Connect America Fund; Developing a Unified Intercarrier Compensation Regime, 15906-15909 [2015-06642]
Download as PDF
15906
Federal Register / Vol. 80, No. 58 / Thursday, March 26, 2015 / Rules and Regulations
investigation to assess the nature and
extent of public health and
environmental risks associated with a
release of hazardous substances,
pollutants or contaminants. The NPL is
of only limited significance as it does
not assign liability to any party. Also,
placing a site on the NPL does not mean
that any remedial or removal action
necessarily need be taken.
K. Congressional Review Act
This action is subject to the CRA, and
the EPA will submit a rule report to
each House of the Congress and to the
Comptroller General of the United
States. This action is not a ‘‘major rule’’
as defined by 5 U.S.C. 804(2).
Provisions of the Congressional
Review Act (CRA) or section 305 of
CERCLA may alter the effective date of
this regulation. Under 5 U.S.C.
801(b)(1), a rule shall not take effect, or
continue in effect, if Congress enacts
(and the President signs) a joint
resolution of disapproval, described
under section 802. Another statutory
provision that may affect this rule is
CERCLA section 305, which provides
for a legislative veto of regulations
promulgated under CERCLA. Although
INS v. Chadha, 462 U.S. 919,103 S. Ct.
2764 (1983), and Bd. of Regents of the
University of Washington v. EPA, 86
F.3d 1214,1222 (D.C. Cir. 1996), cast the
validity of the legislative veto into
question, the EPA has transmitted a
copy of this regulation to the Secretary
of the Senate and the Clerk of the House
of Representatives.
If action by Congress under either the
CRA or CERCLA section 305 calls the
effective date of this regulation into
question, the EPA will publish a
document of clarification in the Federal
Register.
List of Subjects in 40 CFR Part 300
Environmental protection, Air
pollution control, Chemicals, Hazardous
substances, Hazardous waste,
Intergovernmental relations, Natural
resources, Oil pollution, Penalties,
Reporting and recordkeeping
requirements, Superfund, Water
pollution control, Water supply.
Dated: March 16, 2015.
Mathy Stanislaus,
Assistant Administrator, Office of Solid Waste
and Emergency Response.
40 CFR part 300 is amended as
follows:
PART 300—NATIONAL OIL AND
HAZARDOUS SUBSTANCES
POLLUTION CONTINGENCY PLAN
1. The authority citation for Part 300
continues to read as follows:
■
Authority: 33 U.S.C. 1321(c)(2); 42 U.S.C.
9601–9657; E.O. 13626, 77 FR 56749, 3 CFR,
2013 Comp., p.306; E.O. 12777, 56 FR 54757,
3 CFR, 1991 Comp., p.351; E.O. 12580, 52 FR
2923, 3 CFR, 1987 Comp., p.193.
2. Table 1 of Appendix B to Part 300
is amended by adding entries for
‘‘Kokomo Contaminated Ground Water
Plume’’ and ‘‘DSC McLouth Steel
Gibraltar Plant’’ in alphabetical order by
state to read as follows:
■
Appendix B to Part 300—National
Priorities List
TABLE 1—GENERAL SUPERFUND SECTION
Site name
*
IN ........................
*
*
*
Kokomo Contaminated Ground Water Plume .......................................
*
Kokomo
*
*
*
MI ........................
*
*
*
DSC McLouth Steel Gibraltar Plant ......................................................
*
Gibraltar
*
*
*
*
*
*
*
*
City/county
Notes a
State
*
aA
= Based on issuance of health advisory by Agency for Toxic Substances and Disease Registry (if scored, HRS score need not be greater
than or equal to 28.50).
*
*
*
*
*
[FR Doc. 2015–06696 Filed 3–25–15; 8:45 am]
BILLING CODE 6560–50–P
FEDERAL COMMUNICATIONS
COMMISSION
47 CFR Part 51
[WC Docket No. 10–90, CC Docket No. 01–
92; DA 15–249]
Connect America Fund; Developing a
Unified Intercarrier Compensation
Regime
Federal Communications
Commission.
ACTION: Final rule.
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AGENCY:
In this document, the Federal
Communications Commission’s
Wireline Competition Bureau clarifies
certain rules related to the
implementation of the intercarrier
SUMMARY:
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compensation transition for rate-ofreturn local exchange carriers adopted
in the USF/ICC Transformation Order.
Specifically, the Bureau clarifies the
Commission’s rules governing Eligible
Recovery calculations to address limited
unanticipated results of the application
of the true-up process evidenced by the
rate-of-return carriers’ 2014 annual
access tariff filings.
DATES: Effective April 27, 2015.
FOR FURTHER INFORMATION CONTACT:
Pamela Arluk, Wireline Competition
Bureau, Pricing Policy Division, (202)
418–1520 or (202) 418–0484 (TTY); or
Robin Cohn, Wireline Competition
Bureau, Pricing Policy Division, (202)
418–1520 or (202) 418–0484 (TTY).
SUPPLEMENTARY INFORMATION: This is a
summary of the Commission’s Order in
WC Docket No. 10–90 and CC Docket
No. 01–92, adopted and released on
February 24, 2015. The full text of this
document can be viewed at the
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following Internet address: https://
apps.fcc.gov/edocs_public/attachmatch/
DA-15-249A1.docx. The full text of this
document is also available for public
inspection during regular business
hours in the FCC Reference Center, 445
12th Street SW., Room CY–A257,
Washington, DC 20554. To request
materials in accessible formats for
people with disabilities (e.g. braille,
large print, electronic files, audio
format, etc.) or to request reasonable
accommodations (e.g. accessible format
documents, sign language interpreters,
CART, etc.), send an email to fcc504@
fcc.gov or call the Consumer &
Governmental Affairs Bureau at (202)
418–0530 (voice) or (202) 418–0432
(TTY).
