; supplements announcing same; etc.

    Authority: Secs. 1, 4(i), 4(j), 201-205 and 403 of the 
Communications Act of 1934, as amended; 47 U.S.C. 151, 154(i), 154(j), 
201-205 and 403, unless otherwise noted.

    Source: 49 FR 40869, Oct. 18, 1984, unless otherwise noted.



                            Subpart A_General



Sec. 61.1  Purpose and application.

    (a) The purpose of this part is to prescribe the framework for the 
initial establishment of and subsequent revisions to tariff 
publications.
    (b) Tariff publications filed with the Commission must conform to 
the rules in this part and with Commission rules regarding the payment 
of statutory charges (see subpart G of part 1 of this title) and the use 
of FCC Registration Numbers (FRNs) (see subpart W of part 1 of this 
title). Failure to comply with any provisions of these rules may be 
grounds for rejection of the non-complying publication, a determination 
that it is unlawful or other action. Where an FRN has been omitted from 
a cover letter or transmittal accompanying a tariff publication filed 
under this part or the FRN included in that letter is invalid, the 
submitting carrier or carrier representative shall have ten (10) 
business days from the date of filing to amend the cover letter or 
transmittal to include a valid FRN. If within that ten (10) business day 
period, the carrier or carrier representative amends the cover letter or 
transmittal to include a valid FRN, that FRN shall be deemed to have 
been included in the letter as of its original filing date. If, after 
the expiration of the ten (10) business day period, the cover letter or 
transmittal has not been amended to include a valid FRN, the related 
tariff publication may be rejected if it has not yet become effective, 
declared unlawful if it has become effective, or subject to other 
action.
    (c) No carrier required to file tariffs may provide any interstate 
or foreign communication service until every tariff publication for such 
communication service is on file with the Commission and in effect.

[49 FR 40869, Oct. 18, 1984, as amended at 66 FR 47896, Sept. 14, 2001]



Sec. 61.2  General tariff requirements.

    (a) In order to remove all doubt as to their proper application, all 
tariff publications must contain clear and explicit explanatory 
statements regarding the rates and regulations.
    (b) Tariff publications must be delivered to the Commission free 
from all charges, including claims of postage.
    (c) Tariff publications will not be returned.

[64 FR 46586, Aug. 26, 1999]



Sec. 61.3  Definitions.

    (a) Act. The Communications Act of 1934 (48 Stat. 1004; 47 U.S.C. 
chapter 5), as amended.
    (b) Actual Price Index (API). An index of the level of aggregate 
rate element rates in a basket, which index is calculated pursunt to 
Sec. 61.46.
    (c) Association. This term has the meaning given it in Sec. 
69.2(d).
    (d) Average Price Cap CMT Revenue per Line month. (1) Price Cap CMT 
Revenue (as defined in Sec. 61.3(cc)) per month as of July 1, 2000 
(adjusted to remove Universal Service Contributions assessed to local 
exchange carriers pursuant to Sec. 54.702 of this chapter) using 2000

[[Page 187]]

annual filing base period demand, divided by the 2000 annual filing base 
period demand. In filing entities with multiple study areas, if it 
becomes necessary to calculate the Average Price Cap CMT Revenue per 
Line month for a specific study area, then the Average Price Cap CMT 
Revenue per Line month for that study area is determined as follows, 
using base period demand revenues (adjusted to remove Universal Service 
Contributions assessed to Local Exchange Carriers pursuant to Sec. 
54.702 of this chapter), Base Factor Portion (BFP) and 2000 annual 
filing base period lines:
    Average Price Cap CMT Revenue per Line Month in a study area = Price 
Cap CMT Revenue x (BFP in the study area / (BFP in the Filing Entity) /
(Lines in the study area.
    (2) Nothing in this definition precludes a price cap local exchange 
carrier from continuing to average rates across filing entities 
containing multiple study areas, where permitted under existing rules.
    (3) Average Price Cap CMT Revenues per Line month may be adjusted 
after July 1, 2000 to reflect exogenous costs pursuant to Sec. 
61.45(d).
    (4) Average Price Cap CMT Revenues per Line month may also be 
adjusted pursuant to Sec. 61.45 (b)(1)(iii).
    (e) Average Traffic Sensitive Charge. (1) The Average Traffic 
Sensitive Charge (ATS charge) is the sum of the following two 
components:
    (i) The Local Switching (LS) component. The LS component will be 
calculated by dividing the proposed LS revenues (End Office Switch, LS 
trunk ports, Information Surcharge, and signalling transfer point (STP) 
port) by the base period LS minutes of use (MOUs); and
    (ii) The Transport component. The Transport component will be 
calculated by dividing the proposed Transport revenues (Switched Direct 
Trunk Transport, Signalling for Switched Direct Trunk Transport, 
Entrance Facilities for Switched Access traffic, Tandem Switched 
Transport, Signalling for Tandem Switching and residual per minute 
Transport Interconnection Charge (TIC) pursuant to Sec. 69.155 of this 
chapter) by price cap local exchange carrier only base period MOUs 
(including meet-point billing arrangements for jointly-provided 
interstate access by a price cap local exchange carrier and any other 
local exchange carrier).
    (2) For the purposes of determining whether the ATS charge has 
reached the Target Rate as set forth in Sec. 61.3(qq), the calculations 
should include all the relevant revenues and minutes for services 
provided under generally available price cap tariffs.
    (f) Band. A zone of pricing flexibility for a service category, 
which zone is calculated pursuant to Sec. 61.47.
    (g) Base period. For carriers subject to Sec. Sec. 61.41 through 
61.49, the 12-month period ending six months prior to the effective date 
of annual price cap tariffs. Base year or base period earnings shall 
exclude amounts associated with exogenous adjustments to the PCI for the 
lower formula adjustment mechanism permitted by Sec. 61.45(d)(1)(vii).
    (h) Basket. Any class or category of tariffed service or charge:
    (1) Which is established by the Commission pursuant to price cap 
regulation;
    (2) The rates of which are reflected in an Actual Price Index; and
    (3) The related revenues of which are reflected in a Price Cap 
Index.
    (i) Change in rate structure. A restructuring or other alteration of 
the rate components for an existing service.
    (j) Charges. The price for service based on tariffed rates.
    (k) Commercial contractor. The commercial firm to whom the 
Commission annually awards a contract to make copies of Commission 
records for sale to the public.
    (l) Commission. The Federal Communications Commission.
    (m) Concurring carrier. A carrier (other than a connecting carrier) 
subject to the Act which concurs in and assents to schedules of rates 
and regulations filed on its behalf by an issuing carrier or carriers.
    (n) Connecting carrier. A carrier engaged in interstate or foreign 
communication solely through physical connection with the facilities of 
another carrier not directly or indirectly controlling or controlled by, 
or under direct or indirect common control with, such carrier.

[[Page 188]]

    (o) Contract-based tariff. A tariff based on a service contract 
entered into between a non-dominant carrier and a customer, or between a 
customer and a price cap local exchange carrier which has obtained 
permission to offer contract-based tariff services pursuant to part 69, 
subpart H, of this chapter.
    (p) Corrections. The remedy of errors in typing, spelling, or 
punctuation.
    (q) Dominant carrier. A carrier found by the Commission to have 
market power (i.e., power to control prices).
    (r) GDP Price Index (GDP-PI). The estimate of the Chain-Type Price 
Index for Gross Domestic Product published by the United States 
Department of Commerce, which the Commission designates by Order.
    (s) GNP Price Index (GNP-PI). The estimate of the ``Fixed-Weighted 
Price Index for Gross National Product, 1982 Weights'' published by the 
United States Department of Commerce, which the Commission designates by 
Order.
    (t) Issuing carrier. A carrier subject to the Act that publishes and 
files a tariff or tariffs with the Commission.
    (u) Line month. Line demand per month multiplied by twelve.
    (v) Local exchange carrier. Any person that is engaged in the 
provision of telephone exchange service or exchange access as defined in 
section 3(26) of the Act.
    (w) Mid-size company. All price cap local exchange carriers other 
than the Regional Bell Operating Companies and GTE.
    (x) New service offering. A tariff filing that provides for a class 
or sub-class of service not previously offered by the carrier involved 
and that enlarges the range of service options available to ratepayers.
    (y) Non-dominant carrier. A carrier not found to be dominant. The 
nondominant status of providers of international interexchange services 
for purposes of this subpart is not affected by a carrier's 
classification as dominant under Sec. 63.10 of this chapter.
    (aa) Price Cap Local Exchange Carrier. A local exchange carrier 
subject to regulation pursuant to Sec. 61.41 through 61.49.
    (bb) Pooled Local Switching Revenue. For certain qualified companies 
as set forth in Sec. 61.48 (m), is the amount of additional local 
switching reductions in the July 2000 Annual filing allowed to be moved 
and recovered in the CMT basket.
    (cc) Price Cap CMT Revenue. The maximum total revenue a filing 
entity would be permitted to receive from End User Common Line charges 
under Sec. 69.152 of this chapter, Presubscribed Interexchange Carrier 
charges (PICCs) under Sec. 69.153 of this chapter, Carrier Common Line 
charges under Sec. 69.154 of this chapter, and Marketing under Sec. 
69.156 of this chapter, using Base Period lines. Price Cap CMT Revenue 
does not include the price cap local exchange carrier universal service 
contributions as of July 1, 2000. The Price Cap CMT revenue does not 
include the pooled local switching revenue outlined in paragraph (bb) of 
this section.
    (dd) Price Cap Index (PCI). An index of prices applying to each 
basket of services of each carrier subject to price cap regulation, and 
calculated pursuant to Sec. 61.45.
    (ee) Price cap regulation. A method of regulation of dominant 
carriers provided in Sec. Sec. 61.41 through 61.49.
    (ff) Price cap tariff filing. Any tariff filing involving a service 
subject to price cap regulation, or that requires calculations pursuant 
to Sec. Sec. 61.45, 61.46, or 61.47.
    (gg) [Reserved]
    (hh) Rate. The tariffed price per unit of service.
    (ii) Rate increase. Any change in a tariff which results in an 
increased rate or charge to any of the filing carrier's customers.
    (jj) Rate level change. A tariff change that only affects the actual 
rate associated with a rate element, and does not affect any tariff 
regulations or any other wording of tariff language.
    (kk) Regulations. The body of carrier prescribed rules in a tariff 
governing the offering of service in that tariff, including rules, 
practices, classifications, and definitions.
    (ll) Restructured service. An offering which represents the 
modification of a method of charging or provisioning a service; or the 
introduction of a new method of charging or provisioning that does not 
result in a net increase in options available to customers.

[[Page 189]]

    (mm) Rural Company. A company that, as of December 31, 1999, was 
certified to the Commission as a rural telephone company.
    (nn) Service Band Index (SBI). An index of the level of aggregate 
rate element rates in a service category, which index is calculated 
pursuant to Sec. 61.47.
    (oo) Service category. Any group of rate elements subject to price 
cap regulation, which group is subject to a band.
    (pp) Supplement. A publication filed as part of a tariff for the 
purpose of suspending or canceling that tariff, or tariff publication 
and numbered independently from the tariff page series.
    (qq) Target Rate. The applicable Target Rate shall be defined as 
follows:
    (1) For regional Bell Operating Companies and GTE, $0.0055 per ATS 
minute of use;
    (2) For a holding company with a holding company average of less 
than 19 Switched Access End User Common Line charge lines per square 
mile served such company may elect to use a Target Rate of $0.0095 with 
respect to all exchanges owned by that holding company on July 1, 2000, 
or which that holding company is, as of April 1, 2000, under a binding 
and executed contract to purchase;
    (3) For other price cap local exchange carriers, $0.0065 per ATS 
minute of use.
    (rr) Tariff. Schedules of rates and regulations filed by common 
carriers.
    (ss) Tariff publication, or publication. A tariff, supplement, 
revised page, additional page, concurrence, notice of revocation, 
adoption notice, or any other schedule of rates or regulations filed by 
common carriers.
    (tt) Tariff year. The period from the day in a calendar year on 
which a carrier's annual access tariff filing is scheduled to become 
effective through the preceding day of the subsequent calendar year.
    (uu) Text change. A change in the text of a tariff which does not 
result in a change in any rate or regulation.
    (vv) United States. The several States and Territories, the District 
of Columbia, and the possessions of the United States.
    (ww) Corridor service. ``Corridor service'' refers to interLATA 
services offered in the ``limited corridors'' established by the 
District Court in United States v. Western Electric Co., Inc., 569 F. 
Supp. 1057, 1107 (D.D.C. 1983).
    (xx) Toll dialing parity. ``Toll dialing parity'' exists when there 
is dialing parity, as defined in Sec. 51.5 of this chapter, for toll 
services.
    (yy) Loop-based services. Loop-based services are services that 
employ Subcategory 1.3 facilities, as defined in Sec. 36.154 of this 
chapter.
    (zz) Zone Average Revenue per Line. The amount calculated as 
follows:

Zone Average Revenue per Line = (25% * (Loop + Port)) + U (Uniform 
    revenue per line adjustment)

Where:

Loop = the price for unbundled loops in a UNE zone.
Port = the price for switch ports in that UNE zone.
U = [(Average Price Cap CMT Revenue per Line month in a study area * 
price cap local exchange carrier Base Period Lines)-(25% * [Sigma] 
(price cap local exchange carrier Base Period Lines in a UNE Zone * 
((Loop + Port ) for all zones)))] / price cap local exchange carrier 
Base Period Lines in a study area.

[54 FR 19840, May 8, 1989, as amended at 55 FR 42382, Oct. 19, 1990; 56 
FR 55239, Oct. 25, 1991; 58 FR 36147, July 6, 1993; 59 FR 10301, Mar. 4, 
1994; 60 FR 19527, Apr. 19, 1995; 60 FR 20052, Apr. 24, 1995; 61 FR 
59366, Nov. 22, 1996; 62 FR 5777, Feb. 7, 1997; 62 FR 31930, June 11, 
1997; 64 FR 46586, Aug. 26, 1999; 64 FR 51265, Sept. 22, 1999; 65 FR 
38694, June 21, 2000; 65 FR 57740, 57741, Sept. 26, 2000; 66 FR 16881, 
Mar. 28, 2001]



Sec. Sec. 61.11-61.12  [Reserved]



                  Subpart B_Rules for Electronic Filing

    Source: 63 FR 35540, June 30, 1998, unless otherwise noted.



Sec. 61.13  Scope.

    (a) This applies to all tariff publications of carriers required to 
file tariff publications electronically, and any tariff publication that 
a carrier chooses to file electronically.
    (b) All incumbent local exchange carriers are required to file 
tariff publications electronically.
    (c) All tariff publications shall be filed in a manner that is 
compatible

[[Page 190]]

and consistent with the technical requirements of the Electronic Tariff 
Filing System.



Sec. 61.14  Method of filing publications.

    (a) Publications filed electronically must be addressed to 
``Secretary, Federal Communications Commission, Washington, DC 20554.'' 
The Electronic Tariff Filing System will accept filings 24 hours a day, 
seven days a week. The official filing date of a publication received by 
the Electronic Tariff Filing System will be determined by the date and 
time the transmission ends. If the transmission ends after the close of 
a business day, as that term is defined in Sec. 1.4(e)(2) of this 
Chapter, the filing will be date and time stamped as of the opening of 
the next business day.
    (b)(1) In addition, except for issuing carriers filing tariffing 
fees electronically, for all tariff publications requiring fees as set 
forth in part 1, subpart G of this chapter, issuing carriers must submit 
the original of the cover letter (without attachments), FCC Form 159, 
and the appropriate fee to the U.S. Bank, St. Louis, Missouri at the 
address set forth in Sec. 1.1105 of this chapter.
    (2) Issuing carriers filing tariffing fees electronically must 
submit the Form 159. The issuing carrier may submit the Form 159 in 
either of the methods set forth in paragraphs (b)(2)(i) or (b)(2)(ii) of 
this section:
    (i) Issuing carriers submitting tariffing fees electronically may 
submit a paper copy of the Form 159, and the original transmittal letter 
to the Secretary of the Commission in lieu of the U.S. Bank, or;
    (ii) Issuing carriers submitting tariffing fees electronically may 
submit a copy of the Form 159 electronically as an associated document 
with their tariff filing publication. In this instance issuing carriers 
must provide an electronic signature on their letter of transmittal in 
accordance with section 1.52 of this chapter.
    (iii) Regardless of whether the Form 159 is submitted pursuant to 
paragraph (b)(2)(i) or (b)(2)(ii) of this section, the Form 159 should 
display the Electronic Audit Code in the box in the upper left hand 
corner marked ``reserved.'' Issuing carriers should submit these fee 
materials on the same date as the submission in paragraph (a) of this 
section.
    (c) Carriers that are required to file publications electronically 
may not file those publications on paper or other media unless 
specifically required to do so by the Commission.
    (d) Carriers that are required to file publications electronically 
need only transmit one set of files to the Commission. No other copies 
to any other party are required.
    (e) Carriers that are required to file publications electronically 
must continue to comply with the format requirements set forth in part 
61.

[63 FR 35540, June 30, 1998, as amended at 64 FR 46586, Aug. 26, 1999; 
73 FR 9030, Feb. 19, 2008]



Sec. 61.15  Letters of transmittal and cover letters.

    (a) All tariff publications filed with the Commission electronically 
must be accompanied by a letter of transmittal. All letters of 
transmittal must:
    (1) Concisely explain the nature and purpose of the filing;
    (2) Specify whether supporting information is required for the new 
tariff or tariff revision, and specify the Commission rule or rules 
governing the supporting information requirements for that filing;
    (3) Contain a statement indicating the date and method of filing of 
the original of the transmittal as required by Sec. 61.14(b);
    (4) Include the FCC Registration Number (FRN) of the carrier(s) on 
whose behalf the cover letter is submitted. See subpart W of part 1 of 
this title.
    (b) Carriers filing tariffs electronically pursuant to the notice 
requirements of section 204(a)(3) of the Communications Act shall 
display prominently, in the upper right hand corner of the letter of 
transmittal, a statement that the filing is made pursuant to that 
section and whether the tariff is filed on 7 or 15 days notice.
    (c) Any carrier filing a new or revised tariff made on 15 days' 
notice or less shall include in the letter of transmittal the name, room 
number, street

[[Page 191]]

address, telephone number, and facsimile number of the individual 
designated by the filing carrier to receive personal or facsimile 
service of petitions against the filing as required under Sec. 
1.773(a)(4) of this chapter.
    (d) The letter of transmittal must specifically reference by number 
any special permission necessary to implement the tariff publication. 
Special permission must be granted prior to the filing of the tariff 
publication and may not be requested in the transmittal letter.
    (e) The letter of transmittal must be substantially in the format 
established in Sec. Sec. 61.33(g) and 61.33(h)(1).
    (f) All submissions of documents other than a new tariff or 
revisions to an existing tariff, such as Base Documents or Tariff Review 
Plans, must be accompanied by a cover letter that concisely explains the 
nature and purpose of the filing. Publications submitted under this 
paragraph are not required to submit a tariffing fee.

[63 FR 35540, June 30, 1998, as amended at 66 FR 47896, Sept. 14, 2001]



Sec. 61.16  Base documents.

    (a) The Base Document is a complete tariff which incorporates all 
effective revisions, as of the last day of the preceding month. The Base 
Document should be submitted with a cover letter as specified in Sec. 
61.15(f) of this part and identified as the Monthly Updated Base 
Document.
    (b) Initially, carriers that currently have tariffs on file with the 
commission must file a Base Document within five days of the initiation 
of mandatory electronic filing.
    (c) Subsequently, if there have been revisions that became effective 
up to and including the last day of the preceding month, a new Base 
Document must be submitted within the first five business days of the 
current month that will incorporate those revisions.



Sec. 61.17  Method of filing applications for special permission.

    (a) An application for special permission filed electronically must 
be addressed to ``Secretary, Federal Communications Commission, 
Washington, DC 20554.'' The Electronic Tariff Filing System will accept 
filings 24 hours a day, seven days a week. The official filing date of a 
publication received by the Electronic Tariff Filing System will be 
determined by the date and time the transmission ends. If the 
transmission ends after the close of a business day, as that term is 
defined in Sec. 1.4(e)(2) of this chapter, the filing will be date and 
time stamped as of the opening of the next business day.
    (b) In addition, except for issuing carriers filing tariffing fees 
electronically, for special permission applications requiring fees as 
set forth in part 1, subpart G of this chapter, issuing carriers must 
submit the original of the application letter (without attachments), FCC 
Form 159, and the appropriate fee to the U.S. Bank, St. Louis, Missouri, 
at the address set forth in Sec. 1.1105 of this chapter. Issuing 
carriers submitting tariffing fees electronically should submit a copy 
of the Form 159 and the original application letter to the Secretary of 
the Commission in lieu of the U.S. Bank. The Form 159 should display the 
Electronic Audit Code in the box in the upper left hand corner marked 
``reserved''. Issuing carriers should submit these fee materials on the 
same day as the transmission in paragraph (a) of this section.
    (c) In addition, if a carrier applies for special permission to 
revise joint tariffs, the application must state that it is filed on 
behalf of all carriers participating in the affected service. 
Applications must be numbered consecutively in a series separate from 
FCC tariff numbers, bear the signature of the officer or agent of the 
carrier, and be in the following format:

Application No. ----------
(Date)----------
Secretary
Federal Communications Commission
Washington, DC 20554.

    Attention: Wireline Competition Bureau (here provide the statements 
required by section 61.152).

(Exact name of carrier)----------
(Name of officer or agent)----------
(Title of officer or agent)----------

[63 FR 35540, June 30, 1998, as amended at 64 FR 46586, Aug. 26, 1999; 
67 FR 13228, Mar. 21, 2002; 73 FR 9030, Feb. 19, 2008]

[[Page 192]]



            Subpart C_General Rules for Nondominant Carriers



Sec. 61.18  Scope.

    The rules in this subpart apply to all nondominant carriers.

[64 FR 46587, Aug. 26, 1999]



Sec. 61.19  Detariffing of international and interstate, domestic 
interexchange services.

    (a) Except as otherwise provided in paragraphs (b) through (e) of 
this section, or by Commission order, carriers that are nondominant in 
the provision of international and interstate, domestic interexchange 
services shall not file tariffs for such services.
    (b) Carriers that are nondominant in the provision of international 
and domestic, interstate, interexchange services are permitted to file 
tariffs for dial-around 1+ services. For the purposes of this paragraph, 
dial-around 1+ calls are those calls made by accessing the interexchange 
carrier through the use of that carrier's carrier access code.
    (c) Carriers that are nondominant in the provision of international 
and domestic, interstate, interexchange services are permitted to file a 
tariff for such services applicable to those customers who contact the 
local exchange carrier to designate an interexchange carrier or to 
initiate a change with respect to their primary interexchange carrier. 
Such tariff will enable the interexchange carrier to provide service to 
the customer until the interexchange carrier and the customer consummate 
a written agreement, but in no event shall the interexchange carrier 
provide service to its customer pursuant to such tariff for more than 45 
days.
    (d) Carriers that are nondominant in the provision of international 
inbound collect calls to the United States are permitted to file a 
tariff for such services.
    (e) Carriers that are nondominant in the provision of ``on-demand'' 
Mobile Satellite Services are permitted to file a tariff for such 
services applicable to those customers that have not entered into pre-
existing service contracts designating a specific provider for such 
services.

[66 FR 16881, Mar. 28, 2001]



Sec. 61.20  Method of filing publications.

    (a) Publications sent for filing must be addressed to ''Secretary, 
Federal Communications Commission, Washington, DC 20554.`` The date on 
which the publication is received by the Secretary of the Commission (or 
the Mail Room where submitted by mail) is considered the official filing 
date.
    (b)(1) In addition, except for issuing carriers filing tariffing 
fees electronically, for all tariff publications requiring fees as set 
forth in part 1, subpart G of this chapter, issuing carriers must submit 
the original of the cover letter (without attachments), FCC Form 159, 
and the appropriate fee to the U.S. Bank, St. Louis, Missouri at the 
address set forth in Sec. 1.1105 of this chapter. Issuing carriers 
submitting tariffing fees electronically should submit the Form 159 and 
the original cover letter to the Secretary of the Commission in lieu of 
the U.S. Bank. The Form 159 should display the Electronic Audit Code in 
the box in the upper left hand corner marked ``reserved.'' Issuing 
carriers should submit these fee materials on the same date as the 
submission in paragraph (a) of this section.
    (2) International carriers must certify in their original cover 
letter that they are authorized under Section 214 of the Communications 
Act of 1934, as amended, to provide service, and reference the FCC file 
number of that authorization.
    (c) In addition to the requirements set forth in paragraphs (a) and 
(b) of this section, the issuing carrier must send a copy of the cover 
letter with one 3\1/2\ inch diskette or CD-ROM containing both the 
complete tariff and any attachments, as appropriate, to the Secretary, 
Federal Communications Commission. In addition, the issuing carrier must 
send one diskette or CD-ROM of the complete tariff and a copy of the 
cover letter to the commercial contractor (at its office on Commission 
premises), and to the Chief, Tariff and Pricing Analysis Branch. The 
latter should be clearly labeled as the ``Public Reference Copy.'' The

[[Page 193]]

issuing carrier should file the copies required by this paragraph so 
they will be received on the same date as the filings in paragraph (a) 
of this section. In cases where the a single diskette or CD-ROM does not 
provide sufficient capacity for the carrier's entire tariff filing, the 
issuing carrier may submit two or more diskettes, or two or more CD-
ROMs, as necessary.

[58 FR 44460, Aug. 23, 1993, as amended at 61 FR 15726, Apr. 9, 1996. 
Redesignated at 61 FR 59366, Nov. 22, 1996, and further redesignated and 
amended at 64 FR 46587, Aug. 26, 1999; 73 FR 9031, Feb. 19, 2008]



Sec. 61.21  Cover letters.

    (a)(1) Except as specified in Sec. 61.32(b), all publications filed 
with the Commission must be accompanied by a cover letter, 8.5 by 11 
inches (21.6 cm x 27.9 cm) in size, and must be plainly printed in black 
ink. All transmittal letters should briefly explain the nature and 
purpose of the filing and indicate the date and method of filing of the 
original cover letter, as required by Sec. 61.20(b)(1) of this part.
    (2) International carriers must certify that they are authorized 
under Section 214 of the Communications Act of 1934, as amended, to 
provide service, and reference the FCC file number of that 
authorization.
    (3) All cover letters and letters of transmittal shall include the 
FCC Registration Number (FRN) of the issuing carrier(s) on whose behalf 
the letter is submitted. See part 1, subpart W of this chapter.
    (b) A separate cover letter may accompany each publication, or an 
issuing carrier may file as many publications as desired with one cover 
letter.

    Note: If a receipt for accompanying publication is desired, the 
cover letter must be sent in duplicate. One copy showing the date of the 
receipt by the Commission will then be returned to the sender.

[58 FR 44460, Aug. 23, 1993, as amended at 61 FR 15726, Apr. 9, 1996. 
Redesignated at 61 FR 59366, Nov. 22, 1996, and further redesignated and 
amended at 64 FR 46587, Aug. 26, 1999; 66 FR 47896, Sept. 14, 2001]



Sec. 61.22  Composition of tariffs.

