[Title 47 CFR ]
[Code of Federal Regulations (annual edition) - October 1, 2013 Edition]
[From the U.S. Government Printing Office]



[[Page i]]

          

          Title 47

Telecommunication


________________________

Parts 40 to 69

                         Revised as of October 1, 2013

          Containing a codification of documents of general 
          applicability and future effect

          As of October 1, 2013
                    Published by the Office of the Federal Register 
                    National Archives and Records Administration as 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:
      Table of CFR Titles and Chapters........................     535
      Alphabetical List of Agencies Appearing in the CFR......     555
      Table of OMB Control Numbers............................     565
      List of CFR Sections Affected...........................     575

[[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, 2013), 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 
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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.

PAST PROVISIONS OF THE CODE

    Provisions of the Code that are no longer in force and effect as of 
the revision date stated on the cover of each volume are not carried. 
Code users may find the text of provisions in effect on any given date 
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previous annual editions of the LSA. For changes to the Code prior to 
2001, consult the List of CFR Sections Affected compilations, published 
for 1949-1963, 1964-1972, 1973-1985, and 1986-2000.

``[RESERVED]'' TERMINOLOGY

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Federal Regulations. An agency may add regulatory information at a 
``[Reserved]'' location at any time. Occasionally ``[Reserved]'' is used 
editorially to indicate that a portion of the CFR was left vacant and 
not accidentally dropped due to a printing or computer error.

INCORPORATION BY REFERENCE

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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.
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alphabetical list of agencies publishing in the CFR are also included in 
this volume.

[[Page vii]]

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This index is based on a consolidation of the ``Contents'' entries in 
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the revision dates of the 50 CFR titles.

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in the Code of Federal Regulations.

INQUIRIES

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or write to the Director, Office of the Federal Register, National 
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register.
    The e-CFR is a regularly updated, unofficial editorial compilation 
of CFR material and Federal Register amendments, produced by the Office 
of the Federal Register and the Government Printing Office. It is 
available at www.ecfr.gov.

    Charles A. Barth,
    Director,
    Office of the Federal Register.
    October 1, 2013.







[[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. All five volumes 
contain 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, chapter III--National 
Telecommunications and Information Administration, Department of 
Commerce, and chapter IV--National Telecommunications and Information 
Administration, Department of Commerce, and National Highway Traffic 
Safety Administration, Department of Transportation. The contents of 
these volumes represent all current regulations codified under this 
title of the CFR as of October 1, 2013.

    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
40-41           [Reserved]

42              Preservation of records of communication 
                    common carriers.........................           5
43              Reports of communication common carriers and 
                    certain affiliates......................           7
51              Interconnection.............................          14
52              Numbering...................................          87
53              Special provisions concerning Bell operating 
                    companies...............................         114
54              Universal service...........................         118
59              Infrastructure sharing......................         236
61              Tariffs.....................................         237
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.........         276
64              Miscellaneous rules relating to common 
                    carriers................................         307
65              Interstate rate of return prescription 
                    procedures and methodologies............         445
68              Connection of terminal equipment to the 
                    telephone network.......................         454
69              Access charges..............................         488

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)



                         PARTS 40-41 [RESERVED]



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

[[Page 6]]

they may be readily identified and made available to representatives of 
the Commission.



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

[[Page 7]]

service information only about its international common carrier service 
offerings and only for those routes on 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.
43.61 Reports of international telecommunications traffic.
43.62 Reporting requirements for holders of international Section 214 
          authorizations and providers of international services.
43.72 [Reserved]
43.82 International circuit status reports.

    Authority: 47 U.S.C. 154; Telecommunications Act of 1996; Pub. L. 
104-104, sec. 402(b)(2)(B), (c), 110 Stat. 56 (1996) as amended unless 
otherwise noted. 47 U.S.C. 211, 219, 220, as amended; Cable Landing 
License Act of 1921, 47 U.S.C. 35-39.

    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

[[Page 8]]

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 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; 78 FR 49149, Aug. 13, 2013]



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.
    (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) and 
shall report the title of their certifying official.
    (c) Disclosure of data contained in FCC Form 477 will be addressed 
as follows:
    (1) Emergency operations contact information contained in FCC Form 
477 are information that should not be routinely available for public 
inspection pursuant to Sec. 0.457 of this chapter.
    (2) Respondents may make requests for Commission non-disclosure of 
the following data contained in FCC Form 477 under Sec. 0.459 of this 
chapter by so indicating on Form 477 at the time that the subject data 
are submitted:
    (i) Provider-specific subscription data and
    (ii) Provider-specific mobile deployment data that includes specific 
spectrum and speed parameters that may be used by providers for internal 
network planning purposes.
    (3) Respondents seeking confidential treatment of any other data 
contained in FCC Form 477 must submit a request that the data be treated 
as confidential with the submission of their Form 477 filing, along with 
their reasons for withholding the information from the public, pursuant 
to Sec. 0.459 of this chapter.
    (4) 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:
    (i) A state commission provided that the state commission has 
protections in place that would preclude disclosure of any confidential 
information, and
    (ii) ``Eligible entities,'' as those entities are defined in the 
Broadband Data Improvement Act, in an aggregated format and pursuant to 
confidentiality conditions prescribed by the Commission, and
    (iii) Others, to the extent that access to such data can be 
accomplished in a manner that addresses concerns about the competitive 
sensitivity of the data and precludes public 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; 78 FR 49149, Aug. 13, 2013]

    Effective Date Note: At 78 FR 49149, August 13, 2013, Sec. 43.11 
was amended by revising

[[Page 9]]

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 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

[[Page 10]]

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.
    (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

[[Page 11]]

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.
    (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.

[[Page 12]]

    (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 (collectively hereinafter referred to as 
``agreement'' for purposes of this rule) 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, 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; 
or
    (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.
    (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, other than a provider of commercial mobile 
radio services, that is engaged in foreign communications, and enters 
into an agreement with a foreign carrier, is subject to the Commission's 
authority to require the U.S. carrier providing service on any U.S.-
international routes to file, on an as-needed basis, a copy of each 
agreement to which it is a party.

    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.

[66 FR 16879, Mar. 28, 2001, as amended at 69 FR 23153, Apr. 28, 2004; 
78 FR 11112, Feb. 15, 2013]

    Effective Date Note: At 78 FR 11112, Feb. 15, 2013, Sec. 43.51 was 
amended by revising paragraph (d). This paragraph (d) contains 
information collection and recordkeeping requirements and will not 
become effective until approval has been given by the Office of 
Management and Budget.

[[Page 13]]



Sec. 43.61  Reports of international telecommunications traffic.

    (a) Each common carrier engaged in providing international 
telecommunications service between the United States (as defined in the 
Communications Act, as amended, 47 U.S.C. 153) 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) [Reserved]

[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; 76 FR 42573, July 19, 2011]

    Effective Date Note: At 78 FR 15623, Mar. 12, 2013, Sec. 43.61 was 
removed. 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. 43.62  Reporting requirements for holders of international Section 214 

authorizations and providers of international services.

    (a) Circuit Capacity Reports. Not later than March 31 of each year:
    (1) Satellite and Terrestrial Circuits. Each facilities-based common 
carrier shall file a report showing its active common carrier circuits 
between the United States and any foreign point as of December 31 of the 
preceding calendar year in any terrestrial or satellite facility for the 
provision of service to an end user or resale carrier, which includes 
active circuits used by themselves or their affiliates. Each non-common 
carrier satellite licensee shall file a report showing its active 
circuits between the United States and any foreign point as of December 
31 of the preceding calendar sold or leased to any customer, including 
themselves or their affiliates, other than a carrier authorized by the 
Commission to provide U.S. international common carrier services.
    (2) International Submarine Cable Capacity--(i) The licensee(s) of a 
submarine cable between the United States and any foreign point shall 
file a report showing the capacity of the submarine cable as of December 
31 of the preceding calendar year. The licensee(s) shall also file a 
report showing the planned capacity of the submarine cable (the intended 
capacity of the submarine cable two years from December 31 of the 
preceding calendar year). Only one cable landing licensee shall file the 
capacity data for each submarine cable. For cables with more than one 
licensee, the licensees shall determine which licensee will file the 
reports.
    (ii) Each cable landing licensee and common carrier shall file a 
report showing its capacity on submarine cables between the United 
States and any foreign point as of December 31 of the preceding calendar 
year.
    (b) Traffic and revenue reports. (1) Not later than July 31 of each 
year, each person or entity that holds an authorization pursuant to 
section 214 to provide international telecommunications service shall 
report whether it provided international telecommunications services 
during the preceding calendar year.
    (2) Not later than July 31 of each year, each common carrier engaged 
in providing international telecommunications service, and each person 
or entity engaged in providing Voice over Internet Protocol service 
connected to the public switched telephone network, between the United 
States and any foreign point shall file a report with the

[[Page 14]]

Commission showing revenues, payouts, and traffic for such international 
telecommunications service and Voice over Internet Protocol service 
connected to the public switched telephone network provided during the 
preceding calendar year.
    (3) Entities filing such reports shall submit a revised report by 
October 31 identifying and correcting any inaccuracies included in the 
annual report exceeding one percent of the reported figure.

    Note to paragraphs (a) and (b): United States is defined in section 
3 of the Communications Act of 1934, as amended, 47 U.S.C. 153.

    (c)(1) A Registration Form, containing information about the filer, 
such as address, phone number, email address, etc., shall be filed with 
each report filed pursuant to paragraphs (a) and (b).
    (2) The Registration Form shall include a certification enabling the 
filer to check a box to indicate that the filer requests that its 
circuit capacity data or traffic and revenue data be treated as 
confidential. If a filer checks that box, the Commission shall treat the 
data contained in the accompanying report as confidential. Upon receipt 
of a request for inspection of such information, the Commission shall 
notify the filer; at that point, the filer must justify continued 
confidentiality of the information consistent with section 0.459(b) of 
the Commission's rules.
    (d) Filing Manual. Authority is delegated to the Chief, 
International Bureau to prepare instructions and reporting requirements 
for the filing of these reports prepared and published as a Filing 
Manual. The information required under this section shall be furnished 
in conformance with the instructions and reporting requirements in the 
Filing Manual.

    Note to paragraph (d): The instructions and reporting requirements 
prepared by the Chief, International Bureau, shall be consistent with 
the terms of Reporting Requirements for U.S. Providers of International 
Telecommunications Services; Amendment of Part 43 of the Commission's 
Rules, IB Docket No. 04-112, Second Report and Order, FCC 13-6 (rel. 
January 15, 2013).

[78 FR 15623, Mar. 12, 2013]

    Effective Date Note: At 78 FR 15623, Mar. 12, 2013, Sec. 43.62 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. 43.72  [Reserved]



Sec. 43.82  International circuit status reports.

    (a) Each facilities-based common carrier engaged in providing 
international telecommunications service between the United States (as 
defined in the Communications Act, as amended, 47 U.S.C. 153) 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, as amended at 76 FR 42573, July 19, 2011]

    Effective Date Note: At 78 FR 15623, Mar. 12, 2013, Sec. 43.82 was 
removed. 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.



PART 51_INTERCONNECTION--Table of Contents



                      Subpart A_General Information

Sec.
51.1 Basis and purpose.

[[Page 15]]

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.

  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

51.700 Purpose of this subpart.
51.701 Scope of transport and termination pricing rules.
51.703 Non-Access reciprocal compensation obligation of LECs.
51.705 LECs' rates for transport and termination.
51.707 [Reserved]
51.709 Rate structure for transport and termination.
51.711 Symmetrical reciprocal compensation.

[[Page 16]]

51.713 Bill-and-keep arrangements.
51.715 Interim transport and termination pricing.
51.717 [Reserved]

    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.

              Subpart J_Transitional Access Service Pricing

51.901 Purpose and scope of transitional access service pricing rules.
51.903 Definitions.
51.905 Implementation.
51.907 Transition of price cap carrier access charges.
51.909 Transition of rate-of-return carrier access charges.
51.911 Access reciprocal compensation rates for competitive LECs.
51.913 Transition for VoIP-PSTN traffic.
51.915 Recovery mechanism for price cap carriers.
51.917 Revenue recovery for Rate of Return carriers.
51.919 Reporting and monitoring.

    Authority: Sections 1-5, 7, 201-05, 207-09, 218, 220, 225-27, 251-
54, 256, 271, 303(r), 332, 706 of the Telecommunication Act of 1996, 48 
Stat. 1070, as amended, 1077; 47 U.S.C. 151-55, 157, 201-05, 207-09, 
218, 220, 225-27, 251-54, 256, 271, 303(r), 332, 1302, 47 U.S.C. 157 
note, unless otherwise noted.

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



                      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.

[[Page 17]]

    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.
    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

[[Page 18]]

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.
    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.

[[Page 19]]

    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;
    (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:

[[Page 20]]

    (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 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

[[Page 21]]

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.
    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

[[Page 22]]

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 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

[[Page 23]]

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:
    (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

[[Page 24]]

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.
    (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]



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.

[[Page 25]]



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.
    (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]

[[Page 26]]



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 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;

[[Page 27]]

    (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 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

[[Page 28]]

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 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

[[Page 29]]

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 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

[[Page 30]]

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 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

[[Page 31]]

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 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

[[Page 32]]

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 (8) 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-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 (5) of this section.
    (i) 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. 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

[[Page 33]]

end-user customer premises, and includes the high frequency portion of 
any inside wire owned or controlled by the incumbent LEC.
    (A) An incumbent LEC's obligation, under paragraph (a)(1)(i) 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 from the incumbent LEC.
    (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.
    (ii) 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 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, 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 have, under 
paragraphs (a) and (b) of this section, to access 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.
    (iii) 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.
    (iv) 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 through a 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.
    (2) Hybrid loops. A hybrid loop is a local loop composed of both 
fiber optic cable, usually in the feeder plant, and

[[Page 34]]

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 copper loops pursuant to paragraph 
(a)(3)(iv) of this section.

[[Page 35]]

    (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.
    (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.
    (6) Dark fiber loops. 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.
    (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. Routine network modifications may

[[Page 36]]

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 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

[[Page 37]]

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 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) 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 (d) through (d)(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 
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.

[[Page 38]]

    (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 in 
paragraphs (d)(2)(ii)(A) and (B) of this section. 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 (d)(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.
    (iii) Dedicated DS3 transport. Dedicated DS3 transport shall be made 
available to requesting carriers on an unbundled basis as set forth in 
paragraphs (d)(2)(iii)(A) and(B) of this section. 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 (d)(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.
    (iv) Dark fiber transport. Dark fiber transport consists of 
unactivated optical interoffice transmission facilities. Incumbent LECs 
shall unbundle dark fiber transport between any pair of incumbent LEC 
wire centers except where, through application of tier classifications 
described in paragraph (d)(3) of this section, both wire centers 
defining the route are either Tier 1 or Tier 2 wire centers. 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.
    (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

[[Page 39]]

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.
    (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.
    (e) 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.
    (f) 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, 2005:78 FR 5746, Jan. 28, 2013]



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.

[[Page 40]]

    (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 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]

[[Page 41]]



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, 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;

[[Page 42]]

    (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
    (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.

[[Page 43]]

    (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 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

[[Page 44]]

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 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

[[Page 45]]

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 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

[[Page 46]]

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 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

[[Page 47]]

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 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

[[Page 48]]

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 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

[[Page 49]]

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 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.

[[Page 50]]



                      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 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

[[Page 51]]

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 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.

[[Page 52]]

    (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.
    (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.

[[Page 53]]

    (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
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

[[Page 54]]

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 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)-(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--

[[Page 55]]

    (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 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

[[Page 56]]

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]



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

[[Page 57]]

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.
    (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 of part 51 appear 
at 66 FR 26806, May 15, 2001.



Sec. 51.700  Purpose of this subpart.

    The purpose of this subpart, as revised in 2011 by FCC 11-161 is to 
establish rules governing the transition of intercarrier compensation 
from a calling-party's-network pays system to a default bill-and-keep 
methodology. Following the transition, the exchange of 
telecommunications traffic between and among service providers will, by 
default, be governed by bill-and-keep arrangements.

    Note to Sec. 51.700: See FCC 11-161, figure 9 (chart identifying 
steps in the transition).

[76 FR 73854, Nov. 29, 2011]



Sec. 51.701  Scope of transport and termination pricing rules.

    (a) Effective December 29, 2011, compensation for telecommunications 
traffic exchanged between two telecommunications carriers that is 
interstate or intrastate exchange access, information access, or 
exchange services for such access, other than special access, is 
specified in subpart J of this part. The provisions of this subpart 
apply to Non-Access Reciprocal Compensation for transport and 
termination of Non-Access Telecommunications Traffic between LECs and 
other telecommunications carriers.
    (b) Non-Access Telecommunications Traffic. For purposes of this 
subpart, Non-Access 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.
    (3) This definition includes telecommunications traffic exchanged 
between a LEC and another telecommunications carrier in Time Division 
Multiplexing (TDM) format that originates and/or terminates in IP format 
and that otherwise meets the definitions in paragraphs (b)(1) or (b)(2) 
of this section. Telecommunications traffic originates and/or terminates 
in IP format if it originates from and/or terminates to an end-user 
customer of a service that requires Internet protocol-compatible 
customer premises equipment.
    (c) Transport. For purposes of this subpart, transport is the 
transmission and any necessary tandem switching of Non-Access 
Telecommunications Traffic subject to section 251(b)(5) of the 
Communications Act of 1934, as amended, 47 U.S.C. 251(b)(5), from the 
interconnection point between the two carriers to the terminating 
carrier's end

[[Page 58]]

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 Non-Access 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) Non-Access Reciprocal Compensation. For purposes of this 
subpart, a Non-Access Reciprocal Compensation arrangement between two 
carriers is either a bill-and-keep arrangement, per Sec. 51.713, or an 
arrangement in which each carrier receives intercarrier compensation for 
the transport and termination of Non-Access Telecommunications Traffic.

[61 FR 45619, Aug. 29, 1996, as amended at 66 FR 26806, May 15, 2001; 76 
FR 73855, Nov. 29, 2011]



Sec. 51.703  Non-Access reciprocal compensation obligation of LECs.

    (a) Each LEC shall establish Non-Access Reciprocal Compensation 
arrangements for transport and termination of Non-Access 
Telecommunications Traffic with any requesting telecommunications 
carrier.
    (b) A LEC may not assess charges on any other telecommunications 
carrier for Non-Access Telecommunications Traffic that originates on the 
LEC's network.
    (c) Notwithstanding any other provision of the Commission's rules, a 
LEC shall be entitled to assess and collect the full charges for the 
transport and termination of Non-Access Telecommunications Traffic, 
regardless of whether the local exchange carrier assessing the 
applicable charges itself delivers such traffic to the called party's 
premises or delivers the call to the called party's premises via 
contractual or other arrangements with an affiliated or unaffiliated 
provider of interconnected VoIP service, as defined in 47 U.S.C. 
153(25), or a non-interconnected VoIP service, as defined in 47 U.S.C. 
153(36), that does not itself seek to collect Non-Access Reciprocal 
Compensation charges for the transport and termination of that Non-
Access Telecommunications Traffic. In no event may the total charges 
that a LEC may assess for such service to the called location exceed the 
applicable transport and termination rate. For purposes of this section, 
the facilities used by the LEC and affiliated or unaffiliated provider 
of interconnected VoIP service or a non-interconnected VoIP service for 
the transport and termination of such traffic shall be deemed an 
equivalent facility under Sec. 51.701.

[76 FR 73855, Nov. 29, 2011]



Sec. 51.705  LECs' rates for transport and termination.

    (a) Notwithstanding any other provision of the Commission's rules, 
by default, transport and termination for Non-Access Telecommunications 
Traffic exchanged between a local exchange carrier and a CMRS provider 
within the scope of Sec. 51.701(b)(2) shall be pursuant to a bill-and-
keep arrangement, as provided in Sec. 51.713.
    (b) Establishment of incumbent LECs' rates for transport and 
termination:
    (1) This provision applies when, in the absence of a negotiated 
agreement between parties, state commissions establish Non-Access 
Reciprocal Compensation rates for the exchange of Non-Access 
Telecommunications Traffic between a local exchange carrier and a 
telecommunications carrier other than a CMRS provider where the 
incumbent local exchange carriers did not have any such rates as of 
December 29, 2011. Any rates established pursuant to this provision 
apply between December 29, 2011 and the date at which they are 
superseded by the transition specified in paragraphs (c)(2) through 
(c)(5) of this section.
    (2) 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:
    (i) The forward-looking economic costs of such offerings, using a 
cost study pursuant to Sec. Sec. 51.505 and 51.511; or
    (ii) A bill-and-keep arrangement, as provided in Sec. 51.713.
    (3) In cases where both carriers in a Non-Access Reciprocal 
Compensation arrangement are incumbent LECs, state commissions shall 
establish the rates of the smaller carrier on the basis

[[Page 59]]

of the larger carrier's forward-looking costs, pursuant to Sec. 51.711.
    (c) Except as provided by paragraph (a) of this section, and 
notwithstanding any other provision of the Commission's rules, default 
transitional Non-Access Reciprocal Compensation rates shall be 
determined as follows:
    (1) Effective December 29, 2011, no telecommunications carrier may 
increase a Non-Access Reciprocal Compensation for transport or 
termination above the level in effect on December 29, 2011. All Bill-
and-Keep Arrangements in effect on December 29, 2011 shall remain in 
place unless both parties mutually agree to an alternative arrangement.
    (2) Beginning July 1, 2012, if any telecommunications carrier's Non-
Access Reciprocal Compensation rates in effect on December 29, 2011 or 
established pursuant to paragraph (b) of this section subsequent to 
December 29, 2011, exceed that carrier's interstate access rates for 
functionally equivalent services in effect in the same state on December 
29, 2011, that carrier shall reduce its reciprocal compensation rate by 
one half of the difference between the Non-Access Reciprocal 
Compensation rate and the corresponding functionally equivalent 
interstate access rate.
    (3) Beginning July 1, 2013, no telecommunications carrier's Non-
Access Reciprocal Compensation rates shall exceed that carrier's 
tariffed interstate access rate in effect in the same state on January 1 
of that same year, for equivalent functionality.
    (4) After July 1, 2018, all Price-Cap Local Exchange Carrier's Non-
Access Reciprocal Compensation rates and all non-incumbent LECs that 
benchmark access rates to Price Cap Carrier shall be set pursuant to 
Bill-and-Keep arrangements for Non-Access Reciprocal Compensation as 
defined in this subpart.
    (5) After July 1, 2020, all Rate-of-Return Local Exchange Carrier's 
Non-Access Reciprocal Compensation rates and all non-incumbent LECs that 
benchmark access rates to Rate-of-Return Carriers shall be set pursuant 
to Bill-and-Keep arrangements for Non-Access Reciprocal Compensation as 
defined in this subpart.

[76 FR 73855, Nov. 29, 2011]



Sec. 51.707  [Reserved]



Sec. 51.709  Rate structure for transport and termination.

    (a) In state proceedings, where a rate for Non-Access Reciprocal 
Compensation does not exist as of December 29, 2011, a state commission 
shall establish initial rates for the transport and termination of Non-
Access Telecommunications Traffic that are structured consistently with 
the manner that carriers incur those costs, and consistently with the 
principles in this section.
    (b) The rate of a carrier providing transmission facilities 
dedicated to the transmission of non-access traffic between two 
carriers' networks shall recover only the costs of the proportion of 
that trunk capacity used by an interconnecting carrier to send non-
access traffic that will terminate on the providing carrier's network. 
Such proportions may be measured during peak periods.
    (c) For Non-Access Telecommunications Traffic exchanged between a 
rate-of-return regulated rural telephone company as defined in Sec. 
51.5 and a CMRS provider, the rural rate-of-return incumbent local 
exchange carrier will be responsible for transport to the CMRS 
provider's interconnection point when it is located within the rural 
rate-of-return incumbent local exchange carrier's service area. When the 
CMRS provider's interconnection point is located outside the rural rate-
of-return incumbent local exchange carrier's service area, the rural 
rate-of-return incumbent local exchange carrier's transport and 
provisioning obligation stops at its meet point and the CMRS provider is 
responsible for the remaining transport to its interconnection point. 
This paragraph (c) is a default provision and applicable in the absence 
of an existing agreement or arrangement otherwise.

[76 FR 73856, Nov. 29, 2011]

[[Page 60]]



Sec. 51.711  Symmetrical reciprocal compensation.

    (a) Rates for transport and termination of Non-Access 
Telecommunications Traffic shall be symmetrical, unless carriers 
mutually agree otherwise, 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 Non-Access 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) Except as provided in Sec. 51.705, a state commission may 
establish asymmetrical rates for transport and termination of Non-Access 
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 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.

[61 FR 45619, Aug. 29, 1996 , as amended at 76 FR 73856, Nov. 29, 2011]



Sec. 51.713  Bill-and-keep arrangements.

    Bill-and-keep arrangements are those in which carriers exchanging 
telecommunications traffic do not charge each other for specific 
transport and/or termination functions or services.

[76 FR 73856, Nov. 29, 2011]



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 Non-Access 
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 Non-Access 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 Non-Access 
Telecommunications Traffic at symmetrical rates.
    (1) In a state in which the state commission has established 
transport and termination rates based on forward-

[[Page 61]]

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 not established 
transport and termination rates based on forward-looking economic cost 
studies, an incumbent LEC shall set interim transport and termination 
rates either at the default ceilings specified in Sec. 51.705(c) or in 
accordance with a bill-and-keep methodology as defined in Sec. 51.713.
    (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 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 Non-Access 
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.

[61 FR 45619, Aug. 29, 1996, as amended at 76 FR 73856, Nov. 29, 2011]



Sec. 51.717  [Reserved]



    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

[[Page 62]]

finding that the state commission has failed to act;
    (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 63]]

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]



              Subpart J_Transitional Access Service Pricing

    Source: 76 FR 73856, Nov. 29, 2011, unless otherwise noted.



Sec. 51.901  Purpose and scope of transitional access service pricing rules.

    (a) The purpose of this section is to establish rules governing the 
transition of intercarrier compensation from a calling-party's-network 
pays system

[[Page 64]]

to a default bill-and-keep methodology. Following the transition, the 
exchange of traffic between and among service providers will, by 
default, be governed by bill-and-keep arrangements.
    (b) Effective December 29, 2011, the provisions of this subpart 
apply to reciprocal compensation for telecommunications traffic 
exchanged between telecommunications providers that is interstate or 
intrastate exchange access, information access, or exchange services for 
such access, other than special access.

    Note to Sec. 51.901: See FCC 11-161, figure 9 (chart identifying 
steps in the transition).



Sec. 51.903  Definitions.

    For the purposes of this subpart:
    (a) Competitive Local Exchange Carrier. A Competitive Local Exchange 
Carrier is any local exchange carrier, as defined in Sec. 51.5, that is 
not an incumbent local exchange carrier .
    (b) Composite Terminating End Office Access Rate means terminating 
End Office Access Service revenue, calculated using demand for a given 
time period, divided by end office switching minutes for the same time 
period.
    (c) Dedicated Transport Access Service means originating and 
terminating transport on circuits dedicated to the use of a single 
carrier or other customer provided by an incumbent local exchange 
carrier or any functional equivalent of the incumbent local exchange 
carrier access service provided by a non-incumbent local exchange 
carrier. Dedicated Transport Access Service rate elements for an 
incumbent local exchange carrier include the entrance facility rate 
elements specified in Sec. 69.110 of this chapter, the dedicated 
transport rate elements specified in Sec. 69.111 of this chapter, the 
direct-trunked transport rate elements specified in Sec. 69.112 of this 
chapter, and the intrastate rate elements for functionally equivalent 
access services. Dedicated Transport Access Service rate elements for a 
non-incumbent local exchange carrier include any functionally equivalent 
access services.
    (d) End Office Access Service means:
    (1) The switching of access traffic at the carrier's end office 
switch and the delivery to or from of such traffic to the called party's 
premises;
    (2) The routing of interexchange telecommunications traffic to or 
from the called party's premises, either directly or via contractual or 
other arrangements with an affiliated or unaffiliated entity, regardless 
of the specific functions provided or facilities used; or
    (3) Any functional equivalent of the incumbent local exchange 
carrier access service provided by a non-incumbent local exchange 
carrier. End Office Access Service rate elements for an incumbent local 
exchange carrier include the local switching rate elements specified in 
Sec. 69.106 of this chapter, the carrier common line rate elements 
specified in Sec. 69.154 of this chapter, and the intrastate rate 
elements for functionally equivalent access services. End Office Access 
Service rate elements for an incumbent local exchange carrier also 
include any rate elements assessed on local switching access minutes, 
including the information surcharge and residual rate elements. End 
office Access Service rate elements for a non-incumbent local exchange 
carrier include any functionally equivalent access service.

    Note to paragraph (d): For incumbent local exchange carriers, 
residual rate elements may include, for example, state Transport 
Interconnection Charges, Residual Interconnection Charges, and PICCs. 
For non-incumbent local exchange carriers, residual rate elements may 
include any functionally equivalent access service.

    (e) Fiscal Year 2011 means October 1, 2010 through September 30, 
2011.
    (f) Price Cap Carrier has the same meaning as that term is defined 
in Sec. 61.3(aa) of this chapter.
    (g) Rate-of-Return Carrier is any incumbent local exchange carrier 
not subject to price cap regulation as that term is defined in Sec. 
61.3(aa) of this chapter, but only with respect to the territory in 
which it operates as an incumbent local exchange carrier.
    (h) Access Reciprocal Compensation means telecommunications traffic 
exchanged between telecommunications service providers that is 
interstate or intrastate exchange access, information access, or 
exchange services for such access, other than special access.
    (i) Tandem-Switched Transport Access Service means:

[[Page 65]]

    (1) Tandem switching and common transport between the tandem switch 
and end office; or
    (2) Any functional equivalent of the incumbent local exchange 
carrier access service provided by a non-incumbent local exchange 
carrier via other facilities. Tandem-Switched Transport rate elements 
for an incumbent local exchange carrier include the rate elements 
specified in Sec. 69.111 of this chapter, except for the dedicated 
transport rate elements specified in that section, and intrastate rate 
elements for functionally equivalent service. Tandem Switched Transport 
Access Service rate elements for a non-incumbent local exchange carrier 
include any functionally equivalent access service.
    (j) Transitional Intrastate Access Service means terminating End 
Office Access Service that was subject to intrastate access rates as of 
December 31, 2011; terminating Tandem-Switched Transport Access Service 
that was subject to intrastate access rates as of December 31, 2011; and 
originating and terminating Dedicated Transport Access Service that was 
subject to intrastate access rates as of December 31, 2011.



Sec. 51.905  Implementation.

    (a) The rates set forth in this section are default rates. 
Notwithstanding any other provision of the Commission's rules, 
telecommunications carriers may agree to rates different from the 
default rates.
    (b) LECs who are otherwise required to file tariffs are required to 
tariff rates no higher than the default transitional rates specified by 
this subpart.
    (1) With respect to interstate switched access services governed by 
this subpart, LECs shall tariff rates for those services in their 
federal tariffs. Except as expressly superseded below, LECs shall follow 
the procedures specified in part 61 of this chapter when filing such 
tariffs.
    (2) With respect to Transitional Intrastate Access Services governed 
by this subpart, LECs shall follow the procedures specified by relevant 
state law when filing such tariffs, price lists or other instrument 
(referred to collectively as ``tariffs'').
    (c) Nothing in this section shall be construed to require a carrier 
to file or maintain a tariff or to amend an existing tariff if it is not 
otherwise required to do so under applicable law.



Sec. 51.907  Transition of price cap carrier access charges.

    (a) Notwithstanding any other provision of the Commission's rules, 
on December 29, 2011, a Price Cap Carrier shall cap the rates for all 
interstate and intrastate rate elements for services contained in the 
definitions of Interstate End Office Access Services, Tandem Switched 
Transport Access Services, and Dedicated Transport Access Services. In 
addition, a Price Cap Carrier shall also cap the rates for any 
interstate and intrastate rate elements in the traffic sensitive 
basket'' and the ``trunking basket'' as described in 47 CFR 61.42(d)(2) 
and (3) to the extent that such rate elements are not contained in the 
definitions of Interstate End Office Access Services, Tandem Switched 
Transport Access Services, and Dedicated Transport Access Services. 
Carriers will remove these services from price cap regulation in their 
July 1, 2012 annual tariff filing.
    (b) Step 1. Beginning July 1, 2012, notwithstanding any other 
provision of the Commission's rules:
    (1) Each Price Cap Carrier shall file tariffs, in accordance with 
Sec. 51.905(b)(2), with the appropriate state regulatory authority, 
that set forth the rates applicable to Transitional Intrastate Access 
Service in each state in which it provides Transitional Intrastate 
Access Service.
    (2) Each Price Cap Carrier shall establish the rates for 
Transitional Intrastate Access Service using the following methodology:
    (i) Calculate total revenue from Transitional Intrastate Access 
Service at the carrier's interstate access rates in effect on December 
29, 2011, using Fiscal Year 2011 intrastate switched access demand for 
each rate element.
    (ii) Calculate total revenue from Transitional Intrastate Access 
Service at the carrier's intrastate access rates in effect on December 
29, 2011, using Fiscal Year 2011 intrastate switched access demand for 
each rate element.

[[Page 66]]

    (iii) Calculate the Step 1 Access Revenue Reduction. The Step 1 
Access Revenue Reduction is equal to one-half of the difference between 
the amount calculated in paragraph (b)(2)(i) of this section and the 
amount calculated in paragraph (b)(2)(ii) of this section.
    (iv) A Price Cap Carrier may elect to establish rates for 
Transitional Intrastate Access Service using its intrastate access rate 
structure. Carriers using this option shall establish rates for 
Transitional Intrastate Access Service such that Transitional Intrastate 
Access Service revenue at the proposed rates is no greater than 
Transitional Intrastate Access Service revenue at the intrastate rates 
in effect as of December 29, 2011 less the Step 1 Access Revenue 
Reduction, using Fiscal Year 2011 demand. Carriers electing to establish 
rates for Transitional Intrastate Access Service in this manner shall 
notify the appropriate state regulatory authority of their election in 
the filing required by Sec. 51.907(b)(1).
    (v) A Price Cap Carrier may elect to apply its interstate access 
rate structure and interstate rates to Transitional Intrastate Access 
Service. In addition to applicable interstate access rates, the carrier 
may, between July 1, 2012 and July 1, 2013, assess a transitional per-
minute charge on Transitional Intrastate Access Service end office 
switching minutes (previously billed as intrastate access). The 
transitional per-minute charge shall be no greater than the Step 1 
Access Revenue Reduction divided by Fiscal Year 2011 Transitional 
Intrastate Access Service end office switching minutes. Carriers 
electing to establish rates for Transitional Intrastate Access Service 
in this manner shall notify the appropriate state regulatory authority 
of their election in the filing required by paragraph (b)(1) of this 
section.
    (vi) Except as provided in paragraph (b)(3) of this section, nothing 
in this section obligates or allows a Price Cap Carrier that has 
intrastate rates lower than its functionally equivalent interstate rates 
to make any intrastate tariff filing or intrastate tariff revisions to 
increase such rates.
    (3) If a Price Cap Carrier must make an intrastate switched access 
rate reduction pursuant to paragraph (b)(2) of this section, and that 
Price Cap Carrier has an intrastate rate for a rate element that is 
below the comparable interstate rate for that element, the Price Cap 
Carrier shall:
    (i) Increase the rate for any intrastate rate element that is below 
the comparable interstate rate for that element to the interstate rate 
no later than July 1, 2013;
    (ii) Include any increases made pursuant to paragraph (b)(3)(i) of 
this section in the calculation of its eligible recovery for 2012.
    (c) Step 2. Beginning July 1, 2013, notwithstanding any other 
provision of the Commission's rules:
    (1) Transitional Intrastate Access Service rates shall be no higher 
than the Price Cap Carrier's interstate access rates. Once the Price Cap 
Carrier's Transitional Intrastate Access Service rates are equal to its 
functionally equivalent interstate access rates, they shall be subject 
to the same rate structure and all subsequent rate and rate structure 
modifications. Except as provided in paragraph (c)(4) of this section, 
nothing in this section obligates or allows a Price Cap Carrier that has 
intrastate rates lower than its functionally equivalent interstate rates 
to make any intrastate tariff filing or intrastate tariff revisions to 
increase such rates.
    (2) In cases where a Price Cap Carrier does not have intrastate 
rates that permit it to determine composite intrastate End Office Access 
Service rates, the carrier shall establish End Office Access Service 
rates such that the ratio between its composite intrastate End Office 
Access Service revenues and its total intrastate switched access 
revenues may not exceed the ratio between its composite interstate End 
Office Access Service revenues and its total interstate switched access 
revenues.
    (3) [Reserved]
    (4) If a Price Cap Carrier made an intrastate switched access rate 
reduction in 2012 pursuant to paragraph (b)(2) of this section, and that 
Price Cap Carrier has an intrastate rate for a rate element that is 
below the comparable interstate rate for that element, the Price Cap 
Carrier shall:

[[Page 67]]

    (i) Increase the rate for any intrastate rate element that is below 
the comparable interstate rate for that element to the interstate rate 
on July 1, 2013; and
    (ii) Include any increases made pursuant to paragraph (b)(4)(i) of 
this section in the calculation of its eligible recovery for 2013.
    (d) Step 3. Beginning July 1, 2014, notwithstanding any other 
provision of the Commission's rules:
    (1) A Price Cap Carrier shall establish separate originating and 
terminating rate elements for all per-minute components within 
interstate and intrastate End Office Access Service. For fixed charges, 
the Price Cap Carrier shall divide the rate between originating and 
terminating rate elements based on relative originating and terminating 
end office switching minutes. If sufficient originating and terminating 
end office switching minute data is not available, the carrier shall 
divide such charges equally between originating and terminating 
elements.
    (2) Each Price Cap Carrier shall establish rates for interstate or 
intrastate terminating End Office Access Service using the following 
methodology:
    (i) Each Price Cap Carrier shall calculate the 2011 Baseline 
Composite Terminating End Office Access Rate. The 2011 Baseline 
Composite Terminating End Office Access Rate means the Composite 
Terminating End Office Access Rate calculated using Fiscal Year 2011 
demand and the End Office Access Service rates at the levels in effect 
on December 29, 2011.
    (ii) Each Price Cap Carrier shall calculate its 2014 Target 
Composite Terminating End Office Access Rate. The 2014 Target Composite 
Terminating End Office Access Rate means $0.0007 per minute plus two-
thirds of any difference between the 2011 Baseline Composite Terminating 
End Office Access Rate and $0.0007 per minute.
    (iii) Beginning July 1, 2014, no Price Cap Carrier's interstate or 
intrastate Composite Terminating End Office Access Rate shall exceed its 
2014 Target Composite Terminating End Office Access Rate. In the 
alternative, any Price Cap Carrier may elect to implement a single per 
minute rate element for terminating End Office Access Service no greater 
than the 2014 Target Composite Terminating End Office Access Rate.
    (iv) Nothing in this section obligates or allows a Price Cap Carrier 
that has intrastate rates lower than its functionally equivalent 
interstate rates to make any intrastate tariff filing or intrastate 
tariff revisions increasing such rates.
    (e) Step 4. Beginning July 1, 2015, notwithstanding any other 
provision of the Commission's rules:
    (1) Each Price Cap Carrier shall establish interstate or intrastate 
rates for terminating End Office Access Service using the following 
methodology:
    (i) Each Price Cap Carrier shall calculate its 2015 Target Composite 
Terminating End Office Access Rate. The 2015 Target Composite 
Terminating End Office Access Rate means $0.0007 per minute plus one-
third of any difference between the 2011 Composite Terminating End 
Office Access Rate and $0.0007 per minute.
    (ii) Beginning July 1, 2015, no Price Cap Carrier's interstate or 
intrastate Composite Terminating End Office Access Rate shall exceed its 
2015 Target Composite Terminating End Office Access Rate. In the 
alternative, any Price Cap Carrier may elect to implement a single per 
minute rate element for terminating End Office Access Service no greater 
than the 2015 Target Composite Terminating End Office Access Rate.
    (2) Nothing in this section obligates or allows a Price Cap Carrier 
that has intrastate rates lower than its functionally equivalent 
interstate rates to make any intrastate tariff filing or intrastate 
tariff revisions raising such rates.
    (f) Step 5. Beginning July 1, 2016, notwithstanding any other 
provision of the Commission's rules, each Price Cap Carrier shall 
establish interstate and intrastate per minute terminating End Office 
Access Service rates such that its Composite Terminating End Office 
Access Service rate does not exceed $0.0007 per minute. Nothing in this 
section obligates or allows a Price Cap Carrier that has intrastate 
rates lower

[[Page 68]]

than its functionally equivalent interstate rates to make any intrastate 
tariff filing or intrastate tariff revisions raising such rates.
    (g) Step 6. Beginning July 1, 2017, notwithstanding any other 
provision of the Commission's rules:
    (1) Each Price Cap Carrier shall, in accordance with a bill-and-keep 
methodology, refile its interstate access tariffs and any state tariffs, 
in accordance with Sec. 51.905(b)(2), removing any intercarrier charges 
for terminating End Office Access Service.
    (2) Each Price Cap Carrier shall establish, for interstate and 
intrastate terminating traffic traversing a tandem switch that the 
terminating carrier or its affiliates owns, Tandem-Switched Transport 
Access Service rates no greater than $0.0007 per minute.
    (3) Nothing in this section obligates or allows a Price Cap Carrier 
that has intrastate rates lower than its functionally equivalent 
interstate rates to make any intrastate tariff filing or intrastate 
tariff revisions raising such rates.
    (h) Step 7. Beginning July 1, 2018, notwithstanding any other 
provision of the Commission's rules, each Price Cap carrier shall, in 
accordance with bill-and-keep, as defined in Sec. 51.713, revise and 
refile its interstate switched access tariffs and any state tariffs to 
remove any intercarrier charges applicable to terminating tandem-
switched access service traversing a tandem switch that the terminating 
carrier or its affiliate owns.