I. Introduction
1. In the USF/ICC Transformation
Order, the Commission delegated to the
Wireline Competition Bureau (Bureau)
the authority to make any rule revisions
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necessary to ensure that the intercarrier
compensation (ICC) reforms adopted by
the Commission are properly reflected
in the Commission’s rules, including
correction of any conflicts between the
new or revised rules and addressing any
omissions or oversights. In the Order,
the Bureau acts pursuant to its delegated
authority to clarify certain rules relating
to implementation of the ICC transition
for rate-of-return local exchange carriers
(LECs) adopted in the USF/ICC
Transformation Order. We clarify the
Commission’s rules governing Eligible
Recovery calculations under § 51.917(d)
to address a limited number of
unanticipated results associated with
application of the true-up process that
became apparent in rate-of-return
carriers’ 2014 annual access tariff
filings. Specifically, we clarify that a
rate-of-return carrier that received too
much Eligible Recovery in 2012–13
because of an under-projection of
demand for that tariff period, and does
not have sufficient Eligible Recovery in
2014–15 to fully offset the 2012–13
amount of over-recovery, must refund
the amount that is not offset to the
Universal Service Administrative
Company (USAC) to avoid duplicative
recovery. Additionally, to ensure a
carrier receives the Eligible Recovery it
was entitled to in 2012–13, we clarify
that a rate-of-return carrier that received
too little Eligible Recovery in 2012–13
because of an over-projection of demand
for that tariff period may seek recovery
for any amounts it was not able to
recover through its 2014–15 Eligible
Recovery from USAC. We also revise
§ 51.917 of the Commission’s rules to
address similar discrepancies that may
occur in future years as a result of the
true-up process.
II. Background
2. In the USF/ICC Transformation
Order, the Commission adopted, among
other things, rules to implement the ICC
reform timeline that require carriers to
adjust, over a period of years, many of
their legacy ICC rates effective on July
1 of each of those years, with the
ultimate goal of transitioning to a billand-keep regime. The Commission also
adopted a recovery mechanism to
mitigate the impact of reduced ICC
revenues on carriers and to facilitate
continued investment in broadband
infrastructure while providing greater
certainty and predictability going
forward. The recovery mechanism
allows incumbent LECs to recover ICC
revenues reduced due to the ICC
reforms, up to an amount defined for
each year of the transition, which is
referred to as ‘‘Eligible Recovery.’’ A
Rate-of-Return carrier initially may
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recover its Eligible Recovery each year
from its end users through the Access
Recovery Charge (ARC) subject to an
annual cap. If the projected ARC
revenues do not recover the entire
Eligible Recovery amount, the carrier
may elect to collect the remainder from
Connect America Fund ICC support.
3. For rate-of-return LECs, the
calculation each year of a carrier’s
Eligible Recovery begins with its Base
Period Revenue (BPR). A rate-of-return
carrier’s BPR is the sum of certain ICC
intrastate switched access revenues and
net reciprocal compensation revenues
received by March 31, 2012, for services
provided during FY 2011, and the
projected revenue requirement for
interstate switched access services
provided during the 2011–2012 tariff
period. The BPR for rate-of-return
carriers was reduced by 5% initially and
is reduced by an additional 5% in each
year of the transition. A rate-of-return
LEC’s Eligible Recovery is equal to the
adjusted BPR for the year in question
less, for each relevant year of the
transition, the sum of (1) projected
intrastate switched access revenue; (2)
projected interstate switched access
revenue; and (3) projected net reciprocal
compensation revenue.
4. Beginning in 2014, the recovery
mechanism also incorporates in the
Eligible Recovery calculation a true-up
of the revenue difference between
projected and actual demand for
interstate and intrastate switched access
services, reciprocal compensation, and
the ARC for the tariff period that began
two years earlier. This adjustment
measures the extent to which a carrier
received more or less than the revenues
it projected for the earlier period and
thus whether it received too little, or too
much, Eligible Recovery through ARCs
and/or Connect America Fund ICC
support for that period. The true-up is
achieved by adjusting the later tariff
period’s Eligible Recovery to account for
the carrier’s revenue variance resulting
from differences between projected and
actual demand for the prior period. The
true-up process ensures that rate-ofreturn carriers at a minimum have the
opportunity to receive their adjusted
BPR, notwithstanding changes in
demand for their intercarrier
compensation rates being capped or
reduced. The true-up process does not
require that a carrier that has negative
Eligible Recovery, meaning the carrier
received revenues in excess of its
adjusted BPR from its interstate and
intrastate switched access and
reciprocal compensation alone and not
through an ARC or Connect America
Fund ICC support, to refund any of the
revenues it received.
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15907
5. To provide context for how the
true-up process works, the following
two examples demonstrate scenarios in
which the carrier either under-projected
or over-projected its revenues, and thus
must engage in a true-up calculation
pursuant to § 51.917(d)(1)(iii)–(iv) of the
Commission’s rules. In this first
example, Carrier A under-projected its
actual revenues and received too much
Eligible Recovery for the 2012–2013
tariff period. Carrier A had a BPR of
$100.00, a projected revenue amount of
$80.00 and an actual revenue amount of
$85.00:
2012–2013 BPR is $100.00 × .95 =
$95.00 (Adjusted BPR)
2012–2013 Total Projected Revenues =
$80.00
2012–2013 Eligible Recovery
(Adjusted BPR-Projected Revenues) =
$15.00
2012–2013 Total Actual Revenues =
$85.00
Projected Revenue—Actual Revenue =
$¥5.00 (true-up amount)
2014–2015 Eligible Recovery adjusted
by $¥5.00
As a result of its under-projection,
Carrier A would need to reduce its
2014–2015 tariff period Eligible
Recovery by five dollars to reflect the
difference between its actual revenues
and projected revenues for the 2012–
2013 tariff period.