    (a) The tariff must be submitted on a 3\1/2\ inch (8.89 cm) 
diskette, or a 5 inch CD-ROM, formatted in an IBM-compatible form using 
either WordPerfect 5.1, Microsoft Word 6, or Microsoft Word 97 software. 
No diskettes shall contain more than one tariff. The diskette or CD-ROM 
must be submitted in ``read only'' mode. The diskette or CD-ROM must be 
clearly labelled with the carrier's name, Tariff Number, software used, 
and the date of submission. When multiple diskettes or CD-ROMs are 
submitted, the issuing carrier shall clearly label each diskette in the 
following format: ``1 of --'', ``2 of --'', etc.
    (b) The tariff must contain the carrier's name, the international 
Section 214 authorization FCC file number (when applicable), and the 
information required by Section 203 of the Act.
    (c)(1) Changes to a tariff must be made by refiling the entire 
tariff on a new diskette, with the changed material included. The 
carrier must indicate in the tariff what changes have been made.
    (2) Any issuing carrier submitting an individual tariff that 
requires ten or more diskettes that wishes to revise its tariff is 
permitted to do so by filing a diskette containing only those pages on 
which the changed material is located. Any such carrier shall file a 
current effective version of its entire tariff on the first business day 
of each month. For purposes of this paragraph, ``business day'' is 
defined in Sec. 1.4(e)(2) of this chapter.
    (d) Domestic and international nondominant carriers subject to the 
provisions of this section are not subject to the tariff filing 
requirements of Sec. 61.54.
    (e)(1) For contract-based tariffs defined in Sec. 61.3(m), a 
separate letter of transmittal may accompany each tariff filed, or the 
above format may be modified for filing as many publications as may be 
desired with one transmittal letter. The transmittals must be numbered 
in a series separate from transmittals for non-contract tariff filing. 
Numbers must appear on the face of the transmittal and be in the form of 
``CTT No. ------'', using CTT as an abbreviation for contract-based 
tariff transmittals, or some similar form that indicates that the 
transmittal is a contract-based tariff transmittal. Contract-based 
tariffs must also be numbered in a series separate from non-

[[Page 194]]

contract-based tariffs. Numbers must be in the form of ``CT No. ------
'', using CT as an abbreviation for contract-based tariffs, or some 
similar form that indicates that the tariff is a contract-based tariff. 
Each contract-based tariff must be assigned a separate number. 
Transmittals and tariffs subject to this paragraph shall be filed 
beginning with the number ``1'' and shall be numbered consecutively.
    (2) Composition of contract-based tariffs shall comply with 
Sec. Sec. 61.54 (b) through (i).
    (3) Contract-based tariffs shall include the following:
    (i) The term of the contract, including any renewal options;
    (ii) A brief description of each of the services provided under the 
contract;
    (iii) Minimum volume commitments for each service;
    (iv) The contract price for each service or services at the volume 
levels committed to by the customers;
    (v) A general description of any volume discounts built into the 
contract rate structure; and
    (vi) A general description of other classifications, practices and 
regulations affecting the contract rate.

[58 FR 44460, Aug. 23, 1993; 58 FR 48323, Sept. 15, 1993, as amended at 
61 FR 15727, Apr. 9, 1996. Redesignated at 61 FR 59366, Nov. 22, 1996, 
and further redesignated and amended at 64 FR 46587, Aug. 26, 1999]



Sec. 61.23  Notice requirements.

    (a) Every proposed tariff filing must bear an effective date and, 
except as otherwise provided by regulation, special permission, or 
Commission order, must be made on at least the number of days notice 
specified in this section.
    (b) Notice is accomplished by filing the proposed tariff changes 
with the Commission. Any period of notice specified in this section 
begins on and includes the date the tariff is received by the 
Commission, but does not include the effective date. In computing the 
notice period required, all days including Sundays and holidays must be 
counted.
    (c) All tariff filings of domestic and international non-dominant 
carriers must be made on at least one day's notice.

[58 FR 44460, Aug. 23, 1993, as amended at 61 FR 15727, Apr. 9, 1996. 
Redesignated at 61 FR 59366, Nov. 22, 1996, and further redesignated and 
amended at 64 FR 46587, 46588, Aug. 26, 1999]



Sec. 61.25  References to other instruments.

    In addition to the cross-references permitted pursuant to Sec. 
61.74, a non-dominant carrier may cross-reference in its tariff 
publication only the rate provisions of another carrier's FCC tariff 
publication, provided that the following conditions are met:
    (a) The tariff being cross-referenced must be on file with the 
Commission and in effect;
    (b) The issuing carrier must specifically identify in its tariff the 
cross-referenced tariff by Carrier Name and FCC Tariff Number;
    (c) The issuing carrier must specifically identify in its tariff the 
rates being cross-referenced so as to leave no doubt as to the exact 
rates that will apply, including but not limited to any applicable 
credits, discounts, promotions; and
    (d) The issuing carrier must keep its cross-references current.

[64 FR 46588, Aug. 26, 1999]



Sec. 61.26  Tariffing of competitive interstate switched exchange
access services.

    (a) Definitions. For purposes of this section 61.26, the following 
definitions shall apply:
    (1) CLEC shall mean a local exchange carrier that provides some or 
all of the interstate exchange access services used to send traffic to 
or from an end user and does not fall within the definition of 
``incumbent local exchange carrier'' in 47 U.S.C. 251(h).
    (2) Competing ILEC shall mean the incumbent local exchange carrier, 
as defined in 47 U.S.C. 251(h), that would provide interstate exchange 
access services, in whole or in part, to the extent those services were 
not provided by the CLEC.
    (3) Interstate switched exchange access services shall include the 
functional

[[Page 195]]

equivalent of the ILEC interstate exchange access services typically 
associated with following rate elements: carrier common line 
(originating); carrier common line (terminating); local end office 
switching; interconnection charge; information surcharge; tandem 
switched transport termination (fixed); tandem switched transport 
facility (per mile); tandem switching.
    (4) Non-rural ILEC shall mean an incumbent local exchange carrier 
that is not a rural telephone company under 47 U.S.C. 153(37).
    (5) The rate for interstate switched exchange access services shall 
mean the composite, per-minute rate for these services, including all 
applicable fixed and traffic-sensitive charges.
    (6) Rural CLEC shall mean a CLEC that does not serve (i.e., 
terminate traffic to or originate traffic from) any end users located 
within either:
    (i) Any incorporated place of 50,000 inhabitants or more, based on 
the most recently available population statistics of the Census Bureau 
or
    (ii) An urbanized area, as defined by the Census Bureau.
    (b) Except as provided in paragraphs (c) and (e) of this section, a 
CLEC shall not file a tariff for its interstate switched exchange access 
services that prices those services above the higher of:
    (1) The rate charged for such services by the competing ILEC or
    (2) The lower of:
    (i) The benchmark rate described in paragraph (c) of this section or
    (ii) The lowest rate that the CLEC has tariffed for its interstate 
exchange access services, within the six months preceding June 20, 2001.
    (c) From June 20, 2001 until June 20, 2002, the benchmark rate for a 
CLEC's interstate switched exchange access services will be $0.025 per 
minute. From June 20, 2002 until June 20, 2003, the benchmark rate for a 
CLEC's interstate switched exchange access services will be $0.018 per 
minute. From June 20, 2003 until June 21, 2004, the benchmark rate for a 
CLEC's interstate switched exchange access services will be $0.012 per 
minute. After June 21, 2004, the benchmark rate for a CLEC's interstate 
switched exchange access services will be the rate charged for similar 
services by the competing ILEC, provided, however, that the benchmark 
rate for a CLEC's interstate switched exchange access services will not 
move to bill-and-keep, if at all, until June 20, 2005.
    (d) Notwithstanding paragraphs (b) and (c) of this section, in the 
event that, after June 20, 2001, a CLEC begins serving end users in a 
metropolitan statistical area (MSA) where it has not previously served 
end users, the CLEC shall not file a tariff for its interstate exchange 
access services in that MSA that prices those services above the rate 
charged for such services by the competing ILEC.
    (e) Rural exemption. Notwithstanding paragraphs (b) through (d) of 
this section, a rural CLEC competing with a non-rural ILEC shall not 
file a tariff for its interstate exchange access services that prices 
those services above the rate prescribed in the NECA access tariff, 
assuming the highest rate band for local switching. In addition to that 
NECA rate, the rural CLEC may assess a presubscribed interexchange 
carrier charge if, and only to the extent that, the competing ILEC 
assesses this charge.
    (f) If a CLEC provides some portion of the interstate switched 
exchange access services used to send traffic to or from an end user not 
served by that CLEC, the rate for the access services provided may not 
exceed the rate charged by the competing ILEC for the same access 
services.

[66 FR 27900, May 21, 2001; 66 FR 28774, May 24, 2001; 69 FR 35269, June 
24, 2004]



   Subpart D_General Tariff Rules for International Dominant Carriers



Sec. 61.28  International dominant carrier tariff filing requirements.

    (a) Any carrier classified as dominant for the provision of 
particular international communications services on a particular route 
for any reason other than a foreign carrier affiliation under Sec. 
63.10 of this chapter shall file tariffs for those services pursuant to 
the notice and cost support requirements for tariff filings of dominant 
domestic carriers, as set forth in subpart E of this part.

[[Page 196]]

    (b) Other than the notice and cost support requirements set forth in 
paragraph (a) of this section, all tariff filing requirements applicable 
to all carriers classified as dominant for the provision of particular 
international communications services on a particular route for any 
reason other than a foreign carrier affiliation pursuant to Sec. 63.10 
of this chapter are set forth in subpart C of this part.

[66 FR 16881, Mar. 28, 2001]



              Subpart E_General Rules for Dominant Carriers



Sec. 61.31  Scope.

    The rules in this subpart apply to all dominant carriers.

[64 FR 46588, Aug. 26, 1999]



Sec. 61.32  Method of filing publications.

    (a) Publications sent for filing must be addressed to ``Secretary, 
Federal Communications Commission, Washington, DC 20554.'' The date on 
which the publication is received by the Secretary of the Commission (or 
the Mail Room where submitted by mail) is considered the official filing 
date.
    (b) In addition, except for issuing carriers filing tariffing fees 
electronically, for all tariff publications requiring fees as set forth 
in part 1, subpart G of this chapter, issuing carriers must submit the 
original of the transmittal letter (without attachments), FCC Form 159, 
and the appropriate fee to the U.S. Bank, St. Louis, Missouri, at the 
address set forth in Sec. 1.1105 of this chapter. Issuing carriers 
submitting tariffing fees electronically should submit the Form 159 and 
the original cover letter to the Secretary of the Commission in lieu of 
the U.S. Bank. The Form 159 should display the Electronic Audit Code in 
the box in the upper left hand corner marked ``reserved.'' Issuing 
carriers should submit these fee materials on the same date as the 
submission in paragraph (a) of this section.
    (c) In addition to the requirements set forth in paragraphs (a) and 
(b) of this section, the issuing carrier must send a copy of the 
transmittal letter with two copies of the proposed tariff pages and all 
attachments, including the supporting information specified in Sec. 
61.38 or Sec. 61.49, as appropriate, to the Secretary, Federal 
Communications Commission. In addition, the issuing carrier must send a 
copy of the publication, supporting information specified in Sec. 61.38 
or Sec. 61.49, as appropriate, and transmittal letter to the commercial 
contractor (at its office on Commission premises), and to the Chief, 
Pricing Policy Division. The latter should be clearly labeled as the 
``Public Reference Copy.'' The copies of supporting information required 
here are in addition to those required by Sec. 61.38(c). The issuing 
carrier must file the copies required by this paragraph so they will be 
received on the same date as the filings in paragraph (a).

[55 FR 19173, May 8, 1990, as amended at 64 FR 46588, 46593, Aug. 26, 
1999; 67 FR 13228, Mar. 21, 2002; 73 FR 9031, Feb. 19, 2008]



Sec. 61.33  Letters of transmittal.

    (a) Except as specified in Sec. 61.32(b), all publications filed on 
paper with the Commission must be numbered consecutively by the issuing 
carrier beginning with Number 1, and must be accompanied by a letter of 
transmittal, A4 (21 cmx29.7 cm) or 8\1/2\ by 11 inches (21.6 cmx27.9 cm) 
in size. All letters of transmittal must
    (1) Concisely explain the nature and purpose of the filing;
    (2) Specify whether supporting information under Sec. 61.38 is 
required;
    (3) State whether copies have been delivered to the Commercial 
Contractor and the Chief, Pricing Policy Division.
    (4) Contain a statement indicating the date and method of filing of 
the original of the transmittal letter as required by Sec. 61.32(b), 
and the date and method of filing the copies as required by Sec. 61.32 
(a) and (c); and
    (5) Include the FCC Registration Number (FRN) of the carrier(s) on 
whose behalf the letter is submitted. See part 1, subpart W of this 
chapter.
    (b) In addition to the requirements set forth in paragraph (a) of 
this section, any local exchange carrier choosing to file an Access 
Tariff under Sec. 61.39 must include in the transmittal:
    (1) A summary of the filing's basic rates, terms and conditions;

[[Page 197]]

    (2) A statement concerning whether any prior Commission facility 
authorization necessary to the implementation of the tariff has been 
obtained; and
    (3) A statement that the filing is made pursuant to Sec. 61.39.
    (c) In addition to the requirements set forth in paragraph (a) of 
this section, any carrier filing a price cap tariff must include in the 
letter of transmittal a statement that the filing is made pursuant to 
Sec. 61.49.
    (d) Tariffs filed pursuant to section 204(a)(3) of the 
Communications Act shall display prominently in the upper right hand 
corner of the letter of transmittal a statement that the filing is made 
pursuant to that section and whether it is being filed on 7- or 15-days' 
notice.
    (e) In addition to the requirements set forth in paragraph (a) of 
this section, any carrier filing a new or revised tariff made on 15 
days' notice or less shall include in the letter of transmittal, the 
name, room number, street address, telephone number, and facsimile 
number of the individual designated by the filing carrier to receive 
personal or facsimile service of petitions against the filing as 
required under Sec. 1.773(a)(4) of this chapter.
    (f) In addition to the requirements set forth in paragraphs (a), 
(b), and (c) of this section, the letter of transmittal must 
specifically reference by number any special permission necessary to 
implement the tariff publication. Special permission must be granted 
prior to the filing of the tariff publication, and may not be requested 
in the transmittal letter.
    (g) The letter of transmittal must be substantially in the following 
format:
________________________________________________________________________
(Exact name of carrier in full)
________________________________________________________________________
(Post Office Address)
________________________________________________________________________
(Date)
________________________________________________________________________
Transmittal No.
    Secretary, Federal Communications Commission; Washington, DC 20554
    Attention: Wireline Competition Bureau
    The accompanying tariff (or other publication) issued by ------, and 
bearing FCC No. ------, effective ------, 20 --, is sent to you for 
filing in compliance with the requirements of the Communications Act of 
1934, as amended. (Here give the additional information required.)

________________________________________________________________________
(Name of issuing officer or agent)
________________________________________________________________________
(Title)
    (h)(1) A separate letter of transmittal may accompany each 
publication, or the above format may be modified to provide for filing 
as many publications as desired with one transmittal letter.
    (2) [Reserved]

    Note to Sec. 61.33: If a receipt for accompanying publication is 
desired, the letter of transmittal must be sent in duplicate. One copy 
showing the date of receipt by the Commission will then be returned to 
the sender.

[55 FR 19173, May 8, 1990, as amended by 56 FR 55239, Oct. 25, 1991; 58 
FR 17530, Apr. 5, 1993; 58 FR 44906, Aug. 25, 1993; 62 FR 5777, Feb. 7, 
1997; 64 FR 46588, 46593, Aug. 26, 1999; 66 FR 47896, Sept. 14, 2001; 67 
FR 13228, Mar. 21, 2002]



Sec. 61.38  Supporting information to be submitted with letters
of transmittal.

    (a) Scope. This section applies to dominant carriers whose gross 
annual revenues exceed $500,000 for the most recent 12 month period of 
operations or are estimated to exceed $500,000 for a representative 12 
month period. Local exchange carriers serving 50,000 or fewer access 
lines in a given study area that are described as subset 3 carriers in 
Sec. 69.602 of this chapter may submit Access Tariff filings for that 
study area pursuant to either this section or Sec. 61.39. However, the 
Commission may require any carrier to submit such information as may be 
necessary for a review of a tariff filing. This section (other than the 
preceding sentence of this paragraph) shall not apply to tariff filings 
proposing rates for services identified in Sec. 61.42 (d), (e), and 
(g).
    (b) Explanation and data supporting either changes or new tariff 
offerings. The material to be submitted for a tariff change which 
affects rates or charges or for a tariff offering a new service, must 
include an explanation of the changed or new matter, the reasons for the 
filing, the basis of ratemaking employed, and economic information to 
support the changed or new matter.
    (1) For a tariff change the carrier must submit the following, 
including

[[Page 198]]

complete explanations of the bases for the estimates.
    (i) A cost of service study for all elements for the most recent 12 
month period;
    (ii) A study containing a projection of costs for a representative 
12 month period;
    (iii) Estimates of the effect of the changed matter on the traffic 
and revenues from the service to which the changed matter applies, the 
carrier's other service classifications, and the carrier's overall 
traffic and revenues. These estimates must include the projected effects 
on the traffic and revenues for the same representative 12 month period 
used in (ii) above.
    (2) For a tariff filing offering a new service, the carrier must 
submit the following, including complete explanations of the bases for 
the estimates.
    (i) A study containing a projection of costs for a representative 12 
month period; and
    (ii) Estimates of the effect of the new matter on the traffic and 
revenues from the service to which the new matter applies, the carrier's 
other service classifications, and the carrier's overall traffic and 
revenues. These estimates must include the projected effects on the 
traffic and revenues for the same representative 12 month period used in 
paragraph (b)(2)(i) of this section.
    (3) [Reserved]
    (4) For a tariff that introduces a system of density pricing zones, 
as described in Sec. 69.123 of this chapter, the carrier must, before 
filing its tariff, submit a density pricing zone plan including, inter 
alia, documentation sufficient to establish that the system of zones 
reasonably reflects cost-related characteristics, such as the density of 
total interstate traffic in central offices located in the respective 
zones, and receive approval of its proposed plan.
    (c) Working papers and statistical data. (1) Concurrently with the 
filing of any tariff change or tariff filing for a service not 
previously offered, the Chief, Pricing Policy Division must be provided 
two sets of working papers containing the information underlying the 
data supplied in response to paragraph (b) of this section, and a clear 
explanation of how the working papers relate to that information.
    (2) All statistical studies must be submitted and supported in the 
form prescribed in Sec. 1.363 of the Commission's Rules.
    (d) Form and content of additional material to be submitted with 
certain rate increases. In the circumstances set out in paragraphs 
(d)(1) and (2) of this section, the filing carrier must submit all 
additional cost, marketing and other data underlying the working papers 
to justify a proposed rate increase. The carrier must submit this 
information in suitable form to serve as the carrier's direct case in 
the event the rate increase is set by the Commission for investigation.
    (1) Rate increases affecting single services or tariffed items.
    (i) A rate increase in any service or tariffed item which results in 
more than $1 million in additional annual revenues, calculated on the 
basis of existing quantities in service, without regard to the 
percentage increase in such revenues; or
    (ii) A single rate increase in any service or tariffed item, or 
successive rate increases in the same service or tariffed item within a 
12 month period, either of which results in:
    (A) At least a 10 percent increase in annual revenues from that 
service or tariffed item, and
    (B) At least $100,000 in additional annual revenues, both calculated 
on the basis of existing quantities in service.
    (2) Rate increases affecting more than one service or tariffed item.
    (i) A general rate increase in more than one service or tariffed 
item occurring at one time, which results in more than $1 million in 
additional revenues calculated on the basis of existing quantities in 
service, without regard to the percentage increase in such revenues; or
    (ii) A general rate increase in more than one service or tariffed 
item occurring at one time, or successive general rate increases in the 
same services or tariffed items occurring within a 12 month period, 
either of which results in:
    (A) At least a 10 percent increase in annual revenues from those 
services or tariffed items, and

[[Page 199]]

    (B) At least $100,000 in additional annual revenues, both calculated 
on the basis of existing quantities in service.
    (e) Submission of explanation and data by connecting carriers. If 
the changed or new matter is being filed by the issuing carrier at the 
request of a connecting carrier, the connecting carrier must provide the 
data required by paragraphs (b) and (c) of this section on the date the 
issuing carrier files the tariff matter with the Commission.
    (f) Copies of explanation and data to customers. Concurrently with 
the filing of any rate for special construction (or special assembly 
equipment and arrangements) developed on the basis of estimated costs, 
the offering carrier must transmit to the customer a copy of the 
explanation and data required by paragraphs (b) and (c) of this section.
    (g) On each page of cost support material submitted pursuant to this 
section, the carrier shall indicate the transmittal number under which 
that page was submitted.

[49 FR 40869, Oct. 18, 1984, as amended at 53 FR 36289, Sept. 19, 1988; 
54 FR 19841, May 8, 1989; 55 FR 42382, Oct. 19, 1990; 56 FR 55239, Oct. 
25, 1991; 57 FR 54330, Nov. 18, 1992; 58 FR 36147, July 6, 1993; 58 FR 
48762, Sept. 17, 1993; 64 FR 46588, 46593, Aug. 26, 1999; 67 FR 13228, 
Mar. 21, 2002]

    Effective Date Note: At 69 FR 25336, May 6, 2004, paragraph (b)(4) 
of Sec. 61.38 was removed and reserved. This paragraph contains 
information collection and recordkeeping requirements and will not 
become effective until approval has been given by the Office of 
Management and Budget.



Sec. 61.39  Optional supporting information to be submitted with 
letters of transmittal for Access Tariff filings effective on or 

after April 1, 1989, by local 
          exchange carriers serving 50,000 or fewer access lines in a 
          given study area that are described as subset 3 carriers in 
          Sec. 69.602.

    (a) Scope. This section provides for an optional method of filing 
for any local exchange carrier that is described as subset 3 carrier in 
Sec. 69.602, which elects to issue its own Access Tariff for a period 
commencing on or after April 1, 1989, and which serves 50,000 or fewer 
access lines in a study area as determined under Sec. 36.611(a)(8) of 
this chapter. However, the Commission may require any carrier to submit 
such information as may be necessary for review of a tariff filing. This 
section (other than the preceding sentence of this paragraph) shall not 
apply to tariff filings of local exchange carriers subject to price cap 
regulation.
    (b) Explanation and data supporting tariff changes. The material to 
be submitted to either a tariff change or a new tariff which affects 
rates or charges must include an explanation of the filing in the 
transmittal as required by Sec. 61.33. The basis for ratemaking must 
comply with the following requirements. Except as provided in paragraph 
(b)(5) of this section, it is not necessary to submit this supporting 
data at the time of filing. However, the local exchange carrier should 
be prepared to submit the data promptly upon reasonable request by the 
Commission or interested parties.
    (1) For a tariff change, the local exchange carrier that is a cost 
schedule carrier must propose Tariff Sensitive rates based on the 
following:
    (i) For the first period, a cost of service study for Traffic 
Sensitive elements for the most recent 12 month period with related 
demand for the same period.
    (ii) For subsequent filings, a cost of service study for Traffic 
Sensitive elements for the total period since the local exchange 
carrier's last annual filing, with related demand for the same period.
    (2) For a tariff change, the local exchange company that is an 
average schedule carrier must propose Traffic Sensitive rates based on 
the following:
    (i) For the first period, the local exchange carrier's most recent 
annual Traffic Sensitive settlement from the National Exchange Carrier 
Association pool.
    (ii) For subsequent filings, an amount calculated to reflect the 
Traffic Sensitive average schedule pool settlement the carrier would 
have received if the carrier had continued to participate, based upon 
the most recent average schedule formulas approved by the Commission.
    (3) For a tariff change, the local exchange carrier that is a cost 
schedule carrier must propose Common Line rates based on the following:

[[Page 200]]

    (i) For the first biennial filing, the common line revenue 
requirement shall be determined by a cost of service study for the most 
recent 12-month period. Subscriber line charges shall be based on cost 
and demand data for the same period. Carrier common line rates shall be 
determined by the following formula:
[GRAPHIC] [TIFF OMITTED] TR06JN97.008

where:
[GRAPHIC] [TIFF OMITTED] TR06JN97.009

And where:

CCL Rev Req = carrier common line revenue requirement for the most 
recent 12-month period;
CCL MOUb = carrier common line minutes of use for the most recent 12-
month period;
CCL MOU1 = CCL MOUb; and
CCL MOU0 = carrier common line minutes of use for the 12-month period 
preceding the most recent 12-month period.

    (ii) For subsequent biennial filings, the common line revenue 
requirement shall be determined by a cost of service study for the most 
recent 24-month period. Subscriber line charges shall be based on cost 
and demand data for the same period. Carrier common line rates shall be 
determined by the following formula:
[GRAPHIC] [TIFF OMITTED] TR06JN97.010

Where:
[GRAPHIC] [TIFF OMITTED] TR06JN97.011

And where:

CCL Rev Req = carrier common line revenue requirement for the most 
recent 24-month period;
CCL MOUb = carrier common line minutes of use for the most 
recent 24-month period;
CCL MOU1 = carrier common line minutes of use for the 12-
month period; and
CCL MOU0 = carrier common line minutes of use for the 12-
month period preceding the most recent 12-month period.

    (4) For a tariff change, the local exchange carrier which is an 
average schedule carrier must propose common line rates based on the 
following:
    (i) For the first biennial filings, the common line revenue 
requirement shall be determined by the local exchange carrier's most 
recent annual Common Line settlement from the National Exchange Carrier 
Association. Subscriber line charges shall be based on cost and demand 
data for the same period. Carrier common line rates shall be determined 
by the following formula:
[GRAPHIC] [TIFF OMITTED] TR06JN97.012

Where:
[GRAPHIC] [TIFF OMITTED] TR06JN97.013

And where:

CCL Rev Req = carrier common line settlement for the most recent 12-
month period;
CCL MOUb = carrier common line minutes of use for the most recent 12-
month period;
CCL MOU1 = CCL MOUb; and
CCL MOU0 = carrier common line minutes of use for the 12-month period 
preceding the most recent 12-month period.

    (ii) For subsequent biennial filings, the common line revenue 
requirement shall be an amount calculated to reflect the average 
schedule pool settlements the carrier would have received if the carrier 
had continued to participate in the carrier common line pool, based upon 
the average schedule Common Line formulas developed by the National 
Exchange Carrier Association for the most recent 24-month period. 
Subscriber line charges shall be based on cost and demand data for the 
same period. Carrier common line rates shall be determined by the 
following formula:
[GRAPHIC] [TIFF OMITTED] TR06JN97.014

Where:
[GRAPHIC] [TIFF OMITTED] TR06JN97.015

And where:

CCL Rev Req = carrier common line settlement for the most recent 24-
month period;

[[Page 201]]

CCL MOUb = carrier common line minutes of use for the most recent 24-
month period;
CCL MOU1 = carrier common line minutes of use for the most recent 12-
month period; and
CCL MOU0 = carrier common line minutes of use for the 12-month period 
preceding the most recent 12-month period.

    (5) For End User Common Line charges included in a tariff pursuant 
to this Section, the local exchange carrier must provide supporting 
information for the two-year historical period with its letter of 
transmittal in accordance with Sec. 61.38.
    (c) Maximum allowable rate of return. Local exchange carriers filing 
tariffs under this section are not required to comply with Sec. Sec. 
65.700 through 65.701, inclusive, of the Commission's Rules, except with 
respect to periods during which tariffs were not subject to this 
section. The Commission may require any carrier to submit such 
information if it deems it necessary to monitor the carrier's earnings. 
However, rates must be calculated based on the local exchange carrier's 
prescribed rate of return applicable to the period during which the 
rates are effective.
    (d) Rates for a new service that is the same as that offered by a 
price cap regulated local exchange carrier providing service in an 
adjacent serving area are deemed presumptively lawful, if the proposed 
rates, in the aggregate, are no greater than the rates established by 
the price cap local exchange carrier. Tariff filings made pursuant to 
this paragraph must include the following:
    (1) A brief explanation of why the service is like an existing 
service offered by a geographically adjacent price cap regulated local 
exchange carrier; and
    (2) Data to establish compliance with this subsection that, in 
aggregate, the proposed rates for the new service are no greater than 
those in effect for the same or comparable service offered by that same 
geographically adjacent price cap regulated local exchange carrier. 
Compliance may be shown through submission of applicable tariff pages of 
the adjacent carrier; a showing that the serving areas are adjacent; any 
necessary explanations and work sheets.
    (e) Average schedule companies filing pursuant to this section shall 
retain their status as average schedule companies.
    (f) On each page of cost support material submitted pursuant to this 
section, the carrier shall indicate the transmittal number under which 
that page was submitted.