[76 FR 73856, Nov. 29, 2011, as amended at 77 FR 48452, Aug. 14, 2012]



Sec. 51.909  Transition of rate-of-return carrier access charges.

    (a) Notwithstanding any other provision of the Commission's rules, 
on December 29, 2011, a Rate-of-Return Carrier shall:
    (1) Cap the rates for all rate elements for services contained in 
the definitions of End Office Access Service, Tandem Switched Transport 
Access Service, and Dedicated Transport Access Service, as well as all 
other interstate switched access rate elements, in its interstate 
switched access tariffs at the rate that was in effect on the December 
29, 2011; and
    (2) Cap, in accordance with Sec. 51.505(b)(2), the rates for rate 
all elements in its intrastate switched access tariffs associated with 
the provision of terminating End Office Access Service and terminating 
Tandem-Switched Transport Access Service at the rates that were in 
effect on the December 29, 2011,
    (i) Using the terminating rates if specifically identified; or
    (ii) Using the rate for the applicable rate element if the tariff 
does not distinguish between originating and terminating.
    (3) Except as provided in paragraphs (a)(6) and (b)(4) of this 
section, nothing in this section obligates or allows a Rate-of-Return 
Carrier that has intrastate rates lower than its functionally equivalent 
interstate rates to make any intrastate tariff filing or intrastate 
tariff revisions raising such rates.
    (4) Notwithstanding the requirements of paragraph (a)(1) of this 
section, if a Rate-of-Return Carrier enters or exits the National 
Exchange Carrier Association (Association), as defined in Sec. 69.2(d) 
of this chapter, traffic-sensitive tariff pursuant to the provisions of 
Sec. 69.3(e)(6) of this chapter, the Association shall adjust its 
switched access rate caps referenced in paragraph (a)(1) of this 
section.
    (i) For each entering Rate-of-Return Carrier, the Association shall:
    (A) Determine each entering Rate-of-Return Carrier's interstate 
switched access revenues for the preceding calendar year;
    (B) Determine the revenues that would have been realized by the 
entering Rate-of-Return Carrier in the preceding calendar year if it had 
used the Association's switched access rates (employing the rates for 
the appropriate bands) as of December 31 of the preceding year and the 
entering Rate-of-Return Carrier's switched access demand used to 
determine switched access revenues under paragraph (a)(4)(i)(A) of this 
section; and
    (C) Subtract the sum of the revenues determined pursuant to 
paragraph (a)(4)(i)(B) of this section from the sum of the revenues 
determined pursuant to paragraph (a)(4)(i)(A) of this section.

[[Page 69]]

    (ii) The Association shall determine the amount by which each 
exiting Rate-of-Return Carrier is a net contributor or net recipient to 
or from the switched access segment of the Association pool as follows:
    (A) The Association shall calculate the difference between each 
exiting Rate-of-Return Carrier's 2011-2012 tariff year projected 
interstate switched access revenues excluding Local Switching Support 
and the Rate-of-Return Carrier's projected switched access pool 
settlements excluding Local Switching Support for the same period with a 
net contribution amount being treated as a positive amount and a net 
recipient amount being treated as a negative amount. The Association 
shall divide the calculated difference by the Rate-of-Return Carrier's 
2011-2012 tariff year projected interstate switched access revenues 
excluding Local Switching Support to produce a percent net contribution 
or net receipt factor.
    (B) The Association shall multiply the factor calculated in 
paragraph (a)(4)(ii)(A) of this section by the Rate-of-Return Carrier's 
switched access revenues for the preceding calendar year to yield the 
amount of the Rate-of-Return Carrier's net contribution or net receipts 
for the calendar year.
    (iii) To determine the Association's adjusted switched access rate 
caps, the Association shall:
    (A) Add the amounts calculated under paragraphs (a)(4)(i) and 
(a)(4)(ii) of this section;
    (B) Divide the amount determined in paragraph (a)(4)(iii)(A) of this 
section by the preceding year's switched access revenues of the Rate-of-
Return Carriers that will participate in the Association traffic-
sensitive tariff for the next annual tariff period;
    (C) The Association shall proportionately adjust its June 30 
switched access rate caps by the percentage amount determined in 
paragraph (a)(4)(iii)(B) of this section.
    (iv) The interstate switched access rate caps determined pursuant to 
paragraph (a)(4)(iii)(C) of this section shall be the new capped 
interstate switched access rates for purposes of Sec. 51.909(a). The 
Association shall provide support in its annual access tariff filing to 
justify the revised interstate switched access rate caps, the Access 
Recovery Charges that will be assessed, and the amount of Connect 
America Fund ICC support each carrier will be eligible to receive.
    (5) A Rate-of-Return Carrier exiting the Association traffic-
sensitive tariff pursuant to Sec. 69.3(e)(6) of this chapter must 
establish new switched access rate caps as follows:
    (i) The Rate-of-Return Carrier shall multiply the factor determined 
in paragraph (a)(4)(ii)(A) of this section by negative one and then 
proportionately adjust the Association's capped switched access rates as 
of the date preceding the effective date of the exiting Rate-of-Return 
Carrier's next annual tariff filing by this percentage. A Rate-of-Return 
Carrier that was a net contributor to the pool will have rate caps that 
are lower than the Association's switched access rate caps, while a net 
recipient will have switched access rate caps that are higher than the 
Association's switched access rate caps;
    (ii) The interstate switched access rate caps determined pursuant to 
paragraph (a)(5)(i) of this section shall be the new capped interstate 
switched access rates of the exiting Rate-of-Return Carrier for purposes 
of Sec. 51.909(a). An exiting Rate-of-Return Carrier shall provide 
support in its annual access tariff filing to justify the revised 
interstate switched access rate caps, the Access Recovery Charges that 
will be assessed, and the amount of Connect America Fund ICC support the 
carrier will be eligible to receive.
    (6) If the Association revises its interstate switched access rate 
caps pursuant to paragraph (a)(4) of this section, each Rate-of-Return 
Carrier participating in the upcoming annual Association traffic-
sensitive tariff shall:
    (i) Revise any of its intrastate switched access rates that would 
have reached parity with its interstate switched access rates in 2013 to 
parity with the revised interstate switched access rate levels;
    (ii) The Association shall provide Rate-of-Return Carriers that are 
participating in the Association traffic-sensitive pool with notice of 
any revisions the Association proposes under

[[Page 70]]

paragraph (a)(4) of this section no later than May 1.
    (b) Step 1. Beginning July 1, 2012, notwithstanding any other 
provision of the Commission's rules:
    (1) Each Rate-of-Return Carrier shall file intrastate access tariff 
provisions, in accordance with Sec. 51.505(b)(2), that set forth the 
rates applicable to Transitional Intrastate Access Service in each state 
in which it provides Transitional Intrastate Access Service.
    (2) Each Rate-of-Return Carrier shall establish the rates for 
Transitional Intrastate Access Service using the following methodology:
    (i) Calculate total revenue from Transitional Intrastate Access 
Service at the carrier's interstate access rates in effect on December 
29, 2011, using Fiscal Year 2011 intrastate switched access demand for 
each rate element.
    (ii) Calculate total revenue from Transitional Intrastate Access 
Service at the carrier's intrastate access rates in effect on December 
29, 2011, using Fiscal Year 2011 intrastate switched access demand for 
each rate element.
    (iii) Calculate the Step 1 Access Revenue Reduction. The Step 1 
Access Revenue Reduction is equal to one-half of the difference between 
the amount calculated in (b)(2)(i) of this section and the amount 
calculated in (b)(2)(ii) of this section.
    (iv) A Rate-of-Return Carrier may elect to establish rates for 
Transitional Intrastate Access Service using its intrastate access rate 
structure. Carriers using this option shall establish rates for 
Transitional Intrastate Access Service such that Transitional Intrastate 
Access Service revenue at the proposed rates is no greater than 
Transitional Intrastate Access Service revenue at the intrastate rates 
in effect as of December 29, 2011 less the Step 1 Access Revenue 
Reduction, using Fiscal Year 2011 intrastate switched access demand. 
Carriers electing to establish rates for Transitional Intrastate Access 
Service in this manner shall notify the appropriate state regulatory 
authority of their election in the filing required by Sec. 
51.907(b)(1).
    (v) A Rate-of-Return Carrier may elect to apply its interstate 
access rate structure and interstate rates to Transitional Intrastate 
Access Service. In addition to applicable interstate access rates, the 
carrier may, between July 1, 2012 and July 1, 2013, assess a 
transitional per-minute charge on Transitional Intrastate Access Service 
end office switching minutes (previously billed as intrastate access). 
The transitional per-minute charge shall be no greater than the Step 1 
Access Revenue Reduction divided by Fiscal Year 2011 Transitional 
Intrastate Access Service end office switching minutes. Carriers 
electing to establish rates for Transitional Intrastate Access Service 
in this manner shall notify the appropriate state regulatory authority 
of their election in the filing required by Sec. 51.907(b)(1).
    (3) Except as provided in paragraph (b)(4) of this section, nothing 
in this section obligates or allows a Rate-of-Return carrier that has 
intrastate rates lower than its functionally equivalent interstate rates 
to make any intrastate tariff filing or intrastate tariff revisions 
raising such rates.
    (4) If a Rate-of-Return Carrier must make an intrastate switched 
access rate reduction pursuant to paragraph (b)(2) of this section, and 
that Rate-of-Return Carrier has an intrastate rate for a rate element 
that is below the comparable interstate rate for that element, the Rate-
of-Return Carrier shall:
    (i) Increase the rate for any intrastate rate element that is below 
the comparable interstate rate for that element to the interstate rate 
no later than July 1, 2013;
    (ii) Include any increases made pursuant to paragraph (b)(4)(i) of 
this section in the calculation of its eligible recovery for 2012.
    (c) Step 2. Beginning July 1, 2013, notwithstanding any other 
provision of the Commission's rules:
    (1) Transitional Intrastate Access Service rates shall be no higher 
than the Rate-of-Return Carrier's interstate Terminating End Office 
Access Service, Terminating Tandem-Switched Transport Access Service, 
and Originating and Terminating Dedicated Transport Access Service rates 
and subject to the same rate structure and all subsequent rate and rate 
structure modifications. Except as provided in paragraph (c)(2) of this 
section, nothing in this section obligates or allows a Rate-of-Return

[[Page 71]]

Carrier that has intrastate rates lower than its functionally equivalent 
interstate rates to make any intrastate tariff filing or intrastate 
tariff revisions to increase such rates.
    (2) If a Rate-of-Return Carrier made an intrastate switched access 
rate reduction in 2012 pursuant to paragraph (b)(2) of this section, and 
that Rate-of-Return Carrier has an intrastate rate for a rate element 
that is below the comparable interstate rate for that element, the Rate-
of-Return Carrier shall:
    (i) Increase any intrastate rate element that is below the 
comparable interstate rate to the interstate rate by July 1, 2013; and
    (ii) Include any increases made pursuant to paragraph (c)(2)(i) of 
this section in the calculation of its eligible recovery for 2013.
    (d) Step 3. Beginning July 1, 2014, notwithstanding any other 
provision of the Commission's rules:
    (1) Notwithstanding the rate structure rules set forth in Sec. 
69.106 of this chapter or anything else in the Commission's rules, a 
Rate-of-Return Carrier shall establish separate originating and 
terminating interstate and intrastate rate elements for all components 
within interstate End Office Access Service. For fixed charges, the 
Rate-of-Return Carrier shall divide the amount based on relative 
originating and terminating end office switching minutes. If sufficient 
originating and terminating end office switching minute data is not 
available, the carrier shall divide such charges equally between 
originating and terminating elements.
    (2) Nothing in this Step shall affect Tandem-Switched Transport 
Access Service or Dedicated Transport Access Service.
    (3) Each Rate-of-Return Carrier shall establish rates for interstate 
and intrastate terminating End Office Access Service using the following 
methodology:
    (i) Each Rate-of-Return Carrier shall calculate the 2011 Baseline 
Composite Terminating End Office Access Rate. The 2011 Baseline 
Composite Terminating End Office Access Rate means the Composite 
Terminating End Office Access Rate calculated using Fiscal Year 2011 
interstate demand and the interstate End Office Access Service rates at 
the levels in effect on December 29, 2011.
    (ii) Each Rate-of-Return Carrier shall calculate its 2014 interstate 
Target Composite Terminating End Office Access Rate. The 2014 interstate 
Target Composite Terminating End Office Access Rate means $0.005 per 
minute plus two-thirds of any difference between the 2011 Baseline 
Composite Terminating End Office Access Rate. and $0.005 per minute.
    (iii) Beginning July 1, 2014, no Rate-of-Return Carrier's interstate 
or intrastate Composite Terminating End Office Access Rate shall exceed 
its 2014 interstate Target Composite Terminating End Office Access Rate. 
In the alternative, any Rate-of-Return Carrier may elect to implement a 
single per minute rate element for terminating End Office Access Service 
no greater than the 2014 interstate Target Composite Terminating End 
Office Access Rate.
    (4) Nothing in this section obligates or allows a Rate-of-Return 
Carrier that has intrastate rates lower than its functionally equivalent 
interstate rates to make any intrastate tariff filing or intrastate 
tariff revisions raising such rates.
    (e) Step 4. Beginning July 1, 2015, notwithstanding any other 
provision of the Commission's rules:
    (1) Each Rate-of-Return Carrier shall establish rates for interstate 
and intrastate terminating End Office Access Service using the following 
methodology:
    (i) Each Rate-of-Return Carrier shall calculate its 2015 interstate 
Target Composite Terminating End Office Access Rate. The 2015 interstate 
Target Composite Terminating End Office Access Rate means $0.005 per 
minute plus one-third of any difference between the 2011 Baseline 
Composite Terminating End Office Access Rate and $0.005 per minute.
    (ii) Beginning July 1, 2015, no Rate-of-Return Carrier's interstate 
or intrastate Composite Terminating End Office Access Rate shall exceed 
its 2015 Target Composite Terminating End Office Access Rate. In the 
alternative, any Rate-of-Return Carrier may elect to implement a single 
per minute rate

[[Page 72]]

element for terminating End Office Access Service no greater than the 
2015 interstate Target Composite Terminating End Office Access Rate.
    (2) [Reserved]
    (f) Step 5. Beginning July 1, 2016, notwithstanding any other 
provision of the Commission's rules, each Rate-of-Return Carrier shall 
establish interstate and intrastate per minute terminating End Office 
Access Service rates such that its Composite Terminating End Office 
Access Service rate does not exceed $0.005 per minute. Nothing in this 
section obligates or allows a Rate-of-Return Carrier that has intrastate 
rates lower than its functionally equivalent interstate rates to make 
any intrastate tariff filing or intrastate tariff revisions raising such 
rates.
    (g) Step 6. Beginning July 1, 2017, notwithstanding any other 
provision of the Commission's rules:
    (1) Each Rate-of-Return Carrier shall establish rates for 
terminating End Office Access Service using the following methodology:
    (i) Each Rate-of-Return Carrier shall calculate its 2017 interstate 
Target Composite Terminating End Office Access Rate. The 2017 interstate 
Target Composite Terminating End Office Access Rate means $0.0007 per 
minute plus two-thirds of any difference between that carrier's 
Terminating End Office Access Service Rate as of July 1, 2016 and 
$0.0007 per minute.
    (ii) Beginning July 1, 2017, no Rate-of-Return Carrier's interstate 
or intrastate Composite Terminating End Office Access Rate shall exceed 
its 2017 interstate Target Composite Terminating End Office Access Rate. 
In the alternative, any Rate-of-Return Carrier may elect to implement a 
single per minute rate element for terminating End Office Access Service 
no greater than the 2017 interstate Target Composite Terminating End 
Office Access Rate.
    (2) [Reserved]
    (h) Step 7. Beginning July 1, 2018, notwithstanding any other 
provision of the Commission's rules:
    (1) Each Rate-of-Return Carrier shall establish rates for 
terminating End Office Access Service using the following methodology:
    (i) Each Rate-of-Return Carrier shall calculate its 2018 interstate 
Target Composite Terminating End Office Access Rate. The 2018 interstate 
Target Composite Terminating End Office Access Rate means $0.0007 per 
minute plus one-third of any difference between that carrier's 
Terminating End Office Access Service Rate as of July 1, 2016 and 
$0.0007 per minute.
    (ii) Beginning July 1, 2018, no Rate-of-Return Carrier's interstate 
or intrastate Composite Terminating End Office Access Rate shall exceed 
its 2018 interstate Target Composite Terminating End Office Access Rate. 
In the alternative, any Rate-of-Return Carrier may elect to implement a 
single per minute rate element for terminating End Office Access Service 
no greater than the 2018 interstate Target Composite Terminating End 
Office Access Rate.
    (2) [Reserved]
    (i) Step 8. Beginning July 1, 2019, notwithstanding any other 
provision of the Commission's rules, each Rate-of-Return Carrier shall 
establish interstate and intrastate rates for terminating End Office 
Access Service that do not exceed $0.0007 per minute.
    (j) Step 9. Beginning July 1, 2020, notwithstanding any other 
provision of the Commission's rules, each Rate-of-Return Carrier shall, 
in accordance with a bill-and-keep methodology, revise and refile its 
federal access tariffs and any state tariffs to remove any intercarrier 
charges for terminating End Office Access Service.
    (k) As set forth in FCC 11-161, states will facilitate 
implementation of changes to intrastate access rates to ensure 
compliance with the Order. Nothing in this section shall alter the 
authority of a state to monitor and oversee filing of intrastate 
tariffs.

[76 FR 73856, Nov. 29, 2011, as amended at 77 FR 48452, Aug. 14, 2012; 
78 FR 26267, May 6, 2013]



Sec. 51.911  Access reciprocal compensation rates for competitive LECs.

    (a) Caps on Access Reciprocal Compensation and switched access 
rates. Notwithstanding any other provision of the Commission's rules:
    (1) In the case of Competitive LECs operating in an area served by a 
Price

[[Page 73]]

Cap Carrier, no such Competitive LEC may increase the rate for any 
originating or terminating intrastate switched access service above the 
rate for such service in effect on December 29, 2011.
    (2) In the case of Competitive LEC operating in an area served by an 
incumbent local exchange carrier that is a Rate-of-Return Carrier or 
Competitive LECs that are subject to the rural exemption in Sec. 
61.26(e) of this chapter, no such Competitive LEC may increase the rate 
for any originating or terminating intrastate switched access service 
above the rate for such service in effect on December 29, 2011, with the 
exception of intrastate originating access service. For such Competitive 
LECs, intrastate originating access service subject to this subpart 
shall remain subject to the same state rate regulation in effect 
December 31, 2011, as may be modified by the state thereafter.
    (b) Except as provided in paragraph (b)(7) of this section, 
beginning July 3, 2012, notwithstanding any other provision of the 
Commission's rules, each Competitive LEC that has tariffs on file with 
state regulatory authorities shall file intrastate access tariff 
provisions, in accordance with Sec. 51.505(b)(2), that set forth the 
rates applicable to Transitional Intrastate Access Service in each state 
in which it provides Transitional Intrastate Access Service. Each 
Competitive Local Exchange Carrier shall establish the rates for 
Transitional Intrastate Access Service using the following methodology.
    (1) Calculate total revenue from Transitional Intrastate Access 
Service at the carrier's interstate access rates in effect on December 
29, 2011, using Fiscal Year 2011 intrastate switched access demand for 
each rate element.
    (2) Calculate total revenue from Transitional Intrastate Access 
Service at the carrier's intrastate access rates in effect on December 
29, 2011, using Fiscal Year 2011 intrastate switched access demand for 
each rate element.
    (3) Calculate the Step 1 Access Revenue Reduction. The Step 1 Access 
Revenue Reduction is equal to one-half of the difference between the 
amount calculated in (b)(1) of this section and the amount calculated in 
(b)(2) of this section.
    (4) A Competitive Local Exchange Carrier may elect to establish 
rates for Transitional Intrastate Access Service using its intrastate 
access rate structure. Carriers using this option shall establish rates 
for Transitional Intrastate Access Service such that Transitional 
Intrastate Access Service revenue at the proposed rates is no greater 
than Transitional Intrastate Access Service revenue at the intrastate 
rates in effect as of December 29, 2011 less the Step 1 Access Revenue 
Reduction, using Fiscal year 2011 intrastate switched access demand.
    (5) In the alternative, a Competitive Local Exchange Carrier may 
elect to apply its interstate access rate structure and interstate rates 
to Transitional Intrastate Access Service. In addition to applicable 
interstate access rates, the carrier may assess a transitional per-
minute charge on Transitional Intrastate Access Service end office 
switching minutes (previously billed as intrastate access). The 
transitional charge shall be no greater than the Step 1 Access Revenue 
Reduction divided by Fiscal year 2011 intrastate switched access demand
    (6) Except as provided in paragraph (b)(7) of this section, nothing 
in this section obligates or allows a Competitive LEC that has 
intrastate rates lower than its functionally equivalent interstate rates 
to make any intrastate tariff filing or intrastate tariff revisions 
raising such rates.
    (7) If a Competitive LEC must make an intrastate switched access 
rate reduction pursuant to paragraph (b) of this section, and that 
Competitive LEC has an intrastate rate for a rate element that is below 
the comparable interstate rate for that element, the Competitive LEC may 
increase the rate for any intrastate rate element that is below the 
comparable interstate rate for that element to the interstate rate no 
later than July 1, 2013;
    (c) Beginning July 1, 2013, notwithstanding any other provision of 
the Commission's rules, all Competitive Local Exchange Carrier Access 
Reciprocal Compensation rates for switched exchange access services 
subject to this

[[Page 74]]

subpart shall be no higher than the Access Reciprocal Compensation rates 
charged by the competing incumbent local exchange carrier, in accordance 
with the same procedures specified in Sec. 61.26 of this chapter.

[76 FR 73856, Nov. 29, 2011, as amended at 77 FR 48452, Aug. 14, 2012]



Sec. 51.913  Transition for VoIP-PSTN traffic.

    (a)(1) Terminating Access Reciprocal Compensation subject to this 
subpart exchanged between a local exchange carrier and another 
telecommunications carrier in Time Division Multiplexing (TDM) format 
that originates and/or terminates in IP format shall be subject to a 
rate equal to the relevant interstate terminating access charges 
specified by this subpart. Interstate originating Access Reciprocal 
Compensation subject to this subpart exchanged between a local exchange 
carrier and another telecommunications carrier in Time Division 
Multiplexing (TDM) format that originates and/or terminates in IP format 
shall be subject to a rate equal to the relevant interstate originating 
access charges specified by this subpart.
    (2) Until June 30, 2014, intrastate originating Access Reciprocal 
Compensation subject to this subpart exchanged between a local exchange 
carrier and another telecommunications carrier in Time Division 
Multiplexing (TDM) format that originates and/or terminates in IP format 
shall be subject to a rate equal to the relevant intrastate originating 
access charges specified by this subpart. Effective July 1, 2014, 
originating Access Reciprocal Compensation subject to this subpart 
exchanged between a local exchange carrier and another 
telecommunications carrier in Time Division Multiplexing (TDM) format 
that originates and/or terminates in IP format shall be subject to a 
rate equal to the relevant interstate originating access charges 
specified by this subpart.
    (3) Telecommunications traffic originates and/or terminates in IP 
format if it originates from and/or terminates to an end-user customer 
of a service that requires Internet protocol-compatible customer 
premises equipment.
    (b) Notwithstanding any other provision of the Commission's rules, a 
local exchange carrier shall be entitled to assess and collect the full 
Access Reciprocal Compensation charges prescribed by this subpart that 
are set forth in a local exchange carrier's interstate or intrastate 
tariff for the access services defined in Sec. 51.903 regardless of 
whether the local exchange carrier itself delivers such traffic to the 
called party's premises or delivers the call to the called party's 
premises via contractual or other arrangements with an affiliated or 
unaffiliated provider of interconnected VoIP service, as defined in 47 
U.S.C. 153(25), or a non-interconnected VoIP service, as defined in 47 
U.S.C. 153(36), that does not itself seek to collect Access Reciprocal 
Compensation charges prescribed by this subpart for that traffic. This 
rule does not permit a local exchange carrier to charge for functions 
not performed by the local exchange carrier itself or the affiliated or 
unaffiliated provider of interconnected VoIP service or non-
interconnected VoIP service. For purposes of this provision, functions 
provided by a LEC as part of transmitting telecommunications between 
designated points using, in whole or in part, technology other than TDM 
transmission in a manner that is comparable to a service offered by a 
local exchange carrier constitutes the functional equivalent of the 
incumbent local exchange carrier access service.

[76 FR 73856, Nov. 29, 2011, as amended at 77 FR 31536, May 29, 2012]
    (a) Access Reciprocal Compensation subject to this subpart exchanged 
between a local exchange carrier and another telecommunications carrier 
in Time Division Multiplexing (TDM) format that originates and/or 
terminates in IP format shall be subject to a rate equal to the relevant 
interstate access charges specified by this subpart. Telecommunications 
traffic originates and/or terminates in IP format if it originates from 
and/or terminates to an end-user customer of a service that requires 
Internet protocol-compatible customer premises equipment.
    (b) Notwithstanding any other provision of the Commission's rules, a 
local exchange carrier shall be entitled to

[[Page 75]]

assess and collect the full Access Reciprocal Compensation charges 
prescribed by this subpart that are set forth in a local exchange 
carrier's interstate or intrastate tariff for the access services 
defined in Sec. 51.903 regardless of whether the local exchange carrier 
itself delivers such traffic to the called party's premises or delivers 
the call to the called party's premises via contractual or other 
arrangements with an affiliated or unaffiliated provider of 
interconnected VoIP service, as defined in 47 U.S.C. 153(25), or a non-
interconnected VoIP service, as defined in 47 U.S.C. 153(36), that does 
not itself seek to collect Access Reciprocal Compensation charges 
prescribed by this subpart for that traffic. This rule does not permit a 
local exchange carrier to charge for functions not performed by the 
local exchange carrier itself or the affiliated or unaffiliated provider 
of interconnected VoIP service or non-interconnected VoIP service. For 
purposes of this provision, functions provided by a LEC as part of 
transmitting telecommunications between designated points using, in 
whole or in part, technology other than TDM transmission in a manner 
that is comparable to a service offered by a local exchange carrier 
constitutes the functional equivalent of the incumbent local exchange 
carrier access service.



Sec. 51.915  Recovery mechanism for price cap carriers.

    (a) Scope. This section sets forth the extent to which Price Cap 
Carriers may recover certain revenues, through the recovery mechanism 
outlined below, to implement reforms adopted in FCC 11-161 and as 
required by Sec. 20.11(b) of this chapter, and Sec. Sec. 51.705 and 
51.907.
    (b) Definitions. As used in this section and Sec. 51.917, the 
following terms mean:
    (1) CALLS Study Area. A CALLS Study Area means a Price Cap Carrier 
study area that participated in the CALLS plan at its inception. See 
Access Charge Reform, Price Cap Performance Review for Local Exchange 
Carriers, Low-Volume Long-Distance Users, Federal-State Joint Board on 
Universal Service, Sixth Report and Order in CC Docket Nos. 96-262 and 
94-1, Report and Order in CC Docket No. 99-249, Eleventh Report and 
Order in CC Docket No. 96-45, 15 FCC Rcd 12962 (2000).
    (2) CALLS Study Area Base Factor. The CALLS Study Area Base Factor 
is equal to ninety (90) percent.
    (3) CMRS Net Reciprocal Compensation Revenues. CMRS Net Reciprocal 
Compensation Revenues means the reduction in net reciprocal compensation 
revenues required by Sec. 20.11 of this chapter associated with CMRS 
traffic as described in Sec. 51.701(b)(2), which is equal to its Fiscal 
Year 2011 net reciprocal compensation revenues from CMRS carriers.
    (4) Expected Revenues for Access Recovery Charges. Expected Revenues 
for Access Recovery Charges are calculated using the tariffed Access 
Recovery Charge rate for each class of service and the forecast demand 
for each class of service.
    (5) Initial Composite Terminating End Office Access Rate. Initial 
Composite Terminating End Office Access Rate means Fiscal Year 2011 
terminating interstate End Office Access Service revenue divided by 
Fiscal Year 2011 terminating interstate end office switching minutes.
    (6) Lifeline Customer. A Lifeline Customer is a residential lifeline 
subscriber as defined by Sec. 54.400(a) of this chapter that does not 
pay a Residential and/or Single-Line Business End User Common Line 
Charge.
    (7) Net Reciprocal Compensation. Net Reciprocal Compensation means 
the difference between a carrier's reciprocal compensation revenues from 
non-access traffic less its reciprocal compensation payments for non-
access traffic during a stated period of time. For purposes of the 
calculations made under Sec. Sec. 51.915 and 51.917, the term does not 
include reciprocal compensation revenues for non-access traffic 
exchanged between Local Exchange Carriers and CMRS providers; recovery 
for such traffic is addressed separately in these sections.
    (8) Non-CALLS Study Area. Non-CALLS Study Area means a Price Cap 
Carrier study area that did not participate in the CALLS plan at its 
inception.
    (9) Non-CALLS Study Area Base Factor. The Non-CALLS Study Area Base

[[Page 76]]

Factor is equal to one hundred (100) percent for five (5) years 
beginning July 1, 2012. Beginning July 1, 2017, the Non-CALLS Price Cap 
Carrier Base Factor will be equal to ninety (90) percent.
    (10) Price Cap Carrier Traffic Demand Factor. The Price Cap Carrier 
Traffic Demand Factor, as used in calculating eligible recovery, is 
equal to ninety (90) percent for the one-year period beginning July 1, 
2012. It is reduced by ten (10) percent of its previous value in each 
subsequent annual tariff filing.
    (11) Rate Ceiling Component Charges. The Rate Ceiling Component 
Charges consists of the federal end user common line charge and the 
Access Recovery Charge; the flat rate for residential local service 
(sometimes know as the ``1FR'' or ``R1'' rate), mandatory extended area 
service charges, and state subscriber line charges; per-line state high 
cost and/or state access replacement universal service contributions, 
state E911 charges, and state TRS charges.
    (12) Residential Rate Ceiling. The Residential Rate Ceiling, which 
consists of the total of the Rate Ceiling Component Charges, is set at 
$30 per month. The Residential Rate Ceiling will be the higher of the 
rate in effect on January 1, 2012, or the rate in effect on January 1 in 
any subsequent year.
    (13) True-up Revenues for Access Recovery Charge. True-up revenues 
for Access Recovery Charge are equal to (projected demand minus actual 
realized demand for Access Recovery Charges) times the tariffed Access 
Recovery Charge. This calculation shall be made separately for each 
class of service and shall be adjusted to reflect any changes in 
tariffed rates for the Access Recovery Charge. Realized demand is the 
demand for which payment has been received by the time the true-up is 
made.
    (c) 2011 Price Cap Carrier Base Period Revenue. 2011 Price Cap 
Carrier Base Period Revenue is equal to the sum of the following three 
components:
    (1) Terminating interstate end office switched access revenues and 
interstate Tandem-Switched Transport Access Service revenues for Fiscal 
Year 2011 received by March 31, 2012;
    (2) Fiscal Year 2011 revenues from Transitional Intrastate Access 
Service received by March 31, 2012; and
    (3) Fiscal Year 2011 reciprocal compensation revenues received by 
March 31, 2012, less fiscal year 2011 reciprocal compensation payments 
made by March 31, 2012.
    (d) Eligible recovery for Price Cap Carriers.(1) Notwithstanding any 
other provision of the Commission's rules, a Price Cap Carrier may 
recover the amounts specified in this paragraph through the mechanisms 
described in paragraphs (e) and (f) of this section.
    (i) Beginning July 1, 2012, a Price Cap Carrier's eligible recovery 
will be equal to the CALLS Study Area Base Factor and/or the Non-CALLS 
Study Area Base Factor, as applicable, multiplied by the sum of the 
following three components:
    (A) The amount of the reduction in Transitional Intrastate Access 
Service revenues determined pursuant to Sec. 51.907(b)(2) multiplied by 
the Price Cap Carrier Traffic Demand Factor;
    (B) CMRS Net Reciprocal Compensation Revenues multiplied by the 
Price Cap Carrier Traffic Demand Factor; and
    (C) A Price Cap Carrier's reductions in Fiscal Year 2011 net 
reciprocal compensation revenues resulting from rate reductions required 
by Sec. 51.705, other than those associated with CMRS traffic as 
described in Sec. 51.701(b)(2), which may be calculated in one of the 
following ways:
    (1) Calculate the reduction in Fiscal Year 2011 net reciprocal 
compensation revenue as a result of rate reductions required by Sec. 
51.705 using Fiscal Year 2011 reciprocal compensation demand, and then 
multiply by the Price Cap Carrier Traffic Demand Factor;
    (2) By using a composite reciprocal compensation rate as follows:
    (i) Establish a composite reciprocal compensation rate for its 
Fiscal Year 2011 reciprocal compensation receipts and its Fiscal Year 
2011 reciprocal compensation payments by dividing its Fiscal Year 2011 
reciprocal compensation receipts and payments by its respective Fiscal 
Year 2011 demand excluding demand for traffic exchanged pursuant to a 
bill-and-keep arrangement;
    (ii) Calculate the difference between each of the composite 
reciprocal compensation rates and the target reciprocal compensation 
rate set forth in

[[Page 77]]

Sec. 51.705 for the year beginning July 1, 2012 multiply by the 
appropriate Fiscal Year 2011 demand, and then multiply by the Price Cap 
Carrier Traffic Demand Factor; or
    (3) For the purpose of establishing its recovery for net reciprocal 
compensation, a Price Cap Carrier may elect to forgo this step and 
receive no recovery for reductions in net reciprocal compensation. If a 
carrier elects this option, it may not change its election at a later 
date.
    (ii) Beginning July 1, 2013, a Price Cap Carrier's eligible recovery 
will be equal to the CALLS Study Area Base Factor and/or the Non-CALLS 
Study Area Base Factor, as applicable, multiplied by the sum of the 
following three components:
    (A) The cumulative amount of the reduction in Transitional 
Intrastate Access Service revenues determined pursuant to Sec. 
51.907(b)(2) and (c) multiplied by the Price Cap Carrier Traffic Demand 
Factor; and
    (B) CMRS Net Reciprocal Compensation Revenues multiplied by the 
Price Cap Carrier Traffic Demand Factor; and
    (C) A Price Cap Carrier's cumulative reductions in Fiscal Year 2011 
net reciprocal compensation revenues other than those associated with 
CMRS traffic as described in Sec. 51.701(b)(2) resulting from rate 
reductions required by Sec. 51.705 may be calculated in one of the 
following ways:
    (1) Calculate the cumulative reduction in Fiscal Year 2011 net 
reciprocal compensation revenue as a result of rate reductions required 
by Sec. 51.705 using Fiscal Year 2011 reciprocal compensation demand 
and then multiply by the Price Cap Carrier Traffic Demand Factor;
    (2) By using a composite reciprocal compensation rate as follows:
    (i) Establish a composite reciprocal compensation rate for its 
Fiscal Year 2011 reciprocal compensation receipts and its Fiscal Year 
2011 reciprocal compensation payments by dividing its Fiscal Year 2011 
reciprocal compensation receipts and payments by its respective Fiscal 
Year 2011 demand excluding demand for traffic exchanged pursuant to a 
bill-and-keep arrangement;
    (ii) Calculate the difference between each of the composite 
reciprocal compensation rates and the target reciprocal compensation 
rate set forth in Sec. 51.705 for the year beginning July 1, 2013, 
using the appropriate Fiscal Year 2011 demand, and then multiply by the 
Price Cap Carrier Traffic Demand Factor; or
    (3) For the purpose of establishing its recovery for net reciprocal 
compensation, a Price Cap Carrier may elect to forgo this step and 
receive no recovery for reductions in net reciprocal compensation. If a 
carrier elects this option, it may not change its election at a later 
date.
    (iii) Beginning July 1, 2014, a Price Cap Carrier's eligible 
recovery will be equal to the CALLS Study Area Base Factor and/or the 
Non-CALLS Study Area Base Factor, as applicable, multiplied by the sum 
of the amounts in paragraphs (d)(1)(iii)(A) through (d)(1)(iii)(E), of 
this section, and then adding the amount in paragraph (d)(1)(iii)(F) of 
this section to that amount:
    (A) The amount of the reduction in Transitional Intrastate Access 
Service revenues determined pursuant to Sec. 51.907(b)(2) and (c) 
multiplied by the Price Cap Carrier Traffic Demand Factor; and
    (B) The reduction in interstate switched access revenues equal to 
the difference between the Initial Composite Terminating End Office 
Access Rate and the 2014 Target Composite Terminating End Office Access 
Rate determined pursuant to Sec. 51.907(d) using 2011 terminating 
interstate end office switching minutes, and then multiply by the Price 
Cap Carrier Traffic Demand Factor;
    (C) If the 2014 Intrastate Composite Terminating End Office Access 
Rate is higher than the 2014 Target Composite Terminating End Office 
Access Rate, the reduction in revenues equal to the difference between 
the intrastate 2014 Composite Terminating End Office Access Rate and the 
intrastate 2014 Target Composite Terminating End Office Access Rate 
determined pursuant to Sec. 51.907(d) using Fiscal Year 2011 
terminating intrastate end office switching minutes, and then multiply 
by the

[[Page 78]]

Price Cap Carrier Traffic Demand Factor;
    (D) CMRS Net Reciprocal Compensation Revenues multiplied by the 
Price Cap Carrier Traffic Demand Factor; and
    (E) A Price Cap Carrier's cumulative reductions in Fiscal Year 2011 
net reciprocal compensation revenues other than those associated with 
CMRS traffic as described in Sec. 51.701(b)(2) resulting from rate 
reductions required by Sec. 51.705 may be calculated in one of the 
following ways:
    (1) Calculate the cumulative reduction in Fiscal Year 2011 net 
reciprocal compensation revenue as a result of rate reductions required 
by Sec. 51.705 using Fiscal Year 2011 reciprocal compensation demand, 
and then multiply by the Price Cap Carrier Traffic Demand Factor;
    (2) By using a composite reciprocal compensation rate as follows:
    (i) Establish a composite reciprocal compensation rate for its 
Fiscal Year 2011 reciprocal compensation receipts and its Fiscal Year 
2011 reciprocal compensation payments by dividing its Fiscal Year 2011 
reciprocal compensation receipts and payments by its respective Fiscal 
Year 2011 demand excluding demand for traffic exchanged pursuant to a 
bill-and-keep arrangement;
    (ii) Calculate the difference between each of the composite 
reciprocal compensation rates and the target reciprocal compensation 
rate set forth in Sec. 51.705 for the year beginning July 1, 2014, 
using the appropriate Fiscal Year 2011 demand, and then multiply by the 
Price Cap Carrier Traffic Demand Factor; or
    (3) For the purpose of establishing its recovery for net reciprocal 
compensation, a Price Cap Carrier may elect to forgo this step and 
receive no recovery for reductions in net reciprocal compensation. If a 
carrier elects this option, it may not change its election at a later 
date.
    (F) An amount equal to True-up Revenues for Access Recovery Charges 
for the year beginning July 1, 2012.
    (iv) Beginning July 1, 2015, a Price Cap Carrier's eligible recovery 
will be equal to the CALLS Study Area Base Factor and/or the Non-CALLS 
Study Area Base Factor, as applicable, multiplied by the sum of the 
amounts in paragraphs (d)(1)(iv)(A) through (d)(1)(iv)(E) of this 
section and then adding the amount in paragraph (d)(1)(iv)(F) of this 
section to that amount:
    (A) The amount of the reduction in Transitional Intrastate Access 
Service revenues determined pursuant to Sec. 51.907(b)(2) and (c) 
multiplied by the Price Cap Carrier Traffic Demand Factor;
    (B) The reduction in interstate switched access revenues equal to 
the difference between the Initial Composite Terminating End Office 
Access Rate and the 2015 Target Composite Terminating End Office Access 
Rate determined pursuant to Sec. 51.907(e) using Fiscal Year 2011 
terminating interstate end office switching minutes, and then multiply 
by the Price Cap Carrier Traffic Demand Factor;
    (C) If the 2014 Intrastate Composite Terminating End Office Access 
Rate is higher than the 2015 Target Composite Terminating End Office 
Access Rate, the reduction in intrastate switched access revenues equal 
to the difference between the intrastate 2014 Composite Terminating End 
Office Access Rate and the 2015 Target Composite Terminating End Office 
Access Rate determined pursuant to Sec. 51.907(e) using Fiscal Year 
2011 terminating intrastate end office switching minutes, and then 
multiply by the Price Cap Carrier Traffic Demand Factor; and
    (D) CMRS Net Reciprocal Compensation Revenues multiplied by the 
Price Cap Carrier Traffic Demand Factor;
    (E) A Price Cap Carrier's cumulative reductions in Fiscal Year 2011 
net reciprocal compensation revenues other than those associated with 
CMRS traffic as described in Sec. 51.701(b)(2) resulting from rate 
reductions required by Sec. 51.705 may be calculated in one of the 
following ways:
    (1) Calculate the cumulative reduction in Fiscal Year 2011 net 
reciprocal compensation revenue as a result of rate reductions required 
by Sec. 51.705 using Fiscal Year 2011 reciprocal compensation demand, 
and then multiply by the Price Cap Carrier Traffic Demand Factor;
    (2) By using a composite reciprocal compensation rate as follows:

[[Page 79]]

    (i) Establish a composite reciprocal compensation rate for its 
Fiscal Year 2011 reciprocal compensation receipts and its Fiscal Year 
2011 reciprocal compensation payments by dividing its Fiscal Year 2011 
reciprocal compensation receipts and payments by its respective Fiscal 
Year 2011 demand excluding demand for traffic exchanged pursuant to a 
bill-and-keep arrangement;
    (ii) Calculate the difference between each of the composite 
reciprocal compensation rates and the target reciprocal compensation 
rate set forth in Sec. 51.705 for the year beginning July 1, 2015, 
using the appropriate Fiscal Year 2011 demand, and then multiply by the 
Price Cap Carrier Traffic Demand Factor; or
    (3) For the purpose of establishing its recovery for net reciprocal 
compensation, a Price Cap Carrier may elect to forgo this step and 
receive no recovery for reductions in net reciprocal compensation. If a 
carrier elects this option, it may not change its election at a later 
date.
    (F) An amount equal to True-up Revenues for Access Recovery Charges 
for the year beginning July 1, 2013.
    (v) Beginning July 1, 2016, a Price Cap Carrier's eligible recovery 
will be equal to the CALLS Study Area Base Factor and/or the Non-CALLS 
Study Area Base Factor, as applicable, multiplied by the sum of the 
amounts in paragraphs (d)(1)(v)(A) through (d)(1)(v)(E), of this section 
and then adding the amount in paragraph (d)(1)(v)(F) of this section to 
that amount:
    (A) The amount of the reduction in Transitional Intrastate Access 
Service revenues determined pursuant to Sec. 51.907(b)(2) and (c) 
multiplied by the Price Cap Carrier Traffic Demand Factor;
    (B) The reduction in interstate switched access revenues equal to 
the difference between the Initial Composite Terminating End Office 
Access Rate and $0.0007 determined pursuant to Sec. 51.907(f) using 
Fiscal Year 2011 terminating interstate end office switching minutes, 
and then multiply by the Price Cap Carrier Traffic Demand Factor;
    (C) If the 2014 Intrastate Composite Terminating End Office Access 
Rate is higher than $0.0007, the reduction in revenues equal to the 
difference between the intrastate 2014 Composite Terminating End Office 
Access Rate and $0.0007 determined pursuant to Sec. 51.907(f) using 
Fiscal Year 2011 terminating intrastate end office minutes, and then 
multiply by the Price Cap Carrier Traffic Demand Factor;
    (D) CMRS Net Reciprocal Compensation Revenues multiplied by the 
Price Cap Carrier Traffic Demand Factor;
    (E) A Price Cap Carrier's cumulative reductions in Fiscal Year 2011 
net reciprocal compensation revenues other than those associated with 
CMRS traffic as described in Sec. 51.701(b)(2) resulting from rate 
reductions required by Sec. 51.705 may be calculated in one of the 
following ways:
    (1) Calculate the cumulative reduction in Fiscal Year 2011 net 
reciprocal compensation revenue as a result of rate reductions required 
by Sec. 51.705 using Fiscal Year 2011 reciprocal compensation demand, 
and then multiply by the Price Cap Carrier Traffic Demand Factor;
    (2) By using a composite reciprocal compensation rate as follows:
    (i) Establish a composite reciprocal compensation rate for its 
Fiscal Year 2011 reciprocal compensation receipts and its Fiscal Year 
2011 reciprocal compensation payments by dividing its Fiscal Year 2011 
reciprocal compensation receipts and payments by its respective Fiscal 
Year 2011 demand excluding demand for traffic exchanged pursuant to a 
bill-and-keep arrangement;
    (ii) Calculate the difference between each of the composite 
reciprocal compensation rates and the target reciprocal compensation 
rate set forth in Sec. 51.705 for the year beginning July 1, 2016, 
using the appropriate Fiscal Year 2011 demand, and then multiply by the 
Price Cap Carrier Traffic Demand Factor; or
    (3) For the purpose of establishing its recovery for net reciprocal 
compensation, a Price Cap Carrier may elect to forgo this step and 
receive no recovery for reductions in net reciprocal compensation. If a 
carrier elects this option, it may not change its election at a later 
date.