6. Conversely, in the second example,
Carrier B over-projected its revenue
amounts in the 2012–2013 tariff period,
and it would need to increase its 2014–
2015 Eligible Recovery amounts to
reflect the difference. Carrier B had a
BPR of $100.00, a projected revenue
amount of $85.00 and an actual revenue
amount of $80.00:
2012–2013 BRP is $100.00 × .95 =
$95.00 (Adjusted BPR)
2012–2013 Total Projected Revenues =
$85.00
2012–2013 Eligible Recovery
(Adjusted BPR-Projected Revenues) =
$10.00
2012–2013 Total Actual Revenues =
$80.00
Projected Revenue¥Actual Revenue =
$5.00 (true-up amount)
2014–2015 Eligible Recovery adjusted
by $5.00
Thus, in this example, the carrier will
need to increase its 2014–2015 Eligible
Recovery amount by five dollars to
reflect the difference between its actual
revenues and projected revenues for the
2012–2013 tariff period.
III. Discussion
7. As noted above, the 2014 annual
tariff filing was the first time that
Eligible Recovery was adjusted to
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Federal Register / Vol. 80, No. 58 / Thursday, March 26, 2015 / Rules and Regulations
incorporate a true-up of projected
demand used in calculating Eligible
Recovery for an earlier tariff period. The
true-up process is designed to provide
certainty to rate-of-return carriers by
accounting for any difference between
projected and actual switched access
revenues, reciprocal compensation
revenues, or ARC revenues due to
demand variations. As the above
examples and the illustration in the
USF/ICC Transformation Order (which
similarly shows operation of the true-up
process when a carrier both
overestimated and underestimated its
projected revenues for the first year of
the ICC reforms adopted by the
Commission) demonstrate, a carrier’s
Eligible Recovery was to be adjusted
either upward or downward based on
any such differences. As the illustration
in the USF/ICC Transformation Order
reflects, the Commission expected that
the amount of any adjustment could be
completely offset through adjustments
to the amount of Eligible Recovery for
which ARC rates could be assessed and
Connect America Fund ICC support
could be received.
8. In conjunction with the 2014
annual tariff filing process, NECA
informally sought clarification
concerning a limited number of cases in
which the true-up process did not work
as outlined above and for which the
rules do not provide an unambiguous
resolution. In the Order, we clarify how
rate-of-return carriers and USAC should
address the 2014–15 fact scenarios
described below, consistent with the
policy goals of the USF/ICC
Transformation Order, and revise the
Commission’s rules, as set forth in the
Appendix, to provide clarity for future
tariff periods.
9. The first set of facts identified by
NECA involves several carriers whose
2012–13 tariff period projected demand
was underestimated compared to their
ultimate actual demand. Each carrier
therefore received too much Eligible
Recovery in 2012–13, and, under the
rules, their 2014–15 Eligible Recovery
should be reduced by the amount of
revenues associated with the demand
difference. The carriers’ Eligible
Recovery for 2014–15 before reflecting
the true-up adjustment, however, was
not large enough to offset completely
the true-up reduction from the 2012–13
tariff period. Thus, the excess Eligible
Recovery carriers received during the
2012–13 tariff period has not been fully
offset, and the carriers would be left
with duplicative recovery in
contravention of § 51.917(d)(1)(vii) of
the rules absent clarification to specify
the procedures to be followed under
these circumstances. We accordingly
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clarify that carriers that are in this
situation with respect to their 2014–15
Eligible Recovery calculation must
refund to USAC the amount of the
excess recovery that was not offset
within thirty (30) days of the effective
date of the Order. Consistent with the
rules we adopt, as set forth in the
Appendix, in the future a carrier in this
situation must refund excess amounts to
USAC by August 1 following the date of
the annual access tariff filing.
10. The second set of facts that NECA
sought clarification on involves several
carriers who overestimated their 2012–
13 tariff period projected demand
compared to the resulting actual
demand. Thus, to the extent carriers
would have been entitled to Eligible
Recovery for tariff period 2012–13 if
they had accurately projected their
demand, these carriers received too
little Eligible Recovery in tariff period
2012–13. The affected carriers also have
negative Eligible Recovery in the 2014–
15 tariff period before adjusting for any
true-ups. Absent a clarification of our
rules, these carriers would not receive
the same level of revenues they would
have been entitled to if they had
projected their demand accurately in the
2012–13 tariff period. This occurs
because the positive amount of the
2012–13 under-recovery would be
reduced by the negative 2014–15
Eligible Recovery amount before further
Eligible Recovery would be possible in
tariff period 2014–15. This would
deprive such carriers of the cash flow
certainty the Commission sought to
provide carriers through the recovery
mechanism. As explained above,
carriers that have negative Eligible
Recovery were allowed to retain any
revenues received through intercarrier
revenue payments, consistent with the
transition from strict rate-of-return
regulation to incentive regulation. We
accordingly clarify that those carriers
that were in this situation with respect
to their tariff period 2014–15 Eligible
Recovery calculation may seek recovery
of 2012–13 true-up under-recovery from
USAC and are not required to offset the
2012–13 amounts they could have
received in Eligible Recovery in the
2012–13 tariff period if they had
projected demand correctly against their
2014–15 negative Eligible Recovery. The
carrier’s Eligible Recovery from USAC
shall be equal to the amount of the
2012–13 true-up that a carrier could
have recovered through Eligible
Recovery in the 2012–13 tariff period if
it had accurately projected demand and
which amount a carrier was unable to
recover as Eligible Recovery in tariff
period 2014–15. Consistent with the
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rules we adopt in the Appendix, in the
future a carrier in this situation must
treat the amount eligible for true-up as
its Eligible Recovery for the true-up
tariff period and flow that amount
through the normal procedures
associated with the recovery
mechanism. This is consistent with the
priorities established for recovery of
Eligible Recovery in the USF/ICC
Transformation Order.