[52 FR 26682, July 16, 1987, as amended at 53 FR 36289, Sept. 19, 1988; 
55 FR 42382, Oct. 19, 1990; 58 FR 36147, July 6, 1993; 62 FR 31004, June 
6, 1997; 64 FR 46588, Aug. 26, 1999]



Sec. 61.40  Private line rate structure guidelines.

    (a) The Commission uses a variety of tools to determine whether a 
carrier's private line tariffs are just, reasonable, and 
nondiscriminatory. The carrier's burden of cost justification can be 
reduced when its private line rate structures comply with the following 
five guidelines.
    (1) Rate structures for the same or comparable services should be 
integrated;
    (2) Rate structures for the same or comparable services should be 
consistent with one another;
    (3) Rate elements should be selected to reflect market demand, 
pricing convenience for the carrier and customers, and cost 
characteristics; a rate element which appears separately in one rate 
structure should appear separately in all other rate structures;
    (4) Rate elements should be consistently defined with respect to 
underlying service functions and should be consistently employed through 
all rate structures; and
    (5) Rate structures should be simple and easy to understand.
    (b) The guidelines do not preclude a carrier, in a given case when a 
private line tariff does not comply with these guidelines, from 
justifying its departure from the guidelines and showing that its tariff 
is just, reasonable, and nondiscriminatory.



Sec. 61.41  Price cap requirements generally.

    (a) Sections 61.42 through 61.49 shall apply as follows:
    (1) [Reserved]
    (2) To such local exchange carriers as specified by Commission 
order, and to all local exchange carriers, other than

[[Page 202]]

average schedule companies, that are affiliated with such carriers; and
    (3) On an elective basis, to local exchange carriers, other than 
those specified in paragraph (a)(2) of this section, that are neither 
participants in any Association tariff, nor affiliated with any such 
participants, except that affiliation with average schedule companies 
shall not bar a carrier from electing price cap regulation provided the 
carrier is otherwise eligible.
    (b) If a telephone company, or any one of a group of affiliated 
telephone companies, files a price cap tariff in one study area, that 
telephone company and its affiliates, except its average schedule 
affiliates, must file price cap tariffs in all their study areas.
    (c) Except as provided in paragraph (e) of this section, the 
following rules in this paragraph (c) apply to telephone companies 
subject to price cap regulation, as that term is defined in Sec. 
61.3(ee), which are involved in mergers, acquisitions, or similar 
transactions.
    (1) Any telephone company subject to price cap regulation that is a 
party to a merger, acquisition, or similar transaction shall continue to 
be subject to price cap regulation notwithstanding such transaction.
    (2) Where a telephone company subject to price cap regulation 
acquires, is acquired by, merges with, or otherwise becomes affiliated 
with a telephone company that is not subject to price cap regulation, 
the latter telephone company shall become subject to price cap 
regulation no later than one year following the effective date of such 
merger, acquisition, or similar transaction and shall accordingly file 
price cap tariffs to be effective no later than that date in accordance 
with the applicable provisions of this part 61.
    (3) Notwithstanding the provisions of Sec. 61.41(c)(2), when a 
telephone company subject to price cap regulation acquires, is acquired 
by, merges with, or otherwise becomes affiliated with a telephone 
company that qualifies as an ``average schedule'' company, the latter 
company may retain its ``average schedule'' status or become subject to 
price cap regulation in accordance with Sec. 69.3(i)(3) of this chapter 
and the requirements referenced in that section.
    (d) Except as provided in paragraph (e) of this section, local 
exchange carriers that become subject to price cap regulation as that 
term is defined in Sec. 61.3(ee) shall not be eligible to withdraw from 
such regulation.
    (e) Notwithstanding the requirements of paragraphs (c) and (d) of 
this section, a telephone company subject to rate-of-return regulation 
may return lines acquired from a telephone company subject to price cap 
regulation to rate-of-return regulation, provided that the acquired 
lines will not be subject to average schedule settlements, and provided 
further that the telephone company subject to rate-of-return regulation 
may not for five years elect price cap regulation for itself, or by any 
means cause the acquired lines to become subject to price cap 
regulation.

[55 FR 42382, Oct. 19, 1990; 55 FR 50558, Dec. 7, 1990, as amended at 56 
FR 55239, Oct. 25, 1991; 64 FR 46589, Aug. 26, 1999; 65 FR 38695, June 
21, 2000; 65 FR 57741, Sept. 26, 2000; 69 FR 25336, May 6, 2004]

    Effective Date Note: At 69 FR 25336, May 6, 2004, Sec. 61.41 was 
amended by revising paragraphs (c) introductory text and (d) and adding 
a new paragraph (e). These paragraphs contain information collection and 
recordkeeping requirements and will not become effective until approval 
has been given by the Office of Management and Budget.



Sec. 61.42  Price cap baskets and service categories.

    (a)-(c) [Reserved]
    (d) Each local exchange carrier subject to price cap regulation 
shall establish baskets of services as follows:
    (1) A basket for the common line, marketing, and certain residual 
interconnection charge interstate access elements as described in 
Sec. Sec. 69.115, 69.152, 69.153, 69.154, 69.155, 69.156, and 69.157 of 
this chapter. For purposes of Sec. Sec. 61.41 through 61.49, this 
basket shall be referred to as the ``CMT basket.''
    (2) A basket for traffic sensitive switched interstate access 
elements. For purposes of Sec. Sec. 61.41 through 61.49 of this 
chapter, this basket shall be referred to as the ``traffic-sensitive 
basket.''
    (3) A basket for trunking services as described in Sec. Sec. 
69.110, 69.111, 69.112, 69.125(b), 69.129, and 69.155 of this chapter. 
For purposes of Sec. Sec. 61.41 through

[[Page 203]]

61.49, this basket shall be referred to as the ``trunking basket.''
    (4)(i) To the extent that a local exchange carrier specified in 
Sec. 61.41(a) (2) or (3) offers interstate interexchange services that 
are not classified as access services for the purpose of part 69 of this 
chapter, such exchange carrier shall establish a fourth basket for such 
services. For purposes of Sec. Sec. 61.41 through 61.49 of this 
chapter, this basket shall be referred to as the ``interexchange 
basket.''
    (ii) If a price cap carrier has implemented interLATA and intraLATA 
toll dialing parity everywhere it provides local exchange services at 
the holding company level, that price cap carrier may file a tariff 
revision to remove corridor and interstate intraLATA toll services from 
its interexchange basket.
    (5) A basket for special access services as described in Sec. 
69.114 of this chapter.
    (e)(1) The traffice sensitive switched interstate access basket 
shall contain such services as the Commission shall permit or require, 
including the following service categories:
    (i) Local switching as described in Sec. 69.106(f) of this chapter;
    (ii) Information, as described in Sec. 69.109 of this chapter;
    (iii) Data base access services;
    (iv) Billing name and address, as described in Sec. 69.128 of this 
chapter;
    (v) Local switching trunk ports, as described in Sec. 69.106(f)(1) 
of this chapter; and
    (vi) Signalling transfer point port termination, as described in 
Sec. 69.125(c) of this chapter.
    (2) The trunking basket shall contain such switched transport as the 
Commission shall permit or require, including the following service 
categories and subcategories:
    (i) Voice grade entrance facilities, voice grade direct-trunked 
transport, voice grade dedicated signalling transport,
    (ii) High capacity flat-rated transport, including the following 
service subcategories:
    (A) DS1 entrance facilities, DS1 direct-trunked transport, DS1 
dedicated signalling transport, and
    (B) DS3 entrance facilities, DS3 direct-trunked transport, DS3 
dedicated signalling transport.
    (iii) Tandem-switched transport, as described in Sec. 69.111 of 
this chapter; and
    (iv) Signalling for tandem switching, as described in Sec. 69.129 
of this chapter.
    (3) The special access basket shall contain special access services 
as the Commission shall permit or require, including the following 
service categories and subcategories:
    (i) Voice grade special access, WATS special access, metallic 
special access, and telegraph special access services;
    (ii) Audio and video services;
    (iii) High capacity special access, and DDS services, including the 
following service subcategories:
    (A) DS1 special access services; and
    (B) DS3 special access services;
    (iv) Wideband data and wideband analog services.
    (f) Each local exchange carrier subject to price cap regulation 
shall exclude from its price cap baskets such services or portions of 
such services as the Commission has designated or may hereafter 
designate by order.
    (g) New services, other than those within the scope of paragraph (f) 
of this section, must be included in the affected basket at the first 
annual price cap tariff filing following completion of the base period 
in which they are introduced. To the extent that such new services are 
permitted or required to be included in new or existing service 
categories within the assigned basket, they shall be so included at the 
first annual price cap tariff filing following completion of the base 
period in which they are introduced.

[54 FR 19842, May 8, 1989, as amended at 55 FR 42382, Oct. 19, 1990; 55 
FR 50558, Dec. 7, 1990; 56 FR 5956, Feb. 14, 1991; 56 FR 55239, Oct. 25, 
1991; 57 FR 54718, Nov. 20, 1992; 58 FR 7868, Feb. 10, 1993; 58 FR 
29552, May 21, 1993; 58 FR 31914, June 7, 1993; 58 FR 36145, July 6, 
1993; 59 FR 10301, Mar. 4, 1994; 59 FR 32930, June 27, 1994; 60 FR 4569, 
Jan. 24, 1995; 60 FR 13639, Mar. 14, 1995; 60 FR 52346, Oct. 6, 1995; 62 
FR 31930, June 11, 1997; 64 FR 46589, Aug. 26, 1999; 64 FR 51265, Sept. 
22, 1999; 65 FR 38695, June 21, 2000]

[[Page 204]]



Sec. 61.43  Annual price cap filings required.

    Carriers subject to price cap regulation shall submit annual price 
cap tariff filings that propose rates for the upcoming tariff year, that 
make appropriate adjustments to their PCI, API, and SBI values pursuant 
to Sec. Sec. 61.45 through 61.47, and that incorporate new services 
into the PCI, API, or SBI calculations pursuant to Sec. Sec. 61.45(g), 
61.46(b), and 61.47 (b) and (c). Carriers may propose rate, PCI, or 
other tariff changes more often than annually, consistent with the 
requirements of Sec. 61.59.

[64 FR 46589, Aug. 26, 1999]



Sec. 61.44  [Reserved]



Sec. 61.45  Adjustments to the PCI for Local Exchange Carriers.

    (a) Local exchange carriers subject to price cap regulation shall 
file adjustments to the PCI for each basket as part of the annual price 
cap tariff filing, and shall maintain updated PCIs to reflect the effect 
of mid-year exogenous cost changes.
    (b)(1)(i) Adjustments to local exchange carrier PCIs, in those 
carriers' annual access tariff filings, the traffic sensitive basket 
described in Sec. 61.42(d)(2), the trunking basket described in Sec. 
61.42(d)(3), the special access basket described in Sec. 61.42(d)(5) 
and the Interexchange Basket described in Sec. 61.42(d)(4)(i), shall be 
made pursuant to the following formula:

``PCIt=PCIt-1[1+w[GDP--PI--X] + Z/R].''

PCIt-1 = PCIt-1[1+w[GDP-PI-X] + Z/R]

    Where the terms in the equation are described:

GDP-PI = For annual filings only, the percentage change in the GDP-PI 
between the quarter ending six months prior to the effective date of the 
new annual tariff and the corresponding quarter of the previous year. 
For all other filings, the value is zero.
X = For the CMT, traffic sensitive, and trunking baskets, for annual 
filings only, the factor is set at the level prescribed in paragraphs 
(b)(1)(ii) and (iii) of this section. For the interexchange basket, for 
annual filings only, the factor is set at the level prescribed in 
paragraph (b)(1)(v) of this section. For the special access basket, for 
annual filings only, the factor is set at the level prescribed in 
paragraph (b)(1)(iv) of this section. For all other filings, the value 
is zero.
g = For annual filings for the CMT basket only, the ratio of minutes of 
use per access line during the base period, to minutes of use per access 
line during the previous base period, all minus 1.
Z = The dollar effect of current regulatory changes when compared to the 
regulations in effect at the time the PCI was updated to 
PCIt-1, measured at base period level of operations.
Targeted Reduction = the actual possible dollar value of the (GDP-PI--X) 
reductions that will be targeted to the ATS Charge pursuant to Sec. 
61.45(i)(3). The reductions calculated by applying the (GDP-PI--X) 
portion of the formula to the CCL element within the CMT basket will 
contain the ``g'' component, as defined above.
R = Base period quantities for each rate element ``I'', multiplied by 
the price for each rate element ``I'' at the time the PCI was updated to 
PCIt-1.
w = R + Z, all divided by R (used for the traffic sensitive, trunking, 
and special access baskets).
wix = R--(access rate in effect at the time the PCI was 
updated to PCIt-1 * base period demand) + Z, all divided by 
R.
PCIt = The new PCI value.
PCIt-1 = the immediately preceding PCI value.

    (ii) The X value applicable to the baskets specified in Sec. Sec. 
61.42(d)(1), (d)(2), and (d)(3), shall be 6.5%, to the extent necessary 
to reduce a tariff entity's ATS charge to its Target Rate as set forth 
in Sec. 61.3(qq). Once any price cap local exchange carrier tariff 
entity's ATS Charge is equal to the Target Rate as set forth in Sec. 
61.3(qq) for the first time (the former NYNEX telephone companies may be 
treated as a separate tariff entity), then, except as provided in 
paragraph (b)(1)(iii) of this section, X is equal to GDP-PI and no 
further reductions will be mandated (i.e., if applying the full X-factor 
reduction for a given year would reduce the ATS charge below the Target 
Rate as set forth in Sec. 61.3 (qq), the amount of X-factor reduction 
applied that year will be the amount necessary to reach the Target Rate 
as set forth in Sec. 61.3 (qq)). A filing entity does not reach the 
Target Rate as set forth in Sec. 61.3(qq) in any year in which it 
exercises an exogenous adjustment pursuant to Sec. 61.45(d)(vii). For 
companies with separate tariff entities under a single price cap, the 
following rules shall apply:

[[Page 205]]

    (A) Targeting amounts as defined in Sec. 61.45(i)(1)(i) shall be 
identified separately, using the revenue for each of the tariff entities 
under the cap.
    (B) Each tariff entity shall only be required to use the amount of 
targeting necessary to get to the Target Rate as set forth in Sec. 61.3 
(qq).
    (iii)(A) Except as provided in paragraph (b)(1)(iii)(B) of this 
section, once the Tariff Entity's Target Rate as set forth in Sec. 61.3 
(qq) is achieved, the X-factor for the CMT basket will equal GDP-PI as 
long as GDP-PI is less than or equal to 6.5% and greater than 0%. If 
GDP-PI is greater than 6.5%, and an entity has eliminated its CCL and 
multi-line business PICCs charges, the X-factor for the CMT basket will 
equal 6.5%, and all End User Common Line charges, rates and nominal 
caps, will be increased by the difference between GDP-PI and the 6.5% X-
factor. If GDP-PI is less than 0, the X-factor for the CMT basket will 
be 0.
    (B) For tariff filing entities with a Target Rate of $0.0095, or for 
the portion of a filing entity consolidated pursuant to Sec. 61.48(o) 
that, prior to such consolidation, had a Target Rate of $0.0095, in 
which the ATS charge has achieved the Target Rate but in which the 
carrier common line (CCL) charge has not been eliminated, the X-factor 
for the CMT basket will be 6.5% until the earlier of June 30, 2004, or 
until CCL charges are eliminated pursuant to paragraph (i)(4) of this 
section. Thereafter, in any filing entity in which a CCL charge remains 
after July 1, 2004, the X-factor for the CMT basket will be determined 
pursuant to paragraph (b)(1)(iii)(A) of this section as if CCL charges 
were eliminated.
    (iv) For the special access basket specified in Sec. 61.42(d)(5), 
the value of X shall be 3.0% for the 2000 annual filing. The value of X 
shall be 6.5% for the 2001, 2002 and 2003 annual filings. Starting in 
the 2004 annual filing, X shall be equal to GDP-PI for the special 
access basket.
    (v) For the interexchange basket specified in Sec. 61.42(d)(4), the 
value of X shall be 3.0% for all annual filings.
    (b)(2) Adjustments to price cap local exchange carrier PCIs and 
average price cap CMT revenue per line, in tariff filings other than the 
annual access tariff filing, for the CMT basket described in Sec. 
61.42(d)(1), the traffic sensitive basket described in Sec. 
61.42(d)(2), the trunking basket described in Sec. 61.42(d)(3), the 
interexchange basket described in Sec. 61.42(d)(4), and the special 
access basket described in Sec. 61.42(d)(5), shall be made pursuant to 
the formulas set forth in paragraph (b)(1)(i) of this section, except 
that the ``w(GDP-PI--X)'' component of those PCI formulas shall not be 
employed.
    (c) Effective July 1, 2000, the prices of the CMT basket rate 
elements, excluding special access surcharges under Sec. 69.115 of this 
chapter and line ports in excess of basic under Sec. 69.157 of this 
chapter, shall be set based upon Average Price Cap CMT Revenue per Line 
month.
    (d) The exogenous cost changes represented by the term ``Z'' in the 
formula detailed in paragraph (b)(1)(i) of this section shall be limited 
to those cost changes that the Commission shall permit or require by 
rule, rule waiver, or declaratory ruling.
    (1) Subject to further order of the Commission, those exogenous 
changes shall include cost changes caused by:
    (i) The completion of the amortization of depreciation reserve 
deficiencies;
    (ii) Such changes in the Uniform System of Accounts, including 
changes in the Uniform System of Accounts requirements made pursuant to 
Sec. 32.16 of this chapter, as the Commission shall permit or require 
be treated as exogenous by rule, rule waiver, or declaratory ruling;
    (iii) Changes in the Separations Manual;
    (iv) [Reserved]
    (v) The reallocation of investment from regulated to nonregulated 
activities pursuant to Sec. 64.901 of this chapter;
    (vi) Such tax law changes and other extraordinary cost changes as 
the Commission shall permit or require be treated as exogenous by rule, 
rule waiver, or declaratory ruling;
    (vii) Retargeting the PCI to the level specified by the Commission 
for carriers whose base year earnings are below the level of the lower 
adjustment mark, subject to the limitation in Sec. 69.731 of this 
chapter. The allocation of LFAM amounts will be allocated

[[Page 206]]

pursuant to Sec. 61.45(d)(3). This section shall not be applicable to 
tariff filings during the tariff year beginning July 1, 2000, but is 
applicable in subsequent years;
    (viii) Inside wire amortizations;
    (ix) The completion of amortization of equal access expenses.
    (2) Local exchange carriers specified in Sec. Sec. 61.41(a)(2) or 
(a)(3) shall, in their annual access tariff filing, recognize all 
exogenous cost changes attributable to modifications during the coming 
tariff year in their Subscriber Plant Factor and the Dial Equipment 
Minutes factor, and completions of inside wire amortizations and reserve 
deficiency amortizations.
    (3) Exogenous cost changes shall be apportioned on a cost-causative 
basis between price cap services as a group, and excluded services as a 
group. Total exogenous cost changes thus attributed to price cap 
services shall be recovered from services other than those used to 
calculate the ATS charge.
    (e) [Reserved]
    (f) The exogenous costs caused by new services subject to price cap 
regulation must be included in the appropriate PCI calculations under 
paragraphs (b) and (c) of this section beginning at the first annual 
price cap tariff filing following completion of the base period in which 
such services are introduced.
    (g) In the event that a price cap tariff becomes effective, which 
tariff results in an API value (calculated pursuant to Sec. 61.46) that 
exceeds the currently applicable PCI value, the PCI value shall be 
adjusted upward to equal the API value.
    (h) [Reserved]
    (i)(1)(i) Price cap local exchange carriers that are recovering 
revenues through rates pursuant to Sec. Sec. 69.106, 69.108, 69.109, 
69.110, 69.111, 69.112, 69.113, 69.118, 69.123, 69.124, 69.125, 69.129, 
or Sec. 69.155 of this chapter shall target, to the extent necessary to 
reduce the ATS Charge to the Target Rate as set forth in Sec. 61.3 (qq) 
for the first time, any PCI reductions associated with the dollar impact 
of application of the (GDP-PI--X) portion of the formula in Sec. 
61.45(b)(1)(i) to the traffic sensitive and trunking baskets. In order 
to calculate the actual dollars to transfer to the trunking and traffic 
sensitive baskets, carriers will first determine the ``Targeted Revenue 
Differential'' that will be transferred to the trunking and traffic 
sensitive baskets to reduce the ATS Charge to the Target Rate as set 
forth in Sec. 61.3(qq). The Targeted Revenue Differential shall be 
applied only to the trunking and traffic sensitive baskets to the extent 
necessary to reduce the ATS charge to the Target Rate as set forth in 
Sec. 61.3 (qq), and shall not be applied to reduce the PCIs in any 
other basket or to reduce Average Price Cap CMT Revenue per Line month, 
except as provided in Sec. 61.45(i)(4).
    (ii) For the purposes of Sec. 61.45(i)(1)(i), Targeted Revenue 
Differential will be determined by adding together the following 
amounts:
    (A) R * (GDP-PI-X) for the traffic sensitive basket, trunking 
basket, and the CMT basket excluding CCL revenues; and
    (B) CCL Revenues * [(GDP-PI-X-(g/2)]/[1 + (g/2)]
    Where ``g'' is defined in Sec. 61.45(b)(1)(i).
    (2) Until a tariff entity's ATS Charge equals the Target Rate as set 
forth in Sec. 61.3 (qq) for the first time, the Targeted Revenue 
Differential will be targeted to reduce the following rates for that 
tariff filing entity, in order of priority:
    (i) To the residual per minute Transport Interconnection Charge, 
until that rate is $0.00; then
    (ii) To the Information Surcharge, until that rate is $0.00; then
    (iii) To the other Local Switching charges and Switched Transport 
charges until the tariff entity's ATS Rate equals the Target Rate as set 
forth in Sec. 61.3(qq) for the first time. In making these reductions, 
the reductions to Local Switching rates as a percentage of total X-
factor reductions must be greater than or equal to the percentage 
proportion of Local Switching revenues to the total sum of revenues for 
Local Switching, Local Switching Trunk Ports, Signalling Transfer Point 
Port Termination, Switched Direct Trunked Transport, Signalling for 
Switched Direct

[[Page 207]]

Trunked Transport, Entrance Facilities for switched access traffic, 
Tandem Switched Transport, and Signalling for Tandem Switching (i.e., 
Local Switching gets at least its proportionate share of reductions).
    (3) After a price cap local exchange carrier reaches the Target Rate 
as set forth in Sec. 61.3(qq), the ATS Rate will be recalculated each 
subsequent Annual Filing. This process will identify the new ATS Charge 
for the new base period level. Due to change in base period demand and 
inclusion of new services for that annual filing, the absolute level of 
a tariff entity's ATS Charge may change. The resulting new ATS Charge 
level will be what that tariff entity will be measured against during 
that base period. For example, if a company whose target is $0.0055 
reached the Target Rate during the 2000 annual filing, that level may 
change to $0.0058 in the 2001 annual filing due to change in demand and 
inclusion of new services. Therefore, it will be the $0.0058 average 
rate that the tariff entity will be measured against for all non-annual 
filings. Likewise, if that same company was at the Target Rate during 
the 2000 filing, that level may change to $0.0053 average rate in the 
2001 annual filing due to change in demand and inclusion of new 
services. In that case, it will be at the $0.0053 average rate that the 
tariff entity will be measured.
    (4) A company electing a $0.0095 Target Rate will, in the tariff 
year it reaches the Target Rate, apply any Targeted Revenue Differential 
remaining after reaching the Target Rate to reduce Average Price Cap CMT 
Revenue per Line month until the CCL charge is eliminated. In subsequent 
years, until the earlier of June 30, 2004 or when the CCL charge is 
eliminated, tariff filing entities with a Target Rate of $0.0095, or the 
portion of a filing entity consolidated pursuant to Sec. 61.48(o) that, 
prior to such consolidation, had a Target Rate of $0.0095, will reduce 
Average Price Cap CMT Revenue per Line month according to the following 
method:
    (i) Filing entity calculates the maximum allowable carrier common 
line revenue, as defined in Sec. 61.46(d)(1), that would be permitted 
in the absence of further adjustment pursuant to this paragraph;
    (ii) Filing entity identifies maximum amount of dollars available to 
reduce Average Price Cap CMT Revenue per Line month by the following:

(CMT revenue in a $0.0095 Area--CCL revenue in a $0.0095 Area) * (GDP-
    PI--X) + (CCL Revenue in a $0.0095 Area) * [(GDP-PI--X)-(g/2)]/
    [1+(g/2)]

    (iii) The Average Price Cap CMT Revenue per Line month shall then be 
reduced by the lesser of the amount described in paragraph (i)(4)(i) of 
this section and the amount described in paragraph (i)(4)(ii) of this 
section, divided by base period Switched Access End User Common Line 
Charge lines.

[65 FR 38696, June 21, 2000; 65 FR 57741, Sept. 26, 2000]



Sec. 61.46  Adjustments to the API.

    (a) Except as provided in paragraphs (d) and (e) of this section, in 
connection with any price cap tariff filing proposing rate changes, the 
carrier must calculate an API for each affected basket pursuant to the 
following methodology:

APIt = APIt-1[[Sigma]i vi 
    (Pt/Pt-1)i]

Where:

APIt = the proposed API value,
APIt-1 = the existing API value,
Pt = the proposed price for rate element ``i,''
Pt-1 = the existing price for rate element ``i,'' and
vi = the current estimated revenue weight for rate element 
``i,'' calculated as the ratio of the base period demand for the rate 
element ``i'' priced at the existing rate, to the base period demand for 
the entire basket of services priced at existing rates.

    (b) New services subject to price cap regulation must be included in 
the appropriate API calculations under paragraph (a) of this section 
beginning at the first annual price cap tariff filing following 
completion of the base period in which they are introduced. This index 
adjustment requires that the demand for the new service during the base 
period must be included in determining the weights used in calculating 
the API.
    (c) Any price cap tariff filing proposing rate restructuring shall 
require an adjustment to the API pursuant to the general methodology 
described in

[[Page 208]]

paragraph (a) of this section. This adjustment requires the conversion 
of existing rates into rates of equivalent value under the proposed 
structure, and then the comparison of the existing rates that have been 
converted to reflect restructuring to the proposed restructured rates. 
This calculation may require use of carrier data and estimation 
techniques to assign customers of the preexisting service to those 
services (including the new restructured service) that will remain or 
become available after restructuring.
    (d) The maximum allowable carrier common line (CCL) revenue shall be 
computed pursuant to the following methodology:

CCL = CMT-EUCL-Interstate Access Universal Service Support Mechanism Per 
    Line-PICC

Where:

CMT = Price Cap CMT Revenue as defined in Sec. 61.3(cc).
EUCL = Maximum allowable EUCL rates established pursuant to Sec. 69.152 
of this chapter multiplied by base period lines.
Interstate Access Universal Service Support Per Line = the amount as 
determined by the Administrator pursuant to Sec. 54.807 of this chapter 
times the number of base period lines for each customer class and zone 
receiving Interstate Access Universal Service support pursuant to part 
54, subpart J.
PICC = Maximum allowable PICC rates established pursuant to Sec. 69.153 
of this chapter multiplied by base period lines.

    (e) In no case shall a price cap local exchange carrier include data 
associated with services offered pursuant to contract tariff in the 
calculations required by this section.