[[Page 80]]

    (F) An amount equal to True-up Revenues for Access Recovery Charges 
for the year beginning July 1, 2014.
    (vi) Beginning July 1, 2017, a Price Cap Carrier's eligible recovery 
will be equal to ninety (90) percent of the sum of the amounts in 
paragraphs (d)(1)(vi) through (d)(1)(vi)(F) of this section, and then 
adding the amount in paragraph (d)(1)(vi)(G) f this section to that 
amount:
    (A) The amount of the reduction in Transitional Intrastate Access 
Service revenues determined pursuant to Sec. 51.907(b)(2) and (c) 
multiplied by the Price Cap Carrier Traffic Demand Factor; and
    (B) The reduction in interstate switched access revenues equal to 
the Initial Composite terminating End Office Access Rate using Fiscal 
Year 2011 terminating interstate end office switching minutes, and then 
multiply by the Price Cap Carrier Traffic Demand Factor;
    (C) The reduction in revenues equal to the intrastate 2014 Composite 
terminating End Office Access Rate using Fiscal Year 2011 terminating 
intrastate end office switching minutes, and then multiply by the Price 
Cap Carrier Traffic Demand Factor;
    (D) The reduction in revenues resulting from reducing the 
terminating Tandem-Switched Transport Access Service rate to $0.0007 
pursuant to Sec. 51.907(g)(2) using Fiscal Year 2011 terminating 
tandem-switched minutes, and then multiply by the Price Cap Carrier 
Traffic Demand Factor;
    (E) CMRS Net Reciprocal Compensation Revenues multiplied by the 
Price Cap Carrier Traffic Demand Factor; and
    (F) A Price Cap Carrier's cumulative reductions in Fiscal Year 2011 
net reciprocal compensation revenues other than those associated with 
CMRS traffic as described in Sec. 51.701(b)(2) resulting from rate 
reductions required by Sec. 51.705 may be calculated in one of the 
following ways:
    (1) Calculate the cumulative reduction in Fiscal Year 2011 net 
reciprocal compensation revenue as a result of rate reductions required 
by Sec. 51.705 using Fiscal Year 2011 reciprocal compensation demand, 
and then multiply by the Price Cap Carrier Traffic Demand Factor;
    (2) By using a composite reciprocal compensation rate as follows:
    (i) Establish a composite reciprocal compensation rate for its 
Fiscal Year 2011 reciprocal compensation receipts and its Fiscal Year 
2011 reciprocal compensation payments by dividing its Fiscal Year 2011 
reciprocal compensation receipts and payments by its respective Fiscal 
Year 2011 demand excluding demand for traffic exchanged pursuant to a 
bill-and-keep arrangement;
    (ii) Calculate the difference between each of the composite 
reciprocal compensation rates and the target reciprocal compensation 
rate set forth in Sec. 51.705 for the year beginning July 1, 2017, 
using the appropriate Fiscal Year 2011 demand, and then multiply by the 
Price Cap Carrier Traffic Demand Factor; or
    (3) For the purpose of establishing its recovery for net reciprocal 
compensation, a Price Cap Carrier may elect to forgo this step and 
receive no recovery for reductions in net reciprocal compensation. If a 
carrier elects this option, it may not change its election at a later 
date.
    (G) An amount equal to True-up Revenues for Access Recovery Charges 
for the year beginning July 1, 2015.
    (vii) Beginning July 1, 2018, a Price Cap Carrier's eligible 
recovery will be equal to ninety (90) percent of the sum of the amounts 
in paragraphs (d)(1)(vii)(A) though (d)(1)(vii)(G) of this section, and 
then adding the amount in paragraph (d)(1)(vii)(H) of this section to 
that amount:
    (A) The amount of the reduction in Transitional Intrastate Access 
Service revenues determined pursuant to Sec. 51.907(b)(2) and (c) 
multiplied by the Price Cap Carrier Traffic Demand Factor; and:
    (B) The reduction in interstate switched access revenues equal to 
the Initial Composite terminating End Office Access Rate using Fiscal 
Year 2011 terminating interstate end office switching minutes, and then 
multiply by the Price Cap Carrier Traffic Demand Factor;
    (C) The reduction in revenues equal to the intrastate 2014 Composite 
terminating End Office Access Rate using

[[Page 81]]

Fiscal Year 2011 terminating intrastate end office switching minutes, 
and then multiply by the Price Cap Carrier Traffic Demand Factor;
    (D) The reduction in revenues resulting from reducing the 
terminating Tandem-Switched Transport Access Service rate to $0.0007 
pursuant to Sec. 51.907(g)(2) using Fiscal Year 2011 terminating 
tandem-switched minutes, and then multiply by the Price Cap Carrier 
Traffic Demand Factor;
    (E) The reduction in revenues resulting from moving from a 
terminating Tandem-Switched Transport Access Service rate tariffed at a 
maximum of $0.0007 to removal of intercarrier charges pursuant to Sec. 
51.907(h), if applicable, using Fiscal Year 2011 terminating tandem-
switched minutes, and then multiply by the Price Cap Carrier Traffic 
Demand Factor;
    (F) CMRS Net Reciprocal Compensation Revenues multiplied by the 
Price Cap Carrier Traffic Demand Factor; and
    (G) A Price Cap Carrier's cumulative reductions in Fiscal Year 2011 
net reciprocal compensation revenues other than those associated with 
CMRS traffic as described in Sec. 51.701(b)(2) resulting from rate 
reductions required by Sec. 51.705 may be calculated in one of the 
following ways:
    (1) Calculate the cumulative reduction in Fiscal Year 2011 net 
reciprocal compensation revenue as a result of rate reductions required 
by Sec. 51.705 using Fiscal Year 2011 reciprocal compensation demand, 
and then multiply by the Price Cap Carrier Traffic Demand Factor;
    (2) By using a composite reciprocal compensation rate as follows:
    (i) Establish a composite reciprocal compensation rate for its 
Fiscal Year 2011 reciprocal compensation receipts and its Fiscal Year 
2011 reciprocal compensation payments by dividing its Fiscal Year 2011 
reciprocal compensation receipts and payments by its respective Fiscal 
Year 2011 demand excluding demand for traffic exchanged pursuant to a 
bill-and-keep arrangement;
    (ii) Calculate the difference between each of the composite 
reciprocal compensation rates and the target reciprocal compensation 
rate set forth in Sec. 51.705 for the year beginning July 1, 2018, 
using the appropriate Fiscal Year 2011 demand, and then multiply by the 
Price Cap Carrier Traffic Demand Factor; or
    (3) For the purpose of establishing its recovery for net reciprocal 
compensation, a Price Cap Carrier may elect to forgo this step and 
receive no recovery for reductions in net reciprocal compensation. If a 
carrier elects this option, it may not change its election at a later 
date.
    (H) An amount equal to True-up Revenues for Access Recovery Charges 
for the year beginning July 1, 2016.
    (viii) Beginning July 1, 2019, and in subsequent years, a Price Cap 
Carrier's eligible recovery will be equal to the amount calculated in 
paragraph (d)(1)(vii)(A) through (d)(1)(vii)(H) of this section before 
the application of the Price Cap Carrier Traffic Demand Factor 
applicable in 2018 multiplied by the appropriate Price Cap Carrier 
Traffic Demand Factor for the year in question, and then adding an 
amount equal to True-up Revenues for Access Recovery Charges for the 
year beginning July 1 two years earlier.
    (2) If a Price Cap Carrier recovers any costs or revenues that are 
already being recovered as Eligible Recovery through Access Recovery 
Charges or the Connect America Fund from another source, that carrier's 
ability to recover reduced switched access revenue from Access Recovery 
Charges or the Connect America Fund shall be reduced to the extent it 
receives duplicative recovery.
    (3) A Price Cap Carrier seeking revenue recovery must annually 
certify as part of its tariff filings to the Commission and to the 
relevant state commission that the carrier is not seeking duplicative 
recovery in the state jurisdiction for any Eligible Recovery subject to 
the recovery mechanism.
    (e) Access Recovery Charge. (1) A charge that is expressed in 
dollars and cents per line per month may be assessed upon end users that 
may be assessed an end user common line charge pursuant to Sec. 69.152 
of this chapter, to the extent necessary to allow the Price Cap Carrier 
to recover some or all of its eligible recovery determined pursuant to 
paragraph (d) of this section,

[[Page 82]]

subject to the caps described in paragraph (e)(5) of this section. A 
Price Cap Carrier may elect to forgo charging some or all of the Access 
Recovery Charge.
    (2) Total Access Recovery Charges calculated by multiplying the 
tariffed Access Recovery Charge by the projected demand for the year in 
question may not recover more than the amount of eligible recovery 
calculated pursuant to paragraph (d) of this section for the year 
beginning on July 1.
    (3) For the purposes of this section, a Price Cap Carrier holding 
company includes all of its wholly-owned operating companies that are 
price cap incumbent local exchange carriers. A Price Cap Carrier Holding 
Company may recover the eligible recovery attributable to any price cap 
study areas operated by its wholly-owned operating companies through 
assessments of the Access Recovery Charge on end users in any price cap 
study areas operated by its wholly owned operating companies that are 
price cap incumbent local exchange carriers.
    (4) Distribution of Access Recovery Charges among lines of different 
types. (i) A Price Cap Carrier holding company that does not receive 
ICC-replacement CAF support (whether because it elects not to or because 
it does not have sufficient eligible recovery after the Access Recovery 
Charge is assessed or imputed) may not recover a higher fraction of its 
total revenue recovery from Access Recovery Charges assessed on 
Residential and Single Line Business lines than:
    (A) The number of Residential and Single-Line Business lines divided 
by
    (B) The sum of the number of Residential and Single-Line Business 
lines and two (2) times the number of End User Common Line charges 
assessed on Multi-Line Business customers.
    (ii) For purposes of this subpart, Residential and Single Line 
Business lines are lines (other than lines of Lifeline Customers) 
assessed the residential and single line business end user common line 
charge and lines assessed the non-primary residential end user common 
line charge.
    (iii) For purposes of this subpart, Multi-Line Business Lines are 
lines assessed the multi-line business end user common line charge.
    (5) Per-line caps and other limitations on Access Recovery Charges
    (i) For each line other than lines of Lifeline Customers assessed a 
primary residential or single-line business end user common line charge 
or a non-primary residential end user common line charge pursuant to 
Sec. 69.152 of this Chapter, a Price Cap Carrier may assess an Access 
Recovery Charge as follows:
    (A) Beginning July 1, 2012, a maximum of $0.50 per month for each 
line;
    (B) Beginning July 1, 2013, a maximum of $1.00 per month for each 
line;
    (C) Beginning July 1, 2014, a maximum of $1.50 per month for each 
line;
    (D) Beginning July 1, 2015, a maximum of $2.00 per month for each 
line; and
    (E) Beginning July 1, 2016, a maximum of $2.50 per month for each 
line.
    (ii) For each line assessed a multi-line business end user common 
line charge pursuant to Sec. 69.152 of this chapter, a Price Cap 
Carrier may assess an Access Recovery Charge as follows:
    (A) Beginning July 1, 2012, a maximum of $1.00 per month for each 
multi-line business end user common line charge assessed;
    (B) Beginning July 1, 2013, a maximum of $2.00 per month for each 
multi-line business end user common line charge assessed;
    (C) Beginning July 1, 2014, a maximum of $3.00 per month for each 
multi-line business end user common line charge assessed;
    (D) Beginning July 1, 2015, a maximum of $4.00 per month for each 
multi-line business end user common line charge assessed; and
    (E) Beginning July 1, 2016, a maximum of $5.00 per month for each 
multi-line business end user common line charge assessed.
    (iii) The Access Recovery Charge allowed by paragraph (e)(5)(i) of 
this section may not be assessed to the extent that its assessment would 
bring the total of the Rate Ceiling Component Charges above the 
Residential Rate Ceiling on January 1 of that year. This limitation 
applies only to the first residential line obtained by a residential end 
user and does not apply to single-line business customers.

[[Page 83]]

    (iv) The Access Recovery Charge allowed by paragraph (e)(5)(ii) of 
this section may not be assessed to the extent that its assessment would 
bring the total of the multi-line business end user common line charge 
and the Access Recovery Charge above $12.20 per line.
    (v) The Access Recovery Charge assessed on lines assessed the non-
primary residential line end user common line charge in a study area may 
not exceed the Access Recovery Charge assessed on residential end-users' 
first residential line in that study area.
    (vi) The Access Recovery Charge may not be assessed on lines of any 
Lifeline Customers.
    (vii) If in any year, the Price Cap Carrier's Access Recovery Charge 
is not at its maximum, the succeeding year's Access Recovery Charge may 
not increase more than $.0.50 per line per month for charges assessed 
under paragraph (e)(5)(i) of this section or $1.00 per line per month 
for charges assessed under paragraph (e)(5)(ii) of this section.
    (f) Price Cap Carrier eligibility for CAF ICC Support.(1) A Price 
Cap Carrier shall elect in its July 1, 2012 access tariff filing whether 
it will receive CAF ICC Support under this paragraph. A Price Cap 
Carrier eligible to receive CAF ICC Support subsequently may elect at 
any time not to receive such funding. Once it makes the election not to 
receive CAFF ICC Support, it may not elect to receive such funding at a 
later date.
    (2) Beginning July 1, 2012, a Price Cap Carrier may recover any 
eligible recovery allowed by paragraph (d) that it could not have 
recovered through charges assessed pursuant to paragraph (e) of this 
section from CAF ICC Support pursuant to Sec. 54.304. For this purpose, 
the Price Cap Carrier must impute the maximum charges it could have 
assessed under paragraph (e)of this section.
    (3) Beginning July 1, 2017, a Price Cap Carrier may recover two-
thirds (\2/3\) of the amount it otherwise would have been eligible to 
recover under paragraph (f)(2) from CAF ICC Support.
    (4) Beginning July 1, 2018, a Price Cap Carrier may recover one-
third (1/3) of the amount it otherwise would have been eligible to 
recover under paragraph (f)(2) of this section from CAF ICC Support.
    (5) Beginning July 1, 2019, a Price Cap Carrier may no longer 
recover any amount related to revenue recovery under this paragraph from 
CAF ICC Support.
    (6) A Price Cap Carrier that elects to receive CAF ICC support must 
certify with its annual access tariff filing that it has complied with 
paragraphs (d) and (e) of this section, and, after doing so, is eligible 
to receive the CAF ICC support requested pursuant to paragraph (f) of 
this section.

[76 FR 73856, Nov. 29, 2011, as amended at 77 FR 48453, Aug. 14, 2012; 
78 FR 26268, May 6, 2013]



Sec. 51.917  Revenue recovery for Rate-of-Return Carriers.

    (a) Scope. This section sets forth the extent to which Rate-of-
Return Carriers may recover, through the recovery mechanism outlined in 
paragraphs (d) through (f) of this section, a portion of revenues lost 
due to rate reductions required by Sec. 20.11(b) of this chapter, and 
Sec. Sec. 51.705 and 51.909.
    (b) Definitions.
    (1) 2011 Interstate Switched Access Revenue Requirement. 2011 
Interstate Switched Access Revenue Requirement means:
    (i) For a Rate-of-Return Carrier that participated in the NECA 2011 
annual switched access tariff filing, its projected interstate switched 
access revenue requirement associated with the NECA 2011 annual 
interstate switched access tariff filing;
    (ii) For a Rate-of-Return Carrier subject to Sec. 61.38 of this 
chapter that filed its own annual access tariff in 2010 and did not 
participate in the NECA 2011 annual switched access tariff filing, its 
projected interstate switched access revenue requirement in its 2010 
annual interstate switched access tariff filing; and
    (iii) For a Rate-of-Return Carrier subject to Sec. 61.39 of this 
chapter that filed its own annual switched access tariff in 2011, its 
historically-determined annual interstate switched access revenue 
requirement filed with its 2011 annual interstate switched access tariff 
filing.

[[Page 84]]

    (2) Expected Revenues. Expected Revenues from an access service are 
calculated using the default transition rate for that service specified 
by Sec. 51.909 and forecast demand for that service. Expected Revenues 
from a non-access service are calculated using the default transition 
rate for that service specified by Sec. 20.11 of this chapter or Sec. 
51.705 of this chapter and forecast net demand for that service.
    (3) Rate-of-Return Carrier Baseline Adjustment Factor. The Rate-of-
Return Carrier Baseline Adjustment Factor, as used in calculating 
eligible recovery for Rate-of-Return Carriers, is equal to ninety-five 
(95) percent for the period beginning July 1, 2012. It is reduced by 
five (5) percent of its previous value in each subsequent annual tariff 
filing.
    (4) Revenue Requirement. Revenue Requirement is equal to a carrier's 
regulated operating costs plus an 11.25 percent return on a carrier's 
net rate base calculated in compliance with the provisions of parts 36, 
65 and 69 of this chapter. For an average schedule carrier, its Revenue 
Requirement shall be equal to the average schedule settlements it 
received from the pool, adjusted to reflect an 11.25 percent rate of 
return, or what it would have received if it had been a participant in 
the pool. If the reference is to an operating segment, these references 
are to the Revenue Requirement associated with that segment.
    (5) True-up Adjustment. The True-up Adjustment is equal to the True-
up Revenues for any particular service for the period in question.
    (6) True-up Revenues. True-up Revenues from an access service are 
equal to (projected demand minus actual realized demand for that 
service) times the default transition rate for that service specified by 
Sec. 51.909. True-up Revenues from a non-access service are equal to 
(projected demand minus actual realized net demand for that service) 
times the default transition rate for that service specified by Sec. 
20.11(b) of this chapter or Sec. 51.705. Realized demand is the demand 
for which payment has been received, or has been made, as appropriate, 
by the time the true-up is made.
    (7) 2011 Rate-of-Return Carrier Base Period Revenue. 2011 Rate-of-
Return Carrier Base Period Revenue is the sum of:
    (i) 2011 Interstate Switched Access Revenue Requirement;
    (ii) Fiscal Year 2011 revenues from Transitional Intrastate Access 
Service received by March 31, 2012; and
    (iii) Fiscal Year 2011 reciprocal compensation revenues received by 
March 31, 2012, less Fiscal Year 2011 reciprocal compensation payments 
paid and/or payable by March 31, 2012
    (c) 2011 Rate-of-Return Carrier Base Period Revenue shall be 
adjusted to reflect the removal of any increases in revenue requirement 
or revenues resulting from access stimulation activity the Rate-of-
Return Carrier engaged in during the relevant measuring period. A Rate-
of-Return Carrier should make this adjustment for its initial July 1, 
2012, tariff filing, but the adjustment may result from a subsequent 
Commission or court ruling.
    (d) Eligible Recovery for Rate-of-Return Carriers.(1) 
Notwithstanding any other provision of the Commission's rules, a Rate-
of-Return Carrier may recover the amounts specified in this paragraph 
through the mechanisms described in paragraphs (e) and (f) of this 
section.
    (i) Beginning July 1, 2012, a Rate-of-Return Carrier's eligible 
recovery will be equal to the 2011 Rate-of-Return Carrier Base Period 
Revenue multiplied by the Rate-of-Return Carrier Baseline Adjustment 
Factor less:
    (A) The Expected Revenues from Transitional Intrastate Access 
Service for the year beginning July 1, 2012, reflecting forecasted 
demand multiplied by the rates in the rate transition contained in Sec. 
51.909;
    (B) The Expected Revenues from interstate switched access for the 
year beginning July 1, 2012, reflecting forecasted demand multiplied by 
the rates in the rate transition contained in Sec. 51.909; and
    (C) Expected Net Reciprocal Compensation Revenues for the year 
beginning July 1, 2012 using the target methodology required by Sec. 
51.705.
    (ii) Beginning July 1, 2013, a Rate-of-Return Carrier's eligible 
recovery will be equal to the 2011 Rate-of-Return

[[Page 85]]

Carrier Base Period Revenue multiplied by the Rate-of-Return Carrier 
Baseline Adjustment Factor less:
    (A) The Expected Revenues from Transitional Intrastate Access 
Service for the year beginning July 1, 2013, reflecting forecasted 
demand multiplied by the rates in the rate transition contained in Sec. 
51.909;
    (B) The Expected Revenues from interstate switched access for the 
year beginning July 1, 2013, reflecting forecasted demand multiplied by 
the rates in the rate transition contained in Sec. 51.909; and
    (C) Expected Net Reciprocal Compensation Revenues for the year 
beginning July 1, 2013 using the target methodology required by Sec. 
51.705.
    (iii) Beginning July 1, 2014, a Rate-of-Return Carrier's eligible 
recovery will be equal to the 2011 Rate-of-Return Carrier Base Period 
Revenue multiplied by the Rate-of-Return Carrier Baseline Adjustment 
Factor less:
    (A) The Expected Revenues from Transitional Intrastate Access 
Service for the year beginning July 1, 2014, reflecting forecasted 
demand multiplied by the rates in the rate transition contained in Sec. 
51.909 (including the reduction in intrastate End Office Switched Access 
Service rates), adjusted to reflect the True-Up Adjustment for 
Transitional Intrastate Access Service for the year beginning July 1, 
2012;
    (B) The Expected Revenues from interstate switched access for the 
year beginning July 1, 2014, reflecting forecasted demand multiplied by 
the rates in the rate transition contained in Sec. 51.909, adjusted to 
reflect the True-Up Adjustment for Interstate Switched Access for the 
year beginning July 1, 2012; and
    (C) Expected Net Reciprocal Compensation Revenues for the year 
beginning July 1, 2014 using the target methodology required by Sec. 
51.705, adjusted to reflect the True-Up Adjustment for Reciprocal 
Compensation for the year beginning July 1, 2012.
    (D) An amount equal to True-up Revenues for Access Recovery Charges 
for the year beginning July 1, 2012.
    (iv) Beginning July 1, 2015, and for all subsequent years, a Rate-
of-Return Carrier's eligible recovery will be calculated by updating the 
procedures set forth in paragraph (d)(1)(iii) of this section for the 
period beginning July 1, 2014, to reflect the passage of an additional 
year in each subsequent year.
    (v) If a Rate-of-Return Carrier receives payments for intrastate or 
interstate switched access services or for Access Recovery Charges after 
the period used to measure the adjustments to reflect the differences 
between estimated and actual revenues, it shall treat such payments as 
actual revenue in the year the payment is received and shall reflect 
this as an additional adjustment for that year.
    (vi) If a Rate-of-Return Carrier receives or makes reciprocal 
compensation payments after the period used to measure the adjustments 
to reflect the differences between estimated and actual net reciprocal 
compensation revenues, it shall treat such amounts as actual revenues or 
payments in the year the payment is received or made and shall reflect 
this as an additional adjustment for that year.
    (vii) If a Rate-of-Return Carrier recovers any costs or revenues 
that are already being recovered as Eligible Recovery through Access 
Recovery Charges or the Connect America Fund from another source, that 
carrier's ability to recover reduced switched access revenue from Access 
Recovery Charges or the Connect America Fund shall be reduced to the 
extent it receives duplicative recovery. A Rate-of-Return Carrier 
seeking revenue recovery must annually certify as part of its tariff 
filings to the Commission and to the relevant state commission that the 
carrier is not seeking duplicative recovery in the state jurisdiction 
for any Eligible Recovery subject to the recovery mechanism.
    (e) Access Recovery Charge. (1) A charge that is expressed in 
dollars and cents per line per month may be assessed upon end users that 
may be assessed a subscriber line charge pursuant to Sec. 69.104 of 
this chapter, to the extent necessary to allow the Rate-of-Return 
Carrier to recover some or all of its Eligible Recovery determined 
pursuant to paragraph (d) of this section, subject to the caps described 
in paragraph (e)(6) of this section. A Rate-of-Return Carrier may elect 
to forgo

[[Page 86]]

charging some or all of the Access Recovery Charge.
    (2) Total Access Recovery Charges calculated by multiplying the 
tariffed Access Recovery Charge by the projected demand for the year may 
not recover more than the amount of eligible recovery calculated 
pursuant to paragraph (d) of this section for the year beginning on July 
1.
    (3) For the purposes of this section, a Rate-of-Return Carrier 
holding company includes all of its wholly-owned operating companies. A 
Rate-of-Return Carrier Holding Company may recover the eligible recovery 
attributable to any Rate-of-Return study areas operated by its wholly-
owned operating companies that are Rate-of-Return incumbent local 
exchange carriers through assessments of the Access Recovery Charge on 
end users in any Rate-of-Return study areas operated by its wholly-owned 
operating companies that are Rate-of-Return incumbent local exchange 
carriers.
    (4) Distribution of Access Recovery Charges among lines of different 
types
    (i) A Rate-of-Return Carrier that does not receive ICC-replacement 
CAF support (whether because they elect not to or because they do not 
have sufficient eligible recovery after the Access Recovery Charge is 
assessed or imputed) may not recover a higher ratio of its total revenue 
recovery from Access Recovery Charges assessed on Residential and Single 
Line Business lines than the following ratio (using holding company 
lines):
    (A) The number of Residential and Single-Line Business lines 
assessed an End User Common Line charge (excluding Lifeline Customers), 
divided by
    (B) The sum of the number of Residential and Single-Line Business 
lines assessed an End User Common Line charge (excluding Lifeline 
Customers), and two (2) times the number of End User Common Line charges 
assessed on Multi-Line Business customers.
    (5) For purposes of this subpart, Residential and Single Line 
Business lines are lines (other than lines of Lifeline Customers) 
assessed the residential and single line business end user common line 
charge.
    (i) For purposes of this subpart, Multi-Line Business Lines are 
lines assessed the multi-line business end user common line charge.
    (ii) [Reserved]
    (6) Per-line caps and other limitations on Access Recovery 
Charges.(i) For each line other than lines of Lifeline Customers 
assessed a primary residential or single-line business end user common 
line charge pursuant to Sec. 69.104 of this chapter, a Rate-of-Return 
Carrier may assess an Access Recovery Charge as follows:
    (A) Beginning July 1, 2012, a maximum of $0.50 per month for each 
line;
    (B) Beginning July 1, 2013, a maximum of $1.00 per month for each 
line;
    (C) Beginning July 1, 2014, a maximum of $1.50 per month for each 
line;
    (D) Beginning July 1, 2015, a maximum of $2.00 per month for each 
line;
    (E) Beginning July 1, 2016, a maximum of $2.50 per month for each 
line; and
    (F) Beginning July 1, 2017, a maximum of $3.00 per month for each 
line.
    (ii) For each line assessed a multi-line business end user common 
line charge pursuant to Sec. 69.104 of this chapter, a Rate-of-Return 
Carrier may assess an Access Recovery Charge as follows:
    (A) Beginning July 1, 2012, a maximum of $1.00 per month for each 
multi-line business end user common line charge assessed;
    (B) Beginning July 1, 2013, a maximum of $2.00 per month for each 
multi-line business end user common line charge assessed;
    (C) Beginning July 1, 2014, a maximum of $3.00 per month for each 
multi-line business end user common line charge assessed;
    (D) Beginning July 1, 2015, a maximum of $4.00 per month for each 
multi-line business end user common line charge assessed;
    (E) Beginning July 1, 2016, a maximum of $5.00 per month for each 
multi-line business end user common line charge assessed; and
    (F) Beginning July 1, 2017, a maximum of $6.00 per month for each 
multi-line business end user common line charge assessed.
    (iii) The Access Recovery Charge allowed by paragraph (e)(6)(i) of 
this section may not be assessed to the extent that its assessment would 
bring the

[[Page 87]]

total of the Rate Ceiling Component Charges above the Residential Rate 
Ceiling. This limitation does not apply to single-line business 
customers.
    (iv) The Access Recovery Charge allowed by paragraph (e)(6)(ii) of 
this section may not be assessed to the extent that its assessment would 
bring the total of the multi-line business end user common line charge 
and the Access Recovery Charge above $12.20 per line.
    (v) The Access Recovery Charge may not be assessed on lines of 
Lifeline Customers.
    (vi) If in any year, the Rate of return carriers' Access Recovery 
Charge is not at its maximum, the succeeding year's Access Recovery 
Charge may not increase more than $0.50 per line for charges under 
paragraph (e)(6)(i) of this section or $1.00 per line for charges 
assessed under paragraph (e)(6)(ii) of this section.
    (vii) A Price Cap Carrier with study areas that are subject to rate-
of-return regulation shall recover its eligible recovery for such study 
areas through the recovery procedures specified in this section. For 
that purpose, the provisions of paragraph (e)(3) of this section shall 
apply to the rate-of-return study areas if the applicable conditions in 
paragraph (e)(3) of this section are met.
    (f) Rate-of-Return Carrier eligibility for CAF ICC Recovery. (1) A 
Rate-of-Return Carrier shall elect in its July 1, 2012 access tariff 
filing whether it will receive CAF ICC Support under this paragraph. A 
Rate-of-Return Carrier eligible to receive CAF ICC Support subsequently 
may elect at any time not to receive such funding. Once it makes the 
election not to receive CAF ICC Support, it may not elect to receive 
such funding at a later date.
    (2) Beginning July 1, 2012, a Rate-of-Return Carrier may recover any 
eligible recovery allowed by paragraph (d) of this section that it could 
not have recovered through charges assessed pursuant to paragraph (e) of 
this section from CAF ICC Support pursuant to Sec. 54.304. For this 
purpose, the Rate-of-Return Carrier must impute the maximum charges it 
could have assessed under paragraph (e) of this section.
    (3) A Rate-of-Return Carrier that elects to receive CAF ICC support 
must certify with its annual access tariff filing that it has complied 
with paragraphs (d) and (e), and, after doing so, is eligible to receive 
the CAF ICC support requested pursuant to paragraph (f) of this section.

[76 FR 73856, Nov. 29, 2011, as amended at 77 FR 14302, Mar. 9, 2012; 78 
FR 26268, May 6, 2013]



Sec. 51.919  Reporting and monitoring.

    (a) A Price Cap Carrier that elects to participate in the recovery 
mechanism outlined in Sec. 51.915 shall, beginning in 2012, file with 
the Commission the data consistent with Section XIII (f)(3) of FCC 11-
161 with its annual access tariff filing.
    (b) A Rate-of-Return Carrier that elects to participate in the 
recovery mechanism outlined in Sec. 51.917 shall file with the 
Commission the data consistent with Section XIII (f)(3) of FCC 11-161 
with its annual interstate access tariff filing, or on the date such a 
filing would have been required if it had been required to file in that 
year.

    Effective Date Note: At 76 FR 73856, Nov. 29, 2011, Sec. 51.919 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.



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.
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.

[[Page 88]]

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 Porting Intervals.
52.36 Standard data fields for simple port order processing.
52.37-52.99 [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).
    (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

[[Page 89]]

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.
    (j) Inventory. The term ``inventory'' refers to all telephone 
numbers distributed, assigned or allocated:
    (1) To a service provider; or

[[Page 90]]

    (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 the direct or 
indirect common control with another person. A person shall be

[[Page 91]]

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 
performance problems are identified by

[[Page 92]]

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;
    (4) Providing management supervision for all of the services it 
provides, including responsibility for achieving

[[Page 93]]

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 to perform the NANPA and 
central office (CO) Code Administration functions;
    (4) Manage projects such as Numbering Plan Area (NPA) relief (area

[[Page 94]]

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;
    (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

[[Page 95]]

    (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.
    (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.

[[Page 96]]

    (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) 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

[[Page 97]]

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 opened thousands-block 
before assigning telephone numbers from an uncontaminated thousands-
block, unless the available numbers in the

[[Page 98]]

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 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

[[Page 99]]

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, 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

[[Page 100]]

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]



                      Subpart C_Number Portability

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



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-

[[Page 101]]

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.
    (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

[[Page 102]]

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.
    (w) The term 2009 LNP Porting Intervals Order refers to In the 
Matters of Local Number Portability Porting Interval and Validation 
Requirements; Telephone Number Portability, WC Docket No. 07-244, CC 
Docket No. 95-116, Report and Order and Further Notice of Proposed 
Rulemaking, FCC 09-41 (2009).

[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; 74 FR 31638, July 2, 2009]



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;
    (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;

[[Page 103]]

    (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 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

[[Page 104]]

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 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]

[[Page 105]]



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 and the following portions of 
Appendix E: Section 7, Issue Statement I of Appendix A, and Appendix B 
in the Working Group Report are 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, Best Copy and Printing, Inc. 
(BCPI), Portals II, 445 12th Street, SW, Room CY-B402, Washington, DC 
20554, (202) 488-5300, or via e-mail at [email protected], and can be 
inspected during normal business hours at the following locations: 
Reference Information Center, 445 12th Street, SW., Room CY--A257, 
Washington, DC 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/cfr/ibr-locations.html. The Working 
Group Report and its appendices are also available on the Internet at 
http://www.fcc.gov/wcb/cpd/Nanc/lnpastuf.html.

[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; 74 FR 31638, July 
2, 2009; 75 FR 35315, June 22, 2010]

[[Page 106]]



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 107]]

    (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 108]]

    (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 109]]

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]



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. 52.35  Porting Intervals.

    (a) All telecommunications carriers required by the Commission to 
port telephone numbers must complete a simple wireline-to-wireline or 
simple intermodal port request within one business day unless a longer 
period is requested by the new provider or by the customer. The 
traditional work week of Monday through Friday represents mandatory 
business days and 8 a.m. to 5 p.m. represents minimum business hours, 
excluding the current service provider's company-defined holidays. An 
accurate and complete Local Service Request (LSR) must be received by 
the current service provider between 8 a.m. and 1 p.m. local time for a 
simple port request to be eligible for activation at midnight on the 
same day. Any simple port LSRs received after this time will be 
considered received on the following business day at 8 a.m. local time.
    (b) Small providers, as described in the 2009 LNP Porting Interval 
Order, must comply with this section by February 2, 2011.
    (c) Unless directed otherwise by the Commission, any 
telecommunications carrier granted a waiver by the Commission of the 
one-business day porting interval described in paragraph (a) must 
complete a simple wireline-to-wireline or simple intermodal port request 
within four business days unless a longer period is requested by the new 
provider or by the customer.

[[Page 110]]

    (d) All telecommunications carriers required by the Commission to 
port telephone numbers must complete a non-simple wireline-to-wireline 
or non-simple intermodal port request within four business days unless a 
longer period is requested by the new provider or by the customer.
    (e) For purposes of this section:
    (1) The term ``telecommunications carrier'' includes an 
interconnected Voice over Internet Protocol (VoIP) provider as that term 
in defined in Sec. 52.21(h);
    (2) The term ``local time'' means the predominant time zone of the 
Number Portability Administration Center (NPAC) Region in which the 
telephone number is being ported; and
    (3) The term ``intermodal ports'' includes
    (i) Wireline-to-wireless ports;
    (ii) Wireless-to-wireline ports; and
    (iii) Ports involving interconnected VoIP service.

[75 FR 35315, June 22, 2010]



Sec. 52.36  Standard data fields for simple port order processing.

    (a) A telecommunications carrier may require only the data described 
in paragraphs (b) and (c) of this section to accomplish a simple port 
order request from an end user customer's new telecommunication's 
carrier.
    (b) Required standard data fields.
    (1) Ported telephone number;
    (2) Account number;
    (3) Zip code;
    (4) Company code;
    (5) New network service provider;
    (6) Desired due date;
    (7) Purchase order number;
    (8) Version;
    (9) Number portability direction indicator;
    (10) Customer carrier name abbreviation;
    (11) Requisition type and status;
    (12) Activity;
    (13) Telephone number of initiator; and
    (14) Agency authority status.
    (c) Optional standard data field. The Passcode field shall be 
optional unless the passcode has been requested and assigned by the end 
user.
    (d) For purposes of this section, the term ``telecommunications 
carrier'' includes an interconnected VoIP provider as that term is 
defined in Sec. 52.21(h).

[75 FR 35315, June 22, 2010]



Sec. Sec. 52.37-52.99  [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.
    (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

[[Page 111]]

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 
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

[[Page 112]]

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:

    [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

[[Page 113]]

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
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

[[Page 114]]

 
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 [Reserved]

                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 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,

[[Page 115]]

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 [Reserved]



                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

[[Page 116]]

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]



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.
    (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:

[[Page 117]]

    (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 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.

[[Page 118]]

    (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]



           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.

         Subpart D_Universal Service Support for High Cost Areas

54.301 Local switching support.
54.302 Monthly per-line limit on universal service support.
54.304 Administration of Connect America Fund Intercarrier Compensation 
          Replacement.
54.305 Sale or transfer of exchanges.
54.307 Support to a competitive eligible telecommunications carrier.

[[Page 119]]

54.309 Calculation and distribution of forward-looking support for non-
          rural carriers.
54.312 Connect America Fund for Price Cap Territories--Phase I.
54.313 Annual reporting requirements for high-cost recipients.
54.314 Certification of support for eligible telecommunications 
          carriers.
54.318 High-cost support; limitations on high-cost support.
54.320 Compliance and recordkeeping for the high-cost program.

      Subpart E_Universal Service Support for Low Income Consumers

54.400 Terms and definitions.
54.401 Lifeline defined.
54.403 Lifeline support amount.
54.404 The National Lifeline Accountability Database.
54.405 Carrier obligation to offer Lifeline.
54.407 Reimbursement for offering Lifeline.
54.409 Consumer qualification for Lifeline.
54.410 Subscriber eligibility determination and certification.
54.412 Off reservation Tribal lands designation process.
54.413 Link Up for Tribal lands.
54.414 Reimbursement for Tribal Link Up.
54.416 Annual certifications by eligible telecommunications carriers.
54.417 Recordkeeping requirements.
54.418 Digital television transition notices by eligible 
          telecommunications carriers.
54.419 Validity of electronic signatures.
54.420 Low income program audits.
54.422 Annual reporting for eligible telecommunications carriers that 
          receive low-income support.

      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 Eligible services.
54.503 Competitive bidding requirements.
54.504 Requests for services.
54.505 Discounts.
54.506 [Reserved]
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 [Reserved]
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 [Reserved]
54.523 Payment for the non-discount portion of supported services.