11. Finally, we clarify how ARC rates
are to be handled in making Eligible
Recovery calculations in light of midyear revisions that some carriers have
made to their ARC rates after
discovering errors in the rates that were
charged. The Commission’s rules do not
address applicable procedures for
addressing such rate changes. If a carrier
assessed an ARC rate that was too high
for part of a tariff period, it must use
this higher rate and the associated
demand for that time period in
calculating future true-ups for that tariff
period. Failure to account for the higher
ARC rates for the period in question
would constitute impermissible
duplicative recovery because, without
this treatment, the carrier would have
received the ARC revenues without
having to offset Eligible Recovery to
reflect their receipt. We also take this
opportunity to remind carriers that if
they charge ARCs that are below the
maximum rate that could have been
charged, whether for the whole year or
for part of a year, they are required to
impute the maximum rate that they
could have assessed for purposes of
determining the carrier’s Eligible
Recovery. These clarifications help to
ensure that the recovery mechanism
adopted for rate-of-return carriers in the
USF/ICC Transformation Order works
as intended.
IV. Procedural Matters
A. Paperwork Reduction Act
12. This document does not contain
any new or modified information
collection requirements subject to the
Paperwork Reduction Act of 1995
(PRA). In addition, therefore, it does not
contain any new or modified
information collection burden for small
business concerns with fewer than 25
employees, pursuant to the Small
Business Paperwork Relief Act of 2002.
B. Final Regulatory Flexibility Act
Certification
13. The Regulatory Flexibility Act of
1980, as amended (RFA), requires that a
regulatory flexibility analysis be
prepared for rulemaking proceedings,
unless the agency certifies that ‘‘the rule
will not have a significant economic
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impact on a substantial number of small
entities.’’ The RFA generally defines
‘‘small entity’’ as having the same
meaning as the terms ‘‘small business,’’
‘‘small organization,’’ and ‘‘small
governmental jurisdiction.’’ In addition,
the term ‘‘small business’’ has the same
meaning as the term ‘‘small business
concern’’ under the Small Business Act.
A small business concern is one which:
(1) Is independently owned and
operated; (2) is not dominant in its field
of operation; and (3) satisfies any
additional criteria established by the
Small Business Administration (SBA).
14. We hereby certify that the rule
revisions adopted in the Order will not
have a significant economic impact on
a substantial number of small entities.
The Order amends rules adopted in the
USF/ICC Transformation Order by
correcting conflicts between the new or
revised rules and existing rules, as well
as addressing omissions or oversights.
These revisions do not create any
burdens, benefits, or requirements that
were not addressed by the Final
Regulatory Flexibility Analysis attached
to the USF/ICC Transformation Order.
The Commission will send a copy of the
Order, including a copy of this final
certification, to the Chief Counsel for
Advocacy of the SBA. In addition, the
Order (or a summary thereof) and
certification will be published in the
Federal Register.
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C. Congressional Review Act
15. The Commission will send a copy
of the Order to Congress and the
Government Accountability Office
pursuant to the Congressional Review
Act.
V. Ordering Clauses
16. Accordingly, it is ordered, that
pursuant to the authority contained in
sections 1, 2, 4(i), 201–203, 220, 251,
252, 254, 303(r) and 403 of the
Communications Act of 1934, as
amended, 47 U.S.C. 151, 152, 154(i),
201–203, 220, 251, 252, 254, 303(r) and
403, and pursuant to §§ 0.91, 0.201(d),
0.291, 1.3, and 1.427 of the
Commission’s rules, 47 CFR 0.91,
0.201(d), 0.291, 1.3 and 1.427, and
pursuant to the delegation of authority
in paragraph 1404 of 26 FCC Rcd 17663
(2011), the Order and the rules revising
part 51 of the Commission’s rules are
adopted, effective April 27, 2015.
17. It is further ordered that the
Commission shall send a copy of this
Order to Congress and the Government
Accountability Office pursuant to the
Congressional Review Act.
18. It is further ordered that the
Commission’s Consumer and
Governmental Affairs Bureau, Reference
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Information Center, shall send a copy of
the Order, including the Final
Regulatory Flexibility Certification, to
the Chief Counsel for Advocacy of the
Small Business Administration.
List of Subjects in 47 CFR Part 51
Communications common carriers,
Telecommunications.
Federal Communications Commission.
Deena M. Shetler,
Associate Chief, Wireline Competition
Bureau.
15909
period because the Rate-of-Return
Carrier has a negative Eligible Recovery
in the true-up tariff period (before
calculating the true-up amount in the
Eligible Recovery calculation), the Rateof-Return Carrier shall treat the
unrecoverable true-up amount as its
Eligible Recovery for the true-up tariff
period.