[65 FR 38698, June 21, 2000; 65 FR 57741, 57742, Sept. 26, 2000]



Sec. 61.47  Adjustments to the SBI; pricing bands.

    (a) In connection with any price cap tariff filing proposing changes 
in the rates of services in service categories, subcategories, or 
density zones, the carrier must calculate an SBI value for each affected 
service category, subcategory, or density zone pursuant to the following 
methodology:

SBIt = SBIt-1[[Sigma]i 
    vi(Pt/Pt-1)i]

where

SBIt = the proposed SBI value,
SBIt-1 = the existing SBI value,
Pt = the proposed price for rate element ``i,''
Pt-1 = the existing price for rate element ``i,'' and
vi = the current estimated revenue weight for rate element 
``i,'' calculated as the ratio of the base period demand for the rate 
element ``i'' priced at the existing rate, to the base period demand for 
the entire group of rate elements comprising the service category priced 
at existing rates.

    (b) New services that are added to existing service categories or 
subcategories must be included in the appropriate SBI calculations under 
paragraph (a) of this section beginning at the first annual price cap 
tariff filing following completion of the base period in which they are 
introduced. This index adjustment requires that the demand for the new 
service during the base period must be included in determining the 
weights used in calculating the SBI.
    (c) In the event that the introduction of a new service requires the 
creation of a new service category or subcategory, a new SBI must be 
established for that service category or subcategory beginning at the 
first annual price cap tariff filing following completion of the base 
period in which the new service is introduced. The new SBI should be 
initialized at a value of 100, corresponding to the service category or 
subcategory rates in effect the last day of the base period, and 
thereafter should be adjusted as provided in paragraph (a) of this 
section.
    (d) Any price cap tariff filing proposing rate restructuring shall 
require an adjustment to the affected SBI pursuant to the general 
methodology described in paragraph (a) of this section. This adjustment 
requires the conversion of existing rates in the rate element group into 
rates of equivalent value under the proposed structure, and then the 
comparison of the existing rates that have been converted to reflect 
restructuring to the proposed restructured rates. This calculation may 
require use of carrier data and estimation techniques to assign 
customers of the preexisting service to those services (including the 
new restructured service) that will remain or become available after 
restructuring.

[[Page 209]]

    (e) Pricing bands shall be established each tariff year for each 
service category and subcategory within a basket. Each band shall limit 
the pricing flexibility of the service category, subcategory, as 
reflected in the SBI, to an annual increase of a specified percent 
listed in this paragraph, relative to the percentage change in the PCI 
for that basket, measured from the levels in effect on the last day of 
the preceding tariff year. For local exchanage carriers subject to price 
cap regulation as that term is defined in Sec. 61.3(ee), there shall be 
no lower pricing band for any service category or subcategory.
    (1) Five percent:
    (i) Local Switching (traffic sensitive basket)
    (ii) Information (traffic sensitive basket)
    (iii) Database Access Services (traffic sensitive basket)
    (iv) 800 Database Vertical Services subservice (traffic sensitive 
basket)
    (v) Billing Name and Address (traffic sensitive basket)
    (vi) Local Switching Trunk Ports (traffic sensitive basket)
    (vii) Signalling Transfer Point Port Termination (traffic sensitive 
basket)
    (viii) Voice Grade (trunking and special access baskets)
    (ix) Audio/Video (special access basket)
    (x) Total High Capacity (trunking and special access baskets)
    (xi) DS1 Subservice (trunking and special access baskets)
    (xii) DS3 Subservice (trunking and special access baskets)
    (xiii) Wideband (special access basket)
    (2) Two percent:
    (i) Tandem-Switched Transport (trunking basket)
    (ii) Signalling for Tandem Switching (trunking basket)
    (f) A local exchange carrier subject to price cap regulation may 
establish density zones pursuant to the requirements set forth in Sec. 
69.123 of this chapter, for any service in the trunking and special 
access baskets, other than the interconnection charge set forth in Sec. 
69.124 of this chapter. The pricing flexibility of each zone shall be 
limited to an annual increase of 15 percent, relative to the percentage 
change in the PCI for that basket, measured from the levels in effect on 
the last day of the preceding tariff year. There shall be no lower 
pricing band for any density zone.
    (g)-(i)(l) [Reserved]
    (2) Effective January 1, 1998, notwithstanding the requirements of 
paragraph (a) of this section, if a local exchange carrier is recovering 
interconnection charge revenues through per-minute rates pursuant to 
Sec. 69.155 of this chapter, any reductions to the PCI for the basket 
designated in Sec. 61.42(d)(3) resulting from the application of the 
provisions of Sec. 61.45(b)(1)(i) and from the application of the 
provisions of Sec. Sec. 61.45(i)(1) and 61.45(i)(2) shall be directed 
to the SBI of the service category designated in Sec. 61.42(d)(i).
    (3) [Reserved]
    (4) Effective January 1, 1998, the SBI reduction required by 
paragraph (i)(2) of this section shall be determined by dividing the sum 
of the dollar amount of any PCI reduction required by Sec. Sec. 
61.45(i)(1) and 61.45(i)(2), by the dollar amount associated with the 
SBI for the service category designated in Sec. 61.42(e)(2)(vi), and 
multiplying the SBI for the service category designated in Sec. 
61.42(e)(2)(vi) by one minus the resulting ratio.
    (5) Effective July 1, 2000, notwithstanding the requirements of 
paragraph (a) of this section and subject to the limitations of Sec. 
61.45(i), if a local exchange carrier is recovering an ATS charge 
greater than its Target Rate as set forth in Sec. 61.3(qq), any 
reductions to the PCI for the traffic sensitive or trunking baskets 
designated in Sec. Sec. 61.42(d)(2) and 61.42(d)(3) resulting from the 
application of the provisions of Sec. 61.45(b), and the formula in 
Sec. 61.45(b) and from the application of the provisions of Sec. Sec. 
61.45(i)(1), and 61.45(i)(2) shall be directed to the SBIs of the 
service categories designated in Sec. Sec. 61.42(e)(1) and 61.42(e)(2).
    (j) [Reserved]
    (k) In no case shall a price cap local exchange carrier include data 
associated with services offered pursuant to

[[Page 210]]

contract tariff in the calculations required by this section.

[54 FR 19843, May 8, 1989, as amended at 55 FR 42384, Oct. 19, 1990; 56 
FR 55239, Oct. 25, 1991; 57 FR 54331, Nov. 18, 1992; 58 FR 7868, Feb. 
10, 1993; 58 FR 48762, Sept. 17, 1993; 59 FR 10302, Mar. 4, 1994; 59 FR 
32930, June 27, 1994; 60 FR 19528, Apr. 19, 1995; 60 FR 52346, Oct. 6, 
1995; 62 FR 4659, Jan. 31, 1997; 62 FR 31932, June 11, 1997; 62 FR 
40460, July 29, 1997; 64 FR 46590, Aug. 26, 1999; 64 FR 51265, Sept. 22, 
1999; 65 FR 38698, June 21, 2000; 65 FR 57742, Sept. 26, 2000]



Sec. 61.48  Transition rules for price cap formula calculations.

    (a)-(h) [Reserved]
    (i) Transport and Special Access Density Pricing Zone Transition 
Rules--(1) Definitions. The following definitions apply for purposes of 
paragraph (i) of this section:
    Earlier date is the earlier of the special access zone date and the 
transport zone date.
    Earlier service is special access if the special access zone date 
precedes the transport zone date, and is transport if the transport zone 
date precedes the special access zone date.
    Later date is the later of the special access zone date and the 
transport zone date.
    Later service is transport if the special access zone date precedes 
the transport zone date, and is special access if the transport zone 
date precedes the special access zone date.
    Revenue weight of a given group of services included in a zone 
category is the ratio of base period demand for the given service rate 
elements included in the category priced at existing rates, to the base 
period demand for the entire group of rate elements comprising the 
category priced at existing rates.
    Special access zone date is the date on which a local exchange 
carrier tariff establishing divergent special access rates in different 
zones, as described in Sec. 69.123(c) of this chapter, becomes 
effective.
    Transport zone date is the date on which a local exchange carrier 
tariff establishing divergent switched transport rates in different 
zones, as described in Sec. 69.123(d) of this chapter, becomes 
effective.
    (2) Simultaneous Introduction of Special Access and Transport Zones. 
Local exchange carriers subject to price cap regulation that have 
established density pricing zones pursuant to Sec. 69.123 of this 
chapter, and whose special access zone date and transport zone date 
occur on the same date, shall initially establish density pricing zone 
SBIs and bands pursuant to the methodology in Sec. Sec. 61.47(e) 
through (f).
    (3) Sequential Introduction of Zones in the Same Tariff Year. 
Notwithstanding Sec. Sec. 61.47(e) through (f), local exchange carriers 
subject to price cap regulation that have established density pricing 
zones pursuant to Sec. 69.123 of this chapter, and whose special access 
zone date and transport zone date occur on different dates during the 
same tariff year, shall, on the earlier date, establish density pricing 
zone SBIs and pricing bands using the methodology described in 
Sec. Sec. 61.47(e) through (f), but applicable to the earlier service 
only. On the later date, such carriers shall recalculate the SBIs and 
pricing bands to limit the pricing flexibility of the services included 
in each density pricing zone category, as reflected in its SBI, as 
follows:
    (i) The upper pricing band shall be a weighted average of the 
following:
    (A) The upper pricing band that applied to the earlier services 
included in the zone category on the day preceding the later date, 
weighted by the revenue weight of the earlier services included in the 
zone category; and
    (B) 1.05 times the SBI value for the services included in the zone 
category on the day preceding the later date, weighted by the revenue 
weight of the later services included in the zone category.
    (ii) [Reserved]
    (iii) On the later date, the SBI value for the zone category shall 
be equal to the SBI value for the category on the day preceding the 
later date.
    (4) Introduction of Zones in Different Tariff Years. Notwithstanding 
Sec. Sec. 61.47(e) through (f), those local exchange carriers subject 
to price cap regulation that have established density pricing zones 
pursuant to Sec. 69.123 of this chapter, and whose special access zone 
date and transport zone date do not occur within the same tariff year, 
shall, on the earlier date, establish density pricing zone SBIs and 
pricing bands using

[[Page 211]]

the methodology described in Sec. Sec. 61.47(e) through (f), but 
applicable to the earlier service only.
    (i) On the later date, such carriers shall use the methodology set 
forth in paragraphs (a) through (d) of Sec. 61.47 to calculate separate 
SBIs in each zone for each of the following groups of services:
    (A) DS1 special access services;
    (B) DS3 special access services;
    (C) DS1 entrance facilities, DS1 direct-trunked transport, and DS1 
dedicated signalling transport;
    (D) DS3 entrance facilities, DS3 direct-trunked transport, and DS3 
dedicated signalling transport;
    (E) Voice grade entrance facilities, voice grade direct-trunked 
transport, and voice grade dedicated signalling transport;
    (F) Tandem-switched transport; and
    (G) Such other special access services as the Commission may 
designate by order.
    (ii) From the later date through the end of the following tariff 
year, the annual pricing flexibility for each of the subindexes 
specified in paragraph (i)(4)(i) of this section shall be limited to an 
annual increase of five percent or an annual decrease of fifteen 
percent, relative to the percentage change in the PCI for the trunking 
basket, measured from the levels in effect on the last day of the tariff 
year preceding the tariff year in which the later date occurs.
    (iii) On the first day of the second tariff year following the 
tariff year during which the later date occurs, the local exchange 
carriers to which this paragraph applies shall establish the separate 
subindexes provided in Sec. 61.47(e), and shall set the initial SBIs 
for those density pricing zone categories that are combined (specified 
in paragraphs (i)(4)(i)(A), (i)(4)(i)(B), (i)(4)(i)(C), (i)(4)(i)(D), 
(i)(4)(i)(E), and (i)(4)(i)(G) of this section) by computing the 
weighted averages of the SBIs that applied to the formerly separate zone 
categories, weighted by the revenue weights of the respective services 
included in the zone categories.
    (j)-(k) [Reserved]
    (l) Average Traffic Sensitive Revenues. (1) In the July 1, 2000 
annual filing, price cap local exchange carriers will make an additional 
reduction to rates comprising ATS charge, and to associated SBI upper 
limits and PCIs. This reduction will be calculated to be the amount that 
would be necessary to achieve a total $2.1 billion reduction in carrier 
common line and ATS rates by all price cap local exchange carriers, 
compared with those rates as they existed on June 30, 2000 using 2000 
annual filing base period demand.
    (i) The net change in revenue associated with Carrier Common Line 
Rate elements resulting from:
    (A) The removal from access of price cap local exchange carrier 
contributions to the Federal universal service mechanisms;
    (B) Price cap local exchange carrier receipts of interstate access 
universal service support pursuant to subpart J of part 54;
    (C) Changes in End User Common Line Charges and PICC rates;
    (D) Changes in Carrier Common Line charges due to GDP-PI--X 
targeting for $0.0095 filing entities.
    (ii) Reductions in Average Traffic Sensitive charges resulting from:
    (A) Targeting of the application of the (GDP-PI--X) portion of the 
formula in Sec. 61.45(b), and any applicable ``g'' adjustments;
    (B) The removal from access of price cap local exchange carrier 
contributions to the Federal universal service mechanisms;
    (C) Additional ATS charge reductions defined in paragraph (2) of 
this section.
    (2) Once the reductions in paragraph (l)(1)(i) and paragraphs 
(l)(1)(ii)(A) and (l)(1)(ii)(B) of this section are identified, the 
difference between those reductions and $2.1 billion is the total amount 
of additional reductions that would be made to ATS rates of price cap 
local exchange carriers. This amount will then be restated as the 
percentage of total price cap local exchange carrier Local Switching 
revenues as of June 30, 2000 using 2000 annual filing base period demand 
(``June 30 Local Switching revenues'') necessary to yield the total 
amount of additional reductions and taking into account the fact that, 
if participating, a price cap local exchange carrier would not reduce 
ATS rates below its Target Rate as set forth in Sec. 61.3(qq). Each

[[Page 212]]

price cap local exchange carrier then reduces ATS rate elements, and 
associated SBI upper limits and PCIs, by a dollar amount equivalent to 
the percentage times the June 30 Local Switching revenues for that 
filing entity, provided that no price cap local exchange carrier shall 
be required to reduce its ATS rates below its Target Rate as set forth 
in Sec. 61.3(qq). Each carrier can take its additional reductions 
against any of the ATS rate elements, provided that at least a 
proportional share must be taken against Local Switching rates.
    (m) Pooled Local Switching Revenues. (1) Price cap local exchange 
carriers are permitted to pool local switching revenues in their CMT 
basket under one of the following conditions.
    (i) Any price cap local exchange carrier that would otherwise have 
July 1, 2000 price cap reductions as a percentage of Base Period Price 
Cap Revenues at the holding company level greater than the industry wide 
total July 1, 2000 price cap revenue reduction as a percentage of Base 
Period Price Cap Revenues may elect temporarily to pool the amount of 
the additional reductions above 25% of the Local Switching element 
revenues necessary to yield that carrier's proportionate share of a 
total $2.1 billion reduction in switched access usage rates on July 1, 
2000. The basis of the reduction calculation will be R at 
PCIt-1 for the upcoming tariff year. The percentage 
reductions per line amounts will be calculated as follows: (Total Price 
Cap Revenue Reduction / Base Period Price Cap Revenues)
    Pooled local switching revenue for each filing entity within a 
holding company that qualifies under this paragraph (i) will continue 
until such pooled revenues are eliminated under this paragraph. 
Notwithstanding the provisions of Sec. 61.45(b)(1), once the Average 
Traffic Sensitive (ATS) rate reaches the applicable Target Rate as set 
forth in Sec. 61.3(qq), the Targeted Revenue Differential as defined in 
Sec. 61.45(i) shall be targeted to reducing pooled local switching 
revenue until the pooled local switching revenue is eliminated. 
Thereafter, the X-factor for these baskets will be determined in 
accordance with Sec. 61.45(b)(1).
    (ii) Price cap local exchange carriers other than the Bell companies 
and GTE with at least 20% of total holding company lines operated by 
companies that as of December 31, 1999 were certified to the Commission 
as rural carriers, may elect to pool up to the following amounts:
    (A) For a price cap holding company's predominantly non-rural filing 
entities (i.e., filing entities within which more than 50% of all lines 
are operated by telephone companies other than those that as of December 
31, 1999 were certified to the Commission as rural telephone companies), 
the amount of the additional reductions to Average Traffic Sensitive 
Charge rates as defined in paragraph (l)(2) of this section, to the 
extent such reductions exceed 25% of the Local Switching element 
revenues (measured in terms of June 30, 2000 rates times 1999 base 
period demand);
    (B) For a price cap holding company's predominantly rural filing 
entities (i.e., filing entities with greater than 50% of lines operated 
by telephone companies that as of December 31, 1999 were certified to 
the Commission as rural telephone companies), the amount of the 
additional reductions to Average Traffic Sensitive Charge rates as 
defined in paragraph (l)(2) of this section.
    (2) Allocation of Pooled Local Switching Revenue to Certain CMT 
Elements
    (i) The pooled local switching revenue for each filing entity is 
shifted to the CMT basket within price caps. Pooled local switching 
revenue will not be included in calculations to determine the 
eligibility for interstate access universal service funding.
    (ii) Pooled local switching revenue will be capped on a revenue per 
line basis.
    (iii) Pooled local switching revenue is included in the total 
revenue for the CMT basket in calculating the X-factor reduction 
targeted to the traffic sensitive rate elements, and for companies 
qualified under paragraph (m)(1)(i) of this section, to pooled elements 
after the Average Traffic Sensitive Charge reaches the target level. For 
the purpose of targeting X-factor reductions, companies that allocate 
pooled local

[[Page 213]]

switching revenue to other filing entities pursuant to paragraph 
(m)(2)(vii) of this section shall include pooled local switching revenue 
in the total revenue of the CMT basket of the filing entity from which 
the pooled local switching revenue originated.
    (iv) Pooled local switching revenue shall be kept separate from CMT 
revenue in the CMT basket. CMT rate elements for each filing entity 
shall first be set based on CMT revenue per line without regard to the 
presence of pooled local switching revenue for each filing entity.
    (v) If the rates generated without regard to the presence of pooled 
local switching revenue for multi-line business PICC and/or multi-line 
business SLC are below the nominal caps of $4.31 and $9.20, 
respectively, pooled amounts can be added to these rate elements to the 
extent permitted by the nominal caps.
    (vi) Notwithstanding the provisions of Sec. 69.152(k) of this 
chapter, pooled local switching revenue is first added to the multi-line 
business SLC until the rate equals the nominal cap ($9.20) or the pooled 
local switching revenue is fully allocated. If pooled local switching 
revenue remains after applying amounts to the multi-line business SLC, 
notwithstanding the provisions of Sec. 69.153 of this chapter, the 
remaining pooled local switching revenue may be added to the multi-line 
business PICC until the rate equals the nominal cap ($4.31) or the 
pooled local switching revenue is fully allocated. Unallocated pooled 
local switching revenue may still remain. For companies pooling pursuant 
to paragraph (m)(1)(i) of this section, these unallocated amounts may 
not be recovered from the CCL charge, the primary residential and 
single-line business SLC, a non-primary residential SLC, or from CMT 
elements in any other filing entity.
    (vii) For companies pooling pursuant to paragraph (m)(1)(ii) of this 
section, pooled local switching revenue that can not be allocated to the 
multi-line business PICC and multi-line business SLC rates within an 
individual filing entity may not be recovered from the CCL charge, 
primary residential and single-line business SLC or residential/single-
line business SLC charges, but may be allocated to other filing entities 
within the holding company, and collected by adding these amounts to the 
multi-line business PICC and multi-line business SLC rates. The 
allocation of pooled local switching revenue among filing entities will 
be re-calculated at each annual filing. In subsequent annual filings, 
pooled local switching revenue that was allocated to another filing 
entity will be reallocated to the filing entity from where it 
originated, to the full extent permitted by the nominal caps of $9.20 
and $4.31.
    (viii) Notwithstanding the provisions of Sec. 69.152(k) of this 
chapter, these unallocated local switching revenues that cannot be 
recovered fully pursuant to paragraph (m)(2)(vii) of this section are 
first added to the multi-line business SLC of other filing entities 
until the resulting rate equals the nominal cap ($9.20) or the pooled 
local switching revenue for the holding company is fully allocated. If 
the pooled local switching revenue can be fully allocated to the multi-
line business SLC, the amount is distributed to each filing entity with 
a rate below the nominal cap ($9.20) based on its below-cap multi-line 
business SLC revenue as a percentage of the total holding company's 
below-cap multi-line business SLC revenue.
    (ix) If pooled local switching revenue remains after applying 
amounts to the multi-line business SLC of all filing entities in the 
holding company, pooled local switching revenue may be added to the 
multi-line business PICC of other filing entities. Notwithstanding the 
provisions of Sec. 69.153 of this chapter, the remaining pooled local 
switching revenue is distributed to each filing entity with a rate below 
the nominal cap ($4.31) based on its below-cap multi-line business PICC 
revenue as a percentage of the total holding company's below-cap multi-
line business PICC revenue.
    (x) If pooled local switching revenue is added to the multi-line 
business SLC but not to the multi-line business PICC for a filing entity 
that qualified to deaverage SLCs without regard to pooled local 
switching revenue, the resulting SLC rates can still be deaveraged. 
Total pooled local switching revenue is added to the deaveraged

[[Page 214]]

zone 1 multi-line business SLC rate until the per line rate in zone 1 
equals the rate in zone 2 or until the pooled local switching revenue is 
fully allocated to the deaveraged multi-line business SLC rate for zone 
1. If pooled local switching revenue remains after the rate in zone 1 
equals zone 2, the deaveraged rates of zone 1 and zone 2 are increased 
until the pooled local switching revenue is fully allocated to the 
deaveraged multi-line business SLC rates of zone 1 and 2 or until those 
rates reach the zone 3 multi-line business SLC rate level. This process 
continues until pooled local switching revenue is fully allocated to the 
zone deaveraged rates.
    (n) Establishment of the special access basket, effective July 1, 
2000.
    (1) On the effective date, the PCI value for the special access 
basket, as defined in Sec. 61.42(d)(5) shall be equal to the PCI for 
the trunking basket on the day preceding the establishment of the 
special access basket.
    (2) On the effective date, the API value for the special access 
basket, as defined in Sec. 61.42(d)(5) shall be equal to the API for 
the trunking basket on the day preceding the establishment of the 
special access basket.
    (3) Service Category, Subcategory, and Density Zone SBIs and Upper 
Limits.
    (i) Interconnection, Tandem Switched Transport, and Signalling 
Interconnec- tion will retain the SBIs and upper limits and remain in 
the trunking basket.
    (ii) Audio/Video and Wideband will retain the SBIs and upper limits 
and be moved into the special access basket.
    (iii) For Voice Grade, the SBIs and upper limits in both baskets 
will be equal to the SBIs and upper limits in the existing trunking 
basket on the day preceding the establishment of the special access 
basket. Voice Grade density zones in the trunking basket will retain 
their indices and upper limits. Voice Grade density zones will be 
initialized in the special access basket when services are first offered 
in them.
    (iv) For High Cap/DDS, DS1, and DS3 category and subcategories, the 
SBIs and upper limits in both baskets will be equal to the SBIs and 
upper limits in the existing trunking basket on the day preceding the 
establishment of the special access basket. SBIs and upper limits for 
services that are in both combined density zones and either DTT/EF or 
special access density zones will be calculated by using weighted 
averages of the indices in the affected zones.
    (v) For each DTT/EF-related zone remaining in the trunking basket, 
the values will be calculated by taking the sum of the products of the 
DTT/EF revenues times the DTT/EF index (or upper limit) and the DTT/EF-
related revenues in the combined zone times the combined index (or upper 
limit), and dividing by the total DTT/EF-related revenues for that zone.
    (vi) For each special access-related zone in the special access 
basket, the values will be calculated by taking the sum of the products 
of the special access revenues times the special access index (or upper 
limit) and the special access-related revenues in the combined zone 
times the combined index (or upper limit), and dividing by the total 
special access-related revenues for that zone.
    (o) Treatment of acquisitions of exchanges with different ATS Target 
Rates as set forth in Sec. 61.3(qq):
    (1) In the event that a price cap local exchange carrier acquires a 
filing entity or portion thereof from a price cap local exchange carrier 
after July 1, 2000, and the price cap local exchange carrier did not 
have a binding and executed contract to purchase that filing entity or 
portion thereof as of April 1, 2000, those properties retain their pre-
existing Target Rates as set forth in Sec. 61.3(qq). If those 
properties are merged into a filing entity with a different Target Rate 
as set forth in Sec. 61.3(qq), the Target Rate as set forth in Sec. 
61.3(qq) for the merged filing entity will be the weighted average of 
the Target Rates as set forth in Sec. 61.3(qq) for the properties being 
combined into a single filing entity, with the average weighted by local 
switching minutes. When a property acquired as a result of a contract 
for purchase executed after April 1, 2000 is merged with $0.0095 Target 
Rate properties, the obligation to apply price cap reductions to reduce 
CCL, pursuant to Sec. 61.45(b)(iii) does not apply to the properties 
purchased

[[Page 215]]

under contracts executed after April 1, 2000, but continues to apply to 
the other properties.
    (2) For sale of properties for which a holding company was, as of 
April 1, 2000, under a binding and executed contract to purchase but 
which close after June 30, 2000, but during tariff year 2000, and that 
are subject to the $0.0095 Target Rate as set forth in Sec. 61.3(qq), 
the Average Traffic Sensitive Rate charged by the purchaser for that 
property will be the greater of $0.0095 or the Average Traffic Sensitive 
Rate for that property.

[54 FR 19843, May 8, 1989, as amended at 55 FR 42384, Oct. 19, 1990; 56 
FR 21617, May 10, 1991; 56 FR 55239, Oct. 25, 1991; 59 FR 10302, Mar. 4, 
1994; 60 FR 19528, Apr. 19, 1995; 60 FR 52346, Oct. 6, 1995; 62 FR 
31932, June 11, 1997; 64 FR 46590, Aug. 26, 1999; 65 FR 38699, June 21, 
2000; 65 FR 57742, 57743, Sept. 26, 2000]



Sec. 61.49  Supporting information to be submitted with letters of
transmittal for tariffs of carriers subject to price cap regulation.