      Subpart G_Universal Service Support for Health Care Providers

                      Defined Terms and Eligibility

54.600 Terms and definitions.
54.601 Health care provider eligibility.
54.602 Health care support mechanism.

                       Telecommunications Program

54.603 Competitive bidding and certification requirements.
54.604 Consortia, telecommunications services, and existing contracts.
54.605 Determining the urban rate.
54.607 Determining the rural rate.
54.609 Calculating support.
54.613 Limitations on supported services for rural health care 
          providers.
54.615 Obtaining services.
54.619 Audits and recordkeeping.
54.623 Annual filing and funding commitment requirement.
54.625 Support for telecommunications services beyond the maximum 
          supported distance for rural health care providers.

                         Healthcare Connect Fund

54.630 Eligible recipients.
54.631 Designation of Consortium Leader.
54.632 Letters of agency (LOA).
54.633 Health care provider contribution.
54.634 Eligible services.
54.635 Eligible equipment.
54.636 Eligible participant-constructed and owned network facilities for 
          consortium applicants.
54.637 Off-site data centers and off-site administrative offices.
54.638 Upfront payments.
54.639 Ineligible expenses.
54.640 Eligible vendors.
54.642 Competitive bidding requirement and exemptions.
54.643 Funding commitments.
54.644 Multi-year commitments.
54.645 Payment process.
54.646 Site and service substitutions.
54.647 Data collection and reporting.
54.648 Audits and recordkeeping.
54.649 Certifications.

                           General Provisions

54.671 Resale.
54.672 Duplicate support.
54.675 Cap.
54.679 Election to offset support against annual universal service fund 
          contribution.
54.680 Validity of electronic signatures.

[[Page 120]]

                        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.

                         Subpart L_Mobility Fund

54.1001 Mobility Fund--Phase I.
54.1002 Geographic areas eligible for support.
54.1003 Provider eligibility.
54.1004 Service to Tribal Lands.
54.1005 Application process.
54.1006 Public interest obligations.
54.1007 Letter of credit.
54.1008 Mobility Fund Phase I disbursements.
54.1009 Annual reports.
54.1010 Record retention for Mobility Fund Phase I.

    Authority: Sections 1, 4(i), 5, 201, 205, 214, 219, 220, 254, 
303(r), and 403 of the Communications Act of 1934, as amended, and 
section 706 of the Communications Act of 1996, as amended; 47 U.S.C. 
151, 154(i), 155, 201, 205, 214, 219, 220, 254, 303(r), 403, and 1302 
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

[[Page 121]]

permanent Administrator of the federal universal service support 
mechanisms.
    Community anchor institutions. For the purpose of high-cost support, 
``community anchor institutions'' refers to schools, libraries, health 
care providers, community colleges, other institutions of higher 
education, and other community support organizations and entities.
    Competitive eligible telecommunications carrier. A ``competitive 
eligible telecommunications carrier'' is a carrier 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 under subpart C of this 
part.
    High-cost support. ``High-cost support'' refers to those support 
mechanisms in existence as of October 1, 2011, specifically, high-cost 
loop support, safety net additive and safety valve provided pursuant to 
subpart F of part 36, local switching support pursuant to Sec. 54.301, 
forward-looking support pursuant to Sec. 54.309, interstate access 
support pursuant to Sec. Sec. 54.800 through 54.809, and interstate 
common line support pursuant to Sec. Sec. 54.901 through 54.904, 
support provided pursuant to Sec. Sec. 51.915, 51.917, and 54.304, 
support provided to competitive eligible telecommunications carriers as 
set forth in Sec. 54.307(e), Connect America Fund support provided 
pursuant to Sec. 54.312, and Mobility Fund support provided pursuant to 
subpart L of this part.
    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.

[[Page 122]]

    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(ee) 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.
    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.
    Tribal lands. For the purposes of high-cost support, ``Tribal 
lands'' include 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, see Sec. 
54.400(e), as well as Hawaiian Home Lands--areas held in trust for 
native Hawaiians by the state of Hawaii, pursuant to the Hawaiian

[[Page 123]]

Homes Commission Act, 1920, July 9, 1921, 42 Stat 108, et seq., as 
amended.
    Unsubsidized competitor. An ``unsubsidized competitor'' is a 
facilities-based provider of residential fixed voice and broadband 
service that does not receive high-cost support.
    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; 76 FR 73869, Nov. 29, 2011; 77 FR 12966, Mar. 2, 2012; 77 
FR 20553, Apr. 5, 2012; 77 FR 30913, May 24, 2012; 78 FR 13982, Mar. 1, 
2013]



Sec. 54.7  Intended use of federal universal service support.

    (a) 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.
    (b) The use of federal universal service support that is authorized 
by paragraph (a) of this section shall include investments in plant that 
can, either as built or with the addition of plant elements, when 
available, provide access to advanced telecommunications and information 
services.

[76 FR 73869, Nov. 29, 2011]



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.

[[Page 124]]

    (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:
    (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

[[Page 125]]

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. Voice Telephony services shall 
be supported by federal universal service support mechanisms. Eligible 
voice telephony services must provide voice grade access to the public 
switched network or its functional equivalent; minutes of use for local 
service provided at no additional charge to end users; access to the 
emergency services provided by local government or other public safety 
organizations, such as 911 and enhanced 911, to the extent the local 
government in an eligible carrier's service area has implemented 911 or 
enhanced 911 systems; and toll limitation services to qualifying low-
income consumers as provided in subpart E of this part.
    (b) An eligible telecommunications carrier must offer voice 
telephony service as set forth in paragraph (a) of this section in order 
to receive federal universal service support.

[76 FR 73870, Nov. 29, 2011, as amended at 77 FR 12966, Mar. 2, 2012]



        Subpart C_Carriers Eligible for Universal Service Support



Sec. 54.201  Definition of eligible telecommunications carriers, generally.

    (a) Carriers eligible to receive support. (1) Only eligible 
telecommunications carriers designated under this subpart shall receive 
universal service support distributed pursuant to part 36 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

[[Page 126]]

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 not designate a common carrier as an 
eligible telecommunications carrier for purposes of receiving support 
only under subpart E of this part unless the carrier seeking such 
designation has demonstrated that it is financially and technically 
capable of providing the supported Lifeline service in compliance with 
subpart E of this part.
    (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; 77 FR 12966, Mar. 2, 
2012]



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) Certify that it will comply with the service requirements 
applicable to the support that it receives.
    (ii) Submit a five-year plan that describes with specificity 
proposed improvements or upgrades to the applicant's network throughout 
its proposed service area. Each applicant shall estimate the area and 
population that will be served as a result of the improvements. Except, 
a common carrier seeking designation as an eligible telecommunications 
carrier in order to provide supported services only under subpart E of 
this part does not need to submit such a five-year plan.
    (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) For common carriers seeking designation as an eligible 
telecommunications carrier for purposes of receiving support only under 
subpart E of this part, demonstrate that it is financially and 
technically capable of providing the Lifeline service in compliance with 
subpart E of this part.
    (5) For common carriers seeking designation as an eligible 
telecommunications carrier for purposes of receiving support only under 
subpart E of this part, submit information describing the terms and 
conditions of any voice telephony service plans offered to Lifeline 
subscribers, including details on the number of minutes provided as part 
of the plan, additional charges, if any, for toll calls, and rates for 
each such plan. To the extent the eligible telecommunications carrier 
offers plans to Lifeline subscribers that are generally available to the 
public, it

[[Page 127]]

may provide summary information regarding such plans, such as a link to 
a public Web site outlining the terms and conditions of such plans.
    (b) 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.
    (c) 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 any 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 the most 
expeditious means available.

[77 FR 12966, Mar. 2, 2012]



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.



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

[[Page 128]]

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]



         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 and ending December 31, 2011, 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. Beginning January 
1, 2012 and ending June 30, 2012, a rate-of-return carrier, as that term 
is defined in Sec. 54.5 of this chapter, that is 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 
and is not affiliated with a price cap carrier, as that term is defined 
in Sec. 61.3(aa) of this chapter, shall receive support for local 
switching costs frozen at the same support level

[[Page 129]]

received for calendar year 2011, subject to true-up. For purposes of 
this section, local switching costs shall be defined as Category 3 local 
switching costs under part 36 of this chapter. Beginning January 1, 
2012, no carrier that is a price cap carrier, as that term is defined in 
Sec. 61.3(aa) of this chapter, or a rate-of-return carrier, as that 
term is defined in Sec. 54.5 of this chapter, that is affiliated with a 
price cap carrier, shall receive local switching support. Beginning July 
1, 2012, no carrier shall receive local switching support.
    (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 lowered 
weighted interstate DEM factor shall be applied to the study area's 1996 
unweighted interstate DEM factor to derive a new local switching support 
factor. If the number of a study area's access lines decreases or has 
decreased such that, under Sec. 36.125(f) of this chapter, the weighted 
interstate DEM factor for 2010 or any successive year would be raised, 
that higher weighted interstate DEM factor shall be applied to the study 
area'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. Until October 1, 2011, 
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.

[[Page 130]]

 
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
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:


[[Page 131]]


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:

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. Until 
December 31, 2012, 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.

[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; 75 FR 17874, Apr. 8, 
2010; 76 FR 73870, Nov. 29, 2011; 77 FR 14302, Mar. 9, 2012]

[[Page 132]]



Sec. 54.302  Monthly per-line limit on universal service support.

    (a) Beginning July 1, 2012 and until June 30, 2013, each study 
area's universal service monthly support (not including Connect America 
Fund support provided pursuant to Sec. 54.304) on a per-line basis 
shall not exceed $250 per-line plus two-thirds of the difference between 
its uncapped per-line monthly support and $250. Beginning July 1, 2013 
and until June 30, 2014, each study area's universal service monthly 
support on a per-line basis shall not exceed $250 per-line plus one 
third of the difference between its uncapped per-line monthly support 
and $250. Beginning July 1, 2014, each study area's universal service 
monthly per-line support shall not exceed $250.
    (b) For purposes of this section, universal service support is 
defined as the sum of the amounts calculated pursuant to Sec. Sec. 
36.605 and 36.631, of this chapter and Sec. Sec. 54.301, 54.305, and 
54.901 through .904. Line counts for purposes of this section shall be 
as of the most recent line counts reported pursuant to Sec. 36.611(h) 
of this chapter.
    (c) The Administrator, in order to limit support to $250 for 
affected carriers, shall reduce safety net additive support, high-cost 
loop support, safety valve support, and interstate common line support 
in proportion to the relative amounts of each support the study area 
would receive absent such limitation.

[76 FR 73870, Nov. 29, 2011]



Sec. 54.304  Administration of Connect America Fund Intercarrier Compensation 

Replacement.

    (a) The Administrator shall administer CAF ICC support pursuant to 
Sec. 51.915 and Sec. 51.917 of this chapter.
    (b) The funding period is the period beginning July 1 through June 
30 of the following year.
    (c) For price cap carriers that are eligible and elect, pursuant to 
Sec. 51.915(f) of this chapter, to receive CAF ICC support, the 
following provisions govern the filing of data with the Administrator, 
the Commission, and the relevant state commissions and the payment by 
the Administrator to those carriers of CAF ICC support amounts that the 
carrier is eligible to receive pursuant to Sec. 51.915 of this chapter.
    (1) A Price Cap Carrier seeking CAF ICC support pursuant to Sec. 
51.915 of this chapter shall file data with the Administrator, the 
Commission, and the relevant state commissions no later than June 30, 
2012, for the first year, and on the date it files its annual access 
tariff filing with the Commission, in subsequent years, establishing the 
amount of the Price Cap Carrier's eligible CAF ICC funding during the 
upcoming funding period pursuant to Sec. 51.915 of this chapter. The 
amount shall include any true-ups, pursuant to Sec. 51.915 of this 
chapter, associated with an earlier funding period.
    (2) The Administrator shall monthly pay each price cap carrier one-
twelfth (1/12) of the amount the carrier is eligible to receive during 
that funding period.
    (d) For rate-of-return carriers that are eligible and elect, 
pursuant to Sec. 51.917(f) of this chapter, to receive CAF ICC support, 
the following provisions govern the filing of data with the 
Administrator, the Commission, and the relevant state commissions and 
the payment by the Administrator to those carriers of CAF ICC support 
amounts that the rate-of-return carrier is eligible to receive pursuant 
to Sec. 51.917 of this chapter.
    (1) A Rate-of-Return Carrier seeking CAF ICC support shall file data 
with the Administrator, the Commission, and the relevant state 
commissions no later than June 30, 2012, for the first year, and on the 
date it files its annual access tariff filing with the Commission, in 
subsequent years, establishing the Rate-of-Return Carrier's projected 
eligibility for CAF ICC funding during the upcoming funding period 
pursuant to Sec. 51.917 of this chapter. The projected amount shall 
include any true-ups, pursuant to Sec. 51.917 of this chapter, 
associated with an earlier funding period.
    (2) The Administrator shall monthly pay each rate-of-return carrier 
one-twelfth (1/12) of the amount the carrier is to be eligible to 
receive during that funding period.

[76 FR 73871, Nov. 29, 2011, as amended at 78 FR 26268, May 6, 2013]

[[Page 133]]



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. After December 
31, 2011, the provisions of this section shall not be used to determine 
support for any price cap incumbent local exchange carrier or a rate-of-
return carrier, as that term is defined in Sec. 54.5 that is affiliated 
with a price cap incumbent local exchange carrier.
    (b) Beginning January 1, 2012, any carrier subject to the provisions 
of this paragraph shall receive support pursuant to this paragraph or 
support based on the actual costs of the acquired exchanges, whichever 
is less. 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 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.

[[Page 134]]

    (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 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, as amended at 76 FR 73871, Nov. 29, 2011]



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

[[Page 135]]

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 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

[[Page 136]]

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 in paragraph (b) of this section pursuant to the schedule in 
paragraph (c) of this section.
    (e) Support Beginning January 1, 2012. Competitive eligible 
telecommunications carriers will, beginning January 1, 2012, receive 
support based on the methodology described in this paragraph and not 
based on paragraph (a) of this section.
    (1) Baseline Support Amount. Each competitive eligible 
telecommunication carrier will have a ``baseline support amount'' equal 
to its total 2011 support in a given study area, or an amount equal to 
$3,000 times the number of reported lines for 2011, whichever is lower. 
Each competitive eligible telecommunications carrier will have a 
``monthly baseline support amount'' equal to its baseline support amount 
divided by twelve.
    (i) ``Total 2011 support'' is the amount of support disbursed to a 
competitive eligible telecommunication carrier for 2011, without regard 
to prior period adjustments related to years other than 2011 and as 
determined by the Administrator on January 31, 2012.
    (ii) For the purpose of calculating the $3,000 per line limit, the 
average of lines reported by a competitive eligible telecommunication 
carrier pursuant to line count filings required for December 31, 2010, 
and December 31, 2011 shall be used. The $3,000 per line limit shall be 
applied to support amounts determined for each incumbent study area 
served by the competitive eligible telecommunications carrier.
    (2) Monthly Support Amounts. Competitive eligible telecommunications 
carriers shall receive the following support amounts, except as provided 
in paragraphs (e)(3) through (e)(6) of this section.
    (i) From January 1, 2012, to June 30, 2012, each competitive 
eligible telecommunications carrier shall receive its monthly baseline 
support amount each month.
    (ii) From July 1, 2012 to June 30, 2013, each competitive eligible 
telecommunications carrier shall receive 80 percent of its monthly 
baseline support amount each month.
    (iii) From July 1, 2013, to June 30, 2014, each competitive eligible 
telecommunications carrier shall receive 60 percent of its monthly 
baseline support amount each month.
    (iv) From July 1, 2014, to June 30, 2015, each competitive eligible 
telecommunications carrier shall receive 40 percent of its monthly 
baseline support amount each month.
    (v) From July 1, 2015, to June 30, 2016, each competitive eligible 
telecommunications carrier shall receive 20 percent of its monthly 
baseline support amount each month.
    (vi) Beginning July 1, 2016, no competitive eligible 
telecommunications carrier shall receive universal service support 
pursuant to this section.
    (3) Delayed Phase Down for Remote Areas in Alaska. Certain 
competitive eligible telecommunications carriers serving remote areas in 
Alaska shall have their support phased down on a later schedule than 
that described in paragraph (e)(2) of this section.
    (i) Remote Areas in Alaska. For the purpose of this paragraph, 
``remote areas in Alaska'' includes all of Alaska except;

[[Page 137]]

    (A) The ACS-Anchorage incumbent study area;
    (B) The ACS-Juneau incumbent study area;
    (C) The fairbankszone1 disaggregation zone in the ACS-Fairbanks 
incumbent study area; and
    (D) The Chugiak 1 and 2 and Eagle River 1 and 2 disaggregation zones 
of the Matunuska Telephone Association incumbent study area.
    (ii) Carriers Subject to Delayed Phase Down. A competitive eligible 
telecommunications carrier shall be subject to the delayed phase down 
described in paragraph (e)(3) of this section to the extent that it 
serves remote areas in Alaska, and it certified that it served covered 
locations in its September 30, 2011, filing of line counts with the 
Administrator. To the extent a competitive eligible telecommunications 
carrier serving Alaska is not subject to the delayed phase down, it will 
be subject to the phase down of support on the schedule described in 
paragraph (e)(2) of this section.
    (iii) Baseline for Delayed Phase Down. For purpose of the delayed 
phase down for remote areas in Alaska, the baseline amount for each 
competitive eligible telecommunications carrier subject to the delayed 
phase down shall be the annualized monthly support amount received for 
June 2014 or the last full month prior to the implementation of Mobility 
Fund Phase II, whichever is later.
    (iv) Monthly Support Amounts. Competitive eligible 
telecommunications carriers subject to the delayed phase down for remote 
areas in Alaska shall receive the following support amounts, except as 
provided in paragraphs (e)(4) through (e)(6) of this section.
    (A) From July 1, 2014 to June 30, 2015, each competitive eligible 
telecommunications carrier shall receive 80 percent of its monthly 
baseline support amount each month.
    (B) From July 1, 2015, to June 30, 2016, each competitive eligible 
telecommunications carrier shall receive 60 percent of its monthly 
baseline support amount each month.
    (C) From July 1, 2016, to June 30, 2017, each competitive eligible 
telecommunications carrier shall receive 40 percent of its monthly 
baseline support amount each month.
    (D) From July 1, 2017, to June 30, 2018, each competitive eligible 
telecommunications carrier shall receive 20 percent of its monthly 
baseline support amount each month.
    (E) Beginning July 1, 2018, no competitive eligible 
telecommunications carrier serving remote areas in Alaska shall receive 
universal service support pursuant to this section.
    (v) Interim Support for Remote Areas in Alaska. From January 1, 
2012, until June 30, 2014 or the last full month prior to the 
implementation of Mobility Fund Phase II, whichever is later, 
competitive eligible telecommunications carriers subject to the delayed 
phase down for remote areas in Alaska shall continue to receive the 
support, as calculated by the Administrator, that each competitive 
telecommunications carrier would have received under the frozen per-line 
support amount as of December 31, 2011 capped at $3,000 per year, 
provided that the total amount of support for all such competitive 
eligible telecommunications carriers shall be capped pursuant to 
paragraph (e)(3)(v)(A) of this section.
    (A) Cap Amount. The total amount of support available on an annual 
basis for competitive eligible telecommunications carriers subject to 
the delayed phase down for remote areas in Alaska shall be equal to the 
sum of ``total 2011 support,'' as defined in paragraph (e)(1)(i) of this 
section, received by all competitive eligible telecommunications 
carriers subject to the delayed phase down for serving remote areas in 
Alaska.
    (B) Reduction Factor. To effectuate the cap, the Administrator shall 
apply a reduction factor as necessary to the support that would 
otherwise be received by all competitive eligible telecommunications 
carriers serving remote areas in Alaska subject to the delayed phase 
down. The reduction factor will be calculated by dividing the total 
amount of support available amount by the total support amount 
calculated for those carriers in the absence of the cap.

[[Page 138]]

    (4) Further reductions. If a competitive eligible telecommunications 
carrier ceases to provide services to high-cost areas it had previously 
served, the Commission may reduce its baseline support amount.
    (5) Implementation of Mobility Fund Phase II Required. In the event 
that the implementation of Mobility Fund Phase II has not occurred by 
June 30, 2014, competitive eligible telecommunications carriers will 
continue to receive support at the level described in paragraph 
(e)(2)(iii) of this section until Mobility Fund Phase II is implemented. 
In the event that Mobility Fund Phase II for Tribal lands is not 
implemented by June 30, 2014, competitive eligible telecommunications 
carriers serving Tribal lands shall continue to receive support at the 
level described in paragraph (e)(2)(iii) of this section until Mobility 
Fund Phase II for Tribal lands is implemented, except that competitive 
eligible telecommunications carriers serving remote areas in Alaska and 
subject to paragraph (e)(3) of this section shall continue to receive 
support at the level described in paragraph (e)(3)(v) of this section.
    (6) Eligibility after Implementation of Mobility Fund Phase II. If a 
competitive eligible telecommunications carrier becomes eligible to 
receive high-cost support pursuant to the Mobility Fund Phase II, it 
will cease to be eligible for phase-down support in the first month for 
which it receives Mobility Fund Phase II support.
    (7) Line Count Filings. Competitive eligible telecommunications 
carriers, except those subject to the delayed phase down described in 
paragraph (e)(3) of this section, shall no longer be required to file 
line counts beginning January 1, 2012. Competitive eligible 
telecommunications carriers subject to the delayed phase down described 
in paragraph (e)(3) of this section shall no longer be required to file 
line counts beginning July 1, 2014, or the date after the first line 
count filing following the implementation of Mobility Fund Phase II, 
whichever is later.

[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; 76 FR 73871, Nov. 29, 
2011; 77 FR 14302, Mar. 9, 2012; 77 FR 30913, May 24, 2012; 77 FR 52618, 
Aug. 30, 2012]



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.

[[Page 139]]

    (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. Sec. 36.611,36.612, and 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 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. Sec. 36.611, 36.612, and 
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. Sec. 36.611,36.612, and 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.

[[Page 140]]

    (d) Support after December 31, 2011. Beginning January 1, 2012, no 
carrier shall receive support under this rule.

[64 FR 67431, Dec. 1, 1999, as amended at 65 FR 26516, May 8, 2000; 68 
FR 69626, Dec. 15, 2003; 76 FR 73872, Nov. 29, 2011]



Sec. 54.312  Connect America Fund for Price Cap Territories--Phase I.

    (a) Frozen High-Cost Support. Beginning January 1, 2012, each price 
cap local exchange carrier and rate-of-return carrier affiliated with a 
price cap local exchange carrier will have a ``baseline support amount'' 
equal to its total 2011 support in a given study area, or an amount 
equal to $3,000 times the number of reported lines for 2011, whichever 
is lower. For purposes of this section, price cap carriers are defined 
pursuant to Sec. 61.3(aa) of this chapter and affiliated companies are 
determined by Sec. 32.9000 of this chapter. Each price cap local 
exchange carrier and rate-of-return carrier affiliated with a price cap 
local exchange carrier will have a ``monthly baseline support amount'' 
equal to its baseline support amount divided by twelve. Beginning 
January 1, 2012, on a monthly basis, eligible carriers will receive 
their monthly baseline support amount.
    (1) ``Total 2011 support'' is the amount of support disbursed to a 
price cap local exchange carrier or rate-of-return carrier affiliated 
with a price cap local exchange carrier for 2011, without regard to 
prior period adjustments related to years other than 2011 and as 
determined by USAC on January 31, 2012.
    (2) For the purpose of calculating the $3,000 per line limit, the 
average of lines reported by a price cap local exchange carrier or rate-
of-return carrier affiliated with a price cap local exchange carrier 
pursuant to line count filings required for December 31, 2010, and 
December 31, 2011 shall be used.
    (3) A carrier receiving frozen high cost support under this rule 
shall be deemed to be receiving Interstate Access Support and Interstate 
Common Line Support equal to the amount of support the carrier to which 
the carrier was eligible under those mechanisms in 2011.
    (b) Incremental Support in 2012. From January 1, 2012, to December 
31, 2012, support in addition to baseline support defined in paragraph 
(a) of this section will be available for certain price cap local 
exchange carriers and rate-of-return carriers affiliated with price cap 
local exchange carriers as follows.
    (1) For each carrier for which the Wireline Competition Bureau 
determines that it has appropriate data or for which it determines that 
it can make reasonable estimates, the Bureau will determine an average 
per-location cost for each wire center using a simplified cost-
estimation function derived from the Commission's cost model. 
Incremental support will be based on the wire centers for which the 
estimated per-location cost exceeds the funding threshold. The funding 
threshold will be determined by calculating which funding threshold 
would allocate all available incremental support, if each carrier that 
would be offered incremental support were to accept it.
    (2) An eligible telecommunications carrier accepting incremental 
support must deploy broadband to a number of unserved locations, as 
shown as unserved by fixed broadband on the then-current version of the 
National Broadband Map, equal to the amount of incremental support it 
accepts divided by $775.
    (3) A carrier may elect to accept or decline incremental support. A 
holding company may do so on a holding-company basis on behalf of its 
operating companies that are eligible telecommunications carriers, whose 
eligibility for incremental support, for these purposes, shall be 
considered on an aggregated basis. A carrier must provide notice to the 
Commission, relevant state commissions, and any affected Tribal 
government, stating the amount of incremental support it wishes to 
accept and identifying the areas by wire center and census block in 
which the designated eligible telecommunications carrier will deploy 
broadband to meet its deployment obligation, or stating that it declines 
incremental support. Such notification must be made within 90 days of 
being notified of any incremental support for which it would be 
eligible. Along with its notification, a carrier accepting incremental 
support must also submit a certification that the locations to be

[[Page 141]]

served to satisfy the deployment obligation are not shown as served by 
fixed broadband provided by any entity other than the certifying entity 
or its affiliate on the then-current version of the National Broadband 
Map; that, to the best of the carrier's knowledge, the locations are, in 
fact, unserved by fixed broadband; that the carrier's current capital 
improvement plan did not already include plans to complete broadband 
deployment within the next three years to the locations to be counted to 
satisfy the deployment obligation; and that incremental support will not 
be used to satisfy any merger commitment or similar regulatory 
obligation. If a carrier intends to deploy to census blocks not 
initially identified at the time of election, it must inform the 
Commission, the Administrator, relevant state commissions, and any 
affected Tribal government of the change at least 90 days prior to 
commencing deployment in the new census blocks. No sooner than 46 days 
after the Wireline Competition Bureau issues a public notice announcing 
the updated deployment plans but prior to commencing deployment, the 
carrier must make the certifications described in this paragraph with 
respect to the new census blocks. If a carrier no longer intends to 
deploy to a previously identified census block, it must inform the 
Commission, the Administrator, relevant state commission, and any 
affected Tribal government prior to filing its certification pursuant to 
Sec. 54.313(b)(2).
    (c) Incremental Support in 2013. From January 1, 2013, to December 
31, 2013, support in addition to baseline support defined in paragraph 
(a) of this section will be available for certain price cap local 
exchange carriers and rate-of-return carriers affiliated with price cap 
local exchange carriers as follows:

    (1) For each carrier for which the Wireline Competition Bureau 
determines that it has appropriate data or for which it determines that 
it can make reasonable estimates, the Bureau will determine an average 
per-location cost for each wire center using a simplified cost-
estimation function derived from the Commission's high-cost proxy model. 
Incremental support will be based on the wire centers for which the 
estimated per-location cost exceeds the funding threshold. The funding 
threshold will be determined by calculating which funding threshold 
would allocate all available incremental support, if each carrier that 
would be offered incremental support were to accept it.
    (2) An eligible telecommunications carrier accepting incremental 
support must deploy broadband to a number of unserved locations, shown 
as unserved by fixed Internet access with speeds of at least 768 kbps 
downstream and 200 kbps upstream on the then-current version of the 
National Broadband Map, equal to the amount of incremental support it 
accepts divided by $775.
    (3) An eligible telecommunications carrier must accept funding 
pursuant to paragraph (c)(2) of this section before it may accept 
funding pursuant to paragraph (c)(3) of this section. If an eligible 
telecommunications carrier has committed to deploy to all locations 
eligible for support under paragraph (c)(2) of this section on routes or 
projects that can economically be built with $775 in Connect America 
funding for each location unserved by 768 kbps downstream and 200 kbps 
upstream plus an equal amount of non-Connect America carrier capital 
expenditure funding, but the carrier has not fully utilized its allotted 
funding, it may also count towards its deployment obligation locations 
shown as unserved by fixed Internet access with speeds of at least 3 
Mbps downstream and 768 kbps upstream equal to the amount of remaining 
incremental support divided by $550.
    (4) A carrier may elect to accept or decline incremental support. A 
holding company may do so on a holding-company basis on behalf of its 
operating companies that are eligible telecommunications carriers, whose 
eligibility for incremental support, for these purposes, shall be 
considered on an aggregated basis. A carrier must provide notice to the 
Commission, the Administrator, relevant state commissions, and any 
affected Tribal government, stating the amount of incremental support it 
wishes to accept, the number of locations at the $775 amount, the number 
of locations at the $550 amount, and identifying the areas by wire 
center and census block in which the designated eligible 
telecommunications carrier will deploy broadband to meet its deployment 
obligation, or stating that it declines incremental support. Such 
notification must be made within 75 days of being notified of any 
incremental support for which it would be eligible. If a carrier intends 
to deploy to census blocks not initially identified at the time of 
election, it must inform the Commission, the Administrator, relevant 
state commissions, and any affected Tribal government of the change at 
least 90 days prior to commencing deployment in the new census blocks. 
No sooner than 46 days after the Wireline Competition Bureau issues a 
public notice announcing the updated deployment plans but prior to 
commencing deployment, the carrier

[[Page 142]]

must make the certifications described in paragraph (c)(5) of this 
section with respect to the new census blocks. If a carrier no longer 
intends to deploy to a previously identified census block, it must 
inform the Commission, the Administrator, relevant state commission, and 
any affected Tribal government prior to filing its certification 
pursuant to Sec. 54.313(b)(2).
    (5) Along with its notification, an eligible telecommunications 
carrier accepting incremental support must submit the following 
certifications:
    (i) The locations to be served to satisfy the deployment obligation 
are not shown as served by fixed broadband at the speeds specified in 
paragraph (c)(2) or (c)(3) of this section provided by any entity other 
than the certifying entity or its affiliate on the then-current version 
of the National Broadband Map or that it is challenging the National 
Broadband Map's designation of that census block under the challenge 
process in paragraph (c)(7) of this section;
    (ii) To the best of the carrier's knowledge, the locations are, in 
fact, unserved by fixed Internet access with speeds of at least 3 Mbps 
downstream and 768 kbps upstream, or 768 kbps downstream and 200 kbps 
upstream, as appropriate;
    (iii) The carrier's current capital improvement plan did not already 
include plans to complete broadband deployment within the next three 
years to the locations to be counted to satisfy the deployment 
obligation;
    (iv) Incremental support will not be used to satisfy any merger 
commitment or similar regulatory obligation; and
    (v) The carrier has undertaken due diligence to determine the 
locations in question are not within the service area of either 
Broadband Initiatives Program or the Broadband Technology Opportunities 
Program projects that will provide Internet access with speeds of at 
least 3 Mbps downstream and 768 upstream.
    (6) An eligible telecommunications carrier deploying to locations 
unserved by 3 Mbps downstream and 768 kbps upstream under paragraph 
(c)(3) of this section must also certify that it has prioritized its 
planned projects or routes so as to maximize the deployment of 
broadband-capable infrastructure to locations lacking Internet access 
with speeds of 768 kbps downstream and 200 kbps upstream.
    (7) A person may challenge the designation of a census block as 
served or unserved by a certain speed as shown on the National Broadband 
Map. When the Wireline Competition Bureau determines that the evidence 
presented makes it more likely than not that the census block should be 
designated as served by broadband with speeds of at least 3 Mbps 
downstream and 768 kbps upstream, that locations in that census block 
will be treated as served by broadband and therefore ineligible to be 
counted for the purposes of paragraph (c)(3) of this section. When the 
Wireline Competition Bureau determines that the evidence presented makes 
it more likely than not that the census block should be designated as 
served by Internet service with speeds of 768 kbps downstream and 200 
kbps upstream, but unserved by broadband with speeds of at least 3 Mbps 
downstream and 768 kbps upstream, locations in that census block will be 
treated as served by Internet access with speeds of 768 kbps downstream 
and 200 kbps upstream and therefore eligible to be counted for the 
purposes of paragraph (c)(3) of this section. When the Wireline 
Competition Bureau determines that the evidence presented makes it more 
likely than not that the census block should be designated as unserved 
by Internet service with speeds of 768 kbps downstream and 200 kbps 
upstream, locations in that census block will be treated as unserved by 
Internet access with speeds of 768 kbps downstream and 200 kbps upstream 
and therefore eligible to be counted for the purposes of paragraph 
(c)(2) of this section.
    (8) If no entity other than the carrier or its affiliate provides 
Internet service with speeds of 3 Mbps downstream and 768 kbps upstream 
or greater as shown on the National Broadband Map or as determined by 
the process described in paragraph (c)(7), the carrier may satisfy its 
deployment obligations at a location shown by the National Broadband Map 
as being served by that carrier or its affiliate with such service by 
certifying that it is the only entity providing such service, that the 
location does not actually receive speeds of 3 Mbps downstream and 768 
kbps upstream, and the location is served through a copper-fed digital 
subscriber line access multiplexer. The carrier must specifically 
identify such locations in its election. Such locations will be treated 
the same as locations under paragraph (c)(3) of this section.
    (9) An eligible telecommunications carrier must complete deployment 
of broadband-capable infrastructure to two-thirds of the required number 
of locations within two years of providing notification of acceptance of 
funding, and must complete deployment to all required locations within 
three years. To satisfy its deployment obligation, the eligible 
telecommunications carrier must offer broadband service to such 
locations of at least 4 Mbps downstream and 1 Mbps upstream, with 
latency sufficiently low to enable the use of real-time communications, 
including Voice over Internet Protocol, and with usage allowances, if 
any, associated with a specified price for a service offering

[[Page 143]]

that are reasonably comparable to comparable offerings in urban areas.

[76 FR 73872, Nov. 29, 2011, as amended at 77 FR 31536, May 29, 2012; 78 
FR 38233, June 26, 2013; 78 FR 48624, Aug. 9, 2013]

    Effective Date Note: At 78 FR 48624, Aug. 9, 2013, Sec. 54.312 was 
amended by revising paragraphs (b)(3) and (c)(4). These paragraph 
contain information collection and recordkeeping requirements and will 
not become effective until approval has been given by the Office of 
Management and Budget.



Sec. 54.313  Annual reporting requirements for high-cost recipients.

    (a) Any recipient of high-cost support shall provide the following, 
with the information and data required by paragraphs (a)(1) through (7) 
of this section separately broken out for both voice service and 
broadband service:
    (1) A progress report on its five-year service quality improvement 
plan pursuant to Sec. 54.202(a), 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 service 
quality, coverage, or capacity, and an explanation regarding any network 
improvement targets that have not been fulfilled in the prior calendar 
year. The information shall be submitted at the wire center level or 
census block as appropriate;
    (2) Detailed information on any outage in the prior calendar year, 
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 recipient's service areas that were unfulfilled during the 
prior calendar year. The carrier shall also detail how it attempted to 
provide service to those potential customers;
    (4) The number of complaints per 1,000 connections (fixed or mobile) 
in the prior calendar year;
    (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. 54.202(a)(2);
    (7) The company's price offerings in a format as specified by the 
Wireline Competition Bureau;
    (8) The recipient's holding company, operating companies, 
affiliates, and any branding (a ``dba,'' or ``doing-business-as 
company'' or brand designation), as well as universal service 
identifiers for each such entity by Study Area Codes, as that term is 
used by the Administrator. For purposes of this paragraph, 
``affiliates'' has the meaning set forth in section 3(2) of the 
Communications Act of 1934, as amended;
    (9) Beginning July 1, 2013. To the extent the recipient serves 
Tribal lands, documents or information demonstrating that the ETC had 
discussions with Tribal governments that, at a minimum, included:
    (i) A needs assessment and deployment planning with a focus on 
Tribal community anchor institutions;
    (ii) Feasibility and sustainability planning;
    (iii) Marketing services in a culturally sensitive manner;
    (iv) Rights of way processes, land use permitting, facilities 
siting, environmental and cultural preservation review processes; and
    (v) Compliance with Tribal business and licensing requirements. 
Tribal business and licensing requirements include business practice 
licenses that Tribal and non-Tribal business entities, whether located 
on or off Tribal lands, must obtain upon application to the relevant 
Tribal government office or

[[Page 144]]

division to conduct any business or trade, or deliver any goods or 
services to the Tribes, Tribal members, or Tribal lands. These include 
certificates of public convenience and necessity, Tribal business 
licenses, master licenses, and other related forms of Tribal government 
licensure.
    (10) Beginning July 1, 2013. A letter certifying that the pricing of 
the company's voice services is no more than two standard deviations 
above the applicable national average urban rate for voice service, as 
specified in the most recent public notice issued by the Wireline 
Competition Bureau and Wireless Telecommunications Bureau; and
    (11) Beginning July 1, 2013. The results of network performance 
tests pursuant to the methodology and in the format determined by the 
Wireline Competition Bureau, Wireless Telecommunications Bureau, and 
Office of Engineering and Technology.
    (b) In addition to the information and certifications in paragraph 
(a) of this section:

    (1) Any recipient of incremental Connect America Phase I support 
pursuant to Sec. 54.312(b) and (c) shall provide:
    (i) In its next annual report due after two years after filing a 
notice of acceptance of funding pursuant to Sec. 54.312(b) and (c), a 
certification that the company has deployed to no fewer than two-thirds 
of the required number of locations; and
    (ii) In its next annual report due after three years after filing a 
notice of acceptance of funding pursuant to Sec. 54.312(b) and (c), a 
certification that the company has deployed to all required locations 
and that it is offering broadband service of at least 4 Mbps downstream 
and 1 Mbps upstream, with latency sufficiently low to enable the use of 
real-time communications, including Voice over Internet Protocol, and 
with usage allowances, if any, associated with a specified price for a 
service offering that are reasonably comparable to comparable offerings 
in urban areas.
    (2) In addition to the information and certifications required in 
paragraph (b)(1) of this section, any recipient of incremental Connect 
America Phase I support pursuant to Sec. 54.312(c) shall provide:
    (i) In its annual reports due after one, two, and three years after 
filing a notice of acceptance of funding pursuant to Sec. 54.312(c), a 
certification that, to the best of the recipient's knowledge, the 
locations in question are not receiving support under the Broadband 
Initiatives Program or the Broadband Technology Opportunities Program 
for projects that will provide broadband with speeds of at least 4 Mbps/
1 Mbps; and
    (ii) In its annual reports due after one, two, and three years after 
filing a notice of acceptance of funding pursuant to Sec. 54.312(c), a 
statement of the total amount of capital funding expended in the 
previous year in meeting Connect America Phase I deployment obligations, 
accompanied by a list of census blocks indicating where funding was 
spent.
    (c) In addition to the information and certifications in paragraph 
(a) of this section, price cap carriers that receive frozen high-cost 
support pursuant to Sec. 54.312(a) shall provide:
    (1) By July 1, 2013. A certification that frozen high-cost support 
the company received in 2012 was used consistent with the goal of 
achieving universal availability of voice and broadband;
    (2) By July 1, 2014. A certification that at least one-third of the 
frozen-high cost support the company received in 2013 was used to build 
and operate broadband-capable networks used to offer the provider's own 
retail broadband service in areas substantially unserved by an 
unsubsidized competitor;
    (3) By July 1, 2015. A certification that at least two-thirds of the 
frozen-high cost support the company received in 2014 was used to build 
and operate broadband-capable networks used to offer the provider's own 
retail broadband service in areas substantially unserved by an 
unsubsidized competitor; and
    (4) By July 1, 2016 and in subsequent years. A certification that 
all frozen-high cost support the company received in the previous year 
was used to build and operate broadband-capable networks used to offer 
the provider's own retail broadband service in areas substantially 
unserved by an unsubsidized competitor.
    (d) In addition to the information and certifications in paragraph 
(a) of this section, beginning July 1, 2013, price cap carriers 
receiving high-cost support to offset reductions in access charges shall 
provide a certification that the support received pursuant to Sec. 
54.304 in the prior calendar year was used to build and operate 
broadband-

[[Page 145]]

capable networks used to offer provider's own retail service in areas 
substantially unserved by an unsubsidized competitor.
    (e) In addition to the information and certifications in paragraph 
(a) of this section, any recipient of CAF Phase II support shall 
provide:
    (1) In the calendar year no later than three years after 
implementation of CAF Phase II. A certification that the company is 
providing broadband service to 85% of its supported locations at actual 
speeds of at least 4 Mbps downstream/1 Mbps upstream, with latency 
suitable for real-time applications, including Voice over Internet 
Protocol, and usage capacity that is reasonably comparable to comparable 
offerings in urban areas as determined in an annual survey.
    (2) In the calendar year no later than five years after 
implementation of CAF Phase II. A certification that the company is 
providing broadband service to 100% of its supported locations at actual 
speeds of at least 4 Mbps downstream/1 Mbps upstream, and a percentage 
of supported locations, to be specified by the Wireline Competition 
Bureau, at actual speeds of at least 6 Mbps downstream/1.5 Mbps 
upstream, with latency suitable for real-time applications, including 
Voice over Internet Protocol, and usage capacity that is reasonably 
comparable to comparable offerings in urban areas as determined in an 
annual survey.
    (3) Beginning July 1, 2014. A progress report on the company's five-
year service quality plan pursuant to Sec. 54.202(a), including the 
following information:
    (i) A letter certifying that it is meeting the interim deployment 
milestones as set forth, and that it is taking reasonable steps to meet 
increased speed obligations that will exist for all supported locations 
at the expiration of the five-year term for CAF Phase II funding; and
    (ii) The number, names, and addresses of community anchor 
institutions to which the ETC newly began providing access to broadband 
service in the preceding calendar year.
    (f) In addition to the information and certifications in paragraph 
(a) of this section, any rate-of-return carrier shall provide:
    (1) Beginning July 1, 2014. A progress report on its five-year 
service quality plan pursuant to Sec. 54.202(a) that includes the 
following information:
    (i) A letter certifying that it is taking reasonable steps to 
provide upon reasonable request broadband service at actual speeds of at 
least 4 Mbps downstream/1 Mbps upstream, with latency suitable for real-
time applications, including Voice over Internet Protocol, and usage 
capacity that is reasonably comparable to comparable offerings in urban 
areas as determined in an annual survey, and that requests for such 
service are met within a reasonable amount of time; and
    (ii) The number, names, and addresses of community anchor 
institutions to which the ETC newly began providing access to broadband 
service in the preceding calendar year.
    (2) Privately held rate-of-return carriers only. A full and complete 
annual report of the company's financial condition and operations as of 
the end of the preceding fiscal year.
    (i) Recipients of loans from the Rural Utility Service (RUS) shall 
provide copies of their RUS Operating Report for Telecommunications 
Borrowers as filed with the RUS. Such carriers must make their 
underlying audit and related workpapers and financial information 
available upon request by the Commission, USAC, or the relevant state 
commission, relevant authority in a U.S. Territory, or Tribal 
government, as appropriate.
    (ii) All privately held rate-of-return carriers that are not 
recipients of loans from the RUS and whose financial statements are 
audited in the ordinary course of business must provide either: A copy 
of their audited financial statement; or a financial report in a format 
comparable to RUS Operating Report for Telecommunications Borrowers, 
accompanied by a copy of a management letter issued by the independent 
certified public accountant that performed the company's financial 
audit. A carrier choosing the latter option must make its audit and 
related workpapers and financial information available upon request by 
the Commission, USAC, or the relevant state commission, relevant 
authority in a U.S.