*
*
*
*
*
[FR Doc. 2015–06642 Filed 3–25–15; 8:45 am]
BILLING CODE 6712–01–P
For the reasons discussed in the
preamble, the Federal Communications
Commission amends 47 CFR part 51 as
follows:
DEPARTMENT OF DEFENSE
PART 51—INTERCONNECTION
48 CFR Parts 225 and 236
1. The authority citation for part 51
continues to read as follows:
RIN 0750–AI52
■
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.
Subpart J—Transitional Access
Service Pricing
2. Section 51.917 is amended by
adding paragraphs (d)(1)(viii)(A) and (B)
to read as follows:
■
§ 51.917 Revenue recovery for rate-ofreturn carriers.
*
*
*
*
*
(d) * * *
(1) * * *
(viii) * * *
(A) If a Rate-of-Return Carrier in any
tariff period underestimates its
projected demand for services covered
by § 51.917(b)(6) or 51.915(b)(13), and
thus has too much Eligible Recovery in
that tariff period, it shall refund the
amount of any such True-up Revenues
or True-up Revenues for Access
Recovery Charge that are not offset by
the Rate-of-Return Carrier’s Eligible
Recovery (calculated before including
the true-up amounts in the Eligible
Recovery calculation) in the true-up
tariff period to the Administrator by
August 1 following the date of the Rateof-Return Carrier’s annual access tariff
filing.
(B) If a Rate-of-Return Carrier in any
tariff period receives too little Eligible
Recovery because it overestimates its
projected demand for services covered
by § 51.917(b)(6) or 51.915(b)(13), which
True-up Revenues and True-up
Revenues for Access Recovery Charge it
cannot recover in the true-up tariff
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Defense Acquisition Regulations
System
Defense Federal Acquisition
Regulation Supplement: Use of Military
Construction Funds (DFARS Case
2015–D006)
Defense Acquisition
Regulations System, Department of
Defense (DoD).
ACTION: Interim rule.
AGENCY:
DoD is issuing an interim rule
amending the Defense Federal
Acquisition Regulation Supplement
(DFARS) to implement sections of the
Military Construction and Veterans
Affairs and Related Agencies
Appropriations Act, 2015, that require
offerors bidding on DoD military
construction contracts to provide
opportunity for competition to
American steel producers, fabricators,
and manufacturers; and restrict use of
military construction funds in certain
foreign countries, including countries
that border the Arabian Gulf.
DATES: Effective March 26, 2015.
Comment Date: Comments on the
interim rule should be submitted in
writing to the address shown below on
or before May 26, 2015, to be considered
in the formation of a final rule.
ADDRESSES: Submit comments
identified by DFARS Case 2015–D006,
using any of the following methods:
Æ Regulations.gov: https://
www.regulations.gov. Submit comments
via the Federal eRulemaking portal by
entering ‘‘DFARS Case 2015–D006’’
under the heading ‘‘Enter keyword or
ID’’ and selecting ‘‘Search.’’ Select the
link ‘‘Submit a Comment’’ that
corresponds with ‘‘DFARS Case 2015–
D006.’’ Follow the instructions provided
at the ‘‘Submit a Comment’’ screen.
Please include your name, company
name (if any), and ‘‘DFARS Case 2015–
D006’’ on your attached document.
SUMMARY:
E:\FR\FM\26MRR1.SGM
26MRR1
Agencies
[Federal Register Volume 80, Number 58 (Thursday, March 26, 2015)]
[Rules and Regulations]
[Pages 15906-15909]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2015-06642]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 51
[WC Docket No. 10-90, CC Docket No. 01-92; DA 15-249]
Connect America Fund; Developing a Unified Intercarrier
Compensation Regime
AGENCY: Federal Communications Commission.
ACTION: Final rule.
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SUMMARY: In this document, the Federal Communications Commission's
Wireline Competition Bureau clarifies certain rules related to the
implementation of the intercarrier compensation transition for rate-of-
return local exchange carriers adopted in the USF/ICC Transformation
Order. Specifically, the Bureau clarifies the Commission's rules
governing Eligible Recovery calculations to address limited
unanticipated results of the application of the true-up process
evidenced by the rate-of-return carriers' 2014 annual access tariff
filings.
DATES: Effective April 27, 2015.
FOR FURTHER INFORMATION CONTACT: Pamela Arluk, Wireline Competition
Bureau, Pricing Policy Division, (202) 418-1520 or (202) 418-0484
(TTY); or Robin Cohn, Wireline Competition Bureau, Pricing Policy
Division, (202) 418-1520 or (202) 418-0484 (TTY).
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Order
in WC Docket No. 10-90 and CC Docket No. 01-92, adopted and released on
February 24, 2015. The full text of this document can be viewed at the
following Internet address: https://apps.fcc.gov/edocs_public/attachmatch/DA-15-249A1.docx. The full text of this document is also
available for public inspection during regular business hours in the
FCC Reference Center, 445 12th Street SW., Room CY-A257, Washington, DC
20554. To request materials in accessible formats for people with
disabilities (e.g. braille, large print, electronic files, audio
format, etc.) or to request reasonable accommodations (e.g. accessible
format documents, sign language interpreters, CART, etc.), send an
email to fcc504@fcc.gov or call the Consumer & Governmental Affairs
Bureau at (202) 418-0530 (voice) or (202) 418-0432 (TTY).