    (a) Each price cap tariff filing must be accompanied by supporting 
materials sufficient to calculate required adjustments to each PCI, API, 
and SBI pursuant to the methodologies provided in Sec. Sec. 61.45, 
61.46, and 61.47, as applicable.
    (b) Each price cap tariff filing that proposes rates that are within 
applicable bands established pursuant to Sec. 61.47, and that results 
in an API value that is equal to or less than the applicable PCI value, 
must be accompanied by supporting materials sufficient to establish 
compliance with the applicable bands, and to calculate the necessary 
adjustment to the affected APIs and SBIs pursuant to Sec. Sec. 61.46 
and 61.47, respectively.
    (c) Each price cap tariff filing that proposes rates above the 
applicable band limits established in Sec. Sec. 61.47 (e) must be 
accompanied by supporting materials establishing substantial cause for 
the proposed rates.
    (d) Each price cap tariff filing that proposes rates that will 
result in an API value that exceeds the applicable PCI value must be 
accompanied by:
    (1) An explanation of the manner in which all costs have been 
allocated among baskets; and
    (2) Within the affected basket, a cost assignment slowing down to 
the lowest possible level of disaggregation, including a detailed 
explanation of the reasons for the prices of all rate elements to which 
costs are not assigned.
    (e) Each price cap tariff filing that proposes restructuring of 
existing rates must be accompanied by supporting materials sufficient to 
make the adjustments to each affected API and SBI required by Sec. Sec. 
61.46(c) and 61.47(d), respectively.
    (f)(1) [Reserved]
    (2) Each tariff filing submitted by a price cap LEC that introduces 
a new loop-based service, as defined in Sec. 61.3(pp) of this part--
including a restructured unbundled basic service element (BSE), as 
defined in Sec. 69.2(mm) of this chapter, that constitutes a new loop-
based service--that is or will later be included in a basket, must be 
accompanied by cost data sufficient to establish that the new loop-based 
service or unbundled BSE will not recover more than a just and 
reasonable portion of the carrier's overhead costs.
    (3) A price cap LEC may submit without cost data any tariff filings 
that introduce new services, other than loop-based services.
    (4) A price cap LEC that has removed its corridor or interstate 
intraLATA toll services from its interexchange basket pursuant to Sec. 
61.42(d)(4)(ii), may submit its tariff filings for corridor or 
interstate intraLATA toll services without cost data.
    (g) Each tariff filing submitted by a local exchange carrier subject 
to price cap regulation that introduces a new loop-based service or a 
restructured unbundled basic service element (BSE), as defined in Sec. 
69.2(mm) of this chapter, that is or will later be included in a basket, 
or that introduces or changes the rates for connection charge 
subelements for expanded interconnection, as defined in Sec. 69.121 of 
this chapter, must also be accompanied by:
    (1) The following, including complete explanations of the bases for 
the estimates.
    (i) A study containing a projection of costs for a representative 12 
month period; and
    (ii) Estimates of the effect of the new tariff on the traffic and 
revenues from

[[Page 216]]

the service to which the new tariff applies, the carrier's other service 
classifications, and the carrier's overall traffic and revenues. These 
estimates must include the projected effects on the traffic and revenues 
for the same representative 12 month period used in paragraph (g)(1)(i) 
of this section.
    (2) Working papers and statistical data. (i) Concurrently with the 
filing of any tariff change or tariff filing for a service not 
previously offered, the Chief, Tariff and Pricing Analysis Branch must 
be provided two sets of working papers containing the information 
underlying the data supplied in response to paragraph (h)(1) of this 
section, and a clear explanation of how the working papers relate to 
that information.
    (ii) All statistical studies must be submitted and supported in the 
form prescribed in Sec. 1.363 of the Commission's rules.
    (h) Each tariff filing submitted by a local exchange carrier subject 
to price cap regulation that introduces or changes the rates for 
connection charge subelements for expanded interconnection, as defined 
in Sec. 69.121 of this chapter, must be accompanied by cost data 
sufficient to establish that such charges will not recover more than a 
just and reasonable portion of the carrier's overhead costs.
    (i) [Reserved]
    (j) For a tariff that introduces a system of density pricing zones, 
as described in Sec. 69.123 of this chapter, the carrier must, before 
filing its tariff, submit a density pricing zone plan including, inter 
alia, documentation sufficient to establish that the system of zones 
reasonably reflects cost-related characteristics, such as the density of 
total interstate traffic in central offices located in the respective 
zones, and receive approval of its proposed plan.
    (k) In accordance with Sec. Sec. 61.41 through 61.49, local 
exchange carriers subject to price cap regulation that elect to file 
their annual access tariff pursuant to section 204(a)(3) of the 
Communications Act shall submit supporting material for their interstate 
annual access tariffs, absent rate information, 90 days prior to July 1 
of each year.
    (l) On each page of cost support material submitted pursuant to this 
section, the carrier shall indicate the transmittal number under which 
that page was submitted.

[54 FR 19843, May 8, 1989, as amended at 55 FR 42384, Oct. 19, 1990; 56 
FR 5956, Feb. 14, 1991; 56 FR 21617, May 10, 1991; 56 FR 33880, July 24, 
1991; 57 FR 37730, Aug. 20, 1992; 57 FR 54331, Nov. 18, 1992; 58 FR 
17167, Apr. 1, 1993; 58 FR 38536, July 19, 1993; 58 FR 48762, Sept. 17, 
1993; 59 FR 10304, Mar. 4, 1994; 62 FR 4659, Jan. 31, 1997; 62 FR 5778, 
Feb. 7, 1997; 62 FR 42218, Aug. 6, 1997; 64 FR 46590, 46593, Aug. 26, 
1999; 64 FR 51266, Sept. 22, 1999]



Sec. Sec. 61.50-61.51  [Reserved]



Sec. 61.52  Form, size, type, legibility, etc.

    (a) All tariff publications must be in loose-leaf form of size A4 
(21 cmx29.7 cm) or 8.5x11 inches (21.6 cmx27.9 cm), and must be plainly 
printed in black print on white paper of durable quality. Less than 6-
point type may not be used. Erasures or alterations in writing must not 
be made in any tariff publication filed with the Commission or in those 
copies posted for public convenience. A margin of no less than 2.5 cm (1 
inch) in width must be allowed at the left edge of every tariff 
publication.
    (b) Pages of tariffs must be printed on one side only, and must be 
numbered consecutively and designated as ``Original title page,'' 
``Original page 1,'' ``Original page 2,'' etc.
    (1) All such pages must show, in the upper left-hand corner the name 
of the issuing carrier; in the upper right-hand corner the FCC number of 
the tariff, with the page designation directly below; in the lower left-
hand corner the issued date; in the lower right-hand corner the 
effective date; and at the bottom, center, the street address of the 
issuing officer. The carrier must also specify the issuing officer's 
title either at the bottom center of all tariff pages, or on the title 
page and check sheet only.
    (2) As an alternative, the issuing carrier may show in the upper 
left-hand corner the name of the issuing carrier, the title and street 
address of the issuing officer, and the issued date; and in the upper 
right-hand corner the FCC

[[Page 217]]

number of the tariff, with the page designation directly below, and the 
effective date. The carrier must specify the issuing officer's title in 
the upper left-hand corner of either all tariff pages, or on the title 
page and check sheet only. A carrier electing to place the information 
at the top of the page should annotate the bottom of each page to 
indicate the end of the material, e.g., a line, or the term ``Printed in 
USA,'' or ``End''.
    (3) Only one format may be employed in a tariff publication.
    (c) Incumbent local exchange carriers shall file all tariff 
publications and associated documents, such as transmittal letters, 
requests for special permission, and supporting information, 
electronically in accordance with the requirements set forth in Sec. 
61.13 through Sec. 61.17.

[49 FR 40869, Oct. 18, 1984, as amended at 58 FR 44906, Aug. 25, 1993; 
62 FR 5778, Feb. 7, 1997; 63 FR 35541, June 30, 1998]



Sec. 61.54  Composition of tariffs.

    (a) Tariffs must contain in consecutive order: A title page; check 
sheet; table of contents; list of concurring, connecting, and other 
participating carriers; explanation of symbols and abbreviations; 
application of tariff; general rules (including definitions), 
regulations, exceptions and conditions; and rates. If the issuing 
carrier elects to add a section assisting in the use of the tariff, it 
should be placed immediately after the table of contents.
    (b) The title page of every tarif--f and supplement must show:
    (1) FCC number, indication of cancellations. In the upper right-hand 
corner, the designation of the tariff or supplement as ``FCC No. ------
--,'' or ``Supplement No. -------- to FCC No. --------,'' and 
immediately below, the FCC number or numbers of tariffs or supplements 
cancelled thereby.
    (2) Name of carrier, class of service, geographical application, 
means of transmission. The exact name of the carrier, and such other 
information as may be necessary to identify the carrier issuing the 
tariff publication; a brief statement showing each class of service 
provided; the geographical application; and the type of facilities used 
to provide service.
    (3) Expiration date. Subject to Sec. 61.59, when the entire tariff 
or supplement is to expire with a fixed date, the expiration date must 
be shown in connection with the effective date in the following manner. 
Changes in expiration date must be made pursuant to the notice 
requirements of Sec. 61.58, unless otherwise authorized by the 
Commission.

    Expires at the end of ---- (date) unless sooner canceled, changed, 
or extended.

    (4) Title and address of issuing officer. The title and street 
address of the officer issuing the tariff or supplement in the format 
specified in Sec. 61.52.
    (5) Revised title page. When a revised title page is issued, the 
following notation must be shown in connection with its effective date:

Original tariff --effective -------------------- (here show the 
effective date of the original tariff).

    (c)(1)(i) The page immediately following the title page must be 
designated as ``Original page 1'' and captioned ``Check Sheet.'' When 
the original tariff is filed, the check sheet must show the number of 
pages contained in the tariff. For example, ``Page 1 to 150, inclusive, 
of this tariff are effective as of the date shown.'' When new pages are 
added, they must be numbered in continuing sequence, and designated as 
``Original page -------- .'' For example, when the original tariff filed 
has 150 pages, the first page added after page 150 is to be designated 
as ``Original page 151,'' and the foregoing notation must be revised to 
include the added pages.
    (ii) Alternatively, the carrier is permitted to number its tariff 
pages, other than the check sheet, to reflect the section number of the 
tariff as well as the page. For example, under this system, pages in 
section 1 of the tariff would be numbered 1-1, 1-2, etc., and pages in 
section 2 of the tariff would be numbered 2-1, 2-2, etc. Issuing 
carriers shall utilize only one page numbering system throughout its 
tariff.
    (2) If pages are to be inserted between numbered pages, each such 
page must be designated as an original page and must bear the number of 
the immediately preceding page followed by an alpha or numeric suffix. 
For example, when two new pages are to be inserted

[[Page 218]]

between pages 44 and 45 of the tariff, the first inserted page must be 
designated as Original page 44A or 44.1 and the second inserted page as 
Original page 44B or 44.2. Issuing carriers may not utilize both the 
alpha and numeric systems in the same publication.
    (3)(i) When pages are revised, when new pages (including pages with 
letter or numeric suffix as set forth above) are added to the tariff, or 
when supplements are issued, the check sheet must be revised 
accordingly. Revised check sheets must indicate with an asterisk the 
specific pages added or revised. In addition to the notation in (1), the 
check sheet must list, under the heading ``The original and revised 
pages named below (and Supplement No. --------) contain all changes from 
the original tariff that are in effect on the date shown,'' all original 
pages in numerical order that have been added to the tariff and the 
pages which have been revised, including the revision number. For 
example:

------------------------------------------------------------------------
                                               Number of revision except
                     Page                             as indicated
------------------------------------------------------------------------
Title........................................  1st
1............................................  *8th
3............................................  5th
5A...........................................  *Orig.
10...........................................  *8th
151..........................................  Orig.
------------------------------------------------------------------------
*New or Revised page.

    (ii) On each page, the carrier shall indicate the transmittal number 
under which that page was submitted.
    (4) Changes in, and additions to tariffs must be made by reprinting 
the page upon which a change or addition is made. Such changed page is 
to be designated as a revised page, cancelling the page which it amends. 
For example, ``First revised page 1 cancels original page 1,'' or 
``Second revised page 2 cancels first revised page 2,'' etc. When a 
revised page omits rates or regulations previously published on the page 
which it cancels, but such rates or regulations are published on another 
page, the revised page must make specific reference to the page on which 
the rates or regulations will be found. This reference must be 
accomplished by inserting a sentence at the bottom of the revised page 
that states ``Certain rates (or regulations) previously found on this 
page can now be found on page ------.'' In addition, the page on which 
the omitted material now appears must bear the appropriate symbol 
opposite such material, and make specific reference to the page from 
which the rates or regulations were transferred. This reference must be 
accomplished by inserting a sentence at the bottom of the other page 
that states ``Certain rates (or regulations) on this page formerly 
appeared on page --------.''
    (5) Rejected pages must be treated as indicated in Sec. 61.69.
    (d) Table of contents. The table of contents must contain a full and 
complete statement showing the exact location and specifying the page or 
section and page numbers, where information by subjects under general 
headings will be found. If a tariff contains so small a volume of matter 
that its title page or its interior arrangement plainly discloses its 
contents, the table of contents may be omitted.
    (e) Tariff User's guide. At its option, a carrier may include a 
section explaining how to use the tariff.
    (f) List of concurring carriers. This list must contain the exact 
name or names of carriers concurring in the tariff, alphabetically 
arranged, and the name of the city or town in which the principal office 
of every such carrier is located. If there are no concurring carriers, 
then the statement ``no concurring carriers'' must be made at the place 
where the names of the concurring carriers would otherwise appear. If 
the concurring carriers are numerous, their names may be stated in 
alphabetical order in a separate tariff filed with the Commission by the 
issuing carrier. Specific reference to such separate tariff by FCC 
number must be made in the tariff at the place where such names would 
otherwise appear.
    (g) List of connecting carriers. This list must contain the exact 
name or names of connecting carriers, alphabetically arranged, for which 
rates or regulations are published in the tariff, and the name of the 
city or town in which the principal office of every such carrier is 
located. If there are no connecting carriers, then the statement ``no 
connecting carriers'' must be made at the place where their names would

[[Page 219]]

otherwise appear. If connecting carriers are numerous, their names may 
be stated in alphabetical order in a separate tariff filed with the 
Commission by the issuing carrier. Specific reference to such separate 
tariff by FCC number must be made in the tariff at the place where such 
names would otherwise appear.
    (h) List of other participating carriers. This list must contain the 
exact name of every other carrier subject to the Act engaging or 
participating in the communication service to which the tariff or 
supplement applies, together with the name of the city or town in which 
the principal office of such carrier is located. If there is no such 
other carrier, then the statement ``no participating carriers'' must be 
made at the place where the names of such other carriers would otherwise 
appear. If such other carriers are numerous, their names may be stated 
in alphabetical order in a separate tariff filed with the Commission by 
the issuing carrier. Specific reference must be made in the tariff at 
the place where such names would otherwise appear. The names of 
concurring and connecting carriers properly listed in a tariff published 
by any other participating carrier need not be repeated in this list.
    (i)(1) Symbols, reference marks, abbreviations. The tariff must 
contain an explanation of symbols, reference marks, and abbreviations of 
technical terms used. The following symbols used in tariffs are reserved 
for the purposes indicated below:

R to signify reduction.
I to signify increase.
C to signify changed regulation.
T to signify a change in text but no change in rate or regulation.
S to signify reissued matter.
M to signify matter relocated without change.
N to signify new rate or regulation.
D to signify discontinued rate or regulation.
Z to signify a correction.

    (2) The uniform symbols must be used as follows.
    (i) When a change of the same character is made in all or in 
substantially all matter in a tariff, it may be indicated at the top of 
the title page of the tariff or at the top of each affected page, in the 
following manner: ``All rates in this tariff are increases,'' or, ``All 
rates on this page are reductions, except as otherwise indicated.''
    (ii) When a change of the same character is made in all or 
substantially all matters on a page or supplement, it may be indiated at 
the top of the page or supplement in the following manner: All rates on 
this page (or supplement) are increases,'' or, ``All rates on this page 
(or supplement) are reductions except as otherwise indicated.''
    (3) Items which have not been in effect 30 days when brought forward 
on revised pages must be shown as reissued, in the manner prescribed in 
Sec. 61.54(i)(1). The number and original effective date of the tariff 
publication in which the matter was originally published must be 
associated with the reissued matter. Items which have been in effect 30 
days or more and are brought forward without change on revised pages 
must not be shown as reissued items.
    (j) Rates and general rules, regulations, exceptions and conditions. 
The general rules (including definitions), regulations, exceptions, and 
conditions which govern the tariff must be stated clearly and 
definitely. All general rules, regulations, exceptions or conditions 
which in any way affect the rates named in the tariff must be specified. 
A special rule, regulation, exception or condition affecting a 
particular item or rate must be specifically referred to in connection 
with such item or rate. Rates must be expressed in United States 
currency, per chargeable unit of service for all communication services, 
together with a list of all points of service to and from which the 
rates apply. They must be arranged in a simple and systematic manner. 
Complicated or ambiguous terminology may not be used, and no rate, rule, 
regulation, exception or condition shall be included which in any way 
attempts to substitute a rate, rule, regulation, exception or condition 
named in any other tariff.

[49 FR 40869, Oct. 18, 1984, as amended at 64 FR 46591, Aug. 26, 1999]



Sec. 61.55  Contract-based tariffs.

    (a) This section shall apply to price cap LECs permitted to offer 
contract-

[[Page 220]]

based tariffs under Sec. 69.727(a) of this chapter.
    (b) Composition of contract-based tariffs shall comply with 
Sec. Sec. 61.54(b) through (i).
    (c) Contract-based tariffs shall include the following:
    (1) The term of contract, including any renewal options;
    (2) A brief description of each of the services provided under the 
contract;
    (3) Minimum volume commitments for each service;
    (4) The contract price for each service or services at the volume 
levels committed to by the customers;
    (5) A general description of any volume discounts built into the 
contract rate structure; and
    (6) A general description of other classifications, practices, and 
regulations affecting the contract rate.

[64 FR 51266, Sept. 22, 1999]



Sec. 61.58  Notice requirements.

    (a) Every proposed tariff filing must bear an effective date and, 
except as otherwise provided by regulation, special permission, or 
Commission order, must be made on at least the number of days notice 
specified in this section.
    (1) Notice is accomplished by filing the proposed tariff changes 
with the Commission. Any period of notice specified in this section 
begins on and includes the date the tariff is received by the 
Commission, but does not include the effective date. If a tariff filing 
proposes changes governed by more than one of the notice periods listed 
below, the longest notice period will apply. In computing the notice 
period required, all days including Sundays and holidays must be 
counted.
    (2)(i) Local exchange carriers may file tariffs pursuant to the 
streamlined tariff filing provisions of section 204(a)(3) of the 
Communications Act. Such a tariff may be filed on 7 days' notice if it 
proposes only rate decreases. Any other tariff filed pursuant to section 
204(a)(3) of the Communications Act, including those that propose a rate 
increase or any change in terms and conditions, shall be filed on 15 
days' notice. Any tariff filing made pursuant to section 204(a)(3) of 
the Communications Act must comply with the applicable cost support 
requirements specified in this part.
    (ii) Local exchange carriers may elect not to file tariffs pursuant 
to section 204(a)(3) of the Communications Act. Any such tariffs shall 
be filed on at least 16 days' notice.
    (iii) Except for tariffs filed pursuant to section 204(a)(3) of the 
Communications Act, the Chief, Wireline Competition Bureau, may require 
the deferral of the effective date of any filing made on less than 120 
days' notice, so as to provide for a maximum of 120 days' notice, or of 
such other maximum period of notice permitted by section 203(b) of the 
Communications Act, regardless of whether petitions under Sec. 1.773 of 
this chapter have been filed.
    (3) Tariff filings proposing corrections or voluntarily deferring 
the effective date of a pending tariff revision must be made on at least 
3 days' notice, and may be filed notwithstanding the provisions of Sec. 
61.59. Corrections to tariff materials not yet effective cannot take 
effect before the effective date of the original material. Deferrals 
must take effect on or before the current effective date of the pending 
tariff revisions being deferred.
    (4) This subsection applies only to dominant carriers. If the tariff 
publication would increase any rate or charge, or would effectuate and 
authorized discountinuance, reduction or other impairment of service to 
any customer, the offering carrier must inform the affected customers of 
the content of the tariff publication. Such notification should be made 
in a form appropriate to the circumstance, and may include written 
notification, personal contact, or advertising in newspapers of general 
circulation.
    (b) Tariffs for new services filed by price cap local exchange 
carriers shall be filed on at least one day's notice.
    (c) Contract-based tariffs filed by price cap local exchange 
carriers pursuant to Sec. 69.727(a) of this chapter shall be filed on 
at least one day's notice.
    (d)(1) A local exchange carrier that is filing a tariff revision to 
remove its corridor or interstate intraLATA toll services from its 
interexchange basket pursuant to Sec. 61.42(d)(4)(ii) shall submit such 
filing on at least fifteen days' notice.

[[Page 221]]

    (2) A local exchange carrier that has removed its corridor and 
interstate intraLATA toll services from its interexchange basket 
pursuant to Sec. 61.42(d)(4)(ii) shall file subsequent tariff filings 
for corridor or interstate intraLATA toll services on at least one day's 
notice.
    (e) Non-price cap carriers and/or services. (1) Tariff filings in 
the instances specified in paragraphs (d)(1) (i), (ii), and (iii) of 
this section must be made on at least 15 days' notice.
    (i) Tariffs filed in the first instance by new carriers.
    (ii) Tariffs filings involving new rates and regulations not 
previously filed at, from, to or via points on new lines; at, from to or 
via new radio facilities; or for new points of radio communication.
    (iii) Tariff filings involving a change in the name of a carrier, a 
change in Vertical or Horizontal coordinates (or other means used to 
determine airline mileages), a change in the lists of mileages, a change 
in the lists of connecting, concurring or other participating carriers, 
text changes, or the imposition of termination charges calculated from 
effective tariff provisions. The imposition of termination charges does 
not include the initial filing of termination liability provisions.
    (2) Tariff filings involving a change in rate structure, a new 
offering, or a rate increase must be made on at least 45 days' notice.
    (3) Alascom, Inc. shall file its annual tariff revisions for its 
Common Carrier Services (Alascom Tariff F.C.C No. 11) on at least 35 
days' notice.
    (4) All tariff filings not specifically assigned a different period 
of public notice in this part must be made on at least 35 days' notice.
    (f) [Reserved]

[49 FR 40869, Oct. 18, 1984, as amended at 54 FR 19844, May 8, 1989; 55 
FR 42384, Oct. 19, 1990; 56 FR 1500, Jan. 15, 1991; 56 FR 5956, Feb. 14, 
1991; 56 FR 55239, Oct. 25, 1991; 58 FR 36149, July 6, 1993; 59 FR 
10304, Mar. 4, 1994; 62 FR 5778, Feb. 7, 1997; 64 FR 46591, Aug. 26, 
1999; 64 FR 51266, Sept. 22, 1999; 67 FR 13228, Mar. 21, 2002]



Sec. 61.59  Effective period required before changes.

    (a) Except as provided in Sec. 61.58(a)(3) or except as otherwise 
authorized by the Commission, new rates or regulations must be effective 
for at least 30 days before a dominant carrier will be permitted to make 
any change.
    (b) Changes to rates and regulations that have not yet become 
effective, i.e., are pending, may not be made unless the effective date 
of the proposed changes is at least 30 days after the scheduled 
effective date of the pending revisions.
    (c) Changes to rates and regulations that have taken effect but have 
not been in effect for at least 30 days may not be made unless the 
scheduled effective date of the proposed changes is at least 30 days 
after the effective date of the existing regulations.

[64 FR 46592, Aug. 26, 1999]



    Subpart F_Specific Rules for Tariff Publications of Dominant and 
                          Nondominant Carriers



Sec. 61.66  Scope.

    The rules in this subpart apply to all carriers, unless otherwise 
noted.

[64 FR 46592, Aug. 26, 1999]



Sec. 61.68  Special notations.

    (a) A tariff filing must contain a statement of the authority for 
any matter to be filed on less than the notice required in Sec. 61.58. 
The following must be used:

    Issued on not less than -- days' notice under authority of -- 
(specific reference to the special permission, decision, order or 
section of these rules).


If all the matter in a tariff publication is to become effective on less 
than the notice required in Sec. 61.58, specific reference to the 
Commission authority must be shown on the title page. If only a part of 
the tariff publication is to become effective on less than the notice 
required in Sec. 61.58, reference to the Commission authority must 
appear on the same page(s), and be associated with the pertinent matter.
    (b) When a portion of any tariff publication is issued in order to 
comply with the Commission order, the following notation must be 
associated with that portion of the tariff publication:

    In compliance with the order of the Federal Communications 
Commission in -- (a

[[Page 222]]

specific citation to the applicable order should be made).



Sec. 61.69  Rejection.

    When a tariff publication is rejected by the Commission, its number 
may not be used again. This includes, but is not limited to, such 
publications as tariff numbers or specific page revision numbers. The 
rejected tariff publication may not be referred to as either cancelled 
or revised. Within five business days of the release date of the 
Commission's Order rejecting such tariff publication, the issuing 
carrier shall file tariff revisions removing the rejected material, 
unless the Commission's Order establishes a different date for this 
filing. The publication that is subsequently issued in lieu of the 
rejected tariff publication must bear the notation:

    In lieu of ----, rejected by the Federal Communications Commission.

[64 FR 46592, Aug. 26, 1999]



Sec. 61.72  Public information requirements.

    (a) Issuing carriers must make available accurate and timely 
information pertaining to rates and regulations subject to tariff filing 
requirements.
    (b) Issuing carriers must, at a minimum, provide a telephone number 
for public inquiries about information contained in its tariffs. This 
telephone number should be made readily available to all interested 
parties.
    (c) Any issuing carrier that is an incumbent local exchange carrier, 
and chooses to establish an Internet web site, must make its tariffs 
available on that web site, in addition to the Commission's web site.

[64 FR 46592, Aug. 26, 1999]



Sec. 61.73  Duplication of rates or regulations.

    A carrier concurring in schedules of another carrier must not 
publish conflicting or duplicative rates or regulations.



Sec. 61.74  References to other instruments.

    (a) Except as otherwise provided in this and other sections of this 
part, no tariff publication filed with the Commission may make reference 
to any other tariff publication or to any other document or instrument.
    (b) Tariffs for end-on-end through services may reference the 
tariffs of other carriers participating in the offering.
    (c) Tariffs may reference concurrences for the purpose of starting 
where rates or regulations applicable to a service not governed by the 
tariff may be found.
    (d) Tariffs may reference other FCC tariffs that are in effect and 
on file with the Commission for purposes of determining mileage, or 
specifying the operating centers at which a specific service is 
available.
    (e) Tariffs may reference technical publications which describe the 
engineering, specifications, or other technical aspects of a service 
offering, provided the following conditions are satisfied:
    (1) The tariff must contain a general description of the service 
offering, including basic parameters and structural elements of the 
offering;
    (2) The technical publication includes no rates, regulatory terms, 
or conditions which are required to be contained in the tariff, and any 
revisions to the technical publication do not affect rates, regulatory 
terms, or conditions included in the tariff, and do not change the basic 
nature of the offering;
    (3) The tariff indicates where the technical publication can be 
obtained;
    (4) The referenced technical publication is publicly available 
before the tariff is scheduled to take effect; and
    (5) The issuing carrier regularly revises its tariff to refer to the 
current edition of the referenced technical publication.

[49 FR 40869, Oct. 18, 1984, as amended at 61 FR 59366, Nov. 22, 1996; 
64 FR 46592, Aug. 26, 1999; 66 FR 16881, Mar. 28, 2001]



Sec. 61.83  Consecutive numbering.

    Carriers should file tariff publications under consecutive FCC 
numbers. If this cannot be done, a memorandum containing an explanation 
of the missing number or numbers must be submitted. Supplements to a 
tariff must

[[Page 223]]

be numbered consecutively in a separate series.

[49 FR 40869, Oct. 18, 1984. Redesignated at 64 FR 46591, Aug. 26, 1999]



Sec. 61.86  Supplements.

    A carrier may not file a supplement except to suspend or cancel a 
tariff publication, or to defer the effective date of pending tariff 
revisions. A carrier may file a supplement for the voluntary deferral of 
a tariff publication.

[64 FR 46591, Aug. 26, 1999]



Sec. 61.87  Cancellation of tariffs.

    (a) A carrier may cancel an entire tariff. Cancellation of a tariff 
automatically cancels every page and supplement to that tariff except 
for the canceling Title Page or first page.
    (1) If the existing service(s) will be provided under another 
carrier's tariff, then
    (i) The carrier whose tariff is being canceled must revise the Title 
Page or the first page of its tariff indicating that the tariff is no 
longer effective, or
    (ii) The carrier under whose tariff the service(s) will be provided 
must revise the Title Page or first page of the tariff to be canceled, 
using the name and numbering shown in the heading of the tariff to be 
canceled, indicating that the tariff is no longer effective. This 
carrier must also file with the Commission the new tariff provisions 
reflecting the service(s) being canceled. Both filings must be effective 
on the same date and may be filed under the same transmittal.
    (2) If a carrier canceling its tariff intends to cease to provide 
existing service, then it must revise the Title Page or first page of 
its tariff indicating that the tariff is no longer effective.
    (3) A carrier canceling its tariff, as described in this section, 
must comply with Sec. 61.22 or Sec. Sec. 61.54(b)(1) and 61.54(b)(5), 
as applicable.
    (b) When a carrier cancels a tariff as described in this section, 
the canceling Title Page or the first page of the canceled tariff must 
show where all rates and regulations will be found except for paragraph 
(c) of this section. The Title Page or first page of the new tariff must 
indicate the name of the carrier and tariff number where the canceled 
material had been found.
    (c) When a carrier ceases to provide service(s) without a successor, 
it must cancel its tariff pursuant to the notice requirements of Sec. 
61.23 or Sec. 61.58, as applicable, unless otherwise authorized by the 
Commission.