[[Page 146]]

Territory, or Tribal government, as appropriate.
    (iii) All other privately held rate-of-return carriers must provide 
either: A copy of their financial statement which has been subject to 
review by an independent certified public accountant; or a financial 
report in a format comparable to RUS Operating Report for 
Telecommunications Borrowers, with the underlying information subjected 
to a review by an independent certified public accountant and 
accompanied by an officer certification that: The carrier was not 
audited in the ordinary course of business for the preceding fiscal 
year; and that the reported data are accurate. If the carrier elects the 
second option, it must make the review and related workpapers and 
financial information available upon request by the Commission, USAC, or 
the relevant state commission, relevant authority in a U.S. Territory, 
or Tribal government, as appropriate.
    (g) Areas with No Terrestrial Backhaul. Carriers without access to 
terrestrial backhaul that are compelled to rely exclusively on satellite 
backhaul in their study area must certify annually that no terrestrial 
backhaul options exist. Any such funding recipients must certify they 
offer broadband service at actual speeds of at least 1 Mbps downstream 
and 256 kbps upstream within the supported area served by satellite 
middle-mile facilities. To the extent that new terrestrial backhaul 
facilities are constructed, or existing facilities improve sufficiently 
to meet the relevant speed, latency and capacity requirements then in 
effect for broadband service supported by the CAF, within twelve months 
of the new backhaul facilities becoming commercially available, funding 
recipients must provide the certifications required in paragraphs (e) or 
(f) of this section in full. Carriers subject to this paragraph must 
comply with all other requirements set forth in the remaining paragraphs 
of this section.
    (h) Additional voice rate data. (1) All incumbent local exchange 
carrier recipients of high-cost support must report all of their rates 
for residential local service for all portions of their service area, as 
well as state fees as defined pursuant to Sec. 54.318(e), to the extent 
the sum of those rates and fees are below the rate floor as defined in 
Sec. 54.318, and the number of lines for each rate specified. Carriers 
shall report lines and rates in effect as of June 1.
    (2) In addition to the annual filing, local exchange carriers may 
file updates of their rates for residential local service, as well as 
state fees as defined pursuant to Sec. 54.318(e), on January 2 of each 
year. If a local exchange carrier reduces its rates and the sum of the 
reduced rates and state fees are below the rate floor as defined in 
Sec. 54.318, the local exchange carrier shall file such an update. For 
the update, carriers shall report lines and rates in effect as of 
December 1.
    (i) All reports pursuant to this section shall be filed with the 
Office of the Secretary of the Commission clearly referencing WC Docket 
No. 10-90, and with the Administrator, and the relevant state 
commissions, relevant authority in a U.S. Territory, or Tribal 
governments, as appropriate.
    (j) Filing deadlines. In order for a recipient of high-cost support 
to continue to receive support for the following calendar year, or 
retain its eligible telecommunications carrier designation, it must 
submit the annual reporting information required by this section no 
later than July 1, 2012, except as otherwise specified in this section 
to begin in a subsequent year, and thereafter annually by July 1 of each 
year. Eligible telecommunications carriers that file their reports after 
the July 1 deadline shall receive support pursuant to the following 
schedule:
    (1) Eligible telecommunication carriers that file no later than 
October 1 shall receive support for the second, third and fourth 
quarters of the subsequent year.
    (2) Eligible telecommunication carriers that file no later than 
January 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 
April 1 of the subsequent year shall receive support for the fourth 
quarter of the subsequent year.

[[Page 147]]

    (k) This section does not apply to recipients that solely receive 
support from the Phase I Mobility Fund.

[76 FR 73873, Nov. 29, 2011, as amended at 77 FR 14302, Mar. 9, 2012; 77 
FR 30914, May 24, 2012; 78 FR 3843, Jan. 17, 2013; 78 FR 22201, Apr. 15, 
2013; 78 FR 29656, May 21, 2013; 78 FR 38233. June 26, 2013]

    Effective Date Notes: At 77 FR 14302, Mar. 9, 2012, Sec. 54.313 was 
amended by revising paragraphs (a)(9) introductory text and (f)(2). 
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. 54.314  Certification of support for eligible telecommunications 

carriers.

    (a) Certification. States that desire eligible telecommunications 
carriers to receive support pursuant to the high-cost program 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 was used in the preceding calendar year and will be 
used in the coming calendar year only for the provision, maintenance, 
and upgrading of facilities and services for which the support is 
intended. High-cost support 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. An eligible 
telecommunications carrier not subject to the jurisdiction of a State 
that desires to receive support pursuant to the high-cost program must 
file an annual certification with the Administrator and the Commission 
stating that all federal high-cost support provided to such carrier was 
used in the preceding calendar year and will be used in the coming 
calendar year only for the provision, maintenance, and upgrading of 
facilities and services for which the support is intended. Support 
provided pursuant to the high-cost program shall only be provided to the 
extent that the carrier has filed the requisite certification pursuant 
to this section.
    (c) Certification format. (1) 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 WC Docket 
No. 10-90, and with the Administrator of the high-cost 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 only used support 
during the preceding calendar year and will only use support in the 
coming calendar year 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.
    (2) An eligible telecommunications carrier not subject to the 
jurisdiction of a State shall file a sworn affidavit executed by a 
corporate officer attesting that the carrier only used support during 
the preceding calendar year and will only use support in the coming 
calendar year 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 WC Docket No. 10-90, 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 an eligible telecommunications 
carrier to receive federal high-cost support, the State or the carrier, 
if not subject to the jurisdiction of a State, must file an annual 
certification, as described in paragraph (c) of this section, with both 
the Administrator and the Commission. Upon the filing of the 
certification described in this section, support shall be provided in 
accordance with the following schedule:

[[Page 148]]

    (1) Certifications filed on or before October 1. Carriers subject to 
certifications filed on or before October 1 shall receive support in the 
first, second, third, and fourth quarters of the succeeding year.
    (2) Certifications filed on or before January 1. Carriers subject to 
certifications filed on or before January 1 shall receive support in the 
second, third, and fourth quarters of that year. Such carriers shall not 
receive support in the first quarter of that year.
    (3) Certifications filed on or before April 1. Carriers subject to 
certifications filed on or before April 1 shall receive support in the 
third and fourth quarters of that year. Such carriers shall not receive 
support in the first or second quarters of that year.
    (4) Certifications filed on or before July 1. Carriers subject to 
certifications filed on or before July 1 shall receive support beginning 
in the fourth quarter of that year. Such carriers shall not receive 
support in the first, second, or third quarters of that year.
    (5) Certifications filed after July 1. Carriers subject to 
certifications filed after July 1 shall not receive support 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 as of the effective date of 
its designation as an eligible telecommunications carrier under section 
214(e)(2) or (e)(6) of the Act, 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.

[76 FR 73875, Nov. 29, 2011]



Sec. 54.318  High-cost support; limitations on high-cost support.

    (a) Beginning July 1, 2012, each carrier receiving high-cost support 
in a study area under this subpart will receive the full amount of high-
cost support it otherwise would be entitled to receive if its rates for 
residential local service plus state regulated fees as defined in 
paragraph (e) of this section exceed a local urban rate floor 
representing the national average of local urban rates plus state 
regulated fees under the schedule specified in paragraph (f) of this 
section.
    (b) Carriers whose rates for residential local service plus state 
regulated fees offered for voice service are below the specified local 
urban rate floor under the schedule below plus state regulated fees 
shall have high-cost support reduced by an amount equal to the extent to 
which its rates for residential local service plus state regulated fees 
are below the local urban rate floor, multiplied by the number of lines 
for which it is receiving support.
    (c) This rule will apply only to rate-of-return carriers as defined 
in Sec. 54.5 and carriers subject to price cap regulation as that term 
is defined in Sec. 61.3 of this chapter.
    (d) For purposes of this section, high-cost support is defined as 
the support available pursuant to Sec. 36.631 of this chapter and 
frozen high-cost support provided to price cap carriers to the extent it 
is based on support previously provided pursuant to Sec. 36.631 or 
Sec. 54.309 of this chapter.
    (e) State regulated fees. (1) Beginning on July 1, 2012, for 
purposes of calculating limitations on high-cost support under this 
section, state regulated fees shall be limited to state subscriber line 
charges, state universal service fees and mandatory extended area 
service charges, which shall be determined as part of a local rate 
survey, the results of which shall be published annually.
    (2) Federal subscriber line charges shall not be included in 
calculating limitations on high-cost support under this section.
    (f) Schedule. High-cost support will be limited where the rate for 
residential local service plus state regulated fees are below the local 
urban rate floor representing the national average of local urban rates 
plus state regulated fees under the schedule specified in this 
paragraph. To the extent end user rates plus state regulated fees are 
below local urban rate floors plus state regulated fees, appropriate 
reductions

[[Page 149]]

in high-cost support will be made by the Universal Service 
Administrative Company.
    (g) Any reductions in high-cost support under this section will not 
be redistributed to other carriers that receive support pursuant to 
Sec. 36.631 of this chapter.
    (h) If, due to changes in local service rates, a local exchange 
carrier makes an updated rate filing pursuant to section 54.313(h)(2), 
the Universal Service Administrative Company will update the support 
reduction applied pursuant to paragraphs (b) and (f) of this section.
    (i) For the purposes of this section and the reporting of rates 
pursuant to paragraph 313(h), rates for residential local service 
provided pursuant to measured or message rate plans or as part of a 
bundle of services should be calculated as follows:
    (1) Rates for measured or message service shall be calculated by 
adding the basic rate for local service plus the additional charges 
incurred for measured service, using the mean number of minutes or 
message units for all customers subscribing to that rate plan multiplied 
by the applicable rate per minute or message unit. The local service 
rate includes additional charges for measured service only to the extent 
that the average number of units used by subscribers to that rate plan 
exceeds the number of units that are included in the plan. Where 
measured service plans have multiple rates for additional units, such as 
peak and off-peak rates, the calculation should reflect the average 
number of units that subscribers to the rate plan pay at each rate.
    (2) For bundled service, the residential local service rate is the 
local service rate as tariffed, if applicable, or as itemized on end-
user bills. If a carrier neither tariffs nor itemizes the local voice 
service rate on bills for bundled services, the local service rate is 
the rate of a similar stand-alone local voice service that it offers to 
consumers in that study area.

[76 FR 73876, Nov. 29, 2011, as amended at 77 FR 14302, Mar. 9, 2012; 77 
FR 30914, May 24, 2012]



Sec. 54.320  Compliance and recordkeeping for the high-cost program.

    (a) Eligible telecommunications carriers authorized to receive 
universal service high-cost support are subject to random compliance 
audits and other investigations to ensure compliance with program rules 
and orders.
    (b) 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. This 
documentation must be maintained for at least ten years from the receipt 
of funding. All such documents shall be made available upon request to 
the Commission and any of its Bureaus or Offices, the Administrator, and 
their respective auditors.
    (c) Eligible telecommunications carriers authorized to receive high-
cost support that fail to comply with public interest obligations or any 
other terms and conditions may be subject to further action, including 
the Commission's existing enforcement procedures and penalties, 
reductions in support amounts, potential revocation of ETC designation, 
and suspension or debarment pursuant to Sec. 54.8.

[76 FR 73876, Nov. 29, 2011]



      Subpart E_Universal Service Support for Low-Income Consumers



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 service. ``Toll blocking service'' is a service 
provided by an eligible telecommunications carrier that lets subscribers 
elect not to allow the completion of outgoing toll calls from their 
telecommunications channel.
    (c) Toll control service. ``Toll control service'' is a service 
provided by an eligible telecommunications carrier that allows 
subscribers to specify a certain

[[Page 150]]

amount of toll usage that may be incurred on their telecommunications 
channel per month or per billing cycle.
    (d) Toll limitation service. ``Toll limitation service'' denotes 
either toll blocking service or toll control service for eligible 
telecommunications carriers that are incapable of providing both 
services. For eligible telecommunications carriers that are capable of 
providing both services, ``toll limitation service'' denotes both toll 
blocking service and toll control service.
    (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 Tribal lands. For purposes of 
this subpart, ``Tribal lands'' include 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); Indian allotments; Hawaiian 
Home Lands--areas held in trust for Native Hawaiians by the state of 
Hawaii, pursuant to the Hawaiian Homes Commission Act, 1920 July 9, 
1921, 42 Stat. 108, et. seq., as amended; and any land designated as 
such by the Commission for purposes of this subpart pursuant to the 
designation process in Sec. 54.412.
    (f) Income. ``Income'' is all income actually received by all 
members of a 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.
    (g) Duplicative support. ``Duplicative support'' exists when a 
Lifeline subscriber is receiving two or more Lifeline services 
concurrently or two or more subscribers in a household are receiving 
Lifeline services or Tribal Link Up support concurrently.
    (h) Household. A ``household'' is any individual or group of 
individuals who are living together at the same address as one economic 
unit. A household may include related and unrelated persons. An 
``economic unit'' consists of all adult individuals contributing to and 
sharing in the income and expenses of a household. An adult is any 
person eighteen years or older. If an adult has no or minimal income, 
and lives with someone who provides financial support to him/her, both 
people shall be considered part of the same household. Children under 
the age of eighteen living with their parents or guardians are 
considered to be part of the same household as their parents or 
guardians.
    (i) National Lifeline Accountability Database or Database. The 
``National Lifeline Accountability Database'' or ``Database'' is an 
electronic system, with associated functions, processes, policies and 
procedures, to facilitate the detection and elimination of duplicative 
support, as directed by the Commission.
    (j) Qualifying assistance program. A ``qualifying assistance 
program'' means any of the federal, state, or Tribal assistance programs 
participation in which, pursuant to Sec. 54.409(a) or (b), qualifies a 
consumer for Lifeline service, including Medicaid; Supplemental 
Nutrition Assistance Program; Supplemental Security Income; Federal 
Public Housing Assistance (Section 8); Low-Income Home Energy Assistance 
Program; National School Lunch Program's free lunch program; Temporary 
Assistance for Needy Families; Bureau of Indian Affairs general 
assistance; Tribally administered Temporary Assistance for Needy 
Families (Tribal TANF); Head Start (only those households meeting its 
income qualifying standard); or the Food Distribution Program on Indian 
Reservations (FDPIR), and with respect to the residents of any 
particular state, any other program so designated by that state pursuant 
to Sec. 54.409(a).

[77 FR 12966, Mar. 2, 2012]



Sec. 54.401  Lifeline defined.

    (a) As used in this subpart, Lifeline means a non-transferable 
retail service offering:

[[Page 151]]

    (1) 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
    (2) That provides qualifying low-income consumers with voice 
telephony service as specified in Sec. 54.101(a). Toll limitation 
service does not need to be offered for any Lifeline service that does 
not distinguish between toll and non-toll calls in the pricing of the 
service. If an eligible telecommunications carrier charges Lifeline 
subscribers a fee for toll calls that is in addition to the per month or 
per billing cycle price of the subscribers' Lifeline service, the 
carrier must offer toll limitation service at no charge to its 
subscribers as part of its Lifeline service offering.
    (b) Eligible telecommunications carriers may allow qualifying low-
income consumers to apply Lifeline discounts to any residential service 
plan that includes voice telephony service, including bundled packages 
of voice and data services; and plans that include optional calling 
features such as, but not limited to, caller identification, call 
waiting, voicemail, and three-way calling. Eligible telecommunications 
carriers may also permit qualifying low-income consumers to apply their 
Lifeline discount to family shared calling plans.
    (c) Eligible telecommunications carriers may not collect a service 
deposit in order to initiate Lifeline service for plans that:
    (1) Do not charge subscribers additional fees for toll calls; or
    (2) That charge additional fees for toll calls, but the subscriber 
voluntarily elects toll limitation service.
    (d) When an eligible telecommunications carrier is designated by a 
state commission, 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 describing the terms and 
conditions of any voice telephony service plans offered to Lifeline 
subscribers, including details on the number of minutes provided as part 
of the plan, additional charges, if any, for toll calls, and rates for 
each such plan. To the extent the eligible telecommunications carrier 
offers plans to Lifeline subscribers that are generally available to the 
public, it may provide summary information regarding such plans, such as 
a link to a public Web site outlining the terms and conditions of such 
plans. 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) of this chapter, 
eligible telecommunications carriers may not charge Lifeline customers a 
monthly number-portability charge.

[77 FR 12967, Mar. 2, 2012]



Sec. 54.403  Lifeline support amount.

    (a) The federal Lifeline support amount for all eligible 
telecommunications carriers shall equal:
    (1) Basic support amount. Federal Lifeline support in the amount of 
$9.25 per month will be made available to an eligible telecommunications 
carrier providing Lifeline service to a qualifying low-income consumer, 
if that carrier certifies to the Administrator that it will pass through 
the full amount of support to the qualifying low-income consumer and 
that it has received any non-federal regulatory approvals necessary to 
implement the rate reduction.
    (2) Tribal lands support amount. 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 the eligible telecommunications carrier certifies to the 
Administrator that it will pass through the full Tribal lands support 
amount to the qualifying eligible resident of Tribal lands and that it 
has received any non-federal regulatory approvals necessary to implement 
the required rate reduction.
    (b) Application of Lifeline discount amount. (1) Eligible 
telecommunications carriers that charge federal End User Common Line 
charges or equivalent federal charges must apply federal Lifeline 
support to waive the federal End User Common Line charges for Lifeline 
subscribers. Such carriers

[[Page 152]]

must 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 must apply the 
federal Lifeline support amount, plus any additional support amount, to 
reduce the cost of any generally available residential service plan or 
package offered by such carriers that provides voice telephony service 
as described in Sec. 54.101, and charge Lifeline subscribers the 
resulting amount.
    (2) Where a subscriber makes only a partial payment to an eligible 
telecommunications carrier for a bundled service package, the eligible 
telecommunications carrier must apply the partial payment first to the 
allocated price of the voice telephony service component of the package 
and then to the cost of any additional services included in the bundled 
package.
    (c) Toll limitation service. An eligible telecommunications carrier 
providing toll limitation service voluntarily elected by Lifeline 
subscribers whose Lifeline plans would otherwise include a fee for 
placing a toll call that would be in addition to the per month or per 
billing cycle price of the subscriber's Lifeline service, shall, for 
April 2012 Lifeline disbursements through December 2013 Lifeline 
disbursements, receive support in an amount equal to the lesser of:
    (1) The eligible telecommunications carrier's incremental cost of 
providing either toll blocking services or toll control services to each 
Lifeline subscriber who has selected such service; or
    (2) The following amounts for each Lifeline subscriber who has 
selected toll blocking services or toll control services:
    (i) $3.00 per month per subscriber during 2012; and
    (ii) $2.00 per month per subscriber during 2013.

[77 FR 12967, Mar. 2, 2012]



Sec. 54.404  The National Lifeline Accountability Database.

    (a) State certification. An eligible telecommunications carrier 
operating in a state that provides an approved valid certification to 
the Commission in accordance with this section is not required to comply 
with the requirements set forth in paragraphs (b) and (c) of this 
section with respect to the eligible telecommunications carriers' 
subscribers in that state. A valid certification must include a 
statement that the state has a comprehensive system in place to prevent 
duplicative federal Lifeline support that is at least as robust as the 
system adopted by the Commission and that incorporates information from 
all eligible telecommunications carriers receiving low-income support in 
the state and their subscribers. A valid certification must also 
describe in detail how the state system functions and for each 
requirement adopted by the Commission to prevent duplicative support, 
how the state system performs the equivalent functions. The 
certification must be submitted to the Commission no later than six 
months from the effective date of this section of the Commission's rules 
to be valid. Such certification will be considered approved unless the 
Wireline Competition Bureau rejects the certification within 90 days of 
filing.
    (b) The National Lifeline Accountability Database. In order to 
receive Lifeline support, eligible telecommunications carriers operating 
in states that have not provided the Commission with approved valid 
certification pursuant to paragraph (a) of this section must comply with 
the following requirements:
    (1) All eligible telecommunications carriers must query the National 
Lifeline Accountability Database to determine whether a prospective 
subscriber who has executed a certification pursuant to Sec. 54.410(d) 
is currently receiving a Lifeline service from another eligible 
telecommunications carrier; and whether anyone else living at the 
prospective subscriber's residential address is currently receiving a 
Lifeline service.
    (2) If the Database indicates that a prospective subscriber, who is 
not seeking to port his or her telephone number, is currently receiving 
a Lifeline service, the eligible telecommunications carrier must not 
provide and

[[Page 153]]

shall not seek or receive Lifeline reimbursement for that subscriber.
    (3) If the Database indicates that another individual at the 
prospective subscriber's residential address is currently receiving a 
Lifeline service, the eligible telecommunications carrier must not seek 
and will not receive Lifeline reimbursement for providing service to 
that prospective subscriber, unless the prospective subscriber has 
certified, pursuant to Sec. 54.410(d) that to the best of his or her 
knowledge, no one in his or her household is already receiving a 
Lifeline service.
    (4) An eligible telecommunications carrier is not required to comply 
with paragraphs (b)(1) through (3) of this section if it receives notice 
from a state Lifeline administrator or other state agency that the 
administrator or other agency has queried the Database about a 
prospective subscriber and that providing the prospective subscriber 
with a Lifeline benefit would not result in duplicative support.
    (5) Eligible telecommunications carriers may query the Database only 
for the purposes provided in paragraphs (b)(1) through (b)(3) of this 
section, and to determine whether information with respect to its 
subscribers already in the Database is correct and complete.
    (6) Eligible telecommunications carriers must transmit to the 
Database in a format prescribed by the Administrator each new and 
existing Lifeline subscriber's full name; full residential address; date 
of birth and the last four digits of the subscriber's Social Security 
number or Tribal Identification number, if the subscriber is a member of 
a Tribal nation and does not have a Social Security number; the 
telephone number associated with the Lifeline service; the date on which 
the Lifeline service was initiated; the date on which the Lifeline 
service was terminated, if it has been terminated; the amount of support 
being sought for that subscriber; and the means through which the 
subscriber qualified for Lifeline.
    (7) In the event that two or more eligible telecommunications 
carriers transmit the information required by this paragraph to the 
Database for the same subscriber, only the eligible telecommunications 
carrier whose information was received and processed by the Database 
first, as determined by the Administrator, will be entitled to 
reimbursement from the Fund for that subscriber.
    (8) All eligible telecommunications carriers must update an existing 
Lifeline subscriber's information in the Database within ten business 
days of receiving any change to that information, except as described in 
paragraph (b)(10) of this section.
    (9) All eligible telecommunications carriers must obtain, from each 
new and existing subscriber, consent to transmit the subscriber's 
information. Prior to obtaining consent, the eligible telecommunications 
carrier must describe to the subscriber, using clear, easily understood 
language, the specific information being transmitted, that the 
information is being transmitted to the Administrator to ensure the 
proper administration of the Lifeline program, and that failure to 
provide consent will result in subscriber being denied the Lifeline 
service.
    (10) When an eligible telecommunications carrier de-enrolls a 
subscriber, it must transmit to the Database the date of Lifeline 
service de-enrollment within one business day of de-enrollment.
    (c) Tribal Link Up and the National Lifeline Accountability 
Database. In order to receive universal service support reimbursement 
for Tribal Link Up, eligible telecommunications carriers operating in 
states that have not provided the Commission with a valid certification 
pursuant to paragraph (a) of this section, must comply with the 
following requirements:
    (1) Such eligible telecommunications carriers must query the 
Database to determine whether a prospective Link Up recipient who has 
executed a certification pursuant to Sec. 54.410(d) has previously 
received a Link Up benefit at the residential address provided by the 
prospective subscriber.
    (2) If the Database indicates that a prospective subscriber has 
received a Link Up benefit at the residential address provided by the 
subscriber, the eligible telecommunications provider must not seek Link 
Up reimbursement for that subscriber.

[[Page 154]]

    (3) An eligible telecommunications carrier is not required to comply 
with paragraphs (c)(1) through (c)(2) of this section, if it receives 
notice from a state Lifeline administrator or other state agency that 
the administrator or other agency has queried the Database about a 
prospective subscriber and that providing the prospective subscriber 
with a Link Up benefit would not result in duplicative support or 
support to a subscriber who had already received Link Up support at that 
residential address.
    (4) All eligible telecommunications carriers must transmit to the 
Database in a format prescribed by the Administrator each new and 
existing Link Up recipient's full name; residential address; date of 
birth; and the last four digits of the subscriber's Social Security 
number, or Tribal identification number if the subscriber is a member of 
a Tribal nation and does not have a Social Security number; the 
telephone number associated with the Link Up support; and the date of 
service activation. Where two or more eligible telecommunications 
carriers transmit the information required by this paragraph to the 
Database for the same subscriber, only the eligible telecommunications 
carrier whose information was received and processed by the Database 
first, as determined by the Administrator, will be entitled to 
reimbursement from the Fund for that subscriber.
    (5) All eligible telecommunications carriers must obtain, from each 
new and existing subscriber, consent to transmit the information 
required in paragraph (c) of this section. Prior to obtaining consent, 
the eligible telecommunications carrier must describe to the subscriber, 
using clear, easily understood language, the specific information being 
transmitted, that the information is being transmitted to the 
Administrator to ensure the proper administration of the Link Up 
program, and that failure to provide consent will result in the 
subscriber being denied the Link Up benefit.

[77 FR 12968, Mar. 2, 2012]



Sec. 54.405  Carrier obligation to offer Lifeline.

    All eligible telecommunications carriers must:
    (a) Make available Lifeline service, as defined in Sec. 54.401, to 
qualifying low-income consumers.
    (b) Publicize the availability of Lifeline service in a manner 
reasonably designed to reach those likely to qualify for the service.
    (c) Indicate on all materials describing the service, using easily 
understood language, that it is a Lifeline service, that Lifeline is a 
government assistance program, the service is non-transferable, only 
eligible consumers may enroll in the program, and the program is limited 
to one discount per household. For the purposes of this section, the 
term ``materials describing the service'' includes all print, audio, 
video, and web materials used to describe or enroll in the Lifeline 
service offering, including application and certification forms.
    (d) Disclose the name of the eligible telecommunications carrier on 
all materials describing the service.
    (e) De-enrollment--(1) De-enrollment generally. If an eligible 
telecommunications carrier has a reasonable basis to believe that a 
Lifeline subscriber no longer meets the criteria to be considered a 
qualifying low-income consumer under Sec. 54.409, the carrier must 
notify the subscriber of impending termination of his or her Lifeline 
service. Notification of impending termination must be sent in writing 
separate from the subscriber's monthly bill, if one is provided, and 
must be written in clear, easily understood language. 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. The carrier must allow a subscriber 
30-days following the date of the impending termination letter required 
to demonstrate continued eligibility. A subscriber making such a 
demonstration must present proof of continued eligibility to the carrier 
consistent with applicable annual re-certification requirements, as 
described in

[[Page 155]]

Sec. 54.410(f). An eligible telecommunications carrier must terminate 
any subscriber who fails to demonstrate continued eligibility within the 
30-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.
    (2) De-enrollment for duplicative support. Notwithstanding paragraph 
(e)(1) of this section, upon notification by the Administrator to any 
eligible telecommunications carrier that a subscriber is receiving 
Lifeline service from another eligible telecommunications carrier or 
that more than one member of a subscriber's household is receiving 
Lifeline service and therefore that the subscriber should be de-enrolled 
from participation in that carrier's Lifeline program, the eligible 
telecommunications carrier must de-enroll the subscriber from 
participation in that carrier's Lifeline program within five business 
days. An eligible telecommunications carrier shall not be eligible for 
Lifeline reimbursement for any de-enrolled subscriber following the date 
of that subscriber's de-enrollment.
    (3) De-enrollment for non-usage. Notwithstanding paragraph (e)(1) of 
this section, if a Lifeline subscriber fails to use, as ``usage'' is 
defined in Sec. 54.407(c)(2), for 60 consecutive days a Lifeline 
service that does not require the eligible telecommunications carrier to 
assess or collect a monthly fee from its subscribers, an eligible 
telecommunications carrier must provide the subscriber 30 days' notice, 
using clear, easily understood language, that the subscriber's failure 
to use the Lifeline service within the 30-day notice period will result 
in service termination for non-usage under this paragraph. If the 
subscriber uses the Lifeline service within 30 days of the carrier 
providing such notice, the eligible telecommunications carrier shall not 
terminate the subscriber's Lifeline service. Eligible telecommunications 
carriers shall report to the Commission annually the number of 
subscribers de-enrolled for non-usage under this paragraph. This de-
enrollment information must be reported by month and must be submitted 
to the Commission at the time an eligible telecommunications carrier 
submits its annual certification report pursuant to Sec. 54.416.
    (4) De-enrollment for failure to re-certify. Notwithstanding 
paragraph (e)(1) of this section, an eligible telecommunications carrier 
must de-enroll a Lifeline subscriber who does not respond to the 
carrier's attempts to obtain re-certification of the subscriber's 
continued eligibility as required by Sec. 54.410(f); who fails to 
provide the annual one-per-household re-certifications as required by 
Sec. 54.410(f); or who relies on a temporary address and fails to 
respond to the carrier's address re-certification attempts pursuant to 
Sec. 54.410(g). Prior to de-enrolling a subscriber under this 
paragraph, the eligible telecommunications carrier must notify the 
subscriber in writing separate from the subscriber's monthly bill, if 
one is provided using clear, easily understood language, that failure to 
respond to the re-certification request within 30 days of the date of 
the request will trigger de-enrollment. If a subscriber does not respond 
to the carrier's notice of impending de-enrollment, the carrier must de-
enroll the subscriber from Lifeline within five business days after the 
expiration of the subscriber's time to respond to the re-certification 
efforts.

[77 FR 12969, Mar. 2, 2012]



Sec. 54.407  Reimbursement for offering Lifeline.

    (a) Universal service support for providing Lifeline shall be 
provided directly to an eligible telecommunications carrier, based on 
the number of actual qualifying low-income consumers it serves.
    (b) An eligible telecommunications carrier may receive universal 
service support reimbursement for each qualifying low-income consumer 
served. For each qualifying low-income consumer receiving Lifeline 
service, the reimbursement amount shall equal the federal support 
amount, including the support amounts described in Sec. 54.403(a) and 
(c). The eligible telecommunications carrier's universal service support 
reimbursement shall not exceed the carrier's rate for that offering, or 
similar offerings, subscribed to by consumers who do not qualify for 
Lifeline.

[[Page 156]]

    (c) An eligible telecommunications carrier offering a Lifeline 
service that does not require the eligible telecommunications carrier to 
assess or collect a monthly fee from its subscribers:
    (1) Shall not receive universal service support for a subscriber to 
such Lifeline service until the subscriber activates the service by 
whatever means specified by the carrier, such as completing an outbound 
call; and
    (2) After service activation, an eligible telecommunications carrier 
shall only continue to receive universal service support reimbursement 
for such Lifeline service provided to subscribers who have used the 
service within the last 60 days, or who have cured their non-usage as 
provided for in Sec. 54.405(e)(3). Any of these activities, if 
undertaken by the subscriber will establish ``usage'' of the Lifeline 
service:
    (i) Completion of an outbound call;
    (ii) Purchase of minutes from the eligible telecommunications 
carrier to add to the subscriber's service plan;
    (iii) Answering an incoming call from a party other than the 
eligible telecommunications carrier or the eligible telecommunications 
carrier's agent or representative; or
    (iv) Responding to direct contact from the eligible communications 
carrier and confirming that he or she wants to continue receiving the 
Lifeline service.
    (d) In order to receive universal service support reimbursement, an 
eligible telecommunications carrier must certify, as part of each 
request for reimbursement, that it is in compliance with all of the 
rules in this subpart, and, to the extent required under this subpart, 
has obtained valid certification and re-certification forms for each of 
the subscribers for whom it is seeking reimbursement.
    (e) In order to receive universal service support reimbursement, an 
eligible telecommunications carrier must keep accurate records of the 
revenues it forgoes in providing Lifeline services. 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.

[77 FR 12970, Mar. 2, 2012, as amended at 77 FR 38534, June 28, 2012]



Sec. 54.409  Consumer qualification for Lifeline.

    (a) To constitute a qualifying low-income consumer:
    (1) A consumer's household income as defined in Sec. 54.400(f) must 
be at or below 135% of the Federal Poverty Guidelines for a household of 
that size; or
    (2) The consumer, one or more of the consumer's dependents, or the 
consumer's household must receive benefits from one of the following 
federal assistance programs: Medicaid; Supplemental Nutrition Assistance 
Program; 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; or
    (3) The consumer meets additional eligibility criteria established 
by a state for its residents, provided that such-state specific criteria 
are based solely on income or other factors directly related to income.
    (b) A consumer who lives on Tribal lands is eligible for Lifeline 
service as a ``qualifying low-income consumer'' as defined by Sec. 
54.400(a) and as an ``eligible resident of Tribal lands'' as defined by 
Sec. 54.400(e) if that consumer meets the qualifications for Lifeline 
specified in paragraph (a) of this section or if the consumer, one or 
more of the consumer's dependents, or the consumer's household 
participates in one of the following Tribal-specific federal assistance 
programs: Bureau of Indian Affairs general assistance; Tribally 
administered Temporary Assistance for Needy Families; Head Start (only 
those households meeting its income qualifying standard); or the Food 
Distribution Program on Indian Reservations.
    (c) In addition to meeting the qualifications provided in paragraph 
(a) or (b) of this section, in order to constitute a qualifying low-
income consumer, a consumer must not already be receiving a Lifeline 
service, and there

[[Page 157]]

must not be anyone else in the subscriber's household subscribed to a 
Lifeline service.

[77 FR 12970, Mar. 2, 2012, as amended at 77 FR 38534, June 28, 2012]



Sec. 54.410  Subscriber eligibility determination and certification.

    (a) All eligible telecommunications carriers must implement policies 
and procedures for ensuring that their Lifeline subscribers are eligible 
to receive Lifeline services. An eligible telecommunications carrier may 
not provide a consumer with an activated device that it represents 
enables use of Lifeline-supported service, nor may it activate service 
that it represents to be Lifeline service, unless and until it has:
    (1) Confirmed that the consumer is a qualifying low-income consumer 
pursuant to Sec. 54.409, and;
    (2) Completed the eligibility determination and certification 
required by this section and Sec. Sec. 54.404 through 54.405, and 
completed any other necessary enrollment steps.
    (b) Initial income-based eligibility determination. (1) Except where 
a state Lifeline administrator or other state agency is responsible for 
the initial determination of a subscriber's eligibility, when a 
prospective subscriber seeks to qualify for Lifeline or using the 
income-based eligibility criteria provided for in Sec. 54.409(a)(1) or 
(a)(3) an eligible telecommunications carrier:
    (i) Must not seek reimbursement for providing Lifeline to a 
subscriber, unless the carrier has received a certification of 
eligibility from the prospective subscriber that complies with the 
requirements set forth in paragraph (d) of this section and has 
confirmed the subscriber's income-based eligibility using the following 
procedures:
    (A) If an eligible telecommunications carrier can determine a 
prospective subscriber's income-based eligibility by accessing one or 
more databases containing information regarding the subscriber's income 
(``income databases''), the eligible telecommunications carrier must 
access such income databases and determine whether the prospective 
subscriber qualifies for Lifeline.
    (B) If an eligible telecommunications carrier cannot determine a 
prospective subscriber's income-based eligibility by accessing income 
databases, the eligible telecommunications carrier must review 
documentation that establishes that the prospective subscriber meets the 
income-eligibility criteria set forth in Sec. 54.409(a)(1) or (a)(3). 
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/Workers' Compensation statement 
of benefit; federal or Tribal notice letter of participation in General 
Assistance; or a divorce decree, child support award, or other official 
document containing income information. If the prospective subscriber 
presents documentation of income that does not cover a full year, such 
as current pay stubs, the prospective subscriber must present the same 
type of documentation covering three consecutive months within the 
previous twelve months.
    (ii) Must not retain copies of the documentation of a prospective 
subscriber's income-based eligibility for Lifeline.
    (iii) Must, consistent with Sec. 54.417, keep and maintain accurate 
records detailing the data source a carrier used to determine a 
subscriber's eligibility or the documentation a subscriber provided to 
demonstrate his or her eligibility for Lifeline.
    (2) Where a state Lifeline administrator or other state agency is 
responsible for the initial determination of a subscriber's eligibility, 
an eligible telecommunications carrier must not seek reimbursement for 
providing Lifeline service to a subscriber, based on that subscriber's 
income eligibility, unless the carrier has received from the state 
Lifeline administrator or other state agency:
    (i) Notice that the prospective subscriber meets the income-
eligibility criteria set forth in Sec. 54.409(a)(1) or (a)(3); and
    (ii) A copy of the subscriber's certification that complies with the 
requirements set forth in paragraph (d) of this section.