I. Introduction
1. In the USF/ICC Transformation Order, the Commission delegated to
the Wireline Competition Bureau (Bureau) the authority to make any rule
revisions
[[Page 15907]]
necessary to ensure that the intercarrier compensation (ICC) reforms
adopted by the Commission are properly reflected in the Commission's
rules, including correction of any conflicts between the new or revised
rules and addressing any omissions or oversights. In the Order, the
Bureau acts pursuant to its delegated authority to clarify certain
rules relating to implementation of the ICC transition for rate-of-
return local exchange carriers (LECs) adopted in the USF/ICC
Transformation Order. We clarify the Commission's rules governing
Eligible Recovery calculations under Sec. 51.917(d) to address a
limited number of unanticipated results associated with application of
the true-up process that became apparent in rate-of-return carriers'
2014 annual access tariff filings. Specifically, we clarify that a
rate-of-return carrier that received too much Eligible Recovery in
2012-13 because of an under-projection of demand for that tariff
period, and does not have sufficient Eligible Recovery in 2014-15 to
fully offset the 2012-13 amount of over-recovery, must refund the
amount that is not offset to the Universal Service Administrative
Company (USAC) to avoid duplicative recovery. Additionally, to ensure a
carrier receives the Eligible Recovery it was entitled to in 2012-13,
we clarify that a rate-of-return carrier that received too little
Eligible Recovery in 2012-13 because of an over-projection of demand
for that tariff period may seek recovery for any amounts it was not
able to recover through its 2014-15 Eligible Recovery from USAC. We
also revise Sec. 51.917 of the Commission's rules to address similar
discrepancies that may occur in future years as a result of the true-up
process.
II. Background
2. In the USF/ICC Transformation Order, the Commission adopted,
among other things, rules to implement the ICC reform timeline that
require carriers to adjust, over a period of years, many of their
legacy ICC rates effective on July 1 of each of those years, with the
ultimate goal of transitioning to a bill-and-keep regime. The
Commission also adopted a recovery mechanism to mitigate the impact of
reduced ICC revenues on carriers and to facilitate continued investment
in broadband infrastructure while providing greater certainty and
predictability going forward. The recovery mechanism allows incumbent
LECs to recover ICC revenues reduced due to the ICC reforms, up to an
amount defined for each year of the transition, which is referred to as
``Eligible Recovery.'' A Rate-of-Return carrier initially may recover
its Eligible Recovery each year from its end users through the Access
Recovery Charge (ARC) subject to an annual cap. If the projected ARC
revenues do not recover the entire Eligible Recovery amount, the
carrier may elect to collect the remainder from Connect America Fund
ICC support.
3. For rate-of-return LECs, the calculation each year of a
carrier's Eligible Recovery begins with its Base Period Revenue (BPR).
A rate-of-return carrier's BPR is the sum of certain ICC intrastate
switched access revenues and net reciprocal compensation revenues
received by March 31, 2012, for services provided during FY 2011, and
the projected revenue requirement for interstate switched access
services provided during the 2011-2012 tariff period. The BPR for rate-
of-return carriers was reduced by 5% initially and is reduced by an
additional 5% in each year of the transition. A rate-of-return LEC's
Eligible Recovery is equal to the adjusted BPR for the year in question
less, for each relevant year of the transition, the sum of (1)
projected intrastate switched access revenue; (2) projected interstate
switched access revenue; and (3) projected net reciprocal compensation
revenue.
4. Beginning in 2014, the recovery mechanism also incorporates in
the Eligible Recovery calculation a true-up of the revenue difference
between projected and actual demand for interstate and intrastate
switched access services, reciprocal compensation, and the ARC for the
tariff period that began two years earlier. This adjustment measures
the extent to which a carrier received more or less than the revenues
it projected for the earlier period and thus whether it received too
little, or too much, Eligible Recovery through ARCs and/or Connect
America Fund ICC support for that period. The true-up is achieved by
adjusting the later tariff period's Eligible Recovery to account for
the carrier's revenue variance resulting from differences between
projected and actual demand for the prior period. The true-up process
ensures that rate-of-return carriers at a minimum have the opportunity
to receive their adjusted BPR, notwithstanding changes in demand for
their intercarrier compensation rates being capped or reduced. The
true-up process does not require that a carrier that has negative
Eligible Recovery, meaning the carrier received revenues in excess of
its adjusted BPR from its interstate and intrastate switched access and
reciprocal compensation alone and not through an ARC or Connect America
Fund ICC support, to refund any of the revenues it received.
5. To provide context for how the true-up process works, the
following two examples demonstrate scenarios in which the carrier
either under-projected or over-projected its revenues, and thus must
engage in a true-up calculation pursuant to Sec. 51.917(d)(1)(iii)-
(iv) of the Commission's rules. In this first example, Carrier A under-
projected its actual revenues and received too much Eligible Recovery
for the 2012-2013 tariff period. Carrier A had a BPR of $100.00, a
projected revenue amount of $80.00 and an actual revenue amount of
$85.00:
2012-2013 BPR is $100.00 x .95 = $95.00 (Adjusted BPR)
2012-2013 Total Projected Revenues = $80.00
2012-2013 Eligible Recovery (Adjusted BPR-Projected Revenues) = $15.00
2012-2013 Total Actual Revenues = $85.00
Projected Revenue--Actual Revenue = $-5.00 (true-up amount)
2014-2015 Eligible Recovery adjusted by $-5.00
As a result of its under-projection, Carrier A would need to reduce its
2014-2015 tariff period Eligible Recovery by five dollars to reflect
the difference between its actual revenues and projected revenues for
the 2012-2013 tariff period.