[64 FR 46591, Aug. 26, 1999]



                         Subpart G_Concurrences



Sec. 61.131  Scope.

    Sections 61.132 through 61.136 apply to a carrier which must file 
concurrences reflecting rates and regulations for through service 
provided in conjunction with other carriers and to a carrier which has 
chosen, as an alternative to publishing its own tariff, to arrange 
concurrence in an effective tariff of another carrier. Limited or 
partial concurrences will not be permitted.



Sec. 61.132  Method of filing concurrences.

    A carrier proposing to concur in another carrier's effective tariff 
must deliver two copies of the concurrence to the issuing carrier in 
whose favor the concurrence is issued. The concurrence must be signed by 
an officer or agent of the carrier executing the concurrence, and must 
be numbered consecutively in a separate series from its FCC tariff 
numbers. At the same time the issuing carrier revises its tariff to 
reflect such a concurrence, it must submit both copies of the 
concurrence to the Commission. The concurrence must bear the same 
effective date as the date of the tariff filing reflecting the 
concurrence. Nondominant issuing carriers shall file revisions 
reflecting concurrences in their tariffs on the notice period specified 
in Sec. 61.23 of this part. Dominant issuing carriers shall file 
concurrences in their tariffs on the notice periods specified in Sec. 
61.58(a)(2) or Sec. 61.58(e)(1)(iii) of this part.

[49 FR 40869, Oct. 18, 1984, as amended at 64 FR 46592, Aug. 26, 1999]



Sec. 61.133  Format of concurrences.

    (a) Concurrences must be issued in the follo--wing format:

[[Page 224]]

                               Concurrence

F.C.C. Concurrence No. --------
(Cancels F.C.C. Concurrence No. ----
(Name of Carrier ------------)
(Post Office Address ------------)
(Date) ---------------------- 19----.
Secretary,
Federal Communications Commission, Washington, D.C. 20554.
This is to report that (name of concurring carrier) assents to and 
concurs in the tariffs described below. (Name of concurring carrier) 
thus makes itself a party to these tariffs and obligates itself (and its 
connecting carriers) to observe every provision in them, until a notice 
of revocation is filed with the Commission and delivered to the issuing 
carrier.
This concurrence applies to interstate (and foreign) communication:
    1. Between the different points on the concurring carrier's own 
system;
    2. Between all points on the concurring carrier's system and the 
systems of its connecting carriers; and
    3. Between all points on the system of the concurring carrier and 
the systems of its connecting carriers on the one hand, and, on the 
other hand, all points on the system of the carrier issuing the tariff 
or tariffs listed below and the systems of its connecting carriers and 
other carriers with which through routes have been established.

    (Note: Any of the above numbered paragraphs may be omitted or the 
wording modified to state the points to which the concurrence applies.)

                                 Tariff

    (Here describe the tariff or tariffs concurred in by the carrier, 
specifying FCC number, title, date of issuance, and date effective. 
Example: A.B.C. Communications Company, Tariff FCC No. 1, Interstate 
Telegraph Message Service, Issued January 1, 1983, Effective April 1, 
1983).
    Cancels FCC Concurrence No.------, effective ----------------------
--, 19----.

(Name of concurring carrier)____________________________________________
By______________________________________________________________________
(Title)_________________________________________________________________

    (b) No material is to be included in a concurrence other than that 
indicated in the above-prescribed form, unless specially authorized by 
the Commission. A concurrence in any tariff so described will be deemed 
to include all amendments and successive issues which the issuing 
carrier may make and file. All such amendments and successive issues 
will be binding between customers and carriers. Between carriers 
themselves, however, the filing by the issuing carrier of an amendment 
or successive issue with the Commission must not imply or be construed 
to imply an agreement to the filing by concurring carriers. Such filings 
do not affect the contractual rights or remedies of any concurring 
carrier(s) which have not, by contract or otherwise, specifically 
consented in advance to such amendment or successive issue.



Sec. 61.134  Concurrences for through services.

    A carrier filing rates or regulations for through services between 
points on its own system and points on another carrier's system (or 
systems), or between points on another carrier's system (or systems), 
must list all concurring, connecting or other participating carriers as 
provided in Sec. 61.54 (f), (g) and (h). A concurring carrier must 
tender a properly executed instrument of concurrence to the issuing 
carrier. If rates and regulations of the other carriers engaging in the 
through service(s) are not specified in the issuing carrier's tariff, 
that tariff must state where the other carrier's rates and regulations 
can be found. Such reference(s) must contain the FCC number(s) of the 
referenced tariff publication(s), the exact name(s) of the carrier(s) 
issuing such tariff publication(s), and must clearly state how the rates 
and regulations in the separate publications apply.



Sec. 61.135  Concurrences for other purposes.

    When an issuing carrier permits another carrier to concur in its 
tariff, the issuing carrier's tariff must state the concurring carrier's 
rates and points of service.



Sec. 61.136  Revocation of concurrences.

    A concurrence may be revoked by a revocation notice or cancelled by 
a new concurrence. A revocation notice or a new concurrence, if less 
broad in scope than the concurrence it cancels, must bear an effective 
date not less than 45 days after its receipt by the Commission. A 
revocation notice is not given a serial number, but must specify the 
number of the concurrence to be revoked and the name of the carrier in 
whose favor the concurrence was

[[Page 225]]

issued. It must be in the following format:

                            Revocation Notice

(Name of carrier ------------------------)
(Post office address ----------------------------)
(Date) ----------------------, 19----.
Secretary,
Federal Communications Commission, Washington, D.C. 20554.
    Effective --------------------------, 19---- FCC Concurrence No. --
--, issued by (Name of concurring carrier) in favor of (Name of issuing 
carrier) is hereby cancelled and revoked. Rates and regulations of (Name 
of concurring carrier) and its connecting carriers will thereafter be 
found in Tariff FCC No. ---- issued by ------------------ (If the 
concurring carrier has ceased operations, the revocation notice must so 
indicate.)

(Name of carrier)_______________________________________________________
By______________________________________________________________________
(Title)_________________________________________________________________



              Subpart H_Applications for Special Permission



Sec. 61.151  Scope.

    Sections 61.152 and 61.153 set forth the procedures to be followed 
by a carrier applying for a waiver of any of the rules in this part.

[55 FR 19173, May 8, 1990]



Sec. 61.152  Terms of applications and grants.

    Applications for special permission must contain:
    (a) A detailed description of the tariff publication proposed to be 
put into effect;
    (b) A statement citing the specific rules and the grounds on which 
waiver is sought;
    (c) A showing of good cause; and
    (d) A statement as to the date and method of filing the original of 
the application for special permission as required by Sec. 61.153(b) 
and the date and method of filing the copies required by Sec. 61.153 
(a) and (c).

If approved, the carrier must comply with all terms and use all 
authority specified in the grant. If a carrier elects to use less than 
the authority granted, it must apply to the Commission for modification 
of the original grant. If a carrier elects not to use the authority 
granted within sixty days of its effective date, the original grant will 
be automatically cancelled by the Commission.

[55 FR 19173, May 8, 1990]



Sec. 61.153  Method of filing applications.

    (a) An application for special permission must be addressed to 
``Secretary, Federal Communication Commission, Washington, DC 20554.'' 
The date on which the application is received by the Secretary of the 
Commission (or the Mail Room where submitted by mail) is considered the 
official filing date.
    (b) In addition, except for issuing carriers filing tariffing fees 
electronically, for all special permission applications requiring fees 
as set forth in part 1, subpart G of this chapter, the issuing carrier 
must submit the original of the application letter (without 
attachments), FCC Form 159, and the appropriate fee to the U.S. Bank, 
St. Louis, Missouri at the address set forth in Sec. 1.1105 of this 
chapter. Issuing carriers submitting tariffing fees electronically 
should submit the Form 159 and the original cover letter to the 
Secretary of the Commission in lieu of the U.S. Bank. The Form 159 
should display the Electronic Audit Code in the box in the upper left 
hand corner marked ``reserved.'' Issuing carriers should submit these 
fee materials on the same date as the submission in paragraph (a) of 
this section.
    (c) In addition to the requirements set forth in paragraphs (a) and 
(b) of this section, the issuing carrier must send a copy of the 
application letter with all attachments to the Secretary, Federal 
Communications Commission and a separate copy with all attachments to 
the Chief, Pricing Policy Division. If a carrier applies for special 
permission to revise joint tariffs, the application must state that it 
is filed on behalf of all carriers participating in the affected 
service. Applications must be numbered consecutively in a series 
separate from FCC tariff numbers, bear the signature of the officer or 
agent of the carrier, and be in the following format:

________________________________________________________________________
Application No.
________________________________________________________________________
(Date)

[[Page 226]]

________________________________________________________________________
Secretary
    Federal Communications Commission, Washington, DC 20554.
    Attention: Wireline Competition Bureau (here provide the statements 
required by Sec. 61.152).
 (Exact name of carrier)________________________________________________
 (Name of officer or agent)_____________________________________________
 (Title of officer or agent)____________________________________________

[55 FR 19173, May 8, 1990, as amended at 64 FR 46592, 46593, Aug. 26, 
1999; 67 FR 13228, Mar. 21, 2002; 73 FR 9031, Feb. 19, 2008]



    Subpart I_Adoption of Tariffs and Other Documents of Predecessor 
                                Carriers



Sec. 61.171  Adoption notice.

    When a carrier's name is changed, or its operating control 
transferred from one carrier to another in whole or in part, the 
successor carrier must file tariff revisions to reflect the name change. 
The successor carrier may either immediately reissue the entire tariff 
in its own name, or immediately file an adoption notice. Within 35 days 
of filing an adoption notice, the successor must reissue the entire 
tariff in its own name. The reissued tariff must be numbered in the 
series of the successor carrier, and must contain all original pages 
without changes in regulations or rates. The transmittal letter must 
state the tariff is being filed to show a change in the carrier's name 
pursuant to Sec. 61.171 of the Commission's Rules. The adoption notice, 
if used, must read as follows:

    The (Exact name of successor carrier or receiver) here adopts, 
ratifies and makes its own in every respect, all applicable tariffs and 
amendments filed with the Federal Communications Commission by 
(predecessor) prior to (date).



Sec. 61.172  Changes to be incorporated in tariffs of successor carrier.

    When only a portion of properties is transferred to a successor 
carrier, that carrier must incorporate in its tariff the rates applying 
locally between points on the transferred portion. Moreover, the 
predecessor carrier must simultaneously cancel the corresponding rates 
from its tariffs, and reference the FCC number of the successor 
carrier's tariff containing the rates that will thereafter apply.



                          Subpart J_Suspensions



Sec. 61.191  Carrier to file supplement when notified of suspension.

    If a carrier is notified by the Commission that its tariff 
publication has been suspended, the carrier must file, within five 
business days from the release date of the suspension order, a 
consecutively numbered supplement without an effective date, which 
specifies the schedules which have been suspended.

[64 FR 46593, Aug. 26, 1999]



Sec. 61.192  Contents of supplement announcing suspension.

    (a) A supplement announcing a suspension by the Commission must 
specify the term of suspension imposed by the Commission.
    (b) A supplement announcing a suspension of either an entire tariff 
or a part of a tariff publication, must specify the applicable tariff 
publication effective during the period of suspension.



Sec. 61.193  Vacation of suspension order; supplements announcing same; etc.

    If the Commission vacates a suspension order, the affected carrier 
must issue a supplement or revised page stating the Commission's action 
as well as the lawful schedules.



  PART 63_EXTENSION OF LINES, NEW LINES, AND DISCONTINUANCE, REDUCTION,
  OUTAGE AND IMPAIRMENT OF SERVICE BY COMMON CARRIERS; AND GRANTS
  
  OF RECOGNIZED PRIVATE 
OPERATING AGENCY STATUS--Table of Contents




                       Extensions and Supplements

Sec.
63.01 Authority for all domestic common carriers.
63.02 Exemptions for extensions of lines and for systems for the 
          delivery of video programming.
63.03 Streamlining procedures for domestic transfer of control 
          applications.
63.04 Filing procedures for domestic transfer of control applications.
63.09 Definitions applicable to international Section 214 
          authorizations.
63.10 Regulatory classification of U.S. international carriers.

[[Page 227]]

63.11 Notification by and prior approval for U.S. international carriers 
          that are or propose to become affiliated with a foreign 
          carrier.
63.12 Processing of international Section 214 applications.
63.13 Procedures for modifying regulatory classification of U.S. 
          international carriers from dominant to non-dominant.
63.14 Prohibition on agreeing to accept special concessions.
63.16 Switched services over private lines.
63.17 Special provisions for U.S. international common carriers.
63.18 Contents of applications for international common carriers.
63.19 Special procedures for discontinuances of international services.
63.20 Electronic filing, copies required; fees; and filing periods for 
          international service providers.
63.21 Conditions applicable to all international Section 214 
          authorizations.
63.22 Facilities-based international common carriers.
63.23 Resale-based international common carriers.
63.24 Assignments and transfers of control.
63.25 Special provisions relating to temporary or emergency service by 
          international carriers.

    General Provisions Relating to All Applications Under Section 214

63.50 Amendment of applications.
63.51 Additional information.
63.52 Copies required; fees; and filing periods for domestic 
          authorizations.
63.53 Form.

            Discontinuance, Reduction, Outage and Impairment

63.60 Definitions.
63.61 Applicability.
63.62 Type of discontinuance, reduction, or impairment of telephone or 
          telegraph service requiring formal application.
63.63 Emergency discontinuance, reduction, or impairment of service.
63.65 Closure of public toll station where another toll station of 
          applicant in the community will continue service.
63.66 Closure of or reduction of hours of service at telephone exchanges 
          at military establishments.
63.71 Procedures for discontinuance, reduction or impairment of service 
          by domestic carriers.
63.90 Publication and posting of notices.
63.100 Notification of service outage.

                   Contents of Applications; Examples

63.500 Contents of applications to dismantle or remove a trunk line.
63.501 Contents of applications to sever physical connection or to 
          terminate or suspend interchange of traffic with another 
          carrier.
63.504 Contents of applications to close a public toll station where no 
          other such toll station of the applicant in the community will 
          continue service and where telephone toll service is not 
          otherwise available to the public through a telephone exchange 
          connected with the toll lines of a carrier.
63.505 Contents of applications for any type of discontinuance, 
          reduction, or impairment of telephone service not specifically 
          provided for in this part.
63.601 Contents of applications for authority to reduce the hours of 
          service of public coast stations under the conditions 
          specified in Sec. 63.70.

    Request for Designation as a Recognized Private Operating Agency

63.701 Contents of application.
63.702 Form.

    Authority: Sections 1, 4(i), 4(j), 10, 11, 201-205, 214, 218, 403 
and 651 of the Communications Act of 1934, as amended, 47 U.S.C. 151, 
154(i), 154(j), 160, 201-205, 214, 218, 403, and 571, unless otherwise 
noted.

    Source: 28 FR 13229, Dec. 5, 1963, unless otherwise noted.

                       Extensions and Supplements



Sec. 63.01  Authority for all domestic common carriers.

    (a) Any party that would be a domestic interstate communications 
common carrier is authorized to provide domestic, interstate services to 
any domestic point and to construct or operate any domestic transmission 
line as long as it obtains all necessary authorizations from the 
Commission for use of radio frequencies.
    (b) Domestic common carriers subject to this section shall not 
engage in any line construction that may have a significant effect on 
the environment as defined in Sec. 1.1307 of this chapter without prior 
compliance with the Commission's environmental rules. See Sec. 1.1312 
of this chapter.

[64 FR 39939, July 23, 1999, as amended at 67 FR 18830, Apr. 17, 2002]



Sec. 63.02  Exemptions for extensions of lines and for systems for
the delivery of video programming.

    (a) Any common carrier is exempt from the requirements of section 
214 of the Communications Act of 1934, as amended, for the extension of 
any line.

[[Page 228]]

    (b) A common carrier shall not be required to obtain a certificate 
under section 214 of the Communications Act of 1934 with respect to the 
establishment or operation of a system for the delivery of video 
programming.

[64 FR 39939, July 23, 1999]



Sec. 63.03  Streamlining procedures for domestic transfer of 
control applications.

    Any domestic carrier that seeks to transfer control of lines or 
authorization to operate pursuant to section 214 of the Communications 
Act of 1934, as amended, shall be subject to the following procedures:
    (a) Public Notice and Review Period. Upon determination by the 
Common Carrier Bureau that the applicants have filed a complete 
application and that the application is appropriate for streamlined 
treatment, the Common Carrier Bureau will issue a public notice stating 
that the application has been accepted for filing as a streamlined 
application. Unless otherwise notified by the Commission, an applicant 
is permitted to transfer control of the domestic lines or authorization 
to operate on the 31st day after the date of public notice listing a 
domestic section 214 transfer of control application as accepted for 
filing as a streamlined application, but only in accordance with the 
operations proposed in its application. Comments on streamlined 
applications may be filed during the first 14 days following public 
notice, and reply comments may be filed during the first 21 days 
following public notice, unless the public notice specifies a different 
pleading cycle. All comments on streamlined applications shall be filed 
electronically, and shall satisfy such other filing requirements as may 
be specified in the public notice.
    (b) Presumptive Streamlined Categories. (1) The streamlined 
procedures provided in this rule shall be presumed to apply to all 
transfer of control applications in which:
    (i) Both applicants are non-facilities-based carriers;
    (ii) The transferee is not a telecommunications provider; or
    (iii) The proposed transaction involves only the transfer of the 
local exchange assets of an incumbent LEC by means other than an 
acquisition of corporate control.
    (2) Where a proposed transaction would result in a transferee having 
a market share in the interstate, interexchange market of less than 10 
percent, and the transferee would provide competitive telephone exchange 
services or exchange access services (if at all) exclusively in 
geographic areas served by a dominant local exchange carrier that is not 
a party to the transaction, the streamlined procedures provided in this 
rule shall be presumed to apply to transfer of control applications in 
which:
    (i) Neither of the applicants is dominant with respect to any 
service;
    (ii) The applicants are a dominant carrier and a non-dominant 
carrier that provides services exclusively outside the geographic area 
where the dominant carrier is dominant; or
    (iii) The applicants are incumbent independent local exchange 
carriers (as defined in Sec. 64.1902 of this chapter) that have, in 
combination, fewer than two (2) percent of the nation's subscriber lines 
installed in the aggregate nationwide, and no overlapping or adjacent 
service areas.
    (3) For purposes of (b)(1) and (2) of this paragraph, the terms 
``applicant,'' ``carrier,'' ``party,'' and ``transferee'' (and their 
plural forms) include any affiliates of such entities within the meaning 
of section 3(1) of the Communications Act of 1934, as amended.
    (c) Removal of Application from Streamlined Processing. (1) At any 
time after an application is filed, the Commission, acting through the 
Chief of the Wireline Competition Bureau, may notify an applicant that 
its application is being removed from streamlined processing, or will 
not be subject to streamlined processing. Examples of appropriate 
circumstances for such action are:
    (i) An application is associated with a non-routine request for 
waiver of the Commission's rules;
    (ii) An application would, on its face, violate a Commission rule or 
the Communications Act;
    (iii) An applicant fails to respond promptly to Commission 
inquiries;

[[Page 229]]

    (iv) Timely-filed comments on the application raise public interest 
concerns that require further Commission review; or
    (v) The Commission, acting through the Chief of the Wireline 
Competition Bureau, otherwise determines that the application requires 
further analysis to determine whether a proposed transfer of control 
would serve the public interest.
    (2) Notification will be by public notice that states the reason for 
removal or non-streamlined treatment, and indicates the expected 
timeframe for Commission action on the application. Except in 
extraordinary circumstances, final action on the application should be 
expected no later than 180 days from public notice that the application 
has been accepted for filing.
    (d) Pro Forma Transactions. (1) Any party that would be a domestic 
common carrier under section 214 of the Communications Act of 1934, as 
amended, is authorized to undertake any corporate restructuring, 
reorganization or liquidation of internal business operations that does 
not result in a change in ultimate ownership or control of the carrier's 
lines or authorization to operate, including transfers in bankruptcy 
proceedings to a trustee or to the carrier itself as a debtor-in-
possession.\1\ Under this rule, a transfer of control of a domestic line 
or authorization to operate is considered pro forma when, together with 
all previous internal corporate restructurings, the transaction does not 
result in a change in the carrier's ultimate ownership or control, or 
otherwise falls into one of the illustrative categories found in Sec. 
63.24 of this part governing transfers of control of international 
carriers under section 214 of the Communications Act of 1934, as 
amended.
---------------------------------------------------------------------------

    \1\ ``Control'' includes actual working control in whatever manner 
exercised and is not limited to majority stock ownership. ``Control'' 
also includes direct or indirect ownership or control, such as through 
intervening subsidiaries. See 47 CFR 63.09.
---------------------------------------------------------------------------

    (2) Any party that would be a domestic common carrier under section 
214 of the Communications Act of 1934, as amended, must notify the 
Commission no later than 30 days after control of the carrier is 
transferred to a trustee under Chapter 7 of the Bankruptcy Code, a 
debtor-in-possession under Chapter 11 of the Bankruptcy Code, or any 
other party pursuant to any applicable chapter of the Bankruptcy Code 
when that transfer does not result in a change in ultimate ownership or 
control of the carrier's lines or authorization to operate. The 
notification can be in the form of a letter (in duplicate to the 
Secretary). The letter or other form of notification must also contain 
the information listed in paragraphs (a)(1) through (a)(4) in Sec. 
63.04. A single letter may be filed for more than one such transfer of 
control. If a carrier files a discontinuance request within 30 days of 
the transfer in bankruptcy, the Commission will treat the discontinuance 
request as sufficient to fulfill the pro forma post-transaction notice 
requirement.
    (3) Notwithstanding any other provision in this part, any party that 
would be a domestic common carrier under section 214 of the 
Communications Act of 1934, as amended, including a carrier that begins 
providing service through a differently named subsidiary after an 
internal corporate restructuring, remains subject to all applicable 
conditions of service after an internal restructuring, such as rules 
governing slamming and tariffing.

[67 FR 18831, Apr. 17, 2002; 67 FR 21803, May 1, 2002]



Sec. 63.04  Filing procedures for domestic transfer of control
applications

    (a) Domestic services only. A carrier seeking domestic section 214 
authorization for transfer of control should file an application 
containing:
    (1) The name, address and telephone number of each applicant;
    (2) The government, state, or territory under the laws of which each 
corporate or partnership applicant is organized;
    (3) The name, title, post office address, and telephone number of 
the officer or contact point, such as legal counsel, to whom 
correspondence concerning the application is to be addressed;
    (4) The name, address, citizenship and principal business of any 
person or entity that directly or indirectly owns at least ten (10) 
percent of the equity of

[[Page 230]]

the applicant, and the percentage of equity owned by each of those 
entities (to the nearest one (1) percent);
    (5) Certification pursuant to Sec. Sec. 1.2001 through 1.2003 of 
this chapter that no party to the application is subject to a denial of 
Federal benefits pursuant to section 5301 of the Anti-Drug Abuse Act of 
1988. See 21 U.S.C. 853.
    (6) A description of the transaction;
    (7) A description of the geographic areas in which the transferor 
and transferee (and their affiliates) offer domestic telecommunications 
services, and what services are provided in each area;
    (8) A statement as to how the application fits into one or more of 
the presumptive streamlined categories in this section or why it is 
otherwise appropriate for streamlined treatment;
    (9) Identification of all other Commission applications related to 
the same transaction;
    (10) A statement of whether the applicants are requesting special 
consideration because either party to the transaction is facing imminent 
business failure;
    (11) Identification of any separately filed waiver requests being 
sought in conjunction with the transaction; and
    (12) A statement showing how grant of the application will serve the 
public interest, convenience and necessity, including any additional 
information that may be necessary to show the effect of the proposed 
transaction on competition in domestic markets.
    (b) Domestic/International applications for transfers of control. 
Where an applicant wishes to file a joint international section 214 
transfer of control application and domestic section 214 transfer of 
control application, the applicant should submit information that 
satisfies the requirements of Sec. 63.18, which specifies the contents 
of applications for international authorizations, together with filing 
fees that satisfy (and are in accordance with filing procedures 
applicable to) both Sec. Sec. 1.1105 and 1.1107 of this chapter. In an 
attachment to the international application, the applicant should submit 
the information described in paragraphs (a)(6) through (a)(12) of this 
section.

[67 FR 18832, Apr. 17, 2002]



Sec. 63.09  Definitions applicable to international Section 214 authorizations.

    The following definitions shall apply to Sec. Sec. 63.09-63.24 of 
this part, unless the context indicates otherwise:
    (a) Facilities-based carrier means a carrier that holds an 
ownership, indefeasible-right-of-user, or leasehold interest in bare 
capacity in the U.S. end of an international facility, regardless of 
whether the underlying facility is a common carrier or non-common 
carrier submarine cable or a satellite system.
    (b) Control includes actual working control in whatever manner 
exercised and is not limited to majority stock ownership. Control also 
includes direct or indirect control, such as through intervening 
subsidiaries.
    (c) Special concession is defined as in Sec. 63.14(b) of this part.
    (d) Foreign carrier is defined as any entity that is authorized 
within a foreign country to engage in the provision of international 
telecommunications services offered to the public in that country within 
the meaning of the International Telecommunication Regulations, see 
Final Acts of the World Administrative Telegraph and Telephone 
Conference, Melbourne, 1988 (WATTC-88), Art. 1, which includes entities 
authorized to engage in the provision of domestic telecommunications 
services if such carriers have the ability to originate or terminate 
telecommunications services to or from points outside their country.
    (e) Two entities are affiliated with each other if one of them, or 
an entity that controls one of them, directly or indirectly owns more 
than 25 percent of the capital stock of, or controls, the other one.
    Also, a U.S. carrier is affiliated with two or more foreign carriers 
if the foreign carriers, or entities that control them, together 
directly or indirectly own more than 25 percent of the capital stock of, 
or control, the U.S. carrier and those foreign carriers are parties to, 
or the beneficiaries of, a contractual relation (e.g., a joint venture 
or market alliance) affecting the provision or marketing of 
international basic telecommunications services in the United States.

[[Page 231]]

    (f) Market power means sufficient market power to affect competition 
adversely in the U.S. market.
    (g) As used in this part, the term:
    (1) Interlocking directorates shall mean persons or entities who 
perform the duties of ``officer or director'' in an authorized U.S. 
international carrier or an applicant for international Section 214 
authorization who also performs such duties for any foreign carrier.
    (2) Officer or director shall include the duties, or any of the 
duties, ordinarily performed by a director, president, vice president, 
secretary, treasurer, or other officer of a carrier.