[[Page 158]]

    (c) Initial program-based eligibility determination. (1) Except in 
states where a state Lifeline administrator or other state agency is 
responsible for the initial determination of a subscriber's program-
based eligibility, when a prospective subscriber seeks to qualify for 
Lifeline service using the program-based criteria set forth in Sec. 
54.409(a)(2), (a)(3) or (b), an eligible telecommunications carrier:
    (i) Must not seek reimbursement for providing Lifeline to a 
subscriber unless the carrier has received a certification of 
eligibility from the subscriber that complies with the requirements set 
forth in paragraph (d) of this section and has confirmed the 
subscriber's program-based eligibility using the following procedures:
    (A) If the eligible telecommunications carrier can determine a 
prospective subscriber's program-based eligibility for Lifeline by 
accessing one or more databases containing information regarding 
enrollment in qualifying assistance programs (``eligibility 
databases''), the eligible telecommunications carrier must access such 
eligibility databases to determine whether the prospective subscriber 
qualifies for Lifeline based on participation in a qualifying assistance 
program; or
    (B) If an eligible telecommunications carrier cannot determine a 
prospective subscriber's program-based eligibility for Lifeline by 
accessing eligibility databases, the eligible telecommunications carrier 
must review documentation demonstrating that a prospective subscriber 
qualifies for Lifeline under the program-based eligibility requirements. 
Acceptable documentation of program eligibility includes the current or 
prior year's statement of benefits from a qualifying assistance program, 
a notice or letter of participation in a qualifying assistance program, 
program participation documents, or another official document 
demonstrating that the prospective subscriber, one or more of the 
prospective subscriber's dependents or the prospective subscriber's 
household receives benefits from a qualifying assistance program.
    (ii) Must not retain copies of the documentation of a subscriber's 
program-based eligibility for Lifeline services.
    (iii) Must, consistent with Sec. 54.417, keep and maintain accurate 
records detailing the data source a carrier used to determine a 
subscriber's program-based eligibility or the documentation a subscriber 
provided to demonstrate his or her eligibility for Lifeline.
    (2) Where a state Lifeline administrator or other state agency is 
responsible for the initial determination of a subscriber's eligibility, 
when a prospective subscriber seeks to qualify for Lifeline service 
using the program-based eligibility criteria provided in Sec. 54.409, 
an eligible telecommunications carrier must not seek reimbursement for 
providing Lifeline to a subscriber unless the carrier has received from 
the state Lifeline administrator or other state agency:
    (i) Notice that the subscriber meets the program-based eligibility 
criteria set forth in Sec. Sec. 54.409(a)(2), (a)(3) or (b); and
    (ii) a copy of the subscriber's certification that complies with the 
requirements set forth in paragraph (d) of this section.
    (d) Eligibility certifications. Eligible telecommunications carriers 
and state Lifeline administrators or other state agencies that are 
responsible for the initial determination of a subscriber's eligibility 
for Lifeline must provide prospective subscribers Lifeline certification 
forms that in clear, easily understood language:
    (1) Provide the following information:
    (i) Lifeline is a federal benefit and that willfully making false 
statements to obtain the benefit can result in fines, imprisonment, de-
enrollment or being barred from the program;
    (ii) Only one Lifeline service is available per household;
    (iii) A household is defined, for purposes of the Lifeline program, 
as any individual or group of individuals who live together at the same 
address and share income and expenses;
    (iv) A household is not permitted to receive Lifeline benefits from 
multiple providers;
    (v) Violation of the one-per-household limitation constitutes a 
violation of the Commission's rules and will result in the subscriber's 
de-enrollment from the program; and

[[Page 159]]

    (vi) Lifeline is a non-transferable benefit and the subscriber may 
not transfer his or her benefit to any other person.
    (2) Require each prospective subscriber to provide the following 
information:
    (i) The subscriber's full name;
    (ii) The subscriber's full residential address;
    (iii) Whether the subscriber's residential address is permanent or 
temporary;
    (iv) The subscriber's billing address, if different from the 
subscriber's residential address;
    (v) The subscriber's date of birth;
    (vi) The last four digits of the subscriber's social security 
number, or the subscriber's Tribal identification number, if the 
subscriber is a member of a Tribal nation and does not have a social 
security number;
    (vii) If the subscriber is seeking to qualify for Lifeline under the 
program-based criteria, as set forth in Sec. 54.409, the name of the 
qualifying assistance program from which the subscriber, his or her 
dependents, or his or her household receives benefits; and
    (viii) If the subscriber is seeking to qualify for Lifeline under 
the income-based criterion, as set forth in Sec. 54.409, the number of 
individuals in his or her household.
    (3) Require each prospective subscriber to certify, under penalty of 
perjury, that:
    (i) The subscriber meets the income-based or program-based 
eligibility criteria for receiving Lifeline, provided in Sec. 54.409;
    (ii) The subscriber will notify the carrier within 30 days if for 
any reason he or she no longer satisfies the criteria for receiving 
Lifeline including, as relevant, if the subscriber no longer meets the 
income-based or program-based criteria for receiving Lifeline support, 
the subscriber is receiving more than one Lifeline benefit, or another 
member of the subscriber's household is receiving a Lifeline benefit.
    (iii) If the subscriber is seeking to qualify for Lifeline as an 
eligible resident of Tribal lands, he or she lives on Tribal lands, as 
defined in 54.400(e);
    (iv) If the subscriber moves to a new address, he or she will 
provide that new address to the eligible telecommunications carrier 
within 30 days;
    (v) If the subscriber provided a temporary residential address to 
the eligible telecommunications carrier, he or she will be required to 
verify his or her temporary residential address every 90 days;
    (vi) The subscriber's household will receive only one Lifeline 
service and, to the best of his or her knowledge, the subscriber's 
household is not already receiving a Lifeline service;
    (vii) The information contained in the subscriber's certification 
form is true and correct to the best of his or her knowledge,
    (viii) The subscriber acknowledges that providing false or 
fraudulent information to receive Lifeline benefits is punishable by 
law; and
    (ix) The subscriber acknowledges that the subscriber may be required 
to re-certify his or her continued eligibility for Lifeline at any time, 
and the subscriber's failure to re-certify as to his or her continued 
eligibility will result in de-enrollment and the termination of the 
subscriber's Lifeline benefits pursuant to Sec. 54.405(e)(4).
    (e) State Lifeline administrators or other state agencies that are 
responsible for the initial determination of a subscriber's eligibility 
for Lifeline must provide each eligible telecommunications carrier with 
a copy of each of the certification forms collected by the state 
Lifeline administrator or other state agency from that carrier's 
subscribers.
    (f) Annual eligibility re-certification process. (1) All eligible 
telecommunications carriers must annually re-certify all subscribers 
except for subscribers in states where a state Lifeline administrator or 
other state agency is responsible for re-certification of subscribers' 
Lifeline eligibility.
    (2) In order to re-certify a subscriber's eligibility, an eligible 
telecommunications carrier must confirm a subscriber's current 
eligibility to receive Lifeline by:
    (i) Querying the appropriate eligibility databases, confirming that 
the subscriber still meets the program-

[[Page 160]]

based eligibility requirements for Lifeline, and documenting the results 
of that review; or
    (ii) Querying the appropriate income databases, confirming that the 
subscriber continues to meet the income-based eligibility requirements 
for Lifeline, and documenting the results of that review; or
    (iii) Obtaining a signed certification from the subscriber that 
meets the certification requirements in paragraph (d) of this section.
    (3) Where a state Lifeline administrator or other state agency is 
responsible for re-certification of a subscriber's Lifeline eligibility, 
the state Lifeline administrator or other state agency must confirm a 
subscriber's current eligibility to receive a Lifeline service by:
    (i) Querying the appropriate eligibility databases, confirming that 
the subscriber still meets the program-based eligibility requirements 
for Lifeline, and documenting the results of that review; or
    (ii) Querying the appropriate income databases, confirming that the 
subscriber continues to meet the income-based eligibility requirements 
for Lifeline, and documenting the results of that review; or
    (iii) Obtaining a signed certification from the subscriber that 
meets the certification requirements in paragraph (d) of this section.
    (4) Where a state Lifeline administrator or other state agency is 
responsible for re-certification of subscribers' Lifeline eligibility, 
the state Lifeline administrator or other state agency must provide to 
each eligible telecommunications carrier the results of its annual re-
certification efforts with respect to that eligible telecommunications 
carrier's subscribers.
    (5) If an eligible telecommunications carrier is unable to re-
certify a subscriber or has been notified of a state Lifeline 
administrator's or other state agency's inability to re-certify a 
subscriber, the eligible telecommunications carrier must comply with the 
de-enrollment requirements provided for in Sec. 54.405(e)(4).
    (g) Re-certification of temporary address. An eligible 
telecommunications carrier must re-certify, every 90 days, the 
residential address of each of its subscribers who have provided a 
temporary address as part of the subscriber's initial certification or 
re-certification of eligibility, pursuant to paragraphs (d), (e), or (f) 
of this section.

[77 FR 12970, Mar. 2, 2012, as amended at 77 FR 38534, June 28, 2012; 78 
FR 40970, July 9, 2013]



Sec. 54.412  Off reservation Tribal lands designation process.

    (a) The Commission's Wireline Competition Bureau and the Office of 
Native Affairs and Policy may, upon receipt of a request made in 
accordance with the requirements of this section, designate as Tribal 
lands, for the purposes of the Lifeline and Tribal Link Up program, 
areas or communities that fall outside the boundaries of existing Tribal 
lands but which maintain the same characteristics as lands identified as 
Tribal lands defined as in Sec. 54.400(e).
    (b) A request for designation must be made to the Commission by a 
duly authorized official of a federally recognized American Indian Tribe 
or Alaska Native Village.
    (c) A request for designation must clearly describe a defined 
geographical area for which the requesting party seeks designation as 
Tribal lands.
    (d) A request for designation must demonstrate the Tribal character 
of the area or community.
    (e) A request for designation must provide sufficient evidence of a 
nexus between the area or community and the Tribe, and describe in 
detail how program support to the area or community would aid the Tribe 
in serving the needs and interests of its citizens and further the 
Commission's goal of increasing telecommunications access on Tribal 
lands.
    (f) Upon designation by the Wireline Competition Bureau and the 
Office of Native Affairs and Policy, the area or community described in 
the designation shall be considered Tribal lands for the purposes of 
this subpart.

[77 FR 12972, Mar. 2, 2012, as amended at 77 FR 38534, June 28, 2012]



Sec. 54.413  Link Up for Tribal lands.

    (a) Definition. For purposes of this subpart, the term ``Tribal Link 
Up''

[[Page 161]]

means an assistance program for eligible residents of Tribal lands 
seeking telecommunications service from a telecommunications carrier 
that is receiving high-cost support on Tribal lands, pursuant to subpart 
D of this part, that provides:
    (1) A 100 percent reduction, up to $100, of the customary charge for 
commencing telecommunications service for a single telecommunications 
connection at a subscriber's principal place of residence imposed by an 
eligible telecommunications carrier that is also receiving high-cost 
support on Tribal lands, pursuant to subpart D of this part. For 
purposes of this subpart, a ``customary charge for commencing 
telecommunications service'' is the ordinary charge an eligible 
telecommunications carrier imposes and collects from all subscribers to 
initiate service with that eligible telecommunications carrier. A charge 
imposed only on qualifying low-income consumers to initiate service is 
not a customary charge for commencing telecommunications service. 
Activation charges routinely waived, reduced, or eliminated with the 
purchase of additional products, services, or minutes are not customary 
charges eligible for universal service support; and
    (2) A deferred schedule of payments of the customary charge for 
commencing telecommunications service for a single telecommunications 
connection at a subscriber's principal place of residence imposed by an 
eligible telecommunications carrier that is also receiving high-cost 
support on Tribal lands, pursuant to subpart D of this part, for which 
the eligible resident of Tribal lands does not pay interest. The 
interest charges not assessed to the eligible resident of tribal lands 
shall be for a customary charge for connecting telecommunications 
service of up to $200 and such interest charges shall be deferred for a 
period not to exceed one year.
    (b) An eligible resident of Tribal lands may receive the benefit of 
the Tribal Link Up program for a second or subsequent time only for 
otherwise qualifying commencement of telecommunications service at a 
principal place of residence with an address different from the address 
for which Tribal Link Up assistance was provided previously.

[77 FR 12973, Mar. 2, 2012]



Sec. 54.414  Reimbursement for Tribal Link Up.

    (a) Eligible telecommunications carriers that are receiving high-
cost support, pursuant to subpart D of this part, may receive universal 
service support reimbursement for the reduction in their customary 
charge for commencing telecommunications service and for providing a 
deferred schedule for payment of the customary charge for commencing 
telecommunications services for which the subscriber does not pay 
interest, in conformity with Sec. 54.413.
    (b) In order to receive universal support reimbursement for 
providing Tribal Link Up, eligible telecommunications carriers must 
follow the procedures set forth in Sec. 54.410 to determine an eligible 
resident of Tribal lands' initial eligibility for Tribal Link Up. 
Eligible telecommunications carriers must obtain a certification form 
from each eligible resident of Tribal lands that complies with Sec. 
54.410 prior to enrolling him or her in Tribal Link Up.
    (c) In order to receive universal service support reimbursement for 
providing Tribal Link Up, eligible telecommunications carriers must keep 
accurate records of the reductions in 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 subscriber does not pay interest, in conformity with Sec. 
54.413. 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 reductions in 
the customary charge 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 subscriber receiving Lifeline services.

[77 FR 12973, Mar. 2, 2012]

[[Page 162]]



Sec. 54.416  Annual certifications by eligible telecommunications carriers.

    (a) Eligible telecommunications carrier certifications. Eligible 
telecommunications carriers are required to make and submit to the 
Administrator the following annual certifications, under penalty of 
perjury, relating to the Lifeline program:
    (1) An officer of each eligible telecommunications carrier must 
certify that the carrier has policies and procedures in place to ensure 
that its Lifeline subscribers are eligible to receive Lifeline services. 
Each eligible telecommunications carrier must make this certification 
annually to the Administrator as part of the carrier's submission of 
annual re-certification data pursuant to this section. In instances 
where an eligible telecommunications carrier confirms consumer 
eligibility by relying on income or eligibility databases, as defined in 
Sec. 54.410(b)(1)(i)(A) or (c)(1)(i)(A), the representative must attest 
annually as to what specific data sources the eligible 
telecommunications carrier used to confirm eligibility.
    (2) An officer of the eligible telecommunications carrier must 
certify that the carrier is in compliance with all federal Lifeline 
certification procedures. Eligible telecommunications carriers must make 
this certification annually to the Administrator as part of the 
carrier's submission of re-certification data pursuant to this section.
    (b) All eligible telecommunications carriers must annually provide 
the results of their re-certification efforts, performed pursuant to 
Sec. 54.410(f), to the Commission and the Administrator. Eligible 
telecommunications carriers designated as such by one or more states 
pursuant to Sec. 54.201 must also provide, on an annual basis, the 
results of their re-certification efforts to state commissions for 
subscribers residing in those states where the state designated the 
eligible telecommunications carrier. Eligible telecommunications 
carriers must also provide their annual re-certification results for 
subscribers residing on Tribal lands to the relevant Tribal governments.
    (c) States that mandate Lifeline support may impose additional 
standards on eligible telecommunications carriers operating in their 
states to ensure compliance with state Lifeline programs.

[77 FR 12973, Mar. 2, 2012, as amended at 77 FR 38534, June 28, 2012]



Sec. 54.417  Recordkeeping requirements.

    (a) Eligible telecommunications carriers must maintain records to 
document compliance with all Commission and state requirements governing 
the Lifeline and Tribal Link Up program 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. 54.410(d) and (f) for as long as the subscriber 
receives Lifeline service from that eligible telecommunications carrier.
    (b) If an eligible telecommunications carrier provides Lifeline 
discounted wholesale services to a reseller, it must obtain a 
certification from that reseller that it is complying with all 
Commission requirements governing the Lifeline and Tribal Link Up 
program.
    (c) 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 and Tribal Link Up 
program 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 must fulfill the obligations of an eligible 
telecommunications carrier in Sec. Sec. 54.405 and 54.410.

[77 FR 12974, Mar. 2, 2012, as amended at 77 FR 38534, June 28, 2012]



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

[[Page 163]]

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 1, 2009, and concluding on 
June 30, 2009.
    (b) The notice must be provided as part of an information section on 
the 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) The nationwide switch to digital television broadcasting will be 
complete on June 12, 2009, but your local television stations may switch 
sooner. After the switch, analog-only television sets that receive TV 
programming through an antenna will need a converter box to continue to 
receive over-the-air TV. Watch your local stations to find out when they 
will turn off their analog signal and switch to digital-only 
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 your 
local television stations, http://www.DTV.gov, or 1-888-CALL-FCC (TTY 1-
888-TELL-FCC), and from http://www.dtv2009.gov or 1-888-DTV-2009 (TTY 1-
877-530-2634) 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 June 30, 2009.

[73 FR 28732, May 19, 2008, as amended at 74 FR 8878, Feb. 27, 2009]



Sec. 54.419  Validity of electronic signatures.

    (a) For the purposes of this subpart, an electronic signature, 
defined by the Electronic Signatures in Global and National Commerce 
Act, as an electronic sound, symbol, or process, attached to or 
logically associated with a contract or other record and executed or 
adopted by a person with the intent to sign the record, has the same 
legal effect as a written signature.
    (b) For the purposes of this subpart, an electronic record, defined 
by the Electronic Signatures in Global and National Commerce Act as a 
contract or other record created, generated, sent, communicated, 
received, or stored by electronic means, constitutes a record.

[77 FR 12974, Mar. 2, 2012]



Sec. 54.420  Low income program audits.

    (a) Independent audit requirements for eligible telecommunications 
carriers. Companies that receive $5 million or more annually in the 
aggregate, on a holding company basis, in Lifeline reimbursements must 
obtain a third party biennial audit of their compliance with the rules 
in this subpart. Such engagements shall be agreed upon performance 
attestations to assess the company's overall compliance with rules and 
the company's internal controls regarding these regulatory requirements.
    (1) For purposes of the $5 million threshold, a holding company 
consists of operating companies and affiliates, as that term is defined 
in section 3(2) of the Communications Act of 1934, as amended, that are 
eligible telecommunications carriers.
    (2) The initial audit must be completed one year after the 
Commission issues a standardized audit plan outlining the scope of the 
engagement and the extent of compliance testing to be performed by 
third-party auditors and shall be conducted every two years thereafter, 
unless directed otherwise

[[Page 164]]

by the Commission. The following minimum requirements shall apply:
    (i) The audit must be conducted by a licensed certified public 
accounting firm that is independent of the carrier.
    (ii) The engagement shall be conducted consistent with government 
accounting standards (GAGAS).
    (3) The certified public accounting firm shall submit to the 
Commission any rule interpretations necessary to complete the biennial 
audit, and the Administrator shall notify all firms subject to the 
biennial audit requirement of such requests. The audit issue will be 
noted, but not held as a negative finding, in future audit reports for 
all carriers subject to this requirement unless and until guidance has 
been provided by the Commission.
    (4) Within 60 days after completion of the audit work, but prior to 
finalization of the report, the third party auditor shall submit a draft 
of the audit report to the Commission and the Administrator, who shall 
be deemed authorized users of such reports. Finalized audit reports must 
be provided to the Commission, the Administrator, and relevant states 
and Tribal governments within 30 days of the issuance of the final audit 
report. The reports will not be considered or deemed confidential.
    (5) Delegated authority. The Wireline Competition Bureau and the 
Office of Managing Director have delegated authority to perform the 
functions specified in paragraphs (a)(2) and (a)(3) of this section.
    (b) Audit requirements for new eligible telecommunications carriers. 
After a company is designated for the first time in any state or 
territory the Administrator will audit that new eligible 
telecommunications carrier to assess its overall compliance with the 
rules in this subpart and the company's internal controls regarding 
these regulatory requirements. This audit should be conducted within the 
carrier's first twelve months of seeking federal low-income Universal 
Service Fund support.

[77 FR 12974, Mar. 2, 2012, as amended at 77 FR 38534, June 28, 2012]



Sec. 54.422  Annual reporting for eligible telecommunications carriers that 

receive low-income support.

    (a) In order to receive support under this subpart, an eligible 
telecommunications carrier must annually report:
    (1) The company name, names of the company's holding company, 
operating companies and affiliates, and any branding (a ``dba,'' or 
``doing-business-as company'' or brand designation) as well as relevant 
universal service identifiers for each such entity by Study Area Code. 
For purposes of this paragraph, ``affiliates'' has the meaning set forth 
in section 3(2) of the Communications Act of 1934, as amended; and
    (2) Information describing the terms and conditions of any voice 
telephony service plans offered to Lifeline subscribers, including 
details on the number of minutes provided as part of the plan, 
additional charges, if any, for toll calls, and rates for each such 
plan. To the extent the eligible telecommunications carrier offers plans 
to Lifeline subscribers that are generally available to the public, it 
may provide summary information regarding such plans, such as a link to 
a public Web site outlining the terms and conditions of such plans.
    (b) In order to receive support under this subpart, a common carrier 
that is designated as an eligible telecommunications carrier under 
section 214(e)(6) of the Act and does not receive support under subpart 
D of this part must annually provide:
    (1) Detailed information on any outage in the prior calendar year, 
as that term is defined in 47 CFR 4.5, of at least 30 minutes in 
duration for each service area in which the 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;

[[Page 165]]

    (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.
    (2) The number of complaints per 1,000 connections (fixed or mobile) 
in the prior calendar year;
    (3) Certification of compliance with applicable service quality 
standards and consumer protection rules;
    (4) Certification that the carrier is able to function in emergency 
situations as set forth in Sec. 54.202(a)(2).
    (c) All reports required by this section must be filed with the 
Office of the Secretary of the Commission, and with the Administrator. 
Such reports must also be filed with the relevant state commissions and 
the relevant authority in a U.S. territory or Tribal governments, as 
appropriate.

[77 FR 38534, June 28, 2012]



      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'' means an elementary 
school as defined in 20 U.S.C. 7801(18), 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 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

[[Page 166]]

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'' means a secondary 
school as defined in 20 U.S.C. 7801(38), a non-profit institutional day 
or residential school, including a public secondary charter school, that 
provides secondary education, as determined under state law except that 
the term does not include any 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; 76 
FR 56302, Sept. 13, 2011]



Sec. 54.501  Eligibility for services provided by telecommunications carriers.

    (a) Schools. (1) Only schools meeting the statutory definition of 
``elementary school'' or ``secondary school'' as defined in Sec. 
54.500(c) or (k) of these rules, and not excluded under paragraphs 
(a)(2) or (a)(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.
    (b) Libraries. (1) Only libraries eligible for assistance from a 
State library administrative agency under the Library Services and 
Technology Act (Pub. L. 104-208) and not excluded under paragraphs 
(b)(2) or (3) of this section shall be eligible for discounts under this 
subpart.
    (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.
    (c) Consortia. (1) For purposes of seeking competitive bids for 
supported 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,

[[Page 167]]

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 
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; 75 FR 75411, Dec. 3, 2010; 76 FR 56302, Sept. 
13, 2011]



Sec. 54.502  Eligible services.

    (a) Supported services. Supported services are listed in the 
Eligible Services List as updated annually in accordance with paragraph 
(b) of this section. The services in this subpart will be supported 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. These supported services fall within the 
following general categories:
    (1) Telecommunications services. For purposes of this subpart, 
supported telecommunications services provided by telecommunications 
carriers include all commercially available telecommunications services.
    (2) Telecommunications. For purposes of this subpart, supported 
telecommunications can be provided in whole or in part via fiber by any 
entity.
    (3) Internet access. For purposes of this subpart, Internet access 
is as defined in Sec. 54.5.
    (4) Internal connections and basic maintenance. (i) For purposes of 
this subpart, 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 or the Commission has found 
that the use of those services meets the definition of educational 
purpose. 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.
    (ii) For purposes of this subpart, 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 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.
    (iii) 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

[[Page 168]]

year 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 to the school or library in determining whether it is 
eligible for support.
    (b) Eligible Services List. (1) The Administrator shall submit by 
March 30 of each year a draft list of services eligible for support, 
based on the Commission's rules for the following funding year. The 
Wireline Competition Bureau 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 
final list of services eligible for support will be released.
    (2) All supported services are listed in the Eligible Services List 
as updated annually in accordance with paragraph (b)(1) of this section.

[75 FR 75411, Dec. 3, 2010]



Sec. 54.503  Competitive bidding requirements.

    (a) All entities participating in the schools and libraries 
universal service support program must conduct a fair and open 
competitive bidding process, consistent with all requirements set forth 
in this subpart.

    Note to paragraph (a): The following is an illustrative list of 
activities or behaviors that would not result in a fair and open 
competitive bidding process: the applicant for supported services has a 
relationship with a service provider that would unfairly influence the 
outcome of a competition or would furnish the service provider with 
inside information; someone other than the applicant or an authorized 
representative of the applicant prepares, signs, and submits the FCC 
Form 470 and certification; a service provider representative is listed 
as the FCC Form 470 contact person and allows that service provider to 
participate in the competitive bidding process; the service provider 
prepares the applicant's FCC Form 470 or participates in the bid 
evaluation or vendor selection process in any way; the applicant turns 
over to a service provider the responsibility for ensuring a fair and 
open competitive bidding process; an applicant employee with a role in 
the service provider selection process also has an ownership interest in 
the service provider seeking to participate in the competitive bidding 
process; and the applicant's FCC Form 470 does not describe the 
supported services with sufficient specificity to enable interested 
service providers to submit responsive bids.

    (b) 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. 54.502. 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.
    (c) 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 to initiate the 
competitive bidding process. The FCC Form 470 and any request for 
proposal cited in the FCC Form 470 shall include, at a minimum, the 
following information, to the extent applicable with respect to the 
services requested:
    (i) A list of specified services for which the school, library, or 
consortia including such entities, anticipates they are likely to seek 
discounts; and
    (ii) Sufficient information to enable bidders to reasonably 
determine the needs of the applicant.
    (2) The FCC Form 470 shall be signed by the person authorized to 
order eligible services for the eligible school, library, or consortium 
including such entities and shall include that person's certification 
under oath that:
    (i) The schools meet the statutory definition of ``elementary 
school'' or ``secondary school'' as defined in Sec. 54.500(c) or (k) of 
these rules, 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

[[Page 169]]

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 or will be covered by:
    (A) Technology plans for using the services requested in the 
application; or
    (B) No technology plan is required by Commission rules.
    (iv) To the extent a technology plan is required by Sec. 54.508, 
the technology plan(s) has/have been/will be approved consistent with 
Sec. 54.508.
    (v) The services the school, library, or consortium purchases at 
discounts will be used primarily for educational purposes and will not 
be sold, resold, or transferred in consideration for money or any other 
thing of value, except as allowed by Sec. 54.513.
    (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 for eligible products and services will be 
carefully considered, with price being the primary factor, and the bid 
selected will be for the most cost-effective service offering consistent 
with Sec. 54.511.
    (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 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).
    (d) Gift restrictions. (1) Subject to paragraphs (d)(3) and (4) of 
this section, an eligible school, library, or consortium that includes 
an eligible school or library may not directly or indirectly solicit or 
accept any gift, gratuity, favor, entertainment, loan, or any other 
thing of value from a service provider participating in or seeking to 
participate in the schools and libraries universal service program. No 
such service provider shall offer or provide any such gift, gratuity, 
favor, entertainment, loan, or other thing of value except as otherwise 
provided herein. Modest refreshments not offered as part of a meal, 
items with little intrinsic value intended solely for presentation, and 
items worth $20 or less, including meals, may be offered or provided, 
and accepted by any individuals or entities subject to this rule, if the 
value of these items received by any individual does not exceed $50 from 
any one service provider per funding year. The $50 amount for any 
service provider shall be calculated as the aggregate value of all gifts 
provided during a funding year by the individuals specified in paragraph 
(d)(2)(ii) of this section.
    (2) For purposes of this paragraph:
    (i) The terms ``school, library, or consortium'' include all 
individuals who are on the governing boards of such entities (such as 
members of a school committee), and all employees, officers, 
representatives, agents, consultants or independent contractors of such 
entities involved on behalf of such school, library, or consortium with 
the Schools and Libraries Program of the Universal Service Fund (E-rate 
Program), including individuals who prepare, approve, sign or submit E-
rate applications, technology plans, or other forms related to the E-
rate Program, or who prepare bids, communicate or work with E-rate 
service providers, E-rate consultants, or with USAC, as well as any 
staff of such entities responsible for monitoring compliance with the E-
rate Program; and
    (ii) The term ``service provider'' includes all individuals who are 
on the governing boards of such an entity

[[Page 170]]

(such as members of the board of directors), and all employees, 
officers, representatives, agents, or independent contractors of such 
entities.
    (3) The restrictions set forth in this paragraph shall not be 
applicable to the provision of any gift, gratuity, favor, entertainment, 
loan, or any other thing of value, to the extent given to a family 
member or a friend working for an eligible school, library, or 
consortium that includes an eligible school or library, provided that 
such transactions:
    (i) Are motivated solely by a personal relationship,
    (ii) Are not rooted in any service provider business activities or 
any other business relationship with any such eligible school, library, 
or consortium, and
    (iii) Are provided using only the donor's personal funds that will 
not be reimbursed through any employment or business relationship.
    (4) Any service provider may make charitable donations to an 
eligible school, library, or consortium that includes an eligible school 
or library in the support of its programs as long as such contributions 
are not directly or indirectly related to E-rate procurement activities 
or decisions and are not given by service providers to circumvent 
competitive bidding and other E-rate program rules, including those in 
paragraph (c)(2)(vi) of this section, requiring schools and libraries to 
pay their own non-discount share for the services they are purchasing.

[75 FR 75412, Dec. 3, 2010, as amended at 76 FR 56302, Sept. 13, 2011]



Sec. 54.504  Requests for services.

    (a) Filing of the 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 an FCC Form 471.
    (1) The FCC Form 471 shall be signed by the person authorized to 
order eligible 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 
school'' or ``secondary school'' as defined in Sec. 54.500(c) or (k) of 
these rules, 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 or will be covered by:
    (A) Technology plan(s) for using the services requested in the 
application; or
    (B) No technology plan is required by Commission rules.
    (v) To the extent a technology plan is required by Sec. 54.508, 
status of technology plan(s) has/have been approved or will be approved 
by a state or other authorized body.
    (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 school, library, or consortium purchases at 
discounts will be used primarily for educational purposes and will not 
be sold, resold, or transferred in consideration for money or any other 
thing of value, except as allowed by Sec. 54.513.

[[Page 171]]

    (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 to a school, library, or consortium seeking 
eligible services were carefully considered and the most cost-effective 
bid was selected in accordance with Sec. 54.503 of this subpart, with 
price being the primary factor considered, and is the most cost-
effective means of meeting educational needs and technology plan goals.
    (2) [Reserved]
    (b) Mixed eligibility requests. If 30 percent or more of a request 
for discounts made in an FCC Form 471 is for ineligible services, the 
request shall be denied in its entirety.
    (c) 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.
    (d) 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.
    (e) 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

[[Page 172]]

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 
paragraph (e)(1) of this section.
    (f) 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. The 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 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.

[75 FR 75413, Dec. 3, 2010, as amended at 76 FR 56303, Sept. 13, 2011]



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

[[Page 173]]

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.
    (4) School districts, library systems, or other billed entities 
shall calculate discounts on supported services described in Sec. 
54.502(b) 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; 75 FR 75414, Dec. 3, 
2010]



Sec. 54.506  [Reserved]



Sec. 54.507  Cap.

    (a) Amount of the annual cap. In funding year 2010 and subsequent 
funding years, the $2.25 billion funding cap on

[[Page 174]]

federal universal service support for schools and libraries shall be 
automatically increased annually to take into account increases in the 
rate of inflation as calculated in paragraph (a)(1) of this section.
    (1) Increase calculation. To measure increases in the rate of 
inflation for the purposes of this paragraph (a), the Commission shall 
use the Gross Domestic Product Chain-type Price Index (GDP-CPI). To 
compute the annual increase as required by this paragraph (a), the 
percentage increase in the GDP-CPI from the previous year will be used. 
For instance, the annual increase in the GDP-CPI from 2008 to 2009 would 
be used for the 2010 funding year. The increase shall be rounded to the 
nearest 0.1 percent by rounding 0.05 percent and above to the next 
higher 0.1 percent and otherwise rounding to the next lower 0.1 percent. 
This percentage increase shall be added to the amount of the annual 
funding cap from the previous funding year. If the yearly average GDP-
CPI decreases or stays the same, the annual funding cap shall remain the 
same as the previous year.
    (2) Public notice. When the calculation of the yearly average GDP-
CPI is determined, the Wireline Competition Bureau shall publish a 
public notice in the Federal Register within 60 days announcing any 
increase of the annual funding cap based on the rate of inflation.
    (3) Amount of unused funds. 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.
    (i) 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.
    (ii) 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 
this paragraph (a).
    (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 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

[[Page 175]]

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. The Administrator shall act in accordance 
with paragraph (g)(1) of this section with respect to applicants that 
file an FCC Form 471, as described in Sec. 54.504(a), when a filing 
period described in paragraph (c) of this section is in effect. The 
Administrator shall act in accordance with paragraph (g)(2) of this 
section with respect to applicants that file an FCC Form 471, as 
described in Sec. 54.504(a), 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, the 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, the 
Administrator shall take the following steps:
    (i) The Administrator shall first calculate the demand for services 
listed under the telecommunications services, telecommunications, and 
Internet access categories on the eligible services list for all 
discount levels, 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) The Administrator shall then calculate the amount of available 
funding remaining after providing support for the telecommunications and 
Internet access categories for all discount levels. The Administrator 
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. Sec. 54.507(g)(1)(i) and (ii), the Administrator 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)(1)(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 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

[[Page 176]]

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]

    Editorial Note: For Federal Register citations affecting Sec. 
54.507, see the List of CFR Sections Affected, which appears in the 
Finding Aids section of the printed volume and at www.fdsys.gov.



Sec. 54.508  Technology plans.

    (a) Applicants must develop a technology plan when requesting 
discounts for internal connections and basic maintenance for internal 
connections. Applicants must document the date on which the technology 
plan was created. The technology plan must include the following 
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; and
    (4) 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 U.S. 
Department of Education's Enhancing Education Through Technology (EETT), 
20 U.S.C. 6764, are sufficient for satisfying paragraphs (a)(1) through 
(4) of this section. Furthermore, to the extent that the U.S. Department 
of Education adopts future technology plan requirements that require one 
or more of the four 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 Sec. Sec. 
54.503(c)(2)(iii) and 54.504(a)(1)(iv), applicants must certify

[[Page 177]]

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.

[75 FR 75415, Dec. 3, 2010]



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 a service provider shall be exempt from 
the requirements set forth in Sec. 54.503 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. 
54.503 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

[[Page 178]]

of determining whether and to what extent the school, library, or 
consortium is exempt from the competitive bid requirements.
    (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.
    (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; 75 FR 
75415, Dec. 3, 2010]



Sec. 54.513  Resale and transfer of services.

    (a) Prohibition on resale. Eligible supported services provided at a 
discount under this subpart shall not be sold, resold, or transferred in 
consideration of money or any other thing of value, except as provided 
in paragraph (b) of this section.
    (b) Disposal of obsolete equipment components of eligible services. 
Eligible equipment components of eligible services purchased at a 
discount under this subpart shall be considered obsolete if the 
equipment components have has been installed for at least five years. 
Obsolete equipment components of eligible services may be resold or 
transferred in consideration of money or any other thing of value, 
disposed of, donated, or traded.
    (c) 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.
    (d) 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; 75 
FR 75415, Dec. 3, 2010]



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]



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

[[Page 179]]

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 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  [Reserved]



Sec. 54.518  Support for wide area networks.

    To the extent that schools, libraries or consortia that include an 
eligible school or library 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.

[75 FR 75415, Dec. 3, 2010]

[[Page 180]]



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(a)) 
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. 
54.503.
    (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. 54.502(a), 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, as amended at75 
FR 75415, Dec. 3, 2010]



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 board, 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.
    (i) The term ``minor'' means any individual who has not attained the 
age of 17 years.
    (ii) The term ``obscene'' has the meaning given such term in 18 
U.S.C. 1460.
    (iii) The term ``child pornography'' has the meaning given such term 
in 18 U.S.C. 2256.
    (iv) The term ``harmful to minors'' means any picture, image, 
graphic image file, or other visual depiction that--
    (A) Taken as a whole and with respect to minors, appeals to a 
prurient interest in nudity, sex, or excretion;
    (B) Depicts, describes, or represents, in a patently offensive way 
with respect to what is suitable for minors, an actual or simulated 
sexual act or sexual contact, actual or simulated normal or perverted 
sexual acts, or a lewd exhibition of the genitals; and
    (C) Taken as a whole, lacks serious literary, artistic, political, 
or scientific value as to minors.
    (v) The terms ``sexual act'' and ``sexual contact'' have the 
meanings given such terms in 18 U.S.C. 2246.
    (vi) The term ``technology protection measure'' means a specific 
technology that blocks or filters Internet access to the material 
covered by a certification under paragraph (c) of this section.
    (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

[[Page 181]]

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. The school must enforce the 
operation of the technology protection measure during use of its 
computers with Internet access, although an administrator, supervisor, 
or other person authorized by the certifying authority under paragraph 
(a)(1) of this section may disable the technology protection measure 
concerned, during use by an adult, to enable access for bona fide 
research or other lawful purpose. This Internet safety policy must also 
include monitoring the online activities of minors. Beginning July 1, 
2012, schools' Internet safety policies must provide for educating 
minors about appropriate online behavior, including interacting with 
other individuals on social networking Web sites and in chat rooms and 
cyberbullying awareness and response.
    (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, for whom this is the 
first funding year in the federal universal service support mechanism 
for schools and libraries, 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.
    (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

[[Page 182]]

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. The library must enforce the 
operation of the technology protection measure during use of its 
computers with Internet access, although an administrator, supervisor, 
or other person authorized by the certifying authority under paragraph 
(a)(2) of this section may disable the technology protection measure 
concerned, during use by an adult, to enable access for bona fide 
research or other lawful purpose.
    (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, 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, for whom this is the 
first funding year in the federal universal service support mechanism 
for schools and libraries, 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 requested or received Funding Commitments, 
and for whom this is the first funding year in the federal universal 
service support mechanism for schools and libraries, is (are) 
undertaking such

[[Page 183]]

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.
    (4) Local determination of content. A determination regarding matter 
inappropriate for minors shall be made by the school board, local 
educational agency, library, or other authority responsible for making 
the determination. No agency or instrumentality of the United States 
Government may establish criteria for making such determination; review 
the determination made by the certifying school, school board, school 
district, local educational agency, library, or other authority; or 
consider the criteria employed by the certifying school, school board, 
school district, local educational agency, library, or other authority 
in the administration of the schools and libraries universal service 
support mechanism.
    (5) Availability for review. Each Internet safety policy adopted 
pursuant to 47 U.S.C. 254(l) shall be made available to the Commission, 
upon request from the Commission, by the school, school board, school 
district, local educational agency, library, or other authority 
responsible for adopting such Internet safety policy for purposes of the 
review of such Internet safety policy by the Commission.
    (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

[[Page 184]]

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 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.
    (h) Public notice; hearing or meeting. A school or library shall 
provide reasonable public notice and hold at least one public hearing or 
meeting to address the proposed Internet safety policy.

[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; 76 FR 56303, Sept. 
13, 2011]



Sec. 54.522  [Reserved]



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

                      Defined Terms and Eligibility



Sec. 54.600  Terms and definitions.

    As used in this subpart, the following terms shall be defined as 
follows:
    (a) Health care provider. A ``health care provider'' is any:
    (1) Post-secondary educational institution offering health care 
instruction, including a teaching hospital or medical school;
    (2) Community health center or health center providing health care 
to migrants;
    (3) Local health department or agency;
    (4) Community mental health center;
    (5) Not-for-profit hospital;
    (6) Rural health clinic; or
    (7) Consortium of health care providers consisting of one or more 
entities described in paragraphs (a)(1) through (a)(6) of this section.

[[Page 185]]

    (b) Rural area. (1) 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 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. For purposes of 
this rule, ``Core Based Statistical Area,'' ``Urban Area,'' and 
``Place'' are as identified by the Census Bureau.
    (2) Notwithstanding the definition of ``rural area,'' any health 
care provider that is located in a ``rural area'' under the definition 
used by the Commission prior to July 1, 2005, and received a funding 
commitment from the rural health care program prior to July 1, 2005, is 
eligible for support under this subpart.
    (c) Rural health care provider. A ``rural health care provider'' is 
an eligible health care provider site located in a rural area.

[78 FR 13982, Mar. 1, 2013]



Sec. 54.601  Health care provider eligibility.

    (a) Eligible health care providers. (1) Only an entity that is 
either a public or non-profit health care provider, as defined in this 
subpart, shall be eligible to receive support under this subpart.
    (2) Each separate site or location of a health care provider shall 
be considered an individual health care provider for purposes of 
calculating and limiting support under this subpart.
    (b) Determination of health care provider eligibility for the 
Healthcare Connect Fund. Health care providers in the Healthcare Connect 
Fund may certify to the eligibility of particular sites at any time 
prior to, or concurrently with, filing a request for services to 
initiate competitive bidding for the site. Applicants who utilize a 
competitive bidding exemption must provide eligibility information for 
the site to the Administrator prior to, or concurrently with, filing a 
request for funding for the site. Health care providers must also notify 
the Administrator within 30 days of a change in the health care 
provider's name, site location, contact information, or eligible entity 
type.

[78 FR 13982, Mar. 1, 2013]



Sec. 54.602  Health care support mechanism.

    (a) Telecommunications Program. Rural health care providers may 
request support for the difference, if any, between the urban and rural 
rates for telecommunications services, subject to the provisions and 
limitations set forth in Sec. Sec. 54.600 through 54.625 and Sec. Sec. 
54.671 through 54.680. This support is referred to as the 
``Telecommunications Program.''
    (b) Healthcare Connect Fund. Eligible health care providers may 
request support for eligible services, equipment, and infrastructure, 
subject to the provisions and limitations set forth in Sec. Sec. 54.600 
through 54.602 and Sec. Sec. 54.630 through 54.680. This support is 
referred to as the ``Healthcare Connect Fund.''
    (c) Allocation of discounts. An eligible health care provider that 
engages in both eligible and ineligible activities or that collocates 
with an ineligible entity shall allocate eligible and ineligible 
activities in order to receive prorated support for the eligible 
activities only. 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.
    (d) Health care purposes. Services for which eligible health care 
providers receive support from the Telecommunications Program or the 
Healthcare Connect Fund must be 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.

[78 FR 13982, Mar. 1, 2013]

                       Telecommunications Program



Sec. 54.603  Competitive bidding and certification requirements.

    (a) Competitive bidding requirement. To select the 
telecommunications carriers that will provide services eligible for 
universal service support to it under the Telecommunications Program, 
each eligible health care provider shall

[[Page 186]]

participate in a competitive bidding process pursuant to the 
requirements established in this section and any additional and 
applicable state, Tribal, 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 the Telecommunications Program shall submit a 
completed FCC Form 465 to the Administrator. 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. 54.600(a);
    (ii) The requester is physically located in a rural area;
    (iii) [Reserved]
    (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 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; 78 FR 13983, Mar. 1, 
2013]



Sec. 54.604  Consortia, telecommunications services, and existing contracts.

    (a) Consortia. (1) Under the Telecommunications Program, 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 of this part; 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 the 
Telecommunications

[[Page 187]]

Program shall apply only to the portion of eligible services used by an 
eligible health care provider.
    (b) Telecommunications Services. 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).
    (c) Existing contracts. A signed contract for services eligible for 
Telecommunications Program support pursuant to this subpart between an 
eligible health care provider as defined under Sec. 54.600 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]
    (d) 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.
    (e) 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; 78 FR 13983, Mar. 1, 2013]



Sec. 54.605  Determining the urban rate.

