High Cost

Step 7: For New Incumbent Carriers

New incumbent carriers may not disaggregate support unless directed to do so by their state commission.

For New Incumbent Carriers
In the Rural Task Force Order (FCC 01-157, released May 23, 2001), the FCC concluded that High Cost support should be disaggregated and targeted below the study area level for rural carriers to achieve a balance between rural carriers' needs for flexibility and the FCC's goal of encouraging competitive entry. The FCC adopted a plan specifying three paths for the disaggregation and targeting of high cost universal service support proposed by the Rural Task Force.  Search the disaggregation checklist to see if incumbent carriers filed disaggregation plans for your state. Use disaggregation map search to find disaggregation maps for an incumbent carrier.

In establishing the Interstate Common Line Support component, the disaggregation requirement was extended to all incumbent rate-of-return carriers.  All incumbent rural carriers and all incumbent rate-of-return carriers were required to select a disaggregation path and submit the required information to USAC by May 15, 2002. The disaggregation plans are valid for four years from the date approved by a state commission unless the state commission requires modification to a disaggregation plan.

The chosen disaggregation path applies to a rural carrier's High Cost Loop support, Long Term Support (now merged into ICLS), Local Switching Support, and Interstate Common Line Support, which was implemented July 1, 2002.

Carriers have three paths to choose from for disaggregating and targeting High Cost support:

Path One: Carriers opting not to disaggregate and target support
Path 1 is intended to address those instances in which a carrier determines that, given the demographics, cost characteristics, and location of its service territory, and the lack of a realistic prospect of competition, disaggregation is not economically rational. See Section 54.315(b) of the FCC's rules for more detailed requirements for carriers selecting Path 1.

Path Two: Carriers seeking prior regulatory approval of disaggregation plans
Path 2 provides the most flexibility in the development of a disaggregation plan. A carrier may elect any level of disaggregation and targeting but the plan requires regulatory approval to ensure that the methodology implemented is competitively neutral. The carrier must file its disaggregation plan with its state commission, and the plan must be approved by that commission. If not subject to state jurisdiction, a carrier may submit its plan and obtain approval directly from the FCC. Path 2 disaggregation is discussed in Section 54.315(c) of the FCC's rules.

Path Three: Carriers self-certifying disaggregation plans
Path 3 provides for disaggregation and targeting of support but, because there is no regulatory approval involved, a carrier's options are somewhat more limited than under Path 2. The FCC concluded that permitting carriers to self-certify their disaggregation and targeting plans to the state would reduce the administrative burden on carriers and states, and would facilitate the rapid implementation of disaggregation and targeting plans. Section 54.315(d) outlines the details for Path 3 disaggregation plans.

General Requirements Applicable to Paths Two and Three

Until a competitive eligible telecommunications carrier (CETC) is certified in a study area, support will continue to be distributed at the study area level.

  • In study areas in which a CETC was designated prior to June 19, 2001, the incumbent carrier must generally opt for Path 2 and seek state regulatory approval if it wishes to disaggregate and target support. The only exceptions to this rule are study areas in which a disaggregation and targeting plan was already approved by a state commission. Under those circumstances, an incumbent carrier could self-certify its disaggregation plan that had already been approved by a state commission.
  • Disaggregated support must equal support without disaggregation. That is, an incumbent carrier's study area support must be the same regardless of whether support is disaggregated or not.
  • The ratio of per-line support between zones for High Cost Loop, Long Term Support, and Local Switching Support shall remain fixed over time unless the state commission dictates a change. This ratio of per-line support must be made publicly available.
  • Once a CETC is designated in a rural study area, the CETC's per-line amounts should mirror the incumbent carrier's per-line support amounts. That is, the per-line support amounts used to determine the CETC's support should be based on the incumbent carrier's total support levels, lines, and disaggregated support relationships.
  • Per-line support for each category of support in each disaggregation zone must be determined such that the relative support relationships between zones will be maintained. In addition, the product of all of the incumbent's lines for each cost zone multiplied by the per-line support for those zones when added together must equal the sum of the incumbent's total level of support.
  • Whenever an incumbent's total annual support amounts change, per-line support amounts for each zone must be similarly re-calculated, using the changed support amounts and lines at that point in time.

Required Filings

All rural incumbent carriers must submit to USAC the information required under their chosen path.

The information required under Paths One, Two, and Three is outlined below:

Path 1: Carriers opting not to disaggregate and target support
Carriers choosing Path 1 must submit a copy of the certification it submitted to its state commission (or the FCC, if the carrier is not subject to state jurisdiction), stating that the carrier is opting not to disaggregate and target support.

Path 2: Carriers seeking prior regulatory approval of disaggregation plans
Carriers choosing Path 2 must submit the following information:

  • A copy of the order from either the state commission (or the FCC, if the carrier is not subject to state jurisdiction) approving the disaggregation plan.
  • A copy of the disaggregation plan approved by the state commission (or the FCC, if the carrier is not subject to state jurisdiction).
  • Maps precisely identifying the boundaries of the approved disaggregation zones within the carrier's study area.

Path 3: Carriers self-certifying disaggregation plans
Carriers choosing Path 3 must submit the following information:

  • A copy of its self-certification plan, including the information submitted to the state commission (or to the FCC, if not subject to state jurisdiction).
  • Maps precisely identifying the boundaries of the approved disaggregation zones within the carrier's study area.
  • Publicly available information that allows competitors to verify and reproduce the algorithm used to determine zone support levels.
  • Information demonstrating that the underlying rationale is reasonably related to the cost of providing service for each cost zone within each disaggregated category.

Map image requirements

Maps must be sent in electronic format.

Format:

.jpg or .gif

Dimensions:

No larger than 650 pixels horizontal and 866 pixels vertical (creating a printed image roughly 9 x 12 inches)

Size:

No larger than 300KB

 

Provide the carrier name and study area code in the top right hand corner of the image.

We request that the maps be emailed to: HCMaps. However, if this is not possible, please send the maps on a 3.5" diskette or CD format via U.S. Postal Service to the address below.

Please Note: Carriers selecting Path 1 (not opting for disaggregation) do not have to submit maps.

Address for submitting disaggregation information to USAC:

Karen Majcher
Vice President, High Cost and Low Income Division
Universal Service Administrative Company
2000 L Street, N.W.
Suite 200
Washington, D.C. 20036


Last modified on 1/15/2008