    Note 1: The assessment of ``capital stock'' ownership will be made 
under the standards developed in Commission case law for determining 
such ownership. See, e.g., Fox Television Stations, Inc., 10 FCC Rcd 
8452 (1995). ``Capital stock'' includes all forms of equity ownership, 
including partnership interests.
    Note 2: Ownership and other interests in U.S. and foreign carriers 
will be attributed to their holders and deemed cognizable pursuant to 
the following criteria: Attribution of ownership interests in a carrier 
that are held indirectly by any party through one or more intervening 
corporations will be determined by successive multiplication of the 
ownership percentages for each link in the vertical ownership chain and 
application of the relevant attribution benchmark to the resulting 
product, except that wherever the ownership percentage for any link in 
the chain that is equal to or exceeds 50 percent or represents actual 
control, it shall be treated as if it were a 100 percent interest. For 
example, if A owns 30 percent of company X, which owns 60 percent of 
company Y, which owns 26 percent of ``carrier,''' then X's interest in 
``carrier''' would be 26 percent (the same as Y's interest because X's 
interest in Y exceeds 50 percent), and A's interest in ``carrier''' 
would be 7.8 percent (0.30x0.26 because A's interest in X is less than 
50 percent). Under the 25 percent attribution benchmark, X's interest in 
``carrier''' would be cognizable, while A's interest would not be 
cognizable.

[64 FR 19062, Apr. 19, 1999, as amended at 65 FR 60116, Oct. 10, 2000; 
67 FR 45390, July 9, 2002]



Sec. 63.10  Regulatory classification of U.S. international carriers.

    (a) Unless otherwise determined by the Commission, any party 
authorized to provide an international communications service under this 
part shall be classified as either dominant or non-dominant for the 
provision of particular international communications services on 
particular routes as set forth in this section. The rules set forth in 
this section shall also apply to determinations of regulatory status 
pursuant to Sec. Sec. 63.11 and 63.13. For purposes of paragraphs 
(a)(2) and (a)(3) of this section, the relevant markets on the foreign 
end of a U.S. international route include: international transport 
facilities or services, including cable landing station access and 
backhaul facilities; inter-city facilities or services; and local access 
facilities or services on the foreign end of a particular route.
    (1) A U.S. carrier that has no affiliation with, and that itself is 
not, a foreign carrier in a particular country to which it provides 
service (i.e., a destination country) shall presumptively be considered 
non-dominant for the provision of international communications services 
on that route;
    (2) Except as provided in paragraph (a)(4) of this section, a U.S. 
carrier that is, or that has or acquires an affiliation with a foreign 
carrier that is a monopoly provider of communications services in a 
relevant market in a destination country shall presumptively be 
classified as dominant for the provision of international communications 
services on that route; and
    (3) A U.S. carrier that is, or that has or acquires an affiliation 
with a foreign carrier that is not a monopoly provider of communications 
services in a relevant market in a destination country and that seeks to 
be regulated as non-dominant on that route bears the burden of 
submitting information to the Commission sufficient to demonstrate that 
its foreign affiliate lacks sufficient market power on the foreign end 
of the route to affect competition adversely in the U.S. market. If the 
U.S. carrier demonstrates that the foreign affiliate lacks 50 percent 
market share in the international transport and the local access markets 
on the foreign end of the route, the U.S. carrier shall presumptively be 
classified as non-dominant.
    (4) A carrier that is authorized under this part to provide to a 
particular destination an international switched service, and that 
provides such service

[[Page 232]]

solely through the resale of an unaffiliated U.S. facilities-based 
carrier's international switched services (either directly or indirectly 
through the resale of another U.S. resale carrier's international 
switched services), shall presumptively be classified as non-dominant 
for the provision of the authorized service. A carrier regulated as non-
dominant pursuant to this subparagraph shall notify the Commission at 
any time that it begins to provide such service through the resale of an 
affiliated U.S. facilities-based carrier's international switched 
services. The carrier will be deemed a dominant carrier on the route 
absent a Commission finding that the carrier otherwise qualifies for 
non-dominant regulation pursuant to this section.
    (b) Any party that seeks to defeat the presumptions in paragraph (a) 
of this section shall bear the burden of proof upon any issue it raises 
as to the proper classification of the U.S. carrier.
    (c) Any carrier classified as dominant for the provision of 
particular services on particular routes under this section shall comply 
with the following requirements in its provision of such services on 
each such route:
    (1) Provide services as an entity that is separate from its foreign 
carrier affiliate, in compliance with the following requirements:
    (i) The authorized carrier shall maintain separate books of account 
from its affiliated foreign carrier. These separate books of account do 
not need to comply with Part 32 of this chapter; and
    (ii) The authorized carrier shall not jointly own transmission or 
switching facilities with its affiliated foreign carrier. Nothing in 
this section prohibits the U.S. carrier from sharing personnel or other 
resources or assets with its foreign affiliate;
    (2) File quarterly reports on traffic and revenue, consistent with 
the reporting requirements authorized pursuant to Sec. 43.61, within 90 
days from the end of each calendar quarter;
    (3) File quarterly reports summarizing the provisioning and 
maintenance of all basic network facilities and services procured from 
its foreign carrier affiliate or from an allied foreign carrier, 
including, but not limited to, those it procures on behalf of customers 
of any joint venture for the provision of U.S. basic or enhanced 
services in which the authorized carrier and the foreign carrier 
participate, within 90 days from the end of each calendar quarter. These 
reports should contain the following: the types of circuits and services 
provided; the average time intervals between order and delivery; the 
number of outages and intervals between fault report and service 
restoration; and for circuits used to provide international switched 
service, the percentage of ``peak hour'' calls that failed to complete;
    (4) In the case of an authorized facilities-based carrier, file 
quarterly circuit status reports within 90 days from the end of each 
calendar quarter in the format set out by the Sec. 43.82 annual circuit 
status manual, with two exceptions: activated or idle circuits must be 
reported on a facility-by-facility basis; and the derived circuits need 
not be specified in the three quarterly reports due on June 30, 
September 30, and December 31.
    (5) If authorized to provide facilities-based service, comply with 
paragraph (e) of this section.
    (d) A carrier classified as dominant under this section shall file 
an original and two copies of each report required by paragraphs (c)(3), 
(c)(4), and (c)(5) of this section with the Chief, International Bureau. 
The carrier shall also file one copy of these reports with the 
Commission's copy contractor. The transmittal letter accompanying each 
report shall clearly identify the report as responsive to the 
appropriate paragraph of Sec. 63.10(c).
    (e) Except as otherwise ordered by the Commission, a carrier that is 
classified as dominant under this section for the provision of 
facilities-based services on a particular route and that is affiliated 
with a carrier that collects settlement payments for terminating U.S. 
international switched traffic at the foreign end of that route may not 
provide switched facilities-based service on that route unless the 
current rates the affiliate charges U.S. international carriers to 
terminate traffic are at or below the Commission's relevant benchmark 
adopted in IB Docket

[[Page 233]]

No. 96-261. See FCC 97-280 (rel. Aug. 18, 1997) (available at the FCC's 
Reference Operations Division, Washington, D.C. 20554, and on the FCC's 
World Wide Web Site at http://www.fcc.gov).

[62 FR 64752, Dec. 9, 1997, as amended at 64 FR 19062, Apr. 19, 1999; 64 
FR 46593, Aug. 26, 1999; 64 FR 47702, Sept. 1, 1999; 66 FR 16881, Mar. 
28, 2001; 67 FR 45390, July 9, 2002]



Sec. 63.11  Notification by and prior approval for U.S. international
carriers that are or propose to become affiliated with a foreign carrier.

    If a carrier is authorized by the Commission (``authorized 
carrier'') to provide service between the United States and a particular 
foreign destination market and it becomes, or seeks to become, 
affiliated with a foreign carrier that is authorized to operate in that 
market, then its authorization to provide that international service is 
conditioned upon notifying the Commission of that affiliation.
    (a) Affiliations requiring prior notification. Except as provided in 
paragraph (b) of this section, the authorized carrier must notify the 
Commission, pursuant to this section, forty-five days before 
consummation of either of the following types of transactions:
    (1) Acquisition by the authorized carrier, or by any entity that 
controls the authorized carrier, or by any entity that directly or 
indirectly owns more than twenty-five percent of the capital stock of 
the authorized carrier, of a controlling interest in a foreign carrier 
that is authorized to operate in a market that the carrier is authorized 
to serve; or
    (2) Acquisition of a direct or indirect interest greater than 
twenty-five percent, or of a controlling interest, in the capital stock 
of the authorized carrier by a foreign carrier that is authorized to 
operate in a market that the authorized carrier is authorized to serve, 
or by an entity that controls such a foreign carrier.
    (b) Exceptions. (1) Notwithstanding paragraph (a) of this section, 
the notification required by this section need not be filed before 
consummation, and may instead be filed pursuant to paragraph (c) of this 
section, if either of the following is true with respect to the named 
foreign carrier regardless of whether that foreign carrier is authorized 
to operate in a World Trade Organization (WTO) or non-WTO Member:
    (i) The Commission has previously determined in an adjudication that 
the foreign carrier lacks market power in that destination market (for 
example, in an international section 214 application or a declaratory 
ruling proceeding); or
    (ii) The foreign carrier owns no facilities in that destination 
market. For this purpose, a carrier is said to own facilities if it 
holds an ownership, indefeasible-right-of-user, or leasehold interest in 
bare capacity in international or domestic telecommunications facilities 
(excluding switches).
    (2) In the event paragraph (b)(1) of this section cannot be 
satisfied, notwithstanding paragraph (a) of this section, the 
notification required by this section need not be filed before 
consummation, and may instead be filed pursuant to paragraph (c) of this 
section, if the authorized carrier certifies that the named foreign 
carrier is authorized to operate in a WTO Member and provides 
certification to satisfy either of the following:
    (i) The authorized carrier demonstrates that it is entitled to 
retain non-dominant classification on its newly affiliated route 
pursuant to Sec. 63.10; or
    (ii) The authorized carrier agrees to comply with the dominant 
carrier safeguards contained in Sec. 63.10 effective upon the 
acquisition of the affiliation. See Sec. 63.10.
    (c) Notification after consummation. Any authorized carrier that 
becomes affiliated with a foreign carrier and has not previously 
notified the Commission pursuant to this section shall notify the 
Commission within thirty days after consummation of the acquisition.

    Example 1 to paragraph (c). Acquisition by an authorized carrier (or 
by any entity that directly or indirectly controls, is controlled by, or 
is under direct or indirect common control with the authorized carrier) 
of a direct or indirect interest in a foreign carrier that is greater 
than twenty-five percent but not controlling is subject to paragraph (c) 
but not to paragraph (a).
    Example 2 to paragraph (c). Notification of an acquisition by an 
authorized carrier of a hundred percent interest in a foreign carrier 
may be made after consummation, pursuant

[[Page 234]]

to paragraph (c), if the foreign carrier operates only as a resale 
carrier.
    Example 3 to paragraph (c). Notification of an acquisition by a 
foreign carrier from a WTO Member of a greater than twenty-five percent 
interest in the capital stock of an authorized carrier may be made after 
consummation, pursuant to paragraph (c) of this section, if the 
authorized carrier demonstrates in the post-notification that it 
qualifies for non-dominant classification on the affiliated route or 
agrees to comply with dominant carrier safeguards on the affiliated 
route effective upon the acquisition of the affiliation.

    (d) Cross-reference: In the event a transaction requiring a foreign 
carrier notification pursuant to this section also requires a transfer 
of control of assignment application pursuant to Sec. 63.24, the 
foreign carrier notification shall reference in the notification the 
transfer of control of assignment application and the date of its 
filing.
    (e) Contents of notification. The notification shall certify the 
following information:
    (1) The name of the newly affiliated foreign carrier and the country 
or countries in which it is authorized to provide telecommunications 
services to the public;
    (2) Which, if any, of those countries is a Member of the World Trade 
Organization;
    (3) What services the authorized carrier is authorized to provide to 
each named country, and the FCC file numbers under which each such 
authorization was granted;
    (4) Which, if any, of those countries the authorized carrier serves 
solely through the resale of the international switched services of 
unaffiliated U.S. facilities-based carriers;
    (5) The name, address, citizenship, and principal business of any 
person or entity that directly or indirectly owns at least ten (10) 
percent of the equity of the authorized carrier, and the percentage of 
equity owned by each of those entities (to the nearest one percent);
    (6) A certification that the authorized carrier has not agreed to 
and will not in the future agree to accept special concessions directly 
or indirectly from any foreign carrier with respect to any U.S. 
international route where the foreign carrier possesses market power on 
the foreign end of the route; and
    (7) Interlocking directorates. The name of any interlocking 
directorates, as defined in Sec. 63.09(g), with each foreign carrier 
named in the notification. See Sec. 63.09(g).
    (8) With respect to each foreign carrier named in the notification, 
a statement as to whether the notification is subject to paragraph (a) 
or (c) of this section. In the case of a notification subject to 
paragraph (a) of this section, the authorized carrier shall include the 
projected date of closing. In the case of a notification subject to 
paragraph (c) of this section, the authorized carrier shall include the 
actual date of closing.
    (9) If an authorized carrier relies on an exception in paragraph (b) 
of this section, then a certification as to which exception the foreign 
carrier satisfies and a citation to any adjudication upon which the 
carrier is relying. Authorized carriers relying upon the exceptions in 
paragraph (b)(2) of this section must make the required certified 
demonstration in paragraph (b)(2)(i) of this section or the certified 
commitment to comply with dominant carrier safeguards in paragraph 
(b)(2)(ii) of this section in the notification required by paragraph (c) 
of this section.
    (f) In order to retain non-dominant status on each newly affiliated 
route, the authorized carrier should demonstrate that it qualifies for 
non-dominant classification pursuant to Sec. 63.10. See Sec. 63.10.
    (g) Procedure. After the Commission issues a public notice of the 
submissions made under this section, interested parties may file 
comments within fourteen days of the public notice.
    (1) If the Commission deems it necessary at any time before or after 
the deadline for submission of public comments, the Commission may 
impose dominant carrier regulation on the authorized carrier for the 
affiliated routes based on the provisions of Sec. 63.10. See Sec. 
63.10.
    (2) In the case of a prior notification filed pursuant to paragraph 
(a) of this section in which the foreign carrier is authorized to 
operate in a non-WTO Member, the authorized carrier must demonstrate 
that it continues to serve

[[Page 235]]

the public interest for it to operate on the route for which it proposes 
to acquire an affiliation with the non-WTO foreign carrier by making the 
required showing in Sec. Sec. 63.18(k)(2) or (3) to the Commission. If 
the authorized carrier is unable to make the required showing in 
Sec. Sec. 63.18(k)(2) or (3) or is notified that the affiliation may 
otherwise harm the public interest pursuant to the Commission's policies 
and rules, then the Commission may impose conditions necessary to 
address any public interest harms or may proceed to an immediate 
authorization revocation hearing. See Sec. Sec. 63.18(k)(2) and (3).
    (h) All authorized carriers are responsible for the continuing 
accuracy of information provided pursuant to this section for a period 
of forty-five (45) days after filing. During this period if the 
information furnished is no longer accurate, the authorized carrier 
shall as promptly as possible, and in any event within ten (10) days, 
unless good cause is shown, file with the Commission a corrected 
notification referencing the FCC file numbers under which the original 
notification was provided, except that the carrier shall immediately 
inform the Commission, if at any time, not limited to the forty-five 
(45) days, the representations in the ``special concessions'' 
certification provided under paragraph (e)(6) of this section or Sec. 
63.18(n) are no longer true. See Sec. 63.18(n).
    (i) A carrier that files a prior notification pursuant to paragraph 
(a) of this section may request confidential treatment of its filing, 
pursuant to Sec. 0.459 of this chapter, for the first twenty (20) days 
after filing.
    (j) Subject to the availability of electronic forms, notifications 
described in this section must be filed electronically through the 
International Bureau Filing System (IBFS). A list of forms that are 
available for electronic filing can be found on the IBFS homepage. For 
information on electronic filing requirements, see part 1, Sec. Sec. 
1.1000 through 1.10018 of this chapter and the IBFS homepage at http://
www.fcc.gov/ibfs. See also Sec. Sec. 63.20 and 63.53.

[65 FR 60116, Oct. 10, 2000, as amended at 68 FR 50973, Aug. 25, 2003; 
69 FR 29901, May 26, 2004; 70 FR 38798, July 6, 2005]



Sec. 63.12  Processing of international Section 214 applications.

    (a) Except as provided by paragraph (c) of this section, a complete 
application seeking authorization under Sec. 63.18 of this part shall 
be granted by the Commission 14 days after the date of public notice 
listing the application as accepted for filing.
    (b) The applicant may commence operation on the 15th day after the 
date of public notice listing the application as accepted for filing, 
but only in accordance with the operations proposed in its application 
and the rules, regulations, and policies of the Commission. The public 
notice of the grant of the authorization shall represent the applicant's 
Section 214 certificate.
    (c) The streamlined processing procedures provided by paragraphs (a) 
and (b) of this section shall not apply where:
    (1) The applicant is affiliated with a foreign carrier in a 
destination market, unless the applicant clearly demonstrates in its 
application at least one of the following:
    (i) The Commission has previously determined that the affiliated 
foreign carrier lacks market power in that destination market;
    (ii) The applicant qualifies for a presumption of non-dominance 
under Sec. 63.10(a)(3);
    (iii) The affiliated foreign carrier owns no facilities, or only 
mobile wireless facilities, in that destination market. For this 
purpose, a carrier is said to own facilities if it holds an ownership, 
indefeasible-right-of-user, or leasehold interest in bare capacity in 
international or domestic telecommunications facilities (excluding 
switches);
    (iv) The affiliated destination market is a WTO Member country and 
the applicant qualifies for a presumption of non-dominance under Sec. 
63.10(a)(4)of this part;
    (v) The affiliated destination market is a WTO Member country and 
the applicant agrees to be classified as a dominant carrier to the 
affiliated destination country under Sec. 63.10, without prejudice to 
its right to petition for reclassification at a later date; or
    (vi) An entity with exactly the same ultimate ownership as the 
applicant

[[Page 236]]

has been authorized to provide the applied-for services on the 
affiliated destination route, and the applicant agrees to be subject to 
all of the conditions to which the authorized carrier is subject for its 
provision of service on that route; or
    (2) The applicant has an affiliation with a dominant U.S. carrier 
whose international switched or private line services the applicant 
seeks authority to resell (either directly or indirectly through the 
resale of another reseller's services), unless the applicant agrees to 
be classified as a dominant carrier to the affiliated destination 
country under Sec. 63.10 (without prejudice to its right to petition 
for reclassification at a later date); or
    (3) The Commission has informed the applicant in writing, within 14 
days after the date of public notice listing the application as accepted 
for filing, that the application is not eligible for streamlined 
processing.
    (d) If an application is deemed complete but, pursuant to paragraph 
(c) of this section, is deemed ineligible for the streamlined processing 
procedures provided by paragraphs (a) and (b) of this section, the 
Commission will issue public notice indicating that the application is 
ineligible for streamlined processing. Within 90 days of the public 
notice, the Commission will take action upon the application or provide 
public notice that, because the application raises questions of 
extraordinary complexity, an additional 90-day period for review is 
needed. Each successive 90-day period may be so extended. The 
application shall not be deemed granted until the Commission 
affirmatively acts upon the application. Operation for which such 
authorization is sought may not commence except in accordance with any 
terms or conditions imposed by the Commission.

[62 FR 64753, Dec. 9, 1997, as amended at 64 FR 19063, Apr. 19, 1999; 64 
FR 22903, Apr. 28, 1999; 64 FR 43095, Aug. 9, 1999; 69 FR 23154, Apr. 
28, 2004]



Sec. 63.13  Procedures for modifying regulatory classification of
U.S. international carriers from dominant to non-dominant.

    Any party that desires to modify its regulatory status from dominant 
to non-dominant for the provision of particular international 
communications services on a particular route should provide information 
in its application to demonstrate that it qualifies for non-dominant 
classification pursuant to Sec. 63.10.

[62 FR 64754, Dec. 9, 1997]



Sec. 63.14  Prohibition on agreeing to accept special concessions.

    (a) Any carrier authorized to provide international communications 
service under this part shall be prohibited, except as provided in 
paragraph (c) of this section, from agreeing to accept special 
concessions directly or indirectly from any foreign carrier with respect 
to any U.S. international route where the foreign carrier possesses 
sufficient market power on the foreign end of the route to affect 
competition adversely in the U.S. market and from agreeing to accept 
special concessions in the future.

    Note to paragraph (a): Carriers may rely on the Commission's list of 
foreign carriers that do not qualify for the presumption that they lack 
market power in particular foreign points for purposes of determining 
which foreign carriers are the subject of the prohibitions contained in 
this section. The Commission's list of foreign carriers that do not 
qualify for the presumption that they lack market power is available 
from the International Bureau's World Wide Web site at http://
www.fcc.gov/ib.

    (b) A special concession is defined as an exclusive arrangement 
involving services, facilities, or functions on the foreign end of a 
U.S. international route that are necessary for the provision of basic 
telecommunications services where the arrangement is not offered to 
similarly situated U.S.-licensed carriers and involves:
    (1) Operating agreements for the provision of basic services;
    (2) Distribution arrangements or interconnection arrangements, 
including pricing, technical specifications, functional capabilities, or 
other quality and operational characteristics, such as provisioning and 
maintenance times; or
    (3) Any information, prior to public disclosure, about a foreign 
carrier's basic network services that affects either the provision of 
basic or enhanced

[[Page 237]]

services or interconnection to the foreign country's domestic network by 
U.S. carriers or their U.S. customers.
    (c) This section shall not apply to the rates, terms and conditions 
in an agreement between a U.S. carrier and a foreign carrier that govern 
the settlement of U.S. international traffic, including the method for 
allocating return traffic, if the U.S. international route is exempt 
from the international settlements policy set forth in Sec. 64.1002 of 
this chapter.

    Note to Paragraph (c): The Commission's list of international routes 
exempted from the international settlements policy is available on the 
International Bureau's World Wide Web site at http://www.fcc.gov/ib.

[62 FR 64754, Dec. 9, 1997, as amended at 64 FR 19063, Apr. 19, 1999; 64 
FR 34741, June 29, 1999; 66 FR 16881, Mar. 28, 2001; 69 FR 23154, Apr. 
28, 2004]



Sec. 63.17  Special provisions for U.S. international common carriers.

    (a) Unless otherwise prohibited by the terms of its Section 214 
certificate, a U.S. common carrier authorized under this part to provide 
international private line service, whether as a reseller or facilities-
based carrier, may interconnect its authorized private lines to the 
public switched network on behalf of an end user customer for the end 
user customer's own use.
    (b) Except as provided in paragraph (b)(4) of this section, a U.S. 
common carrier, whether a reseller or facilities-based carrier, may 
engage in ``switched hubbing'' to countries that do not appear on the 
list of U.S. international routes exempted from the international 
settlements policy, set forth in Sec. 64.1002 of this chapter provided 
the carrier complies with the following conditions:
    (1) U.S.-outbound switched traffic shall be routed over the 
carrier's authorized U.S. international circuits extending between the 
United States and a country that is exempt from the international 
settlements policy (i.e., the ``hub'' country), and then forwarded to 
the third country only by taking at published rates and reselling the 
international message telephone service (IMTS) of a carrier in the hub 
country;
    (2) U.S.-inbound switched traffic shall be carried to a country that 
is exempt from the international settlements policy (i.e., the ``hub'' 
country) as part of the IMTS traffic flow from a third country and then 
terminated in the United States over the carrier's authorized U.S. 
international circuits extending between the United States and the hub 
country.

    Note to Paragraph (b): The Commission's list of international routes 
exempted from the international settlements policy is available on the 
International Bureau's World Wide Web site at http://www.fcc.gov/ib.

    (3) Authorized carriers filing tariffs pursuant to Sec. Sec. 61.19 
or 61.28 of this chapter that route U.S.-billed traffic via switched 
hubbing shall tariff their service on a ``through'' basis between the 
United States and the ultimate point of origination or termination;
    (4) No U.S. common carrier may engage in switched hubbing to or from 
a third country where it has an affiliation with a foreign carrier 
unless and until it has received authority to serve that country under 
Sec. 63.18(e)(1), (e)(2), or (e)(3).

[60 FR 67339, Dec. 29, 1995, as amended at 61 FR 15728, Apr. 9, 1996; 63 
FR 64754, Dec. 9, 1997; 64 FR 19064, Apr. 19, 1999; 66 FR 16881, Mar. 
28, 2001; 67 FR 45390, July 9, 2002; 69 FR 23154, Apr. 28, 2004]



Sec. 63.18  Contents of applications for international common carriers.

    Except as otherwise provided in this part, any party seeking 
authority pursuant to Section 214 of the Communications Act of 1934, as 
amended, to construct a new line, or acquire or operate any line, or 
engage in transmission over or by means of such additional line for the 
provision of common carrier communications services between the United 
States, its territories or possessions, and a foreign point shall 
request such authority by formal application. The application shall 
include information demonstrating how the grant of the application will 
serve the public interest, convenience, and necessity. Such 
demonstration shall consist of the following information, as applicable:
    (a) The name, address, and telephone number of each applicant;

[[Page 238]]

    (b) The Government, State, or Territory under the laws of which each 
corporate or partnership applicant is organized;
    (c) The name, title, post office address, and telephone number of 
the officer and any other contact point, such as legal counsel, to whom 
correspondence concerning the application is to be addressed;
    (d) A statement as to whether the applicant has previously received 
authority under Section 214 of the Act and, if so, a general description 
of the categories of facilities and services authorized (i.e., 
authorized to provide international switched services on a facilities 
basis);
    (e) One or more of the following statements, as pertinent:
    (1) Global facilities-based authority. If applying for authority to 
become a facilities-based international common carrier subject to Sec. 
63.22 of this part, the applicant shall:
    (i) State that it is requesting Section 214 authority to operate as 
a facilities-based carrier pursuant to Sec. 63.18(e)(1) of this part of 
the Commission's rules;
    (ii) List any countries for which the applicant does not request 
authorization under this paragraph (see Sec. 63.22(a) of this part); 
and
    (iii) Certify that it will comply with the terms and conditions 
contained in Sec. Sec. 63.21 and 63.22 of this part.
    (2) Global Resale Authority. If applying for authority to resell the 
international services of authorized common carriers subject to Sec. 
63.23, the applicant shall:
    (i) State that it is requesting Section 214 authority to operate as 
a resale carrier pursuant to Sec. 63.18(e)(2) of this section of the 
Commission's rules;
    (ii) List any countries for which the applicant does not request 
authorization under this paragraph (see Sec. 63.23(a) of this part); 
and
    (iii) Certify that it will comply with the terms and conditions 
contained in Sec. Sec. 63.21 and 63.23 of this part.
    (3) Other authorizations. If applying for authority to acquire 
facilities or to provide services not covered by paragraphs (e)(1) and 
(e)(2) of this section, the applicant shall provide a description of the 
facilities and services for which it seeks authorization. The applicant 
shall certify that it will comply with the terms and conditions 
contained in Sec. 63.21 and Sec. 63.22 and/or Sec. 63.23, as 
appropriate. Such description also shall include any additional 
information the Commission shall have specified previously in an order, 
public notice or other official action as necessary for authorization.
    (f) Applicants may apply for any or all of the authority provided 
for in paragraph (e) of this section in the same application. The 
applicant may want to file separate applications for those services not 
subject to streamlined processing under Sec. 63.12.
    (g) Where the applicant is seeking facilities-based authority under 
paragraph (e)(3) of this section, a statement whether an authorization 
of the facilities is categorically excluded as defined by Sec. 1.1306 
of this chapter. If answered affirmatively, an environmental assessment 
as described in Sec. 1.1311 of this chapter need not be filed with the 
application.
    (h) The name, address, citizenship and principal businesses of any 
person or entity that directly or indirectly owns at least ten percent 
of the equity of the applicant, and the percentage of equity owned by 
each of those entities (to the nearest one percent). The applicant shall 
also identify any interlocking directorates with a foreign carrier.