    (a) If a rural health care provider requests support for an eligible 
service to be funded from the Telecommunications Program that is 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 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; 78 FR 13983, Mar. 
1, 2013]



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

[[Page 188]]

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) The amount of universal service support provided for an eligible 
service to be funded from the Telecommunications Program 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. Under the Telecommunications 
Program, 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, 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) 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

[[Page 189]]

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. 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 under the 
Telecommunications Program, even when another functionally similar 
terrestrial-based service is available in that rural area. Support 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 support from the 
Telecommunications Program 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. 
The support amount allowed under the Telecommunications Program for 
satellite services provided to mobile rural health care providers is 
calculated by comparing the rate for the satellite service to the rate 
for an urban wireline service with a similar bandwidth. Support 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 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; 78 
FR 13983, Mar. 1, 2013]

[[Page 190]]



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) [Reserved]

[64 FR 66787, Nov. 30, 1999, as amended at 68 FR 74503, Dec. 24, 2003; 
78 FR 13984, Mar. 1, 2013]



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. Upon receiving a bona fide request, as 
defined in paragraph (c) of this section, from a rural health care 
provider for a telecommunications service that is eligible for support 
under the Telecommunications Program, 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 applicable to the 
Telecommunications Program.
    (c) Bona fide request. In order to receive services eligible for 
support under the Telecommunications Program, 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, 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) [Reserved]
    (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; 78 
FR 13984, Mar. 1, 2013]



Sec. 54.619  Audits and recordkeeping.

    (a) Health care providers. (1) Health care providers shall maintain 
for their purchases of services supported under the Telecommunications 
Program 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.

[[Page 191]]

    (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 that rates 
charged comply with the statute and regulations.
    (d) Service providers. Service providers shall retain documents 
related to the delivery of discounted services under the 
Telecommunications Program 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; 78 FR 13984, Mar. 1, 2013]



Sec. 54.623  Annual filing and funding commitment requirement.

    (a) Annual filing requirement. Health care providers seeking support 
under the Telecommunications Program shall file new funding requests for 
each funding year.
    (b) Long term contracts. Under the Telecommunications Program, 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.

[78 FR 13984, Mar. 1, 2013]



Sec. 54.625  Support for telecommunications services beyond the maximum 

supported distance for rural health care providers.

    (a) The maximum support distance for the Telecommunications Program 
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 supported under the Telecommunications 
Program 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 supported under the Telecommunications 
Program 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.

[78 FR 13984, Mar. 1, 2013]

                         Healthcare Connect Fund



Sec. 54.630  Eligible recipients.

    (a) Rural health care provider site--individual and consortium. 
Under the Healthcare Connect Fund, an eligible rural health care 
provider may receive universal service support by applying individually 
or through a consortium. For purposes of the Healthcare Connect Fund, a 
``consortium'' is a group of two or more health care provider sites that 
request support through a single application. Consortia may include 
health care providers who are not eligible for support under the 
Healthcare Connect Fund, but such health care providers cannot receive 
support for their expenses and must participate pursuant to the cost 
allocation guidelines in Sec. 54.639(d).
    (b) Limitation on participation of non-rural health care provider 
sites in a consortium. An eligible non-rural health care provider site 
may receive universal service support only as part of a consortium that 
includes more than 50 percent eligible rural health care provider sites.

[[Page 192]]

    (c) Limitation on large non-rural hospitals. Each eligible non-rural 
public or non-profit hospital site with 400 or more licensed patient 
beds may receive no more than $30,000 per year in Healthcare Connect 
Fund support for eligible recurring charges and no more than $70,000 in 
Healthcare Connect Fund support every 5 years for eligible nonrecurring 
charges, exclusive in both cases of costs shared by the network.

[78 FR 13984, Mar. 1, 2013]



Sec. 54.631  Designation of Consortium Leader.

    (a) Identifying a Consortium Leader. Each consortium seeking support 
from the Healthcare Connect Fund must identify an entity or organization 
that will be the lead entity (the ``Consortium Leader'').
    (b) Consortium Leader eligibility. The Consortium Leader may be the 
consortium itself (if it is a distinct legal entity); an eligible health 
care provider participating in the consortium; or a state organization, 
public sector (governmental) entity (including a Tribal government 
entity), or non-profit entity that is ineligible for Healthcare Connect 
Fund support. Ineligible state organizations, public sector entities, or 
non-profit entities may serve as Consortium Leaders or provide 
consulting assistance to consortia only if they do not participate as 
potential vendors during the competitive bidding process. An ineligible 
entity that serves as the Consortium Leader must pass on the full value 
of any discounts, funding, or other program benefits secured to the 
consortium members that are eligible health care providers.
    (c) Consortium Leader responsibilities. The Consortium Leader's 
responsibilities include the following:
    (1) Legal and financial responsibility for supported activities. The 
Consortium Leader is the legally and financially responsible entity for 
the activities supported by the Healthcare Connect Fund. By default, the 
Consortium Leader is the responsible entity if audits or other 
investigations by Administrator or the Commission reveal violations of 
the Act or Commission rules, with individual consortium members being 
jointly and severally liable if the Consortium Leader dissolves, files 
for bankruptcy, or otherwise fails to meet its obligations. Except for 
the responsibilities specifically described in paragraphs (c)(2) through 
(c)(6) of this section, consortia may allocate legal and financial 
responsibility as they see fit, provided that this allocation is 
memorialized in a formal written agreement between the affected parties 
(i.e., the Consortium Leader, and the consortium as a whole and/or its 
individual members), and the written agreement is submitted to the 
Administrator for approval with or prior to the Request for Services. 
Any such agreement must clearly identify the party(ies) responsible for 
repayment if the Administrator is required, at a later date, to recover 
disbursements to the consortium due to violations of program rules.
    (2) Point of contact for the FCC and Administrator. The Consortium 
Leader is responsible for designating an individual who will be the 
``Project Coordinator'' and serve as the point of contact with the 
Commission and the Administrator for all matters related to the 
consortium. The Consortium Leader is responsible for responding to 
Commission and Administrator inquiries on behalf of the consortium 
members throughout the application, funding, invoicing, and post-
invoicing period.
    (3) Typical applicant functions, including forms and certifications. 
The Consortium Leader is responsible for submitting program forms and 
required documentation and ensuring that all information and 
certifications submitted are true and correct. The Consortium Leader 
must also collect and retain a Letter of Agency (LOA) from each member, 
pursuant to Sec. 54.632.
    (4) Competitive bidding and cost allocation. The Consortium Leader 
is responsible for ensuring that the competitive bidding process is fair 
and open and otherwise complies with Commission requirements. If costs 
are shared by both eligible and ineligible entities, the Consortium 
Leader must ensure that costs are allocated in a manner that ensures 
that only eligible entities receive the benefit of program discounts.
    (5) Invoicing. The Consortium Leader is responsible for notifying 
the Administrator when supported services have

[[Page 193]]

commenced and for submitting invoices to the Administrator.
    (6) Recordkeeping, site visits, and audits. The Consortium Leader is 
also responsible for compliance with the Commission's recordkeeping 
requirements and for coordinating site visits and audits for all 
consortium members.

[78 FR 13985, Mar. 1, 2013]



Sec. 54.632  Letters of agency (LOA).

    (a) Authorizations. Under the Healthcare Connect Fund, the 
Consortium Leader must obtain the following authorizations.
    (1) Prior to the submission of the request for services, the 
Consortium Leader must obtain authorization, the necessary 
certifications, and any supporting documentation from each consortium 
member to permit the Consortium Leader to submit the request for 
services and prepare and post the request for proposal on behalf of the 
member.
    (2) Prior to the submission of the funding request, the Consortium 
Leader must secure authorization, the necessary certifications, and any 
supporting documentation from each consortium member to permit the 
Consortium Leader to submit the funding request and manage invoicing and 
payments on behalf of the member.
    (b) Optional two-step process. The Consortium Leader may secure both 
required authorizations from each consortium member in either a single 
LOA or in two separate LOAs.
    (c) Required Information in LOA. (1) An LOA must include, at a 
minimum, the name of the entity filing the application (i.e., lead 
applicant or Consortium Leader); name of the entity authorizing the 
filing of the application (i.e., the participating health care provider/
consortium member); the physical location of the health care provider/
consortium member site(s); the relationship of each site seeking support 
to the lead entity filing the application; the specific timeframe the 
LOA covers; the signature, title and contact information (including 
phone number, mailing address, and email address) of an official who is 
authorized to act on behalf of the health care provider/consortium 
member; signature date; and the type of services covered by the LOA.
    (2) For HCPs located on Tribal lands, if the health care facility is 
a contract facility that is run solely by the tribe, the appropriate 
tribal leader, such as the tribal chairperson, president, or governor, 
shall also sign the LOA, unless the health care responsibilities have 
been duly delegated to another tribal government representative.

[78 FR 13985, Mar. 1, 2013]



Sec. 54.633  Health care provider contribution.

    (a) Health care provider contribution. All health care providers 
receiving support under the Healthcare Connect Fund shall receive a 65 
percent discount on the cost of eligible expenses and shall be required 
to contribute 35 percent of the total cost of all eligible expenses.
    (b) Limits on eligible sources of health care provider contribution. 
Only funds from eligible sources may be applied toward the health care 
provider's required contribution.
    (1) Eligible sources include the applicant or eligible health care 
provider participants; state grants, funding, or appropriations; federal 
funding, grants, loans, or appropriations except for other federal 
universal service funding; Tribal government funding; and other grant 
funding, including private grants.
    (2) Ineligible sources include (but are not limited to) in-kind or 
implied contributions from health care providers; direct payments from 
vendors or other service providers, including contractors and 
consultants to such entities; and for-profit entities.
    (c) Disclosure of health care provider contribution source. Prior to 
receiving support, applicants are required to identify with specificity 
their sources of funding for their contribution of eligible expenses.
    (d) Future revenues from excess capacity as source of health care 
provider contribution. A consortium applicant that receives support for 
participant-owned network facilities under Sec. 54.636 may use future 
revenues from excess capacity as a source for the required health care 
provider contribution, subject to the following limitations.

[[Page 194]]

    (1) The consortium's selection criteria and evaluation for ``cost-
effectiveness'' pursuant to Sec. 54.642 cannot provide a preference to 
bidders that offer to construct excess capacity.
    (2) The applicant must pay the full amount of the additional costs 
for excess capacity facilities that will not be part of the supported 
health care network.
    (3) The additional cost of constructing excess capacity facilities 
may not count toward a health care provider's required contribution.
    (4) The inclusion of excess capacity facilities cannot increase the 
funded cost of the dedicated health care network in any way.
    (5) An eligible health care provider (typically the consortium, 
although it may be an individual health care provider participating in 
the consortium) must retain ownership of the excess capacity facilities. 
It may make the facilities available to third parties only under an 
indefeasible right of use (IRU) or lease arrangement. The lease or IRU 
between the participant and the third party must be an arm's length 
transaction. To ensure that this is an arm's length transaction, neither 
the vendor that installs the excess capacity facilities nor its 
affiliate is eligible to enter into an IRU or lease with the 
participant.
    (6) Any amount prepaid for use of the excess capacity facilities 
(IRU or lease) must be placed in an escrow account. The participant can 
then use the escrow account as an eligible source of funds for the 
participant's 35 percent contribution to the project.
    (7) All revenues from use of the excess capacity facilities by the 
third party must be used for the health care provider contribution or 
for sustainability of the health care network supported by the 
Healthcare Connect Fund. Network costs that may be funded with any 
additional revenues that remain include administration, equipment, 
software, legal fees, or other costs not covered by the Healthcare 
Connect Fund, as long as they are relevant to sustaining the network.

[78 FR 13985, Mar. 1, 2013]



Sec. 54.634  Eligible services.

    (a) Eligible services. Subject to the provisions of Sec. Sec. 
54.600 through 54.602 and Sec. Sec. 54.630 through 54.680, eligible 
health care providers may request support from the Healthcare Connect 
Fund for any advanced telecommunications or information service that 
enables health care providers to post their own data, interact with 
stored data, generate new data, or communicate, by providing 
connectivity over private dedicated networks or the public Internet for 
the provision of health information technology.
    (b) Eligibility of dark fiber. A consortium of eligible health care 
providers may receive support for ``dark'' fiber where the customer, not 
the vendor, provides the modulating electronics, subject to the 
following limitations:
    (1) Support for recurring charges associated with dark fiber is only 
available once the dark fiber is ``lit'' and actually being used by the 
health care provider. Support for non-recurring charges for dark fiber 
is only available for fiber lit within the same funding year, but 
applicants may receive up to a one-year extension to light fiber if they 
provide documentation to the Administrator that construction was 
unavoidably delayed due to weather or other reasons.
    (2) Requests for proposals (RFPs) that solicit dark fiber solutions 
must also solicit proposals to provide the needed services over lit 
fiber over a time period comparable to the duration of the dark fiber 
lease or indefeasible right of use.
    (3) If an applicant intends to request support for equipment and 
maintenance costs associated with lighting and operating dark fiber, it 
must include such elements in the same RFP as the dark fiber so that the 
Administrator can review all costs associated with the fiber when 
determining whether the applicant chose the most cost-effective bid.
    (c) Dark and lit fiber maintenance costs. (1) Both individual and 
consortium applicants may receive support for recurring maintenance 
costs associated with leases of dark or lit fiber.
    (2) Consortium applicants may receive support for upfront payments 
for maintenance costs associated with

[[Page 195]]

leases of dark or lit fiber, subject to the limitations in Sec. 54.638.
    (d) Reasonable and customary installation charges. Eligible health 
care providers may obtain support for reasonable and customary 
installation charges for eligible services, up to an undiscounted cost 
of $5,000 per eligible site.
    (e) Upfront charges for vendor deployment of new or upgraded 
facilities. (1) Participants may obtain support for upfront charges for 
vendor deployment of new or upgraded facilities to serve eligible sites.
    (2) Support is available to extend vendor deployment of facilities 
up to the ``demarcation point,'' which is the boundary between 
facilities owned or controlled by the vendor, and facilities owned or 
controlled by the customer.

[78 FR 13986, Mar. 1, 2013]



Sec. 54.635  Eligible equipment.

    (a) Both individual and consortium applicants may receive support 
for network equipment necessary to make functional an eligible service 
that is supported under the Healthcare Connect Fund.
    (b) Consortium applicants may also receive support for network 
equipment necessary to manage, control, or maintain an eligible service 
or a dedicated health care broadband network. Support for network 
equipment is not available for networks that are not dedicated to health 
care.
    (c) Network equipment eligible for support includes the following:
    (1) Equipment that terminates a carrier's or other provider's 
transmission facility and any router/switch that is directly connected 
to either the facility or the terminating equipment. This includes 
equipment required to light dark fiber, or equipment necessary to 
connect dedicated health care broadband networks or individual health 
care providers to middle mile or backbone networks;
    (2) Computers, including servers, and related hardware (e.g. 
printers, scanners, laptops) that are used exclusively for network 
management;
    (3) Software used for network management, maintenance, or other 
network operations, and development of software that supports network 
management, maintenance, and other network operations;
    (4) Costs of engineering, furnishing (i.e. as delivered from the 
manufacturer), and installing network equipment; and
    (5) Equipment that is a necessary part of health care provider-owned 
network facilities.
    (d) Additional limitations: Support for network equipment is limited 
to equipment:
    (1) Purchased or leased by a Consortium Leader or eligible health 
care provider; and
    (2) Used for health care purposes.

[78 FR 13986, Mar. 1, 2013]



Sec. 54.636  Eligible participant-constructed and owned network facilities for 

consortium applicants.

    (a) Subject to the funding limitations under Sec. Sec. 54.675 and 
54.638 and the following restrictions, consortium applicants may receive 
support for network facilities that will be constructed and owned by the 
consortium (if the consortium is an eligible health care provider) or 
eligible health care providers within the consortium.
    (1) Consortia seeking support to construct and own network 
facilities are required to solicit bids for both:
    (i) Services provided over third-party networks; and
    (ii) Construction of participant-owned network facilities, in the 
same request for proposals. Requests for proposals must provide 
sufficient detail so that cost-effectiveness can be evaluated over the 
useful life of the proposed network facility to be constructed.
    (2) Support for participant-constructed and owned network facilities 
is only available where the consortium demonstrates that constructing 
its own network facilities is the most cost-effective option after 
competitive bidding, pursuant to Sec. 54.642.
    (b) [Reserved]

[78 FR 13987, Mar. 1, 2013]



Sec. 54.637  Off-site data centers and off-site administrative offices.

    (a) The connections and network equipment associated with off-site 
data centers and off-site administrative offices used by eligible health 
care providers for their health care purposes

[[Page 196]]

are eligible for support under the Healthcare Connect Fund, subject to 
the conditions and restrictions set forth in paragraph (b) of this 
section.
    (1) An ``off-site administrative office'' is a facility that does 
not provide hands-on delivery of patient care, but performs 
administrative support functions that are critical to the provision of 
clinical care by eligible health care providers.
    (2) An ``off-site data center'' is a facility that serves as a 
centralized repository for the storage, management, and dissemination of 
an eligible health care provider's computer systems, associated 
components, and data, including (but not limited to) electronic health 
records.
    (b) Conditions and Restrictions. The following conditions and 
restrictions apply to support provided under this sections.
    (1) Connections eligible for support are only those that are 
between:
    (i) Eligible health care provider sites and off-site data centers or 
off-site administrative offices,
    (ii) Two off-site data centers,
    (iii) Two off-site administrative offices,
    (iv) An off-site data center and the public Internet or another 
network,
    (v) An off-site administrative office and the public Internet or 
another network, or
    (vi) An off-site administrative office and an off-site data center.
    (2) The supported connections and network equipment must be used 
solely for health care purposes.
    (3) The supported connections and network equipment must be 
purchased by an eligible health care provider or a public or non-profit 
health care system that owns and operates eligible health care provider 
sites.
    (4) If traffic associated with one or more ineligible health care 
provider sites is carried by the supported connection and/or network 
equipment, the ineligible health care provider sites must allocate the 
cost of that connection and/or equipment between eligible and ineligible 
sites, consistent with the ``fair share'' principles set forth in Sec. 
54.639(d).

[78 FR 13987, Mar. 1, 2013]



Sec. 54.638  Upfront payments.

    (a) Upfront payments include all non-recurring costs for services, 
equipment, or facilities, other than reasonable and customary 
installation charges of up to $5,000.
    (b) The following limitations apply to all upfront payments:
    (1) Upfront payments associated with services providing a bandwidth 
of less than 1.5 Mbps (symmetrical) are not eligible for support.
    (2) Only consortium applicants are eligible for support for upfront 
payments.
    (c) The following limitations apply if a consortium makes a request 
for support for upfront payments that exceeds, on average, $50,000 per 
eligible site in the consortium:
    (1) The support for the upfront payments must be prorated over at 
least three years.
    (2) The upfront payments must be part of a multi-year contract.

[78 FR 13987, Mar. 1, 2013]



Sec. 54.639  Ineligible expenses.

    (a) Equipment or services not directly associated with eligible 
services. Expenses associated with equipment or services that are not 
necessary to make an eligible service functional, or to manage, control, 
or maintain an eligible service or a dedicated health care broadband 
network are ineligible for support.

    Note to paragraph (a): The following are examples of ineligible 
expenses:
    1. Costs associated with general computing, software, applications, 
and Internet content development are not supported, including the 
following:
    i. Computers, including servers, and related hardware (e.g., 
printers, scanners, laptops), unless used exclusively for network 
management, maintenance, or other network operations;
    ii. End user wireless devices, such as smartphones and tablets;
    iii. Software, unless used for network management, maintenance, or 
other network operations;
    iv. Software development (excluding development of software that 
supports network management, maintenance, and other network operations);
    v. Helpdesk equipment and related software, or services, unless used 
exclusively in support of eligible services or equipment;
    vi. Web server hosting;
    vii. Web site portal development;

[[Page 197]]

    viii. Video/audio/web conferencing equipment or services; and
    ix. Continuous power source.
    2. Costs associated with medical equipment (hardware and software), 
and other general health care provider expenses are not supported, 
including the following:
    i. Clinical or medical equipment;
    ii. Telemedicine equipment, applications, and software;
    iii. Training for use of telemedicine equipment;
    iv. Electronic medical records systems; and
    v. Electronic records management and expenses.

    (b) Inside wiring/internal connections. Expenses associated with 
inside wiring or internal connections are ineligible for support under 
the Healthcare Connect Fund.
    (c) Administrative expenses. Administrative expenses are not 
eligible for support under the Healthcare Connect Fund.

    Note to paragraph (c): Ineligible administrative expenses include, 
but not limited to, the following expenses:
    1. Personnel costs (including salaries and fringe benefits), except 
for personnel expenses in a consortium application that directly relate 
to designing, engineering, installing, constructing, and managing a 
dedicated broadband network. Ineligible costs of this category include, 
for example, personnel to perform program management and coordination, 
program administration, and marketing;
    2. Travel costs, except for travel costs that are reasonable and 
necessary for network design or deployment and that are specifically 
identified and justified as part of a competitive bid for a construction 
project;
    3. Legal costs;
    4. Training, except for basic training or instruction directly 
related to and required for broadband network installation and 
associated network operations;
    5. Program administration or technical coordination (e.g., preparing 
application materials, obtaining letters of agency, preparing request 
for proposals, negotiating with vendors, reviewing bids, and working 
with the Administrator) that involves anything other than the design, 
engineering, operations, installation, or construction of the network;
    6. Administration and marketing costs (e.g., administrative costs; 
supplies and materials, except as part of network installation/
construction; marketing studies, marketing activities, or outreach to 
potential network members; evaluation and feedback studies);
    7. Billing expenses (e.g., expense that vendors may charge for 
allocating costs to each health care provider in a network);
    8. Helpdesk expenses (e.g., equipment and related software, or 
services); and
    9. Technical support services that provide more than basic 
maintenance.

    (d) Cost allocation for ineligible sites, services, or equipment--
(1) Ineligible sites. Eligible health care provider sites may share 
expenses with ineligible sites, as long as the ineligible sites pay 
their fair share of the expenses. An applicant may seek support for only 
the portion of a shared eligible expense attributable to eligible health 
care provider sites. To receive support, the applicant must ensure that 
ineligible sites pay their fair share of the expense. The fair share is 
determined as follows:
    (i) If the vendor charges a separate and independent price for each 
site, an ineligible site must pay the full undiscounted price.
    (ii) If there is no separate and independent price for each site, 
the applicant must prorate the undiscounted price for the ``shared'' 
service, equipment, or facility between eligible and ineligible sites on 
a proportional fully-distributed basis. Applicants must make this cost 
allocation using a method that is based on objective criteria and 
reasonably reflects the eligible usage of the shared service, equipment, 
or facility. The applicant bears the burden of demonstrating the 
reasonableness of the allocation method chosen.
    (2) Ineligible components of a single service or piece of equipment. 
Applicants seeking support for a service or piece of equipment that 
includes an ineligible component must explicitly request in their 
requests for proposals that vendors include pricing for a comparable 
service or piece of equipment that is comprised of only eligible 
components. If the selected provider also submits a price for the 
eligible component on a stand-alone basis, the support amount is 
calculated based on the stand-alone price of the eligible component on a 
stand-alone basis. If the vendor does not offer the eligible component 
on a stand-alone basis, the full price of the entire service or piece of 
equipment must be taken into account,

[[Page 198]]

without regard to the value of the ineligible components, when 
determining the most cost-effective bid.
    (3) Written description. Applicants must submit a written 
description of their allocation method(s) to the Administrator with 
their funding requests.
    (4) Written agreement. If ineligible entities participate in a 
network, the allocation method must be memorialized in writing, such as 
a formal agreement among network members, a master services contract, or 
for smaller consortia, a letter signed and dated by all (or each) 
ineligible entity and the Consortium Leader.

[78 FR 13987, Mar. 1, 2013]



Sec. 54.640  Eligible vendors.

    (a) Eligibility. For purposes of the Healthcare Connect Fund, 
eligible vendors shall include any provider of equipment, facilities, or 
services that are eligible for support under Healthcare Connect Fund.
    (b) Obligation to assist health care providers. Vendors in the 
Healthcare Connect Fund must certify, as a condition of receiving 
support, that they will provide to health care providers, on a timely 
basis, all information and documents regarding supported equipment, 
facilities, or services that are necessary for the health care provider 
to submit required forms or respond to Commission or Administrator 
inquiries. The Administrator may withhold disbursements for the vendor 
if the vendor, after written notice from the Administrator, fails to 
comply with this requirement.

[78 FR 13988, Mar. 1, 2013]



Sec. 54.642  Competitive bidding requirement and exemptions.

    (a) Competitive bidding requirement. All applicants are required to 
engage in a competitive bidding process for supported services, 
facilities, or equipment consistent with the requirements set forth in 
this subpart, unless they qualify for one or more of the exemptions in 
paragraph (h) of this section. In addition, applicants may engage in 
competitive bidding even if they qualify for an exemption. Applicants 
who utilize a competitive bidding exemption may proceed directly to 
filing a funding request as described in Sec. 54.643.
    (b) Fair and open process. (1) All entities participating in the 
Healthcare Connect Fund must conduct a fair and open competitive bidding 
process, consistent with all applicable requirements.
    (2) Vendors who intend to bid to provide supported services, 
equipment, or facilities to a health care provider may not 
simultaneously help the health care provider choose a winning bid. Any 
vendor who submits a bid, and any individual or entity that has a 
financial interest in such a vendor, is prohibited from:
    (i) Preparing, signing or submitting an applicant's request for 
services;
    (ii) Serving as the Consortium Leader or other point of contact on 
behalf of applicant(s);
    (iii) Being involved in setting bid evaluation criteria; or
    (iv) Participating in the bid evaluation or vendor selection process 
(except in their role as potential vendors).
    (3) All potential bidders must have access to the same information 
and must be treated in the same manner.
    (4) All applicants and vendors must comply with any applicable 
state, Tribal, or local competitive bidding requirements. The 
competitive bidding requirements in this section apply in addition to 
state, Tribal, and local competitive bidding requirements and are not 
intended to preempt such state, Tribal, or local requirements.
    (c) Cost-effective. For purposes of the Healthcare Connect Fund, 
``cost-effective'' 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) Bid evaluation criteria. Applicants must develop weighted 
evaluation criteria (e.g., scoring matrix) that demonstrate how the 
applicant will choose the most ``cost-effective'' bid before submitting 
a Request for Services. Price must be a primary factor, but need not be 
the only primary factor. A non-price factor can receive an equal weight 
to price, but may not receive a greater weight than price.

[[Page 199]]

    (e) Request for services. Applicants must submit the following 
documents to the Administrator in order to initiate competitive bidding.
    (1) Form 461, including certifications. The applicant must provide 
the following certifications as part of the request for services.
    (i) The person signing the application is authorized to submit the 
application on behalf of the applicant and has examined the form and all 
attachments, and to the best of his or her knowledge, information, and 
belief, all statements of fact contained therein are true.
    (ii) The applicant has followed any applicable state, Tribal, or 
local procurement rules.
    (iii) All Healthcare Connect Fund support will be used solely for 
purposes reasonably related to the provision of health care service or 
instruction that the HCP is legally authorized to provide under the law 
of the state in which the services are provided and will not be sold, 
resold, or transferred in consideration for money or any other thing of 
value.
    (iv) The applicant satisfies all of the requirements under section 
254 of the Act and applicable Commission rules.
    (v) The applicant has reviewed all applicable requirements for the 
program and will comply with those requirements.
    (2) Bid evaluation criteria. Requirements for bid evaluation 
criteria are described in paragraph (d) of this section.
    (3) Declaration of assistance. All applicants must submit a 
``Declaration of Assistance'' with their Request for Services. In the 
Declaration of Assistance, applicants must identify each and every 
consultant, vendor, and other outside expert, whether paid or unpaid, 
who aided in the preparation of their applications.
    (4) Request for proposal (if applicable). (i) Any applicant may use 
a request for proposals (RFP). Applicants who use an RFP must submit the 
RFP and any additional relevant bidding information to the Administrator 
with Form 461.
    (ii) An applicant must submit an RFP:
    (A) If it is required to issue an RFP under applicable State, 
Tribal, or local procurement rules or regulations;
    (B) If the applicant is a consortium seeking more than $100,000 in 
program support during the funding year, including applications that 
seek more than $100,000 in program support for a multi-year commitment; 
or
    (C) If the applicant is a consortium seeking support for 
participant-constructed and owned network facilities.
    (iii) RFP requirements. (A) An RFP must provide sufficient 
information to enable an effective competitive bidding process, 
including describing the health care provider's service needs and 
defining the scope of the project and network costs (if applicable).
    (B) An RFP must specify the period during which bids will be 
accepted.
    (C) An RFP must include the bid evaluation criteria described in 
paragraph (d) of this section, and solicit sufficient information so 
that the criteria can be applied effectively.
    (D) Consortium applicants seeking support for long-term capital 
investments whose useful life extends beyond the period of the funding 
commitment (e.g., facilities constructed and owned by the applicant, 
fiber indefeasible rights of use) must seek bids in the same RFP from 
vendors who propose to meet those needs via services provided over 
vendor-owned facilities, for a time period comparable to the life of the 
proposed capital investment.
    (E) Applicants may prepare RFPs in any manner that complies with the 
rules in this subpart and any applicable state, Tribal, or local 
procurement rules or regulations.
    (5) Additional requirements for consortium applicants. (i) Network 
plan. Consortium applicants must submit a narrative describing specific 
elements of their network plan with their Request for Services. 
Consortia applicants are required to use program support for the 
purposes described in their narrative. The required elements of the 
narrative include:
    (A) Goals and objectives of the network;
    (B) Strategy for aggregating the specific needs of health care 
providers (including providers that serve rural areas) within a state or 
region;
    (C) Strategy for leveraging existing technology to adopt the most 
efficient

[[Page 200]]

and cost effective means of connecting those providers;
    (D) How the supported network will be used to improve or provide 
health care delivery;
    (E) Any previous experience in developing and managing health 
information technology (including telemedicine) programs; and
    (F) A project management plan outlining the project's leadership and 
management structure, and a work plan, schedule, and budget.
    (ii) Letters of agency. Consortium applicants must submit letters of 
agency pursuant to Sec. 54.632.
    (f) Public posting by the Administrator. The Administrator shall 
post on its web site the following competitive bidding documents, as 
applicable:
    (1) Form 461,
    (2) Bid evaluation criteria,
    (3) Request for proposal, and
    (4) Network plan.
    (g) 28-day waiting period. After posting the documents described in 
paragraph (f) of this section on its Web site, the Administrator shall 
send confirmation of the posting to the applicant. The applicant shall 
wait at least 28 days from the date on which its competitive bidding 
documents are posted on the Web site before selecting and committing to 
a vendor.
    (1) Selection of the most ``cost-effective'' bid and contract 
negotiation. Each applicant subject to competitive bidding is required 
to certify to the Administrator that the selected bid is, to the best of 
the applicant's knowledge, the most cost-effective option available. 
Applicants are required to submit the documentation listed in Sec. 
54.643 to support their certifications.
    (2) Applicants who plan to request evergreen status under Sec. 
54.642(h)(4)(ii) must enter into a contract that identifies both 
parties, is signed and dated by the health care provider or Consortium 
Leader after the 28-day waiting period expires, and specifies the type, 
term, and cost of service.
    (h) Exemptions to competitive bidding requirements. (1) Annual 
undiscounted cost of $10,000 or less. An applicant that seeks support 
for $10,000 or less of total undiscounted eligible expenses for a single 
year is exempt from the competitive bidding requirements under this 
section, if the term of the contract is one year or less.
    (2) Government Master Service Agreement (MSA). Eligible health care 
providers that seek support for services and equipment purchased from 
MSAs negotiated by federal, state, Tribal, or local government entities 
on behalf of such health care providers and others, if such MSAs were 
awarded pursuant to applicable federal, state, Tribal, or local 
competitive bidding requirements, are exempt from the competitive 
bidding requirements under this section.
    (3) Master Service Agreements approved under the Pilot Program or 
Healthcare Connect Fund. A eligible health care provider site may opt 
into an existing MSA approved under the Pilot Program or Healthcare 
Connect Fund and seek support for services and equipment purchased from 
the MSA without triggering the competitive bidding requirements under 
this section, if the MSA was developed and negotiated in response to an 
RFP that specifically solicited proposals that included a mechanism for 
adding additional sites to the MSA.
    (4) Evergreen contracts. (i) Subject to the provisions in Sec. 
54.644, the Administrator may designate a multi-year contract as 
``evergreen,'' which means that the service(s) covered by the contract 
need not be re-bid during the contract term.
    (ii) A contract entered into by a health care provider or consortium 
as a result of competitive bidding may be designated as evergreen if it 
meets all of the following requirements:
    (A) Is signed by the individual health care provider or consortium 
lead entity;
    (B) Specifies the service type, bandwidth and quantity;
    (C) Specifies the term of the contract;
    (D) Specifies the cost of services to be provided; and
    (E) Includes the physical location or other identifying information 
of the health care provider sites purchasing from the contract.
    (iii) Participants may exercise voluntary options to extend an 
evergreen contract without undergoing additional competitive bidding, 
if:

[[Page 201]]

    (A) The voluntary extension(s) is memorialized in the evergreen 
contract;
    (B) The decision to extend the contract occurs before the 
participant files its funding request for the funding year when the 
contract would otherwise expire; and
    (C) The voluntary extension(s) do not exceed five years in the 
aggregate.
    (5) Schools and libraries program master contracts. Subject to the 
provisions in Sec. Sec. 54.500(g), 54.501(c)(1), and 54.503, an 
eligible health care provider in a consortium with participants in the 
schools and libraries universal service support program and a party to 
the consortium's existing contract is exempt from the Healthcare Connect 
Fund competitive bidding requirements if the contract was approved in 
the schools and libraries universal service support program as a master 
contract. The health care provider must comply with all Healthcare 
Connect Fund rules and procedures except for those applicable to 
competitive bidding.

[78 FR 13988, Mar. 1, 2013]



Sec. 54.643  Funding commitments.

    (a) Once a vendor is selected, applicants must submit a ``Funding 
Request'' (and supporting documentation) to provide information about 
the services, equipment, or facilities selected and certify that the 
services selected were the most cost-effective option of the offers 
received. The following information should be submitted to the 
Administrator with the Funding Request.
    (1) Request for funding. The applicant shall submit a request for 
funding (Form 462) to identify the service(s), equipment, or facilities; 
rates; vendor(s); and date(s) of vendor selection.
    (2) Certifications. The applicant must provide the following 
certifications as part of the request for funding:
    (i) The person signing the application is authorized to submit the 
application on behalf of the applicant and has examined the form and all 
attachments, and to the best of his or her knowledge, information, and 
belief, all statements of fact contained therein are true.
    (ii) Each vendor selected is, to the best of the applicant's 
knowledge, information and belief, the most cost-effective vendor 
available, as defined in Sec. 54.642(c).
    (iii) All Healthcare Connect Fund support will be used only for 
eligible health care purposes.
    (iv) The applicant is not requesting support for the same service 
from both the Telecommunications Program and the Healthcare Connect 
Fund.
    (v) The applicant satisfies all of the requirements under section 
254 of the Act and applicable Commission rules, and understands that any 
letter from the Administrator that erroneously commits funds for the 
benefit of the applicant may be subject to rescission.
    (vi) The applicant has reviewed all applicable requirements for the 
program and will comply with those requirements.
    (vii) The applicant will maintain complete billing records for the 
service for five years.
    (3) Contracts or other documentation. All applicants must submit a 
contract or other documentation that clearly identifies the vendor(s) 
selected and the health care provider(s) who will receive the services, 
equipment, or facilities; the service, bandwidth, and costs for which 
support is being requested; and the term of the service agreement(s) if 
applicable (i.e., if services are not being provided on a month-to-month 
basis). For services, equipment, or facilities provided under contract, 
the applicant must submit a copy of the contract signed and dated (after 
the Allowable Contract Selection Date) by the individual health care 
provider or Consortium Leader. If the service, equipment, or facilities 
are not being provided under contract, the applicant must submit a bill, 
service offer, letter, or similar document from the vendor that provides 
the required information.
    (4) Competitive bidding documents. Applicants must submit 
documentation to support their certifications that they have selected 
the most cost-effective option, including a copy of each bid received 
(winning, losing, and disqualified), the bid evaluation criteria, and 
the following documents (as applicable): bid evaluation sheets; a list 
of people who evaluated bids (along with their title/role/relationship 
to the applicant organization); memos, board minutes, or similar 
documents related to the vendor selection/award; copies of

[[Page 202]]

notices to winners; and any correspondence with vendors during the 
bidding/evaluation/award phase of the process. Applicants who claim a 
competitive bidding exemption must submit relevant documentation to 
allow the Administrator to verify that the applicant is eligible for the 
claimed exemption.
    (5) Cost allocation for ineligible entities or components. Pursuant 
to Sec. 54.639(d)(3) through (d)(4), where applicable, applicants must 
submit a description of how costs will be allocated for ineligible 
entities or components, as well as any agreements that memorialize such 
arrangements with ineligible entities.
    (6) Additional documentation for consortium applicants. A consortium 
applicant must also submit the following:
    (i) Any revisions to the network plan submitted with the Request for 
Services pursuant to Sec. 54.642(e)(5)(i), as necessary. If not 
previously submitted, the consortium should provide a narrative 
description of how the network will be managed, including all 
administrative aspects of the network, including but not limited to 
invoicing, contractual matters, and network operations. If the 
consortium is required to provide a sustainability plan as set forth in 
Sec. 54.643(a)(6)(iv), the revised budget should include the budgetary 
factors discussed in the sustainability plan requirements.
    (ii) A list of participating health care providers and all of their 
relevant information, including eligible (and ineligible, if applicable) 
cost information for each participating health care provider.
    (iii) Evidence of a viable source for the undiscounted portion of 
supported costs.
    (iv) Sustainability plans for applicants requesting support for 
long-term capital expenses: Consortia that seek funding to construct and 
own their own facilities or obtain indefeasible right of use or capital 
lease interests are required to submit a sustainability plan with their 
funding requests demonstrating how they intend to maintain and operate 
the facilities that are supported over the relevant time period. 
Applicants may incorporate by reference other portions of their 
applications (e.g., project management plan, budget). The sustainability 
plan must, at a minimum, address the following points:
    (A) Projected sustainability period. Indicate the sustainability 
period, which at a minimum is equal to the useful life of the funded 
facility. The consortium's budget must show projected income and 
expenses (i.e., for maintenance) for the project at the aggregate level, 
for the sustainability period.
    (B) Principal factors. Discuss each of the principal factors that 
were considered by the participant to demonstrate sustainability. This 
discussion must include all factors that show that the proposed network 
will be sustainable for the entire sustainability period. Any factor 
that will have a monetary impact on the network must be reflected in the 
applicant's budget.
    (C) Terms of membership in the network. Describe generally any 
agreements made (or to be entered into) by network members (e.g., 
participation agreements, memoranda of understanding, usage agreements, 
or other similar agreements). The sustainability plan must also 
describe, as applicable:
    (1) Financial and time commitments made by proposed members of the 
network;
    (2) If the project includes excess bandwidth for growth of the 
network, describe how such excess bandwidth will be financed; and
    (3) If the network will include ineligible health care providers and 
other network members, describe how fees for joining and using the 
network will be assessed.
    (D) Ownership structure. Explain who will own each material element 
of the network (e.g., fiber constructed, network equipment, end user 
equipment). For purposes of this subsection, ``ownership'' includes an 
indefeasible right of use interest. Applicants must clearly identify the 
legal entity that will own each material element. Applicants must also 
describe any arrangements made to ensure continued use of such elements 
by the network members for the duration of the sustainability period.
    (E) Sources of future support. Describe other sources of future 
funding, including fees to be paid by eligible health

[[Page 203]]

care providers and/or non-eligible entities.
    (F) Management. Describe the management structure of the network for 
the duration of the sustainability period. The applicant's budget must 
describe how management costs will be funded.
    (v) Material change to sustainability plan. A consortium that is 
required to file a sustainability plan must maintain its accuracy. If 
there is a material change to a required sustainability plan that would 
impact projected income or expenses by more than 20 percent or $100,000 
from the previous submission, or if the applicant submits a funding 
request based on a new Form 462 (i.e., a new competitively bid 
contract), the consortium is required to re-file its sustainability 
plan. In the event of a material change, the applicant must provide the 
Administrator with the revised sustainability plan no later than the end 
of the relevant quarter, clearly showing (i.e., by redlining or 
highlighting) what has changed.
    (b) [Reserved]

[78 FR 13990, Mar. 1, 2013]



Sec. 54.644  Multi-year commitments.

    (a) Participants in the Healthcare Connect Fund are permitted to 
enter into multi-year contracts for eligible expenses and may receive 
funding commitments from the Administrator for a period that covers up 
to three funding years.
    (b) If a long-term contract covers a period of more than three 
years, the applicant may also have the contract designated as 
``evergreen'' under Sec. 54.642(h)(4) which will allow the applicant to 
re-apply for a funding commitment under the contract after three years 
without having to undergo additional competitive bidding.

[78 FR 13991, Mar. 1, 2013]



Sec. 54.645  Payment process.

    (a) The Consortium Leader (or health care provider, if participating 
individually) must certify to the Administrator that it has paid its 
contribution to the vendor before the invoice can be sent to 
Administrator and the vendor can be paid.
    (b) Before the Administrator may process and pay an invoice, both 
the Consortium Leader (or health care provider, if participating 
individually) and the vendor must certify that they have reviewed the 
document and that it is accurate. All invoices must be received by the 
Administrator within six months of the end date of the funding 
commitment.

[78 FR 13991, Mar. 1, 2013]



Sec. 54.646  Site and service substitutions.

    (a) A Consortium Leader (or health care provider, if participating 
individually) may request a site or service substitution if:
    (1) The substitution is provided for in the contract, within the 
change clause, or constitutes a minor modification;
    (2) The site is an eligible health care provider and the service is 
an eligible service under the Healthcare Connect Fund;
    (3) The substitution does not violate any contract provision or 
state, Tribal, or local procurement laws; and
    (4) The requested change is within the scope of the controlling 
request for services, including any applicable request for proposal used 
in the competitive bidding process.
    (b) Support for a qualifying site and service substitution will be 
provided to the extent the substitution does not cause the total amount 
of support under the applicable funding commitment to increase.

[78 FR 13991, Mar. 1, 2013]



Sec. 54.647  Data collection and reporting.