6. Conversely, in the second example, Carrier B over-projected its
revenue amounts in the 2012-2013 tariff period, and it would need to
increase its 2014-2015 Eligible Recovery amounts to reflect the
difference. Carrier B had a BPR of $100.00, a projected revenue amount
of $85.00 and an actual revenue amount of $80.00:
2012-2013 BRP is $100.00 x .95 = $95.00 (Adjusted BPR)
2012-2013 Total Projected Revenues = $85.00
2012-2013 Eligible Recovery (Adjusted BPR-Projected Revenues) = $10.00
2012-2013 Total Actual Revenues = $80.00
Projected Revenue-Actual Revenue = $5.00 (true-up amount)
2014-2015 Eligible Recovery adjusted by $5.00
Thus, in this example, the carrier will need to increase its 2014-2015
Eligible Recovery amount by five dollars to reflect the difference
between its actual revenues and projected revenues for the 2012-2013
tariff period.
III. Discussion
7. As noted above, the 2014 annual tariff filing was the first time
that Eligible Recovery was adjusted to
[[Page 15908]]
incorporate a true-up of projected demand used in calculating Eligible
Recovery for an earlier tariff period. The true-up process is designed
to provide certainty to rate-of-return carriers by accounting for any
difference between projected and actual switched access revenues,
reciprocal compensation revenues, or ARC revenues due to demand
variations. As the above examples and the illustration in the USF/ICC
Transformation Order (which similarly shows operation of the true-up
process when a carrier both overestimated and underestimated its
projected revenues for the first year of the ICC reforms adopted by the
Commission) demonstrate, a carrier's Eligible Recovery was to be
adjusted either upward or downward based on any such differences. As
the illustration in the USF/ICC Transformation Order reflects, the
Commission expected that the amount of any adjustment could be
completely offset through adjustments to the amount of Eligible
Recovery for which ARC rates could be assessed and Connect America Fund
ICC support could be received.
8. In conjunction with the 2014 annual tariff filing process, NECA
informally sought clarification concerning a limited number of cases in
which the true-up process did not work as outlined above and for which
the rules do not provide an unambiguous resolution. In the Order, we
clarify how rate-of-return carriers and USAC should address the 2014-15
fact scenarios described below, consistent with the policy goals of the
USF/ICC Transformation Order, and revise the Commission's rules, as set
forth in the Appendix, to provide clarity for future tariff periods.
9. The first set of facts identified by NECA involves several
carriers whose 2012-13 tariff period projected demand was
underestimated compared to their ultimate actual demand. Each carrier
therefore received too much Eligible Recovery in 2012-13, and, under
the rules, their 2014-15 Eligible Recovery should be reduced by the
amount of revenues associated with the demand difference. The carriers'
Eligible Recovery for 2014-15 before reflecting the true-up adjustment,
however, was not large enough to offset completely the true-up
reduction from the 2012-13 tariff period. Thus, the excess Eligible
Recovery carriers received during the 2012-13 tariff period has not
been fully offset, and the carriers would be left with duplicative
recovery in contravention of Sec. 51.917(d)(1)(vii) of the rules
absent clarification to specify the procedures to be followed under
these circumstances. We accordingly clarify that carriers that are in
this situation with respect to their 2014-15 Eligible Recovery
calculation must refund to USAC the amount of the excess recovery that
was not offset within thirty (30) days of the effective date of the
Order. Consistent with the rules we adopt, as set forth in the
Appendix, in the future a carrier in this situation must refund excess
amounts to USAC by August 1 following the date of the annual access
tariff filing.
10. The second set of facts that NECA sought clarification on
involves several carriers who overestimated their 2012-13 tariff period
projected demand compared to the resulting actual demand. Thus, to the
extent carriers would have been entitled to Eligible Recovery for
tariff period 2012-13 if they had accurately projected their demand,
these carriers received too little Eligible Recovery in tariff period
2012-13. The affected carriers also have negative Eligible Recovery in
the 2014-15 tariff period before adjusting for any true-ups. Absent a
clarification of our rules, these carriers would not receive the same
level of revenues they would have been entitled to if they had
projected their demand accurately in the 2012-13 tariff period. This
occurs because the positive amount of the 2012-13 under-recovery would
be reduced by the negative 2014-15 Eligible Recovery amount before
further Eligible Recovery would be possible in tariff period 2014-15.
This would deprive such carriers of the cash flow certainty the
Commission sought to provide carriers through the recovery mechanism.
As explained above, carriers that have negative Eligible Recovery were
allowed to retain any revenues received through intercarrier revenue
payments, consistent with the transition from strict rate-of-return
regulation to incentive regulation. We accordingly clarify that those
carriers that were in this situation with respect to their tariff
period 2014-15 Eligible Recovery calculation may seek recovery of 2012-
13 true-up under-recovery from USAC and are not required to offset the
2012-13 amounts they could have received in Eligible Recovery in the
2012-13 tariff period if they had projected demand correctly against
their 2014-15 negative Eligible Recovery. The carrier's Eligible
Recovery from USAC shall be equal to the amount of the 2012-13 true-up
that a carrier could have recovered through Eligible Recovery in the
2012-13 tariff period if it had accurately projected demand and which
amount a carrier was unable to recover as Eligible Recovery in tariff
period 2014-15. Consistent with the rules we adopt in the Appendix, in
the future a carrier in this situation must treat the amount eligible
for true-up as its Eligible Recovery for the true-up tariff period and
flow that amount through the normal procedures associated with the
recovery mechanism. This is consistent with the priorities established
for recovery of Eligible Recovery in the USF/ICC Transformation Order.
