Mixed Merger Information and Requirements
Carriers must notify USAC within 30 days of a merger closing when a company receiving a fixed level of High Cost support (e.g. model-based support) acquires or is acquired by an average schedule company or a company receiving support based on its costs.
On May 11, 2018, the FCC released an order (FCC 18-62 ) approving the purchase of a carrier receiving model-based support by a carrier receiving legacy support. This type of transaction is known as a “mixed merger.” FCC approval was subject to a condition now known as the “Hargray condition,” which caps the operating expense of the carriers of the combined entity that receive cost-based support. The purpose of this condition is to prevent potential cost shifting.
This condition has been applied to subsequent mixed mergers and requires carriers to:
- Notify USAC of the merger within 30 days of the merger closing date.
- Submit the latest audited financial statements to USAC, including all notes and consolidating statements, by December 31, annually, for seven years following the merger. This submission should also include a certification that the carrier has complied with the “Hargray condition”.
Carriers should send these submissions to USAC at hcinfo@usac.org.
The condition “sunsets” if any of the cost-based carriers involved in the mixed merger become fixed-support carriers at any point during the seven-year period.
For questions please write to hcinfo@usac.org or call (888) 641 – 8722 and ask for High Cost Operations.