    (a) Each consortium lead entity must file an annual report with the 
Administrator on or before September 30 for the preceding funding year, 
with the information and in the form specified by the Wireline 
Competition Bureau.
    (b) Each consortium is required to file an annual report for each 
funding year in which it receives support from the Healthcare Connect 
Fund.
    (c) For consortia that receive large upfront payments, the reporting 
requirement extends for the life of the supported facility.

[78 FR 13991, Mar. 1, 2013]

[[Page 204]]



Sec. 54.648  Audits and recordkeeping.

    (a) Random audits. Participants shall be subject to random 
compliance audits and other investigations to ensure compliance with 
program rules and orders.
    (b) Recordkeeping. (1) Participants, including Consortium Leaders 
and health care providers, shall maintain records to document compliance 
with program rules and orders for at least 5 years after the last day of 
service delivered in a particular funding year. Participants who receive 
support for long-term capital investments in facilities whose useful 
life extends beyond the period of the funding commitment shall maintain 
records for at least 5 years after the end of the useful life of the 
facility. Participants shall maintain asset and inventory records of 
supported network equipment to verify the actual location of such 
equipment for a period of 5 years after purchase.
    (2) Vendors shall retain records related to the delivery of 
supported services, facilities, or equipment to document compliance with 
program rules and orders for at least 5 years after the last day of the 
delivery of supported services, equipment, or facilities in a particular 
funding year.
    (3) Both participants and vendors shall produce such records at the 
request of the Commission, any auditor appointed by the Administrator or 
the Commission, or of any other state or federal agency with 
jurisdiction.

[78 FR 13991, Mar. 1, 2013]



Sec. 54.649  Certifications.

    For individual health care provider applicants, required 
certifications must be provided and signed by an officer or director of 
the health care provider, or other authorized employee of the health 
care provider. For consortium applicants, an officer, director, or other 
authorized employee of the Consortium Leader must sign the required 
certifications. Pursuant to Sec. 54.680, electronic signatures are 
permitted for all required certifications.

[78 FR 13992, Mar. 1, 2013]

                           General Provisions



Sec. 54.671  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 services purchased with support provided under 
this subpart.

[78 FR 13992, Mar. 1, 2013]



Sec. 54.672  Duplicate support.

    (a) Eligible health care providers that seek support under the 
Healthcare Connect Fund for telecommunications services may not also 
request support from the Telecommunications Program for the same 
services.
    (b) Eligible health care providers that seek support under the 
Telecommunications Program or the Healthcare Connect Fund may not also 
request support from any other universal service program for the same 
expenses.

[78 FR 13992, Mar. 1, 2013]



Sec. 54.675  Cap.

    (a) Amount of the annual cap. The aggregate annual cap on federal 
universal service support for health care providers shall be $400 
million per funding year, of which up to $150 million per funding year 
will be available to support upfront payments and multi-year commitments 
under the Healthcare Connect Fund.
    (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) For the Telecommunications Program and the Healthcare Connect

[[Page 205]]

Fund, the Administrator shall implement a filing window period that 
treats all eligible health care providers filing within the window 
period as if their applications were simultaneously received.
    (3) [Reserved]
    (4) The deadline to submit a funding commitment request under the 
Telecommunications Program and the Healthcare Connect Fund is June 30 
for the funding year that begins on the previous July 1.
    (d) Annual filing requirement. Health care providers shall file new 
funding requests for each funding year, except for health care providers 
who have received a multi-year funding commitment under Sec. 54.644.
    (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, except for multi-year funding commitments as 
described in Sec. 54.644.
    (f) Pro-rata reductions for Telecommunications Program support. The 
Administrator shall act in accordance with this section when a filing 
window period for the Telecommunications Program and the Healthcare 
Connect Fund, as described in paragraph (c)(2) of this section, is in 
effect. When a filing window period described in paragraph (c)(2) of 
this section closes, the Administrator shall calculate the total demand 
for Telecommunications Program and Healthcare Connect Fund support 
submitted by all applicants during the filing window period. If the 
total demand during a filing window period exceeds the total remaining 
support available for the funding year, the Administrator shall take the 
following steps:
    (1) The Administrator shall divide the total remaining funds 
available for the funding year by the total amount of Telecommunications 
Program and Healthcare Connect Fund support requested by each applicant 
that has filed during the window period, to produce a pro-rata factor.
    (2) The Administrator shall calculate the amount of 
Telecommunications Program and Healthcare Connect Fund support requested 
by each applicant that has filed during the filing window.
    (3) The Administrator shall multiply the pro-rata factor by the 
total dollar amount requested by each applicant filing during the window 
period. Administrator shall then commit funds to each applicant for 
Telecommunications Program and Healthcare Connect Fund support 
consistent with this calculation.

[78 FR 13992, Mar. 1, 2013]



Sec. 54.679  Election to offset support against annual universal service fund 

contribution.

    (a) A service provider that contributes to the universal service 
support mechanisms under subpart H of this part and also provides 
services eligible for support under this subpart to eligible health care 
providers may, at the election of the contributor:
    (1) Treat the amount eligible for support under this subpart as an 
offset against the contributor's universal service support obligation 
for the year in which the costs for providing eligible services were 
incurred; or
    (2) Receive direct reimbursement from the Administrator for that 
amount.
    (b) Service providers that are contributors 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 service provider that fails to remit its 
monthly universal service contribution obligation, however, shall first 
be applied as an offset to that contributor's contribution obligation. 
Such a service provider shall remain subject to the offsetting method 
for the remainder of the calendar year in which it failed to remit its 
monthly universal service obligation. A service provider 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.
    (c) If a service provider providing services eligible for support 
under this subpart elects to treat that support

[[Page 206]]

amount as an offset against its universal service contribution 
obligation and the total amount of support owed exceeds its universal 
service obligation, calculated on an annual basis, the service provider 
shall receive a direct reimbursement in the amount of the difference. 
Any such reimbursement due a service provider shall be provided by the 
Administrator 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 contributor's universal service obligation was applied.

[78 FR 13992, Mar. 1, 2013]



Sec. 54.680  Validity of electronic signatures.

    (a) For the purposes of this subpart, an electronic signature 
(defined by the Electronic Signatures in Global and National Commerce 
Act, as an electronic sound, symbol, or process, attached to or 
logically associated with a contract or other record and executed or 
adopted by a person with the intent to sign the record) has the same 
legal effect as a written signature.
    (b) For the purposes of this subpart, an electronic record (defined 
by the Electronic Signatures in Global and National Commerce Act, as a 
contract or other record created, generated, sent, communicated, 
received, or stored by electronic means) constitutes a record.

[78 FR 13993, Mar. 1, 2013]



                        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.
    (d) The Administrator shall be managed by a Chief Executive Officer, 
as

[[Page 207]]

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, and the low income support mechanism.
    (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, 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 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

[[Page 208]]

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; 76 
FR 73876, Nov. 29, 2011]



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 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

[[Page 209]]

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]



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.
    (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]

[[Page 210]]



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.
    (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.

[[Page 211]]

    (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;
    (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.

[[Page 212]]

    (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]



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 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

[[Page 213]]

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]



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 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

[[Page 214]]

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. The Commission may instruct the 
Administrator to treat excess contributions in a manner other than as 
prescribed in this paragraph (b). Such instructions may be made in the 
form of a Commission Order or a public notice released by the Wireline 
Competition Bureau. Any such public notice will become effective 
fourteen days after release of the public notice, absent further 
Commission action.
    (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; 76 FR 73876, Nov. 29, 2011]



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 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.

[[Page 215]]

    (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]



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 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

[[Page 216]]

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, and the low income 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 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; 76 FR 73877, Nov. 29, 2011]



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:

[[Page 217]]

    (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 Managing Director.
    (b) The Office of Managing Director shall review the preliminary 
audit requirements to determine whether they are adequate to meet the 
audit objectives. The Office of Managing Director shall prescribe 
modifications that shall be incorporated into the final audit 
requirements.
    (c) After the audit requirements have been approved by the Office of 
Managing Director, 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 Managing Director. The Office of Managing Director 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 Managing Director 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 Managing Director of any revisions to the 
final audit program or to the scope of the audit;
    (2) Notify the Office of Managing Director 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 Managing Director Audit 
Staff.
    (g) The Office of Managing Director 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 Managing Director 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 
Managing Director'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 Managing Director. The Administrator 
shall provide the independent auditor time to perform additional audit 
work recommended by the Office of Managing Director.
    (i) Within thirty (30) calendar days after receiving the audit 
report, the Administrator shall respond to the audit findings and send 
copies of its response to the Office of Managing Director. 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 Managing Director 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 Managing Director may take 
any action necessary to ensure that the universal service support 
mechanisms

[[Page 218]]

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; 77 FR 71712, Dec. 4, 2012]



        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 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;

[[Page 219]]

    (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]



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.

[[Page 220]]

    (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 
          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

[[Page 221]]

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.
    (f) Beginning January 1, 2012, no incumbent or competitive eligible 
telecommunications carrier shall receive support pursuant to this 
subpart, nor shall any incumbent or competitive eligible 
telecommunications carrier be required to complete any filings pursuant 
to this subpart after March 31, 2012.

[65 FR 38690, June 21, 2000, as amended at 65 FR 57739, Sept. 26, 2000; 
76 FR 73877, Nov. 29, 2011]



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 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;

[[Page 222]]

    (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]



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

[[Page 223]]

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 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

[[Page 224]]

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 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

[[Page 225]]

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 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

[[Page 226]]

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 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

[[Page 227]]

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.
    (4) Beginning January 1, 2012, competitive eligible 
telecommunications carriers shall not receive Interstate Common Line 
Support pursuant to this subpart and will instead receive support 
consistent with Sec. 54.307(e).
    (c) Beginning January 1, 2012, for purposes of calculating the 
amount of Interstate Common Line Support determined pursuant to 
paragraph (a) of this section that a non-price cap carrier may receive, 
the corporate operations expense allocated to the Common Line Revenue 
Requirement, pursuant to Sec. 69.409 of this chapter, shall be limited 
to the lesser of:
    (1) The actual average monthly per-loop corporate operations 
expense; or
    (2) The portion of the monthly per-loop amount computed pursuant to 
Sec. 36.621(a)(4)(iii) of this chapter that would be allocated to the 
interstate Common Line Revenue Requirement pursuant to Sec. 69.409 of 
this chapter.
    (d) Support After December 31, 2011. Notwithstanding paragraph (a) 
of this section, beginning January 1, 2012, no carrier that is a rate-
of-return carrier, as that term is defined in Sec. 54.5 affiliated with 
a price cap local exchange carrier, as that term is defined in Sec. 
61.3(aa) of this chapter, shall receive support under this subpart.

[66 FR 59728, Nov. 30, 2001, as amended at 76 FR 73877, Nov. 29, 2011; 
78 FR 26269, May 6, 2013]



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

[[Page 228]]

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 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

[[Page 229]]

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) 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; 77 FR 14303, Mar. 9, 
2012]



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

[[Page 230]]

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.
    (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.



                         Subpart L_Mobility Fund

    Source: 76 FR 73877, Nov. 29, 2011, unless otherwise noted.



Sec. 54.1001  Mobility Fund--Phase I.

    The Commission will use competitive bidding, as provided in part 1, 
subpart AA, of this chapter, to determine the recipients of support 
available through Phase I of the Mobility Fund and the amount(s) of 
support that they may receive for specific geographic areas, subject to 
applicable post-auction procedures.



Sec. 54.1002  Geographic areas eligible for support.

    (a) Mobility Fund Phase I support may be made available for census 
blocks identified as eligible by public notice.
    (b) Except as provided in Sec. 54.1004, coverage units for purposes 
of conducting competitive bidding and disbursing support based on 
designated road miles will be identified by public notice for each 
census block eligible for support.



Sec. 54.1003  Provider eligibility.

    (a) Except as provided in Sec. 54.1004, an applicant shall be an 
Eligible Telecommunications Carrier in an area in order to receive 
Mobility Fund Phase I support for that area. The applicant's designation 
as an Eligible Telecommunications Carrier may be conditional subject to 
the receipt of Mobility Fund support.
    (b) An applicant shall have access to spectrum in an area that 
enables it to satisfy the applicable performance requirements in order 
to receive Mobility Fund Phase I support for that area. The applicant 
shall certify, in a form acceptable to the Commission, that it has 
received any Commission approvals necessary for such access at the time 
it applies to participate in competitive bidding and at the time that it 
applies for support and that it will retain such access for five (5) 
years after the date on which it is authorized to receive support. 
Pending requests for such approvals are not sufficient to satisfy this 
requirement.
    (c) An applicant shall certify that it is financially and 
technically qualified to provide the services supported by Mobility Fund 
Phase I in order to receive such support.

[76 FR 73877, Nov. 29, 2011, as amended at 77 FR 14303, Mar. 9, 2012]

    Effective Date Note: At 77 FR 14303, Mar. 9, 2012, Sec. 54.1003, 
paragraph (b) was revised. This paragraph contains information and 
recordkeeping requirements and will not become effective until approval 
has been given by the Office of Management and Budget.



Sec. 54.1004  Service to Tribal Lands.

    (a) A Tribally-owned or -controlled entity that has pending an 
application to be designated an Eligible Telecommunications Carrier may 
participate in any Mobility Fund Phase I auction, including any auction 
for support solely in Tribal lands, by bidding for support in areas 
located within the boundaries of the Tribal land associated with the 
Tribe that owns or controls the entity. To bid on this basis, an entity 
shall certify that it is a Tribally-owned or -controlled entity and 
identify the applicable Tribe and Tribal lands in its application to 
participate in the competitive bidding. A Tribally-owned or -controlled 
entity

[[Page 231]]

shall receive Mobility Fund Phase I support only after it has become an 
Eligible Telecommunications Carrier.
    (b) In any auction for support solely in Tribal lands, coverage 
units for purposes of conducting competitive bidding and disbursing 
support based on designated population will be identified by public 
notice for each census block eligible for support.
    (c) Tribally-owned or -controlled entities may receive a bidding 
credit with respect to bids for support within the boundaries of 
associated Tribal lands. To qualify for a bidding credit, an applicant 
shall certify that it is a Tribally-owned or -controlled entity and 
identify the applicable Tribe and Tribal lands in its application to 
participate in the competitive bidding. An applicant that qualifies 
shall have its bid(s) for support in areas within the boundaries of 
Tribal land associated with the Tribe that owns or controls the 
applicant reduced by twenty-five (25) percent or purposes of determining 
winning bidders without any reduction in the amount of support 
available.
    (d) A winning bidder for support in Tribal lands shall notify and 
engage the Tribal governments responsible for the areas supported.
    (1) A winning bidder's engagement with the applicable Tribal 
government shall consist, at a minimum, of discussion regarding:
    (i) A needs assessment and deployment planning with a focus on 
Tribal community anchor institutions;
    (ii) Feasibility and sustainability planning;
    (iii) Marketing services in a culturally sensitive manner;
    (iv) Rights of way processes, land use permitting, facilities 
siting, environmental and cultural preservation review processes; and
    (v) Compliance with Tribal business and licensing requirements.
    (2) A winning bidder shall notify the appropriate Tribal government 
of its winning bid no later than five (5) business days after being 
identified by public notice as a winning bidder.
    (3) A winning bidder shall certify in its application for support 
that it has substantively engaged appropriate Tribal officials regarding 
the issues specified in Sec. 54.1004(d)(1), at a minimum, as well as 
any other issues specified by the Commission, and provide a summary of 
the results of such engagement. A copy of the certification and summary 
shall be sent to the appropriate Tribal officials when it is sent to the 
Commission.
    (4) A winning bidder for support in Tribal lands shall certify in 
its annual report, pursuant to Sec. 54.1009(a)(5), and prior to 
disbursement of support, pursuant to Sec. 54.1008(c), that it has 
substantively engaged appropriate Tribal officials regarding the issues 
specified in Sec. 54.1004(d)(1), at a minimum, as well as any other 
issues specified by the Commission, and provide a summary of the results 
of such engagement. A copy of the certification and summary shall be 
sent to the appropriate Tribal officials when it is sent to the 
Commission.



Sec. 54.1005  Application process.

    (a) Application to participate in competitive bidding for Mobility 
Fund Phase I support. In addition to providing information specified in 
Sec. 1.21001(b) of this chapter and any other information required by 
the Commission, an applicant to participate in competitive bidding for 
Mobility Fund Phase I support also shall:
    (1) Provide ownership information as set forth in Sec. 1.2112(a) of 
this chapter;
    (2) Certify that the applicant is financially and technically 
capable of meeting the public interest obligations of Sec. 54.1006 in 
each area for which it seeks support;
    (3) Disclose its status as an Eligible Telecommunications Carrier in 
any area for which it will seek support or as a Tribal entity with a 
pending application to become an Eligible Telecommunications Carrier in 
any such area, and certify that the disclosure is accurate;
    (4) Describe the spectrum access that the applicant plans to use to 
meet obligations in areas for which it will bid for support, including 
whether the applicant currently holds a license for or leases the 
spectrum, and certify that the description is accurate and that the 
applicant will retain such access for at least five (5) years after the 
date on which it is authorized to receive support;

[[Page 232]]

    (5) Certify that it will not bid on any areas in which it has made a 
public commitment to deploy 3G or better wireless service by December 
31, 2012; and
    (6) Make any applicable certifications required in Sec. 54.1004.
    (b) Application by winning bidders for Mobility Fund Phase I 
support.--(1) Deadline. Unless otherwise provided by public notice, 
winning bidders for Mobility Fund Phase I support shall file an 
application for Mobility Fund Phase I support no later than 10 business 
days after the public notice identifying them as winning bidders.
    (2) Application contents.--(i) Identification of the party seeking 
the support, including ownership information as set forth in Sec. 
1.2112(a) of this chapter.
    (ii) Certification that the applicant is financially and technically 
capable of meeting the public interest obligations of Sec. 54.1006 in 
the geographic areas for which it seeks support.
    (iii) Proof of the applicant's status as an Eligible 
Telecommunications Carrier or as a Tribal entity with a pending 
application to become an Eligible Telecommunications Carrier in any area 
for which it seeks support and certification that the proof is accurate.
    (iv) A description of the spectrum access that the applicant plans 
to use to meet obligations in areas for which it is the winning bidder 
for support, including whether the applicant currently holds a license 
for or leases the spectrum, and a certification that the description is 
accurate and that the applicant will retain such access for at least 
five (5) years after the date on which it is authorized to receive 
support.
    (v) A detailed project description that describes the network, 
identifies the proposed technology, demonstrates that the project is 
technically feasible, discloses the budget and describes each specific 
phase of the project, e.g., network design, construction, deployment, 
and maintenance. The applicant shall indicate whether the supported 
network will provide third generation (3G) mobile service within the 
period prescribed by Sec. 54.1006(a) or fourth generation (4G) mobile 
service within the period prescribed by Sec. 54.1006(b).
    (vi) Certifications that the applicant has available funds for all 
project costs that exceed the amount of support to be received from 
Mobility Fund Phase I and that the applicant will comply with all 
program requirements.
    (vii) Any guarantee of performance that the Commission may require 
by public notice or other proceedings, including but not limited to the 
letters of credit required in Sec. 54.1007, or a written commitment 
from an acceptable bank, as defined in Sec. 54.1007(a)(1), to issue 
such a letter of credit.
    (viii) Certification that the applicant will offer service in 
supported areas at rates that are within a reasonable range of rates for 
similar service plans offered by mobile wireless providers in urban 
areas for a period extending until five (5) years after the date on 
which it is authorized to receive support.
    (ix) Any applicable certifications and showings required in Sec. 
54.1004.
    (x) Certification that the party submitting the application is 
authorized to do so on behalf of the applicant.
    (xi) Such additional information as the Commission may require.
    (3) Application processing. (i) No application will be considered 
unless it has been submitted in an acceptable form during the period 
specified by public notice. No applications submitted or demonstrations 
made at any other time shall be accepted or considered.
    (ii) Any application that, as of the submission deadline, either 
does not identify the applicant seeking support as specified in the 
public notice announcing application procedures or does not include 
required certifications shall be denied.
    (iii) An applicant may be afforded an opportunity to make minor 
modifications to amend its application or correct defects noted by the 
applicant, the Commission, the Administrator, or other parties. Minor 
modifications include correcting typographical errors in the application 
and supplying non-material information that was inadvertently omitted or 
was not available at the time the application was submitted.
    (iv) Applications to which major modifications are made after the 
deadline for submitting applications shall

[[Page 233]]

be denied. Major modifications include, but are not limited to, any 
changes in the ownership of the applicant that constitute an assignment 
or change of control, or the identity of the applicant, or the 
certifications required in the application.
    (v) After receipt and review of the applications, a public notice 
shall identify each winning bidder that may be authorized to receive 
Mobility Fund Phase I support after the winning bidder submits a Letter 
of Credit and an accompanying opinion letter as required by Sec. 
54.1007, in a form acceptable to the Commission, and any final 
designation as an Eligible Telecommunications Carrier that any Tribally-
owned or -controlled applicant may still require. Each such winning 
bidder shall submit a Letter of Credit and an accompanying opinion 
letter as required by Sec. 54.1007, in a form acceptable to the 
Commission, and any required final designation as an Eligible 
Telecommunications Carrier no later than 10 business days following the 
release of the public notice.
    (vi) After receipt of all necessary information, a public notice 
will identify each winning bidder that is authorized to receive Mobility 
Fund Phase I support.



Sec. 54.1006  Public interest obligations.

    (a) Deadline for construction--3G networks. A winning bidder 
authorized to receive Mobility Fund Phase I support that indicated in 
its application that it would provide third generation (3G) service on 
the supported network shall, no later than two (2) years after the date 
on which it was authorized to receive support, submit data from drive 
tests covering the area for which support was received demonstrating 
mobile transmissions supporting voice and data to and from the network 
covering 75% of the designated coverage units in the area deemed 
uncovered, or a higher percentage established by Public Notice prior to 
the competitive bidding, and meeting or exceeding the following:
    (1) Outdoor minimum data transmission rates of 50 kbps uplink and 
200 kbps downlink at vehicle speeds appropriate for the roads covered;
    (2) Transmission latency low enough to enable the use of real time 
applications, such as VoIP.
    (b) Deadline for construction--4G networks. A winning bidder 
authorized to receive Mobility Fund Phase I support that indicated in 
its application that it would provide fourth generation (4G) service on 
the supported network shall, no later than three (3) years after the 
date on which it was authorized to receive support, submit data from 
drive tests covering the area for which support was received 
demonstrating mobile transmissions supporting voice and data to and from 
the network covering 75% of the designated coverage units in the area 
deemed uncovered, or an applicable higher percentage established by 
public notice prior to the competitive bidding, and meeting or exceeding 
the following:
    (1) Outdoor minimum data transmission rates of 200 kbps uplink and 
768 kbps downlink at vehicle speeds appropriate for the roads covered;
    (2) Transmission latency low enough to enable the use of real time 
applications, such as VoIP.
    (c) Coverage test data. Drive tests submitted in compliance with a 
recipient's public interest obligations shall cover roads designated in 
the public notice detailing the procedures for the competitive bidding 
that is the basis of the recipient's support. Scattered site tests 
submitted in compliance with a recipient's public interest obligations 
shall be in compliance with standards set forth in the public notice 
detailing the procedures for the competitive bidding that is the basis 
of the recipient's authorized support.
    (d) Collocation obligations. During the period when a recipient 
shall file annual reports pursuant to Sec. 54.1009, the recipient shall 
allow for reasonable collocation by other providers of services that 
would meet the technological requirements of Mobility Fund Phase I on 
newly constructed towers that the recipient owns or manages in the area 
for which it receives support. In addition, during this period, the 
recipient may not enter into facilities access arrangements that 
restrict any party to the arrangement from allowing others to collocate 
on the facilities.

[[Page 234]]

    (e) Voice and data roaming obligations. During the period when a 
recipient shall file annual reports pursuant to Sec. 54.1009, the 
recipient shall comply with the Commission's voice and data roaming 
requirements that were in effect as of October 27, 2011, on networks 
that are built through Mobility Fund Phase I support.
    (f) Liability for failing to satisfy public interest obligations. A 
winning bidder authorized to receive Mobility Fund Phase I support that 
fails to comply with the public interest obligations in this paragraph 
or any other terms and conditions of the Mobility Fund Phase I support 
will be subject to repayment of the support disbursed together with an 
additional performance default payment. Such a winning bidder may be 
disqualified from receiving Mobility Fund Phase I support or other USF 
support. The additional performance default amount will be a percentage 
of the Mobility Fund Phase I support that the winning bidder has been 
and is eligible to request be disbursed to it pursuant to Sec. 54.1008. 
The percentage will be determined as specified in the public notice 
detailing competitive bidding procedures prior to the commencement of 
competitive bidding. The percentage will not exceed twenty percent.



Sec. 54.1007  Letter of credit.

    (a) Before being authorized to receive Mobility Fund Phase I 
support, a winning bidder shall obtain an irrevocable standby letter of 
credit which shall be acceptable in all respects to the Commission. Each 
winning bidder authorized to receive Mobility Fund Phase I support shall 
maintain its standby letter of credit or multiple standby letters of 
credit in an amount equal to the amount of Mobility Fund Phase I support 
that the winning bidder has been and is eligible to request be disbursed 
to it pursuant to Sec. 54.1008 plus the additional performance default 
amount described in Sec. 54.1006(f), until at least 120 days after the 
winning bidder receives its final distribution of support pursuant to 
Sec. 54.1008(b)(3).
    (1) The bank issuing the letter of credit shall be acceptable to the 
Commission. A bank that is acceptable to the Commission is
    (i) Any United States Bank that
    (A) Is among the 50 largest United States banks, determined on the 
basis of total assets as of the end of the calendar year immediately 
preceding the issuance of the letter of credit,
    (B) Whose deposits are insured by the Federal Deposit Insurance 
Corporation, and
    (C) Who has a long-term unsecured credit rating issued by Standard & 
Poor's of A- or better (or an equivalent rating from another nationally 
recognized credit rating agency); or
    (ii) Any non-U.S. bank that
    (A) Is among the 50 largest non-U.S. banks in the world, determined 
on the basis of total assets as of the end of the calendar year 
immediately preceding the issuance of the letter of credit (determined 
on a U.S. dollar equivalent basis as of such date),
    (B) Has a branch office in the District of Columbia or such other 
branch office agreed to by the Commission,
    (C) Has a long-term unsecured credit rating issued by a widely-
recognized credit rating agency that is equivalent to an A- or better 
rating by Standard & Poor's, and
    (D) Issues the letter of credit payable in United States dollars.
    (2) [Reserved]
    (b) A winning bidder for Mobility Fund Phase I support shall provide 
with its Letter of Credit an opinion letter from its legal counsel 
clearly stating, subject only to customary assumptions, limitations, and 
qualifications, that in a proceeding under Title 11 of the United States 
Code, 11 U.S.C. 101 et seq. (the ``Bankruptcy Code''), the bankruptcy 
court would not treat the letter of credit or proceeds of the letter of 
credit as property of the winning bidder's bankruptcy estate under 
section 541 of the Bankruptcy Code.
    (c) Authorization to receive Mobility Fund Phase I support is 
conditioned upon full and timely performance of all of the requirements 
set forth in Sec. 54.1006 and any additional terms and conditions upon 
which the support was granted.
    (1) Failure by a winning bidder authorized to receive Mobility Fund 
Phase I support to comply with any of the requirements set forth in 
Sec. 54.1006 or any other term or conditions upon which support was 
granted, or its loss

[[Page 235]]

of eligibility for any reason for Mobility Fund Phase I support, will be 
deemed an automatic performance default, will entitle the Commission to 
draw the entire amount of the letter of credit, and may disqualify the 
winning bidder from the receipt of Mobility Fund Phase I support or 
additional USF support.
    (2) A performance default will be evidenced by a letter issued by 
the Chief of either the Wireless Bureau or Wireline Bureau or their 
respective designees, which letter, attached to a standby letter of 
credit draw certificate, shall be sufficient for a draw on the standby 
letter of credit for the entire amount of the standby letter of credit.



Sec. 54.1008  Mobility Fund Phase I disbursements.

    (a) A winning bidder for Mobility Fund Phase I support will be 
advised by public notice whether it has been authorized to receive 
support. The public notice will detail how disbursement will be made 
available.
    (b) Mobility Fund Phase I support will be available for disbursement 
to authorized winning bidders in three stages.
    (1) One-third of the total possible support, if coverage were to be 
extended to 100 percent of the units deemed unserved in the geographic 
area, when the winning bidder is authorized to receive support.
    (2) One-third of the total possible support with respect to a 
specific geographic area when the recipient demonstrates coverage of 50 
percent of the coverage requirements of Sec. 54.1006(a) or (b), as 
applicable.
    (3) The remainder of the total support, based on the final total 
units covered, when the recipient demonstrates coverage meeting the 
requirements of Sec. 54.1006(a) or (b), as applicable.
    (c) A recipient accepting a final disbursement for a specific 
geographic area based on coverage of less than 100 percent of the units 
in the area previously deemed unserved waives any claim for the 
remainder of potential Mobility Fund Phase I support with respect to 
that area.
    (d) Prior to each disbursement request, a winning bidder for support 
in a Tribal land will be required to certify that it has substantively 
engaged appropriate Tribal officials regarding the issues specified in 
Sec. 54.1004(d)(1), at a minimum, as well as any other issues specified 
by the Commission and to provide a summary of the results of such 
engagement.
    (e) Prior to each disbursement request, a winning bidder will be 
required to certify that it is in compliance with all requirements for 
receipt of Mobility Fund Phase I support at the time that it requests 
the disbursement.



Sec. 54.1009  Annual reports.

    (a) A winning bidder authorized to receive Mobility Fund Phase I 
support shall submit an annual report no later than July 1 in each year 
for the five years after it was so authorized. Each annual report shall 
include the following, or reference the inclusion of the following in 
other reports filed with the Commission for the applicable year:
    (1) Electronic Shapefiles site coverage plots illustrating the area 
newly reached by mobile services at a minimum scale of 1:240,000;
    (2) A list of relevant census blocks previously deemed unserved, 
with road miles and total resident population and resident population 
residing in areas newly reached by mobile services (based on Census 
Bureau data and estimates);
    (3) If any such testing has been conducted, data received or used 
from drive tests, or scattered site testing in areas where drive tests 
are not feasible, analyzing network coverage for mobile services in the 
area for which support was received;
    (4) Certification that the applicant offers service in supported 
areas at rates that are within a reasonable range of rates for similar 
service plans offered by mobile wireless providers in urban areas;
    (5) Any applicable certifications and showings required in Sec. 
54.1004; and
    (6) Updates to the information provided in Sec. 54.1005(b)(2)(v).
    (b) The party submitting the annual report must certify that they 
have been authorized to do so by the winning bidder.

[[Page 236]]

    (c) Each annual report shall be submitted to the Office of the 
Secretary of the Commission, clearly referencing WT Docket No. 10-208; 
the Administrator; and the relevant state commissions, relevant 
authority in a U.S. Territory, or Tribal governments, as appropriate.

[76 FR 73877, Nov. 29, 2011, as amended at 77 FR 30915, May 24, 2012]



Sec. 54.1010  Record retention for Mobility Fund Phase I.

    A winning bidder authorized to receive Mobility Fund Phase I support 
and its agents are required to retain any documentation prepared for, or 
in connection with, the award of Mobility Fund Phase I support for a 
period of not less than ten (10) years after the date on which the 
winning bidder receives its final disbursement of Mobility Fund Phase I 
support.



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.

[[Page 237]]

    (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 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 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.
61.25 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

61.38 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 by incumbent 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 [Reserved]

  Subpart F_Formatting and Notice Requirements for Tariff Publications

61.51 Scope.
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 G_Specific Rules for Tariff Publications of Dominant and 
                          Nondominant Carriers

61.66 Scope.
61.68 Special notations.

[[Page 238]]

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.

                         Subpart H_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 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 239]]

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 240]]

    (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) Incumbent Local Exchange Carrier. ``Incumbent Local Exchange 
Carrier'' or ``ILEC'' has the same meaning as that term is defined in 47 
U.S.C. 251(h).
    (u) Issuing carrier. A carrier subject to the Act that publishes and 
files a tariff or tariffs with the Commission.
    (v) Line month. Line demand per month multiplied by twelve.
    (w) 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.
    (x) Mid-size company. All price cap local exchange carriers other 
than the Regional Bell Operating Companies and GTE.
    (y) 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.
    (z) 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) Other participating carrier. A carrier subject to the Act that 
publishes a tariff containing rates and regulations applicable to the 
portion or through service it furnishes in conjunction with another 
subject carrier.
    (bb) Price Cap Local Exchange Carrier. A local exchange carrier 
subject to regulation pursuant to Sec. 61.41 through 61.49.
    (cc) 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.
    (dd) 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.
    (ee) 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.
    (ff) Price cap regulation. A method of regulation of dominant 
carriers provided in Sec. Sec. 61.41 through 61.49.
    (gg) 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.
    (hh) [Reserved]
    (ii) Rate. The tariffed price per unit of service.
    (jj) Rate increase. Any change in a tariff which results in an 
increased rate or charge to any of the filing carrier's customers.
    (kk) 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.
    (ll) Regulations. The body of carrier prescribed rules in a tariff 
governing

[[Page 241]]

the offering of service in that tariff, including rules, practices, 
classifications, and definitions.
    (mm) 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.
    (nn) Rural Company. A company that, as of December 31, 1999, was 
certified to the Commission as a rural telephone company.
    (oo) 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.
    (pp) Service category. Any group of rate elements subject to price 
cap regulation, which group is subject to a band.
    (qq) 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.
    (rr) 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.
    (ss) Tariff. Schedules of rates and regulations filed by common 
carriers.
    (tt) 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.
    (uu) 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.
    (vv) Text change. A change in the text of a tariff which does not 
result in a change in any rate or regulation.
    (ww) United States. The several States and Territories, the District 
of Columbia, and the possessions of the United States.
    (xx) 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).
    (yy) Toll dialing parity. ``Toll dialing parity'' exists when there 
is dialing parity, as defined in Sec. 51.5 of this chapter, for toll 
services.
    (zz) Loop-based services. Loop-based services are services that 
employ Subcategory 1.3 facilities, as defined in Sec. 36.154 of this 
chapter.
    (aaa) 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.
    (bbb) Access stimulation.(1) A rate-of-return local exchange carrier 
or a Competitive Local Exchange Carrier engages in access stimulation 
when it satisfies the following two conditions:
    (i) Has an access revenue sharing agreement, whether express, 
implied, written or oral, that, over the course of the agreement, would 
directly or indirectly result in a net payment to the other party 
(including affiliates) to the agreement, in which payment by the rate-
of-return local exchange carrier or Competitive Local Exchange Carrier 
is based on the billing or collection of access charges from 
interexchange carriers or wireless carriers. When determining whether 
there is a net payment

[[Page 242]]

under this rule, all payments, discounts, credits, services, features, 
functions, and other items of value, regardless of form, provided by the 
rate-of-return local exchange carrier or Competitive Local Exchange 
Carrier to the other party to the agreement shall be taken into account; 
and
    (ii) Has either an interstate terminating-to-originating traffic 
ratio of at least 3:1 in a calendar month, or has had more than a 100 
percent growth in interstate originating and/or terminating switched 
access minutes of use in a month compared to the same month in the 
preceding year.
    (2) The local exchange carrier will continue to be engaging in 
access stimulation until it terminates all revenue sharing arrangements 
covered in paragraph (a)(1)(i) of this section. A local exchange carrier 
engaging in access stimulation is subject to revised interstate switched 
access charge rules under Sec. 61.38 and Sec. 69.3(e)(12) of this 
chapter.

[54 FR 19840, May 8, 1989]

    Editorial Note: For Federal Register citations affecting Sec. 61.3, 
see the List of CFR Sections Affected, which appears in the Finding Aids 
section of the printed volume and at www.fdsys.gov.



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 issuing carriers 
required to file tariff publications electronically, and any tariff 
publication that a carrier chooses to file electronically.
    (b) All issuing carriers that file tariffs are required to file 
tariff publications electronically.
    (c) All tariff publications shall be filed in a manner that is 
compatible and consistent with the technical requirements of the 
Electronic Tariff Filing System.

[63 FR 35540, June 30, 1998, as amended at 76 FR 43210, July 20, 2011]



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) 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 address set forth in Sec. 1.1105 of this 
chapter.
    (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 comply with the format requirements set forth in Sec. Sec. 61.52 
and 61.54, with the exception of the informational tariffs filed 
pursuant to 47 U.S.C. 226(h)(1)(A).

[63 FR 35540, June 30, 1998, as amended at 64 FR 46586, Aug. 26, 1999; 
73 FR 9030, Feb. 19, 2008; 76 FR 43210, July 20, 2011]



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 filed with the Commission must be numbered consecutively by 
the issuing carrier beginning with Number 1. All letters of transmittal 
must also:
    (1) Concisely explain the nature and purpose of the filing;
    (2) Specify whether supporting information is required for the new 
tariff or

[[Page 243]]

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) Local exchange 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 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) 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.
    (e) In addition to the requirements set forth in paragraph (a) of 
this section, any incumbent 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;
    (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.
    (f) In addition to the requirements set forth in paragraph (a) of 
this section, any price cap local exchange 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.
    (g) 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.
    (h)(1) 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)

    (2) 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.
    (i) 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.

[76 FR 43210, July 20, 2011]



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(i) and identified as the Monthly Updated Base Document.

[[Page 244]]

    (b) 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.

[76 FR 43211, July 20, 2011]



Sec. 61.17  Applications for special permission.

    (a) All issuing carriers that file applications for special 
permission, associated documents, such as transmittal letters, requests 
for special permission, and supporting information, shall file those 
documents electronically.
    (b) Applications for special permission must contain:
    (1) A detailed description of the tariff publication proposed to be 
put into effect;
    (2) A statement citing the specific rules and the grounds on which 
waiver is sought;
    (3) A showing of good cause; and
    (4) The appropriate Illustrative tariff pages the issuing carrier 
wishes to either revise or add as new pages to its tariff.
    (c) An application for special permission 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.
    (d) 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 address set forth in Sec. 
1.1105 of this chapter.
    (e) In addition, if an issuing 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 and Letters of Transmittal, 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 61.17(b)).

 (Exact name of carrier)________________________________________________

 (Name of officer or agent)_____________________________________________

 (Title of officer or agent)____________________________________________

    (f) If approved, the issuing 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.

[76 FR 43211, July 20, 2011]



            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

[[Page 245]]

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) All issuing carriers that file tariffs 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. Sec. 61.13 through 61.17.
    (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 cover letter (without attachments), FCC Form 159, and 
the appropriate fee to the address set forth in Sec. 1.1105 of this 
chapter.

[76 FR 43211, July 20,2011]



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, 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) Switched exchange access services shall include:
    (i) The functional equivalent of the ILEC interstate exchange access 
services typically associated with the 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

[[Page 246]]

switched transport facility (per mile); tandem switching;
    (ii) The termination of interexchange telecommunications traffic to 
any end user, either directly or via contractual or other arrangements 
with an affiliated or unaffiliated provider of interconnected VoIP 
service, as defined in 47 U.S.C. 153(25), or a non-interconnected VoIP 
service, as defined in 47 U.S.C. 153(36), that does not itself seek to 
collect reciprocal compensation charges prescribed by this subpart for 
that traffic, regardless of the specific functions provided or 
facilities used.
    (4) Non-rural ILEC shall mean an incumbent local exchange carrier 
that is not a rural telephone company under 47 U.S.C. 153(44).
    (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), (e), and (g) 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) In the case of interstate switched exchange access service, the 
lowest rate that the CLEC has tariffed for its interstate exchange 
access services, within the six months preceding June 20, 2001.
    (c) The benchmark rate for a CLEC's switched exchange access 
services will be the rate charged for similar services by the competing 
ILEC. If an ILEC to which a CLEC benchmarks its rates, pursuant to this 
section, lowers the rate to which a CLEC benchmarks, the CLEC must 
revise its rates to the lower level within 15 days of the effective date 
of the lowered ILEC rate.
    (d) Except as provided in paragraph (g) of this section, and 
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 exchange access 
services in that MSA that prices those services above the rate charged 
for such services by the competing ILEC.
    (e) Rural exemption. Except as provided in paragraph (g) of this 
section, and 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. Beginning July 
1, 2013, all CLEC reciprocal compensation rates for intrastate switched 
exchange access services subject to this subpart also shall be no higher 
than that NECA rate.
    (f) If a CLEC provides some portion of the 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, except if 
the CLEC is listed in the database of the Number Portability 
Administration Center as providing the calling party or dialed number, 
the CLEC may, to the extent permitted by Sec. 51.913(b) of this 
chapter, assess a rate equal to the rate that would be charged by the 
competing ILEC for all exchange access services required to deliver 
interstate traffic to the called number.
    (g) Notwithstanding paragraphs (b) through (e) of this section:
    (1) A CLEC engaging in access stimulation, as that term is defined 
in Sec. 61.3(bbb), shall not file a tariff for its interstate exchange 
access services

[[Page 247]]

that prices those services above the rate prescribed in the access 
tariff of the price cap LEC with the lowest switched access rates in the 
state.
    (2) A CLEC engaging in access stimulation, as that term is defined 
in Sec. 61.3(bbb), shall file revised interstate switched access 
tariffs within forty-five (45) days of commencing access stimulation, as 
that term is defined in Sec. 61.3(bbb), or within forty-five (45) days 
of [date] if the CLEC on that date is engaged in access stimulation, as 
that term is defined in Sec. 61.3(bbb).

[76 FR 73881, Nov. 29, 2011, as amended at 77 FR 20553, Apr. 5, 2012]



   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.
    (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. 61.38  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. Incumbent 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 issuing 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 tar