Summary of Order

The FCC clarified that under the high-cost support rules, eligible telecommunications carriers (ETCs) in the Katrina disaster area may use high-cost support funds received for high-cost areas in Alabama, Louisiana, and Mississippi to assist in reconstructing facilities damaged by the hurricane.

The FCC is providing ETCs in the states of Alabama, Louisiana, and Mississippi the flexibility to determine how best to use high cost support to restore service in the affected area. ETCs opting to use this flexibility must file a revised certification, stating that (1) the carrier is serving in the area affected by Hurricane Katrina; and (2) the carrier incurred substantial damage as a result of Hurricane Katrina. While no additional high –cost support is being provided to ETCs harmed by Hurricane Katrina, the additional flexibility in the use of some high-cost funds will assist in the repair and rebuilding of facilities and services damaged by the storm. Through the greater flexibility granted to high-cost carriers, ETCs throughout the disaster area will be able to use their more than $240 million in estimated annual high-cost support to assist in restoration efforts.

The FCC further clarified that the actions taken in the Katrina Order do not modify or otherwise permit carriers in the disaster area to use high-cost support disbursed to one state to meet the needs in another state.

Audit Information

To safeguard the USF from potential program violations, ETCs shall be subject to audit or investigation by the FCC’s Office of Inspector General (OIG) where an ETC uses the temporary rules. Furthermore, any ETC receiving more than $1 million under the new temporary rules shall be subject to an automatic audit, investigation, or other review by the FCC OIG or USAC working under the OIG’s oversight to ensure the temporary support is used for its intended purposes..