11. Finally, we clarify how ARC rates are to be handled in making
Eligible Recovery calculations in light of mid-year revisions that some
carriers have made to their ARC rates after discovering errors in the
rates that were charged. The Commission's rules do not address
applicable procedures for addressing such rate changes. If a carrier
assessed an ARC rate that was too high for part of a tariff period, it
must use this higher rate and the associated demand for that time
period in calculating future true-ups for that tariff period. Failure
to account for the higher ARC rates for the period in question would
constitute impermissible duplicative recovery because, without this
treatment, the carrier would have received the ARC revenues without
having to offset Eligible Recovery to reflect their receipt. We also
take this opportunity to remind carriers that if they charge ARCs that
are below the maximum rate that could have been charged, whether for
the whole year or for part of a year, they are required to impute the
maximum rate that they could have assessed for purposes of determining
the carrier's Eligible Recovery. These clarifications help to ensure
that the recovery mechanism adopted for rate-of-return carriers in the
USF/ICC Transformation Order works as intended.
IV. Procedural Matters
A. Paperwork Reduction Act
12. This document does not contain any new or modified information
collection requirements subject to the Paperwork Reduction Act of 1995
(PRA). In addition, therefore, it does not contain any new or modified
information collection burden for small business concerns with fewer
than 25 employees, pursuant to the Small Business Paperwork Relief Act
of 2002.
B. Final Regulatory Flexibility Act Certification
13. The Regulatory Flexibility Act of 1980, as amended (RFA),
requires that a regulatory flexibility analysis be prepared for
rulemaking proceedings, unless the agency certifies that ``the rule
will not have a significant economic
[[Page 15909]]
impact on a substantial number of small entities.'' The RFA generally
defines ``small entity'' as having the same meaning as the terms
``small business,'' ``small organization,'' and ``small governmental
jurisdiction.'' In addition, the term ``small business'' has the same
meaning as the term ``small business concern'' under the Small Business
Act. A small business concern is one which: (1) Is independently owned
and operated; (2) is not dominant in its field of operation; and (3)
satisfies any additional criteria established by the Small Business
Administration (SBA).
14. We hereby certify that the rule revisions adopted in the Order
will not have a significant economic impact on a substantial number of
small entities. The Order amends rules adopted in the USF/ICC
Transformation Order by correcting conflicts between the new or revised
rules and existing rules, as well as addressing omissions or
oversights. These revisions do not create any burdens, benefits, or
requirements that were not addressed by the Final Regulatory
Flexibility Analysis attached to the USF/ICC Transformation Order. The
Commission will send a copy of the Order, including a copy of this
final certification, to the Chief Counsel for Advocacy of the SBA. In
addition, the Order (or a summary thereof) and certification will be
published in the Federal Register.
C. Congressional Review Act
15. The Commission will send a copy of the Order to Congress and
the Government Accountability Office pursuant to the Congressional
Review Act.
V. Ordering Clauses
16. Accordingly, it is ordered, that pursuant to the authority
contained in sections 1, 2, 4(i), 201-203, 220, 251, 252, 254, 303(r)
and 403 of the Communications Act of 1934, as amended, 47 U.S.C. 151,
152, 154(i), 201-203, 220, 251, 252, 254, 303(r) and 403, and pursuant
to Sec. Sec. 0.91, 0.201(d), 0.291, 1.3, and 1.427 of the Commission's
rules, 47 CFR 0.91, 0.201(d), 0.291, 1.3 and 1.427, and pursuant to the
delegation of authority in paragraph 1404 of 26 FCC Rcd 17663 (2011),
the Order and the rules revising part 51 of the Commission's rules are
adopted, effective April 27, 2015.
17. It is further ordered that the Commission shall send a copy of
this Order to Congress and the Government Accountability Office
pursuant to the Congressional Review Act.
18. It is further ordered that the Commission's Consumer and
Governmental Affairs Bureau, Reference Information Center, shall send a
copy of the Order, including the Final Regulatory Flexibility
Certification, to the Chief Counsel for Advocacy of the Small Business
Administration.
List of Subjects in 47 CFR Part 51
Communications common carriers, Telecommunications.
Federal Communications Commission.
Deena M. Shetler,
Associate Chief, Wireline Competition Bureau.
For the reasons discussed in the preamble, the Federal
Communications Commission amends 47 CFR part 51 as follows:
PART 51--INTERCONNECTION
0
1. The authority citation for part 51 continues to read as follows:
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.
Subpart J--Transitional Access Service Pricing
0
2. Section 51.917 is amended by adding paragraphs (d)(1)(viii)(A) and
(B) to read as follows:
Sec. 51.917 Revenue recovery for rate-of-return carriers.
* * * * *
(d) * * *
(1) * * *
(viii) * * *
(A) If a Rate-of-Return Carrier in any tariff period underestimates
its projected demand for services covered by Sec. 51.917(b)(6) or
51.915(b)(13), and thus has too much Eligible Recovery in that tariff
period, it shall refund the amount of any such True-up Revenues or
True-up Revenues for Access Recovery Charge that are not offset by the
Rate-of-Return Carrier's Eligible Recovery (calculated before including
the true-up amounts in the Eligible Recovery calculation) in the true-
up tariff period to the Administrator by August 1 following the date of
the Rate-of-Return Carrier's annual access tariff filing.
(B) If a Rate-of-Return Carrier in any tariff period receives too
little Eligible Recovery because it overestimates its projected demand
for services covered by Sec. 51.917(b)(6) or 51.915(b)(13), which
True-up Revenues and True-up Revenues for Access Recovery Charge it
cannot recover in the true-up tariff period because the Rate-of-Return
Carrier has a negative Eligible Recovery in the true-up tariff period
(before calculating the true-up amount in the Eligible Recovery
calculation), the Rate-of-Return Carrier shall treat the unrecoverable
true-up amount as its Eligible Recovery for the true-up tariff period.
* * * * *
[FR Doc. 2015-06642 Filed 3-25-15; 8:45 am]
BILLING CODE 6712-01-P