    Note to paragraph (h): Ownership and other interests in U.S. and 
foreign carriers will be attributed to their holders and deemed 
cognizable pursuant to the following criteria: Attribution of ownership 
interests in a carrier that are held indirectly by any party through one 
or more intervening corporations will be determined by successive 
multiplication of the ownership percentages for each link in the 
vertical ownership chain and application of the relevant attribution 
benchmark to the resulting product, except that wherever the ownership 
percentage for any link in the chain that is equal to or exceeds 50 
percent or represents actual control, it shall be treated as if it were 
a 100 percent interest. For example, if A owns 30 percent of company X, 
which owns 60 percent of company Y, which owns 26 percent of 
``carrier,'' then X's interest in ``carrier'' would be 26 percent (the 
same as Y's interest because X's interest in Y exceeds 50 percent), and 
A's interest in ``carrier'' would be 7.8 percent (0.30x0.26 because A's 
interest in X is less than 50 percent). Under the 25 percent attribution 
benchmark, X's interest in ``carrier''

[[Page 239]]

would be cognizable, while A's interest would not be cognizable.

    (i) A certification as to whether or not the applicant is, or is 
affiliated with, a foreign carrier. The certification shall state with 
specificity each foreign country in which the applicant is, or is 
affiliated with, a foreign carrier.
    (j) A certification as to whether or not the applicant seeks to 
provide international telecommunications services to any destination 
country for which any of the following is true. The certification shall 
state with specificity the foreign carriers and destination countries:
    (1) The applicant is a foreign carrier in that country; or
    (2) The applicant controls a foreign carrier in that country; or
    (3) Any entity that owns more than 25 percent of the applicant, or 
that controls the applicant, controls a foreign carrier in that country.
    (4) Two or more foreign carriers (or parties that control foreign 
carriers) own, in the aggregate, more than 25 percent of the applicant 
and are parties to, or the beneficiaries of, a contractual relation 
(e.g., a joint venture or market alliance) affecting the provision or 
marketing of international basic telecommunications services in the 
United States.
    (k) For any destination country listed by the applicant in response 
to paragraph (j) of this section, the applicant shall make one of the 
following showings:
    (1) The named foreign country (i.e., the destination foreign 
country) is a Member of the World Trade Organization; or
    (2) The applicant's affiliated foreign carrier lacks market power in 
the named foreign country; or
    (3) The named foreign country provides effective competitive 
opportunities to U.S. carriers to compete in that country's market for 
the service that the applicant seeks to provide (facilities-based, 
resold switched, or resold non-interconnected private line services). An 
effective competitive opportunities demonstration should address the 
following factors:
    (i) If the applicant seeks to provide facilities-based international 
services, the legal ability of U.S. carriers to enter the foreign market 
and provide facilities-based international services, in particular 
international message telephone service (IMTS);
    (ii) If the applicant seeks to provide resold services, the legal 
ability of U.S. carriers to enter the foreign market and provide resold 
international switched services (for switched resale applications) or 
non-interconnected private line services (for non-interconnected private 
line resale applications);
    (iii) Whether there exist reasonable and nondiscriminatory charges, 
terms and conditions for interconnection to a foreign carrier's domestic 
facilities for termination and origination of international services or 
the provision of the relevant resale service;
    (iv) Whether competitive safeguards exist in the foreign country to 
protect against anticompetitive practices, including safeguards such as:
    (A) Existence of cost-allocation rules in the foreign country to 
prevent cross-subsidization;
    (B) Timely and nondiscriminatory disclosure of technical information 
needed to use, or interconnect with, carriers' facilities; and
    (C) Protection of carrier and customer proprietary information;
    (v) Whether there is an effective regulatory framework in the 
foreign country to develop, implement and enforce legal requirements, 
interconnection arrangements and other safeguards; and
    (vi) Any other factors the applicant deems relevant to its 
demonstration.
    (l) Any applicant that proposes to resell the international switched 
services of an unaffiliated U.S. carrier for the purpose of providing 
international telecommunications services to a country where it is a 
foreign carrier or is affiliated with a foreign carrier shall either 
provide a showing that would satisfy Sec. 63.10(a)(3) of this part or 
state that it will file the quarterly traffic reports required by Sec. 
43.61(c) of this chapter.
    (m) With respect to regulatory classification under Sec. 63.10 of 
this part, any applicant that is or is affiliated with a foreign carrier 
in a country listed in response to paragraph (i) of this section and 
that desires to be regulated as

[[Page 240]]

non-dominant for the provision of particular international 
telecommunications services to that country should provide information 
in its application to demonstrate that it qualifies for non-dominant 
classification pursuant to Sec. 63.10 of this part.
    (n) A certification that the applicant has not agreed to accept 
special concessions directly or indirectly from any foreign carrier with 
respect to any U.S. international route where the foreign carrier 
possesses market power on the foreign end of the route and will not 
enter into such agreements in the future.
    (o) A certification pursuant to Sec. Sec. 1.2001 through 1.2003 of 
this chapter that no party to the application is subject to a denial of 
Federal benefits pursuant to Section 5301 of the Anti-Drug Abuse Act of 
1988. See 21 U.S.C. 853a.
    (p) If the applicant desires streamlined processing pursuant to 
Sec. 63.12, a statement of how the application qualifies for 
streamlined processing.
    (q) Subject to the availability of electronic forms, all 
applications described in this section must be filed electronically 
through the International Bureau Filing System (IBFS). A list of forms 
that are available for electronic filing can be found on the IBFS 
homepage. For information on electronic filing requirements, see part 1, 
Sec. Sec. 1.1000 through 1.10018 of this chapter and the IBFS homepage 
at http://www.fcc.gov/ibfs. See also Sec. Sec. 63.20 and 63.53.

[61 FR 15729, Apr. 9, 1996, as amended at 62 FR 32965, June 17, 1997; 62 
FR 45762, Aug. 29, 1997; 62 FR 64755, Dec. 9, 1997; 63 FR 24121, May 1, 
1998; 64 FR 19064, Apr. 19, 1999; 65 FR 60117, Oct. 10, 2000; 67 FR 
45390, July 9, 2002; 69 FR 29902, May 26, 2004; 70 FR 38798, July 6, 
2005; 72 FR 54366, Sept. 25, 2007]



Sec. 63.19  Special procedures for discontinuances of international 
services.

    (a) With the exception of those international carriers described in 
paragraphs (b) and (c) of this section, any international carrier that 
seeks to discontinue, reduce or impair service, including the retiring 
of international facilities, dismantling or removing of international 
trunk lines, shall be subject to the following procedures in lieu of 
those specified in Sec. Sec. 63.61 through 63.601:
    (1) The carrier shall notify all affected customers of the planned 
discontinuance, reduction or impairment at least 30 days prior to its 
planned action. Notice shall be in writing to each affected customer 
unless the Commission authorizes in advance, for good cause shown, 
another form of notice.
    (2) The carrier shall file with this Commission a copy of the 
notification on the date on which notice has been given to all affected 
customers. The filing may be made by letter (sending an original and 
five copies to the Office of the Secretary, and a copy to the Chief, 
International Bureau) and shall identify the geographic areas of the 
planned discontinuance, reduction or impairment and the authorization(s) 
pursuant to which the carrier provides service.
    (b) The following procedures shall apply to any international 
carrier that the Commission has classified as dominant in the provision 
of a particular international service because the carrier possesses 
market power in the provision of that service on the U.S. end of the 
route. Any such carrier that seeks to retire international facilities, 
dismantle or remove international trunk lines, but does not discontinue, 
reduce or impair the dominant services being provided through these 
facilities, shall only be subject to the notification requirements of 
paragraph (a) of this section. If such carrier discontinues, reduces or 
impairs the dominant service, or retires facilities that impair or 
reduce the service, the carrier shall file an application pursuant to 
Sec. Sec. 63.62 and 63.500.
    (c) Commercial Mobile Radio Service (CMRS) carriers, as defined in 
Sec. 20.9 of this chapter, are not subject to the provisions of this 
section.
    (d) Subject to the availability of electronic forms, all filings 
described in this section must be filed electronically through the 
International Bureau Filing System (IBFS). A list of forms that are 
available for electronic filing can be found on the IBFS homepage. For 
information on electronic filing requirements, see part 1, Sec. Sec. 
1.1000 through 1.10018 of this chapter and the IBFS

[[Page 241]]

homepage at http://www.fcc.gov/ibfs. See also Sec. Sec. 63.20 and 
63.53.

[67 FR 45391, July 9, 2002, as amended at 70 FR 38798, July 6, 2005; 72 
FR 54366, Sept. 25, 2007]

    Effective Date Note: At 72 FR 54366, Sept. 25, 2007, Sec. 
63.19(a)(1) and (a)(2) were revised. This text contains information 
collection and recordkeeping requirements and will not become effective 
until approval has been given by the Office of Management and Budget.



Sec. 63.20  Electronic filing, copies required; fees; and filing 
periods for international service providers.

    (a) Subject to the availability of electronic forms, all filings 
described in this section must be filed electronically through the 
International Bureau Filing System (IBFS). A list of forms that are 
available for electronic filing can be found on the IBFS homepage. For 
information on electronic filing requirements, see part 1, Sec. Sec. 
1.1000 through 1.10018 of this chapter and the IBFS homepage at http://
www.fcc.gov/ibfs. Each application shall be accompanied by the fee 
prescribed in subpart G of part 1 of this chapter. For applications 
filed electronically it is not necessary to send the original or any 
copies with the fee payment. For applications and other filings that are 
not submitted electronically, an original and five (5) copies of the 
submission must be filed with the Commission. Upon request by the 
Commission, additional copies shall be furnished.
    (b) No application accepted for filing and subject to the provisions 
of Sec. Sec. 63.18, 63.62 or 63.505 of this part shall be granted by 
the Commission earlier than 28 days following issuance of public notice 
by the Commission of the acceptance for filing of such application or 
any major amendment unless said public notice specifies another time 
period, or the application qualifies for streamlined processing pursuant 
to Sec. 63.12 of this part.
    (c) No application accepted for filing and subject to the 
streamlined processing provisions of Sec. 63.12 of this part shall be 
granted by the Commission earlier than 14 days following issuance of 
public notice by the Commission of the acceptance for filing of such 
application or any major amendment unless said public notice specifies 
another time period.
    (d) Any interested party may file a petition to deny an application 
within the time period specified in the public notice listing an 
application as accepted for filing and ineligible for streamlined 
processing. The petitioner shall serve a copy of such petition on the 
applicant no later than the date of filing thereof with the Commission. 
The petition shall contain specific allegations of fact sufficient to 
show that the petitioner is a party in interest and that a grant of the 
application would be prima facie inconsistent with the public interest, 
convenience and necessity. Such allegations of fact shall, except for 
those of which official notice may be taken, be supported by affidavit 
of a person or persons with personal knowledge thereof. The applicant 
may file an opposition to any petition to deny within 14 days after the 
original pleading is filed. The petitioner may file a reply to such 
opposition within seven days after the time for filing oppositions has 
expired. Allegations of facts or denials thereof shall similarly be 
supported by affidavit. These responsive pleadings shall be served on 
the applicant or petitioner, as appropriate, and other parties to the 
proceeding.

[61 FR 15732, Apr. 9, 1996, as amended at 64 FR 19065, Apr. 19, 1999; 67 
FR 45391, July 9, 2002; 69 FR 29902, May 26, 2004; 70 FR 38798, July 6, 
2005]



Sec. 63.21  Conditions applicable to all international 
Section 214 authorizations.

    International carriers authorized under Section 214 of the 
Communications Act of 1934, as amended, must follow the following 
requirements and prohibitions:
    (a) Each carrier is responsible for the continuing accuracy of the 
certifications made in its application. Whenever the substance of any 
such certification is no longer accurate, the carrier shall as promptly 
as possible and, in any event, within thirty (30) days, file with the 
Commission a corrected certification referencing the FCC file number 
under which the original certification was provided. The information may 
be used by the Commission to

[[Page 242]]

determine whether a change in regulatory status may be warranted under 
Sec. 63.10. See also Sec. 63.11.
    (b) Carriers must file copies of operating agreements entered into 
with their foreign correspondents as specified in Sec. 43.51 of this 
chapter and shall otherwise comply with the filing requirements 
contained in that section.
    (c) Carriers regulated as dominant for the provision of a particular 
international communications service on a particular route for any 
reason other than a foreign carrier affiliation under Sec. 63.10 shall 
file tariffs pursuant to Section 203 of the Communications Act, 47 
U.S.C. 203, and part 61 of this chapter. Except as specified in Sec. 
20.15(d) of this chapter with respect to commercial mobile radio service 
providers, carriers regulated as non-dominant, as defined in Sec. 61.3 
of this chapter, and providing detariffed international services 
pursuant to Sec. 61.19 of this chapter must comply with all applicable 
public disclosure and maintenance of information requirements in 
Sec. Sec. 42.10 and 42.11 of this chapter.
    (d) Carriers must file annual reports of overseas telecommunications 
traffic as required by Sec. 43.61 of this chapter.
    (e) Authorized carriers may not access or make use of specific U.S. 
customer proprietary network information that is derived from a foreign 
network unless the carrier obtains approval from that U.S. customer. In 
seeking to obtain approval, the carrier must notify the U.S. customer 
that the customer may require the carrier to disclose the information to 
unaffiliated third parties upon written request by the customer.
    (f) Authorized carriers may not receive from a foreign carrier any 
proprietary or confidential information pertaining to a competing U.S. 
carrier, obtained by the foreign carrier in the course of its normal 
business dealings, unless the competing U.S. carrier provides its 
permission in writing.
    (g) The Commission reserves the right to review a carrier's 
authorization, and, if warranted, impose additional requirements on U.S. 
international carriers in circumstances where it appears that harm to 
competition is occurring on one or more U.S. international routes.
    (h) Subject to the requirement of Sec. 63.10 that a carrier 
regulated as dominant along a route must provide service as an entity 
that is separate from its foreign carrier affiliate, and subject to any 
other structural-separation requirement in Commission regulations, an 
authorized carrier may provide service through any wholly owned direct 
or indirect subsidiaries. The carrier must, within thirty (30) days 
after the subsidiary begins providing service, file with the Commission 
a notification referencing the authorized carrier's name and the FCC 
file numbers under which the carrier's authorizations were granted and 
identifying the subsidiary's name and place of legal organization. This 
provision shall not be construed to authorize the provision of service 
by any entity barred by statute or regulation from itself holding an 
authorization or providing service.
    (i) An authorized carrier, or a subsidiary operating pursuant to 
paragraph (h) of this section, that changes its name (including the name 
under which it is doing business) must notify the Commission within 
thirty (30) days of the name change. Such notification shall reference 
the FCC file numbers under which the carrier's authorizations were 
granted.
    (j) Subject to the availability of electronic forms, all 
notifications and other filings described in this section must be filed 
electronically through the International Bureau Filing System (IBFS). A 
list of forms that are available for electronic filing can be found on 
the IBFS homepage. For information on electronic filing requirements, 
see part 1, Sec. Sec. 1.1000 through 1.10018 of this chapter and the 
IBFS homepage at http://www.fcc.gov/ibfs. See also Sec. Sec. 63.20 and 
63.53.

[61 FR 15732, Apr. 9, 1996, as amended at 62 FR 45762, Aug. 29, 1997; 62 
FR 64758, Dec. 9, 1997; 64 FR 19065, Apr. 19, 1999; 66 FR 16881, Mar. 
28, 2001; 67 FR 45391, July 9, 2002; 67 FR 57344, Sept. 10, 2002; 70 FR 
38798, July 6, 2005]



Sec. 63.22  Facilities-based international common carriers.

    The following conditions apply to authorized facilities-based 
international carriers:
    (a) A carrier authorized under Sec. 63.18(e)(1) may provide 
international

[[Page 243]]

facilities-based services to international points for which it qualifies 
for non-dominant regulation as set forth in Sec. 63.10, except in the 
following circumstance: If the carrier is, or is affiliated with, a 
foreign carrier in a destination market and the Commission has not 
determined that the foreign carrier lacks market power in the 
destination market (see Sec. 63.10(a)), the carrier shall not provide 
service on that route unless it has received specific authority to do so 
under Sec. 63.18(e)(3).
    (b) The carrier may provide service using half-circuits on any U.S. 
common carrier and non-common carrier facilities that do not appear on 
an exclusion list published by the Commission. Carriers may also use any 
necessary non-U.S.-licensed facilities, including any submarine cable 
systems, that do not appear on the exclusion list. Carriers may not use 
U.S. earth stations to access non-U.S.-licensed satellite systems unless 
the Commission has specifically approved the use of those satellites and 
so indicates on the exclusion list. The exclusion list is available from 
the International Bureau's World Wide Web site at http://www.fcc.gov/ib.
    (c) Specific authority under Sec. 63.18(e)(3) is required for the 
carrier to provide service using any facilities listed on the exclusion 
list, to provide service between the United States and any country on 
the exclusion list, or to construct, acquire, or operate lines in any 
new major common carrier facility project.
    (d) The carrier may provide international basic switched, private 
line, data, television and business services.
    (e) The carrier shall file annual international circuit status 
reports as required by Sec. 43.82 of this chapter.
    (f) The authority granted under this part is subject to all 
Commission rules and regulations and any conditions or limitations 
stated in the Commission's public notice or order that serves as the 
carrier's Section 214 certificate. See Sec. Sec. 63.12, 63.21 of this 
part.

[64 FR 19065, Apr. 19, 1999, as amended at 64 FR 34741, June 29, 1999; 
67 FR 45391, July 9, 2002; 69 FR 23154, Apr. 28, 2004]



Sec. 63.23  Resale-based international common carriers.

    The following conditions apply to carriers authorized to resell the 
international services of other authorized carriers:
    (a) A carrier authorized under Sec. 63.18(e)(2) may provide resold 
international services to international points for which the applicant 
qualifies for non-dominant regulation as set forth in Sec. 63.10, 
except that the carrier may not provide either of the following services 
unless it has received specific authority to do so under Sec. 
63.18(e)(3):
    (1) Resold switched services to a non-WTO Member country where the 
applicant is, or is affiliated with, a foreign carrier; and
    (2) Switched or private line services over resold private lines to a 
destination market where the applicant is, or is affiliated with, a 
foreign carrier and the Commission has not determined that the foreign 
carrier lacks market power in the destination market (see Sec. 
63.10(a)).
    (b) The carrier may not resell the international services of an 
affiliated carrier regulated as dominant on the route to be served 
unless it has received specific authority to do so under Sec. 
63.18(e)(3).
    (c) Subject to the limitations specified in paragraph (b) of this 
section and in Sec. 63.17(b), the carrier may provide service by 
reselling the international services of any other authorized U.S. common 
carrier or foreign carrier, or by entering into a roaming or other 
arrangement with a foreign carrier, for the provision of international 
basic switched, private line, data, television and business services to 
all international points.

    Note to paragraph (c): For purposes of this paragraph, a roaming 
arrangement with a foreign carrier is defined as an arrangement under 
which the subscribers of a U.S. commercial mobile radio service provider 
use the facilities of a foreign carrier with which the subscriber has no 
direct pre-existing service or financial relationship to place a call 
from the foreign country to the United States.

    (d) The carrier may provide switched basic services over its 
authorized resold private lines in either of the following two 
circumstances:

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    (1) The country at the foreign end of the private line appears on 
the Commission's list of international routes exempted from the 
international settlements policy set forth in Sec. 64.1002 of this 
chapter; or
    (2) The carrier is exchanging switched traffic with a foreign 
carrier that lacks market power in the country at the foreign end of the 
private line. A foreign carrier lacks market power for purposes of this 
section if it does not appear on the Commission's list of foreign 
carriers that do not qualify for the presumption that they lack market 
power in particular foreign points.

    Note to paragraph (d): The Commission's list of international routes 
exempted from the international settlements policy, and the Commission's 
list of foreign carriers that do not qualify for the presumption that 
they lack market power in particular foreign points are available on the 
International Bureau's World Wide Web site at http://www.fcc.gov/ib.

    (e) Any party certified to provide international resold private 
lines to a particular geographic market shall report its circuit 
additions on an annual basis. Circuit additions should indicate the 
specific services provided (e.g., IMTS or private line) and the country 
served. This report shall be filed on a consolidated basis not later 
than March 31 for the preceding calendar year.
    (f) The authority granted under this part is subject to all 
Commission rules and regulations and any conditions or limitations 
stated in the Commission's public notice or order that serves as the 
carrier's Section 214 certificate. See Sec. Sec. 63.12, 63.21 of this 
part.

[64 FR 19066, Apr. 19, 1999, as amended at 64 FR 34741, June 29, 1999; 
67 FR 45391, July 9, 2002; 69 FR 23154, Apr. 28, 2004; 72 FR 54366, 
Sept. 25, 2007]



Sec. 63.24  Assignments and transfers of control.

    (a) General. Except as otherwise provided in this section, an 
international section 214 authorization may be assigned, or control of 
such authorization may be transferred by the transfer of control of any 
entity holding such authorization, to another party, whether voluntarily 
or involuntarily, directly or indirectly, only upon application to and 
prior approval by the Commission.
    (b) Assignments. For purposes of this section, an assignment of an 
authorization is a transaction in which the authorization is assigned 
from one entity to another entity. Following an assignment, the 
authorization is held by an entity other than the one to which it was 
originally granted.

    Note to paragraph (b): The sale of a customer base, or a portion of 
a customer base, by a carrier to another carrier, is a sale of assets 
and shall be treated as an assignment, which requires prior Commission 
approval under this section.

    (c) Transfers of control. For purposes of this section, a transfer 
of control is a transaction in which the authorization remains held by 
the same entity, but there is a change in the entity or entities that 
control the authorization holder. A change from less than 50 percent 
ownership to 50 percent or more ownership shall always be considered a 
transfer of control. A change from 50 percent or more ownership to less 
than 50 percent ownership shall always be considered a transfer of 
control. In all other situations, whether the interest being transferred 
is controlling must be determined on a case-by-case basis with reference 
to the factors listed in Note to paragraph (c).
    (d) Pro forma assignments and transfers of control. Transfers of 
control or assignments that do not result in a change in the actual 
controlling party are considered non-substantial or pro forma. Whether 
there has been a change in the actual controlling party must be 
determined on a case-by-case basis with reference to the factors listed 
in Note 1 to this paragraph (d). The types of transactions listed in 
Note 2 to this paragraph (d) shall be considered presumptively pro forma 
and prior approval from the Commission need not be sought.

    Note 1 to paragraph (d): Because the issue of control inherently 
involves issues of fact, it must be determined on a case-by-case basis 
and may vary with the circumstances presented by each case. The factors 
relevant to a determination of control in addition to equity ownership 
include, but are not limited to the following: power to constitute or 
appoint more than fifty percent of the board of directors or partnership 
management committee; authority to appoint, promote,

[[Page 245]]

demote and fire senior executives that control the day-to-day activities 
of the licensee; ability to play an integral role in major management 
decisions of the licensee; authority to pay financial obligations, 
including expenses arising out of operations; ability to receive monies 
and profits from the facility's operations; and unfettered use of all 
facilities and equipment.
    Note 2 to paragraph (d): If a transaction is one of the types listed 
further, the transaction is presumptively pro forma and prior approval 
need not be sought. In all other cases, the relevant determination shall 
be made on a case-by-case basis. Assignment from an individual or 
individuals (including partnerships) to a corporation owned and 
controlled by such individuals or partnerships without any substantial 
change in their relative interests; Assignment from a corporation to its 
individual stockholders without effecting any substantial change in the 
disposition of their interests; Assignment or transfer by which certain 
stockholders retire and the interest transferred is not a controlling 
one; Corporate reorganization that involves no substantial change in the 
beneficial ownership of the corporation (including re-incorporation in a 
different jurisdiction or change in form of the business entity); 
Assignment or transfer from a corporation to a wholly owned direct or 
indirect subsidiary thereof or vice versa, or where there is an 
assignment from a corporation to a corporation owned or controlled by 
the assignor stockholders without substantial change in their interests; 
or Assignment of less than a controlling interest in a partnership.

    (e) Applications for substantial transactions. (1) In the case of an 
assignment or transfer of control shall of an international section 214 
authorization that is not pro forma, the proposed assignee or transferee 
must apply to the Commission for authority prior to consummation of the 
proposed assignment or transfer of control.
    (2) The application shall include the information requested in 
paragraphs (a) through (d) of Sec. 63.18 for both the transferor/
assignor and the transferee/assignee. The information requested in 
paragraphs (h) through (p) of Sec. 63.18 is required only for the 
transferee/assignee. At the beginning of the application, the applicant 
shall include a narrative of the means by which the proposed transfer or 
assignment will take place.
    (3) The Commission reserves the right to request additional 
information as to the particulars of the transaction to aid it in making 
its public interest determination.
    (4) An assignee or transferee must notify the Commission no later 
than thirty (30) days after either consummation of the proposed 
assignment or transfer of control, or a decision not to consummate the 
proposed assignment or transfer of control. The notification shall 
identify the file numbers under which the initial authorization and the 
authorization of the assignment or transfer of control were granted.
    (f) Notifications for non-substantial or pro forma transactions. (1) 
In the case of a pro forma assignment or transfer of control, the 
section 214 authorization holder is not required to seek prior 
Commission approval.
    (2) A pro forma assignee or a carrier that is subject to a pro forma 
transfer of control must file a notification with the Commission no 
later than thirty (30) days after the assignment or transfer is 
completed. The notification must contain the following:
    (i) The information requested in paragraphs (a) through (d) and (h) 
of Sec. 63.18 for the transferee/assignee;
    (ii) A certification that the transfer of control or assignment was 
pro forma and that, together with all previous pro forma transactions, 
does not result in a change in the actual controlling party.
    (3) A single notification may be filed for an assignment or transfer 
of control of more than one authorization if each authorization is 
identified by the file number under which it was granted.
    (4) Upon release of a public notice granting a pro forma assignment 
or transfer of control, petitions for reconsideration under Sec. 1.106 
of this chapter or applications for review under Sec. 1.115 of this 
chapter of the Commission's rules may be filed within 30 days. 
Petitioner should address why the assignment or transfer of control in 
question should have been filed under paragraph (e) of this section 
rather than under this paragraph (f).
    (g) Involuntary assignments or transfers of control. In the case of 
an involuntary assignment or transfer of control to: a bankruptcy 
trustee appointed under involuntary bankruptcy; an independent

[[Page 246]]

receiver appointed by a court of competent jurisdiction in a foreclosure 
action; or, in the case of death or legal disability, to a person or 
entity legally qualified to succeed the deceased or disabled person 
under the laws of the place having jurisdiction over the estate 
involved; the applicant must make the appropriate filing no later than 
30 days after the event causing the involuntary assignment or transfer 
of control.
    (h) Subject to the availability of electronic forms, all 
applications and notifications described in this section must be filed 
electronically through the International Bureau Filing System (IBFS). A 
list of forms that are available for electronic filing can be found on 
the IBFS homepage. For information on electronic filing requirements, 
see part 1, Sec. Sec. 1.1000 through 1.10018 of this chapter and the 
IBFS homepage at http://www.fcc.gov/ibfs. See also Sec. Sec. 63.20 and 
63.53.

[67 FR 45391, July 9, 2002, as amended at 70 FR 38799, July 6, 2005; 72 
FR 54366, Sept. 25, 2007]

    Effective Date Note: At 72 FR 54366, Sept. 25, 2007, Sec. 63.24 was 
amended by revising paragraph (c). This text contains information 
collection and recordkeeping requirements and will not become effective 
until approval has been given by the Office of Management and Budget.



Sec. 63.25  Special provisions relating to temporary or emergency
service by international carriers.

    (a) For the purpose of this section the following definitions shall 
apply:
    (1) Temporary service shall mean service for a period not exceeding 
6 months;
    (2) Emergency service shall mean service for which there is an 
immediate need occasioned by conditions unforeseen by, and beyond the 
control of, the carrier.
    (b) Applicants seeking immediate authorization to provide temporary 
service or emergency service must file their request with the 
Commis